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<SEC-DOCUMENT>0001125282-06-002140.txt : 20060407
<SEC-HEADER>0001125282-06-002140.hdr.sgml : 20060407
<ACCEPTANCE-DATETIME>20060407161356
ACCESSION NUMBER:		0001125282-06-002140
CONFORMED SUBMISSION TYPE:	N-2
PUBLIC DOCUMENT COUNT:		9
FILED AS OF DATE:		20060407
DATE AS OF CHANGE:		20060407

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INDIA FUND INC
		CENTRAL INDEX KEY:			0000917100
		IRS NUMBER:				133749070
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-133089
		FILM NUMBER:		06748237

	BUSINESS ADDRESS:	
		STREET 1:		345 PARK AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10154
		BUSINESS PHONE:		866-800-8933

	MAIL ADDRESS:	
		STREET 1:		345 PARK AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10154

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INDIA FUND INC /NY NEW
		DATE OF NAME CHANGE:	19940106
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>b412592_n2.htm
<DESCRIPTION>FORM N-2
<TEXT>

<html>
<head>

<title>Prepared and filed by St Ives Financial</title>

</head>

<body>














<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page> </font>
<P align="center"> <FONT size=2 face="Times New Roman, Times, serif">As filed
     with the Securities and Exchange Commission on April 7, 2006</FONT></P>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
    <td width="50%" align="center" valign="bottom"> <font size=2 face="Times New Roman, Times, serif">Securities
      Act Registration No. 333-</font><font face="Times New Roman, Times, serif"><br>
      <font size=2>Investment Company Act File No. 811-8266</font></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="center" valign="bottom">&nbsp;</td>
  </tr>
</table>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td height="4" valign="bottom" bgcolor="#000000"></td>
  </tr>
  <tr>
    <td height="2" valign="top"></td>
  </tr>
  <tr>
    <td height="1" valign="top" bgcolor="#000000"></td>
  </tr>
</table>
<P align="center"> <font face="Times New Roman, Times, serif"><B><FONT size=4>U.S.
  SECURITIES AND EXCHANGE COMMISSION<br>
  </FONT><FONT size=2>Washington, D.C. 20549 </FONT></B></font></P>
<hr align="center" width="200" size="1" noshade>
<div align="center">
  <p><font face="Times New Roman, Times, serif"><B><FONT size=5>FORM N-2 </FONT></B><br>
    <FONT size=1>(Check appropriate box or boxes)</FONT></font></p>
  <table width="100%" border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="3%"><font face="Times New Roman, Times, serif"><img src="tickedbox.gif" width="12" height="12"></font></td>
      <td><font size=2 face="Times New Roman, Times, serif">REGISTRATION STATEMENT
        UNDER THE SECURITIES ACT OF 1933</font></td>
    </tr>
    <tr>
      <td><font face="Times New Roman, Times, serif"><img src="emptybox.gif" width="12" height="12"></font></td>
      <td><font size=2 face="Times New Roman, Times, serif">Pre-Effective Amendment
        No.</font></td>
    </tr>
    <tr>
      <td><font face="Times New Roman, Times, serif"><img src="emptybox.gif" width="12" height="12"></font></td>
      <td><font size=2 face="Times New Roman, Times, serif">Post-Effective Amendment
        No.</font></td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td><font size=2 face="Times New Roman, Times, serif"> and/or</font></td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td><font face="Times New Roman, Times, serif"><img src="tickedbox.gif" width="12" height="12"></font></td>
      <td><font size=2 face="Times New Roman, Times, serif">REGISTRATION STATEMENT
        UNDER THE INVESTMENT COMPANY ACT OF 1940</font></td>
    </tr>
    <tr>
      <td><font face="Times New Roman, Times, serif"><img src="tickedbox.gif" width="12" height="12"></font></td>
      <td><font size=2 face="Times New Roman, Times, serif">Amendment No. 8</font></td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
  </table>
  <hr align="center" width="200" size="1" noshade>
</div>
<P align="center"> <font face="Times New Roman, Times, serif"><B><FONT size=5>The
  India Fund, Inc.</FONT><FONT size=2> </FONT></B><BR>
  <FONT size=1>(Exact name of Registrant as Specified in Charter) </FONT></font></P>
<hr align="center" width="200" size="1" noshade>
<div align="center">
  <p><FONT size=2 face="Times New Roman, Times, serif"><b>345 Park Avenue, New
    York, New York 10154</b></FONT><font face="Times New Roman, Times, serif"><br>
    <FONT size=1>(Address of Principal Executive Offices) </FONT></font></p>
  <p><font face="Times New Roman, Times, serif"><b> <FONT size=2>(866) 800-8933
    </FONT></b><BR>
    <FONT size=1>(Registrant&#146;s Telephone Number, including Area Code) </FONT></font></p>
  <hr align="center" width="200" size="1" noshade>
  <p><FONT size=2 face="Times New Roman, Times, serif"><b>Prakash A. Melwani </b></FONT><font face="Times New Roman, Times, serif"><b><BR>
    <FONT size=2>Director and President </FONT><BR>
    <FONT size=2>The India Fund, Inc. </FONT><BR>
    <FONT size=2>345 Park Avenue, New York, New York 10154</FONT></b><BR>
    <FONT size=1>(Name and Address of Agent for Service) </FONT></font></p>
  <hr align="center" width="200" size="1" noshade>
  <p><font size="2" face="Times New Roman, Times, serif"><I>COPIES TO:</I></font></p>
  <p><FONT size=2 face="Times New Roman, Times, serif">Cynthia G. Cobden, Esq.
    </FONT><font face="Times New Roman, Times, serif"><BR>
    <FONT size=2>Simpson Thacher &amp; Bartlett LLP</FONT><BR>
    <FONT size=2>425 Lexington Avenue </FONT><BR>
    <FONT size=2>New York, New York 10017 </FONT></font></p>
  <hr align="center" width="200" size="1" noshade>
  <div style="text-indent:3%">
    <p><font face="Times New Roman, Times, serif"><B><FONT size=2>Approximate
      Date of Proposed Public Offering: </FONT></B><FONT size=2>As soon as practicable
      after the effective date of this Registration Statement.</FONT></font></p>
  </div>
</div>
<div style="text-indent:3%">
  <P> <FONT size=2 face="Times New Roman, Times, serif"> If any securities being
    registered on this form will be offered on a delayed or continuous basis in
    reliance on Rule 415 under the Securities Act of 1933, other than securities
    offered in connection with a dividend reinvestment plan, check the following
    box.&nbsp; <img src="emptybox.gif" width="12" height="12"></FONT></P>
</div>
<div style="text-indent:3%">
  <P> <FONT size=2 face="Times New Roman, Times, serif">It is proposed that this
    filing will become effective (if appropriate, check box)</FONT></P>
</div>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif"><img src="tickedbox.gif" width="12" height="12">&nbsp;&nbsp;&nbsp;when
    declared effective pursuant to section 8(c).</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">If appropriate, check the
    following boxes:</FONT></P>
</div>
<div style="text-indent:3%">
  <P> <FONT size=2 face="Times New Roman, Times, serif"> <img src="emptybox.gif" width="12" height="12">&nbsp;&nbsp;&nbsp;This
    [post-effective] amendment designates a new effective date for a previously
    filed [post-effective amendment] [registration statement].</FONT></P>
</div>
<div style="text-indent:3%">
  <P> <FONT size=2 face="Times New Roman, Times, serif"> <img src="emptybox.gif" width="12" height="12">&nbsp;&nbsp;&nbsp;This
    Form is filed to register additional securities for an offering pursuant to
    Rule 462(b) under the Securities Act and the Securities Act registration statement
    number of the earlier effective registration statement for the same offering
    is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .</FONT></P>
  <hr align="center" width="200" size="1" noshade>
  <P align="center"><font size="2" face="Times New Roman, Times, serif"><B>CALCULATION
    OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933</B></font></P>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD rowspan="4"><font size="1" face="Times New Roman, Times, serif"><B>Title
      of Securities</B></font></TD>
    <TD rowspan="3"><font size="1" face="Times New Roman, Times, serif"><B>Amount</B></font></TD>
    <TD rowspan="5"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font> <font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font> <font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Proposed</B></font></TD>
    <TD rowspan="5"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font> <font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font> <font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Proposed</B></font></TD>
    <TD rowspan="5"><font size="1" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD rowspan="3"><font size="1" face="Times New Roman, Times, serif"><B>Amount
      of</B></font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Maximum</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Maximum</B></font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Offering</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Aggregate</B></font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"><B>Being</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Price Per</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Offering</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Registration</B></font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Being Registered</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"><B>Registered(1)</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Unit(2)</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Price(2)</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Fee(3)</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="center" width="150" size="1" noshade></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Common Stock
      (&#36;.001 par value per share)</FONT></TD>
    <TD width="15%" align=center><font size=2 face="Times New Roman, Times, serif">13,203,582 shares</font></TD>
    <TD width="2%" align=left>&nbsp; </TD>
    <TD width="12%" align=center><font size=2 face="Times New Roman, Times, serif">&#36;51.02</font>
    </TD>
    <TD width="2%" align=left>&nbsp; </TD>
    <TD width="12%" align=center><font size=2 face="Times New Roman, Times, serif">&#36;673,646,753.64</font>
    </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="12%" align=center> <FONT size=2 face="Times New Roman, Times, serif">&#36;72,080.20</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD colspan="2"><hr align="left" width="100" size="1" noshade></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><FONT size=1 face="Times New Roman, Times, serif">(1)</FONT></TD>
    <TD><FONT size=1 face="Times New Roman, Times, serif">This amount includes shares to be issued pursuant to oversubscription, as described herein.</FONT></TD>
  </TR>
  <TR align="left" valign="top">
    <TD width="3%"><FONT size=1 face="Times New Roman, Times, serif">(2)</FONT></TD>
    <TD><FONT size=1 face="Times New Roman, Times, serif">Estimated solely for
      the purpose of calculating the registration fee based on the average of the high and low sale prices
        reported on the New York Stock Exchange on March 31, 2006.</FONT></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><FONT size=1 face="Times New Roman, Times, serif">(3)</FONT></TD>
    <TD><FONT size=1 face="Times New Roman, Times, serif">The registration fee
         for the securities offered hereby has been calculated under Rule 457(c) of the Securities Act.</FONT></TD>
  </TR>
</TABLE>
<div style="text-indent:3%">
  <P> <font size="2" face="Times New Roman, Times, serif"><B> THE REGISTRANT HEREBY
    AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY
    TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT
    WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER
    BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT, OR
    UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATES AS THE
    SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
    MAY DETERMINE.</B></font></P>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td height="1" valign="top" bgcolor="#000000"></td>
  </tr>
  <tr>
    <td height="2" valign="top" bgcolor="#FFFFFF"></td>
  </tr>
  <tr>
    <td height="4" valign="bottom" bgcolor="#000000"></td>
  </tr>
</table>
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p??"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>The
  India Fund, Inc. </B></font></P>
<P align="center"><FONT size=2 face="Times New Roman, Times, serif">Cross-Reference
  Sheet <br>
  Parts A and B of Prospectus* </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD colspan=3 align=left><font size="1" face="Times New Roman, Times, serif">
      <B>Items in Parts A and B of Form N-2</B></font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=38% align=left><font size="1" face="Times New Roman, Times, serif">
      <B>Location in Prospectus</B></font></TD>
  </TR>
  <TR valign="top">
    <TD colspan="3" align=left><hr align="left" width="200" size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr align="left" width="150" size="1" noshade></TD>
  </TR>
  <TR valign="top">
    <TD width=10% align=left> <FONT size=2 face="Times New Roman, Times, serif">Item
      1.</FONT></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=48% align=left> <FONT size=2 face="Times New Roman, Times, serif">Outside
      Front Cover</FONT></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Cover of
      Prospectus</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 2.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Cover Pages;
      Other Offering Information</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Cover of
      Prospectus</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 3.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Fee Table
      and Synopsis</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Summary
      of Expenses</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 4.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Financial
      Highlights</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Financial
      Highlights</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 5.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Plan of
      Distribution</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Not Applicable</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 6.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Selling
      Shareholders</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Not Applicable</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 7.</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Use of Proceeds</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">The Offer;
      Use of Proceeds; Investment </FONT> <FONT size=2 face="Times New Roman, Times, serif">Objective
      and Policies; Additional Investment </FONT> <FONT size=2 face="Times New Roman, Times, serif">Activities</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 8.</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">General
      Description of the Registrant</FONT> </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Cover of
      Prospectus; The Fund; Investment </FONT> <FONT size=2 face="Times New Roman, Times, serif">Objective
      and Policies; Additional Investment </FONT> <FONT size=2 face="Times New Roman, Times, serif">Activities;
      Semi-Annual Repurchases of </FONT> <FONT size=2 face="Times New Roman, Times, serif">Securities;
      Investment Restrictions; Risk </FONT> <FONT size=2 face="Times New Roman, Times, serif">Factors;
      Description of Capital Stock; Net </FONT> <FONT size=2 face="Times New Roman, Times, serif">Asset
      Value; Financial Statements</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 9.</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Management</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Management
      of the Fund; Investment </FONT> <FONT size=2 face="Times New Roman, Times, serif">Management
      and Other Services; Description </FONT> <FONT size=2 face="Times New Roman, Times, serif">of
      Capital Stock; Enforceability of Civil </FONT> <FONT size=2 face="Times New Roman, Times, serif">Liabilities;
      Custodians, Transfer Agent, </FONT> <FONT size=2 face="Times New Roman, Times, serif">Dividend
      Paying Agent and Registrar</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 10.</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Capital
      Stock, Long-Term Debt, and Other </FONT> <FONT size=2 face="Times New Roman, Times, serif">Securities</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Dividends
      and Distributions; Dividend </FONT> <FONT size=2 face="Times New Roman, Times, serif">Reinvestment
      and Cash Purchase Plan; </FONT> <FONT size=2 face="Times New Roman, Times, serif">Taxation;
      Description of Capital Stock; Risk </FONT> <FONT size=2 face="Times New Roman, Times, serif">Factors</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 11.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Defaults
      and Arrears on Senior Securities</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Not Applicable</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 12.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Legal Proceedings</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Not Applicable</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 13.</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Table of
      Contents of the Statement of</FONT> <FONT size=2 face="Times New Roman, Times, serif">Additional
      Information</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Table of
      Contents of the Statement of </FONT> <FONT size=2 face="Times New Roman, Times, serif">Additional
      Information</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 14.</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Cover Page</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Cover Page
      of the Statement of Additional </FONT> <FONT size=2 face="Times New Roman, Times, serif">Information</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 15.</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Table of
      Contents</FONT> </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Table of
      Contents of the Statement of </FONT> <FONT size=2 face="Times New Roman, Times, serif">Additional
      Information</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 16.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">General
      Information and History</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Not Applicable</FONT></TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=1 face="Times New Roman, Times, serif">&nbsp;</FONT></P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p??"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD colspan=3 align=left><font size="1" face="Times New Roman, Times, serif">
      <B>Items in Parts A and B of Form N-2</B></font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> <B>Location
      in Prospectus</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="3" align=left><hr align="left" width="200" size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr align="left" width="150" size="1" noshade></TD>
  </TR>
  <TR valign="top">
    <TD width=10% align=left> <FONT size=2 face="Times New Roman, Times, serif">Item
      17.</FONT> </TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=48% align=left> <FONT size=2 face="Times New Roman, Times, serif">Investment
      Objective and Policies</FONT> </TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Investment
      Objective and Policies; Additional </FONT> <FONT size=2 face="Times New Roman, Times, serif">Investment
      Activities; Investment Restrictions; </FONT> <FONT size=2 face="Times New Roman, Times, serif">Portfolio
      Transactions</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 18.</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Management</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Management
      of the Fund; Investment </FONT> <FONT size=2 face="Times New Roman, Times, serif">Management
      and Other Services; Custodians, </FONT> <FONT size=2 face="Times New Roman, Times, serif">Transfer
      Agent, Dividend Paying Agent and </FONT> <FONT size=2 face="Times New Roman, Times, serif">Registrar;
      Statement of Additional Information</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 19.</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Control
      Persons and Principal Holders of</FONT> <FONT size=2 face="Times New Roman, Times, serif">Securities</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Control
      Persons and Principal Holders of </FONT> <FONT size=2 face="Times New Roman, Times, serif">Securities;
      Management of the Fund</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 20.</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Investment
      Advisory and Other Services</FONT> </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Investment
      Management and Other Services; </FONT> <FONT size=2 face="Times New Roman, Times, serif">Custodians,
      Transfer Agent, Dividend Paying </FONT> <FONT size=2 face="Times New Roman, Times, serif">Agent
      and Registrar; Experts</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 21.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Portfolio
         Managers</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Portfolio
      Manager</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 22.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Brokerage
      Allocation and Other Practices</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Portfolio
      Transactions</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 23.</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Tax Status</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Dividends
      and Distributions; Dividend </FONT> <FONT size=2 face="Times New Roman, Times, serif">Reinvestment
      and Cash Purchase Plan; </FONT> <FONT size=2 face="Times New Roman, Times, serif">Taxation</FONT></TD>
  </TR>
  <TR valign="top">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Item 24.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Financial
      Statements</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Financial
      Statements</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD colspan="2"><hr align="left" width="100" size="1" noshade></TD>
  </TR>
  <TR align="left" valign="top">
    <TD width="3%"> <FONT size=1 face="Times New Roman, Times, serif">*</FONT></TD>
    <TD> <FONT size=1 face="Times New Roman, Times, serif">All information required
      to be set forth in &#147;Part B: Statement of Additional Information&#148;
      has been included in &#147;Part A: The Prospectus,&#148; except for the
      Fund&#146;s proxy voting policies and procedures, which are required to
      be disclosed pursuant to Item 18 of Form N-2 and which are included in the
      Statement of Additional Information. All items required to be included in
      &#147;Part C: Other Information&#148; are set forth in Part C.</FONT></TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
</TABLE>
<P align="center"><FONT size=1 face="Times New Roman, Times, serif">&nbsp;</FONT></P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p??"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<div style="text-indent:0%">
  <P><font color="#FF0000" size="2" face="Times New Roman, Times, serif"><b>The information in
    this prospectus is not complete and may be changed. These securities may not
    be sold until the registration statement filed with the Securities and Exchange
    Commission is effective. This prospectus is not an offer to sell these securities
    and is not soliciting an offer to buy these securities in any jurisdiction
    where the offer or sale is not permitted. </b></font></P>
</div>
<p align="center"><B><FONT size=2>SUBJECT TO COMPLETION, DATED APRIL 7, 2006 </FONT></B></p>
<p><B><FONT size=2>PROSPECTUS </FONT></B></p>
</font>
<P align="center"> <font face="Times New Roman, Times, serif"><B><FONT size=4>THE
  INDIA FUND, INC. <br>
  </FONT><FONT size=2>[_] Shares of Common Stock<br>
  Issuable Upon Exercise of Non-Transferable <br>
  Rights to Subscribe for Shares of Common Stock </FONT></B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The India Fund, Inc. (the
    &#147;Fund&#148;) is offering to its common stockholders of record as of [record
    date], 2006 non-transferable rights. These rights will allow you to subscribe
    for one share of common stock for each [_] rights held. You will receive one
    right for each whole share of common stock that you hold of record as of [record
    date], 2006. You need [_] rights to purchase one share at the subscription
    price. The Fund will not issue fractional shares upon the exercise of less
    than [_] rights. The rights will not be listed for trading on the New York
    Stock Exchange (the &#147;NYSE&#148;) or any other exchange. The subscription
    price will be [ ]% of the average of the last reported sales price per share
    of the Fund&#146;s common stock on the NYSE on the date on which the offer
    expires and the four preceding trading days (the &#147;Average Market Price&#148;),
    but in any case not less than [_]% of the net asset value per share of the
    Fund&#146;s common stock at the close of trading on the NYSE on the date on
    which the offer expires. If the Average Market Price is less than [_]% of
    the net asset value per share of the Fund&#146;s common stock at the close
    of trading on the NYSE on the date on which the offer expires, the offer will
    not be consummated. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">THE OFFER WILL EXPIRE
      AT 5:00 P.M., EASTERN DAYLIGHT TIME, ON [expiration date], 2006, UNLESS
      EXTENDED
    TO NOT LATER THAN [extended expiration date], 2006 OR TERMINATED EARLY AS
      DESCRIBED HEREIN. The Fund announced the offer after the close of business
      on the NYSE on April 7, 2006. The last reported sale price of
      a  share of the Fund&#146;s common stock on the NYSE on March 31,
       2006 and [recent date], 2006 was &#36;50.50 and &#36;[ ], respectively.
       The  net asset value per share at the close of business on March 31,
    2006 and [recent date], 2006 was &#36;41.83 and &#36;[ ], respectively. Because
     the expiration date and the date upon which the price of the rights will
    be
    determined will be the same date, stockholders who exercise their rights
    will  not know the purchase price of the shares when they make their investment

    decision. Once you subscribe for shares and the Fund receives payment or
    a  guarantee of payment, you will not be able to change your decision. If
    the
    market price of the Fund&#146;s common stock is below the subscription price,
     it may not be in your interest to participate in this offering. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund is a closed-end
    investment company whose shares of common stock are listed and traded on the
    NYSE under the symbol &#147;IFN&#148; and whose primary investment goal is
    long-term capital appreciation by investing primarily in Indian equity securities.
    Under normal market conditions, at least 80% of the Fund&#146;s total assets
    are invested in the equity securities of Indian companies. The Fund operates
    under an interval fund structure pursuant to which it conducts semi-annual
    repurchase offers for between 5% and 25% of the Fund&#146;s outstanding common
    stock. See &#147;Semi-Annual Repurchases of Securities&#148; and &#147;Risk
    Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The Fund&#146;s
    &#147;interval fund&#148; structure involves certain risks and special considerations
    not typically associated with other closed-end funds&#148; in this prospectus.
    </FONT></p>
</div>
<div style="text-indent:3%">
  <p><font size="2" face="Times New Roman, Times, serif"><B>Investment in the
         Fund involves certain special considerations and risks arising in part
        from
    the Fund&#146;s investment in securities of Indian companies, which are not
     associated with investments in securities of U.S. companies or certain other

    non-U.S. issuers. These risks relate to, among other things, political, social
     and economic conditions in India, and are described in greater detail elsewhere

    in this prospectus. The Fund may also invest in debt obligations that may
     be rated below investment grade or in comparable debt obligations. Debt
    obligations
    of below investment grade quality are regarded as having predominately speculative
     characteristics with respect to capacity to pay interest and repay principal

    and are commonly referred to as &#147;junk bonds.&#148; There are special
     risks and considerations associated with investing in such high yield/high

    risk debt obligations. You could lose some or all of your investment and
    you  should carefully consider the &#147;risk factors&#148; beginning on
    page 36 of this prospectus before participating in this offer. </B></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">This prospectus contains
       important information you should know before investing. Please read it
      before
    you invest and keep it for future reference. A Statement of Additional Information
       dated [date of prospectus], 2006 containing additional information about
      the
    Fund has been filed with the Securities and Exchange Commission and legally
       forms a part of this prospectus. The table of contents of the Statement
      of
    Additional Information appears on page 80 of this prospectus. You may obtain
       a copy of the Statement of Additional Information free of charge by contacting

    Blackstone Asia Advisors L.L.C., the Funds&#146; investment manager, 345
    Park  Avenue, New York, New York 10154, by calling 1-866-800-8933 toll free
    or on
    the Internet at www.blackstone.com. In addition, the Fund&#146;s Annual Report,
     containing the fund&#146;s financial statements for the fiscal year ended
      December 31, 2005, as filed on Form N-CSR, is available free of charge
     by
    contacting Blackstone Asia Advisors L.L.C. as indicated above. The Fund&#146;s
     Statement of Additional Information and Annual Report and other information

    about the Fund, including material incorporated by reference into this prospectus,
     are also available free of charge on the SEC&#146;s website at www.sec.gov.
    </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Stockholders who do not
    fully exercise their rights will own a smaller proportional interest in the
    Fund. In addition, because the subscription price could be less than the net
    asset value per share, the offer may result in an immediate dilution of the
    net asset value per share for all stockholders. See &#147;Risk Factors&#148; on page 36 of this prospectus. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">This prospectus sets forth
    concisely the information about the Fund that a prospective investor ought
    to know before investing. Investors are advised to read this prospectus and
    to retain it for future reference. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">FOR INFORMATION REGARDING
       THE OFFER, CONTACT GEORGESON SHAREHOLDER COMMUNICATIONS INC., THE INFORMATION

    AGENT, AT (866) 297-1264. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><font size="2" face="Times New Roman, Times, serif"><B>NEITHER THE SECURITIES
    AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
    DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL
    OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. </B></font></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD rowspan="2" align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center valign="bottom"> <font size="1" face="Times New Roman, Times, serif"><B>Estimated
      Price to </B></font></TD>
    <TD rowspan="2" align=center valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD rowspan="2" align=center valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center valign="bottom"> <font size="1" face="Times New Roman, Times, serif"><B>Estimated
      Proceeds to the</B>&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=center valign="bottom"> <font size="1" face="Times New Roman, Times, serif"><B>Public
      (1)</B> </font></TD>
    <TD align=center valign="bottom"> <font size="1" face="Times New Roman, Times, serif"><B>Estimated
      Sales Load (2)</B>&nbsp; </font></TD>
    <TD align=center valign="bottom"> <font size="1" face="Times New Roman, Times, serif"><B>Fund
      (2)</B>&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right><hr align="left" size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center><hr align="left" size="1" noshade></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><hr align="left" size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Per Share</FONT></TD>
    <TD width=20% align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;[&nbsp;&nbsp;]</FONT>
    </TD>
    <TD width="2%" align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=20% align=center> <FONT size=2 face="Times New Roman, Times, serif">None</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=20% align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;[&nbsp;&nbsp;]</FONT>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Total (3)</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;[&nbsp;&nbsp;]</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">None</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;[&nbsp;&nbsp;]</FONT>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD width="3%"> <FONT size=1 face="Times New Roman, Times, serif">(1)</FONT></TD>
    <TD> <FONT size=1 face="Times New Roman, Times, serif">The estimated subscription
      price to the public is based upon [ ]% of [ ] on [ ], 2006</FONT> </TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=2><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD> <FONT size=1 face="Times New Roman, Times, serif">(2)</FONT></TD>
    <TD> <FONT size=1 face="Times New Roman, Times, serif">After deduction of
      expenses payable by the Fund, estimated at &#36;[ ].</FONT> </TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=2><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD> <FONT size=1 face="Times New Roman, Times, serif">(3)</FONT></TD>
    <TD> <FONT size=1 face="Times New Roman, Times, serif">Assumes all rights
      are exercised at the estimated subscription price. If the Fund increases
      the number of shares subject to subscription by 25%, the Estimated Price
      to the Public, Estimated Sales Load and Estimated Proceeds to the Fund will
      be &#36;[ ], &#36;[ ] and &#36;[ ], respectively. See &#147;The Offer&#151;Over-Subscription
      Privilege.&#148;</FONT></TD>
  </TR>
</TABLE>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may increase the
    number of shares of common stock subject to subscription by up to 25%, or
    up to an additional [ ] shares, for an aggregate total of [ ] shares. The
    shares will be ready for delivery on or about [payment date], 2006. </FONT></p>
</div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> The date
  of this prospectus is [&nbsp;&nbsp;&nbsp;&nbsp; ]. </font></P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="#contents"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>TABLE
  OF CONTENTS</B></font></P>
<div style="float: left; width: 48%">
  <TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
    <TR valign="bottom">
      <TD align=left>&nbsp; </TD>
      <TD align=center valign="bottom"> <font face="Times New Roman, Times, serif"><B><FONT size=1>Page</FONT></B><font size="1">&nbsp;
        </font></font> </TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right><hr size="1" noshade></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p1">
        <FONT size=2>Prospectus Summary</FONT></a></font></TD>
      <TD width=12% align=right><font face="Times New Roman, Times, serif"><a href="#p1">
        <FONT size=2>1</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p12">
        <FONT size=2>Summary of Expenses</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p12">
        <FONT size=2>12</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p14">
        <FONT size=2>Financial Highlights</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p14">
        <FONT size=2>14</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p17">
        <FONT size=2>The Fund</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p17">
        <FONT size=2>17</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p17a">
        <FONT size=2>Investment in India</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p17a">
        <FONT size=2>17</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p19">
        <FONT size=2>The Offer</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p19">
        <FONT size=2>19</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p27">
        <FONT size=2>Use of Proceeds</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p27">
        <FONT size=2>27</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p27a">
        <FONT size=2>Investment Objective and Policies</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p27a">
        <FONT size=2>27</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p30">
        <FONT size=2>Additional Investment Activities</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p30">
        <FONT size=2>30</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p34">
        <FONT size=2>Investment Restrictions</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p34">
        <FONT size=2>34</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p36">
        <FONT size=2>Risk Factors</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p36">
        <FONT size=2>36</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p47">
        <FONT size=2>Management of the Fund </FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p47">
        <FONT size=2>47</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=left>&nbsp; </TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><div style="margin-left:3%; text-indent:-3%"><font size="2" face="Times New Roman, Times, serif"><a href="#p54">Control
          Persons and Principal Holders of Securities</a></font></div></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p54">
        <FONT size=2>54</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p54a">
        <FONT size=2>Portfolio Transactions</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p54a">
        <FONT size=2>54</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=right>&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><font face="Times New Roman, Times, serif"><a href="#p55">
        <FONT size=2>Semi-Annual Repurchases of Securities</FONT></a></font></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p55">
        <FONT size=2>55</FONT></a></font></TD>
    </TR>
    <TR valign="bottom">
      <TD align=left>&nbsp;</TD>
      <TD align=left>&nbsp; </TD>
    </TR>
    <TR valign="bottom">
      <TD align=left><div style="margin-left:3%; text-indent:-3%"><font face="Times New Roman, Times, serif"><a href="#p56">
          <font size=2>Dividends and Distributions; Dividend Reinvestment and
          Cash Purchase Plan</font></a></font></div></TD>
      <TD align=right><font face="Times New Roman, Times, serif"><a href="#p56">
        <FONT size=2>56</FONT></a></font></TD>
    </TR>
  </TABLE>
</div>
<div style="float: left; width: 4%"> </div>
<div style="float: right; width: 48%">
  <table width="100%" border=0 cellpadding=0 cellspacing=0>
    <tr valign="bottom">
      <td align=left>&nbsp; </td>
      <td align=right> <font face="Times New Roman, Times, serif"><b><font size=1>Page</font></b>&nbsp;
        </font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right><hr size="1" noshade> </td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#p58">
        <font size=2>Taxation</font></a></font></td>
      <td width=12% align=right><font face="Times New Roman, Times, serif"><a href="#p58">
        <font size=2>58</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#p67">
        <font size=2>Net Asset Value</font></a></font></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#p67">
        <font size=2>67</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#p67a">
        <font size=2>Description of Capital Stock</font></a></font></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#p67a">
        <font size=2>67</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#p73">
        <font size=2>Investment Management and Other Services</font></a></font></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#p73">
        <font size=2>73</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#p77">
        <font size=2>Portfolio Manager</font></a></font></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#p77">
        <font size=2>77</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=center>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><div style="margin-left:3%; text-indent:-3%"><font size="2" face="Times New Roman, Times, serif"><a href="#p78">Custodians,
          Transfer Agent, Dividend Paying Agent and Registrar</a></font></div></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#p78">
        <font size=2>78</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#p78a">
        <font size=2>Experts</font></a></font></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#p78a">
        <font size=2>78</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#p78b">
        <font size=2>Legal Matters</font></a></font></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#p78b">
        <font size=2>78</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#p78c">
        <font size=2>Enforceability of Civil Liabilities</font></a></font></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#p78c">
        <font size=2>78</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#p79">
        <font size=2>Official Documents</font></a></font></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#p79">
        <font size=2>79</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#p79a">
        <font size=2>Additional Information</font></a></font></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#p79a">
        <font size=2>79</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><div style="margin-left:3%; text-indent:-3%"><font face="Times New Roman, Times, serif"><a href="#p80">
          <font size=2>Table of Contents of the Statement of Additional Information</font></a></font></div></td>
      <td align=right><font size="2" face="Times New Roman, Times, serif"><a href="#p80">80</a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#pf1">
        <font size=2>Financial Statements </font></a></font></td>
      <td align=right><font size="2" face="Times New Roman, Times, serif"><a href="#pf1">F-1</a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><div style="margin-left:3%; text-indent:-3%"><font face="Times New Roman, Times, serif"><a href="#pa1">
          <font size=2>Appendix A: General Characteristics and Risks of Hedging</font></a></font></div></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#pa1">
        <font size=2>A-1</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#pb1">
        <font size=2>Appendix B: Republic of India</font></a></font></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#pb1">
        <font size=2>B-1</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align=left><font face="Times New Roman, Times, serif"><a href="#pc1">
        <font size=2>Appendix C: The Indian Securities Market</font></a></font></td>
      <td align=right><font face="Times New Roman, Times, serif"><a href="#pc1">
        <font size=2>C-1</font></a></font></td>
    </tr>
    <tr valign="bottom">
      <td align=left>&nbsp;</td>
      <td align=right>&nbsp;</td>
    </tr>
  </table>
</div>
<font face="Times New Roman, Times, serif"><br clear="all">
</font>
<hr align="center" width="200" size="1" noshade>
<div style="text-indent:3%">
  <p><font size="2" face="Times New Roman, Times, serif"><B>The information contained
    in this prospectus speaks only as of the date of this prospectus unless the
    information specifically indicates that another date applies. No dealer, salesperson
    or other person has been authorized to give any information or to make any
    representations other than those contained in this prospectus in connection
    with the offer contained herein and, if given or made, such information or
    representations must not be relied upon as having been authorized by the Fund.
    </B></font></p>
</div>
<hr align="center" width="200" size="1" noshade>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">In this prospectus and
    except as the context otherwise requires or indicates:</FONT></P>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr align="left" valign="top">
    <td width="3%"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td width="3%"><font size="2" face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">The &#147;Fund&#148;
      means The India Fund, Inc., a Maryland corporation.</FONT></td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> &#147;Blackstone
      Advisors&#148; or &#147;Investment Manager&#148; means Blackstone Asia Advisors
      L.L.C., a Delaware limited liability company.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> &#147;Blackstone
      India&#148; or &#147;Country Adviser&#148; means Blackstone Fund Services
      India Private Limited, a company organized under the laws of India.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In this prospectus, unless
    otherwise indicated, all references to &#147;U.S. dollars,&#148; &#147;US&#36;,&#148;
    &#147;dollars&#148; and &#147;&#36;&#148; are to United States dollars, the
    lawful currency of the United States of America, and all reference to &#147;rupees&#148;
    and &#147;Rs.&#148; are to Indian rupees. On [recent date], 2006, the U.S.
    dollar value of the Indian rupee was Rs. [_]</FONT><font face="Times New Roman, Times, serif"><I><FONT size=1>
    </FONT></I><FONT size=2>= US&#36;1.00, as reported in <I>The Wall Street Journal</I>
    on [recent date], 2006.</FONT></font></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">i</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pii"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>FORWARD-LOOKING
  STATEMENTS</B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may not claim
    the safe harbor for forward-looking statements contained in the federal securities
    laws of the United States because that safe harbor does not apply to investment
    companies. Nevertheless, you should note that certain statements in this prospectus
    are forward-looking statements, which involve known and unknown risks, uncertainties
    and other factors that may cause the Fund&#146;s actual results or level of
    performance to be materially different from any future results or level of
    performance expressed or implied by such forward-looking statements. Such
    factors include, among others, those listed under &#147;Risk Factors,&#148;
    &#147;Appendix B: Republic of India,&#148; &#147;Appendix C: The Indian Securities
    Market&#148; and elsewhere in this prospectus. As a result of these and other
    factors, the Fund cannot give you any assurances as to its future results
    or level of performance. To the extent required by law, the Fund undertakes
    to amend or reflect any material changes to it after the date of this prospectus.</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">ii</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p1"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>PROSPECTUS
  SUMMARY</B></font></P>
<div style="text-indent:3%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>You should read the
    entire prospectus, including the Statement of Additional Information that
    legally forms part of this prospectus, before you decide whether to exercise
    your rights. In particular, you should carefully read the risks of investing
    in the shares, as discussed under &#147;Risk Factors.&#148; </I></font></p>
</div>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>THE
  OFFER AT A GLANCE</B></font></P>
<p><font size="2" face="Times New Roman, Times, serif"><B>The Offer</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The India Fund, Inc., or
    the Fund, is offering to its common stockholders of record as of [record date],
    2006 non-transferable rights. These rights will allow you to subscribe for
    one share of common stock, par value &#36;.001 per share, for each [_] rights
    held. You will receive one right for each whole share of common stock that
    you hold of record as of [record date], 2006. You need [_] rights to purchase
    one share at the subscription price. The Fund will not issue fractional shares
    upon the exercise of less than [_] rights. The rights will not be listed for
    trading on the NYSE or any other exchange. Rights may be exercised at any
    time from [beginning date], 2006 through 5:00 p.m., Eastern daylight time,
    on [expiration date], 2006, unless extended to not later than [extended expiration
    date], 2006 or terminated early as described herein. See &#147;The Offer&#151;Expiration,
    Extension and Early Termination of the Offer.&#148; Since the expiration date
    is prior to the pricing date, stockholders who exercise their rights will
    not know the subscription price at the time they exercise their rights. If
    the market price of the Fund&#146;s common stock is below the subscription
    price, it may not be in your interest to participate in this offering. Once
    you subscribe for shares and the Fund receives payment or a guarantee of payment,
    you will not be able to change your decision. In certain instances described
    below under &#147;&#151;Over-Subscription Privilege,&#148; the Fund may increase
    the number of shares of common stock subject to subscription by up to 25%
    of the shares. We refer to any such additional shares as &#147;additional
    shares.&#148; See &#147;The Offer.&#148; </FONT></p>
</div>
<div style="text-indent:3%">
  <P> <FONT size=2 face="Times New Roman, Times, serif">The Fund previously conducted
    a rights offering in January 2005.</FONT></P>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Purposes of the Offer</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Board of Directors
    of the Fund has determined that it would be in the best interests of the Fund
    and its stockholders to increase the assets of the Fund through this offer
    because it may provide the following benefits: (i) a greater ability to take
    advantage of investment opportunities without being required to sell current
    portfolio positions that the Investment Manager believes should be retained;
    (ii) additional investment flexibility, including the ability to diversify
    the Fund by investing in a greater number of mid-capitalization companies;
    (iii) additional opportunity to capitalize on attractive investment opportunities
    in India, including initial public offerings, privatizations and preferential
    allotments; (iv) improved market visibility for the Fund; (v) improved liquidity
    of the trading market for shares on the NYSE; and (vi) an opportunity for
    existing stockholders by providing them with an opportunity to purchase additional
    shares potentially at a price below the current market price without incurring
    significant transaction costs. See &#147;The Offer&#151;Purposes of the Offer.&#148;
    </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Subscription Price</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The subscription price
    will be [ ]% of the Average Market Price, but in any case not less than [
    ]% of the net asset value per share of the Fund&#146;s common stock at the
    close of trading on the NYSE on the date on which the offer expires. See &#147;The
    Offer&#151;Subscription Price.&#148; </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Over-Subscription Privilege</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Each stockholder as of
    the record date who fully exercises all rights issued to him or her will be
    entitled to subscribe for additional shares that were not subscribed for by
    other stockholders. This is known as the &#147;over-subscription privilege.&#148;
    If sufficient shares are available, all record stockholders&#146; over-subscription
    requests will be honored in full. If sufficient shares are not available to
    honor all requests for over-subscription, the Fund may increase the number
    of shares available by up to 25%, or [ ] shares, in order to satisfy over-subscription
    requests. If the requests for additional shares exceed the shares available,
    the available shares, including any additional shares, will be allocated pro
    rata among stockholders who over-subscribe based on the number of rights originally
    issued to them by the Fund. See &#147;The Offer&#151;Over-Subscription Privilege.&#148;
    </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">1</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p2"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p><B><FONT size=2>How to Exercise Rights</FONT></B> </font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Rights may be exercised
    by stockholders who fill in and sign the accompanying subscription certificate
    and mail it in the envelope provided or deliver the completed and signed subscription
    certificate to the subscription agent, together with any required payment
    for the shares as described below under &#147;The Offer&#151;Payment for Shares.&#148;
    Rights may also be exercised by a stockholder contacting his or her broker,
    bank or trust company, which can arrange, on the stockholder&#146;s behalf,
    to guarantee delivery, by using a notice of guaranteed delivery, of a properly
    completed and executed subscription certificate and payment for the shares.
    The broker, bank or trust company may charge a fee for this service. Stockholders
    who choose to exercise their rights will not know at the time of exercise
    the subscription price for shares being acquired and will be required initially
    to pay for such shares at the estimated subscription price of &#36;[ ] per
    share. Fractional shares will not be issued. Completed subscription certificates
    must be received by the subscription agent prior to 5:00 p.m., Eastern daylight
    time, on the expiration date, which is [expiration date], 2006 (unless payment
    is to be effected by means of a notice of guaranteed delivery). See &#147;The
    Offer&#151;Payment for Shares.&#148; </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Rights May Not Be Purchased
  or Sold</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">You may not purchase or
    sell the rights, and they will not trade on any exchange. If you do not exercise
    your rights before the conclusion of this offer, your rights will expire without
    value. However, the shares to be issues pursuant to the offer will be listed
    on the NYSE, subject to the NYSE being officially notified of the issuance
    of those shares. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Restrictions on Foreign
  Stockholders</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund will not mail
    subscription certificates to stockholders whose record addresses are outside
    the United States. PFPC Inc. will hold the rights to which subscription certificates
    relate for foreign stockholders accounts until instructions are received to
    exercise the rights. If no instructions are received prior to the expiration
    date, which is [expiration date], 2006, the rights will expire. Foreign stockholders
    holding shares through a U.S. broker-dealer should contact the broker-dealer
    regarding this offer. See &#147;The Offer&#151;Restrictions on Foreign Stockholders.&#148;
    </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Obtaining Subscription
  Information</B></font></p>
<div style="text-indent:3%">
  <P> <FONT size=2 face="Times New Roman, Times, serif">If you have any questions
    or requests for assistance, please contact Georgeson Shareholder Communications
    Inc., the information agent, toll-free at (866) 297-1264. You may also call
    your broker or nominee for information with respect to this offer. See &#147;The
    Offer&#151;Information Agent&#148; and &#147;&#151;Subscription Agent.&#148;
    Please note that the dates in the table may change if the offer is extended.
    </FONT></P>
</div>
<P> <font size="2" face="Times New Roman, Times, serif"><B>Important Dates to
  Remember </B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left><div align="center"><font size="1" face="Times New Roman, Times, serif"><B>Event</B>&nbsp;
        </font></div></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"><b>Date</b>&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr width="400" size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Record Date</FONT></TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=40% align=left> <FONT size=2 face="Times New Roman, Times, serif">[
      ]</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Subscription
      Period*</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">[ ] to [
      ]</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Expiration
      Date*</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">[ ]</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Pricing
      Date*</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">[ ]</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Subscription
      Certificate and Payment for Shares or Notice of</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <font face="Times New Roman, Times, serif">&nbsp; &nbsp; &nbsp;<FONT size=2>Guaranteed
      Delivery Due*</FONT></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">[ ]</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Subscription
      Certificate and Payment for Shares Due for</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <font face="Times New Roman, Times, serif">&nbsp; &nbsp; &nbsp;<FONT size=2>Those
      Using Notice of Guaranteed Delivery*</FONT></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">[ ]</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Confirmation
      to Participants*</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">[ ]</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Final Payment
      for Shares*</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">[ ]</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr align="left" valign="top">
    <td colspan="2"> <hr align="left" width="100" size="1" noshade>
      <font face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr align="left" valign="top">
    <td width="3%"><font size=1 face="Times New Roman, Times, serif">*</font></td>
    <td><font size=1 face="Times New Roman, Times, serif">Unless extended or terminated
      early as described herein.</font></td>
  </tr>
</table>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">2</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p3"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<p> <font size="2" face="Times New Roman, Times, serif"><B>Tax Consequences</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">For federal income tax
    purposes, neither the receipt nor the exercise of the rights will result in
    taxable income to you. You will not realize a taxable loss if your rights
    expire without being exercised. See &#147;The Offer&#151;United States Federal
    Income Tax Consequences of the Offer.&#148; </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Use of Proceeds</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">We estimate the net proceeds
    of this offer to be approximately &#36;[ ]. If the Fund increases the number
    of shares subject to subscription by 25%, then the total net proceeds of the
    offer will be approximately &#36;[ ]. These figures assume (i) all rights
    are exercised in full, (ii) a subscription price of &#36;[ ] and (iii) payment
    of offering expenses estimated to be approximately &#36;[ ]. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund anticipates that
    investment of the net proceeds of this offer in accordance with the Fund&#146;s
    investment objective and policies may take up to [six] months from their receipt
    by the Fund, depending on market conditions and the availability of appropriate
    securities. The Fund may require up to [six] months due to the Fund&#146;s
    need to invest substantially all of its assets in the securities Indian companies.
    See &#147;Use of Proceeds&#148; and &#147;Risk Factors&#151;Risks Related
    to the Fund&#146;s Operations.&#148; </FONT></p>
</div>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>THE
  FUND AT A GLANCE</B></font></P>
<p><font size="2" face="Times New Roman, Times, serif"><B>The Fund</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund is a Maryland
    corporation organized on December 27, 1993 and is a non-diversified, closed-end
    management investment company. As of March 31, 2006, the net assets of
    the Fund were approximately &#36;[ ] million. Assuming that all rights are
    exercised at the estimated subscription price, including the additional shares
    that may be issued under the over-subscription privilege, the net assets of
    the Fund would be approximately &#36;[ ] million. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Investment in India</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s investment
    objective and policies reflect the Investment Manager&#146;s opinion that
    economic and political developments and changes in the last several years
    have well positioned India to experience a period of significant economic
    growth. The Investment Manager believes that India should continue to grow
    as an economic force and that investment in its securities market offers significant
    potential returns. For a detailed description of India and its securities
    market, see &#147;Appendix B: Republic of India&#148; and &#147;Appendix C:
    The Indian Securities Market.&#148; </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund invests in India
    pursuant to the Securities and Exchange Board of India (Foreign Institutional
    Investors) Regulations, 1995, which we refer to as the &#147;FII Regulations&#148;
    and which were established by the Securities and Exchange Board of India (&#147;SEBI&#148;)
    to regulate investment by foreign institutional investors in Indian securities.
    The FII Regulations allow direct investment in Indian securities by registered
    foreign institutional investors or their clients, also known as &#147;sub-accounts.&#148;
    Under the FII regulations, the Fund invests in India as a sub-account of the
    Investment Manager, which is registered with SEBI as a foreign institutional
    investor. The Investment Manager in its capacity as a foreign institutional
    investor acts on behalf of the Fund and other approved clients. The Fund&#146;s
    investments are held in the Fund&#146;s name through the Fund&#146;s custodian,
    Deutsche Bank AG. See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s
    Operations&#148; and &#147;Investment in India.&#148;</FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Investment Objective
  and Policies</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s investment
    objective is long-term capital appreciation by investing primarily in the
    equity securities of Indian companies. Under normal market conditions, at
    least 80% of the Fund&#146;s total assets are invested in equity securities
    of Indian companies. Equity securities include common and preferred stock
    (including convertible preferred stock), American, global or other types of
    depositary receipts, convertible bonds, notes and debentures, equity interests
    in trusts, partnerships, joint ventures or similar enterprises and common
    stock purchase warrants and rights. Most of the equity securities purchased
    by the Fund are traded on an Indian or other foreign stock exchange or over-the-counter
    market. However, the Fund may invest to a limited extent in securities that
    are not publicly traded and in investment funds that invest at least 80% of
    their total assets in the equity securities of Indian companies in which the
    Fund is authorized to invest. The Fund invests in such investment funds when
    the Investment Manager believes that such investments may be more advantageous
    to the Fund than a direct market purchase of such securities. For temporary
    defensive purposes, the Fund may invest without limitation in temporary investments.
    No assurance can be given that the Fund&#146;s investment objective will be
    realized. See &#147;Investment Objective and Policies&#148; and &#147;Risk
    Factors&#151;Risks Related to the Fund&#146;s Operations.&#148;</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">3</FONT></p>
<hr noshade align="center" width="100%" size="2">


<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p4"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Indian companies
  include companies that:</FONT></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="3%" valign="top">&nbsp;</td>
    <td width="3%" align="left" valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="top"><font size="2" face="Times New Roman, Times, serif"> are
      organized under the laws of India;</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="left" valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="top"><font face="Times New Roman, Times, serif"> <FONT size=2>regardless
      of where organized, derive at least 50% of their revenues from goods produced
      or sold,</FONT> <FONT size=2>investments
      made, or services performed, in India, or have at least 50% of their assets
      in India; or</FONT></font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="left" valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="top"><font face="Times New Roman, Times, serif"> <FONT size=2>have
      securities which are traded principally on any Indian stock exchange or
      in the Indian over-</FONT> <FONT size=2>the-counter
      market.</FONT></font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><font size=2 face="Times New Roman, Times, serif">See &#147;Investment
    Objective and Policies&#151;Portfolio Structure&#148; for other eligible
    investments.</font></p></div>
<div style="text-indent:3%"><p><font size=2 face="Times New Roman, Times, serif">Up
      to 20% of the Fund&#146;s total assets may be invested, subject to certain
  restrictions, in: </font></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" align="left" valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="top"><font face="Times New Roman, Times, serif"> <FONT size=2>equity
      securities of companies (other than companies meeting the definition of
      Indian companies),</FONT> <FONT size=2>regardless
      of where organized, which the Investment Manager and the Country Adviser
      believe</FONT> <FONT size=2>derive,
      or will derive, at least 25% of their revenues from business in or with
      India, or have at least</FONT> <FONT size=2>25%
      of their assets in India;</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left" valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="top"><font face="Times New Roman, Times, serif"> <FONT size=2>debt
      securities denominated in Indian rupees or issued or guaranteed by an Indian
      company, the</FONT> <FONT size=2>Government
      of India or an Indian governmental entity; and</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left" valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="top"><font size="2" face="Times New Roman, Times, serif"> short-term
        debt securities of the type described under &#147;Investment Objective
        and Policies&#151;Temporary
      Investments.&#148;</font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Up
      to 20% of the Fund&#146;s total assets may also be utilized to purchase and sell options on securities, financial futures, fixed income indices and other
financial futures contracts, enter into interest rate transactions and to enter into currency transactions, sell securities short and loan portfolio securities. The Fund will only invest in such assets in order to hedge against financial risks. The
Fund will not be obligated, however, to do any hedging and makes no representation as to the availability of these techniques at this time or at any time in the future. See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations,&#148;
&#147;&#151;The Fund&#146;s ability to successfully hedge against financial risks may adversely affect the Fund&#146;s net asset value&#148; and &#147;Additional Investment Activities&#151;Hedging.&#148; </FONT></p></div>
<div style="text-indent:3%"><font size="2" face="Times New Roman, Times, serif"> The
    Fund&#146;s
    assets may be invested in debt securities (other than temporary investments)
    when the Investment
  Manager believes that, based upon factors such as relative interest rate levels
    and foreign exchange rates, such securities offer opportunities for long-term
  capital appreciation. </font></div>
<div style="text-indent:3%"><p><font size=2 face="Times New Roman, Times, serif">See &#147;Risk
    Factors&#151;Risks Related to the Fund&#146;s Operations.&#148;</font></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Listing</B>
</font></p>
<div style="text-indent:3%"><font size="2" face="Times New Roman, Times, serif"> The
    Fund&#146;s
  common stock is listed and traded on the NYSE under the symbol &#147;IFN.&#148;</font></div>
<div align="center">
  <p><FONT size=2 face="Times New Roman, Times, serif">4</FONT></p></div>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p5"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><B>Dividends and Distributions</B> </font></p>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Fund intends to distribute annually to holders of common stock substantially all of its net investment income and distributes any net realized capital
gains at least annually. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Under
      the Fund&#146;s dividend reinvestment and cash purchase plan, all dividends and distributions are automatically reinvested in additional shares of
common stock of the Fund unless a stockholder elects to receive cash. Participants also have the option of making additional cash payments, annually, to be used to acquire additional shares of common stock of the Fund in the open market.
Stockholders whose shares are held in the name of a broker or nominee should contact such broker or nominee to confirm that they are able to participate in the plan. See &#147;Dividends
and Distributions; Dividend Reinvestment and Cash Purchase
Plan.&#148; </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Semi-Annual Share Repurchases</B> </font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund operates as an interval fund structure, pursuant to which the Fund
      conducts semi-annual
      repurchase offers for between 5% and 25% of the Fund&#146;s
outstanding common stock. See &#147;Semi-Annual Repurchases of Securities.&#148; </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Investment Manager and Country Adviser</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Investment Manager is Blackstone Advisors, an affiliate of The Blackstone
      Group (&#147;Blackstone&#148;). For more information on the Investment Manager,
see &#147;Investment Management and Other Services&#151;Investment Manager.&#148; </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Country Adviser is Blackstone India, an affiliate of Blackstone and Blackstone
      Advisors. For more information on the Country Adviser, see &#147;Investment Management and Other Services&#151;Country
Adviser.&#148; </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Under
      the existing management agreement, the Fund pays the Investment Manager
      a monthly
      fee at an annual rate of: (i) 1.10% for the first &#36;500,000,000 of
the Fund&#146;s average weekly net assets; (ii) 0.90% for the next &#36;500,000,000 of the Fund&#146;s average weekly net assets; (iii) 0.85% for the next &#36;500,000,000 of the Fund&#146;s average weekly net assets; and (iv) 0.75% of the
Fund&#146;s average weekly net assets in excess of &#36;1,500,000,000 for its services. Under the existing country advisory agreement, the Investment Manager pays the Country Adviser a monthly fee at an annual rate of 0.10% of the Fund&#146;s
average weekly net assets. </FONT></p></div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Because the
    Investment Manager and the Country Adviser receive fees based on net assets,
      they will benefit from the increase in assets that will result from this
      offer.
    It is not possible to state precisely the amount of additional compensation
      that the Investment Manager and the Country Adviser might receive as a
      result
    of this offer because it is not known how many shares will be subscribed
      for and because the proceeds of this offer will be invested in additional
      portfolio
    securities, which will fluctuate in value. However, assuming that the value
      of the Fund&#146;s assets remained constant prior to the offer at &#36;[ ]
    million (its approximate value as of [recent date], 2006) and after the offer
    at &#36;[ ] million (which assumes that all rights are exercised at the estimated
    subscription price, including the additional shares that may be issued under
    the over-subscription privilege), the annual compensation received by the
    Investment Manager and the Country Adviser would be increased by approximately
    &#36;[ ] million and &#36;[
    ], respectively. The Country Adviser&#146;s fee is paid by the Investment
    Manager and not directly by the Fund. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The advisory
    fees paid by the Fund may be higher than those paid by most other investment
      companies that invest predominantly in the securities of U.S. companies,
      primarily
    due to the additional time and expense required of the Investment Manager
      and the Country Adviser in pursuing the Fund&#146;s objective, which is
      long-term capital appreciation by investing primarily in the equity securities
      of Indian
    companies.</FONT></p></div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">5</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p6"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<P><font size="2" face="Times New Roman, Times, serif"> <B>Fund Administrators</B> </font></P>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Blackstone
    Advisors, the Fund&#146;s Investment Manager, also serves as the Fund&#146;s
    administrator. The Fund pays Blackstone Advisors a monthly fee at an annual
    rate of 0.20% of the Fund&#146;s average monthly net assets for its services.
    Because the Fund administrator receives fees based on net assets, it will
    benefit from the increase in assets that
    will result from this offer. Blackstone Advisors subcontracts certain of
    its services to PFPC Inc. Assuming that the value of the Fund&#146;s assets remained
    constant prior to the offer at &#36;[ ] million (its approximate value as
    of [recent date], 2006) and after the offer at &#36;[ ] million (which assumes
    that all rights are exercised at the estimated subscription price, including
    the additional shares that may be issued under the over-subscription privilege),
    the annual compensation received by the Fund&#146;s administrator would be
    increased by approximately &#36;[ ]. </FONT></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Multiconsult
      Ltd. serves as the Fund&#146;s Mauritius administrator. The Fund pays Multiconsult Ltd. a monthly fee of &#36;1,500 for its services and a
quarterly fee of &#36;1,000 for its calculation of net asset value. The Fund
also reimburses Multiconsult Ltd. for all reasonable out-of-pocket expenses reasonably
incurred by it in the performance of its duties. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">See &#147;Investment Management and Other Services&#151;Administrator&#148; and &#147;Investment Management and Other Services&#151;Mauritian
Administrator.&#148; </FONT></p></div>
<P><font size="2" face="Times New Roman, Times, serif">
<B>Custodian, Transfer Agent, Dividend Paying Agent and Registrar </B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Deutsche Bank AG is custodian of the assets of the Fund. Deutsche Bank (Mauritius) Limited acts as custodian of the cash assets of the Fund. PFPC Inc. acts
as transfer agent, dividend paying agent and registrar for the Fund. </FONT></p></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
<B>RISK FACTORS AND SPECIAL CONSIDERATIONS AT A GLANCE</B></font></P>
<div style="text-indent:3%"><p><font size="2" face="Times New Roman, Times, serif"><I>You should
        carefully consider the following factors, as well as the other information
        in this prospectus, before making an investment in the Fund under this
offer. </I></font></p></div>
<div style="text-indent:0%"><p><font size="2" face="Times New Roman, Times, serif"><b><i>As
          a result of this offer, you could incur dilution of ownership, voting
          rights and your share of any distributions made by the Fund if you
          do not exercise all of your rights, and you could incur immediate economic
          dilution if the subscription price is less than the Fund&#146;s net
          asset value per share.</i></b></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">If you do not exercise all of your rights, you may incur dilution of ownership and voting rights, as well as dilution of your share of any distributions made
by the Fund, as a result of this offer. This dilution may occur because you could own a smaller interest in the Fund after the offer than you owned prior to the offer. If you do not submit a subscription request pursuant to the over-subscription
privilege, you may also experience dilution in your Fund ownership if the Fund offers additional shares for subscription. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      addition to the dilution described above, if the subscription price is
      less than
      the Fund&#146;s net asset value per share, you would experience immediate
dilution of net asset value per share because the number of shares outstanding after the offer will have increased proportionately more than the increase in the size of the Fund&#146;s net assets. This dilution of net asset value would
disproportionately affect stockholders who do not exercise their rights. In addition, whether or not you exercise your rights, you will experience a dilution of net asset value because you could indirectly bear the expenses of this offer, which
include, among other items, SEC registration fees, state &#147;blue sky&#148; qualification fees, printing expenses and the fees assessed by service providers (including the cost of the Fund&#146;s
counsel and accountants). We cannot state precisely the amount of any decrease
because we do not know at this time how many shares will be subscribed for or
what the net asset value per share will be at the pricing date. </FONT></p></div>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">See &#147;The Offer&#151;Dilution&#148; and &#147;Risk
    Factors&#151;Risks Relating to the Offer&#151;As a result of this offer,
    you could incur dilution of  ownership, voting rights and your share of any
    distributions made by the Fund if you do not exercise all of your rights,
    and you could incur immediate economic dilution if the subscription price
    is less than the Fund&#146;s
net asset value per share.&#148; </FONT></p>
</div>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>You
        may lose money by investing in the Fund, including the possibility that
  you may lose all of your investment.</i></b></font></div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">An investment
    in the Fund is not a deposit in a bank and is not insured or guaranteed by
    the U.S. Federal Deposit Insurance Corporation or any other governmental agency.</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">6</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p7"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Among the principal risks of investing in the Fund is market risk, which is the risk that the value of your investment may fluctuate as stock markets
fluctuate. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">As
      an investment company that primarily holds common stocks, the Fund&#146;s
      portfolio is subject to the possibility that common stock prices will decline
      over short
      or even extended periods. The Fund may remain substantially fully invested
      during periods when stock prices generally rise and also during periods
      when they generally decline. Risks are inherent in investments in equities,
      and Fund
stockholders should be able to tolerate significant fluctuations in the value
of their investment in the Fund. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In addition, the Fund may invest up to 20% of its assets in debt securities whose value will tend to decrease as interest rates rise. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund is intended to be a long-term investment vehicle and is not designed
      to provide
      investors with a means of speculating on short-term stock market movements.
      Investors should not consider the Fund a complete investment program. See &#147;Risk Factors&#151;Risks Related to the Offer&#151;You
      may lose money by investing in the Fund, including the possibility that
      you may lose all of your
investment.&#148; </FONT></p></div>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>Investing
        in India involves certain risks and special considerations not typically
  associated with investing in U.S. companies.</i></b></font></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Investing
      in Indian equity securities involves certain risks and special considerations
      not typically associated with investing in the securities of established
      U.S. companies, including: (i) greater political, economic and social uncertainty;
      (ii) significantly greater price volatility, substantially less liquidity
      and much smaller market capitalization of securities markets; (iii) less
      developed corporate disclosure and governance standards; greater difficulty
      in enforcing judgments; (iv) restrictions on foreign investment and repatriation
      of capital; (v) exchange control regulations; (vi) currency devaluations
      and exchange rate
fluctuations, which may increase the costs associated with conversion of investment
      principal and income from one currency to another; (vii) higher rates of
      inflation; and (viii) greater governmental involvement in the economy.
      These risks are
described in more detail under &#147;Risk Factors&#151;Risks Related to the Fund&#146;s
Operations.&#148; </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      addition, future actions of the Indian Government or religious and ethnic
      unrest
      could have a significant impact on the economy, which could adversely affect
      private sector companies in which the Fund invests. In addition, accounting,
      auditing and financial reporting standards in India differ from U.S. standards,
      meaning that disclosure of certain material information may not be made,
      and less
information may be available to the Fund than would be the case if the Fund invested
      primarily in U.S. issuers. There is also generally less governmental regulation
      of the securities industry in India than in the United States, and it may
      be more difficult to obtain a judgment in a court outside the United States.
      The Fund will be subject to withholding taxes, including withholding taxes
      imposed on dividends, interest and realized capital gains by the government
      of India. See &#147;Risk
Factors&#151;Risks Related to the Fund&#146;s Operations&#148; and &#147;Taxation.&#148; </FONT></p></div>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>The
        Fund&#146;s investments in illiquid securities may restrict its ability
        to dispose of its investments in a timely fashion and at a price approximating
  the value at which the Fund carries the securities on its books. </i></b></font></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund may invest up to 20% of its total assets in illiquid securities, for
      which
      there may be no or only a limited trading market and for which a low trading
      volume of a particular security may result in abrupt and erratic price
      movements. The Fund may encounter substantial delays and could incur losses
      in attempting to resell illiquid securities. See &#147;Additional Investment Activities&#148;
and &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The Fund&#146;s
investments in illiquid securities may restrict its ability to dispose of its
investments in a timely fashion and at a price approximating the value at which
the Fund carries the securities on its books.&#148; </FONT></p></div>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>The
        concentration of the Fund&#146;s investments in specific economic sectors
        and related industries may expose it to greater risk of loss with respect
  to its portfolio securities.</i></b></font></div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">From time to
    time, the Fund may invest a greater proportion of its assets in the securities
      of companies that are part of specific sectors and related industries of
      the
    Indian economy. For example, at March 31, 2006, the Fund
    maintained approximately [&nbsp;&nbsp;]% of its total assets in the securities
    of Indian companies in the software sector and related industries. The Fund
      is therefore
      subject to greater risk of loss with respect to its portfolio securities
      as
    a result of its concentration in such sectors and related industries. See &#147;Risk
    Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The
    concentration of the Fund&#146;s investments in specific economic sectors
    and related industries may expose it to greater risk of loss with respect
    to its portfolio securities.&#148; </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">7</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p8"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>A
        change in the Fund&#146;s tax status could adversely affect the Fund&#146;s
  return on its investments.</i></b></font></div>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund currently operates through a branch in the Republic of Mauritius to
      take advantage
      of favorable tax treatment by the Indian government pursuant to a taxation
      treaty between India and Mauritius. Recently, the Supreme Court of India
      upheld the validity of this tax treaty in response to a lower court challenge
      contesting the treaty&#146;s applicability to entities such as the Fund. Any change in
the provision of this treaty or in its applicability to the Fund could result in the imposition of withholding and other taxes on the Fund by India, which would reduce the return to the Fund on its investments. See &#147;Risk Factors&#151;Risks
Related to the Fund&#146;s Operations&#151;A change in the Fund&#146;s tax status could adversely affect the Fund&#146;s return on its investments,&#148; &#147;Taxation&#151;U.S. Stockholders&#148; and &#147;Taxation&#151;Mauritian
Tax Status.&#148;
</FONT></p></div>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">In
      addition, prior to Blackstone Advisors assuming management, the Fund may
      have failed
      to qualify as a regulated investment company under Subchapter M of the
      Internal Revenue Code for the taxable year ended December 31, 2004. A provision
      of &#36;25,507,350 has been made for U.S. federal income tax purposes.
      However, the Fund recently declared a deficiency dividend (within the meaning
      of Section 860
of the Internal Revenue Code) of &#36;1.07 per share with respect to its income
for the taxable year ending December 31, 2004. As a result of this deficiency
dividend, the Fund now expects its liability to be reduced to approximately &#36;5,000,000.
 There can be no assurance that the Fund will be able to further reduce the liability.
See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations&#151;A
change in the Fund&#146;s tax status could adversely affect the Fund&#146;s return

on its investments&#148; and &#147;Taxation&#151;The Fund.&#148; </FONT></p>
</div>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>The
        Fund&#146;s shares have traded and may in the future trade at a discount
  to net asset value.</i></b></font></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Although
      the Fund&#146;s shares of common stock have recently traded on the NYSE at a premium to their net asset value, the Fund&#146;s shares have in the
past traded at a discount to their net asset value. There can also be no assurance that the Fund&#146;s shares will trade at a premium in the future or that the present premium is sustainable. The Fund&#146;s
shares have traded at discounts of as
much as 40%. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      addition, you should note that shares of closed-end investment companies
      frequently
      trade at a discount from net asset value. This characteristic is a risk
      separate and distinct from the risk that the Fund&#146;s net asset value will decrease as a result of its investment activities. The Fund cannot predict whether its shares will trade at, above or below net asset value. The Fund is intended
primarily for long-term investors and should not be considered as a vehicle for trading purposes. See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The Fund&#146;s
shares have traded and may trade in the future at a
discount to net asset value.&#148; </FONT></p></div>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>The
        Fund&#146;s &#147;interval fund&#148; structure involves certain risks
        and special considerations not typically associated with other closed-end
  funds.</i></b></font></div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund has
    adopted an interval fund structure whereby the Fund conducts semi-annual
      repurchase offers for between 5% and 25% of the Fund&#146;s outstanding common stock.
    The Fund&#146;s required semi-annual repurchases are likely to continually
    decrease the overall size of the Fund which could over time: (i) harm investment
    performance in part by limiting the extent to which the Fund may pursue its
    investment strategy; (ii) increase the Fund&#146;s expense ratio as the Fund&#146;s
    assets decrease; and (iii) jeopardize the Fund&#146;s viability and continued
    existence. Moreover, there are additional risks associated with the Fund&#146;s
    repurchase offers, including the risk that: (i) if the repurchase offer is
    over-subscribed, stockholders may be unable to liquidate all or a given percentage
    of their investment at net asset value during the repurchase offer; (ii) because
    the Fund expects to liquidate portfolio securities in order to fund repurchase
    offers, the need to sell such securities may in turn affect the market for
    such securities and accordingly diminish the value of the Fund&#146;s investments;
    (iii) share values may decrease as a result of currency fluctuations between
    the date of tender and the repurchase pricing date; (iv) the repurchase offer
    may not eliminate any discount, if any, at which the Fund&#146;s shares trade;
    and (v) due to the potential for proration if the repurchase
    offer is over-subscribed, some investors may tender more shares than they
    wish to have repurchased in order to ensure the repurchase of a specific
    number
    of shares. See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The
    Fund&#146;s &#147;interval fund&#148; structure involves certain risks and
    special considerations not typically associated with other closed-end funds&#148;
    and &#147;Semi-Annual Repurchases of Securities.&#148;</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">8</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p9"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>The
        Fund&#146;s status as a &#147;non-diversified&#148; investment company
  may expose it to greater risk of loss with respect to its portfolio securities.</i></b></font></div>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund is classified as a &#147;non-diversified&#148; investment company under the U.S. Investment Company Act of 1940, as amended (the &#147;1940
Act&#148;), which means that the Fund is not limited in the proportion of its assets that may be invested in the securities of a single issuer. However, the Fund intends to comply with the diversification requirements imposed by the U.S. Internal
Revenue Code of 1986, as amended (the &#147;Internal Revenue Code&#148;), for qualification as a regulated investment company. As a non-diversified investment company, the Fund may invest a greater proportion of its assets in the securities of a
smaller number of issuers and, as a result, is subject to greater risk of loss with respect to its portfolio securities. See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The Fund&#146;s status as a
&#147;non-diversified&#148; investment company may expose it to greater risk of loss with respect to its portfolio securities&#148; and &#147;Taxation&#151;The
Fund.&#148; </FONT></p></div>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>There
  are no fixed limitations regarding portfolio turnover.</i></b></font></div>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">Frequency
      of portfolio turnover is not a limiting factor if the Fund considers it
      advantageous to purchase or sell securities. The Fund anticipates that
      its annual portfolio turnover rate will not exceed 150%. For the year ended
      December 31, 2005, the Fund&#146;s portfolio turnover rate was 50.28%.
      A high rate of portfolio turnover involves correspondingly greater aggregate
      payments for brokerage  commissions than a lower rate, which expenses must
      be borne by the Fund and its stockholders, while a lower rate of portfolio
      turnover involves correspondingly lower aggregate payments and stockholder
      expenses. See &#147;Risk Factors&#151;Risks
Related to the Fund&#146;s Operations&#151;There are no fixed limitations regarding
portfolio turnover.&#148; </FONT></p>
</div>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>The
        extent to which the Fund invests in high yield/high risk and unrated
  debt may adversely affect the Fund&#146;s performance.</i></b></font></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund has not established any rating criteria for the debt securities in
      which it
      may invest. Securities rated in medium to low rating categories of nationally
      recognized statistical rating organizations and unrated securities of comparable
      credit quality, or &#147;high yield/high risk securities,&#148; are speculative with respect to the capacity to pay interest and repay principal in
accordance with the terms of the security and generally involve a greater volatility of price than securities in higher-rated categories. These securities are commonly referred to as &#147;junk bonds.&#148; The value of Indian debt securities held
by the Fund may be expected to vary inversely in relation to fluctuations in interest rates in India. See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The extent to which the Fund invests in high yield/high risk and
unrated debt may adversely affect the Fund&#146;s performance.&#148; </FONT></p></div>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>The
        Fund&#146;s ability to successfully hedge against financial risks may
  adversely affect the Fund&#146;s net asset value.</i></b></font></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund may purchase and sell options on securities, financial futures, fixed
      income
      indices and other financial instruments, enter into financial futures contracts,
      enter into interest rate transactions, enter into currency transactions,
      enter into equity swaps and related transactions, enter into securities
      transactions on a when-issued or delayed delivery basis, enter into repurchase
      agreements,
sell securities short and lend portfolio securities. Hedging involves special
      risks, including possible default by the other party to the transaction,
      illiquidity and, to the extent the Investment Manager&#146;s view as to certain market movements
is incorrect, the risks that the use of hedging could result in losses greater than if they had not been used. The extent to which the Fund can engage in such investment practices in India may be limited. See &#147;Additional Investment
Activities,&#148; &#147;Investment Objective and Policies&#151;Other Investments&#148; &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The Fund&#146;s ability to successfully hedge against financial risks may adversely
affect the Fund&#146;s net asset value&#148; and &#147;Appendix A: General Characteristics
and Risks of Hedging.&#148; </FONT></p></div>
<div align="center">
  <p><FONT size=2 face="Times New Roman, Times, serif">9</FONT></p>
</div>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p10"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>The
        extent to which the Fund utilizes leverage to hedge against financial
        risks may increase its expenses and adversely affect the Fund&#146;s
  performance.</i></b></font></div>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Although
      the Fund has no present intention to do so to any significant extent, the
      Fund
      may utilize leverage by borrowing or by issuing preferred stock or short-term
      debt securities in an amount up to 25% of the Fund&#146;s total assets. Leverage by the Fund creates an opportunity for increased return but, at the same time, creates special risks. For example, leverage may exaggerate changes in the net
asset value of the Fund&#146;s common stock and in the return on the Fund&#146;s portfolio. Although the principal of any leverage will be fixed, the Fund&#146;s assets may change in value during the time the leverage is outstanding. Leverage will
create expenses for the Fund that can, during any period, exceed the income from the assets acquired with the proceeds of the leverage. Furthermore, an increase in interest rates could reduce or eliminate the benefits of leverage and could reduce
the value of the Fund&#146;s securities. The Fund may also borrow by entering into reverse repurchase agreements, which will subject the Fund to additional market risk, as well as credit risk with respect to the buyer of the securities under such an
agreement. See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The extent to which the Fund utilizes leverage to hedge against financial risks may increase its expenses and adversely affect the Fund&#146;s
performance.&#148;
</FONT></p></div>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>The
        anti-takeover provisions in the Fund&#146;s charter and amended and restated
        by-laws and certain provisions of Maryland law may limit your ability
  to sell your shares at a premium.</i></b></font></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund&#146;s charter and amended and restated by-laws and Maryland law contain certain anti-takeover provisions that, among other things, may have the
effect of inhibiting the Fund&#146;s possible conversion to open-end status and delaying or limiting the ability of other persons to acquire control of the Fund. In certain circumstances, these provisions may also inhibit the ability of holders of
common stock to sell their shares at a premium over prevailing market prices by discouraging a third party from seeking to obtain control of the Fund. The Fund&#146;s Board of Directors has determined that these provisions are in the best interests
of the Fund and its stockholders. See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The anti-takeover provisions in the Fund&#146;s
charter and amended and restated by-laws and certain provisions of Maryland law
may limit
your ability to sell your shares at a premium.&#148; </FONT></p></div>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>The
        operating expenses of the Fund may be higher than investment companies
  that invest primarily in the securities of U.S. companies.</i></b></font></div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s
    estimated annual operating expenses may be higher than those of most other
    investment companies that invest predominately in the securities of U.S. companies,
    primarily because of the additional time and expense required of the Investment
    Manager and the Country Adviser in pursuing the Fund&#146;s objective of long-term
    capital appreciation through investing in equity securities of Indian companies.
    Investments in Indian equity securities require additional time and expense
    because the available public information regarding such securities is more
    limited in comparison to, and not as comprehensive as, the information available
    for U.S. equity securities. In addition, brokerage commissions, custodial
    fees and other fees are generally higher for investments in foreign securities
    markets. As a result of these higher expected operating expenses, the Fund
    needs to generate higher relative returns to provide investors with an equivalent
    economic return. See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s
    Operations&#151;The operating expenses of the Fund may be higher than investment
    companies that invest primarily in the securities of U.S. companies.&#148;</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">10</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p11"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<div style="text-indent:0%"><font size="2" face="Times New Roman, Times, serif"><b><i>Future
        market disruptions resulting from terrorist attacks in the United States
        and elsewhere or U.S. military action abroad could negatively and adversely
  affect the market for the Fund&#146;s common stock.</i></b></font></div>
</font>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Terrorist attacks
    and related events have led to increased short-term market volatility. Moreover,
      the ongoing U.S. military and related action in Iraq and other events in
      the
    Middle East could have significant adverse effects on U.S. and world economies
      and markets. The Fund does not know how long the securities markets will
      continue
    to be affected by these and other geopolitical events and cannot predict
      the effects of military action or similar events in the future on the U.S.
      economy
    and securities markets. A disruption of the U.S. or world financial markets
      could affect interest rates, secondary trading, ratings, credit risk, inflation
      and other factors relating to the Fund&#146;s common stock. See &#147;Risk
    Factors&#151;Risks Related to the Fund&#146;s Operations&#151;Future market
    disruptions resulting from terrorist attacks in the United States and elsewhere
    or U.S. military action abroad could negatively and adversely affect the market
    for the Fund&#146;s common stock.&#148;</font></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">11</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p12"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
<B>SUMMARY OF EXPENSES </B></font></P>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> <FONT size=2>Stockholder
      transaction expenses</FONT>&nbsp; </font></TD>
    <TD width=10% align=left valign="bottom">&nbsp; </TD>
    <TD width=2% align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2>Sales
      load</FONT>&nbsp; </font></TD>
    <TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif"> None
    </font></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2>Dividend
      reinvestment and cash purchase plan fees</FONT>&nbsp; </font></TD>
    <TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif"> *</font></TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2>Repurchase
      offer fees</FONT>&nbsp; </font></TD>
    <TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif"> 2%**
    </font></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> <FONT size=2>Offering
      costs (1)</FONT>&nbsp; </font></TD>
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> <FONT size=2>[</FONT>&nbsp;
        <font size=2>]%</font>
    </font></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> <FONT size=2>Annual
      expenses (as a percentage of average net assets attributable to</FONT>&nbsp;<FONT size=2>common
      stock)</FONT>&nbsp; </font></TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2>Management
      fees (2)</FONT>&nbsp; </font></TD>
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> <FONT size=2>[</FONT>&nbsp;
        <font size=2>]%</font>
    </font></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2>Interest
      payments in borrowed funds</FONT>&nbsp; </font></TD>
    <TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif"> None
    </font></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2>Other
      expenses (3)</FONT>&nbsp; </font></TD>
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> <FONT size=2>[</FONT>&nbsp;
        <font size=2>]%</font>
    </font></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> <FONT size=2>Total
      annual expenses (3)</FONT>&nbsp; </font></TD>
    <TD align=left valign="bottom"><font face="Times New Roman, Times, serif"> <FONT size=2>[</FONT>&nbsp;
        <font size=2>]%</font></font></TD>
    <TD align=right>&nbsp; </TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD colspan="2" align=right><hr align="left" width="100" size="1" noshade></TD>
  </TR>
  <TR valign="top">
    <TD width=3% align=left><font size="1" face="Times New Roman, Times, serif"> *
    </font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> Participants
          in the Fund&#146;s dividend reinvestment and cash purchase plan pay
          only transaction-based charges. Actual costs
      will vary for each participant depending on the nature and number of transactions
          made. See&nbsp; &#147;Dividends
      and Distributions; Dividend Reinvestment and Cash Purchase Plan.&#148;</font></TD>
  </TR>
  <TR valign="top">
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="top">
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> **
    </font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> Participants
          in the Fund&#146;s repurchase offers pay a repurchase fee of up to
          2% of the value of the shares repurchased.
      See &#147;Semi-Annual Repurchases of Securities.&#148;</font></TD>
  </TR>
  <TR valign="top">
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="top">
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> (1)</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> These
          costs include those incurred in connection with this offer, which are
          estimated
      at &#36;[ ], or approximately [ ]%
      of the total estimated net proceeds of the offer without giving effect
      to the issuance of additional shares pursuant
      to the over-subscription privilege.</font></TD>
  </TR>
  <TR valign="top">
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="top">
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> (2)</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> The
      percentage shown is based upon the net assets of the Fund at [recent date],
        2006 and after giving effect to this
      offer (excluding the issuance of additional shares pursuant to the over-subscription
        privilege) and reflects the
      effects of breakpoints in the management fee schedule for assets in excess
      of &#36;500 million.</font></TD>
  </TR>
  <TR valign="top">
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="top">
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> (3)</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> Based
        upon estimated expenses for the current fiscal year. Total expenses for
        the fiscal year ended December
      31, 2005 were 1.49% of average net assets.</font></TD>
  </TR>
</TABLE>
<p><font size="2" face="Times New Roman, Times, serif"><B>Example</B>
</font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The following example demonstrates the projected dollar amount of total cumulative expense that would be incurred over various periods with respect to a
hypothetical investment in the Fund. These amounts are based upon payment by the Fund of investment management and advisory fees and other expenses at the levels set forth in the above table. </FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=2% align=center>&nbsp;</TD>
    <TD width=10% align=center><font face="Times New Roman, Times, serif"> <B><FONT size=2>1
      Year</FONT></B>&nbsp; </font></TD>
    <TD width=2% align=center>&nbsp;</TD>
    <TD width=10% align=center><font face="Times New Roman, Times, serif"> <B><FONT size=2>3
      Years</FONT></B>&nbsp; </font></TD>
    <TD width=2% align=center>&nbsp;</TD>
    <TD width=10% align=center><font face="Times New Roman, Times, serif"> <B><FONT size=2>5
      Years</FONT></B>&nbsp; </font></TD>
    <TD width=2% align=center>&nbsp;</TD>
    <TD width=10% align=center><font face="Times New Roman, Times, serif"> <B><FONT size=2>10
      Years</FONT></B>&nbsp; </font></TD>
    <TD width=2% align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <FONT size=2>You
      will pay the following expenses on</FONT>&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <FONT size=2>a &#36;1,000
      investment, assuming a 5% annual return:</FONT>&nbsp; </font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>&#36;[
      ]</FONT>&nbsp; </font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>&#36;[
      ]</FONT>&nbsp; </font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>&#36;[
      ]</FONT>&nbsp; </font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>&#36;[
      ]</FONT>&nbsp; </font></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
</TABLE>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">This example
    further assumes that the percentage amounts listed under Annual Expenses
      in the table above remain the same in the years shown, the reinvestment
      of all
    dividends and distributions at net asset value and the full exercise of all
      the rights. The above tables and the assumption in the example of a 5%
      annual
    return and reinvestment at net asset value are required by regulation of
      the U.S. Securities and Exchange Commission, which we refer to as the &#147;SEC,&#148;
    and are applicable to all investment companies, and the assumed 5% annual
    return is not a prediction of, and does not represent, the projected performance
    of the Fund&#146;s common stock. In addition, although the example assumes
    reinvestment of all distributions at net asset value, this may not be the
    case for participants in the dividend reinvestment and cash purchase plan.
    See &#147;Dividends and Distributions; Dividend Reinvestment and Cash Purchase
    Plan.&#148;</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">12</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p13"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<div style="text-indent:3%"><font size="2" face="Times New Roman, Times, serif"> <b>WE
      HAVE PREPARED THE FOREGOING TABLE AND EXAMPLE TO ASSIST YOU IN UNDERSTANDING
      THE VARIOUS COSTS AND EXPENSES THAT YOU WILL BEAR, DIRECTLY OR INDIRECTLY.
      YOU SHOULD NOT CONSIDER THIS EXAMPLE OR THE FOREGOING TABLE AS A REPRESENTATION
      OF FUTURE EXPENSES OR RATE OF RETURN. THE FUND&#146;S ACTUAL EXPENSES MAY
  BE MORE OR LESS THAN THOSE SHOWN. </b></font></div>
</font>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">13</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p14"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>FINANCIAL
  HIGHLIGHTS</B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The financial highlights
    table is intended to help you understand the Fund&#146;s financial performance
    for the periods presented and reflects financial results for a single Fund
    share. The information for each of the years presented, except for &#147;Total
    Investment Return Based on Net Asset Value,&#148; has been derived from financial
    statements audited by PricewaterhouseCoopers LLP, the Fund&#146;s independent
    registered public accounting firm, whose report is included in the Fund&#146;s
    financial statements which are incorporated by reference in this prospectus.
    The following information should be read in conjunction with the financial
    statements and notes, which legally form a part of this prospectus and are
    available upon request. </FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD colspan="15" align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font> <font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font> <font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font> <font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif"> <B>Years ended December
      31,</B>&nbsp; &nbsp;&nbsp;&nbsp;</font> <font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font> <font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD align=center></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center> <font face="Times New Roman, Times, serif"><B><FONT size=1>2005</FONT></B><font size="1"><b>**</b></font></font>
    </TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> &nbsp;
      </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2004</B>
      </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2003</B>
      </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2002</B>
      </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2001</B>
      </font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> <B>Per
      Share Operating Performance</B> </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Net asset
      value, beginning of period </font></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=1% align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD width=7% align=right> <FONT size=2 face="Times New Roman, Times, serif">28.47</FONT>
    </TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=1% align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD width=7% align=right> <FONT size=2 face="Times New Roman, Times, serif">23.76</FONT>
    </TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">
      &#36; </font></TD>
    <TD width=7% align=right> <FONT size=2 face="Times New Roman, Times, serif">12.72</FONT>
    </TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">
      &#36; </font></TD>
    <TD width=7% align=right> <FONT size=2 face="Times New Roman, Times, serif">11.93</FONT>
    </TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=1% align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD width=7% align=right> <FONT size=2 face="Times New Roman, Times, serif">16.18</FONT>
    </TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Net investment
      income (loss)</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.04</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> (1)</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.08</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> (1)</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.11</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> (1)</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.09</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.07</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><div style="margin-left:3%; text-indent:-3%"><font size="2" face="Times New Roman, Times, serif">Net
        realized and unrealized gain (loss) on investments, foreign currency holdings,
        and translation of other assets and liabilities denominated in foreign
        currency </font></div></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right><FONT size=2 face="Times New Roman, Times, serif">11.35</FONT>
    </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right><FONT size=2 face="Times New Roman, Times, serif">6.14</FONT>
    </TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right><FONT size=2 face="Times New Roman, Times, serif">11.00</FONT>
    </TD>
    <TD align=left><FONT size=2 face="Times New Roman, Times, serif">(1)</FONT></TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.76</FONT>
    </TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right><FONT size=2 face="Times New Roman, Times, serif">(4.29</FONT>
    </TD>
    <TD align=left> <font size="2" face="Times New Roman, Times, serif">) </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Income
      tax expense</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.80)</FONT>
    </TD>
    <TD align=left><font size=2 face="Times New Roman, Times, serif">(2)</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Net increase
      (decrease) from investment operations</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10.59</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.22</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11.11</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.85</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(4.22</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Less:
      dividends and distributions</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD><font size="2" face="Times New Roman, Times, serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      investment income</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.06</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.01</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.13</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.09</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.07</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
  </TR>
  <TR valign="bottom">
    <TD><font size="2" face="Times New Roman, Times, serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short
      term capital gains</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.51</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD><font size="2" face="Times New Roman, Times, serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long
      term capital gains</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(3.89</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(1.51</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Total
      dividends and distributions</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(4.46</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(1.52</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.13</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.09</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.07</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> <B>Capital
      Share Transactions</B></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Anti-dilutive
      effect of Share Repurchase Program</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.01</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.01</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.06</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.01</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.04</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Anti-dilutive
      effect of Tender Offer</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.02</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Dilutive
      effect of Rights Offer</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.52</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Total
      capital share transactions</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.53</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.01</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.06</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.03</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.04</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><hr size="1" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Net asset
      value, end of period</font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">34.07</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">28.47</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">23.76</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.72</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11.93</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Per share
      market value, end of period</font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">39.73</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">29.63</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">25.20</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10.59</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.50</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> <B>Total
           investment return based on market value(3)</B></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">49.32</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">23.51</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">139.04</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.36</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(20.69</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )%</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> <B>Total
      investment return based on net asset value(3)</B></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">35.12</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">26.34</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">88.44</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10.79</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(27.70</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )%</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> <B>Ratios/Supplemental
      Data</B></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Net assets,
      end of period (in 000s)</font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,083,714</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">644,672</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">556,811</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size=2 face="Times New Roman, Times, serif">&#36;</font></TD>
    <TD align=right> <font size=2 face="Times New Roman, Times, serif">350,838</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">366,491</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><div style="margin-left:3%; text-indent:-3%"> <font size="2" face="Times New Roman, Times, serif">Ratios
        of expenses after income taxes to average net assets</font></div></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.13</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.64</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.76</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.73</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.70</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><div style="margin-left:3%; text-indent:-3%"> <font size="2" face="Times New Roman, Times, serif">Ratios
        of expenses before income taxes to average net assets</font></div></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.49</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.64</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.76</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.73</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.70</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <div style="margin-left:3%; text-indent:-3%"> <font size="2" face="Times New Roman, Times, serif">Ratios
        of net investment income (loss) to average net assets</font></div></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.12</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.33</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.72</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.65</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.57</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Portfolio
      turnover</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">50.28</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">35.90</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">33.89</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">39.36</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">16.06</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> %</font></TD>
  </TR>
</TABLE>
<div align="center">
  <p> <FONT size=2 face="Times New Roman, Times, serif">14</FONT> </p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p15"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="14" align="center">
      <font size="1" face="Times New Roman, Times, serif"> <B>Years ended December
       31,</B></font></TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center"><hr size="1" noshade></TD>
    <TD align="center"><hr size="1" noshade></TD>
    <TD align="center"><hr size="1" noshade></TD>
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    <TD align="center"><hr size="1" noshade></TD>
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    <TD align="center"><hr size="1" noshade></TD>
    <TD align="center"><hr size="1" noshade></TD>
    <TD align="center">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align="center"> <font size="1" face="Times New Roman, Times, serif"><B>2000</B>
      </font></TD>
    <TD align="left"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align="center"> <font size="1" face="Times New Roman, Times, serif"><B>1999</B>
      </font></TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align="center"> <font size="1" face="Times New Roman, Times, serif"><B>1998</B>
      </font></TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align="center"> <font face="Times New Roman, Times, serif"><B><FONT size=1>1997</FONT></B><font size="1"><B>*</B></font></font>
    </TD>
    <TD align="center">&nbsp;</TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align="center"> <font size="1" face="Times New Roman, Times, serif"><B>1996</B>
      </font></TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> <B>Per
      Share Operating Performance</B></font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Net asset
      value, beginning of period </font></TD>
    <TD width="2%" align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width="1%" align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD width="7%" align=right> <FONT size=2 face="Times New Roman, Times, serif">23.21</FONT>
    </TD>
    <TD width="2%" align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width="1%" align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD width="7%" align=right> <FONT size=2 face="Times New Roman, Times, serif">8.85</FONT>
    </TD>
    <TD width="2%" align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width="1%" align=right><font size="2" face="Times New Roman, Times, serif">
      &#36; </font></TD>
    <TD width="7%" align=right> <FONT size=2 face="Times New Roman, Times, serif">8.11</FONT>
    </TD>
    <TD width="2%" align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width="1%" align=right><font size="2" face="Times New Roman, Times, serif">
      &#36; </font></TD>
    <TD width="7%" align=right> <FONT size=2 face="Times New Roman, Times, serif">7.56</FONT>
    </TD>
    <TD width="2%" align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width="1%" align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD width="7%" align=right> <FONT size=2 face="Times New Roman, Times, serif">8.94</FONT>
    </TD>
    <TD width="4%" align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Net investment
      income (loss) </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.16</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> ) </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.10</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> ) </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.03</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> ) </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.03</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> ) </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.02</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><div style="margin-left:3%; text-indent:-3%"><font size="2" face="Times New Roman, Times, serif">Net
        realized and unrealized gain (loss) on investments, foreign currency holdings,
        and translation of other assets and liabilities denominated in foreign
        currency </font></div></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right><FONT size=2 face="Times New Roman, Times, serif">(7.27</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">) </font></TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right><FONT size=2 face="Times New Roman, Times, serif">14.36</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right><FONT size=2 face="Times New Roman, Times, serif">0.77</FONT>
    </TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right><FONT size=2 face="Times New Roman, Times, serif">0.58</FONT>
    </TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right>&nbsp; </TD>
    <TD align=right><FONT size=2 face="Times New Roman, Times, serif">(1.39</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">) </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Income
      tax expense </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Net increase
      (decrease) from investment operations </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(7.43</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> ) </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">14.26</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.74</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.55</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(1.37</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> ) </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Less:
      dividends and distributions </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size="2">Dividends
      from net investment income </font></font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.01</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> ) </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions
      from net realized gains </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Total
      dividends and distributions </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.01</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> ) </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> <B>Capital
      Share transactions</B></font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Anti-dilutive
      effect of Share Repurchase Program </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.40</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.10</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Anti-dilutive
      effect of Tender Offer </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Dilutive
      effect of Rights Offer </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Total
      capital share transactions </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.40</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.10</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#151;</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center">&nbsp; </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="center"><hr size="1" noshade> </TD>
    <TD align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Net asset
      value, end of year </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">16.18</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">23.21</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> &#36;
      </font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.85</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> &#36;
      </font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.11</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.56</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><hr size="2" noshade> </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Per share
      market value, end of year </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.06</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">16.75</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> &#36;
      </font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.31</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> &#36;
      </font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.37</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.62</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"><b>Total
      investment return based on market value(3)</b></font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(27.99</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )% </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">165.35</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(14.41</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )% </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(3.28</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )% </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(14.08</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )% </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"><b>Total
      investment return based on net asset value(3)</b></font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(30.29</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )% </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">162.26</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.12</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.28</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(15.34</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )% </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> <B>Ratios/Supplemental
      Data</B></font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Net assets,
      end of period (in 000s) </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">504,769</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">768,948</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> &#36;
      </font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">300,523</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> &#36;
      </font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">275,814</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">&#36;</FONT>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">257,156</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;
      </font> <div style="margin-left:3%; text-indent:-3%"> <font size="2" face="Times New Roman, Times, serif">Ratios
        of expenses after income taxes to average net assets </font></div></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.59</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.84</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.03</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.98</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.03</FONT>
    </TD>
    <TD align=left><FONT size=2 face="Times New Roman, Times, serif">%(4)&nbsp;</FONT>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <div style="margin-left:3%; text-indent:-3%"> <font size="2" face="Times New Roman, Times, serif">Ratios
        of expenses before income taxes to average net assets </font></div></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.59</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.84</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.03</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.98</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.03</FONT>
    </TD>
    <TD align=left><FONT size=2 face="Times New Roman, Times, serif">%(4)&nbsp;</FONT>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <div style="margin-left:3%; text-indent:-3%"> <font size="2" face="Times New Roman, Times, serif">Ratios
        of net investment income (loss) to average net assets </font></div></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.75</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )% </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.68</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )% </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.34</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )% </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.37</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> )% </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.22</FONT>
    </TD>
    <TD align=left><FONT size=2 face="Times New Roman, Times, serif">%(4)&nbsp;</FONT>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Portfolio
      turnover </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">19.24</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">18.65</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">28.85</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">42.61</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">33.57</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> % </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD width="3%"><font size="1" face="Times New Roman, Times, serif"> *</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> Barclays Global Investors
      International Inc., formerly known as Barclays de Zoete Wedd Investment
      Management Inc., served as the Fund&#146;s investment adviser until August
      1, 1997. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="1" face="Times New Roman, Times, serif"> **</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> Advantage Advisers,
      Inc. (&#147;Advantage Advisers&#148;), a subsidiary of Oppenheimer Asset
      Management Inc. and an affiliate of Oppenheimer &amp; Co. Inc. served as
      the Fund&#146;s investment adviser from August 1, 1997 to December 4, 2005.
      </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=2>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD width="3%"><font size="1" face="Times New Roman, Times, serif"> (1)</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> Based on average
      shares outstanding. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="1" face="Times New Roman, Times, serif"> (2)</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> A provision of &#36;25,507,350
      has been made for U.S. Federal income tax purposes in the Fund&#146;s 2005 financial statements. This provision has been
      made as the Fund may not have qualified as a regulated investment company
      under Subchapter M of the Internal Revenue Code for the taxable year ended
      December 31, 2004. See &#147;Taxation&#151;The Fund.&#148; </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="1" face="Times New Roman, Times, serif"> (3)</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> Total investment
      return is calculated assuming a purchase of common stock on the opening
      of the first day and a sale on the closing of the last day of each period
      reported, except that for the period ended December 31, 1994, total investment
      return is based on a beginning of period price of &#36;14.02 (initial offering
      price of &#36;15.00 less underwriting discount of &#36;0.98). Dividends
      and distributions, if any, are assumed, for purposes of this calculation,
      to be reinvested at prices obtained under the Fund&#146;s dividend reinvestment
      plan. Total investment return does not reflect brokerage commissions or
      sales charges and is not annualized. </font></TD>
  </TR>
</TABLE>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">15</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p16"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD width="3%"> <FONT size=1 face="Times New Roman, Times, serif">(4)</FONT></TD>
    <TD> <FONT size=1 face="Times New Roman, Times, serif">Includes expense waivers
      by The Bank of New York, as custodian. If such expenses had not been waived,
      the ratio of expenses to average net assets and the ratio of net investment
      income to average net assets would have been 2.12% and 0.13%, respectively,
      for the year ended December 31, 1996.</FONT></TD>
  </TR>
</TABLE>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">16</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p17"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>THE
  FUND</B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund, which was incorporated
    in Maryland on December 27, 1993, is a non-diversified, closed-end management
    investment company registered under the 1940 Act. The Fund&#146;s investment
    objective is long-term capital appreciation, which it seeks to achieve by
    investing primarily in the equity securities of Indian companies. Under normal
    market conditions, at least 80% of the Fund&#146;s total assets are invested
    in the equity securities of Indian companies. The Fund cannot assure that
    its investment objective will be realized. Due to the risks inherent in international
    investments generally, you should consider the Fund as a vehicle for investing
    a portion of your assets in foreign securities markets and not as a complete
    investment program. </FONT></p>
</div>
<P align="center"> <font face="Times New Roman, Times, serif"><a name="p17a"></a></font><font size="2" face="Times New Roman, Times, serif"><B>INVESTMENT
  IN INDIA</B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s investment
    objective and policies reflect the Investment Manager&#146;s opinions that
    economic and political developments and changes in the last several years
    have well positioned India to experience a period of significant economic
    growth. The Investment Manager believes that India should grow as an economic
    force over the next ten years and that investment in its securities markets
    offers significant potential returns. For a detailed description of India
    and its securities market, see &#147;Appendix B: Republic of India&#148; and
    &#147;Appendix C: The Indian Securities Market.&#148; </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Background</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Foreign investment in Indian
    securities is regulated by the Foreign Exchange Management Act, 1999 and the
    rules, regulations and notifications issued thereunder. This Act is the principal
    legislation that governs foreign investment and foreign exchange transactions
    in India. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In 2000, the Reserve Bank
    of India issued the Indian Foreign Exchange Management (Transfer or Issue
    of Security by a Person Resident Outside India) Regulations, 2000, which we
    refer to as the &#147;FEMA regulations,&#148; to regulate the issue of Indian
    securities to persons who reside outside India and the transfer of Indian
    securities by or to such persons. As a non-resident of India, the Fund must
    comply with FEMA Regulations. Under the FEMA regulations, a foreign investor
    may invest in Indian securities through the foreign direct investment route.
    Under the foreign direct investment route, investment may be made through
    the &#147;automatic&#148; route, which does not require the prior approval
    of the Reserve Bank of India/Foreign Investment Promotion Board, subject to
    certain conditions, or through the &#147;approval&#148; route, which requires
    the prior permission of the Reserve Bank of India/Foreign Investment Promotion
    Board but which is nonetheless subject to government-imposed foreign investment
    restrictions in certain economic sectors. The FEMA regulations also prescribe
    rules for the transfer of Indian securities between foreign, domestic, Indian
    and non-Indian security holders. Such transfers often require the approval
    of either the Indian government or the Reserve Bank of India. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Investments by Foreign
  Institutional Investors</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">A foreign investor may
    also invest in Indian securities through the foreign institutional investment
    route. Foreign institutional investors and sub-accounts thereof are regulated
    by the Securities and Exchange Board of India (Foreign Institutional Investors)
    Regulations, 1995 which we refer to as the &#147;FII Regulations&#148;. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Foreign institutional investors
    and sub-accounts wishing to invest and trade in Indian securities in India
    are required to register with SEBI and obtain special permission from the
    Reserve Bank of India. Once qualified under applicable Indian law, a foreign
    institutional investor or its sub-account, subject to the restrictions noted
    below, may:</FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">buy and sell securities
      of Indian companies;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">realize capital gains
      on investments;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">participate in rights
      offerings for shares;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">appoint a domestic
      custodian for custody of investments made; and</FONT></td>
  </tr>
</table>
<div align="center">
  <p> <FONT size=2 face="Times New Roman, Times, serif">17</FONT> </p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p18"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">repatriate capital,
      capital gains, dividends, interest income and any proceeds received in connection</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">with the sale of Indian
      securities.</FONT></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Under applicable Indian
    law, a foreign institutional investor or a sub-account may only invest in
    the following Indian securities: </FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">securities in the primary
      and secondary Indian markets including shares, debentures and warrants</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">of Indian companies;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">securities of Indian
      mutual funds;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">government securities;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">derivatives traded
      on a recognized Indian stock exchange; and</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">commercial paper.</FONT></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Investments by all foreign
    institutional investors and sub-accounts under the FEMA Regulations in the
    primary and secondary markets are subject to an aggregate ceiling of 24% of
    the equity capital or the value of each series of convertible debentures of
    any Indian company, with certain exceptions. This ceiling can be increased
    to 49% by a board resolution of the Indian company. The ceiling would apply
    to the total holdings of foreign institutional investors collectively in an
    Indian company. The FII Regulations prescribe that each broad based foreign
    institutional investor investing on its own behalf or on the behalf of its
    sub-account (broad based) can invest up to 10% of the equity capital of an
    Indian company. A non-broad based foreign institutional investor/sub-account
    can invest only up to 5% of the equity capital of an Indian company. Investments
    by the foreign institutional investor made in its own behalf would be registered
    in the name of the foreign institutional investor while investments by the
    sub-accounts in Indian securities may be registered in the name of either
    the foreign institutional investor or the sub-account.</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Foreign institutional investors
    are also limited in their ability to invest in certain industries, such as
    the banking sector. In such industries, there is often a ceiling on total
    foreign holdings, against which holdings of foreign institutional investors
    are counted. To the extent that the ceiling has been reached in that industry,
    further investment by foreign institutional investors may not be permitted.
    </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">If a foreign institutional
    investor or a sub-account wishes to invest in securities through the Indian
    secondary market, it must, with certain exceptions, conduct its securities
    transactions through brokers certified by SEBI. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">With some exceptions, the
    total investments in equity and equity-related instruments, such as convertible
    debentures and tradeable warrants, made by a foreign institutional investor,
    whether on account of itself or its sub-accounts, cannot be less than 70%
    of the aggregate of all the investments of the foreign institutional investor
    in India, made on its own or through its various sub-accounts. Additionally,
    applicable Indian law imposes aggregate investment limitations on the dollar
    amount of certain Indian securities held by a foreign institutional investor.
    </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">A foreign institutional
    investor or a sub-account may issue, deal in or hold any off-shore derivative
    instruments such as participatory notes, equity-linked notes or other similar
    instruments against underlying securities listed or proposed to be listed
    on an Indian stock exchange, only to entities which are regulated by a relevant
    regulatory authority in the country of their incorporation or establishment,
    subject to the compliance of &#147;know your client&#148; requirements. Further
    such off-shore derivative instruments shall not be issued to, (i) any unregulated
    entity, (ii) persons resident in India, (iii) non-resident Indians, (iv) overseas
    corporate bodies which are owned or controlled by non-resident Indians, or
    (v) persons of Indian origin. Further, a foreign institutional investor/sub-account
    shall ensure that there is no further downstream issue or transfer of any
    offshore derivative instrument to any person other than a regulated entity.
    Moreover, a foreign institutional investor is required to disclose periodically
    certain information relating to off-shore derivative instruments entered into
    by such foreign institutional investor or its sub-accounts with respect to
    Indian securities such as the name of the parties involved, and the principal
    terms of, such off-shore derivative transactions. </FONT></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">18</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">At present, foreign institutional
    investor registrations are granted for five-year periods and may be renewed
    for further five-year periods by SEBI. The registration for each sub-account
    must be renewed upon renewal of the relevant registration if the sub-account
    intends to continue investing in India. The Investment Manager is registered
    with SEBI as a foreign institutional investor to invest in India on behalf
    of the Fund, its sub-account, and its other approved clients. If not renewed,
    the Investment Manager will explore other avenues of investment which may
    be available at that time, which may include a trust or other arrangement
    for investment established under Indian law. </FONT></p>
</div>
<div style="text-indent:3%">
  <P> <FONT size=2 face="Times New Roman, Times, serif">Registered foreign institutional
    investors and sub-accounts are generally subject to tax under </FONT> <FONT size=2 face="Times New Roman, Times, serif">Section
    115AD of the Indian Income Tax Act of 1961. There is uncertainty under Indian
    law as to the tax regime applicable to foreign institutional investors or
    sub-accounts that hold and trade in American depositary shares. See &#147;Taxation&#151;Indian
    Taxes.&#148; </FONT></P>
</div>
<P> <font size="2" face="Times New Roman, Times, serif"><B>Pricing Regulations
  in Relation to Acquisition of Shares Through Secondary Purchase</B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Generally, for transfers
    of shares between residents and non-residents resulting from purchase or sale
    transaction, no prior permission of the Foreign Investment Promotion Board
    or the Reserve Bank of India is required if the transfer of shares is done
    in compliance with the guidelines issued by the Reserve Bank of India and
    the price for such transfer is in accordance with the pricing guidelines issued
    by the Reserve Bank of India. The Reserve Bank of India pricing guidelines
    prescribe a floor price in relation to transfer of shares from a resident
    to a nonresident, and a cap in relation to the transfer of shares from a non-resident
    to a resident. </FONT></p>
</div>
<P> <font size="2" face="Times New Roman, Times, serif"><B>Exchange Controls </B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">A foreign institutional
    investor or its sub-account may open both foreign currency denominated accounts
    and &#147;special non-resident rupee&#148; accounts with Indian banks, and
    any amount that the investor or its sub-account transfers between these accounts
    may occur at the prevailing rate of exchange. However, under rules and policies
    promulgated by the Reserve Bank of India, a foreign institutional investor
    or its sub-account may only invest in Indian securities out of its special
    non-resident rupee account. In addition, it may only repatriate amounts from
    its foreign currency account after its designated bank or custodian has deducted
    and paid all withholding taxes relating to any capital gains. </FONT></p>
</div>
<P align="center"> <font face="Times New Roman, Times, serif"><a name="p19"></a></font><font size="2" face="Times New Roman, Times, serif"><B>THE
  OFFER</B></font></P>
<p><font size="2" face="Times New Roman, Times, serif"><B>Terms of the Offer</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund is offering to
    stockholders of record as of the close of business on [record date], 2006
    non-transferable rights to subscribe for [&nbsp;] shares of common stock of
    the Fund. The Fund may increase the number of shares of common stock subject
    to subscription by up to 25% of the shares, or up to [&nbsp;] additional shares,
    for an aggregate total of [&nbsp;] shares. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Each stockholder is being
    issued one right for each whole share of common stock owned on the record
    date. The rights entitle you to acquire at the subscription price one share
    for each [_] rights held. You need [_] rights to purchase one share at the
    subscription price. The Fund will not issue fractional shares upon the exercise
    of less than [_] rights. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Rights may be exercised
    at any time during the subscription period, which commences on [commencement
    date], 2006 and ends at 5:00 p.m., Eastern daylight time, on [expiration date],
    2006, unless extended by the Fund to not later than [extended expiration date],
    2006 or terminated early as described herein (such date, as it may be extended,
    is referred to in this prospectus as the &#147;expiration date,&#148; and
    such period, as it may be extended, is referred to in this prospectus as the
    &#147;subscription period&#148;). See &#147;&#151;Expiration, Extension and
    Early Termination of the Offer&#148; below. A stockholder&#146;s right to
    acquire one additional share for each [_] rights held during the subscription
    period at the subscription price is referred to as the &#147;primary subscription.&#148;
    The rights are evidenced by subscription certificates, which will be mailed
    to subscribing stockholders. </FONT></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">19</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p20"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In addition, any stockholder
    who fully exercises all rights issued to him or her is entitled to subscribe
    for additional shares, which were not otherwise subscribed for in the primary
    subscription, at the subscription price, which we refer to as the &#147;over-subscription
    privilege.&#148; Shares acquired pursuant to the over-subscription privilege
    are subject to allotment and may be subject to increase, which is more fully
    discussed below under &#147;&#151;Over-Subscription Privilege.&#148; </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The subscription price
    will be [&nbsp;]% of the Average Market Price, but in any case not less than
    [&nbsp;]% of the net asset value per share of the Fund&#146;s common stock
    at the close of trading on the NYSE on the date on which the offer expires.
    </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Because the expiration
    date and the date upon which the price of the rights will be determined will
    be the same date, stockholders who exercise their rights will not know the
    purchase price of the shares when they make their investment decision. If
    the market price of the Fund&#146;s common stock is below the subscription
    price, it may not be in your interest to participate in this offering. Once
    you subscribe for shares and the Fund receives payment or a guarantee of payment,
    you will not be able to change your decision. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The rights are non-transferable.
    Therefore, only the underlying shares, and not the rights, will be listed
    for trading on the NYSE. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Purposes of the Offer</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Board of Directors
    of the Fund has determined that it would be in the best interests of the Fund
    and its stockholders to increase the assets of the Fund through this offer.
    </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In consultation with the
    Investment Manager, the board determined that this offer may provide the following
    benefits: </FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">A greater ability to
      take advantage of investment opportunities without being required to sell</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">current portfolio positions
      that the Investment Manager believes should be retained.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">Additional investment
      flexibility, including the ability to diversify the Fund by investing in
      a</FONT> <FONT size=2 face="Times New Roman, Times, serif">greater number
      of mid-capitalization companies.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">Additional opportunity
      to capitalize on attractive investment opportunities in India, including</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">initial public offerings,
      privatizations and preferential allotments.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">Improved market visibility
      for the Fund.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">Improved liquidity
      of the trading market for the Fund&#146;s shares on the NYSE.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">An opportunity for
      existing stockholders by providing them with an opportunity to purchase</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">additional shares potentially
      at a price below the current market price without incurring significant</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">transaction costs.</FONT></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Prior to reaching this
    conclusion, the Fund&#146;s Board of Directors, in consultation with the Investment
    Manager and others, reviewed the structure, timing and terms of this offer,
    as well as its dilutive effect on both stockholders who exercise their rights
    and those who do not and other potentially adverse consequences resulting
    from this offer. The Board of Directors also considered the fact that the
    Fund&#146;s semi-annual repurchase offers will tend to diminish assets over
    time and that that diminution in assets will offset in whole or in part the
    potential benefits discussed above. After careful consideration, the Board
    of Directors voted unanimously to approve the terms of this offer. However,
    there can be no assurance that the offer will provide any of the benefits
    listed above.</FONT></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">20</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p21"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Two of the Fund&#146;s
    Directors who voted to authorize this offer are affiliated with the Investment
    Manager and the Country Adviser, and therefore could benefit indirectly from
    this offer. The other six Directors are not &#147;interested persons&#148;
    of the Fund within the meaning of the 1940 Act. Subject to certain conditions
    as noted above, the Investment Manager, as well as the Country Adviser, may
    also benefit from this offer because their fees will be based on the net assets
    of the Fund. The Fund&#146;s Board of Directors considered this in its evaluation
    of the offer and determined that, in its business judgment, these increased
    fees were offset by the potential benefits of the offer to the Fund and its
    stockholders. See &#147;Investment Management and Other Services.&#148; It
    is not possible to state precisely the amount of additional compensation the
    Investment Manager and the Country Adviser might receive as a result of this
    offer because it is not known how many shares will be subscribed for and because
    the proceeds of this offer will be invested in additional portfolio securities,
    which will fluctuate in value. However, assuming that the value of the Fund&#146;s
    assets remained constant prior to the offer at &#36;[ ] million (its approximate
    value as of [recent date], 2006) and after the offer at &#36;[ ] million (which
    assumes that all rights are exercised at the estimated subscription price,
    including the additional shares that may be issued under the over-subscription
    privilege), the annual compensation received by the Investment Manager and
    the Country Adviser would increase by approximately &#36;[ ] million (including
    administrative fees) and &#36;[ ], respectively. The Country Adviser&#146;s
    fee is paid by the Investment Manager and not directly by the Fund. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may, in the future,
    choose to make additional rights offerings from time to time for a number
    of shares and on terms that may or may not be similar to this offer. Any such
    future rights offerings will be made in accordance with the then-applicable
    requirements of the 1940 Act and the U.S. Securities Act of 1933, as amended
    (the &#147;1933 Act&#148;). </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">There can be no assurance
    that the Fund or its stockholders will achieve any of the foregoing objectives
    or benefits through this offer. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Over-Subscription Privilege</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">If some stockholders as
    of the record date do not exercise all of the rights initially issued to them,
    any shares for which subscriptions have not been received from stockholders
    will be offered by means of the over-subscription privilege to those stockholders
    as of the record date who have exercised all of the rights initially issued
    to them and who wish to acquire additional shares. Stockholders who exercise
    all of the rights initially issued to them should indicate on the subscription
    certificate how many shares they are willing to acquire through this over-subscription
    privilege. If sufficient shares are available, all over-subscription requests
    will be honored in full. If sufficient shares are not available to honor all
    requests for over-subscription, the Fund may increase the number of shares
    available by up to 25%, or [&nbsp;] shares in order to satisfy over-subscription
    requests. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">To the extent that there
    are not sufficient shares to honor all over-subscription requests, the available
    shares will be allocated among those who over-subscribe based on the number
    of rights originally issued to them by the Fund, so that the number of shares
    issued to stockholders who subscribe through the over-subscription privilege
    will generally be in proportion to the number of shares of the Fund owned
    by them on the record date. The percentage of remaining shares each over-subscribing
    stockholder may acquire may be rounded down to the nearest whole share to
    result in delivery of whole shares. The allocation process may involve a series
    of allocations in order to ensure that the total number of shares available
    for over-subscriptions is distributed, as nearly as may be practicable, on
    a pro rata basis. The Fund will not offer or sell any shares that are not
    subscribed for through the primary subscription or the over-subscription privilege.
    </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Subscription Price</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The subscription price
    will be [ ]% of the Average Market Price, but in any case not less than [&nbsp;]%
    of the net asset value per share of the Fund&#146;s common stock at the close
    of trading on the NYSE on the date on which the offer expires. If the Average
    Market Price is less than [_]% of the net asset value per share of the Fund&#146;s
    common stock at the close of trading on the NYSE on the date on which the
    offer expires, the offer will not be consummated. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund announced the
       offer after the close of business on the NYSE on April 7, 2006.
    The last reported sale price of a share of the Fund&#146;s common stock on
     the NYSE on March 31, 2006 and [recent date], 2006 was &#36;50.50
    and &#36;[&nbsp;], respectively. The net asset value per share at the close
     of business on March 31, 2006 and [recent date], 2006 was &#36;41.83
    and &#36;[&nbsp;], respectively. </FONT></p>
</div>
<P align="center"> <FONT size=2 face="Times New Roman, Times, serif">21</FONT></P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p22"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p><B><FONT size=2>Rights May Not Be Purchased or Sold</FONT></B></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The rights are non-transferable.
    You may not purchase or sell them. The rights will not trade on the NYSE or
    any other exchange. The shares to be issued upon the exercise of the rights,
    however, will trade on the NYSE under the symbol &#147;IFN.&#148; If you do
    not exercise your rights before the conclusion of this offer, your rights
    will expire without value. </FONT></p>
</div>
<P> <font size="2" face="Times New Roman, Times, serif"><B>Expiration, Extension
  and Early Termination of the Offer </B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The expiration date is
    5:00 p.m., Eastern daylight time, on [expiration date], 2006, unless extended
    by the Fund to not later than [extended expiration date], 2006 or terminated
    early as described herein. The Fund may elect to extend the offer in order
    to, among other things, increase potential stockholder participation in the
    offer or allow stockholders additional time to evaluate the terms of the offer.
    Moreover, the Fund may extend the offer upon the occurrence of the events
    described below under &#147;&#151;Notice of Net Asset Value Decline&#151;Possible
    Suspension or Withdrawal of the Offer.&#148; </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The rights will expire
    on the expiration date and may not be exercised after that date. Because the
    expiration date and the date upon which the price of the rights will be determined
    will be the same date, stockholders who exercise their rights will not know
    the purchase price of the shares when they make their investment decision.
    Once you subscribe for shares and the Fund receives payment or a guarantee
    of payment, you will not be able to change your decision except as provided
    under &#147;&#151;Notice of Net Asset Value Decline&#151;Possible Suspension
    or Withdrawal of the Offer.&#148; </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may elect to terminate
    the offer early if, in the judgment of the Fund&#146;s Board of Directors,
    market circumstances significantly change and the Fund&#146;s board determines
    that the offer no longer constitutes a net benefit to the Fund or the Fund&#146;s
    stockholders. In such event, the Fund&#146;s board would likely determine
    that the risks associated with proceeding with the offer would be greater
    to the Fund and the Fund&#146;s stockholders than the risks associated with
    early termination, which risks could include negative public perception of
    the Fund and a negative impact on the Fund&#146;s performance. </FONT></p>
</div>
<font face="Times New Roman, Times, serif"><B><FONT size=2>Subscription Agent</FONT></B><BR>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The subscription agent
    for this offer is The Colbent Corporation, which will receive, for its administrative,
    processing, invoicing and other services as subscription agent, an estimated
    fee of &#36;[ ] and reimbursement for all out-of-pocket expenses related to
    this offer. Stockholder inquiries may be directed to Georgeson Shareholder
    Communications Inc., the information agent, toll-free at 1-866-297-1264. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">THE SIGNED SUBSCRIPTION
    CERTIFICATES SHOULD BE SENT TO THE COLBENT CORPORATION, by one of the following
    methods: </FONT></p>
</div>
<TABLE width="100%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=center> <font face="Times New Roman, Times, serif"><I><FONT size=2>By
      Express Mail or</FONT></I>&nbsp; </font></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD width=28% align=center> <font face="Times New Roman, Times, serif"><I><FONT size=2>By
      First Class Mail:</FONT></I>&nbsp; </font></TD>
    <TD width=25% align=center> <font face="Times New Roman, Times, serif"><I><FONT size=2>Overnight
      Courier:</FONT></I>&nbsp; </font></TD>
    <TD width=25% align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">The Colbent
      Corporation</FONT><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">The Colbent
      Corporation</FONT><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">Attn:
      Corporate Actions</FONT><font face="Times New Roman, Times, serif">&nbsp;
      </font></TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">Attn:
      Corporate Actions</FONT><font face="Times New Roman, Times, serif">&nbsp;
      </font></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">P.O. Box
      859208</FONT><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">161 Bay
      State Drive</FONT><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">Braintree,
      MA 02185-9208</FONT><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">Braintree,
      MA 02184-5203</FONT><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD colspan=2 align=center> <font size="2" face="Times New Roman, Times, serif"><i>By
      Facsimile Transmission:</i> </font></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD colspan=2 align=center> <font size=2 face="Times New Roman, Times, serif">1-781-380-3388</font>
    </TD>
    <TD align=center>&nbsp;</TD>
  </TR>
</TABLE>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">22</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p23"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td align="center"><font size=2 face="Times New Roman, Times, serif">C</font><font size="2" face="Times New Roman, Times, serif"><i>onfirm
      by Telephone:</i> </font></td>
  </tr>
  <tr>
    <td align="center">&nbsp;</td>
  </tr>
  <tr>
    <td align="center"><font size=2 face="Times New Roman, Times, serif">1-781-843-1833,
      Ext. 200</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">THE FUND WILL ONLY ACCEPT
    SUBSCRIPTION CERTIFICATES ACTUALLY RECEIVED ON A TIMELY BASIS. IF YOU DELIVER
    THE CERTIFICATES TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, THAT DELIVERY
    WILL NOT BE EFFECTIVE. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Information Agent</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Any questions or requests
    for assistance may be directed to the information agent at its telephone number
    listed below: </FONT></p>
</div>
<P align="center"> <FONT size=2 face="Times New Roman, Times, serif">Georgeson
  Shareholder Communications Inc.</FONT><font face="Times New Roman, Times, serif"><BR>
  <FONT size=2>Toll Free: 1-866-297-1264 </FONT></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Stockholders may also call
    their nominees, who hold shares for the account of others, for information
    with respect to this offer. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund will pay an estimated
    fee of &#36;[ ] to Georgeson Shareholder Communications Inc. and reimburse
    it for all out-of-pocket expenses related to its services as information agent.
    </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Method for Exercising
  Rights</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Rights may be exercised
    by stockholders who fill in and sign the accompanying subscription certificate
    and mail it in the envelope provided or deliver the completed and signed subscription
    certificate to the subscription agent, together with any required payment
    for the shares as described below under &#147;&#151;Payment for Shares.&#148;
    Rights may also be exercised by a stockholder contacting his or her broker,
    bank or trust company, which can arrange, on the stockholder&#146;s behalf,
    to guarantee delivery, using a &#147;notice of guaranteed delivery,&#148;
    of a properly completed and executed subscription certificate and payment
    for the shares. The broker, bank or trust company may charge a fee for this
    service. Fractional shares will not be issued. Completed subscription certificates
    must be received by the subscription agent prior to 5:00 p.m., Eastern daylight
    time, on the expiration date (unless payment is to be effected by means of
    a notice of guaranteed delivery at the offices of the subscription agent.
    See &#147;&#151;Payment for Shares.&#148; </FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td colspan="2"><FONT size=2 face="Times New Roman, Times, serif">Depending
    on your status, the following methods of delivery should be used:</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif"><i>For stockholders
          who are record owners.</i> Stockholders who are record owners can choose
          between either option set forth below under &#147;&#151;Payment for
          Shares.&#148; If time is of the essence, option (1) set forth below
          under &#147;&#151; Payment for Shares&#148; will permit delivery
      of  the subscription certificate and payment after the expiration date.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif"><i>For investors whose
          shares are held through a nominee.</i> Stockholders whose shares are
          held by a nominee such as a broker, bank or trust company must contact
          that nominee to exercise their rights. In that case, the nominee will
          complete the subscription certificate on behalf of the stockholder
          and arrange for proper payment by one of the methods set forth below
          under &#147;&#151;Payment
       for Shares.&#148;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif"><i>For nominees.</i>      Nominees,
        who hold shares for the account of others,  should notify the respective
        beneficial owners of such shares as soon as possible to ascertain the
        beneficial owners&#146;
      intentions and to obtain instructions with respect to the rights. If the
      beneficial owner so instructs, the nominee should complete the subscription
      certificate and submit it to the subscription agent, together with the
      proper payment described below under &#147;&#151;Payment for Shares.&#148;</FONT></td>
  </tr>
</table>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">23</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p24"></a> </font><font face="TimesNewRoman,Times New Roman,Times,serif"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back
      to Contents</a></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><B>Payment for Shares</B></font></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Stockholders who acquire shares in the
    primary subscription or pursuant to the over-subscription privilege may choose
    between the following methods of payment: </FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD width="3%" valign=top>&nbsp;</TD>
    <TD width="3%" valign=top><font size="2" face="Times New Roman, Times, serif"> (1)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> If, prior to 5:00
        p.m., Eastern daylight time, on the expiration date, the subscription
        agent has received a notice of guaranteed delivery by facsimile or otherwise
        from a bank, trust company or a NYSE member firm guaranteeing delivery
        of (a) payment of the full subscription price for the shares subscribed
        for in the primary subscription and any additional shares subscribed
        for through the over-subscription privilege and (b) a properly completed
        and executed subscription certificate, the subscription will be accepted
        by the subscription agent. The bank, trust company or NYSE member firm
        may charge you a fee for this service. The subscription agent will not
        honor a notice of guaranteed delivery if a properly completed and executed
        subscription certificate is not received by the subscription agent by
      the close of business on [subscription deadline], 2006.</font></TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD valign=top>&nbsp;</TD>
    <TD valign=top><font size="2" face="Times New Roman, Times, serif"> (2)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Alternatively, a
        record owner can send payment for the shares acquired in the primary
        subscription, together with the subscription certificate, to the subscription
        agent based on an estimated subscription price of &#36;[ ] per share.
        To be accepted, such payment, together with the subscription certificate,
        must be received by the subscription agent prior to 5:00 p.m., Eastern
      daylight time, on the expiration date.</font></TD>
  </TR>
</TABLE>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">IF THE SECOND METHOD DESCRIBED ABOVE
    IS USED, PAYMENT BY CHECK MUST ACCOMPANY ANY SUBSCRIPTION CERTIFICATE FOR
    THE SUBSCRIPTION CERTIFICATE TO BE ACCEPTED. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">If the market price of
      the Fund&#146;s
    common stock is below the subscription price, it may not be in your interest
    to participate in this offering. You will have no right to rescind your subscription
    after receipt of your payment for shares by the subscription agent, except
    as provided below under &#147;&#151;Notice of Net Asset Value Decline/Possible
    Suspension or Withdrawal of the Offer.&#148; </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The subscription agent will deposit all
    checks received by it prior to the final due date into a segregated interest
    bearing and insured account at a non-affiliated bank pending distribution
    of the shares. Interest will accrue to the benefit of the Fund regardless
    of whether shares are issued by the Fund. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">THE METHOD OF DELIVERY
      OF SUBSCRIPTION CERTIFICATES AND PAYMENT OF THE SUBSCRIPTION PRICE TO THE
      FUND WILL BE AT
    YOUR ELECTION AND RISK, BUT, IF SENT BY MAIL, WE RECOMMEND THAT YOU SEND
      THE SUBSCRIPTION CERTIFICATES AND PAYMENT BY REGISTERED MAIL, PROPERLY
      INSURED
    WITH RETURN RECEIPT REQUESTED, AND THAT A SUFFICIENT NUMBER OF DAYS BE ALLOWED
      TO ENSURE DELIVERY TO THE FUND PRIOR TO 5:00 P.M., EASTERN DAYLIGHT TIME,
      ON THE EXPIRATION DATE. THE FUND RESERVES THE RIGHT NOT TO ACCEPT YOUR
      PAYMENT
    IF PAYMENT IS NOT RECEIVED IN A TIMELY FASHION. YOU ARE THEREFORE STRONGLY
      ENCOURAGED TO PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF A CERTIFIED OR BANK
    CASHIER&#146;S CHECK. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">A confirmation will be
      sent by the subscription agent to each stockholder (or, if the Fund&#146;s
      shares on the record date are held by a nominee, to such nominee) by [subscription
      deadline], 2006,
    showing: </FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> the number of shares
      acquired pursuant to the primary subscription;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> the number of shares,
      if any, acquired through the over-subscription privilege;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> the per share and
      total purchase price for the shares; and</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <FONT size=2>any additional amount payable by
      the stockholder to the Fund or any excess to be refunded by the</FONT> <FONT size=2>Fund
      to the stockholder, in each case based on the subscription price as determined
      on the Pricing</FONT> <FONT size=2>Date.</FONT></font></td>
  </tr>
</table>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> 24</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p25"></a><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In the case of any stockholder who exercises
    his or her right to acquire shares pursuant to the over-subscription privilege,
    any excess payment which would otherwise be refunded to the stockholder will
    be applied by the Fund toward payment for additional shares acquired pursuant
    to exercise of the over-subscription privilege. Any additional payment required
    from a stockholder must be received by the subscription agent by [payment
    date], 2006. Any excess payment to be refunded by the Fund to a stockholder
    will be mailed by the subscription agent to such stockholder as promptly as
    possible after [payment date], 2006. All payments by a stockholder must be
    made in United States dollars by money order or check drawn on a bank located
    in the United States of America and payable to The India Fund, Inc. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Issuance and delivery of certificates
    for the shares purchased are subject to collection of checks and actual payment
    through any notice of guaranteed delivery. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">If a stockholder who acquires shares
    pursuant to the primary subscription or over-subscription privilege does not
    make payment of all amounts due by [payment date], 2006, the Fund reserves
    the right, among other things, to: </FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> find other purchasers
      for such subscribed and unpaid shares; and/or</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <FONT size=2>apply any payment actually received
      by it toward the purchase of the greatest number of whole shares</FONT>
        <FONT size=2>which could be acquired by such stockholder
      upon exercise of the primary subscription and/or over-subscription privilege.</FONT></font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">All questions concerning the timeliness,
    validity, form and eligibility of any exercise of rights will be determined
    by the Fund, whose determinations will be final and binding. The Fund may,
    in its sole discretion, waive any defect or irregularity, or permit a defect
    or irregularity to be corrected within such time as it may determine, or reject
    the purported exercise of any right. Subscriptions will not be deemed to have
    been received or accepted until all irregularities have been waived or cured
    within such time as the Fund determines in its sole discretion. The Fund will
    not be under any duty to give notification of any defect or irregularity in
    connection with the submission of subscription certificates or incur any liability
    for failure to give such notification. </FONT></p>
</div>
<P><font size="2" face="Times New Roman, Times, serif"> <B>Notice of Net Asset
  Value Decline/Possible Suspension or Withdrawal of the Offer </B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund has, as required
      by the SEC, undertaken to suspend this offer until it amends this prospectus
      if, subsequent
    to the effective date of the Fund&#146;s Registration Statement, the Fund&#146;s
    net asset value declines more than 10% from its net asset value as of the
    effective date. Accordingly, the Fund will notify stockholders of any such
    decline and thereby permit them to cancel their exercise of rights. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Delivery of Share Certificates</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Participants in the Fund&#146;s
      dividend reinvestment and cash purchase plan will have any shares acquired
      in the primary
    subscription and pursuant to the over-subscription privilege credited to
      their accounts in the plan. Stock certificates will not be issued for shares
      credited
    to plan accounts. Stockholders whose shares are held of record by a nominee
      on their behalf will have any shares acquired in the primary subscription
      and pursuant to the over-subscription privilege credited to the account
      of
    such nominee. For all other stockholders, the Fund will issue stock certificates
      for shares acquired through subscription only upon request made at the
      time
    of exercise of the rights. If a request is made, stock certificates will
      be mailed promptly after [payment date], 2006 and after full payment for
      the
    subscribed shares has been received and cleared. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Restrictions on Foreign
Stockholders</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund will not mail subscription certificates
    to stockholders whose record addresses are outside the United States. PFPC
    Inc. will hold the rights to which subscription certificates relate for foreign
    stockholders accounts until instructions are received to exercise the rights.
    If no instructions are received prior to the expiration date, which is [expiration
    date], 2006, the rights will expire. Foreign stockholders holding shares through
    a U.S. broker-dealer should contact the broker-dealer regarding this offer.</FONT></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> 25 </font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p26"></a><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<P><font size="2" face="Times New Roman, Times, serif"> <B>United States Federal
  Income Tax Consequences of the Offer </B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Stockholders who receive rights pursuant
    to this offer will not recognize taxable income for United States federal
    income tax purposes upon their receipt of the rights. If rights issued to
    a stockholder expire without being exercised, no basis will be allocated to
    such rights, and the stockholder will not recognize any gain or loss for U.S.
    federal income tax purposes upon such expiration. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Provided that the fair
      market value of the rights distributed pursuant to this offer is less than
      15% of the fair
    market value of the Fund&#146;s common stock at the time of distribution (which
    the Fund expects will be the case), the tax basis of a stockholder&#146;s
    common stock will remain unchanged, and the stockholder&#146;s basis in the
    rights will be zero. A stockholder may, however, elect to allocate his basis
    in his common stock between his rights and common stock based on their relative
    fair market values on the date of distribution of the rights; this allocation
    is mandatory if the fair market value of the rights distributed pursuant to
    this offer is at least equal to 15% of the fair market value of the Fund&#146;s
    common stock at the time of distribution. A stockholder who exercises rights
    will not recognize any gain or loss for United States federal income tax
    purposes
    upon the exercise. The basis of the newly acquired common stock will equal
    the subscription price paid for the common stock plus the basis allocated
    to the rights that are exercised, if any. Upon a sale or exchange of the
    common
    stock so acquired, the stockholder will recognize gain or loss measured by
    the difference between the proceeds of the sale or exchange and the cost
    basis
    of such common stock. Assuming the stockholder holds the common stock as
    a capital asset, any gain or loss realized upon its sale will generally be
    treated
    as a capital gain or loss, and the gain or loss will be long-term capital
    gain or loss if the common stock has a holding period of more than one year
    at the time of the sale. However, any loss recognized upon the sale of shares
    of common stock with a tax holding period of six months or less will be treated
    as a long-term capital loss to the extent of any capital gain distribution
    previously received by the stockholder with respect to such shares, and a
    loss may be disallowed under wash sale rules to the extent that the stockholder
    purchases additional common stock (including by reinvestment of distributions)
    within 30 days before or after the sale date. The holding period for common
    stock acquired upon the exercise of rights will begin on the date of exercise
    of the rights. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The foregoing is a summary of certain
    U.S. federal income tax consequences of this offer under the provisions of
    the Internal Revenue Code and applicable existing and proposed regulations
    thereunder, all as currently in effect and all subject to change at any time,
    perhaps with retroactive effect. It does not include any state, local or foreign
    tax consequences of this offer. This summary is generally applicable to stockholders
    that are United States persons as defined in the Internal Revenue Code. Further,
    this summary is not intended to be, nor should it be, construed as legal or
    tax advice, and stockholders are urged to consult their own tax advisors to
    determine the tax consequences to them of this offer and their ownership of
    rights and common stock. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Dilution</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">As a result of this offer,
      you could incur dilution of ownership, voting rights and your share of
      any distributions
    made by the Fund if you do not exercise all of your rights, and you could
      incur immediate economic dilution if the subscription price is less than
      the
    Fund&#146;s net asset value per share. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">If you do not exercise all of your rights,
    you may incur dilution of ownership and voting rights, as well as dilution
    of your share of any distributions made by the Fund, as a result of this offer.
    This dilution may occur because you could own a smaller interest in the Fund
    after the offer than you owned prior to the offer. If you do not submit a
    subscription request pursuant to the over-subscription privilege, you may
    also experience dilution in your Fund ownership if the Fund offers additional
    shares for subscription. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In addition to the dilution
      described above, if the subscription price is less than the Fund&#146;s net asset value
    per share, you would experience immediate dilution of net asset value per
    share because the number of shares outstanding after the offer will have increased
    proportionately more than the increase in the size of the Fund&#146;s net
    assets. This dilution of net asset value would disproportionately affect stockholders
    who do not exercise their rights. In addition, whether or not you exercise
    your rights, you will experience a dilution of net asset value because you
    could indirectly bear the expenses of this offer, which include, among other
    items, SEC registration fees, state &#147;blue sky&#148; qualification fees,
    printing expenses and the fees assessed by service providers (including the
    cost of the Fund&#146;s counsel and accountants). We cannot state precisely
    the amount of any decrease because we do not know at this time how many shares
    will be subscribed for or what the net asset value per share will be at the
    pricing date. </FONT></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> 26</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p27"></a> </font><font face="TimesNewRoman,Times New Roman,Times,serif"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back
      to Contents</a></font></p>
<P align="center"><font size="2" face="Times New Roman, Times, serif"><B>USE
OF PROCEEDS</B></font></P>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">We estimate the net proceeds
      of this offer to be approximately &#36;[ ]. If the Fund increases the number of shares
    subject to subscription by 25%, then the total net proceeds of the offer will
    be approximately &#36;[ ]. These figures assume all rights are exercised in
    full, a subscription price of &#36;[ ], and payment of offering expenses of
    approximately &#36;[ ]. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Investment Manager
      anticipates that investment of the net proceeds of this offer in accordance
      with the Fund&#146;s
    investment goal and policies may take up to [six] months from their receipt
    by the Fund, depending on market conditions and the availability of appropriate
    securities. The Fund may require up to [six] months due to the Fund&#146;s
    need to invest substantially all of its assets in the securities of Indian
    companies. See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations.&#148;
    Pending investment, the net proceeds of this offer will be held in the types
    of short-term debt securities and instruments in which the Fund may invest.
    See &#147;Investment Objective and Policies.&#148; As a result of this short-term
    investment of the proceeds, a lower yield may be realized. </FONT></p>
</div>
<P align="center"><font face="Times New Roman, Times, serif"> <B><a name="p27a"></a><FONT size=2>INVESTMENT
  OBJECTIVE AND POLICIES</FONT></B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The investment objective of the Fund
    is long-term capital appreciation, which it seeks to achieve by investing
    primarily in the equity securities of Indian companies. Equity securities
    include common and preferred stock (including convertible preferred stock),
    American, global or other types of depositary receipts, or ADRs, convertible
    bonds, notes and debentures, equity interests in trusts, partnerships, joint
    ventures or similar enterprises and common stock purchase warrants and rights.
    Most of the equity securities purchased by the Fund are expected to be traded
    on an Indian stock exchange or in an Indian over-the-counter market. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s investment objective
    and its policy to invest, under normal market conditions, at least 80% of
    its total assets in equity securities of Indian companies are fundamental
    policies of the Fund that may not be changed without the approval of a majority
    of the Fund&#146;s outstanding voting securities. See &#147;Investment Restrictions.&#148;
    </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Portfolio Structure</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Under normal market conditions,
      at least 80% of the Fund&#146;s total assets are invested in equity securities of Indian
    companies. &#147;Indian companies&#148; include companies that: </FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> are organized under
    the laws of India,</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <FONT size=2>regardless of where organized, derive
      at least 50% of their revenues or profits from goods</FONT> <FONT size=2>produced
      or sold, investments made, or services performed, in India, or have at least
      50% of their</FONT> <FONT size=2>assets in India,
      or</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> have securities
        which are traded principally on any Indian stock exchange or in the Indian
      over-the-counter market.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <P><font size="2" face="Times New Roman, Times, serif"> Up to 20% of the Fund&#146;s
    total assets may be invested, subject to certain restrictions, in:</font></P>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <FONT size=2>equity securities
          of companies (other than companies considered &#147;Indian companies&#148; under
          the</FONT>
        <FONT size=2>above criteria), regardless of where
      organized, which the Investment Manager believes derive, or</FONT> <FONT size=2>will
      derive, at least 25% of their revenues from business in or with India, or
      have at least 25% of</FONT> <FONT size=2>their assets
      in India,</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <FONT size=2>debt securities denominated in Indian
      rupees or issued or guaranteed by an Indian company, the</FONT> <FONT size=2>Government
      of India or an Indian governmental entity, and</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <FONT size=2>debt securities
          of the type described under &#147;&#151;Temporary Investments.&#148; We
          refer to these</FONT>
        <FONT size=2>securities as &#147;temporary investments.&#148;</FONT></font></td>
  </tr>
</table>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">27</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p28"></a><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Up to 20% of the Fund&#146;s assets may
    also be utilized to purchase and sell options on securities, financial futures,
    fixed income indices and other financial futures contracts, enter into interest
    rate transactions and to enter into currency transactions, sell securities
    short and loan portfolio securities. The Fund will only invest in such assets
    in order to hedge against financial risks. The Fund will not be obligated,
    however, to do any hedging and makes no representation as to the availability
    of these techniques at this time or at any time in the future. See &#147;Risk
    Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The Fund&#146;s
    ability to successfully hedge against financial risks may adversely affect
    the Fund&#146;s net asset value&#148; and &#147;Additional Investment Activities&#151;Hedging.&#148;
    </FONT></p>
</div>
<div style="text-indent:3%">
  <P><font size="2" face="Times New Roman, Times, serif"> The Fund&#146;s assets
      may be invested in debt securities, other than temporary investments, when
      the Investment Manager believes that, based upon factors such as relative
      interest rate levels and foreign exchange rates, such securities offer
      opportunities for long-term capital appreciation. The Fund may invest up
      to 100% of its assets in temporary investments for temporary defensive
      purposes due to political, market or other factors affecting markets in
    India. </font></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may invest in
      investment funds that invest at least 80% of their total assets in the
      equity securities of
    Indian companies in which the Fund is authorized to invest. The Fund may
      invest in investment funds as a means of investing in other equity securities
      in
    which the Fund is authorized to invest when the Investment Manager believes
      that such investments may be more advantageous to the Fund than a direct
      market
    purchase of such securities. Under the 1940 Act, the Fund is restricted in
      the amount it may invest in such funds. See &#147;Additional Investment Activities&#151;Investment
    Funds.&#148; </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may invest its
      assets in a broad spectrum of industries. In selecting industries and companies
      for investment,
    the Investment Manager will consider overall growth prospects, financial
      condition, competitive position, technology, research and development,
      productivity,
    labor costs, raw material costs and sources, profit margins, return on investment,
      structural changes in local economies, capital resources, the degree of
      government
    regulation or deregulation, management and other factors. See &#147;Investment
    Restrictions.&#148; </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">There are risks associated
      with investments in securities of small and medium capitalization companies
      that are not customarily
    associated with investments in securities of more established and larger
      capitalized companies. Although the opportunities for growth may be greater
      with these
    companies, they also involve greater risks. For example, they are more susceptible
      to abrupt and erratic price movements and adverse general market and economic
      developments, and it may be more difficult to obtain information about
      these
    companies because they tend to be less well known and followed by fewer securities
      analysts. See &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations&#151;Investments
      in unseasoned and small and mid-capitalization Indian companies may expose
    the Fund to greater investment risk.&#148; </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Temporary Investments</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may hold and/or
      invest its assets in cash and/or temporary investments for cash management
      purposes, pending
    investment in accordance with the Fund&#146;s investment objective and policies
    and to meet operating expenses. In addition, the Fund may take a temporary
    defensive posture and invest without limitation in temporary investments.
    The Fund may assume a temporary defensive posture when, due to political,
    market or other factors broadly affecting markets, the Investment Manager
    determines that either opportunities for capital appreciation in those markets
    may be significantly limited or that significant diminution in value of the
    securities traded in those markets may occur. To the extent that the Fund
    invests in temporary investments, it may not achieve its investment objective. </FONT></p>
</div>
<div align="center">
  <p><font size="2" face="Times New Roman, Times, serif"> 28</font></p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p29"></a><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Specifically, &#147;temporary investments&#148; are
      debt securities denominated in U.S. dollars or in another freely convertible
    currency including:</FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif"> <FONT size=2>short-term (less than
      12 months to maturity) and medium-term (not greater than five years to</FONT>
        <FONT size=2>maturity) obligations issued or guaranteed
      by:</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;<font size=2>&nbsp;</font></font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">the U.S. government or the Indian
      government or their agencies or instrumentalities, or </FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;<font size=2>&nbsp;</font></font></td>
    <td><font size=2 face="Times New Roman, Times, serif">international organizations designated
      or supported by multiple foreign governmental entities to promote economic
      reconstruction or development; </font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td colspan="2"><FONT size=2 font face="Times New Roman, Times, serif">finance
        company obligations, corporate commercial paper and other short-term
        commercial obligations, in each case rated, or issued by companies with
        similar securities outstanding that are rated, Prime-1 or A or better
        by Moody&#146;s Investors Service, Inc. or A-1 or A or better by Standard &amp; Poor&#146;s
        Ratings Services, a division of the McGraw Hill Companies, Inc., or,
        if unrated, of comparable quality as determined by the Investment Manager;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td colspan="2"><FONT size=2 font face="Times New Roman, Times, serif">obligations
        (including certificates of deposit, time deposits, demand deposits and
        bankers&#146; acceptances) of banks, subject to the restriction that
        the Fund may not invest more than 25% of its total assets in bank securities;
        and</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td colspan="2"><FONT size=2 font face="Times New Roman, Times, serif">repurchase
        agreements with respect to securities in which the Fund may invest. The
        banks whose obligations may be purchased by the  Fund and the banks and
        broker-dealers with which the Fund may enter into repurchase agreements
        include any member bank of the U.S. Federal Reserve System and any broker-dealer
        or any foreign bank that has been determined by the Investment Manager
        to be creditworthy.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Repurchase agreements
      are contracts pursuant to which the seller of a security agrees at the
      time of sale to repurchase
    the security at an agreed upon price and date. When the Fund enters into
      a repurchase agreement, the seller will be required to maintain the value
      of
    the securities subject to the repurchase agreement, marked to market daily,
      at not less than their repurchase price. Repurchase agreements may involve
      risks in the event of insolvency or other default by the seller, including
      possible delays or restrictions upon the Fund&#146;s ability to dispose
    of the underlying securities. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Other Investments</B></font></p>
<div style="text-indent:3%">
  <p><font face="Times New Roman, Times, serif"><I><FONT size=2>Illiquid securities. </FONT></I><FONT size=2>The
        Fund may invest up to 20% of its total assets in illiquid securities
        for which
    there may be no or only a limited trading market and for which a low trading
        volume of a particular security may result in abrupt and erratic price
        movements.
    The Fund may be unable to dispose of its holdings in illiquid securities
        at then-current market prices and may have to dispose of such securities
        over
    extended periods of time. See &#147;Risk </FONT></font><FONT size=2 face="Times New Roman, Times, serif">Factors&#151;Risks
    Related to the Fund&#146;s Operations&#151;The Fund&#146;s investments in
    illiquid securities may restrict its ability to dispose of its investments
    in a timely fashion and at a price approximating the value at which the Fund
    carries the securities on its books.&#148; In many cases, illiquid securities
    will be subject to contractual or legal restrictions on transfer. In addition,
    issuers whose securities are not publicly traded may not be subject to the
    disclosure and other investor protection requirements that may be applicable
    if their securities were publicly traded. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><font face="Times New Roman, Times, serif"><I><FONT size=2>Rule 144A securities. </FONT></I><FONT size=2>The
        Fund may purchase certain restricted securities, or Rule 144A securities,
        for which there is a secondary market of qualified institutional buyers,
        as
    contemplated by Rule 144A under the 1933 Act. Rule 144A provides an exemption
        from the registration requirements of the 1933 Act for the resale of
        certain
    restricted securities to qualified institutional buyers. One effect of Rule
        144A is that certain restricted securities may now have liquidity, though
        there is no assurance that a liquid market for Rule 144A securities will
        develop
    or be maintained. To the extent that the number of qualified institutional
        buyers is reduced, a previously liquid Rule 144A security may be determined
        to be illiquid, thus increasing the percentage of illiquid assets in
        the Fund&#146;s
    portfolio. The Board of Directors has adopted policies and procedures for
        the purpose of determining whether securities that are eligible for resale
        under Rule 144A are liquid or illiquid securities. Pursuant to those
        policies
    and procedures, the Board of Directors has delegated to the Investment Manager
    the determination as to whether a particular security is liquid or illiquid. </FONT></font></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">29</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <P><font size="2" face="Times New Roman, Times, serif"> <I>Convertible securities. </I>A
      convertible security is a bond, debenture, note, preferred stock or other
      security that may be converted into or exchanged for a prescribed amount
      of common stock of the same or a different issuer within a particular period
      of time at a specified price or formula. A convertible security entitles
      the holder to receiveinterest generally paid or accrued on debt or the
      dividend paid on preferred stock until the convertible security matures
      or is redeemed, converted or exchanged. Convertible securities have several
    unique investment characteristics such as: </font></P>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> higher yields than
      common stocks but lower yields than comparable nonconvertible securities;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <FONT size=2>a lesser degree of fluctuation in
      value than the underlying stock since they have fixed income</FONT> <FONT size=2>characteristics;
      and</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> the potential for
        capital appreciation if the market price of the underlying common stock
      increases.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">A convertible security
      might be subject to redemption at the option of the issuer at a price established
      in the convertible
    security&#146;s governing instrument. If a convertible security held by the
    Fund is called for redemption, the Fund may be required to permit the issuer
    to redeem the security, convert it into the underlying common stock or sell
    it to a third party. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In selecting convertible debt securities
    for the Fund, the following factors, among others, may be considered by the
    Investment Manager: </FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> the creditworthiness
      of the issuers of the securities;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> the interest income
      generated by the securities;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> the potential for
      capital appreciation of the securities and the underlying stock;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> the conversion prices
      of the securities relative to the underlying stocks; and</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> the conversion prices
      of the securities relative to other comparable securities.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font face="Times New Roman, Times, serif"><I><FONT size=2>Warrants. </FONT></I><FONT size=2>The
    Fund may invest in warrants, which are securities permitting but not obligating
    their holder to subscribe for other securities. Warrants do not carry with
    them the right to dividends or voting rights with respect to the securities
    that they entitle their holder to purchase, and they do not represent any
    rights in the assets of an issuer. As a result, an investment in warrants
    may be considered more speculative than certain other types of investments.
    In addition, the value of a warrant does not necessarily change with the value
    of the underlying securities, and a warrant ceases to have value if it is
    not exercised prior to its expiration date. </FONT></font></p>
</div>
<div style="text-indent:3%">
  <p><font face="Times New Roman, Times, serif"><I><FONT size=2>Equity-linked debt securities.
    </FONT></I><FONT size=2>The Fund may invest in equity-linked debt securities.
    The amount of interest and/or principal payments that an issuer of equity-linked
    debt securities is obligated to make is linked to the performance of a specified
    index of equity securities and may be significantly greater or less than payment
    obligations in respect of other types of debt securities. As a result, an
    investment in equity-linked debt securities may be considered more speculative
    than other types of debt securities. In selecting equity-linked debt securities
    for the Fund, the Investment Manager may consider, among other factors, the
    creditworthiness of the issuers of the securities and the volatility of the
    index of equity securities. </FONT></font></p>
</div>
<P align="center"><font face="Times New Roman, Times, serif"> <B><a name="p30"></a><FONT size=2>ADDITIONAL
  INVESTMENT ACTIVITIES</FONT></B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In addition to the investment policies
    discussed above, the Fund may engage in certain additional investment activities.
    These activities may be limited by Indian law or regulations. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Hedging</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund is authorized to use various
    hedging and investment strategies. From time to time and as permitted by the
    1940 Act, the Fund may engage in certain hedging activities described below
    to hedge various market risks (such as broad or specific market movements
    and interest rates and currency exchange rates). </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">30</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p31"></a><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In addition, techniques
      and instruments may change over time as new instruments and strategies
      are developed or regulatory
    changes occur. Limitations on the portion of the Fund&#146;s assets that may
    be used in connection with the investment strategies described below are set
    out in &#147;Appendix A: General Characteristics and Risks of Hedging.&#148;
    </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Subject to the constraints
      described above, the Fund may purchase and sell interest rate, currency
      or stock index
    futures contracts and enter into currency forward contracts and currency
      swaps. It may purchase and sell (or write) exchange listed and over-the-counter
      put
    and call options on debt and equity securities, currencies, futures contracts,
      fixed income and stock indices and other financial instruments. And it
      may
    enter into interest rate transactions, equity swaps and related transactions
      and other similar transactions that may be developed to the extent the
      Investment
    Manager determines are consistent with the Fund&#146;s investment objective
    and policies and applicable regulatory requirements. The Fund&#146;s futures
    transactions will be entered into for hedging purposes. There is, however,
    no limit on the Fund&#146;s assets that can be put at risk through the use
    of futures contracts and options thereon, and the value of the Fund&#146;s
    futures contracts and options thereon may equal or exceed 100% of the Fund&#146;s
    total assets. The Fund&#146;s interest rate transactions may take the form
    of swaps, caps, floors and collars, currency forward contracts, currency
    futures
    contracts, currency swaps and options on currency or currency futures contracts. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Hedging may be used to
      attempt to protect against possible changes in the market value of securities
      held in or to be
    purchased for the Fund&#146;s portfolio resulting from securities markets
    or currency exchange rate fluctuations, to protect the Fund&#146;s unrealized
    gains in the value of its portfolio securities, to facilitate the sale of
    those securities for investment purposes, to manage the effective maturity
    or duration of the Fund&#146;s portfolio or to establish a position in the
    derivatives markets as a temporary substitute for purchasing or selling particular
    debt or equity securities. The ability of the Fund to utilize hedging successfully
    will depend on the Investment Manager&#146;s ability to predict pertinent
    market movements, and this ability cannot be assured. These skills are different
    from those needed to select portfolio securities. The use of hedging in certain
    circumstances will require that the Fund segregate cash, U.S. government securities
    or other liquid debt obligations to the extent the Fund&#146;s obligations
    are not otherwise &#147;covered&#148; through ownership of the underlying
    security, financial instrument or currency. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">A detailed discussion
      of hedging, including applicable requirements of the U.S. Commodity Futures
      Trading Commission,
    the requirement to segregate assets with respect to these transactions and
      special risks associated with such strategies, appears in this prospectus
      as &#147;Appendix A: General Characteristics and Risks of Hedging.&#148; See
    also &#147;Risk Factors&#151;Risks Related to the Fund&#146;s Operations&#151;The
    Fund&#146;s ability to successfully hedge against financial risks may adversely
    affect the Fund&#146;s net asset value.&#148; </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>When-Issued and Delayed
  Delivery Securities</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may purchase
      securities on a when-issued or delayed delivery basis. Securities purchased
      on a when-issued
    or delayed delivery basis are purchased for delivery beyond the normal settlement
      date at a stated price. No income accrues to the purchaser of a security
      on
    a when-issued or delayed delivery basis prior to delivery. Such securities
      are recorded as an asset and are subject to changes in value based upon
      changes
    in market prices. Purchasing a security on a when-issued or delayed delivery
      basis can involve a risk that the market price at the time of delivery
      may
    be lower than the agreed-upon purchase price, in which case there could be
      an unrealized loss at the time of delivery. The Fund will only make commitments
      to purchase securities on a when-issued or delayed delivery basis with
      the
    intention of actually acquiring the securities, but it may sell them before
      the settlement date if it is deemed advisable. The Fund generally will
      establish
    a segregated account in which it will maintain liquid assets in an amount
      at least equal in value to the Fund&#146;s commitments to purchase securities
    on a when-issued or delayed delivery basis. If the value of these assets declines,
    the Fund will place additional liquid assets in the account on a daily basis
    so that the value of the assets in the account is equal to the amount of such
    commitments. As an alternative, the Fund may elect to treat when-issued or
    delayed delivery securities as senior securities representing indebtedness,
    which are subject to asset coverage requirements under the 1940 Act. See &#147;Investment
    Restrictions.&#148; </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Loans of Portfolio
Securities</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may lend portfolio securities.
    By doing so, the Fund attempts to earn income through the receipt of interest
    on the loan. In the event of the bankruptcy of the other party to a securities
    loan, the Fund could experience delays in recovering the securities that it
    lent. To the extent that, in the meantime, the value of the securities that
    the Fund has lent has increased, the Fund could experience a loss. </FONT></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> 31</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p32"></a><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may lend securities
      from its portfolio if liquid assets in an amount at least equal to the
      current market
    value of the securities lent (including accrued interest thereon) plus the
      interest payable to the Fund with respect to the loan is maintained by
      the
    Fund in a segregated account. Any securities that the Fund may receive as
      collateral will not become a part of its portfolio at the time of the loan
      and, in the event of a default by the borrower, the Fund will, if permitted
      by law, dispose of such collateral except for such part thereof that is
      a
    security in which the Fund is permitted to invest. During the time that securities
      are on loan, the borrower will pay the Fund any accrued income on those
      securities,
    and the Fund may invest the cash collateral and earn additional income or
      receive an agreed-upon fee from a borrower that has delivered cash equivalent
      collateral. Cash collateral received by the Fund will be invested in securities
      in which the Fund is permitted to invest. The value of securities lent
      will
    be marked to market daily. Portfolio securities purchased with cash collateral
      are subject to possible depreciation. Loans of securities by the Fund will
      be subject to termination at the Fund&#146;s or the borrower&#146;s option.
    The Fund may pay reasonable negotiated fees in connection with loaned securities,
    so long as such fees are set forth in a written contract and approved by the
    Fund&#146;s Board of Directors. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Investment Funds</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may invest in
      investment funds, other than those for which the Investment Manager or
      Country Adviser serve
    as investment adviser or sponsor and which invest principally in securities
      in which the Fund is authorized to invest. Under the 1940 Act, the Fund
      may
    invest a maximum of 10% of its total assets in the securities of other investment
      companies. In addition, the Fund may not invest more than 5% of its total
      assets in the securities of any one investment company, and it may not
      invest
    in any investment company if it would own more than 3% of the outstanding
      voting stock of that company. To the extent that the Fund invests in other
      investment funds, the Fund&#146;s stockholders will incur certain duplicative
    fees and expenses, including investment advisory fees. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Short Sales</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Although the Fund does
      not presently do so or intend to do so to any significant extent, the Fund
      may from time
    to time sell securities short. A short sale is a transaction in which the
      Fund would sell securities it does not own but has borrowed. In the event
      the Fund elects to sell securities short, the Fund&#146;s intention would
    be to seek to take advantage of decreases in the market prices of securities
    in order to increase the Fund&#146;s return on its investments. When the
    Fund makes a short sale, the proceeds it receives from the sale will be held
    on
    behalf of a broker until the Fund replaces the borrowed securities. To deliver
    the securities to the buyer, the Fund will need to arrange through a broker
    to borrow the securities, and, in so doing, the Fund will become obligated
    to replace the securities borrowed at their market price at the time of replacement,
    whatever that price may be. The Fund may have to pay a premium to borrow
    the
    securities and must pay</FONT><font face="Times New Roman, Times, serif"><I><FONT size=2>
    </FONT></I><FONT size=2>any dividends or interest payable on the securities
    until they are replaced. </FONT></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s obligation
      to replace the securities borrowed in connection with a short sale will
      be secured by
    collateral deposited with the broker that consists of cash, U.S. government
      securities or other liquid debt obligations. In addition, the Fund will
      place
    in a segregated account with its custodian, or designated sub-custodian,
      an amount of cash, U.S. government securities or other liquid debt obligations
      equal to the difference, if any, between the market value of the securities
      sold at the time they were sold short and any cash, U.S. government securities
      or other liquid obligations deposited as collateral with the broker in
      connection
    with the short sale (not including the proceeds of the short sale). Until
      it replaces the borrowed securities, the Fund will maintain the segregated
      account daily at a level so that the amount deposited in the account plus
      the amount deposited with the broker (not including the proceeds from the
      short sale) will equal the current market value of the securities sold
      short
    and the amount deposited in the account plus the amount deposited with the
      broker (not including the proceeds from the short sale) will not be less
      than
    the market value of the securities at the time they were sold short. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Short sales by the Fund involve certain
    risks and special considerations. Possible losses from short sales differ
    from losses that could be incurred from a purchase of a security because losses
    from short sales may be unlimited whereas losses from purchases can equal
    only the total amount invested. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">32</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p33"></a> </font><font face="TimesNewRoman,Times New Roman,Times,serif"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back
      to Contents</a></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><B>Leverage</B></font></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Although the Fund does
      not presently do so or intend to do so to any significant extent, the Fund
      may utilize leverage
    by borrowing or by issuing preferred stock or short-term debt securities
      in an amount up to 25% of the Fund&#146;s total assets. Borrowings may be secured
    by the Fund&#146;s assets. Temporary borrowings in an additional amount of
    up to 5% of the Fund&#146;s total assets may be made without regard to the
    foregoing limitation for temporary or emergency purposes such as clearance
    of portfolio transactions, share repurchases and payment of dividends. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Leverage by the Fund creates
      an opportunity for increased return but, at the same time, creates special
      risks. For example,
    leverage may exaggerate changes in the net asset value of the common stock
      and in the return on the Fund&#146;s portfolio. Although the principal of
    any leverage will be fixed, the Fund&#146;s assets may change in value during
    the time the leverage is outstanding. Leverage will create expenses for the
    Fund that can exceed the income from the assets acquired with the proceeds
    of the leverage. Furthermore, an increase in interest rates could reduce or
    eliminate the benefits of leverage and could reduce the value of the Fund&#146;s
    common stock. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund also may enter
      into reverse repurchase agreements with any member bank of the U.S. Federal
      Reserve System
    and any broker-dealer or any foreign bank that has been determined by the
      Investment Manager to be creditworthy. Under a reverse repurchase agreement,
      the Fund would sell securities and agree to repurchase them at a mutually
      agreed upon date and price. At the time the Fund enters into a reverse
      repurchase
    agreement, it may establish and maintain a segregated account with its custodian
      or a designated sub-custodian that contains cash, U.S. government securities
      or other liquid debt obligations that have a value not less than the repurchase
      price (including accrued interest). Reverse repurchase agreements involve
      the risk that the market value of the securities purchased with the proceeds
      of the sale of securities received by the Fund may decline below the price
      of the securities that the Fund is obligated to repurchase. In the event
      that
    the buyer of securities under a reverse repurchase agreement files for bankruptcy
      or becomes insolvent, the buyer or its trustee or receiver may receive
      an
    extension of time to determine whether to enforce the Fund&#146;s obligations
    to repurchase the securities, and the Fund&#146;s use of proceeds of the reverse
    repurchase agreement may effectively be restricted pending the decision. Reverse
    repurchase agreements will be treated as borrowings for purposes of calculating
    the Fund&#146;s borrowing limitation to the extent the Fund does not establish
    and maintain a segregated account. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Asset Coverage Requirements</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The 1940 Act requires
      the Fund to satisfy an asset coverage requirement of 300% of its indebtedness,
      including amounts
    borrowed, measured at the time that the Fund incurs the indebtedness. This
      requirement, which we refer to as the &#147;asset coverage requirement,&#148;
    means that the value of the Fund&#146;s total indebtedness may not exceed
    one-third of the value of its total assets (including such indebtedness),
    measured at the time the Fund incurs the indebtedness. The staff at the SEC&#146;s
    Division of Investment Management has taken the position that short sales
    of securities, reverse repurchase agreements, use of margin, sales of put
    and call options on specific securities or indices, investments in certain
    other types of instruments (including certain derivatives, such as swap agreements)
    and the purchase and sale of securities on a when-issued or forward commitment
    basis may be deemed to constitute indebtedness subject to the asset coverage
    requirement. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The SEC&#146;s staff has stated, however,
    that it will not deem a portfolio position involving these instruments to
    be subject to the asset coverage requirement if an investment company &#147;covers&#148; its
    position by segregating liquid securities on its books or in account with
    its custodian in an amount sufficient to offset the liability associated
    with
    the position. Generally, in conjunction with portfolio positions that are
    deemed to constitute senior securities, the Fund must: </FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> observe the asset
    coverage requirement;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <FONT size=2>maintain daily a segregated account
      in cash or liquid securities at such a level that the amount</FONT> <FONT size=2>segregated
      plus any amounts pledged to a broker as collateral will equal the current
      value of the</FONT> <FONT size=2>position; or</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> otherwise cover
      the portfolio position with offsetting portfolio securities.</font></td>
  </tr>
</table>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">33</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Segregation of assets or
    covering portfolio positions with offsetting portfolio positions may limit
    the Fund&#146;s ability to otherwise invest those assets or dispose of those
    securities. If the Fund were to issue preferred stock, the asset coverage
    requirement with respect to such preferred stock would be 200%. </FONT></p>
</div>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B><a name="p34"></a>INVESTMENT
  RESTRICTIONS</B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The following restrictions,
    along with the Fund&#146;s investment objective, its policy to invest at least
    80% of the Fund&#146;s total assets in the equity securities of Indian companies
    under normal market conditions and its interval fund structure, are, subject
    to the next sentence, the Fund&#146;s only fundamental policies, that is,
    policies that cannot be changed without the approval of the holders of a majority
    of the Fund&#146;s outstanding voting securities. In addition, as a matter
    of fundamental policy and notwithstanding any other fundamental investment
    policy or limitation, the Fund may invest all or a portion of its assets invested
    in India through a subsidiary, trust or other similar arrangement (including
    a branch) established by the Fund at any such time that the Board of Directors
    of the Fund determines that it is in the best interests of the Fund&#146;s
    stockholders. As used in here and otherwise in this prospectus, a &#147;majority
    of the Fund&#146;s outstanding voting securities&#148; means the lesser of
    (i) 67% of the shares represented at a meeting at which more than 50% of the
    outstanding shares are represented or (ii) more than 50% of the outstanding
    shares. The other policies and investment restrictions referred to in this
    prospectus are not fundamental policies of the Fund and may be changed by
    the Fund&#146;s Board of Directors without stockholder approval. If a percentage
    restriction set forth below is adhered to at the time a transaction is effected,
    later changes in any percentage resulting from any cause other than actions
    by the Fund will not be considered a violation. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Under its fundamental restrictions,
    the Fund may not:</font></p>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">purchase any securities
        that would cause 25% or more of the value of its total assets at the
        time  of such purchase to be invested in securities of one or more issuers
        conducting their principal business activities in the same industry,
        except that there is no limitation with respect to investment in obligations
        issued or guaranteed by the U.S. government, its agencies or instrumentalities;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">issue senior securities
        or borrow money, except for (a) senior securities (including borrowing
        money, margin transactions if the margin securities are owned and entering
        into reverse repurchase agreements, or any similar transactions) not
        in excess of 25% of its total assets (including the amount borrowed)
        and (b) borrowings of up to 5% of its total assets (including the amount
        borrowed) for temporary or emergency purposes (including for the clearance
        of transactions, repurchase of its shares or payment of dividends), without
        regard to the amount of senior securities outstanding under clause (a)
        above. However, with respect to the above, the Fund&#146;s obligations
        under when-issued and delayed delivery and similar transactions and reverse
        repurchase agreements are not treated as senior securities if covering
        assets are appropriately segregated, and the use of hedging shall not
        be treated as involving the issuance of a &#147;senior security&#148; or
        a &#147;borrowing.&#148; Also, for purposes of clauses (a) and (b) above,
        the term &#147;total assets&#148; shall be calculated after giving effect
        to the net proceeds of senior securities issued by the Fund reduced by
        any liabilities and indebtedness not constituting senior securities,
        except for such liabilities and indebtedness as are excluded from treatment
        as senior securities by this second bullet. The Fund&#146;s obligations under interest rate, currency and equity swaps
       are not treated as senior securities;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">purchase or sell commodities
        or commodity contracts, including futures contracts and options thereon,
        except that the Fund may  engage in hedging, as described in the section
        titled &#147;Additional Investment Activities&#151;Hedging&#148;;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">make loans, except
         that: (1) the Fund may (a) purchase and hold debt instruments (including
      bonds, debentures or other obligations and certificates of deposit, bankers&#146; acceptances
       and fixed time deposits) in accordance with its investment objective and
      policies, (b) enter into repurchase agreements with respect to portfolio
      securities and (c) make loans of portfolio securities, as described under &#147;Additional
      Investment Activities&#151;Loans of Portfolio Securities&#148; in this
      prospectus; and (2) delays in the settlement of securities transactions
      will not be considered loans;</FONT></td>
  </tr>
</table>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">34</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p35"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">underwrite the securities
      of other issuers, except to the extent that, in connection with the disposition
      of portfolio securities, it may be deemed to be an underwriter;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">purchase real estate,
         real estate mortgage loans or real estate limited partnership interests
      (other than securities secured by real estate or interests therein or securities
        issued by companies  that invest in real estate or interests therein);</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">purchase securities
         on margin, except (1) as provided in the second bullet above and (2)
        (a) for delayed delivery or when-issued transactions, (b) such short-term
        credits as are necessary for the clearance of transactions and (c) margin
        deposits in connection with transactions in futures contracts, options
        on futures contracts, options on securities and securities indices and
        currency transactions); or</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">invest for the purpose
      of exercising control over the management of any company.</FONT></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">For purposes of the above
    restrictions on senior securities and as further described above under &#147;Additional
    Investment Activities&#151;Asset Coverage Requirements,&#148; the 1940 Act
    requires the Fund to satisfy an asset coverage requirement of 300% of its
    indebtedness, including amounts borrowed, measured at the time the Fund incurs
    the indebtedness. Short sales of securities, reverse repurchase agreements,
    use of margin, sales of put and call options on specific securities or indices,
    investments in certain other types of instruments (including certain derivatives,
    such as swap agreements) and the purchase and sale of securities on a when-issued
    or forward commitment basis may be deemed to constitute indebtedness subject
    to this requirement. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">For purposes of the above
    restrictions on loans of portfolio securities and as further described under
    &#147;Additional Investment Activities&#151;Loans of Portfolio Securities,&#148;
    the Fund may make loans of portfolio securities if liquid assets in an amount
    at least equal to the current market value of the securities lent (including
    accrued interest thereon) plus the interest payable to the Fund with respect
    to the loan is maintained by the Fund in a segregated account. </FONT></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">35</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p36"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>RISK
  FACTORS</B></font></P>
<div style="text-indent:3%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>You should carefully
    consider the following risks and the other information in this prospectus
    before you decide to participate in this offer. The risks and uncertainties
    described below are not the only ones facing the Fund. Additional risks and
    uncertainties may also adversely affect and impair the Fund. If any of the
    following risks actually occur, the Fund&#146;s operations, results of operations
    and financial condition would likely suffer, which in turn could materially
    adversely affect your investment in the Fund. </I></font></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Risks Relating to the
  Offer</B> </font></p>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>As a result of
    this offer, you could incur dilution of ownership, voting rights and your
    share of any distributions made by the Fund if you do not exercise all of
    your rights, and you could incur immediate economic dilution if the subscription
    price is less than the Fund&#146;s net asset value per share. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">If you do not exercise
    all of your rights, you may incur dilution of ownership and voting rights,
    as well as dilution of your share of any distributions made by the Fund, as
    a result of this offer. This dilution may occur because you could own a smaller
    interest in the Fund after the offer than you owned prior to the offer. If
    you do not submit a subscription request pursuant to the over-subscription
    privilege, you may also experience dilution in your Fund ownership if the
    Fund offers additional shares for subscription. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In addition to the dilution
    described above, if the subscription price is less than the Fund&#146;s net
    asset value per share, you would experience immediate dilution of net asset
    value per share because the number of shares outstanding after the offer will
    have increased proportionately more than the increase in the size of the Fund&#146;s
    net assets. This dilution of net asset value would disproportionately affect
    stockholders who do not exercise their rights. In addition, whether or not
    you exercise your rights, you will experience a dilution of net asset value
    because you could indirectly bear the expenses of this offer, which include,
    among other items, SEC registration fees, state &#147;blue sky&#148; qualification
    fees, printing expenses and the fees assessed by service providers (including
    the cost of the Fund&#146;s counsel and accountants). We cannot state precisely
    the amount of any decrease because we do not know at this time how many shares
    will be subscribed for or what the net asset value per share will be at the
    pricing date. </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>You may lose money
    by investing in the Fund, including the possibility that you may lose all
    of your investment. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">An investment in the Fund
    is not a deposit in a bank and is not insured or guaranteed by the U.S. Federal
    Deposit Insurance Corporation or any other governmental agency. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Among the principal risks
    of investing in the Fund is market risk, which is the risk that the value
    of your investment may fluctuate as stock markets fluctuate. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">As an investment company
    that holds primarily common stocks, the Fund&#146;s portfolio is subject to
    the possibility that common stock prices will decline over short or even extended
    periods. The Fund may remain substantially fully invested during periods when
    stock prices generally rise and also during periods when they generally decline.
    Moreover, as a holder of common stock, the Fund&#146;s rights to the assets
    of the companies in which it invests will be subordinated to such companies&#146;
    holders of preferred stock and debt in the event of a bankruptcy, liquidation
    or similar proceeding. Accordingly, if such an event were to occur to such
    a company in which the Fund invests, the Fund would be entitled to such a
    company&#146;s assets only after such company&#146;s preferred stockholders
    and debt holders have been paid. Risks are inherent in investments in equities,
    and Fund stockholders should be able to tolerate significant fluctuations
    in the value of their investment in the Fund. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In addition, the Fund may
    invest up to 20% of its assets in debt securities whose value will tend to
    decrease as interest rates rise. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund is intended to
    be a long-term investment vehicle and is not designed to provide investors
    with a means of speculating on short-term stock market movements. Investors
    should not consider the Fund a complete investment program. </FONT></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">36</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p37"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p><B><FONT size=2>Risks Related to the Fund&#146;s Operations</FONT></B></p>
</font>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>Political, economic,
    social and other factors in India may adversely affect the Fund&#146;s performance.
    </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The value of the Fund&#146;s
    assets may be adversely affected by political, economic, social and religious
    factors, changes in Indian law or regulations and the status of India&#146;s
    relations with other countries. In addition, the economy of India may differ
    favorably or unfavorably from the U.S. economy in such respects as the rate
    of growth of gross domestic product, the rate of inflation, capital reinvestment,
    resource self-sufficiency and balance of payments position. Agriculture occupies
    a more prominent position in the Indian economy than in the United States,
    and the Indian economy therefore is more susceptible to adverse changes in
    weather. The Indian government has exercised and continues to exercise significant
    influence over many aspects of the economy, and the number of public sector
    enterprises in India is substantial. Accordingly, Indian government actions
    in the future could have a significant effect on the Indian economy, which
    could affect private sector companies and the Fund, market conditions, and
    prices and yields of securities in the Fund&#146;s portfolio. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Since mid-1991, the Indian
    government has committed itself to implementing an economic structural reform
    program with the objective of liberalizing India&#146;s exchange and trade
    policies, reducing the fiscal deficit, controlling inflation, promoting a
    sound monetary policy, reforming the financial sector, and placing greater
    reliance on market mechanisms to direct economic activity. A significant component
    of the program is the promotion of foreign investment in key areas of the
    economy and the further development of, and the relaxation of restrictions
    in, the private sector. These policies have been coupled with the expressed
    intention to redirect the government&#146;s central planning function away
    from the allocation of resources and toward the issuance of indicative guidelines.
    While the government&#146;s policies have resulted in improved economic performance
    there can be no assurance that the economic recovery will be sustained. Moreover,
    there can be no assurance that these economic reforms will persist. There
    can be no assurance that the government will continue the program of economic
    liberalization of the last government which may adversely affect Indian laws
    and policies affecting foreign investment and currency exchange. Such changes
    in economic policies, or lack of movement toward economic liberalization,
    could negatively affect the general business and economic conditions in India,
    which could in turn affect the Fund&#146;s investments. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">There is also the possibility
    of nationalization, expropriation or confiscatory taxation, political changes,
    government regulation, social instability or diplomatic developments (including
    war or terrorist attacks). All of these factors could adversely affect the
    economy of India or the value of the Fund&#146;s investments. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Religious and border disputes
    persist in India. The longstanding grievances between the Hindu and Muslim
    populations resulted in communal violence during 1993 in the aftermath of
    the destruction of a mosque in Ayodhya by radical elements of the Hindu population.
    More recently, there has been communal violence between Hindus and Muslims
    in the western Indian state of Gujarat. Moreover, India has from time to time
    experienced civil unrest and hostilities with neighboring countries such as
    Pakistan. The Indian government has confronted separatist movements in several
    Indian states. The longstanding dispute with Pakistan over the border Indian
    state of Jammu and Kashmir, a majority of whose population is Muslim, remains
    unresolved. If the Indian government is unable to control the violence and
    disruption associated with these tensions, the results could destabilize the
    economy and, consequently, adversely affect the Fund&#146;s investments. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Since early 2003, there
    have also been military hostilities and civil unrest in Afghanistan, Iraq
    and other Asian countries. These events could adversely influence the Indian
    economy and, as a result, negatively affect the Fund&#146;s investments. See
    &#147;Appendix B: Republic of India.&#148; </FONT></p>
</div>
<div style="text-indent:3%"> </div>
<div style="text-indent:3%"></div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">37</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p38"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><b><i>Indian securities
    markets are substantially smaller, less liquid and more volatile than securities
    markets in the United States. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">There are 23 recognized
       stock exchanges in India, including The Over the Counter Exchange of India.

    Most stock exchanges are governed by regulatory boards. The Stock Exchange,
       Mumbai, which we refer to as the &#147;BSE,&#148; and the National Stock
       Exchange  of India Limited, which we refer to as the &#147;NSE,&#148; have
       nationwide  trading terminals and, taken together, are the principal Indian
       stock exchanges
    in terms of the number of listed companies, market capitalization and trading
        volume. The securities market in India is substantially smaller, less
       liquid
    and significantly more volatile than the securities market in the United
       States.  At December 31, 2005, there were 6,800 companies listed on the
       BSE and the
    NSE and the aggregate market capitalization of listed equity securities of
        these companies was approximately &#36;545.43 billion (Rs. 24,894 bilion)
         and &#36;525.42 billion (Rs. 23,224 billion) respectively. For the year
         ended  December 31, 2005 the average daily trading volume of equity
         securities issued
    by listed companies on the BSE and NSE were approximately &#36;632 million
     (Rs. 27.92 billion) and &#36;1.25 billion (Rs. 55.30 billion), respectively,
      resulting in aggregate trading values for the period of approximately &#36;158.55
       billion (Rs. 7,008 billion) and &#36;314.06 billion (Rs. 13,881 billion),
        respectively. By comparison, for the year ended December 31, 2005,
       the average
    daily equity trading value on the NYSE was approximately &#36;56.1 billion
     and the aggregate trading value for the period was &#36; 14.13 trillion.
      On December 31, 2005, the global market capitalization of the NYSE was &#36;21.7
       trillion. The relatively small market capitalizations of, and trading
      values
    on, the BSE and NSE may cause the Fund&#146;s investments in securities listed
     on these exchanges to be comparatively less liquid and subject to greater

    price volatility than comparable U.S. investments. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Under current Indian law,
    only companies organized under the laws of India may list their securities
    on the Indian securities exchanges or over-the-counter markets. If Indian
    law changes in this regard, the Fund would be able to invest in companies
    that are principally traded in India but which may be organized outside of
    India, which could subject the Fund to different risks of the country where
    they are organized. Similarly, Indian companies may have operations outside
    of India and, accordingly, may be subject to risks in the various countries
    where they have operations. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">A high proportion of the
       shares of many Indian issuers are held by a limited number of persons,
      which
    may limit the number of shares available for investment by the Fund. In addition,
       further issuances, or the perception that such issuances may occur, of
      securities
    by Indian issuers in which the Fund has invested could dilute the earnings
       per share of the Fund&#146;s investment and could adversely affect the
       market  price of such securities. Sales of securities by such issuer&#146;s
       major  stockholders, or the perception that such sales may occur, may
       also significantly
    and adversely affect the market price of such securities and, in turn, the
        Fund&#146;s investment. A limited number of issuers represent a disproportionately
         large percentage of market capitalization and trading value. At March
        31,
    2006, the 30 largest companies by market capitalization accounted for approximately
         44% and 59% of the aggregate market capitalization of the BSE and
        NSE, respectively.
    The limited liquidity of the Indian securities markets may also affect the
         Fund&#146;s ability to acquire or dispose of securities at the price
         and time  that it desires. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Anticipation of this offering
    in the Indian securities markets may adversely influence the prices paid by
    the Fund in purchasing certain securities for its portfolio and may affect
    the speed with which the Fund can initially invest in Indian securities. In
    addition, the small trading volume concentrated in a limited number of the
    largest companies, combined with certain investment diversification requirements
    and other restrictions applicable to the Fund, also may affect the rate at
    which the Fund can initially invest. Further, the stock markets in India are
    presently at high levels that may not persist. Accordingly, to the extent
    the Fund purchases securities at present levels, there may be greater risk
    that the value of such securities may decline. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Indian stock exchanges,
    including the BSE and the NSE, have in the past experienced substantial fluctuations
    in the prices of their listed securities. They have also experienced problems
    such as temporary exchange closures, broker defaults, settlement delays and
    broker strikes that, if they occur again in the future, could affect the market
    price and liquidity of the Indian securities in which the Fund invests. In
    addition, the governing bodies of the various Indian stock exchanges have
    from time to time imposed restrictions on trading in certain securities, limitations
    on price movements and margin requirements. Disputes have also occurred from
    time to time among listed companies, the stock exchanges and other regulatory
    bodies, and in some cases those disputes have had a negative effect on overall
    market sentiment. Recently, there have been delays and errors in share allotments
    relating to initial public offerings, which in turn affect overall market
    sentiment and lead to fluctuations in the market prices of the securities
    of those companies and others in which the Fund may invest. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Uncertainties relating
    to the recent Indian general elections and the corresponding potential changes
    in Indian economic policies may cause significant volatility in the price
    and trading volumes of Indian securities. For example, on May 17, 2004, the
    BSE and NSE recorded their biggest single-day falls ever and trading was temporarily
    suspended in response to investors&#146; concerns over potential changes in
    Indian economic policies as a result of the election of a new Congress Party-led
    government. These fluctuations may in turn adversely affect the Fund&#146;s
    investments. </FONT></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">38</FONT>
</p>
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</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The foregoing factors could
    impede the ability of the Fund to effect portfolio transactions on a timely
    basis and could have an adverse effect on the net asset value of the Fund&#146;s
    shares of common stock and the price at which those shares trade. </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>India has different
    corporate disclosure, governance and regulatory requirements than you may
    be familiar with in the United States. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In addition to their smaller
    size, lesser liquidity and greater volatility, Indian securities markets are
    less developed than U.S. securities markets. Disclosure and regulatory standards
    are in many respects less stringent than U.S. standards. Issuers in India
    are subject to accounting, auditing and financial standards and requirements
    that differ, in some cases significantly, from those applicable to U.S. issuers.
    In particular, the assets and profits appearing on the financial statements
    of an Indian issuer may not reflect its financial position or results of operations
    in the way they would be reflected had such financial statements been prepared
    in accordance with U.S. generally accepted accounting principles. There is
    substantially less publicly available information about Indian issuers than
    there is about U.S. issuers. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">There is less regulation
    and monitoring of Indian securities markets and the activities of investors,
    brokers and other participants than in the United States. Moreover, issuers
    of securities in India are not subject to the same degree of regulation as
    are U.S. issuers with respect to such matters as insider trading rules, tender
    offer regulation, stockholder proxy requirements and the timely disclosure
    of information. There is also less publicly available information about Indian
    companies than U.S. companies. See &#147;Appendix C: The Indian Securities
    Market.&#148; </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Legal principles relating
    to corporate affairs and the validity of corporate procedures, directors&#146;
    fiduciary duties and liabilities and stockholders&#146; rights may differ
    from those that may apply in other jurisdictions. Stockholders&#146; rights
    under Indian law may not be as extensive as those that exist under the laws
    of the United States. The Fund may therefore have more difficulty asserting
    its rights as a stockholder of an Indian company in which it invests than
    it would as a stockholder of a comparable American company. </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>The Fund may have
    difficulty enforcing foreign judgments against Indian companies or their management.
    </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Indian companies in
    which the Fund invests are primarily limited liability companies incorporated
    under the laws of India. Generally, the directors, executive officers and
    a substantial portion of the assets of such companies are located in India.
    It may be difficult for the Fund to obtain a judgment in a court outside the
    United States to the extent that there is a default with respect to the security
    of an Indian issuer or with respect to any other claim that the Fund may have
    against any such issuer or its directors and officers. As a result, even if
    the Fund initiates a suit against the issuer in a U.S. court, it may not be
    possible for the Fund to effect service of process in India. Moreover, if
    the Fund obtains a judgment in a U.S. court, it may be difficult to enforce
    such judgment in India since the United States been not declared by the Government
    of India to be a reciprocating territory. A judgment of a court in a jurisdiction
    that is not a reciprocating territory may be enforced only by a fresh suit
    upon the judgment and not by proceedings in execution. The suit must be brought
    in India within three years from the date of the judgment in the same manner
    as any other suit filed to enforce a civil liability in India. It is unlikely
    that a court in India would award damages on the same basis as a foreign court
    if an action were brought in India. Furthermore, it is unlikely that an Indian
    court would enforce foreign judgments if it viewed the amount of damages awarded
    as excessive or inconsistent with public policy. A party seeking to enforce
    a foreign judgment in India is also required to obtain approval from the RBI
    to execute such a judgment or to repatriate outside India any amount recovered
    and any such amount may be subject to income tax in accordance with applicable
    laws. </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>Indian investment
    restrictions applicable to the Fund may hinder its ability to invest in certain
    companies or industries. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund will invest in
    India as a sub-account of the Investment Manager, which is registered as a
    foreign institutional investor with SEBI. Generally, under SEBI regulations
    applicable to foreign institutional investors and subject to certain exceptions,
    total investments by foreign institutional investors and their sub-accounts,
    taken together, in the primary and secondary Indian markets may not exceed
    24% of the equity capital or the value of each series of convertible debentures
    of any Indian company in which they invest. The ceiling would apply to the
    total holdings in any Indian Company of all foreign institutional investors
    and their sub-accounts collectively in a given Indian company. In addition,
    to this 24% overall investment limitation, no individual foreign institutional
    investor, together with its sub-accounts, may generally invest more than 10%
    of the equity capital of any Indian company. </FONT></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">39</FONT>
</p>
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</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In addition, a foreign
    institutional investor and its sub-accounts, may not, with certain exceptions,
    hold more than 30% of their total investments in the debt securities of Indian
    companies. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Foreign institutional investors
    are also limited in their ability to invest in certain industries, such as
    the banking sector. In such industries, there is often a ceiling on total
    foreign holdings, against which holdings of foreign institutional investors
    are counted. To the extent that the ceiling has been reached in that industry,
    further investment by foreign institutional investors may not be permitted.
    </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Accordingly, the ability
    of the Fund to invest in certain companies may be restricted, and there can
    be no assurance that additional restrictions on investments permissible for
    foreign institutional investors will not be imposed in the future. There can
    be no assurance that the foreign institutional investor guidelines will not
    be amended, clarified, interpreted by judicial or administrative ruling or
    superseded in the future in such a way that may adversely affect the Fund.
    At present, registrations for foreign institutional investors and their sub-accounts
    are granted for five-year periods and may be renewed for further five-year
    periods with the prior approval of SEBI. Renewal is required so long as a
    foreign institutional investor and its sub-accounts continue to invest in
    Indian securities. If not renewed, the Investment Manager will explore other
    avenues of investment which may be available at that time, which may include
    a trust or other arrangement for investment established under Indian law.
    </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>Foreign currency
    fluctuations could adversely affect the Fund&#146;s performance. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s assets
    will be invested principally in securities of Indian issuers and substantially
    all of the income received by the Fund will be in Indian rupees. However,
    the Fund will compute and distribute its income in U.S. dollars, and the computation
    of income will be made on the date that the income is earned by the Fund at
    the foreign exchange rate on that date. Therefore, if the value of the Indian
    rupee falls relative to the U.S. dollar between the earning of the income
    and the time at which the Fund converts the Indian rupees to U.S. dollars,
    the Fund may be required to liquidate securities in order to make distributions
    if the Fund has insufficient cash in U.S. dollars to meet distribution requirements.
    See &#147;Taxation&#148; and &#147;Dividends and Distributions; Dividend Reinvestment
    and Cash Purchase Plan.&#148; </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>The liquidation
    of investments, if required, may have an adverse impact on the Fund&#146;s
    performance. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Since the Fund will invest
    primarily in securities denominated or quoted in Indian rupees, changes in
    the U.S. dollar-Indian rupee exchange rate will affect the dollar value of
    securities in the Fund&#146;s portfolio and the unrealized appreciation or
    depreciation of investments. The exchange rate between the Indian rupee and
    the U.S. dollar has changed substantially in the last two decades and may
    fluctuate substantially in the future. On an annual average basis, the Indian
    rupee declined against the U.S. dollar from 1980 until 2002. From April 1,
    1999 until March 31, 2002, the rupee lost approximately 15% of value relative
    to the U.S. dollar. From April 1, 2003 until [March 31, 2004], the value of
    the Indian rupee appreciated [7]% in value relative to the U.S. dollar. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Furthermore, the Fund may
    incur costs in connection with conversions between U.S. dollars and Indian
    rupees. Foreign exchange dealers realize a profit based on the difference
    between the prices at which they are buying and selling various currencies.
    Thus, a dealer normally will offer to sell a foreign currency to the Fund
    at one rate, while offering a lesser rate of exchange should the Fund desire
    immediately to resell that currency to the dealer. The Fund will conduct its
    foreign currency exchange transactions either at the spot rate prevailing
    in the foreign currency exchange market or through entering into forward,
    futures or options contracts to purchase or sell foreign currencies, if available.
    </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>Exchange controls
    in India may restrict the Fund&#146;s ability to repatriate investment. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The ability of the Fund
    to invest in Indian securities, exchange Indian rupees into U.S. dollars and
    repatriate investment income, capital and proceeds of sales realized from
    its investments in Indian securities is subject to the Indian Foreign Exchange
    Management Act, 1999</FONT><font face="Times New Roman, Times, serif"><I><FONT size=1>
    </FONT></I><FONT size=2>and the rules, regulations and notifications issued
    thereunder. See &#147;Investment in India.&#148; </FONT></font></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">40</FONT>
</p>
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</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Under certain circumstances,
    such as a change in law or regulation or loss of foreign institutional investor
    authorization, governmental regulation or approval for the repatriation of
    investment income, capital or the proceeds of sales of securities by foreign
    investors may be required. In addition, there can be no assurance that the
    Indian government in the future, whether for purposes of managing its balance
    of payments or for other reasons, will not impose restrictions on foreign
    capital remittances abroad or otherwise modify the exchange control regime
    applicable to foreign institutional investors in such a way that may adversely
    affect the ability of the Fund to repatriate its income and capital. If for
    any reason the Fund is unable, through borrowing or otherwise, to distribute
    an amount equal to substantially all of its investment company taxable income
    (as defined for U.S. tax purposes, without regard to the deduction for dividends
    paid) within the applicable time periods, the Fund would cease to qualify
    for the favorable tax treatment afforded to regulated investment companies
    under the Internal Revenue Code.</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In addition, indirect foreign
    investment in the securities of companies listed and traded on the stock exchanges
    in India may be permitted through investment funds that have been specially
    authorized. The Fund may invest in these investment funds subject to the provisions
    of the U.S. Investment Company Act of 1940, as amended, as discussed above
    under &#147;Investment Objective and Policies&#151;Portfolio Structure&#148;
    and &#147;Additional Investment Activities&#151;Investment Funds.&#148; If
    the Fund invests in investment funds, the Fund&#146;s stockholders will bear
    not only their proportionate share of the expenses of the Fund (including
    operating expenses and the fees of the Investment Manager), but also will
    indirectly bear similar expenses of the underlying investment funds. </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>Investments in
    unseasoned and small and mid-capitalization Indian companies may expose the
    Fund to greater investment risk.</i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">While the Fund invests
    a substantial portion of its assets in the securities of established Indian
    companies, it also may invest in the securities of less seasoned and smaller
    and mid-capitalization Indian companies. Investments in the securities of
    these companies may present greater opportunities for growth but also involve
    greater risks than are customarily associated with investments in securities
    of more established and larger capitalized companies. The securities of less
    seasoned and smaller capitalized companies are often traded in the over-the-counter
    market and have fewer market makers and wider price spreads, which may in
    turn result in more abrupt and erratic market price movements and make the
    Fund&#146;s investments more vulnerable to adverse general market or economic
    developments than would investments only in large, more established Indian
    companies. It is more difficult to obtain information about less seasoned
    and smaller capitalization companies because they tend to be less well known
    and have shorter operating histories and because they tend not to have significant
    ownership by large investors or be followed by many securities analysts. Additionally,
    these companies may have limited product lines, markets or financial resources,
    or they may be dependent upon a limited management group that may lack depth
    and experience. Investments in larger and more established companies present
    certain advantages in that such companies generally have greater financial
    resources, more extensive research and development, manufacturing, marketing
    and service capabilities, more stability and greater depth of management and
    technical personnel. </font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund has not established
    any minimum capitalization or length of operating history for the smaller,
    less seasoned issuers in whose securities it may invest. </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>The Fund&#146;s
    investments in illiquid securities may restrict its ability to dispose of
    its investments in a timely fashion and at a price approximating the value
    at which the Fund carries the securities on its books. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may invest up
    to 20% of its total assets in illiquid securities. Illiquid securities are
    securities that are not readily marketable. The prices of such securities
    may change abruptly and erratically, and investment of the Fund&#146;s assets
    in illiquid securities may restrict the ability of the Fund to dispose of
    its investments in a timely fashion and at a price approximating the value
    at which the Fund carries the securities on its books, as well as restrict
    its ability to take advantage of market opportunities. The risks associated
    with illiquidity will be particularly acute in situations in which the Fund&#146;s
    operations require cash, such as when the Fund repurchases shares or pays
    dividends or distributions, and could result in the Fund borrowing to meet
    short-term cash requirements or incurring capital losses on the sale of illiquid
    investments. Further, companies whose securities are not publicly traded are
    not subject to the disclosure and other investor protection requirements that
    would be applicable if their securities were publicly traded. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">41</FONT>
</p>
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</font>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><b><i>The concentration
    of the Fund&#146;s investments in specific economic sectors and related industries
    may expose it to greater risk of loss with respect to its portfolio securities.
    </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">From time to time, the
       Fund may invest a greater proportion of its assets in the securities of
      companies
    that are part of specific sectors and related industries of the Indian economy.
       For example, at March 31, 2006, the Fund maintained [&nbsp;&nbsp;]%
       of its total assets
    in the securities of Indian companies in the software sector
    and  related industries. The Fund is therefore subject to greater risk of
    loss
    with respect to its portfolio securities as a result of its concentration
     in such sectors and related industries. </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>A change in the
    Fund&#146;s tax status could adversely affect the Fund&#146;s return on its
    investments. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund currently operates
    through a branch in the Republic of Mauritius to take advantage of favorable
    tax treatment by the Indian government pursuant to a taxation treaty between
    India and Mauritius. Recently, the Supreme Court of India upheld the validity
    of this tax treaty in response to a lower court challenge contesting the treaty&#146;s
    applicability to entities such as the Fund. Any change in the provision of
    this treaty or in its applicability to the Fund could result in the imposition
    of withholding and other taxes on the Fund by India, which would reduce the
    return to the Fund on its investments. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund intends to elect
    to &#147;pass-through&#148; to the Fund&#146;s stockholders as a deduction
    or credit the amount of foreign taxes paid by the Fund. The taxes passed through
    to stockholders are included in each stockholder&#146;s income. Certain stockholders,
    including some non-U.S. stockholders, are not entitled to the benefit of a
    deduction or credit with respect to foreign taxes paid by the Fund. Other
    foreign taxes, such as transfer taxes, may be imposed on the Fund, but would
    not give rise to a credit, or be eligible to be passed through to stockholders.
    See &#147;Taxation&#151;U.S. Stockholders&#148; and &#147;Taxation&#151;Mauritian
    Tax Status.&#148; </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In addition, prior to
      Blackstone  Advisors assuming management, the Fund may have failed to qualify
      as a regulated
    investment company under Subchapter M of the Internal Revenue Code for the
       taxable year ended December 31, 2004. A provision of &#36;25,507,350 has
       been  made for U.S. federal income tax purposes. However, the Fund recently
       declared
    a deficiency dividend (within the meaning of Section 860 of the Internal
       Revenue  Code) of &#36;1.07 per share with respect to its income for the
       taxable year ending December 31, 2004. As a result of this deficiency
       dividend, the Fund
    now expects its liability to be reduced to approximately &#36;5,000,000.
    There can be no assurance that the Fund will be able to further reduce the
    liability.

    See &#147;Taxation&#151;The Fund.&#148; </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>The Fund&#146;s
    shares have traded and may trade in the future at a discount to net asset
    value. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Although the Fund&#146;s
    shares of common stock have recently traded on the NYSE at a premium to their
    net asset value, the Fund&#146;s shares have traded at a discount to their
    net asset value in the past. There can also be no assurance that the Fund&#146;s
    shares will trade at a premium in the future or that the present premium is
    sustainable. The Fund&#146;s shares have traded at discounts of as much as
    40%. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Shares of closed-end investment
    companies frequently trade at a discount from their net asset values and initial
    offering price. This characteristic of shares of a closed-end fund is a risk
    separate and distinct from the risk that a fund&#146;s net asset value will
    decrease. The Fund cannot predict whether its own shares will trade at, below
    or above net asset value. </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>The Fund&#146;s
    &#147;interval fund&#148; structure involves certain risks and special considerations
    not typically associated with other closed-end funds. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund has adopted an
    interval fund structure whereby the Fund conducts semi-annual repurchase offers
    for between 5% and 25% of the Fund&#146;s outstanding common stock. The Fund&#146;s
    required semi-annual repurchases are likely to continually decrease the overall
    size of the Fund, which could over time: </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">42</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p43"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">harm investment performance
      in part by limiting the extent to which the Fund may pursue its</FONT> <FONT size=2 face="Times New Roman, Times, serif">investment
      strategies;</FONT></td>
  </tr>
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">increase the Fund&#146;s
      expense ratio as the Fund&#146;s assets decrease; and</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">jeopardize the Fund&#146;s
      viability, investment opportunities and continued existence.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td colspan="2" align="left"><font size=2 face="Times New Roman, Times, serif">Moreover,
      there are additional risks associated with the Fund&#146;s repurchase offers,
      including that:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td colspan="2" align="left">&nbsp;</td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">if the repurchase offer
        is over-subscribed, stockholders may be unable to liquidate all or a
        given percentage of their investment  at net asset value during the repurchase
        offer;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">because the Fund expects
        to liquidate portfolio securities in order to fund repurchase offers,
        the need to sell such securities may in turn affect the market for such
        securities and accordingly  diminish the value of the Fund&#146;s investments;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">share values may decrease
      as a result of fluctuations between the date of tender and the repurchase</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">pricing date;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">the repurchase offer
      may not eliminate any discount, if any, at which the Fund&#146;s shares
      trade; and</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">due to the potential
        for proration if the repurchase offer is over-subscribed, some investors
        may tender more shares than they wish to have repurchased in order to
        ensure the repurchase  of a specific number of shares.</FONT></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The decrease in the Fund&#146;s
    assets resulting from the semi-annual repurchase offers will likely offset
    in whole or in part the potential benefits to the Fund associated with having
    increased assets as a result of this offer. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">See &#147;Semi-Annual Repurchases
    of Securities&#148; and &#147;Semi-Annual Repurchases of Securities&#151;Fundamental
    Policy Regarding Semi-Annual Repurchase Offers.&#148; </FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><b><i>The Fund&#146;s
    status as a &#147;non-diversified&#148; investment company may expose it to
    greater risk of loss with respect to its portfolio securities. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund is classified
    as a non-diversified investment company under the 1940 Act, which means that
    the Fund is not limited in the proportion of its assets that may be invested
    in the obligations of a single issuer. The Fund, however, intends to comply
    with the diversification requirements imposed by the Internal Revenue Code
    for qualification as a regulated investment company. Because the Fund is not
    limited by the 1940 Act for diversification purposes, the Fund may invest
    a greater proportion of its assets in the securities of a smaller number of
    issuers and, as a result, will be subject to greater risk of loss with respect
    to its portfolio securities. See &#147;Taxation&#151;The Fund&#148; and &#147;Investment
    Restrictions.&#148; </FONT></p>
</div>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><b><i>There are no fixed
    limitations regarding portfolio turnover. </i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Frequency of portfolio
    turnover is not a limiting factor if the Fund considers it advantageous to
    purchase or sell securities. The Fund anticipates that its annual portfolio
    turnover rate will not exceed 150%. For the year ended December 31, 2005,
    the Fund&#146;s portfolio turnover rate was 50.28% . A high rate of portfolio
    turnover involves correspondingly greater aggregate payments for brokerage
    commissions than a lower rate, which expenses must be borne by the Fund and
    its stockholders, while a lower rate of portfolio turnover involves correspondingly
    lower aggregate payments and stockholder expenses. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">43</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p44"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:0%">
  <P><font size="2" face="Times New Roman, Times, serif"> <B><I>The extent to
          which the Fund invests in high yield/high risk and unrated debt may
    adversely affect the Fund&#146;s performance. </I></B></font></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund has not established
      any rating criteria for the debt securities in which it may invest and
      such securities
    may not be rated at all for creditworthiness. Securities rated in medium
      to low rating categories by nationally recognized statistical rating organizations
      and unrated securities of comparable quality, or &#147;high yield/high risk
    securities,&#148; are speculative with respect to the capacity to pay interest
    and repay principal in accordance with the terms of the security and generally
    involve a greater volatility of price than securities in higher rated categories.
    These securities are commonly referred to as &#147;junk bonds,&#148; and credit
    ratings issued with respect to such securities evaluate only the safety of
    principal and interest in respect of such securities and not the risk of change
    in market value. In purchasing such securities, the Fund will rely on the
    Investment Manager&#146;s analysis, judgment and experience in evaluating
    the creditworthiness of an issuer of such securities. The Investment Manager
    will take into consideration, among other things, the issuer&#146;s financial
    resources, its operating history, its sensitivity to economic conditions and
    trends, the quality of the issuer&#146;s management and regulatory matters. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The market values of high
      yield/high risk securities tend to reflect individual issuer developments
      to a greater
    extent than do higher rated securities, which react primarily to fluctuations
      in the general level of interest rates. Issuers of high yield/high risk
      securities
    may be highly leveraged and may not have available to them more traditional
      methods of financing. Therefore, the risks associated with acquiring the
      securities
    of such issuers generally are greater than is the case with higher rated
      securities. For example, during a sustained period of rising interest rates
      or an economic
    downturn, issuers of high yield/high risk securities may be more likely to
      experience financial stress, especially if such issuers are highly leveraged.
      During such periods, service of debt obligations also may be adversely
      affected
    by the issuer&#146;s inability to meet specific projected business forecasts,
    specific issuer developments or the unavailability of additional financing.
    The risk of loss due to default by the issuer is significantly greater for
    the holders of high yield/high risk securities because such securities may
    be unsecured and may be subordinated to other creditors of the issuer. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">High yield/high risk securities may have
    redemption or call features that would permit an issuer to repurchase the
    securities from the Fund. If a call were exercised by the issuer during a
    period of declining interest rates, the Fund in all likelihood would have
    to replace the called securities with lower yielding securities, thus decreasing
    the net investment income to the Fund and dividends to stockholders. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may have difficulty
      disposing of certain high yield/high risk securities, as there may be a
      thin trading
    market for such securities. To the extent that a secondary trading market
      for high yield/high risk securities does exist, it is generally not as
      liquid
    as the secondary market for higher rated securities. Reduced secondary market
      liquidity may have an adverse impact on market price and the Fund&#146;s ability
    to dispose of particular issues when necessary to meet the Fund&#146;s liquidity
    needs or in response to a specific economic event, such as a deterioration
    in the creditworthiness of the issuer. Reduced secondary market liquidity
    for certain high yield/high risk securities may also make it more difficult
    for the Fund to obtain accurate market quotations for purposes of valuing
    the Fund&#146;s portfolio. Market quotations are generally available on many
    high yield/high risk securities only from a limited number of dealers and
    may not necessarily represent firm bids of such dealers of prices for actual
    sales. The Fund&#146;s Board of Directors or the Investment Manager will carefully
    consider the factors affecting the market for high yield/high risk securities
    in determining whether any particular security is liquid or illiquid and whether
    current market quotations are readily available. Adverse publicity and investor
    perceptions, which may not be based on fundamental analysis, also may decrease
    the value and liquidity of high yield/high risk securities, particularly in
    a thinly traded market. Factors adversely affecting the market value of high
    yield/high risk securities are likely to adversely affect the Fund&#146;s
    net asset value. In addition, the Fund may incur additional expenses to the
    extent it is required to seek recovery upon a default on a portfolio holding
    or to participate in the restructuring of the obligations. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">44</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p45"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<div style="text-indent:0%">
  <P><font size="2" face="Times New Roman, Times, serif"><B><I>The Fund&#146;s ability to successfully
    hedge against financial risks may adversely affect the Fund&#146;s net asset
    value. </I></B></font></P>
</div>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The risks and special
      considerations of certain of the investment practices in which the Fund
      may engage are described
    under &#147;Investment Objective and Policies&#148; and &#147;Additional Investment
    Activities.&#148; Hedging involves special risks, including possible default
    by the other party to the transaction, illiquidity and, to the extent the
    Investment Manager&#146;s view as to certain market movements is incorrect,
    the risk that the use of hedging could result in losses greater than if they
    had not been used. Use of put and call options could result in losses to the
    Fund, force the sale or purchase of portfolio securities at inopportune times
    or for prices higher than (in the case of put options) or lower than (in the
    case of call options) current market values, or cause the Fund to hold a security
    that it might otherwise sell. The use of currency transactions could result
    in the Fund&#146;s incurring losses as a result of the imposition of exchange
    controls, suspension of settlements or the inability to deliver or receive
    a specified currency. The use of options and futures transactions entails
    certain special risks. In particular, the variable degree of correlation between
    price movements of futures contracts and price movements in the related portfolio
    position of the Fund could create the possibility that losses on the hedging
    instrument will be greater than gains in the value of the Fund&#146;s position.
    In addition, futures and options markets could be illiquid in some circumstances,
    and certain over-the-counter options could have no markets. As a result, in
    certain markets, the Fund might not be able to close out a position without
    incurring substantial losses. To the extent that the Fund utilizes futures
    and options transactions for hedging, such transactions should tend to minimize
    the risk of loss due to a decline in the value of the hedged position and,
    at the same time, limit any potential gain to the Fund that might result from
    an increase in value of the position. There is, however, no limit on the amount
    of the Fund&#146;s assets that can be put at risk through the use of futures
    contracts and options thereon, and the value of the Fund&#146;s futures contracts
    and options thereon may equal or exceed 100% of the Fund&#146;s total assets.
    Finally, the daily variation margin requirements for futures contracts create
    a greater ongoing potential financial risk than would purchases of options,
    in which case the exposure is limited to the cost of the initial premium and
    transaction costs. Losses resulting from the use of hedging will reduce the
    Fund&#146;s net asset value, and possibly income, and the losses can be greater
    than if hedging had not been used. See &#147;Appendix A: General Characteristics
    and Risks of Hedging.&#148; </FONT></p>
</div>
<div style="text-indent:0%">
  <P><font size="2" face="Times New Roman, Times, serif"> <B><I>The extent to
          which the Fund utilizes leverage to hedge against financial risks may
    increase its expenses and adversely affect the Fund&#146;s performance. </I></B></font></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Although the Fund has
      no present intention to do so to any significant extent, the Fund may utilize
      leverage by borrowing
    or by issuing preferred stock or short-term debt securities in an amount
      up to 25% of the Fund&#146;s total assets. Leverage by the Fund creates an opportunity
    for increased return but, at the same time, creates special risks. For example,
    leverage may exaggerate changes in the net asset value of the common stock
    and in the return on the Fund&#146;s portfolio. Although the principal of
    any leverage will be fixed, the Fund&#146;s assets may change in value during
    the time the leverage is outstanding. Leverage will create expenses for the
    Fund that can, during any period, exceed the income from the assets acquired
    with the proceeds of the leverage. Furthermore, an increase in interest rates
    could reduce or eliminate the benefits of leverage and could reduce the value
    of the Fund&#146;s securities. The Fund may also borrow by entering into
    reverse repurchase agreements, which will subject the Fund to additional
    market risk
    as well as credit risks with respect to the buyer of the securities under
    the agreement. </FONT></p>
</div>
<div style="text-indent:0%">
  <P><font size="2" face="Times New Roman, Times, serif"> <B><I>The anti-takeover
          provisions in the Fund&#146;s charter and amended and restated by-laws
          and certain provisions of Maryland law may limit your ability to sell
    your shares at a premium. </I></B></font></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s charter and amended and
    restated by-laws and Maryland law contain certain anti-takeover provisions
    that, among other things, may have the effect of inhibiting the Fund&#146;s
    possible conversion to open-end status and delaying or limiting the ability
    of other persons to acquire control of the Fund. In certain circumstances,
    these provisions might also inhibit the ability of holders of common stock
    to sell their shares at a premium over prevailing market prices by discouraging
    a third party from seeking to obtain control of the Fund. The Fund&#146;s
    Board of Directors has determined that these provisions are in the best interests
    of the Fund and its stockholders. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">45</FONT></P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p46"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:0%">
  <P><font size="2" face="Times New Roman, Times, serif"><B><I>The operating expenses of the
    Fund may be higher than investment companies that invest primarily in the
    securities of U.S. companies. </I></B></font></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s estimated annual operating
    expenses may be higher than those of most other investment companies that
    invest predominately in the securities of U.S. companies, primarily because
    of the additional time and expense required of the Investment Manager and
    the Country Adviser in pursuing the Fund&#146;s objective of long-term capital
    appreciation through investing in equity securities of Indian companies.
    Investments
    in Indian equity securities require additional time and expense because the
    available public information regarding such securities is more limited in
    comparison to, and not as comprehensive as, the information available for
    U.S. equity securities. In addition, brokerage commissions, custodial fees
    and other fees are generally higher for investments in foreign securities
    markets. As a result of these higher expected operating expenses, the Fund
    needs to generate higher relative returns to provide investors with an equivalent
    economic return. </FONT></p>
</div>
<div style="text-indent:0%">
  <P><font size="2" face="Times New Roman, Times, serif"> <B><I>Future market
          disruptions resulting from terrorist attacks in the United States and
          elsewhere or U.S. military action abroad could negatively and adversely
    affect the market for the Fund&#146;s common stock. </I></B></font></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Terrorist attacks and
      related events have led to increased short-term market volatility. Moreover,
      the ongoing
    U.S. military and related action in Iraq and other events in the Middle East
      could have significant adverse effects on U.S. and world economies and
      markets.
    The Fund does not know how long the securities markets will continue to be
      affected by these and other geopolitical events and cannot predict the
      effects
    of military action or similar events in the future on the U.S. economy and
      securities markets. A disruption of the U.S. or world financial markets
      could
    affect interest rates, secondary trading, ratings, credit risk, inflation
    and other factors relating to the Fund&#146;s common stock. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">46</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p47"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<P align="center"><font size="2" face="Times New Roman, Times, serif"><B>MANAGEMENT OF THE FUND</B></font></P>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The names of the Directors
      and principal officers of the Fund are set forth below, together with their
      positions with
    the Fund and their principal occupations during the past five years. None
      of the Fund&#146;s nonresident Directors has authorized an agent in the
    United States to receive notice. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Directors considered by
      the Fund to be &#147;interested persons&#148; (as defined in the 1940 Act)
    of the Fund or of the Investment Manager: </FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"><B>Name,
          Address and Age</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Position(s)</B><br>
	<B>Held with Fund</B>&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Length of</B><br>
	<B>Time Served;</B><br>
	<B>Term of</B><br>
	<B>Office</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Principal Occupation(s)</B><br>
	<B>During Past 5
    Years</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Number of</B><br>
	<B>Funds in</B><br>
	<B>Fund</B><br>
	<B>Complex</B><br>
	<B>Overseen by</B><br>
	<B>Director</B><br>
	<B>(including</B><br>
	<B>the Fund)</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Other</B> <B>Directorships</B><br>
	<B> Held by Nominee</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><HR noshade size=1></TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="10%" align=left><HR noshade size=1></TD>
    <TD width="2%" align=right>&nbsp;</TD>
    <TD width="8%" align=right><HR noshade size=1></TD>
    <TD width="2%" align=right>&nbsp;</TD>
    <TD width="22%" align=right><HR noshade size=1></TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="8%" align=center><HR noshade size=1></TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="22%" align=left><HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Prakash
      A. Melwani<SUP>*</SUP>&nbsp; <br>
	  The Blackstone Group&nbsp; <br>
	  345 Park Avenue&nbsp;
      <br>
	  New York, NY 10154&nbsp; <br>
	  Birth Year: 1958</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Director
      and President</font></TD>
    <TD align=right><font size="2">&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 2005</font></TD>
    <TD align=right><font size="2">&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Senior Managing
      Director, Private Equity Group,
      Blackstone (May 2003- Present);
      Founder and Chief Investment
      Officer, Vestar Capital Partners
      (1988-2003)</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=center valign="top"><font size="2" face="Times New Roman, Times, serif"> 2</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif">Aspen
        Insurance
      Holdings Limited, Kosmos Energy Holdings
      and The Asia Tigers Fund, Inc.</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=right><font size="2">&nbsp;</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=right><font size="2">&nbsp;</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=center><font size="2">&nbsp;</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Peter G.
      Peterson<SUP>**</SUP>&nbsp; <br>
	  The Blackstone Group&nbsp; <br>
	  345 Park Avenue&nbsp;
      <br>
	  New York, NY 10154&nbsp; <br>
	  Birth Year: 1926</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Director</font></TD>
    <TD align=right><font size="2">&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 2005</font></TD>
    <TD align=right><font size="2">&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Senior Chairman,
        Blackstone (since 1985); Chairman,
      Federal Reserve Bank of New York
      (2000-2004 )</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=center valign="top"><font size="2" face="Times New Roman, Times, serif"> 1</font></TD>
    <TD align=left><font size="2">&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Chairman,
        Council&nbsp; on Foreign&nbsp; Relations; Chairman,&nbsp; Institute for&nbsp;
      International&nbsp; Economics&nbsp; (Washington, D.C.);&nbsp; President,
      Concord&nbsp; Coalition; Trustee,&nbsp; Committee for&nbsp; Economic&nbsp;
      Development;&nbsp; Trustee, Japan&nbsp; Society; Trustee,&nbsp; Museum of
      Modern&nbsp; Art; Director,&nbsp; National Bureau of&nbsp; Economic Research;&nbsp;
      Director, Public&nbsp; Agenda Foundation;&nbsp; Director, The Nixon&nbsp; Center</font></TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD colspan="2" valign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan="2" valign=top><HR align="left" width="100" size=1 noshade></TD>
  </TR>
  <TR>
    <TD width="3%" valign=top><font size="1" face="Times New Roman, Times, serif"> *</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Mr. Melwani is an &#147;interested
        person,&#148; as defined in the 1940 Act, because he serves as President
        of the Fund and as Senior Managing Director at The Blackstone Group,
        an affiliate of Blackstone Advisors, the Fund&#146;s investment manager,
      and Blackstone India, the Fund&#146;s country adviser. </font></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD valign=top><font size="1" face="Times New Roman, Times, serif"> **</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Mr. Peterson is
        an &#147;interested person,&#148; as defined in the 1940 Act, because
        he serves as Senior Chairman of The Blackstone Group, an affiliate of
        Blackstone Advisors, the Fund&#146;s investment manager, and Blackstone
        India, the Fund&#146;s country adviser.
    </font></TD>
  </TR>
</TABLE>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">47</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p48"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Directors considered by
      the Fund not to be &#147;interested persons&#148; (as defined in the 1940
    Act) of the Fund or the Investment Manager: </FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"><B>Name, Address
          and Age</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Position(s)</B><br>
          <B>Held with Fund</B>&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Length of</B><br>
          <B>Time Served;</B><br>
          <B>Term of</B><br>
          <B>Office</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Principal Occupation(s)</B><br>
          <B>During Past 5 Years</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Number of</B><br>
          <B>Funds in</B><br>
          <B>Fund</B><br>
          <B>Complex</B><br>
          <B>Overseen by</B><br>
          <B>Director</B><br>
          <B>(including</B><br>
          <B>the Fund)</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Other</B> <B>Directorships</B><br>
          <B>Held by Nominee</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><HR noshade size=1></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=12% align=left><HR noshade size=1></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=8% align=right><HR noshade size=1></TD>
    <TD width=2% align=left></TD>
    <TD width=22% align=left><HR noshade size=1></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=8% align=center><HR noshade size=1></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=22% align=left><HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Lawrence
        K. Becker&nbsp; <br>
		8039 Harbor View Terrace&nbsp; <br>Brooklyn, N.Y. 11209&nbsp; <br>Birth
      Year: 1955</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Director
      and&nbsp; Member of the&nbsp; Audit&nbsp; Committee and&nbsp; Nominating&nbsp; Committee</font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 2003</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif"> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
    </font></TD>
    <TD align=left valign="top"><font face="Times New Roman, Times, serif"> <FONT size=2>Private Investor,
      Real Estate</FONT> <FONT size=2>Investment Management</FONT>
      <FONT size=2>(July 2003-Present); Vice</FONT>
      <FONT size=2>President,</FONT> <FONT size=2>Controller/Treasurer,</FONT>
      <FONT size=2>National Financial Partners</FONT> <FONT size=2>(2000-2003);
      Managing</FONT> <FONT size=2>Director,</FONT> <FONT size=2>Controller/Treasurer,</FONT>
      <FONT size=2>Oppenheimer Capital-</FONT> <FONT size=2>PIMCO
      (1981-2000)</FONT></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center valign="top"><font size="2" face="Times New Roman, Times, serif"> 2</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Member
        of Board of&nbsp; Trustees or Board of&nbsp; Managers of five&nbsp; registered
      investment&nbsp; companies advised by&nbsp; Advantage Advisers,&nbsp; L.L.C.
      or its affiliates&nbsp; (&#147;Advantage&#148;).</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Leslie
        H. Gelb&nbsp; <br>The Council on Foreign <br>
		Relations <br>58 East 68th
      Street&nbsp; <br>New York, N.Y. 10021&nbsp; <br>Birth Year: 1937</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Director
      and&nbsp; Member of the&nbsp; Audit&nbsp; Committee and&nbsp; Nominating&nbsp; Committee</font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 1994</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif"> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> </font></TD>
    <TD align=left valign="top"><font face="Times New Roman, Times, serif"> <FONT size=2>President
      Emeritus, The</FONT> <FONT size=2>Council on Foreign</FONT>
      <FONT size=2>Relations (2003&#150;Present);</FONT>
      <FONT size=2>President, The Council on</FONT> <FONT size=2>Foreign
      Relations (1993-2003);
      Columnist (1991-1993),
      Deputy Editorial</FONT> <FONT size=2>Page Editor
      (1985-1990)</FONT> <FONT size=2>and Editor,
      Op-Ed Page</FONT> <font size="2"> (1988-1990), <I>The New York</I> </font> <font size="2"><I>Times</I></font></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center valign="top"><font size="2" face="Times New Roman, Times, serif"> 2</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif">Britannica.com; Director of 34 registered investment companies advised by SBAM</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> J.
        Marc Hardy&nbsp; <br>
		c/o Multiconsult Limited&nbsp; <br>
		Frere Felix de Valois Street&nbsp;
      <br>
	  Port Louis, Mauritius&nbsp; <br>
	  Birth Year: 1954</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Director
      and&nbsp; Member of the&nbsp; Nominating&nbsp; Committee</font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 2002</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif"> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
    </font></TD>
    <TD align=left valign="top"><font face="Times New Roman, Times, serif"> <FONT size=2>Managing
      Director,</FONT> <FONT size=2>Mainstream Ltd.</FONT>
      <FONT size=2>(independent financial</FONT> <FONT size=2>advisor)
      and Value</FONT> <FONT size=2>Investors Ltd. (private</FONT>
      <FONT size=2>investment company)</FONT></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center valign="top"><font size="2" face="Times New Roman, Times, serif"> 1</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif">None</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Stephane
        R. F. Henry&nbsp; <br>
		c/o Premium Asset&nbsp; <br>
		Management Ltd.&nbsp; <br>
		Jamalacs,
      Vieux Conseil Street<br>
	  Port Louis, Mauritius&nbsp; <br>
	  Birth Year:
      1967</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Director
      and&nbsp; Member of the&nbsp; Nominating&nbsp; Committee</font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 2004</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif"> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> </font></TD>
    <TD align=left valign="top"><font face="Times New Roman, Times, serif"> <FONT size=2>Managing
      Director,</FONT> <FONT size=2>Premium Asset</FONT>
      <FONT size=2>Management Ltd., (1998</FONT><font face="Times New Roman, Times, serif"><FONT size=2>-</FONT></font><FONT size=2>present)</FONT></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center valign="top"><font size="2" face="Times New Roman, Times, serif"> 1</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif">Boyer
      Allan India Fund, Inc.</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Luis
        F. Rubio&nbsp; <br>
		Jaime Balmes No. 11, D-2&nbsp; <br>
		Los Morales Polanco&nbsp; <br>
		Mexico,
      D.F. 11510&nbsp; <br>
	  Birth Year: 1955</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Director
      and&nbsp; Member of the&nbsp; Audit&nbsp; Committee and&nbsp; Nominating&nbsp; Committee</font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 1999</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif"> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
    </font></TD>
    <TD align=left valign="top"><font face="Times New Roman, Times, serif"> <FONT size=2>President,
      Centro de</FONT> <FONT size=2>Investigacion para
      el</FONT> <FONT size=2>Desarrollo, A.C. (Center of</FONT>
      <FONT size=2>Research for Development)</FONT> <FONT size=2>(2002-Present)
      Director</FONT> <FONT size=2>General, Centro de</FONT>
      <FONT size=2>Investigacion para el</FONT> <FONT size=2>Desarrollo,
      A.C. (1984-2002); frequent
      contributor</FONT> <font size="2"> of op-ed pieces
      to <I>The Los</I> <I>Angeles Times </I>and <I>The Wall</I> </font> <font size="2"><I>Street
      Journal</I></font></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center valign="top"><font size="2" face="Times New Roman, Times, serif"> 2</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Member
        of Board of Trustees or Board of Managers of five registered
      investment companies advised by Advantage; Director of certain other private investment funds</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Jeswald
        W. Salacuse&nbsp; <br>
		The Fletcher School of Law &amp; Diplomacy at Tufts University<br>
		Medford, MA 02155&nbsp; <br>Birth Year: 1938</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Director,&nbsp;
      Chairman of the&nbsp; Board and&nbsp; Chairman of the&nbsp; Audit&nbsp;
      Committee and&nbsp; Nominating&nbsp; Committee</font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 1993</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Henry
        J. Braker Professor of Commercial Law, The Fletcher School of Law
      &amp;&nbsp; Diplomacy (1986-Present); Dean, Fletcher School of Law &amp; Diplomacy,
      Tufts University (1986-1994)</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center valign="top"><font size="2" face="Times New Roman, Times, serif"> 2</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Director
        of 34 registered investment companies advised by Salomon
      Brothers Asset Management Inc (&#147;SBAM&#148;)</font></TD>
  </TR>
</TABLE>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">48</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p49"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The following table provides information
    concerning the number and dollar range of equity securities owned beneficially
    by each Director as of [record date], 2006: </FONT></p>
</div>
<TABLE width="100%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Name of Director</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Dollar Range of</B><br>
	<B>Equity Securities in</B><br>
	<B>the Fund</B>&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Aggregate Dollar Range of</B><br>
	 <B>Equity Securities in All Funds</B><br>
	  <B>Overseen by Director and</B><br>
	  <B>Advised by Blackstone</B><br>
	  <B>Advisors</B>&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><HR align="left" size=1 noshade></TD>
    <TD align=left></TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left></TD>
    <TD align=left><HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <B><FONT size=2>NON-INTERESTED
      DIRECTORS</FONT></B>&nbsp; </font></TD>
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <FONT size=2>Lawrence K. Becker</FONT>&nbsp;
      </font></TD>
    <TD width=2% align=left> </TD>
    <TD width=18% align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
    <TD width=2% align=left> </TD>
    <TD width=24% align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <FONT size=2>Leslie H. Gelb</FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <FONT size=2>J. Marc Hardy</FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <FONT size=2>Stephane R.F. Henry</FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <FONT size=2>Luis F. Rubio</FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <FONT size=2>Jeswald W. Salacuse</FONT>&nbsp;
      </font></TD>
    <TD align=right>&nbsp; </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>&#36;10,001-&#36;50,000</FONT>&nbsp;
      </font></TD>
    <TD align=right>&nbsp; </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>&#36;10,001-&#36;50,000</FONT>&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <B><FONT size=2>INTERESTED DIRECTORS</FONT></B>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <FONT size=2>Prakash A. Melwani<SUP>*</SUP></FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font face="Times New Roman, Times, serif"> <FONT size=2>Peter G. Peterson<SUP>**</SUP></FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
    <TD align=left> </TD>
    <TD align=center><font face="Times New Roman, Times, serif"> <FONT size=2>None</FONT>&nbsp;
      </font></TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD valign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan="2" valign=top><HR align="left" width="100" size=1 noshade></TD>
  </TR>
  <TR>
    <TD width="3%" valign=top><font size="1" face="Times New Roman, Times, serif"> *</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Mr. Melwani is an &#147;interested
        person,&#148; as defined in the 1940 Act, because he serves as President
        of the Fund and as Senior Managing Director at Blackstone, an affiliate
        of Blackstone Advisors, the Fund&#146;s investment manager, and Blackstone
      India, the Fund&#146;s country adviser. </font></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD valign=top><font size="1" face="Times New Roman, Times, serif"> **</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Mr. Peterson is
        an &#147;interested person,&#148; as defined in the 1940 Act, because
        he serves as Senior Chairman of Blackstone, an affiliate of Blackstone
        Advisors, the Fund&#146;s investment manager, and Blackstone India, the
      Fund&#146;s country adviser. </font></TD>
  </TR>
</TABLE>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">As of December 31, 2005,
      the holdings of no Director or executive officer, nor the Directors and
      executive officers
    of the Fund as a group, represented more than 1% of the outstanding shares
      of the Fund&#146;s common stock. During calendar years 2004 and 2005, no Director
    who is not an &#147;interested person&#148; of the Fund (as defined in the
    1940 Act) nor any immediate family member of such persons, had any interest
    in Blackstone Advisors, Blackstone India or person or entity (other than
    the
    Fund) directly or indirectly controlling, controlled by or under common control
    with Blackstone Advisors or Blackstone India. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">49</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p50"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><B>Responsibilities of the Board of Directors</B></font></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Board of Directors
      is responsible for directing the management of the business and affairs
      of the Fund. In performing
    his duties, each Director is required to act in good faith, in a manner he
      reasonably believes to be in the best interests of the Fund and its stockholders
      and with the care of an ordinarily prudent person in a like position under
      similar circumstances. The Directors oversee the Fund&#146;s business by,
    among other things, meeting with the Fund&#146;s management and evaluating
    the performance of the Fund&#146;s service providers including Blackstone
    Advisors, Blackstone India, the custodian, the transfer agent and the sub-administrator.
    As part of this process, the Directors consult with the Fund&#146;s independent
    registered public accounting firm and with their own separate independent
    counsel. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Board of Directors has four regularly
    scheduled meetings each year and additional meetings are scheduled as needed.
    In addition, the Board has an audit committee and a nominating committee that
    meet periodically during the year and whose responsibilities are described
    below. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Directors regularly
      review the Fund&#146;s
    financial statements, performance and market price as well as the quality
    of the services being provided to the Fund. As part of this process, the Directors
    review the Fund&#146;s fees and expenses to determine if they are reasonable
    and competitive in light of the services being received, while also ensuring
    that the Fund continues to have access to high quality services in the future.
    Based on these reviews, the Directors periodically make suggestions to the
    Fund&#146;s management and monitor to ensure that responsive action is taken.
    The Directors also monitor potential conflicts of interest among the Fund,
    Blackstone Advisors, Blackstone India and their affiliates and other funds
    and clients managed by Blackstone Advisors to ensure that the Fund is managed
    in a manner which is in the best interest of the Fund&#146;s stockholders. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Officers</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The executive officers of the Fund are
    chosen each year at the first meeting of the Board of Directors of the Fund
    following the Annual Meeting of Stockholders, to hold office until the meeting
    of the Board following the next Annual Meeting of Stockholders and until their
    successors are chosen and qualified. The current executive officers of the
    Fund are: </FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Name, Address</B>&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Position(s) Held</B>&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Term of Office and</B>&nbsp;
      </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Principal Occupation During</B>&nbsp;
      </font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>and Age</B>&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>with Fund</B>&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Length of Time Served</B>&nbsp;
      </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Past 5 Years</B>&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Prakash
        A. Melwani&nbsp; <br>The Blackstone Group&nbsp; <br>345 Park Avenue&nbsp; <br>New York,
      N.Y. 10154&nbsp; <br>Birth Year: 1958</font></TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD width=20% align=left valign="top"><font size="2" face="Times New Roman, Times, serif">
      Director and President</font></TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD width=15% align=left valign="top"><font size="2" face="Times New Roman, Times, serif">
      Since 2005</font></TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD width=28% align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Senior
        Managing Director,&nbsp; Private Equity Group,&nbsp; Blackstone (May
         2003- Present); Founder and Chief&nbsp; Investment Officer, Vestar&nbsp;
      Capital Partners (1988-2003)</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Robert
        L. Friedman&nbsp; <br>The Blackstone Group&nbsp; <br>
        345 Park Avenue&nbsp; <br>New York,
      N.Y. 10154&nbsp; <br>Birth Year: 1943</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Chief
      Legal Officer and&nbsp; Vice President</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 2005</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Chief
        Administrative Officer&nbsp; and Chief Legal Officer,&nbsp; Blackstone
        (2003-Present);&nbsp;
      Senior Managing Director,&nbsp; Blackstone (1999-Present)</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Joshua
        B. Rovine&nbsp; <br>The Blackstone Group&nbsp; <br>345 Park Avenue&nbsp; <br>New York,
      N.Y. 10154&nbsp; <br>Birth Year: 1965</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Secretary</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 2005</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Managing
        Director, Finance&nbsp; and Administration Group,&nbsp; Blackstone (2003-Present);&nbsp;
      Partner, Sidley Austin Brown &amp;&nbsp; Wood LLP (1994-2003)</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Brian
        S. Chase&nbsp; <br>The Blackstone Group&nbsp; <br>345 Park Avenue&nbsp; <br>New York, N.Y.
      10154&nbsp; <br>Birth Year: 1977</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Treasurer
      and Vice&nbsp; President</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 2005</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Vice
        President and Chief&nbsp; Financial Officer, Distressed&nbsp; Securities Advisors
      Group,&nbsp; Blackstone (May 2005- Present); Controller, Fortress&nbsp;
      Investment Group LLC, (May&nbsp; 2002-May 2005)</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Barbara
        Pires&nbsp; <br>Blackstone Asia Advisors L.L.C.&nbsp; <br>345 Park Avenue&nbsp;
      <br>New York, N.Y. 10154&nbsp; <br>Birth Year: 1952&nbsp; &nbsp;</font><font size="2" face="Times New Roman, Times, serif"> &nbsp;
      </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Chief
        Compliance Officer&nbsp; and Vice President&nbsp; &nbsp;</font><font face="Times New Roman, Times, serif"> <font size="2">&nbsp;</font>
      <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
      <font size="2">&nbsp;</font> </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since
        2005&nbsp; &nbsp;</font><font face="Times New Roman, Times, serif"> <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> <font size="2">&nbsp;</font>
        <font size="2">&nbsp;</font> </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Consultant
        (2005-Present);&nbsp; Chief Compliance Officer, The&nbsp; Asia Tigers
      Fund, Inc. and The&nbsp; India Fund, Inc. (2005); Senior&nbsp; Vice President,
      Oppenheimer&nbsp; Asset Management, Inc. (1996- 2005)&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD rowspan="3" align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Punita
        Kumar-Sinha&nbsp; <br>Blackstone Asia Advisors L.L.C.&nbsp; <br>345 Park
      Avenue&nbsp; <br>New York, N.Y. 10154&nbsp; <br>Birth Year: 1962&nbsp; </font></TD>
    <TD rowspan="3" align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Chief Investment
      Officer</font></TD>
    <TD rowspan="3" align=left>&nbsp;</TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Since 2005</font></TD>
    <TD rowspan="3" align=left>&nbsp;</TD>
    <TD rowspan="3" align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Portfolio
        Manager, The Asia&nbsp; Tigers Fund, Inc. (1999- Present)
      and The India Fund,&nbsp; Inc. (1997-Present)&nbsp; &nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif"> Portfolio
      Manager</font></TD>
    <TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif">Since 1997
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
  </TR>
</TABLE>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> 50</font></P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p51"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<P><font size="2" face="Times New Roman, Times, serif"> <B>Audit Committee </B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s Audit Committee is composed
    entirely of Directors who are not &#147;interested persons&#148; of the Fund,
    Blackstone Advisors or its affiliates within the meaning of the 1940 Act,
    and who are &#147;independent&#148; as defined in the New York Stock Exchange
    listing standards. Currently, Messrs. Becker, Gelb, Rubio and Salacuse are
    members of the Audit Committee. The Audit Committee convened three times during
    the fiscal year ended December 31, 2005. The principal functions of the Audit
    Committee are to appoint and retain the Fund&#146;s independent registered
    public accounting firm, to review with the independent registered public accounting
    firm the scope, performance and anticipated cost of their audit and to receive
    and consider a report from the independent registered public accounting firm
    concerning their conduct of the audit, including the form of the opinion proposed
    to be rendered and any comments or recommendations the independent registered
    public accounting firm might want to make in that connection. The Board has
    determined that Mr. Becker will serve as the &#147;audit committee financial
    expert,&#148; as defined in Section 401(h) of Regulation S-K. The Fund adopted
    an Audit Committee Charter in February 2000, which was most recently amended
    and restated in November 2005. The Fund&#146;s amended and restated Audit
    Committee Charter was filed as an exhibit to the Proxy Statement filed by
    the Fund on January 9, 2006. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Nominating Committee</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Nominating Committee
      is composed entirely of Directors who are not &#147;interested persons&#148; of the Fund,
    Blackstone Advisors or its affiliates within the meaning of the 1940 Act,
    and who are &#147;independent&#148; as defined in the NYSE listing standards.
    Currently Messrs. Becker, Gelb, Hardy, Henry, Rubio and Salacuse are members
    of the Nominating Committee. This Committee met one time during the fiscal
    year ended December 31, 2005. The principal function of the Nominating Committee
    is to select and nominate persons for election as Directors of the Fund.
    The
    Fund adopted a Nominating Committee Charter on December 18, 2003 and the
    Charter was filed as an appendix to the Proxy Statement filed by the Fund
    on April
    5, 2004. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Nominating Committee
      identifies potential nominees through its network of contacts. While the
      Nominating Committee meets
    to discuss and consider such candidates&#146; qualifications and then chooses
    a candidate by majority vote, the Nominating Committee does not have specific,
    minimum qualifications for nominees and has not established specific qualities
    or skills that it regards as necessary for one or more of the Fund&#146;s
    Directors to possess (other than any qualities or skills that may be required
    by applicable law, regulation or listing standard). </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In identifying and evaluating
      nominees, the Nominating Committee considers factors it deems relevant
      which include:
    whether or not the person is an &#147;interested person&#148; as defined
    in the 1940 Act and whether the person is otherwise qualified under applicable
    laws and regulations to serve on the Board of Directors of the Fund; whether
    or not the person has any relationship that might impair his or her independence,
    such as any business, financial or family relationships with Fund management,
    the investment manager of the Fund, Fund service providers or their affiliates;
    whether or not the person serves on boards of, or is otherwise affiliated
    with, competing organizations or funds; and the character and integrity of
    the person and the contribution which the person can make to the Board. The
    Nominating Committee will accept nominations for the office of Director made
    by Fund Stockholders. Stockholders who wish to recommend a nominee should
    send nominations to the Secretary of the Fund which include biographical
    information
    and set forth the qualifications of the proposed nominee. There are no differences
    in the manner in which the Nominating Committee evaluates nominees based
    on
    whether such nominees are recommended by a Stockholder. </FONT></p>
  <p><FONT size=2 face="Times New Roman, Times, serif">Stockholders who wish to recommend a nominee should send nominations to the Secretary of the Fund which include biographical information and set forth the qualifications of the proposed nominee. There are no differences in the manner in which the Nominating Committee evaluates nominees based on whether such nominees are recommended by a Stockholder.</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">51</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p52"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund does not pay
      a fee to any third party or parties to identify or evaluate or assist in
      identifying or evaluating
    potential nominees. The Nominating Committee did not receive a recommended
      nominee from a Stockholder who beneficially owned, or a group of Stockholders
      who beneficially owned, more than 5% of the Fund&#146;s shares for at least
    one year as of the date the recommendation was made. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Board Meetings</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">During the fiscal year ended December
    31, 2005, the Board of Directors held four regular meetings and six special
    meetings. Each Director attended at least 75% of the meetings of the Board
    or the committee of the Board on which he served. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Director Compensation</B> </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Under the federal securities
      laws, the Fund is required to provide to Stockholders in connection with
      the Meeting
    information regarding compensation paid to Directors by the Fund as well
      as by the various other U.S. registered investment companies advised by
      the investment
    manager, the country adviser or an affiliate of the investment manager during
      the Fund&#146;s prior fiscal year. The Fund does not provide any pension
    or retirement benefits to Directors. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">A Fund Complex means two or more registered
    investment companies that hold themselves out to investors as related companies
    for purposes of investment and investor services, or that have a common investment
    manager or that have an investment manager that is an affiliated person of
    the investment manager of any of the other registered investment companies.
    Investment companies are considered to be in the same family if they share
    the same investment manager or principal underwriter and hold themselves out
    to investors as related companies for purposes of investment and investor
    services. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The following table provides information
    concerning the approximate compensation paid during the fiscal year ended
    December 31, 2005 to each Director of the Fund and the aggregate compensation
    paid to him from all registered funds in the Fund Complex for the fiscal year
    ended December 31, 2005: </FONT></p>
</div>
<TABLE width="100%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font><font size="1" face="Times New Roman, Times, serif"> &nbsp; &nbsp;<B>Name
    of Director</B>&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="2"><font size="1" face="Times New Roman, Times, serif"><B>Aggregate</B><br>
	<B>Compensation</B><br>
	<B>from Fund</B><br>
	</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="2"><font size="1" face="Times New Roman, Times, serif"><B>Total</B><br>
	<B>Compensation</B><br>
	<B>from Other
      Funds</B><br>
	  <B>Advised by</B><br>
	  <B>Adviser</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="2"><font size="1" face="Times New Roman, Times, serif"><B>Compensation</B><br>
	<B>from Fund
    and</B><br>
	<B>Fund Complex</B>&nbsp;
    </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><HR align="left" size=1 noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD colspan="2" align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD colspan="2" align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD colspan="2" align=left><HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Lawrence
        K. Becker&nbsp;
      </font></TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left><font size="2" face="Times New Roman, Times, serif"> &#36;&nbsp;
      </font></TD>
    <TD width="15%" align=right><font size="2" face="Times New Roman, Times, serif"> 17,000&nbsp;
      </font></TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left><font size="2" face="Times New Roman, Times, serif"> &#36;&nbsp;
      </font></TD>
    <TD width="15%" align=right><font size="2" face="Times New Roman, Times, serif"> 13,900&nbsp;
      </font></TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left><font size="2" face="Times New Roman, Times, serif"> &#36;&nbsp;
      </font></TD>
    <TD width="15%" align=right><font size="2" face="Times New Roman, Times, serif"> 30,900&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Leslie
        H. Gelb&nbsp;
      </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 10,967&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 9,633&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 20,600&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> J. Marc
        Hardy&nbsp;
      </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 11,600&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 0&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 11,600&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Stephane
        R. F. Henry&nbsp;
      </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 11,600&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 0&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 11,600&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Prakash
        A. Melwani&nbsp;
      </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 0&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 0&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 0&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Peter
        G. Peterson&nbsp;
      </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 0&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 0&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 0&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Luis
        F. Rubio&nbsp;
      </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 11,567&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 10,033&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 21,600&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Jeswald
        W. Salacuse&nbsp;
      </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 17,933&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 13,167&nbsp; </font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 31,100&nbsp; </font></TD>
  </TR>
</TABLE>
<p><font size="2" face="Times New Roman, Times, serif"><B>Code of Ethics</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s Board
      of Directors approved a code of ethics under Rule 17j-1 under the 1940
      Act. Subject to certain conditions
    and restrictions, the code of ethics permits Directors, officers and other
      personnel subject to its provisions to invest in securities, including
      securities
    that may be purchased or held by the Fund. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">52</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p53"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The code of ethics can
      be reviewed and copied at the SEC&#146;s Public Reference Room in Washington, D.C. Information
    about the operation of the Public Reference Room may be obtained by calling
    the SEC at 1-800-SEC-0330. The code of ethics is available on the EDGAR database
    on the SEC&#146;s website at http://www.sec.gov. Copies may also be obtained,
    after paying a duplicating fee, by electronic request to &#147;publicinfo@sec.gov&#148;
    or by writing to the SEC&#146;s Public Reference Section, Washington, D.C.
    20549. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Proxy Voting Policies and Procedures</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund has adopted the
      Investment Manager&#146;s
    policies and procedures with respect to the voting of proxies related to portfolio
    securities. These proxy voting policies and procedures delegate to the Investment
    Manager the responsibility for voting proxy securities, subject to the Board
    of Directors&#146; continuing oversight. A copy of the Fund&#146;s proxy
    voting policies and procedures is included in the Statement of Additional
    Information
    which is available without charge by calling the Fund at 1-866-800-8933. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Information regarding how the Fund voted
    proxies relating to portfolio securities for the 12-month period ended December
    31, 2005 is available, without charge, by calling 1-866-800-8933</FONT><font face="Times New Roman, Times, serif"><B><FONT size=2>
    </FONT></B><FONT size=2>or on the SEC&#146;s website at http://www.sec.gov. </FONT></font></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">53</FONT></p>
<hr noshade align="center" width="100%" size="2">
<font face="Times New Roman, Times, serif"><page> </font><font face="Times New Roman">
<p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back
  to Contents</a></font></p>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> </font><font face="Times New Roman, Times, serif"><a name="p54"></a></font><font size="2" face="Times New Roman, Times, serif"><B>CONTROL
  PERSONS AND PRINCIPAL HOLDERS OF SECURITIES</B></font></P>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The following table sets forth the beneficial ownership of shares of the Fund, as of [recent date], 2006, by each person (including any group) known to the
Fund to be deemed to be the beneficial owner of more than 5% of the outstanding shares of the Fund:</FONT></p>
</div>
<TABLE width="100%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR align="center" valign="bottom">
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif"><B>Name of<br>
	Beneficial Owner</B></font></TD>
	<TD width="2%" rowspan="2">&nbsp;</TD>
	<TD><font size="1" face="Times New Roman, Times, serif"><B>Number of Shares</B><br>
	<B>Beneficially Owned</B></font></TD>
	<TD width="2%" rowspan="2">&nbsp;</TD>
	<TD><font size="1" face="Times New Roman, Times, serif"><B>Percent Ownership</B></font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left><hr size="1" noshade></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
None</font></TD>
	<TD width=12% align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD width=12% align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD width=12% align=left>&nbsp;

	</TD>
</TR>
</TABLE>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      addition, as of [recent date], 2006, Cede &amp; Co., a nominee for participants
      in The Depository Trust Company, held of record [_] shares, equal to [_]%
      of the outstanding shares of the Fund.</FONT></p>
</div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> </font><font face="Times New Roman, Times, serif"><a name="p54a"></a></font><font size="2" face="Times New Roman, Times, serif"><B>PORTFOLIO
  TRANSACTIONS</B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund has no obligation to deal with any brokers or dealers in the execution
      of transactions
      in portfolio securities. Subject to policy established by the
Fund&#146;s Board of Directors, the Investment Manager is primarily responsible for the Fund&#146;s portfolio decisions and the initiation of the Fund&#146;s
portfolio transactions. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      placing orders, it is the policy of the Fund to obtain the best results
      taking
      into account the general execution and operational facilities of the broker
      or dealer, the type of transaction involved and other factors such as the
      risk of the broker or dealer in positioning the securities involved. While
      generally the best price is sought in placing orders, the Fund may not
      necessarily be paying the
lowest price available. Securities firms that provide supplemental research to
      the Investment Manager or the Country Adviser may receive orders for transactions
      by the Fund. In these circumstances, as contemplated by Section 28(e) of
      the U.S.
Securities Exchange Act of 1934, as amended (the &#147;1934 Act&#148;), the Fund
may pay commissions that are higher than those that the Fund might otherwise
have paid to another broker if those services had not been provided. Information
so received will be in addition to and not in lieu of the services that the Investment
Manager and the Country Adviser must perform under their respective agreements,
and the expenses of the Investment Manager or the Country Adviser will not
necessarily be reduced as a result of the receipt of such supplemental information.
The Investment Manager and the Country Adviser may use the research services
furnished to them by brokers who effect securities transactions for the Fund
in servicing other investment companies and accounts that they manage. Similarly,
the Investment Manager and the Country Adviser may use the research services
furnished to them by those brokers in servicing the Fund. The Investment Manager
and the
Country Adviser do not use all of these research services in managing any particular
account, including the Fund. To the extent that any services are provided by
other NYSE members, the Fund will consider whether the commissions and fees with
respect to those transactions are fair and reasonable. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      connection with the execution of portfolio transactions on its behalf,
      affiliated
      persons (as such term is defined in the 1940 Act) of the Fund, or affiliated
      persons of such persons, may from time to time be selected to perform brokerage
      services for the Fund, subject to the considerations discussed above. The
      1940 Act prohibits such affiliated persons from dealing with the Fund as
      principal
in the purchase or sale of securities. In order for such an affiliated person
      to be permitted to effect any portfolio transactions for the Fund, the
      commissions, fees or other remuneration received by such affiliated person
      must be reasonable and fair compared to the commissions, fees or other
      remuneration received by other brokers in connection with comparable transactions
      involving similar securities being purchased or sold on a securities exchange
      during a comparable period of time. This
standard would allow such an affiliated person to receive no more than the remuneration
      that an unaffiliated broker would expect to receive in a commensurate arm&#146;s-length
transaction. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Investment Manager makes investment decisions or recommendations for the
      Fund independently
      from those rendered for The Asia Tigers Fund, Inc., the other fund that
      it manages. The Asia Tigers Fund, Inc. may also invest in the same securities
      as the Fund. If The Asia Tigers Fund, Inc. is prepared to invest in, or
      desires to dispose of, the same security at the same time as the Fund,
      however,
transactions in such securities will be made, insofar as feasible, for the respective
      funds in a manner deemed equitable to both. In some cases, this procedure
      may adversely
      affect the size of the position obtained for or disposed of by the Fund
      or the price paid or received by the Fund. In addition, because of different
      investment objectives, a particular security may be purchased for one fund
      when the other fund is selling the same security. In the future, the Investment
      Manager may advise or manage other funds or accounts, in which case similar
      issues may arise. See &#147;Portfolio
Manager&#151;Potential Conflicts of Interest.&#148;</FONT></p>
</div>
<div align="center">
  <p><FONT size=2 face="Times New Roman, Times, serif">54</FONT></p>
</div>
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<font face="Times New Roman, Times, serif"><page><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Although
      the management agreement does not contain any restrictions on portfolio
      turnover,
      the Fund&#146;s policy is not to engage in transactions with the
objective of seeking profits from short-term trading. It is expected that the annual portfolio turnover rate of the Fund will not exceed 150%. The portfolio turnover rate is calculated by dividing the lesser of sales or purchases of portfolio
securities by the average monthly value of the Fund&#146;s portfolio securities. For purposes of this calculation, portfolio securities exclude all securities having a maturity when purchased of one year or less. Higher portfolio turnover involves
correspondingly higher transaction costs and may result in greater amounts of short-term capital gains, which are taxed to stockholders as ordinary income when distributed. See &#147;Taxation&#151;U.S.
Stockholders.&#148; </FONT></p></div>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">For
      the fiscal years ended December 31, 2005, 2004 and 2003, the Fund paid
      commissions
      for the execution of its portfolio transactions amounting in the aggregate
      to &#36;3,878,801, &#36;1,924,925 and &#36;1,483,875, respectively.</FONT></p>
</div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> </font><font face="Times New Roman, Times, serif"><a name="p55"></a></font><font size="2" face="Times New Roman, Times, serif"><B>SEMI-ANNUAL
  REPURCHASES OF SECURITIES</B></font></P>
<p><font size="2" face="Times New Roman, Times, serif"><B>General</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Under the 1940 Act, the Fund may repurchase its securities:</FONT></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif">
    <FONT size=2>on a securities exchange or such other open market designated by the SEC (so long as the Fund has, in the case of
purchases of its stock, informed holders of the class of stock involved within the preceding six months of its intention to repurchase such stock);</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    by a tender offer open to all holders of the class of securities involved;
    or</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif">
    <FONT size=2>as otherwise permitted by the SEC, including, for example, by electing for an interval fund</FONT> <FONT size=2>structure.</FONT></font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund has adopted an &#147;interval fund&#148; structure, pursuant to which the Fund conducts semi-annual repurchase offers for between 5% and 25% of the
Fund&#146;s outstanding common stock. The Fund currently intends to fund repurchase
offers by using cash on hand and liquidating portfolio securities and does not
intend to make additional discretionary repurchase offers. </FONT></p></div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">If the Fund repurchases
      its shares of common stock for a price below their net asset value, the
      net asset value
      of those shares of common stock that remain outstanding would be enhanced,
      but this does not necessarily mean that the market price of those outstanding
      shares would be affected, either positively or negatively. Repurchases
      of shares of common stock by the Fund would also decrease its total
assets and accordingly may increase its expenses as a percentage of average net
      assets. Further, interest on any borrowings to finance any such share repurchase
transactions would reduce the Fund&#146;s net income.</FONT></p></div>
  <p><font size="2" face="Times New Roman, Times, serif"><B>Fundamental Policy Regarding Semi-Annual
  Repurchase Offers </B></font></p>
  <div style="text-indent:3%">
    <P><font size="2" face="Times New Roman, Times, serif"> The Fund&#146;s fundamental
        policy with respect to repurchase offers is as follows:</font></P>
  </div>
  <table width="100%" border="0" cellpadding="0" cellspacing="0">
    <tr valign="top">
      <td width="3%">&nbsp;</td>
      <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
      <td><font face="Times New Roman, Times, serif"><FONT size=2>The
          Fund will make offers to repurchase its shares at semi-annual intervals
          pursuant to Rule 23c-3 under
          the 1940 Act, and the Fund&#146;s Board of Directors may place such
          conditions and limitations on the
          repurchase offers as may be permitted under Rule 23c-3;</FONT></font></td>
    </tr>
    <tr valign="top">
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr valign="top">
      <td>&nbsp;</td>
      <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
      <td><font face="Times New Roman, Times, serif"><FONT size=2>14 days
          prior to the last Friday of each of the Fund&#146;s first and third
          fiscal quarters (or the next business</FONT> <FONT size=2>day
          if such Friday is not a business day) will be the deadline, which we
          refer to as the &#147;repurchase request deadline,&#148; by which the
          Fund must receive repurchase requests submitted by stockholders in</FONT> <font size=2>response
          to the repurchase offer;</font> </font></td>
    </tr>
</table>
  <div align="center">
  <p><font size="2" face="Times New Roman, Times, serif">  55</font></p>
</div>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%"></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size=2 face="Times New Roman, Times, serif">The date
        on which the repurchase price for shares is to be determined shall occur
        no later than the last Friday
        of each of the Fund&#146;s first and third fiscal quarters, or the next
        business day if such Friday is not a
    business day; and</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size=2 face="Times New Roman, Times, serif">Repurchase
        offers may be suspended or postponed only under certain circumstances
        as provided for in Rule
    23c-3 under the 1940 Act.</font></td>
  </tr>
</table>
<tr valign="top">
  <td>&nbsp;</td>
</tr><tr valign="top"><td>&nbsp;</td>
  </tr>
 <div style="text-indent:3%"><P><font size="2" face="Times New Roman, Times, serif">
 The foregoing policy cannot be changed without stockholder approval.</font></P></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">From
      the date that notice is sent to stockholders announcing the repurchase
      offer until
      the repurchase pricing date, the Fund maintains a percentage of its portfolio
      assets in liquid securities at least equal to the value of the percentage
of the Fund&#146;s shares that the Fund has offered to purchase. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Procedures Relating to Semi-Annual
Repurchase Offers</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Prior
      to each repurchase offer, the Board of Directors, in the exercise of its
      fiduciary
      duties, will determine the number of shares subject to the repurchase offer
      based upon such considerations as market demand and the Fund&#146;s net
      asset value per share. If a repurchase offer is over-subscribed, the Fund
may, but is not obligated to, either: </FONT></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif">
    <FONT size=2>repurchase all additional shares tendered if the additional
    shares do not exceed 2% of the Fund&#146;s</FONT> <FONT size=2>outstanding
common stock; or</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    purchase all shares tendered on a pro rata basis.</font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">All shares tendered may be withdrawn at any time prior to the repurchase request deadline in accordance with certain procedures. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Repurchase prices are set at a price equal to the net asset value of the Fund as of a specified date that occurs after the repurchase request deadline. The
Fund charges a repurchase fee of up to 2% of the value of the shares that are repurchased. Payment for tendered shares is distributed within one week thereafter. All repurchase offer materials are mailed to stockholders of record before commencement
of the repurchase offer. Stockholders whose shares are held in the name of a broker, dealer, commercial bank, trust company or other nominee should contact such firm if they desire to tender their shares in the repurchase offer. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">During
      repurchase offers, net asset value per share is calculated as of the close
      of regular
      trading on the NYSE each Friday and each of the five business days preceding
      the repurchase request deadline. Stockholders who wish to obtain the net
      asset value during this period should contact the Fund&#146;s information
agent for the repurchase offer. </FONT></p></div>
<div style="text-indent:3%"><P><font size="2" face="Times New Roman, Times, serif"> See &#147;Taxation&#151;U.S. Stockholders&#151;Dispositions
      and
repurchases.&#148;</font></P></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> </font><font face="Times New Roman, Times, serif"><a name="p56"></a></font><font size="2" face="Times New Roman, Times, serif"><B>DIVIDENDS
  AND DISTRIBUTIONS; DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN </B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Fund intends to distribute annually to stockholders substantially all of its net investment income and to distribute any net realized capital gains at
least annually. Net investment income for this purpose is income other than net realized long- and short-term capital gains net of expenses. </FONT></p></div>
<p align="center"><font size="2" face="Times New Roman, Times, serif">    56</font></p>
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<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p57"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
<P><font size="2" face="Times New Roman, Times, serif"> Pursuant to the
Fund&#146;s dividend reinvestment and cash purchase plan, which we refer to as
the &#147;plan,&#148; stockholders whose shares of common stock are registered
in their own names will be deemed to have elected to have all distributions automatically
reinvested by PFPC Inc., which serves as the plan agent, in Fund shares pursuant
to the plan, unless such stockholders elect to receive distributions in cash.
Stockholders who elect to receive distributions in cash will receive all distributions
in cash paid by check in dollars mailed directly to the stockholders by the dividend
paying agent. In the case of stockholders, such as banks, brokers or nominees,
that hold shares for others who are beneficial owners, the plan agent will administer
the plan on the basis of the number of shares certified from time to time by
the stockholders as representing
the total amount registered in such stockholders&#146; names and held for the
account of beneficial owners that have not elected to receive distributions in
cash. Investors that own shares registered in the name of a bank, broker or other
nominee should consult with such nominee as to participation in the plan through
such nominee, and may be required to have their shares registered in their own
names
in order to participate in the plan.</font></P>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      plan agent serves as agent for the stockholders in administering the plan.
      If the
      Directors of the Fund declare an income dividend or a capital gains distribution
      payable either in the Fund&#146;s common stock or in cash, nonparticipants in the plan will receive cash and participants in the plan will receive common stock, to be issued by the Fund or purchased by the plan agent in the open market.
If the market price per share on the valuation date equals or exceeds net asset value per share on that date, the Fund will issue new shares to participants at net asset value, except if the net asset value is less than 95% of the market price on
the valuation date, in which case such shares will then be issued at 95% of the market price. The valuation date will be the dividend or distribution payment date or, if that date is not a NYSE trading day, the next preceding trading day. If the net
asset value exceeds the market price of Fund shares at such time, or if the Fund should declare an income dividend or capital gains distribution payable only in cash, the plan agent will, as agent for the participants, buy Fund shares in the open
market, on the NYSE or elsewhere, for the participants&#146; accounts on, or shortly after, the payment date. If, before the plan agent has completed its purchases, the market price exceeds the net asset value of a Fund share, the average per-share
purchase price paid by the plan agent may exceed the net asset value of the Fund&#146;s
shares, resulting in the acquisition of fewer shares than if the distribution
had been paid in shares issued by the Fund on the dividend payment date. Because
of the foregoing difficulty with respect to open-market purchases, the plan provides
that if the plan agent is unable to invest the full dividend amount in open-market
purchases during the purchase period or if the market discount shifts to a market
premium during the purchase period, the plan agent will cease making open-market
purchases and will receive the uninvested portion of the dividend amount in newly
issued shares at the close of business on the last purchase date. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Participants
      have the option of making additional cash payments to the plan agent annually
      in any amount from &#36;100 to &#36;3,000 for investment in the
Fund&#146;s common stock. The plan agent will use all such funds received from
participants to purchase Fund shares in the open market on or about February
15 of each year. Any voluntary cash payment received more than 30 days prior
to this date will be returned by the plan agent, and interest will not be paid
on any uninvested cash payment. To avoid unnecessary cash accumulations and also
to allow ample time for receipt and processing by the plan agent, it is suggested
that participants
send in voluntary cash payments to be received by the plan agent approximately
10 days before an applicable purchase date specified above. A participant may
withdraw a voluntary cash payment by written notice if the notice is received
by the plan
agent not less than 48 hours before such payment is to be invested. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      plan agent maintains all stockholder accounts in the plan and furnishes
      written confirmations
      of all transactions in an account, including information needed by stockholders
      for personal and tax records. Shares in the account of each plan participant
      will be held by the plan agent in the name of the participant, and each
      stockholder&#146;s proxy will include those shares purchased pursuant to
      the
plan. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">There
      is no charge to participants for reinvesting dividends or capital gains
      distributions
      or voluntary cash payments. The Fund will pay the plan
agent&#146;s fees for the reinvestment of dividends and capital gains distributions and voluntary cash payments. There will be no brokerage charges with respect to shares issued directly by the Fund as a result of dividends or capital gains
distributions payable either in stock or in cash. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the plan agent&#146;s
open market purchases in connection with the reinvestment of dividends and capital
gains distributions and voluntary cash payments made by the participant. Brokerage
charges for purchasing small amounts of stock for individual accounts through
the plan are expected to be less than the usual brokerage charges for such
transactions, because the plan agent will be purchasing stock for all participants
in blocks and prorating the lower commission thus attainable. </FONT></p></div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">57</FONT></p>
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<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      receipt of dividends and distributions under the plan will not relieve
      participants
      of any income tax which may be payable on such dividends or distributions.
See &#147;Taxation.&#148; </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Experience
      under the plan may later indicate that changes in the plan are desirable.
      Accordingly, the Fund and the plan agent reserve the right to terminate
      the plan as applied to any voluntary cash payments made and any dividend
      or distribution paid subsequent to notice of the termination sent to members
      of the plan at least 30 days before the record date for such dividend or
      distribution. The plan
also may be amended by the Fund or the plan agent, but (except when necessary
      or appropriate to comply with applicable law, rules or policies of a regulatory
      authority) only by at least 30 days&#146; written notice to participants
      in the plan. All correspondence concerning the plan should be directed
      to the plan agent at P.O. Box 43027, Westborough, Massachusetts 01581 (telephone:
1-508-871-8500). </FONT></p></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> </font><font face="Times New Roman, Times, serif"><a name="p58"></a></font><font size="2" face="Times New Roman, Times, serif"><B>TAXATION</B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      following is a general summary of certain United States federal income
      tax considerations
      affecting the Fund and its stockholders. It is not expected that stockholders
      will be subject to the alternative minimum tax as a result of their investment
      in the Fund. No attempt is made to present a detailed explanation of all
      federal, state, local and foreign income tax considerations, and this
discussion is not intended as a substitute for careful tax planning. Accordingly,
      potential investors are urged to consult their own tax advisors regarding
      an investment in the Fund. This summary reflects applicable tax laws as
      of the date of this prospectus, which tax laws may be changed or subject
      to new interpretations by the courts of the U.S. Internal Revenue Service
(the &#147;IRS&#148;), retroactively or prospectively. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>The Fund</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund has qualified and intends to continue to qualify as a &#147;regulated investment company&#148; for federal income tax purposes under the Internal
Revenue Code, except as noted below. In order to so qualify, the Fund must, among other things, (a) derive in each taxable year at least 90% of its gross income from (i) dividends, interest, payments with respect to loans of securities, gains from
the sale or other disposition of stock or securities or foreign currencies, or other income derived with respect to its business of investing in such stock, securities or currencies (including, but not limited to, gains from options, futures or
forward contracts) and (ii) net income derived from interests in certain publicly traded partnerships that are treated as partnerships for U.S. federal income tax purposes and that derive less than 90% of their gross income from the items described
in (i) above (each, a &#147;Qualified Publicly Traded Partnership&#148;) and (b) diversify its holdings so that, at the end of each quarter of each taxable year, (i) at least 50% of the value of the Fund&#146;s assets is represented by cash, cash
items, U.S. government securities, securities of other regulated investment companies, and other securities which, with respect to any one issuer, do not represent more than 5% of the value of the Fund&#146;s assets nor more than 10% of the voting
securities of such issuer, and (ii) not more than 25% of the value of the Fund&#146;s
assets is invested in the securities (other than U.S. government securities or
the securities of other regulated investment companies) of any one issuer, any
two or more issuers that the Fund controls and that are engaged in the same,
similar or related trades or businesses or any one or more Qualified Publicly
Traded Partnerships. </FONT></p></div>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">The Fund may
    not have qualified as a regulated investment company for the taxable year
    ended December 31, 2004. Section 855(a) of the Internal Revenue Code  provides
    that, in order to eliminate taxable income for a taxable year, a regulated
    investment company may elect to treat dividends distributed during the twelve
    months following the taxable year as having been paid during such taxable
    year. In
order to make this election, a fund must (1) declare such dividend prior to the
    due date of filing its tax return for the taxable year (including any extensions
    granted), and (2) distribute the dividend during the twelve months following
    the taxable  year. For the taxable year ended December 31, 2004, the Fund
    distributed the appropriate dividend within the twelve month timeframe; however,
    the declaration was made on December 19, 2005, which was subsequent to the
    filing deadline for the 2004 tax
return (i.e., September 15, 2005). As such, the Fund may have failed to qualify
    as a regulated investment company under Subchapter M of the Internal Revenue
    Code for the taxable year ended December 31, 2004. A provision of &#36;25,507,350
    has been
made for U.S. federal income tax purposes in the Fund&#146;s 2005 financial statements.
However, the Fund recently declared a deficiency dividend (within the meaning
of Section 860 of the Internal Revenue Code) of &#36;1.07 per share with respect
to
its income for the taxable year ending December 31,
2004. As a result
of this deficiency dividend, the Fund now expects its liability to be reduced
to approximately &#36;5,000,000. There can be no assurance that the Fund will
be able to
further reduce the liability. </FONT></p>
</div>
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<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">If
      the Fund qualifies as a regulated investment company and distributes to
      its stockholders
      at least 90% of its investment company taxable income (as that term is
      defined in the Internal Revenue Code, without regard to the deduction for
      dividends paid), then the Fund will not be subject to federal income tax
      on the income so distributed. However, the Fund would be subject to corporate
      income tax at a
rate of 35% on any undistributed income. Investment company taxable income includes
      dividends, interest, and net short-term capital gains in excess of net
      long-term capital losses, but does not include &#147;net capital gain,&#148; which is net
long-term capital gains in excess of net short-term capital losses. If in any year the Fund should fail to qualify as a regulated investment company, the Fund would be subject to federal income tax in the same manner as an ordinary corporation, and
distributions to stockholders would be taxable to such holders as ordinary dividend income to the extent of the earnings and profits of the Fund. Such distributions generally would be eligible (i) to be treated as &#147;qualified dividend
income&#148; (as discussed below) in the case of individual stockholders and (ii) for the dividends-received deduction in the case of corporate stockholders. Distributions in excess of earnings and profits will be treated as a tax-free return of
capital, to the extent of a holder&#146;s basis in its shares, and any excess, as a long- or short-term capital gain. In addition, the Fund will be subject to a nondeductible 4% excise tax on the amount by which the aggregate income it distributes
in any calendar year is less than the sum of: (a) 98% of the Fund&#146;s ordinary
income for such calendar year, (b) 98% of the excess of capital gains over capital
losses for the one-year period ending on October 31 of such year, and (c) 100%
of the undistributed ordinary income and gains from prior years. For these purposes,
the Fund will be deemed to have distributed any income or gains on which it paid
corporate income tax. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Fund intends to distribute sufficient income so as to avoid both corporate income tax and the excise tax. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund may engage in hedging involving foreign currencies, forward contracts,
      options
      and futures contracts (including options and futures contracts of foreign
      currencies). See &#147;Additional Investment Activities&#151;Hedging.&#148; Such transactions will be subject to special provisions of the Internal Revenue Code that, among other things, may affect the character of gains and losses realized
by the Fund (that is, may affect whether gains or losses are ordinary or capital), accelerate recognition of income to the Fund and defer recognition of certain of the Fund&#146;s losses. These rules could therefore affect the character, amount and
timing of distributions to stockholders. In addition, these provisions (1) will require the Fund to &#147;mark-to-market&#148; certain
types of positions in its portfolio (that is, treat them as if they were closed
out) and (2) may cause the Fund to recognize income without receiving cash with
which to pay dividends or make distributions in amounts necessary to satisfy
the distribution requirements for avoiding income and excise taxes. In addition,
certain Fund investments may produce income
that will not qualify as good income for purposes of the 90% annual gross income
requirement discussed above. The Fund intends to monitor its transactions, will
make the appropriate tax elections and will make the appropriate entries in its
books and records when it acquires any forward contract, option, futures contract,
or hedged investment in order to mitigate the effect of these rules and prevent
disqualification of the Fund as a regulated investment company. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund will maintain accounts and calculate income by reference to the U.S.
      dollar
      for U.S. federal income tax purposes. Investments generally will be maintained
      and income therefrom calculated by reference to certain foreign currencies
      and such calculations will not necessarily correspond to the Fund&#146;s
      distributable income and capital gains for U.S. federal income tax purposes
      as a result of fluctuations in currency exchange rates. Under Section 988
      of the Internal Revenue Code, gains or losses attributable to fluctuations
      in exchange rates between the time the Fund accrues income or receivables
      or expenses or other liabilities
denominated in a foreign currency and the time the Fund actually collects such
      income or receivables or pays such liabilities are generally treated as
      ordinary income or loss. Similarly, gains or losses on foreign currency
      forward contracts and the disposition of debt securities denominated in
      foreign currency, to the extent attributable to fluctuations in exchange
      rates between the acquisition and disposition dates, are also treated as
ordinary income or loss. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Furthermore,
      exchange control regulations may restrict the ability of the Fund to repatriate
      investment income or the proceeds of sales of securities. These restrictions
      and limitations may limit the Fund&#146;s ability to make sufficient distributions
to satisfy the 90% distribution requirement and avoid the 4% excise tax. </FONT></p></div>
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</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      tax treatment of certain investments of the Fund is not free from doubt
      and it is possible
      that an IRS examination of the issuers of such securities or of the Fund
      could result in adjustments to the income of the Fund. An upward adjustment
      by the IRS to the income of the Fund may result in the failure of the Fund
      to satisfy the 90% distribution requirement necessary for the Fund to maintain
      its
status as a regulated investment company under the Internal Revenue Code. In
      such event, the Fund may be able to make a &#147;deficiency dividend&#148; distribution to its stockholders with respect to the year under examination to satisfy this
requirement. Such distribution will be taxable as a dividend to the stockholders receiving the distribution (whether or not the Fund has sufficient current or accumulated earnings and profits for the year in which such distribution is made) in the
taxable year in which such dividends are received. A downward adjustment by the IRS to the income of the Fund may cause a portion of the previously made distribution with respect to the year under examination not to be treated as a dividend. In such
event, the portion of distributions to each stockholder not treated as a dividend would be recharacterized as a return of capital and reduce the stockholder&#146;s basis in the shares held at the time of the previously made distributions.
Accordingly, this reduction in basis could cause a stockholder to recognize additional gain upon the sale of such stockholder&#146;s
shares. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund intends to make investments which may, for federal income tax purposes,
      constitute
      investments in shares of foreign corporations. If the Fund purchases shares
      in certain foreign investment entities, called &#147;passive foreign investment companies&#148; (&#147;PFICs&#148;), the Fund may be subject to U.S. federal income tax on a portion of any &#147;excess distribution&#148; or gain from
the disposition of the shares even if the income is distributed as a taxable dividend by the Fund to its stockholders. The Fund will generally not be able to pass through to its stockholders any credit or deduction for this tax. Additional charges
in the nature of interest may be imposed with respect to deferred taxes arising from the distributions or gains. If the Fund were to invest in a PFIC and (if the Fund received the necessary information available from the PFIC, which may be difficult
to obtain) elected to treat the PFIC as a &#147;qualified electing fund&#148; under
the Internal Revenue Code, in lieu of the foregoing requirements, the Fund would
generally be required to include in income each year a portion of the ordinary
earnings and net capital gains of the PFIC, even if not distributed to the Fund,
and the amounts would be subject to the 90% and calendar year distribution requirements
described above. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Alternatively,
      the Fund may elect to &#147;mark-to-market&#148; any stock in a PFIC it owns at the end of its taxable year. &#147;Marking-to-market,&#148; in
this context, means including in ordinary income for each taxable year the excess, if any, of the fair market value of the stock over the Fund&#146;s adjusted basis therein as of the end of that year. Pursuant to the election, the Fund also may
deduct (as an ordinary, not capital, loss) the excess, if any, of its adjusted basis in PFIC stock over the fair market value thereof as of the taxable year-end, but only to the extent of any net mark-to-market gains with respect to that stock the
Fund included in income for prior taxable years under the election. The Fund&#146;s adjusted basis in each PFIC&#146;s stock subject to the election would be adjusted to reflect the amounts of income included and deductions taken thereunder. Any
income recognized by the Fund pursuant to the &#147;mark-to-market&#148; election
would be subject to the 90% and calendar year distribution requirements described
above. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>U.S. Stockholders</B></font></p>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Distributions. </FONT></I><FONT size=2>Distributions
        to stockholders of investment company taxable income will, except in
        the case of distributions attributable to &#147;qualified dividend income&#148; described below, be taxable as ordinary income to the extent of the Fund&#146;s
        earnings and profits, whether such distributions are paid in cash or
        reinvested in additional shares. It is not anticipated that a significant
        portion of such dividends, if any, will qualify for the dividends-received
        deduction generally available for corporate stockholders under the Internal
        Revenue Code.
Stockholders receiving distributions from the Fund in the form of additional
        shares pursuant to the dividend reinvestment plan will generally be treated
        for federal income tax purposes as receiving a distribution in an amount
        equal to the fair market value of the additional shares on the date of
        such a distribution. Consequently, if the number of shares distributed
        reflects a market premium, the amount distributed to stockholders participating
        in the plan would exceed the amount of the
cash distributed to nonparticipating stockholders. </FONT></font></p></div>
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</font></font>
<div style="text-indent:3%">
<P><font size="2" face="Times New Roman, Times, serif"> For taxable years beginning
    on or before December 31, 2008, distributions of investment company taxable
    income that are designated by the Fund as derived
from &#147;qualified dividend income&#148; are taxed to individual stockholders
at the rates applicable to long-term capital gain, which reach a maximum of 15%.
Qualified dividend income includes dividends received from foreign corporations
only if
such corporations are &#147;qualified foreign corporations&#148; and the Fund
meets holding period and other requirements with respect to its investment in
such corporations. The Fund will not be able to pass through to any stockholder
the tax treatment of qualified dividend income (namely, that such income will
be taxed at long-term capital gain rates) unless that stockholder also meets
the same holding period and other requirements with respect to its investment
in stock of the Fund. A foreign corporation is a &#147;qualified foreign corporation&#148; if
it is (i) eligible for benefits of a comprehensive income tax treaty with the
United States that the United States Treasury Department determines is satisfactory
for this purpose and that includes an exchange of information program or (ii)
any other foreign corporation with respect to any dividend paid by such corporation
if the stock with respect to which such dividend is paid is readily tradable
on an established securities market in the United States. The United States Treasury
Department has issued a notice indicating that the income tax convention between
the United States and India currently
in effect (the &#147;Convention&#148;) satisfies the requirements described in
clause (i) of the preceding sentence. Accordingly, dividends paid by Indian corporations
that are eligible for the benefits of the Convention will generally be eligible
to be passed through to Fund stockholders as qualified dividend income. Dividends
paid by PFICs, however, will not be treated as qualified dividend income. The
provisions of the Internal Revenue Code applicable to qualified dividend income
and the 15% maximum individual tax rate on long-term capital gains are currently
effective through 2008. Thereafter, qualified dividend income will no longer
be taxed at the rates applicable to long-term capital gains, and the maximum
individual tax rate on long-term capital gains will increase to 20%, unless Congress
enacts legislation
providing otherwise. </font></P>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Distributions
      to stockholders of net capital gain that are designated by the Fund as &#147;capital gain dividends&#148; will
      be taxable as long-term capital gains, whether paid in cash or additional
      shares, regardless of how long the shares have been held by such stockholders.
      Capital gain dividends will not be eligible for the dividends-received
      deduction. The current maximum federal income tax rate
imposed on individuals with respect to long-term capital gains is limited to
      15%, whereas the current maximum federal income tax rate imposed on individuals
      with respect to ordinary income (and short-term capital gains, which are
      taxed at the same rates as ordinary income) is 35%. With respect to corporate
      taxpayers, long-term capital gains are currently taxed at the same federal
income tax rates as ordinary income and short-term capital gains. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">A
      distribution to a stockholder of an amount in excess of the Fund&#146;s current and accumulated earnings and profits will be treated by the stockholder as
a return of capital which is applied against and reduces the stockholder&#146;s basis in his shares. To the extent that the amount of any such distribution exceeds the stockholder&#146;s
basis in its shares, the excess will be treated by the stockholder as gain from
a sale or exchange of the shares. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Fund may elect to retain its net capital gain or a portion thereof for investment and be taxed at corporate rates on the amount retained. In such case,
it may designate the retained amount as undistributed capital gains in a notice to its stockholders, who will be treated as if each received a distribution of its pro rata share of such gain, with the result that each stockholder will (i) be
required to report his pro rata share of such gain on his tax return as long-term capital gain, (ii) receive a refundable tax credit for his pro rata share of tax paid by the Fund on the gain and (iii) increase the tax basis for his shares by an
amount equal to the deemed distribution less the tax credit. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Dividends and distributions by the Fund are generally taxable to the stockholders at the time the dividend or distribution is made (even if paid or
reinvested in additional shares). Any dividend declared by the Fund in October, November or December of any calendar year, however, which is payable to stockholders of record on a specified date in such a month and which is not paid on or before
December 31 of such year will be treated as paid by the Fund and received by the stockholders as of December 31 of such year, provided that the dividend is paid during January of the following year. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">A notice detailing the tax status of dividends and distributions paid by the Fund will be mailed annually to the stockholders of the Fund. </FONT></p></div>
<div style="text-indent:3%">
<p><font face="Times New Roman, Times, serif"><I><FONT size=2>Dispositions
      and repurchases. </FONT></I><FONT size=2>Gain
      or loss, if any, recognized on the sale  or other disposition of shares
      of the Fund will be taxed as capital gain or loss if the shares are capital
      assets in the stockholder&#146;s hands. Generally, a stockholder&#146;s
      gain or loss will be a long-term gain or loss if the shares have been
      held for more than one year. If a stockholder sells or otherwise disposes
      of a share of the Fund before holding it for more than six months, any
      loss on the sale or other disposition of such share shall be treated as
      a long-term capital loss to the
extent of any capital gain dividends received or deemed received by the stockholder
      with respect to such share. A loss realized on a sale or exchange of shares
      may be disallowed if other substantially identical shares are acquired
      (whether under the plan or otherwise) within a 61-day period beginning
      30 days before and ending 30 days after the date that the shares are disposed
      of. In such a case, the basis of the shares acquired will be adjusted to
      reflect the disallowed loss. </FONT></font></p>
</div>
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</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">A
      repurchase by the Fund of shares generally will be treated as a sale of
      the shares
      by a stockholder provided that after the repurchase the stockholder does
      not own, either directly or by attribution under Section 318 of the Internal
      Revenue Code, any shares. If, after a repurchase a stockholder continues
      to own, directly or by attribution, any shares, it is possible that any
      amounts received in the
repurchase by such stockholder will be taxable as a dividend to such stockholder,
      and there is a risk that stockholders who do not have any of their shares
      repurchased would be treated as having received a dividend distribution
      as a result of their proportionate increase in the ownership of the Fund.
      Use of the Fund&#146;s cash to repurchase shares may adversely affect the Fund&#146;s
      ability to satisfy the 90% distribution requirement described above. The
      Fund may also recognize income in connection with the liquidation of portfolio
      securities to fund share purchases. Any such income would be taken into
      account in determining whether the 90% distribution requirement has been
satisfied. </FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Foreign taxes. </FONT></I><FONT size=2>The
        Fund will be subject to withholding and other taxes imposed by India
        and may be subject to certain taxes imposed by other foreign countries
        with respect to dividends, interest, capital gains and other income.
        If the Fund qualifies as a regulated investment company, the 90% distribution
        requirement
discussed above is satisfied and more than 50% in value of the Fund&#146;s total assets at the close of any taxable year consists of stocks or securities of foreign corporations, which for this purpose should include obligations issued by foreign
governmental issuers, then the Fund may elect to treat any foreign income taxes paid by it (if such taxes are treated as income taxes under U.S. income tax principles) as paid by its stockholders. The Fund has historically made and intends to
continue to qualify for and to make this election. For any year that the Fund makes such an election, an amount equal to the foreign income taxes paid by the Fund that can be treated as income taxes under U.S. income tax principles will be included
in the income of its stockholders. Each stockholder will be required to include in its gross income, even though not actually received, his pro rata share of the foreign income taxes paid by the Fund, and will be entitled (subject to certain
limitations) to credit the amount included in his income against his U.S. tax liabilities, if any, or to deduct such amount from his U.S. taxable income, if any. Shortly after any year for which it makes such an election, the Fund will report to its
stockholders, in writing, the amount per share of such foreign income taxes that must be included in each stockholder&#146;s gross income and the amount that will be available for deductions or credit. In general, a stockholder may elect each year
whether to claim deductions or credits for foreign taxes. No deductions for foreign taxes may be claimed, however, by non-corporate stockholders (including certain foreign stockholders as described below) who do not itemize deductions. If a
stockholder elects to credit foreign taxes, the amount of credit that may be claimed in any year may not exceed the same proportion of the U.S. tax against which such credit is taken that the stockholder&#146;s taxable income from foreign sources
(but not in excess of the stockholder&#146;s entire taxable income) bears to his entire taxable income. This limitation must be applied separately to certain categories of income and the related foreign taxes. In certain circumstances, a stockholder
that (i) has held shares of the Fund for less than a specified minimum period during which it is not protected from risk of loss or (ii) is obligated to make payments related to the dividends, will not be allowed a foreign tax credit for foreign
taxes deemed imposed on dividends paid on such shares. Additionally, the Fund must meet this holding period requirement with respect to its foreign stock and securities in order for &#147;creditable&#148; foreign
taxes to be passed through to its stockholders. Generally, under U.S. law, capital
gains realized by U.S. residents are treated as U.S. source income. Under the
Convention, however, capital gains realized by U.S. residents which may be taxed
in India will be treated as foreign
source income, unless inconsistent with U.S. law. Section 865(h) of the Internal
Revenue Code provides that if a taxpayer elects, gain from the sale of stock
of a foreign corporation by a U.S. resident (as defined in Section 865(g) of
the Internal Revenue Code) will be treated as foreign source if, pursuant to
a U.S. tax treaty (without regard to the general U.S. sourcing rule for capital
gains), such income is treated as foreign source. Accordingly, capital gains
realized by the Fund which
may be subject to Indian capital gains tax should be treated as foreign source
if the election is made. Stockholders should consult their own tax advisors with
respect to making this election and the general application of foreign tax credits. </FONT></font></p></div>
<div style="text-indent:3%">
<p><font face="Times New Roman, Times, serif"><I><FONT size=2>Backup
      withholding. </FONT></I><FONT size=2>The
      Fund may be required to withhold federal income tax
(&#147;backup withholding&#148;) from dividends and redemption proceeds paid
to non-corporate stockholders. This tax may be withheld from dividends if (i)
the stockholder fails to furnish the Fund with the stockholder&#146;s correct
taxpayer  identification number, (ii) the IRS notifies the Fund that the stockholder
has failed to report properly certain interest and dividend income to the IRS
and to respond to notices to that effect, or (iii) when required to do so, the
stockholder fails
to certify that he or she is not subject to backup withholding. Redemption proceeds
may be subject to withholding under the circumstances described in (i) above.
Corporate stockholders and other stockholders specified in the Internal Revenue
Code or the Treasury regulations promulgated thereunder are exempt from backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
under the backup withholding rules from payments made to a stockholder may be
credited against such stockholder&#146;s federal income tax liability, provided
the required information is furnished
to the IRS. </FONT></font></p>
</div>
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<div style="page-break-before:always"></div>
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<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Disclosure regulations. </FONT></I><FONT size=2>Treasury
      regulations provide that, if a stockholder recognizes a loss with respect
      to shares of &#36;2 million or more for an individual stockholder or &#36;10
      million or more for a corporate stockholder (or a greater loss over a combination
      of years), the stockholder must file with the IRS a disclosure statement
      on IRS Form 8886. Direct stockholders of portfolio securities are in many
      cases excepted from this reporting requirement, but under current guidance,
      stockholders of a regulated investment company are not excepted. Future
      guidance may extend the current exception from this reporting requirement
      to stockholders of most or all regulated investment companies. The fact
      that a loss is reportable under these regulations does not affect the legal
      determination of whether the taxpayer&#146;s treatment of the loss is proper.
      Stockholders should consult their own tax advisors to determine the applicability
      of these regulations in light of their individual circumstances. </FONT></font></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Foreign Stockholders</B></font></p>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">U.S.
      taxation of a stockholder who, as to the United States, is a non-resident
      alien
      individual, a foreign trust or estate, a foreign corporation, or a foreign
      partnership (&#147;foreign stockholder&#148;), depends on whether the income from the Fund is &#147;effectively connected&#148; with a U.S. trade or business carried on by such stockholder. Ordinarily, income from the Fund will not be
treated as so &#147;effectively connected.&#148; </FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Income not effectively connected. </FONT></I><FONT size=2>If
        the income from the Fund is not &#147;effectively connected&#148; with a U.S. trade or business carried on by the foreign stockholder, then, except as described below with respect to interest-related dividends and short-term capital gain dividends, distributions of investment
company taxable income (including dividends designated as qualified dividend income) will generally be subject to a U.S. tax of 30% (or lower treaty rate), which tax is generally withheld from such distributions. Furthermore, foreign stockholders
may be subject to U.S. tax at the rate of 30% (or lower treaty rate) of the income resulting from the Fund&#146;s
election to treat any foreign taxes paid by it as paid by its stockholders, but
will not be able to claim a credit or deduction for the foreign taxes as having
been paid by them. </FONT></font></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Under
      the American Jobs Creation Act of 2004, a new exemption is created under
      which
      the 30% U.S. withholding tax is no longer imposed on dividends paid by
      regulated investment companies to the extent the dividends are designated
      as &#147;interest-related dividends&#148; or &#147;short-term capital gain dividends.&#148; Under
      this exemption, interest-related dividends and short-term capital gain
      dividends generally represent distributions of interest or short-term capital
      gains that would not have been subject to U.S. withholding tax at the source
      if they had been received directly by a foreign person, and that satisfy
      certain other
requirements. The exemption applies to dividends with respect to taxable years
      of regulated investment companies beginning after December 31, 2004 and
before January 1, 2008. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Distributions of capital gain dividends to a non-resident alien who is present in the United States for fewer than one hundred eighty-three days during the
taxable year will not be subject to the 30% U.S. withholding tax. An alien individual who is physically present in the United States for more than one hundred eighty-two days during the taxable year generally is treated as a resident for U.S.
federal income tax purposes, in which case he or she will be subject to U.S. federal income tax on his or her worldwide income, including ordinary income and capital gain dividends, at the graduated rates applicable to U.S. citizens, rather than the
30% U.S. withholding tax. In the case of a foreign stockholder who is a non-resident alien individual, the Fund may be required to withhold U.S. federal income tax from distributions of capital gain dividends under the backup withholding system
unless the foreign stockholder makes required certifications to the Fund on a properly completed IRS Form W-8BEN (or other applicable form), or otherwise establishes an exemption. The amount so withheld could be applied as a credit against any U.S.
tax due from the stockholder or, if no tax is due, refunded pursuant to a claim therefor properly filed on an income tax return. </FONT></p></div>
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    to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Any gain that a foreign stockholder realizes upon the sale or other disposition of shares of the Fund will ordinarily be exempt from U.S. withholding tax
unless the stockholder is an alien individual who is physically present in the United States for more than one hundred eighty-two days during the taxable year (as discussed above), the gain is U.S. source income and certain other requirements are
met. </FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Income effectively connected. </FONT></I><FONT size=2>If
        the income from the Fund is &#147;effectively connected&#148; with a
        U.S. trade or business carried on by a foreign stockholder, then distributions
        of investment company taxable income and net capital gain, and any gains
        realized upon the sale of shares or the Fund, will be subject to U.S.
        federal income tax at the graduated rates applicable to U.S. citizens,
        residents and domestic corporations. Corporate stockholders may also
be subject to the 30% branch profits tax. </FONT></font></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The tax consequences to a foreign stockholder entitled to claim the benefits of an applicable tax treaty may be different from those described herein.
Foreign stockholders are advised to consult their own tax advisers with respect to the particular tax consequences to them of an investment in the Fund. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Indian Taxes</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The income of foreign institutional investors and their sub-accounts, including the Fund, from the transfer of securities or from capital gains arising from
the transfer of securities is taxable as per the provisions of Section 115AD of the Indian Income Tax Act, 1961. Selected provisions as they apply to the Fund are as follows: </FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
	<TD width="3%" valign=top><font face="Times New Roman, Times, serif">&#8226; </font></TD>
	<TD colspan=2 align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    Income received in respect of securities (other than (1) income from dividends
    on which a dividend distribution tax has been paid or (2) income from units
    of the Unit Trust of India or specified mutual funds covered by Section 115AB
    of the Indian Income Tax Act) are taxed at a rate of 20.91%.</font></TD>
</TR>
<TR><TD valign="top">&nbsp;</TD>
  <TD width="3%" align="left" valign="bottom">&nbsp;</TD>
  <TD align="left" valign="bottom">&nbsp;</TD>
</TR><TR>
	<TD valign=top><font face="Times New Roman, Times, serif">&#8226; </font></TD>
	<TD colspan=2 align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    With respect to long-term capital gains:</font></TD>
</TR>
<TR><TD valign="top">&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
</TR><TR>
<TD valign="top">&nbsp;</TD>	<TD valign=top><font face="Times New Roman, Times, serif">&#8226;
 	</font></TD>
	<TD align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    Income received in respect of long-term capital gains from (A) the transfer
    of (i) equity shares of an Indian company listed on an Indian securities
    exchange or (ii) units of an equity-oriented mutual fund listed on an Indian
    securities exchange or (B) the repurchase of units by an equity-oriented
    mutual fund is not subject to any long-term capital gains tax if that income
    is otherwise subject to the securities transaction tax
described under &#147;&#151;Securities Transaction Tax&#148; below.	</font></TD>
</TR>
<TR><TD valign="top">&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align="left" valign="bottom">&nbsp;</TD>
</TR><TR>
<TD valign="top">&nbsp;</TD>	<TD valign=top><font face="Times New Roman, Times, serif">&#8226;
 	</font></TD>
	<TD align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    Income received in respect of long-term capital gains from the transfer of
    securities other than as set forth above are taxed at a rate of 10.455%.</font></TD>
</TR>
<TR><TD valign="top">&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align="left" valign="bottom">&nbsp;</TD>
</TR><TR>
	<TD valign=top><font face="Times New Roman, Times, serif">&#8226; </font></TD>
	<TD colspan=2 align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    With respect to short-term capital gains:	</font></TD>
</TR>
<TR><TD valign="top">&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
</TR><TR>
<TD valign="top">&nbsp;</TD>	<TD valign=top><font face="Times New Roman, Times, serif">&#8226;
	</font></TD>
	<TD align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    Income received in respect of short-term capital gains from (A) the transfer
    of (i) equity shares of an Indian company listed on an Indian securities
    exchange or (ii) units of an equity-oriented mutual fund listed on an Indian
    securities exchange or (B) the repurchase of units by an equity oriented
    mutual fund are taxed at a rate of 10.455% if that income is otherwise subject
    to the securities transaction
tax described under &#147;&#151;Securities Transaction Tax&#148; below.	</font></TD>
</TR>
<TR><TD valign="top">&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align="left" valign="bottom">&nbsp;</TD>
</TR><TR>
<TD valign="top">&nbsp;</TD>	<TD valign=top><font face="Times New Roman, Times, serif">&#8226;
 	</font></TD>
	<TD align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    Income received in respect of short-term capital gains from the transfer
    of securities other than as set forth above are taxed at a rate of 31.365%.	</font></TD>
</TR>
<TR><TD valign="top">&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align="left" valign="bottom">&nbsp;</TD>
</TR><TR>
	<TD valign=top><font face="Times New Roman, Times, serif">&#8226; 	</font></TD>
	<TD colspan=2 align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    If the Fund only has income from securities (other than (1) income from dividends
    on which a dividend distribution tax has been paid or (2) income from units
    of the Unit Trust of India or specified mutual funds registered with SEBI
    and covered by Section 115AB of the Indian Income Tax Act), then the Fund
    may not claim a deduction on the gross amount of such income under Sections
    28 through 44C, Section 57 and Chapter VIA of the
Indian Income Tax Act.	</font></TD>
</TR>
<TR><TD valign="top">&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
</TR></TABLE>

<p align="center"><FONT size=2 face="Times New Roman, Times, serif">64</FONT></p>


<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p65"></a><font size="2" face="Times New Roman, Times, serif"><p><a href="#contents">Back
    to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">As
      used above, the term &#147;securities&#148; has the meaning assigned to
      it Section 2(h) of the Indian Securities Contract (Regulations) Act, 1956
      and
includes: </FONT></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226; </font></td>
    <td align="left" valign="bottom"><font face="Times New Roman, Times, serif">
    <FONT size=2>shares, scrips, stocks, bonds, debentures, derivatives, debenture stock or other marketable securities of</FONT> <FONT size=2>a like
nature in or of any incorporated company or other body corporate;</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226; </font></td>
    <td align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    Indian government securities; and</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226; </font></td>
    <td align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    rights or interests in securities.</font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">As
      used above, &#147;equity-oriented mutual fund&#148; means a mutual fund
      registered with SEBI that has invested more than 50% of its total proceeds
      in the
equity shares of Indian companies. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">On account of the lower tax rate on capital gains, provisions that would otherwise apply to non-residents to protect them from currency fluctuations in
computing the capital gains arising from the transfer of shares or debentures of an Indian company do not apply to the capital gains of foreign institutional investors and their sub-accounts. In addition, the benefit of cost inflation indexation is
also not available to foreign institutional investors and their sub-accounts when computing long-term capital gains from the transfer of securities. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Shares in a company, listed securities or units of a mutual fund must be held for more than twelve months in order to qualify as a long-term capital asset.
All other securities must be held for more than thirty-six months in order to qualify as a long-term capital asset. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The income of foreign institutional investors and their sub-accounts from securities is subject to a tax deduction at source. However, no deduction may be
made on any capital gains income from the transfer of securities. In order for the tax on capital gains of foreign institutional investors and their sub-accounts to be realized, each foreign institutional investor and sub-account must specify an
agent as defined in Section 163 of the Indian Income Tax Act when initially registering with SEBI. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Dividends
      paid to a foreign institutional investor or sub-account will not be subject
      to tax. However, an Indian company must pay a &#147;dividend
distribution tax,&#148; which is currently 13.06%, on the total amount distributed
as a dividend. A distribution to non-residents of bonus shares or rights to subscribe
for shares is not subject to Indian tax. </FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Securities transaction tax. </FONT></I><FONT size=2>The Indian Finance (No. 2) Act, 2004 imposes a
securities transaction tax on the following types of securities transactions: </FONT></font></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    the purchase or sale of equity shares of an Indian company on an Indian securities
    exchange;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    the sale of a derivative on an Indian securities exchange; and</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font face="Times New Roman, Times, serif">
    <FONT size=2>the sale of units of any equity-oriented mutual fund on an Indian securities exchange or the repurchase</FONT> <FONT size=2>of units by an
equity-oriented mutual fund.</FONT></font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The applicable securities transaction tax rate is as follows:</FONT></p>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font face="Times New Roman, Times, serif">
    <FONT size=2>for any transaction involving the purchase or sale of an equity
    share of an Indian company or of a unit of an  equity-oriented mutual fund,
    where the transaction occurs on an Indian securities exchange and where the
    purchase or sale contract is settled by actual delivery or transfer of the

share or unit, 0.075%, which is payable by each of the purchaser and the seller;</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    for any transaction involving the sale of an equity share of an Indian company
    or of a unit of an equity-oriented
mutual fund, where the transaction occurs on an Indian securities exchange and
        where the purchase or sale contract is settled other than by actual delivery
        or transfer of the share
or unit, 0.01%, which is payable by the seller;</FONT></td>
  </tr>
</table>
<div align="center">
  <p><FONT size=2 face="Times New Roman, Times, serif">65</FONT></p>
</div>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p66"></a><font size="2" face="Times New Roman, Times, serif"><p><a href="#contents">Back
    to Contents</a></p>
</font></font>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font face="Times New Roman, Times, serif">
    <FONT size=2>for any transaction involving the sale of a derivative, where the transaction occurs on an Indian</FONT> <FONT size=2>securities exchange,
0.015%, which is payable by the seller; and</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font face="Times New Roman, Times, serif">
    <FONT size=2>for any transaction involving the sale of a unit of an equity-oriented mutual fund to the mutual fund,</FONT> <FONT size=2>0.15%, which is
payable by the seller.</FONT></font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Education cess. </FONT></I><FONT size=2>Pursuant
        to the Indian Finance (No. 2) Act, 2004 an &#147;education cess&#148; of
        2% will be levied on income tax (inclusive of surcharge, as applicable)
from all securities transactions. </FONT></font></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The recent (Indian) Finance Bill, 2006 has proposed an increase of 25% across the board on all rates of Securities Transaction Tax. </FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Capital losses. </FONT></I><FONT size=2>Section 115AD of the Indian Income Tax Act does not contain
provisions for the tax treatment of capital losses arising on a transfer of shares in India. In general, losses arising from a transfer of a capital asset in India can only be set off against capital gains and not against any other income. To the
extent that the losses are not absorbed in the year of transfer, they may be carried forward for a period of eight assessment years immediately succeeding the assessment year for which the loss was first computed and may be set off against the
capital gains assessable for such subsequent assessment years. However, a long-term capital loss can be set off only against a long-term capital gain. In order to make use of capital losses in this manner, the foreign institutional investor or
sub-account must file appropriate and timely tax returns in India and undergo certain assessment procedures. </FONT></font></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">After October 1, 2004, long-term capital losses with respect to (i) a sale transaction of equity shares or units of an equity-oriented mutual fund on an
Indian securities exchange or (ii) a repurchase of units of an equity-oriented mutual fund may not be set off against long-term capital gains and may not be carried forward to subsequent years. </FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Tax treaties. </FONT></I><FONT size=2>Currently, dividend income is not subject to tax in India in
the hands of the holder of the shares. The provisions of the Double Taxation Avoidance Agreement entered into by the Government of India with the country of residence of a foreign institutional investor or sub-account will be applicable in the
matter of taxation of income, gains or dividends (if applicable). Where the Government of India has entered into a Double Taxation Avoidance Agreement, the provisions of the Indian Income Tax Act will apply to the foreign institutional investor or
the sub-account to the extent that they are more beneficial. </FONT></font></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Stamp duty. </FONT></I><FONT size=2>Purchasers
        of shares who seek to register such shares on the share register of an
        Indian company are required to pay an Indian stamp duty at the rate of
        Rs. 0.25 for every Rs. 100 (or part thereof) of the market value of such
        shares. In order to register a transfer of shares in certificated form
        with an
Indian company, it is necessary to present a stamped deed of transfer. Upon issuing
        shares, an Indian company will be required to pay a stamp duty at the
        applicable rate on the share certificate. However, if the shares are
        delivered in
uncertificated or &#147;dematerialized&#148; form, which occurs with most listed
companies, no stamp duty is payable upon transfer. </FONT></font></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Service tax. </FONT></I><FONT size=2>Brokerage or commission fees paid to stockbrokers in
connection with the sale or purchase of securities are subject to an Indian service tax of 10.2% . A stockbroker is responsible for collecting this tax and for paying it to the relevant authority. The recent (Indian) Finance Bill, 2006 has proposed
to increase the current service tax of 10% (plus education cess at the rate of 2%) to 12% (plus education cess at the rate of 2%). </FONT></font></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Mauritius Tax Status</B>
</font></p>
<div style="text-indent:3%">
<p align="left"><font size="2" face="serif">The Fund conducts its investment activities in India as a tax resident of Mauritius and as such expects to obtain benefits under the tax treaty between Mauritius and India, which is referred to as the &#8220;tax treaty&#8221; or &#8220;treaty&#8221;.   In the light of Circular 789 of April 13, 2000 issued by the Central Board of Direct Taxes in India, the Fund will be eligible for the benefits under the treaty if it holds a valid tax residence certificate issued by the Mauritius income tax authorities.  The validity of the circular was subsequently upheld by the Supreme Court of India in a judgment delivered on October 7, 2003.  The Fund has obtained a certificate from the Mauritius tax authorities to the effect that it
is a resident of Mauritius under the treaty.</font></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">66</FONT></p>
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<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><font size="2" face="Times New Roman, Times, serif">
<p><a href="#contents">Back
    to Contents</a></p>
</font></font>
<div style="text-indent:3%">
<p align="left"><font size="2" face="serif">The Fund is subject to tax in Mauritius at the rate of 15% on its net income.   However, it is entitled to a tax credit equal to the higher of any foreign tax paid and a presumed foreign tax equivalent to 80% of Mauritius tax chargeable on such income so that the effective tax rate should not exceed 3%.   Further, the Fund is not subject to capital gains tax in Mauritius nor is it liable to income tax on any gains from sale of units or securities.  Any dividends and redemption proceeds paid by the Fund to its shareholders are exempt from Mauritius tax.</font></p>
<p align="left"><font size="2" face="serif">Provided that the Fund does not have a permanent establishment in India, the tax treatment in India of income derived by the Fund is as follows:</font></p>
</div>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">(i)</font></td>
<td>
<font size="2" face="serif">capital gains are not subject to tax in India by virtue of Article 13 of the treaty;</font></td>
</tr>
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">(ii)</font></td>
<td>
<font size="2" face="serif">dividends from Indian companies are paid to the Fund free of Indian tax;</font></td>
</tr>
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">(iii)</font></td>
<td>
<font size="2" face="serif">any interest income earned on Indian securities is
subject
to
withholding
tax
in India at the rate of 20.5%.</font></td>
</tr>
</table>
<div style="text-indent:3%">
<p align="left"><font size="2" face="serif">The Fund continues to (i) comply
    with the requirements of the tax treaty, (ii) be a tax resident of Mauritius
    and (iii)&nbsp;maintain that its central management and control resides in
    Mauritius, and therefore the Fund&#8217;s management believes that the Fund
    will be able to obtain the benefits of the tax treaty.</font></p>
<p align="left"><font size="2" face="serif">The foregoing is based upon current interpretation and practice and is subject to future changes in Indian or Mauritian tax laws and in the treaty.</font></p>
</div>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
</font><font face="Times New Roman, Times, serif"><a name="p67"></a></font><font size="2" face="Times New Roman, Times, serif"><B>NET ASSET VALUE</B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      net asset value of the Fund&#146;s shares of common stock is calculated
      no less frequently than weekly, on the last business day of each week and
      at such other times as the Board of Directors may determine. In addition,
      during a repurchase offer, the Fund makes this information available by
      telephone toll-free at 1-866-800-8933 and on the Internet at www.blackstone.com.
      Currently, </FONT><font face="Times New Roman, Times, serif"><I><FONT
size=2>The Wall Street Journal</FONT></I><FONT size=2>, <I>The New
York Times</I> and <I>Barron&#146;s</I> publish net asset values for closed-end investment companies weekly. </FONT></font></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      net asset value per share of the common stock is determined by dividing
      the value of the net assets of the Fund (the value of its assets less its
      liabilities including borrowings, exclusive of capital stock and surplus)
      by the total number of shares of common stock outstanding. In valuing the
      Fund&#146;s assets, all securities for which market quotations are readily
available are valued: </FONT></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    at the last sale price prior to the time of determination if there was a
    sale on the date of determination;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font face="Times New Roman, Times, serif">
    <FONT size=2>at the mean between the last current bid and asked prices if there was no sales price on such date and</FONT> <FONT size=2>bid and asked
quotations are available; and</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font face="Times New Roman, Times, serif">
    <FONT size=2>at the bid price if there was no sales price on such date and only bid quotations are available. In</FONT> <FONT size=2>instances where a
price determined above is deemed not to represent fair market value, the price is</FONT> <FONT size=2>determined in such manner as the Board of Directors may prescribe.</FONT></font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Securities may be valued by independent pricing services that use prices provided by market-makers or estimates of market values obtained from yield data
relating to instruments or securities with similar characteristics. Short-term investments having a maturity of 60 days or less are valued at amortized cost, unless the Board of Directors determines that that valuation does not constitute fair
value. In valuing assets, prices denominated in foreign currencies are converted to U.S. dollar equivalents at the current exchange rate. Securities for which reliable quotations or pricing services are not readily available and all other securities
and assets are valued at fair value as determined in good faith by, or under procedures established by, the Board of Directors. </FONT></p></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
</font><font face="Times New Roman, Times, serif"><a name="p67a"></a></font><font size="2" face="Times New Roman, Times, serif"><B>DESCRIPTION OF CAPITAL STOCK</B></font></P>
<p><font size="2" face="Times New Roman, Times, serif"><B>General</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      authorized capital stock of the Fund is 100,000,000 shares of common stock,
      par value &#36;.001
    per share. The outstanding shares of common stock are,  and the shares of
    common stock offered hereby will be, duly authorized, fully paid and nonassessable.
    All shares of common stock are equal as to dividends, distributions and voting
    privileges. There are no conversion, preemptive or other
subscription rights. In the event of liquidation, each share of common stock
    is entitled to its proportion of the Fund&#146;s assets after debts and expenses.
    There are no cumulative voting rights for the election of Directors. As a
    NYSE-listed company and as a Maryland corporation, the Fund is required to
    hold annual meetings of its stockholders. Under Maryland law, stockholders
    of the Fund are not liable for the Fund&#146;s debts or obligations solely
    by reason of their
status as stockholders.</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">67</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p??"></a><font size="2" face="Times New Roman, Times, serif"><p><a href="#contents">Back
    to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Under
      Maryland law, a corporation generally cannot dissolve, amend its charter,
      merge, sell all or substantially all of its assets, engage in a share exchange
      or engage in similar transactions outside the ordinary course of business,
      unless approved by the affirmative vote of stockholders holding at least
      two-thirds of the shares entitled to vote on the matter. However, a Maryland
      corporation may
provide in its charter for approval of these matters by a lesser percentage,
      but not less than a majority of all of the votes entitled to be cast on
      the matter. The charter of the Fund provides for approval of these matters
      by a majority of all of the votes entitled to be cast on the matter, except
in the circumstances described below under &#147;&#151;Special Voting Provisions.&#148; </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund has no present intention of offering additional shares of its common
      stock other than by this offering. Other offerings of its common stock,
      if
made, will require approval of the Fund&#146;s Board of Directors. Any additional offering will be subject to the requirements of the 1940 Act that shares of common stock may not be sold at a price below the then-current net asset value (exclusive
of underwriting discounts and commissions) except in connection with an offering to existing stockholders or with the consent of a majority of the Fund&#146;s
outstanding common stock. </FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif">  <font size=2>The
      following table shows the number of shares of (i) capital stock authorized
  and (ii) capital stock</font>  <font size=2>outstanding for
  each class of authorized securities of the Fund as of March 31, 2006 and as
  adjusted for this offer:</font>&nbsp;</font></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
	<TD colspan="2" align="left"><div style="margin-left:9%"> <font size="1" face="Times New Roman, Times, serif"> <b>Title
    of Class</b></font></div></TD>
	<TD align="center"><font size="1" face="Times New Roman, Times, serif"><B>Amount
Authorized</B></font></TD>
	<TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font><font size="1" face="Times New Roman, Times, serif"><b>Amount
    Outstanding</b><br>
	<B>as of March 31,
2006</B></font></TD>
	<TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align="center"><font size="1" face="Times New Roman, Times, serif">
    <B>Amount
Outstanding,</B><br>
<B>As Adjusted
for the</B><br>
<B>Offer (2)</B></font></TD>
    <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left><hr align="left" width="140" size="1" noshade></TD>
  <TD align=center>&nbsp;</TD>
  <TD align=center><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=center><hr size="1" noshade></TD>
  <TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    Common Stock</font></TD>
	<TD width="2%" align=center><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width="12%" align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    100,000,000</font></TD>
	<TD width="2%" align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width="12%" align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    31,688,594.0853&nbsp;(1
	</font></TD>
	<TD width="2%" align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD width="12%" align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    [&nbsp;&nbsp;&nbsp; ]</font></TD>
    <TD width="2%" align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=center>&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=left valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><hr align="left" width="140" size="1" noshade></TD>
  <TD align=center>&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=left valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
</TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="top">
	<TD width=3%><font size="1" face="Times New Roman, Times, serif">
      *
	</font></TD>
	<TD align=left><font size="1" face="Times New Roman, Times, serif">
      All figures have been
rounded to the nearest whole share.</font></TD>
</TR>
<TR valign="top">
	<TD><font size="1" face="Times New Roman, Times, serif">
      (1)
	</font></TD>
	<TD align=left><font size="1" face="Times New Roman, Times, serif"> The Fund
	    held [ ] treasury shares. These shares were not counted for purposes
	    of determining the amount
of &nbsp;shares
outstanding.&nbsp; </font></TD>
</TR>
<TR valign="top">
	<TD><font size="1" face="Times New Roman, Times, serif">
      (2)
	</font></TD>
	<TD align=left><font size="1" face="Times New Roman, Times, serif"> This amount
	    assumes that all rights are exercised. If the Fund increases the number
	    of shares subject to this&nbsp; offer by 25% in order
to satisfy over-subscription requests, the amount of shares of common stock outstanding,&nbsp;as
adjusted, would be increased by [ ] shares, to an aggregate of [ ] shares outstanding,
as adjusted.&nbsp; 	</font></TD>
</TR>
</TABLE>
<p><font size="2" face="Times New Roman, Times, serif"><B>Common Stock</B>
</font></p>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s
    shares of common stock are publicly held and are listed and traded on the
    NYSE under the symbol &#147;IFN.&#148; The following table sets
forth, for the periods indicated, the high and low closing sale prices per share
    of the Fund&#146;s common stock on the NYSE and the high and low net asset
    values per share of the Fund&#146;s common stock on the dates of those market
    highs and lows:</FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD colspan="3" align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD colspan="9" align=center valign="bottom"><font size="1" face="Times New Roman, Times, serif"> <B>Market
    Price Per Share</B><br>
	<B>and
    Related</B><br>
	<b>Discount
    (-)/Premium (+) (1)(2)</b></font></TD>
  <TD colspan="3" align=center valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD colspan="4" align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif"> <b>Net
    Asset Value Per</b><br>
	<b>Share
        on
Date of Market</b><br>
<b>High
    and Low (3)</b></font></TD>
  <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD colspan="11" align="center" valign="bottom"><hr size="1" noshade>
  </TD>
  <TD align="center" valign="bottom"></TD>
  <TD colspan="5" align="center" valign="bottom"><hr size="1" noshade>
  </TD>
  <TD align="center">&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align="left" valign="bottom"><font size="1" face="Times New Roman, Times, serif"><B>Period</B></font></TD>
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD colspan="3" align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif"><b>High</b></font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD colspan="3" align="center" valign="bottom"><font face="Times New Roman, Times, serif"><b><font size=1>Low</font></b><font size="1">&nbsp;</font></font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align="center" valign="bottom"></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif"><b>High</b></font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif"><b>Low</b></font></TD>
  <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
  <TD align="center" valign="bottom"><hr align="left" width="150" size="1" noshade></TD>
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD colspan="5" align="center" valign="bottom"><hr size="1" noshade>
  </TD>
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD colspan="5" align="center" valign="bottom"><hr size="1" noshade>
    </TD>
  <TD align="center" valign="bottom"></TD>
  <TD colspan="5" align="center" valign="bottom"><hr size="1" noshade>
  </TD>
  <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">January 1, 2004
to March 31, 2004</font></TD>
	<TD width=2% align=right valign="bottom">&nbsp;</TD>
	<TD width=1% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD width=8% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">28.64</font></TD>
	<TD width=2% align=right valign="bottom"></TD>
	<TD width=8% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">(+ 14.15
	</font></TD>
	<TD width=2% align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">%)</font></TD>
	<TD width=2% align=right valign="bottom">&nbsp;</TD>
	<TD width=1% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD width=8% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">23.60</font></TD>
	<TD width=2% align=right valign="bottom">&nbsp;
	</TD>
	<TD width=8% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">(+ 3.78</font></TD>
	<TD width=2% align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">%)</font></TD>
	<TD width=2% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width=1% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD width=8% align=right valign="bottom"><font size=2 face="Times New Roman, Times, serif">25.09</font></TD>
	<TD width=2% align=right valign="bottom">&nbsp;</TD>
	<TD width=1% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD width=8% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">22.74</font></TD>
	<TD width=2% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">April 1, 2004 to June 30, 2004</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">28.55</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">(+ 11.05</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">%)</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">20.71</font></TD>
	<TD align=right valign="bottom"><font face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">(+ 1.42</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">%)</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;25.71</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;20.42</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;
	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    July 1, 2004 to
September
30,
2004</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    24.61
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    (+ 5.80
	</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    %)</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    19.98
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    (&#8211; 4.95
	</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    %)</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size=2 face="Times New Roman, Times, serif">23.26</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;  </font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size=2 face="Times New Roman, Times, serif">21.02</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif"> &nbsp;&nbsp;
	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    October 1, 2004
to December 31, 2004</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    27.33
	</font></TD>
	<TD align=right valign="bottom">&nbsp;
	</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    (+ 6.47
	</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    %)</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    23.75
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    (+ 2.02
	</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    %)</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size=2 face="Times New Roman, Times, serif">25.67</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;23.28</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;
	</font></TD>
</TR>
</TABLE>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
68</font></P>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p69"></a><font size="2" face="Times New Roman, Times, serif"><p><a href="#contents">Back
    to Contents</a></p>
</font></font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD colspan="3" align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD colspan="9" align=center valign="bottom"><font size="1" face="Times New Roman, Times, serif"> <b>Market
        Price Per Share</b><br>
    <b>and Related</b><br>
    <b>Discount (-)/Premium (+) (1)(2)</b>&nbsp; </font></TD>
  <TD colspan="3" align=center valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD colspan="4" align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif"> <b>Net
        Asset Value Per</b><br>
    <b>Share on Date of Market</b><br>
    <b>High and Low (3)</b></font></TD>
  <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD colspan="11" align="center" valign="bottom"><hr size="1" noshade>
  </TD>
  <TD align="center" valign="bottom"></TD>
  <TD colspan="5" align="center" valign="bottom"><hr size="1" noshade>
  </TD>
  <TD align="center">&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align="left" valign="bottom"><font size="1" face="Times New Roman, Times, serif"><B>Period</B></font></TD>
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD colspan="3" align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif"><B>High</B></font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD colspan="3" align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif"><B>Low</B>&nbsp; </font><font face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align="center" valign="bottom"></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif"><B>High</B></font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align="center" valign="bottom"><font size="1" face="Times New Roman, Times, serif"><B>Low</B></font></TD>
  <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
  <TD align="center" valign="bottom"><hr align="left" width="150" size="1" noshade></TD>
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD colspan="5" align="center" valign="bottom"><hr size="1" noshade>
  </TD>
  <TD align="center" valign="bottom">&nbsp;</TD>
  <TD colspan="5" align="center" valign="bottom"><hr size="1" noshade>
    </TD>
  <TD align="center" valign="bottom"></TD>
  <TD colspan="5" align="center" valign="bottom"><hr size="1" noshade>
  </TD>
  <TD align="center"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">January
	    1, 2005
to March 31, 2005</font></TD>
	<TD width=2% align=right valign="bottom">&nbsp;</TD>
	<TD width=1% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD width=8% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">30.50</font></TD>
	<TD width=2% align=right valign="bottom"></TD>
	<TD width=8% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">(+
	    7.17</font></TD>
	<TD width=2% align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">%)</font></TD>
	<TD width=2% align=right valign="bottom">&nbsp;</TD>
	<TD width=1% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD width=8% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">25.88</font></TD>
	<TD width=2% align=right valign="bottom">&nbsp;
	</TD>
	<TD width=8% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">(&#8211; 1.82</font></TD>
	<TD width=2% align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">%)</font></TD>
	<TD width=2% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width=1% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD width=8% align=right valign="bottom"><font size=2 face="Times New Roman, Times, serif">28.46</font></TD>
	<TD width=2% align=right valign="bottom">&nbsp;</TD>
	<TD width=1% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD width=8% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">26.36</font></TD>
	<TD width=2% align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">April
	    1, 2005 to June
30, 2005</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">30.68</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">(+
	    2.23</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">%)</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">24.42</font></TD>
	<TD align=right valign="bottom"><font face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">(&#8211; 8.26</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">%)</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;30.01</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&#36;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;26.62</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;
	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    July 1, 2005 to September
30, 2005</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    41.90</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    (+ 17.63</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    %)</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    29.30</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    (&#8211; 3.43</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    %)</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size=2 face="Times New Roman, Times, serif">35.62</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;  </font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size=2 face="Times New Roman, Times, serif">30.34</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif"> &nbsp;&nbsp;
	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    October 1, 2005
to December 31, 2005</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    43.80</font></TD>
	<TD align=right valign="bottom">&nbsp;
	</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    (+ 15.32</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    %)</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    34.36</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    (+ 1.96</font></TD>
	<TD align=left valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    %)</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size=2 face="Times New Roman, Times, serif">37.98</font></TD>
	<TD align=right valign="bottom">&nbsp;</TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">
    &#36;
	</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;33.70</font></TD>
	<TD align=right valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;
	</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=left valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=left valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
  <TD align=right valign="bottom">&nbsp;</TD>
</TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD colspan="2" valign=top><hr align="left" width="140" size="1">
  </TD>
  </TR>
<TR>
	<TD valign=top><font size="1" face="Times New Roman, Times, serif">
      (1)</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
      Highest and lowest closing market price per share reported on the NYSE.	</font></TD>
</TR><TR>
	<TD valign=top><font size="1" face="Times New Roman, Times, serif">
      (2)</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
      &#147;Related Discount (&#150;) / Premium (+)&#148; represents the discount
      or premium from net asset value of the shares on the date of the high and
      low market price for the respective
quarter.	</font></TD>
</TR><TR>
	<TD width="3%" valign=top><font size="1" face="Times New Roman, Times, serif">
      (3)</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    Based on the Fund&#146;s computations.	</font></TD>
</TR>
</TABLE>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Although
      the Fund&#146;s common stock has recently traded at a premium, it has historically traded at a discount to its net asset value per share. In an
attempt to reduce this discount, if any, the Fund may conduct periodic repurchases of shares or, with the approval of stockholders, amend its articles of amendment and restatement so that it may convert to an open-end investment company. The Fund
has, in the past, conducted open-market repurchases and a tender offer of its shares. In April 2003, the Fund converted to an interval fund structure pursuant to which it conducts semi-annual repurchase offers for between 5% and 25% of the
Fund&#146;s outstanding common stock. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">There
      is no assurance that tendering for shares, conducting repurchase offers
      or converting to an open-end fund will cause the shares to trade at or
      above
net asset value because the market price of the Fund&#146;s shares is, among other things, determined the supply and demand for the Fund&#146;s shares, the Fund&#146;s investment performance and investor perception of the Fund&#146;s
overall
attractiveness as an investment as compared with alternative investments. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Preferred Stock</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund&#146;s charter provides that the Board of Directors may classify or reclassify any unissued shares of capital stock into one or more additional or
other classes or series, with rights as determined by the Board of Directors, by action by the Board of Directors without the approval of the holders of common stock. Holders of common stock have no preemptive right to purchase any shares of
preferred stock that might be issued. The terms of any preferred stock, including its dividend rate, liquidation preference and redemption provisions, will be determined by the Board of Directors, subject to applicable law and the Fund&#146;s
charter. Thus, the Board of Directors could authorize the issuance of shares of preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a
premium price for holders of the Fund&#146;s common stock or otherwise be in
their best interest. Presently, the Fund has no outstanding preferred stock and
has no intention of offering shares of preferred stock. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Special Voting Provisions</B>
</font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund presently has provisions in its charter and its amended and restated
      by-laws that are commonly referred to as &#147;anti-takeover&#148; provisions
      and may have the effect of limiting the ability of other entities or persons
      to acquire control of the Fund, to cause it to engage in certain transactions
or to modify its structure. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">First, a Director may be removed from office only for cause by vote of at least 75% of the shares entitled to be cast for the election of Directors.
</FONT></p></div>

<p align="center"><FONT size=2 face="Times New Roman, Times, serif">69</FONT><font face="Times New Roman, Times, serif">


</font></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p69"></a><font size="2" face="Times New Roman, Times, serif"><p><a href="#contents">Back
    to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Second,
      the affirmative vote of 75% of the entire Board of Directors is required
      to authorize the conversion of the Fund from a closed-end to an open-end
      investment company. The conversion also requires the affirmative vote of
      holders of at least 75% of the common stock unless it is approved by a
      vote of 75% of the Continuing Directors (as defined below), in which event
      such conversion requires the
approval of the holders of a majority of the common stock. A &#147;Continuing Director&#148; for
purposes of this section is any member of the Board of Directors of the Fund
who: </FONT></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font face="Times New Roman, Times, serif">
    <FONT size=2>is not a person or affiliate of a person who enters or proposed to enter into a business combination</FONT> <FONT size=2>(as
    defined
below) with the Fund (an &#147;interested party&#148;), and</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left" valign="bottom"><font face="Times New Roman, Times, serif">
    <FONT size=2>who has been a member of the Board of Directors for a period of at least 12 months, or has been a</FONT> <FONT size=2>member of the Board
of Directors since February 1, 1994, or is a successor of a Continuing</FONT> <FONT size=2>Director who is unaffiliated with an interested party and is recommended to succeed a Continuing</FONT> <FONT
size=2>Director by a majority of the Continuing Directors then on the Board of Directors of the Fund.</FONT></font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Third, the Board of Directors is classified into three classes, each with a term of three years with only one class of Directors standing for election in any
year. Such classification may prevent replacement of a majority of the Directors for up to a two-year period. The affirmative vote of at least 75% of the shares will also be required to amend the charter or by-laws to change any of the provisions in
this paragraph and the preceding two paragraphs. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Additionally, the affirmative vote of 75% of the entire Board of Directors and the holders of at least (i) 80% of the common stock and (ii) in the case of a
business combination (as defined below), 66 % of the common stock other than
common stock held by an interested party who is (or whose affiliate is) a party
to a business combination or an affiliate or associate of the interested party,
are required to authorize any of the following transactions: </FONT></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left"><font size="2" face="Times New Roman, Times, serif">
    merger, consolidation or statutory share exchange of the Fund with or into
    any other person;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left"><font face="Times New Roman, Times, serif">
    <FONT size=2>issuance or transfer by the Fund (in one or a series of transactions
    in any 12-month period) of any securities of the  Fund to any person or entity
    for cash, securities or other property (or combination thereof)
having an aggregate fair market value of &#36;1,000,000 or more, excluding issuances
or transfers of debt securities of the Fund, sales of securities of the Fund
in connection with a public offering, issuances of securities of the Fund pursuant
to a dividend reinvestment plan adopted by the Fund, issuances of securities
of the Fund upon the exercise  of any stock subscription rights distributed by
the Fund, transfers by the Fund of securities or other property to a corporation,
trust, partnership or other entity which is wholly owned by the Fund and portfolio
transactions effected by the Fund in the ordinary
course of its business;</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left"><font face="Times New Roman, Times, serif"><FONT size=2>sale,
          lease, exchange, mortgage, pledge, transfer or other disposition by
          the Fund (in one or a series of transactions  in any 12-month period)
          to or with any person or entity of any assets of the Fund
having an aggregate fair market value of &#36;1,000,000 or more, excluding sales,
exchanges, transfers or other dispositions by the Fund to any person or entity
which is wholly owned by the Fund, and except for portfolio transactions (including
pledges of portfolio securities in connection with borrowings) effected by the
Fund in the ordinary course  of its business (we refer to the transactions described
in
these first three bullets as &#147;business combinations&#148;);</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left"><font face="Times New Roman, Times, serif"><FONT size=2>the voluntary liquidation or dissolution of the Fund, or an
    amendment to the Fund&#146;s charter to terminate the
    Fund&#146;s existence; or</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left"><font face="Times New Roman, Times, serif"><FONT size=2>unless
          the 1940 Act or other federal law requires a lesser vote, any stockholder
          proposal as to specific investment
decisions made or to be made with respect to the Fund&#146;s assets as to which
stockholder approval is required under federal or Maryland law.</FONT></font></td>
  </tr>
</table>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">However, the
    stockholder vote described above will not be required with respect to the
    foregoing transactions (other than those set forth in the fifth bullet  above)
    if they are approved by a vote of 75% of the Continuing Directors. In that
    case, if Maryland law requires, the affirmative vote of a majority of the
    votes entitled to be cast thereon shall be required.</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">70</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p71"></a><font size="2" face="Times New Roman, Times, serif"><p><a href="#contents">Back
    to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Additionally,
      any amendment to the Fund&#146;s charter to amend, alter or repeal (or
      adopt any provision inconsistent with) the provisions of the charter relating
      to the purpose and powers of the Fund, the classification of the Board
      of Directors, removal of directors, the maximum number of directors, the
      special voting requirements discussed above, the perpetual existence of
      the Fund and amendment
of the charter must be approved by at least 75% of the entire Board of Directors
      and the holders of at least 75% of the votes entitled to be cast on the
matter. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund&#146;s by-laws contain provisions the effect of which is to prevent matters, including nominations of Directors, from being considered at a
stockholders&#146; meeting where the Fund has not received notice of the matters at least 90 days but not more than 120 days prior to the first anniversary of the prior year&#146;s
annual meeting, in the case of an annual meeting, or 10 days following the date
notice of such meeting is given by the Fund, in the case of a special meeting. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Reference
      is made to the charter and amended and restated by-laws of the Fund, each
      on file with the SEC, for the full text of these provisions. The percentage
      of votes required under these provisions, which is greater than the minimum
      requirements under Maryland law absent the elections described above or
      in the 1940 Act, will make more difficult a change in the Fund&#146;s business or
management and may have the effect of depriving stockholders of an opportunity to sell shares at a premium over prevailing market prices by discouraging a third party from seeking to obtain control of the Fund in a tender offer or similar
transaction. The Fund&#146;s Board of Directors, however, has considered these
anti-takeover provisions and believes they are in the best interests of the Fund
and its stockholders. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      addition, in the opinion of the Investment Manager, these provisions offer
      several advantages. They may require persons seeking control of the Fund
      to negotiate with its management regarding the price to be paid for the
      shares required to obtain such control; they promote continuity and stability;
      and they enhance the Fund&#146;s ability to pursue long-term strategies
      that are consistent with its
investment objective. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Certain Provisions
      of Maryland Law</B>
</font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      addition to the provisions of the Fund&#146;s charter and amended and restated by-laws that may have an anti-takeover effect, certain provisions of
Maryland law may also have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of the Fund&#146;s
common stock or otherwise be in their best interest. </FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Maryland Business Combination Act</FONT></I><FONT size=2>.
        Under Maryland law, &#147;business
combinations&#148; between a Maryland corporation and an interested stockholder
or an affiliate of an interested stockholder are prohibited for five years after
the most recent date on which the interested stockholder becomes an interested
stockholder. These business combinations include a merger, consolidation, share
exchange, or, in circumstances specified in the statute, an asset transfer or
issuance or reclassification of equity securities. An interested stockholder
is defined as: </FONT></font></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left"><font face="Times New Roman, Times, serif">
    <FONT size=2>any person who beneficially owns ten percent or more of the voting power of the corporation's</FONT> <FONT size=2>shares; or</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left"><font face="Times New Roman, Times, serif">
    <FONT size=2>an affiliate or associate of the corporation who, at any time
    within the two-year period prior to the date in  question, was the beneficial
    owner of ten percent or more of the voting power of the then outstanding
    voting stock of the corporation.</FONT></font></td>
  </tr>
</table>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">A person is
    not an interested stockholder under the statute if the board of directors
    approved in advance the transaction by which he otherwise would have  become
    an interested stockholder. However, in approving a transaction, the board
    of directors may provide that its approval is subject to compliance, at or
    after the time of approval, with any terms and conditions determined by the
    board.</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">71</FONT></p>
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<font face="Times New Roman, Times, serif"><page><a name="p72"></a><font size="2" face="Times New Roman, Times, serif"><p><a href="#contents">Back
    to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the
board of directors of the corporation and approved by the affirmative vote of at least: </FONT></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left"><font face="Times New Roman, Times, serif">
    <FONT size=2>80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the</FONT> <FONT size=2>corporation;
and</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td align="left"><font face="Times New Roman, Times, serif">
    <FONT size=2>two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than</FONT> <FONT size=2>shares held by
the interested stockholder with whom or with whose affiliate the business</FONT> <FONT size=2>combination is to be effected or held by an affiliate or associate of the interested
stockholder.</FONT></font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">These super-majority vote requirements do not apply if the corporation's common stockholders receive a minimum price, as defined under Maryland law, for
their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The statute permits various exemptions from its provisions, including business combinations that are exempted by the board of directors before the time that
the interested stockholder becomes an interested stockholder.</FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Maryland Control Share Acquisition Act</FONT></I><FONT size=2>. Maryland law provides that control
shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquiror, by officers or by
directors who are employees of the corporation are excluded from shares entitled to vote on the matter. Control Shares are voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or in respect of which the
acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power:
</FONT></font></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font size="2" face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    one-tenth or more but less than one-third;</font></td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    one-third or more but less than a majority;</font></td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    or a majority or more of all voting power.</font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A control
share acquisition means the acquisition of control shares, subject to certain exceptions. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">A person who has made or proposes to make a control share acquisition may compel the board of directors of the corporation to call a special meeting of
stockholders to be held within 50 days of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction of certain conditions, including an undertaking to pay the expenses of
the meeting. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then
the corporation may redeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the corporation to redeem control shares is subject to certain conditions and limitations.
Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or of any meeting of stockholders at which the voting rights of the shares are
considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The
fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition. </FONT></p></div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">72</FONT></p>
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<div style="page-break-before:always"></div>
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</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The control share acquisition statute does not apply (a) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the
transaction, or (b) to acquisitions approved or exempted by the charter or by-laws of the corporation. </FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Maryland Unsolicited Takeovers Act</FONT></I><FONT size=2>. Subtitle 8 of Title 3 of the Maryland
General Corporation Law permits a Maryland corporation with a class of equity securities registered under the 1934 Act and at least three independent directors to elect to be subject, by provision in its charter or by-laws or a resolution of its
board of directors and notwithstanding any contrary provision in the charter of by-laws, to any or all of five provisions: </FONT></font></p></div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    a classified board;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    a two-thirds vote requirement for removing a director;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    a requirement that the number of directors be fixed only by vote of directors;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif">
    <FONT size=2>a requirement that a vacancy on the board be filled only by the remaining directors and for the</FONT> <FONT size=2>remainder of the full
term of the class of directors in which the vacancy occurred; and</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    a majority requirement for the calling of a special meeting of stockholders.</font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">A
      corporation may also adopt a charter provision or resolution of the Board
      of Directors that prohibits the corporation from electing to be subject
      to any or all of the provisions of the subtitle. At this time, the Fund
      has not elected to be subject to any of these provisions. However, because
      the Fund&#146;s charter does not include a provision prohibiting it from
      electing to be subject to any of these provisions, the Board of Directors
      may make such an election at any time. Through provisions in its charter
      and by-laws unrelated to Subtitle 8, the Fund already has a classified
      board, requires more than a two-thirds vote for the removal of
directors and requires a majority vote for the calling of a special meeting of
stockholders. </FONT></p></div>
<P align="center"><font face="Times New Roman, Times, serif"><B><a name="p73"></a><FONT size=2>INVESTMENT MANAGEMENT AND OTHER SERVICES</FONT></B></font></P>
<p><font size="2" face="Times New Roman, Times, serif"><B>Investment Manager</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund is party to a management agreement dated March 16, 2006 between the
      Fund and Blackstone Asia Advisors L.L.C., a Delaware limited liability
      company. Blackstone Advisors, which is a registered investment adviser
      under the U.S. Investment Advisers Act of 1940, as amended (the &#147;Advisers Act&#148;), has served as the Investment Manager of the Fund since December 4, 2005. Blackstone Advisors,
which also serves as the Fund&#146;s Administrator, is an affiliate of Blackstone. Blackstone is a leading investment and advisory firm founded in 1985, with offices in New York, Boston, Atlanta, London, Hamburg and Mumbai. As of December 31, 2005,
Blackstone had raised approximately &#36;50 billion for alternative investing.
Blackstone manages investment funds, including hedge funds and private equity,
real estate, mezzanine debt and senior debt funds, and also provides corporate
advisory, mergers and acquisitions and restructuring services to a variety of
clients. Blackstone&#146;s alternative asset management group, with approximately &#36;11 billion under management in the hedge fund industry, manages assets for some of the
world&#146;s leading corporations, pension plans and foundations. The address
of Blackstone Advisors is 345 Park Avenue, New York, NY 10154. </FONT></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Blackstone
      Advisors acts as an investment adviser of the Fund and is responsible on
      a day-to-day basis for investing the Fund&#146;s portfolio in accordance
with its investment objective and policies. Blackstone Advisors has discretion over investment decisions for the Fund and, in that connection, initiates purchase and sale orders for the Fund&#146;s
portfolio securities. In addition, Blackstone Advisors will make available research
and statistical data to the Fund. </FONT></p></div>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">Blackstone
      Advisors serves as investment manager or investment adviser for two registered
      investment companies: the Fund and The Asia Tigers Fund, Inc. The Asia
      Tigers Fund, Inc. was established in 1993 and has approximately &#36;90,177,942
       in assets as of January 31, 2006. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">73</FONT></p>
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<div style="page-break-before:always"></div>
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<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Under the Fund&#146;s articles of amendment and restatement and Maryland law, the Fund&#146;s
      business and affairs are managed under the direction of its Board of Directors.
      Investment decisions for the Fund are made by Blackstone
Advisors, subject to any direction it may receive from the Fund&#146;s Board of Directors, which periodically reviews the Fund&#146;s
investment performance. </FONT></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Prior
      to December 4, 2005, Advantage Advisers, a subsidiary of Oppenheimer Asset
      Management
      Inc. and an affiliate of Oppenheimer &amp; Co. Inc., served as
the Fund&#146;s Investment Manager. </FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Compensation. </FONT></I><FONT size=2>Under
        the existing management agreement, the Fund pays Blackstone Advisors
        monthly fees at an annual rate of: (i) 1.10% of the Fund&#146;s average weekly net assets for the first &#36;500,000,000; (ii) 0.90% of the Fund&#146;s average weekly net assets for the next &#36;500,000,000; (iii) 0.85% of the
Fund&#146;s average weekly net assets for the next &#36;500,000,000; and (iv) 0.75% of the Fund&#146;s average weekly net assets in excess of &#36;1,500,000,000.
For the purposes of calculating compensation, average weekly net assets are determined
at the end of each month based on the average of the net assets as calculated
on each valuation date (generally Fridays) during the month. </FONT></font></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">For
      the fiscal year ended December 31, 2005, the Fund paid a total of &#36;10,066,063 in management fees to Blackstone Advisors and Advantage Advisers. For
the period December 4, 2005 to December 31, 2005, the Fund paid Blackstone Advisors &#36;865,681 in management fees. For the period January 1, 2005 to December 4, 2005, and for the fiscal years ended December 31, 2004 and December 31, 2003, the Fund
paid Advantage Advisers management fees in the amounts of &#36;9,200,382, &#36;5,979,694 and &#36;4,395,688, respectively. Assuming that the value of the Fund&#146;s assets remained constant prior to the offer at &#36;[ ] (its approximate value as
of [ ], 2006) and after the offer at &#36;[ ] (which assumes that all rights are exercised at the estimated subscription price, including the additional shares that may be issued under the over-subscription privilege), the annual compensation
received by Blackstone Advisors under the Management Agreement would be increased by approximately &#36;[
] million as a result of this offering. </FONT></p></div>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">A
      discussion regarding the basis for the Fund&#146;s Board of Directors approving
      the Fund&#146;s management and country advisory agreements is available
      in
the Fund&#146;s 2005 Annual Report to stockholders. </FONT></p>
</div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Expenses. </FONT></I><FONT size=2>Except
        for the expenses borne by Blackstone Advisors pursuant to the management
        agreement, the Fund pays or causes to be paid all of their expenses and
        liabilities, including, among other things, organizational and offering
        expenses (which include out-of-pocket expenses, but not overhead or employee
        costs, of
Blackstone Advisors); expenses for legal, accounting and auditing services; taxes
        and governmental fees; dues and expenses incurred in connection with
        membership in investment company organizations; fees and expenses incurred
        in connection with
listing the Fund&#146;s shares on any stock exchange; costs of printing and distributing stockholder reports, proxy materials, prospectuses, stock certificates and distributions of dividends; charges of the Fund&#146;s custodians, sub-custodians,
administrators and sub-administrators, registrars, transfer agents, dividend disbursing agents and dividend reinvestment plan agents; payment for portfolio pricing services to a pricing agent, if any, registration and filing fees of the SEC;
expenses of registering or qualifying securities of the Fund for sale in the various states; freight and other charges in connection with the shipment of the Fund&#146;s
portfolio securities; fees and expenses of non-interested Directors or non-interested
members of any advisory or investment board, committee or panel of the Fund;
travel expenses or an appropriate portion thereof of Directors and officers of
the Fund, or members of an advisory or investment board, committee, or panel
of the Fund, to the extent that such expenses relate to attendance at meetings
of the Board of Directors or any committee thereof, or of any such advisory of
investment board committee or panel; salaries of stockholder relations personnel;
costs of stockholders meetings; insurance; interest; brokerage costs; and litigation
and other extraordinary or non-recurring expenses. </FONT></font></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Portfolio Manager. </FONT></I><FONT size=2>Punita
        Kumar-Sinha is the Fund&#146;s portfolio manager
who is primarily responsible for the day-to-day management of the Fund&#146;s portfolio. For more information about the portfolio manager, see &#147;Portfolio
Manager.&#148; </FONT></font></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Country Adviser</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Pursuant
      to a country advisory agreement dated March 16, 2006 between Blackstone
      Advisors
      and Blackstone Fund Services India Private Limited, Blackstone India serves
      as the Fund&#146;s Country Advisor. Blackstone India, a company organized
      under the laws of India and a registered investment adviser under the Advisers
      Act, has
been the Country Adviser for the Fund since December 4, 2005. Blackstone India
is an affiliate of Blackstone and Blackstone Advisors. The address of Blackstone
India is
Taj President, 90 Cuffe Parade, Room 802, Mumbai - 400 005, India.</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">74</FONT></p>
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</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Pursuant to the country advisory agreement, Blackstone India acts as a consultant to Blackstone Advisors and provides and procures statistical and factual
information and research for Blackstone Advisors regarding investing in India. Blackstone India is not responsible for the actual investment decisions of the Fund. Blackstone India has a team of four research analysts that cover approximately 150 to 200 companies. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Prior
      to December 4, 2005, Imperial Investment Advisors Private Limited (&#147;Imperial&#148;), a 99%-owned subsidiary of Advantage India, Inc., which in
turn is a wholly-owned subsidiary of Oppenheimer &amp; Co. Inc., served as the Fund&#146;s
Country Adviser. </FONT></p></div>
<div style="text-indent:3%">
  <p><font face="Times New Roman, Times, serif"><I><FONT size=2>Compensation. </FONT></I><FONT size=2>Under
        the country advisory agreement, for its services, Blackstone India receives
        from Blackstone Advisors a monthly fee at an annual rate of 0.10% of
        the Fund&#146;s average weekly net assets. For the period December 4,
        2005 to December 31, 2005, Blackstone Advisors paid Blackstone India &#36;86,911 in
         country advisory fees. For the period January 31, 2005 to December 4,
        2005, and for the fiscal years ended December 31, 2004 and December 31,
        2003, Advantage Advisers paid Imperial country advisory fees in the amounts
        of &#36;874,997, &#36;543,609 and
&#36;399,608, respectively. Assuming that the value of the Fund&#146;s assets
remained constant prior to the offer at &#36;[ ] (its approximate value as of
[ ], 2006) and after the offer at &#36;[
] million (which assumes that all rights are exercised at the estimated subscription
price, including the additional shares that may be issued under the over-subscription
privilege), the annual compensation received by Blackstone India would be increased
by approximately </FONT></font><FONT size=2 face="Times New Roman, Times, serif">&#36;[
] as a result of this offering. The Country Adviser&#146;s
fee is paid by the Investment Manager and not directly by the Fund.</FONT></p>
</div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Expenses. </FONT></I><FONT size=2>Blackstone India, at its expense, provides office space, office
facilities and personnel reasonably necessary for the performance of its services. </FONT></font></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Administrator</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund is party to an
      administration agreement dated January 1, 2006 between the Fund and Blackstone
      Advisors.
      Blackstone Advisors has been the Fund&#146;s
Administrator since January 1, 2006. The address of Blackstone Advisors is 345
Park Avenue, New York, New York 10154. </FONT></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">As
      Administrator, Blackstone Advisors performs various administrative services,
      including
      providing the Fund with the services of persons to perform administrative
      and clerical functions, maintenance of the Fund&#146;s books and records, preparation of various filings, reports, statements and returns filed with government authorities, and preparation of financial information for the Fund&#146;s
      proxy statements and semiannual and annual reports to stockholders. Blackstone
      Advisors subcontracts certain of its responsibilities as Administrator
      to PFPC Inc. The address of PFPC Inc. is 103 Bellevue Parkway, Wilmington,
Delaware 19809. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">From
      December 4, 2005 to December 31, 2005, Blackstone Administrative Services
      Partnership
      L.P. (&#147;Blackstone Administrator&#148;), an affiliate of
Blackstone and Blackstone Advisors, served as the Fund&#146;s Administrator pursuant to an administration agreement dated December 4, 2005. Prior to December 4, 2005, Oppenheimer &amp; Co. Inc., an indirect wholly-owned subsidiary of Oppenheimer
Holdings Inc., served as the Fund&#146;s Administrator </FONT></p></div>
<div style="text-indent:3%">
<p><font size="2" face="Times New Roman, Times, serif"><I>Compensation. </I>The
        Fund pays Blackstone Advisors a fee that is computed monthly and paid
        quarterly at an annual rate of: (i) 0.20% of the value of the Fund&#146;s
        average monthly net assets for the first &#36;1,500,000,000 of the Fund&#146;s
        average monthly net assets and (ii) 0.15% of the value of the Fund&#146;s

average monthly net assets in excess of &#36;1,500,000,000 of the Fund&#146;s
average monthly net assets. For the period December 4, 2005 to December 31, 2005,
the Fund paid Blackstone Administrator &#36;177,582 in administrative fees. For
the  period January 31, 2005 to December 4, 2005, and for the fiscal years ended
December 31, 2004 and December 31, 2003, the Fund paid Oppenheimer &amp; Co.,
Inc. administrative fees in the amounts of $1,761,134, &#36;1,087,217and &#36;799,216,
 respectively. For the fiscal year ended December 31, 2005, the Fund paid a total
of &#36;1,938,716
in administrative fees to Blackstone
Administrator
and Oppenheimer. Assuming that the value of the Fund&#146;s assets remained constant
prior to the offer at &#36;[ ] (its approximate value as of [ ], 2006) and after
the offer at &#36;[ ] million (which assumes that all rights are exercised at
the estimated subscription price, including the additional shares that may be
issued under the over-subscription privilege), the annual compensation received
by
Blackstone Advisors, as Administrator, would be increased by approximately &#36;[
] as a result of this offering. </font></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">75</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p76"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Expenses. </FONT></I><FONT size=2>Pursuant
      to the administration agreement, Blackstone Advisors assumes all expenses
      incurred by it, except that the Fund reimburses Blackstone Advisors for
      out-of-pocket expenses incurred by its employees in connection with their
      attendance at meetings of the Board of Directors or any committee thereof
      or any other meeting at which their attendance is required. </FONT></font></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Mauritian Administrator</B></font></p>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund is party to a Mauritian administration agreement dated April 11, 1994
      between
      the Fund and Multiconsult Ltd., a company organized under the laws of Mauritius.
      Multiconsult Ltd. has been the Fund&#146;s Mauritius administrator since 1994. Multiconsult Ltd.&#146;s
      address is De Chazal Du Mee (DDM) Building, 10, Frere Felix de Valois Street,
Port Louis, Mauritius. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Mauritian administrator performs several administrative services, including the maintenance of certain books, records and statements and the calculation
of net asset value, and also reports quarterly on behalf of the Fund to the Mauritius Financial Services Commission. </FONT></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Compensation. </FONT></I><FONT size=2>The
        Fund pays Multiconsult Ltd. a monthly fee of &#36;1,500
and a quarterly fee of &#36;1,000 for its calculation of net asset value, and the Fund also reimburses Multiconsult Ltd. for all reasonable out-of-pocket expenses reasonably incurred by it in the performance of its duties. For the fiscal years ended
December 31, 2005, 2004 and 2003, the Fund paid the Mauritius administrator &#36;20,443, &#36;27,679 and &#36;26,813,
respectively. </FONT></font></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Expenses. </FONT></I><FONT size=2>Pursuant to the Mauritian administration agreement, the Fund
reimburses Multiconsult Ltd. for all reasonable out-of-pocket expenses incurred by it in the performance of its duties. </FONT></font></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Duration and Termination; Non-Exclusive
Services</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Unless earlier terminated as described below, each of the management agreement and the country advisory agreement will remain in effect until March 16, 2008,
and from year to year thereafter if approved annually (i) by a majority of the non-interested Directors of the Fund and (ii) by the Board of Directors of the Fund or by a majority of the outstanding voting securities of the Fund. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      management agreement may be terminated without penalty by the Fund&#146;s Board of Directors or by vote of a majority of the outstanding voting
securities of the Fund or upon 60 days&#146; written notice by Blackstone Advisors, and it will also terminate in the event it is assigned (as defined in the 1940 Act). The country advisory agreement may be terminated without penalty by the
Fund&#146;s Board of Directors, by a vote of a majority of the outstanding voting securities of the Fund, upon 60 days&#146; written notice by Blackstone Advisors or Blackstone India, and it will also terminate in the event of its
&#147;assignment&#148; (as defined in the 1940 Act). </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      administration agreement will remain in effect until the termination thereof
      by Blackstone
      Advisors on 90 days&#146; written notice or by the Fund on 60
days&#146; written notice, without penalty. The Mauritian administration agreement will remain in effect until the termination thereof by Multiconsult Ltd. on 3 months&#146; written notice or by the Fund on 6 months&#146; written
notice. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The services of Blackstone Advisors, Blackstone India and Multiconsult Ltd. are not deemed to be exclusive, and nothing in the relevant service agreements
will prevent any of them or their affiliates from providing similar services to other investment companies and other clients (whether or not their investment objectives and policies are similar to those of the Fund) or from engaging in other
activities. </FONT></p></div>
  <p align="center"><font size="2" face="Times New Roman, Times, serif">
  76</font></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p77"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
<B>PORTFOLIO MANAGER</B></font></P>
<p><font size="2" face="Times New Roman, Times, serif"><B>Portfolio Manager</B></font></p>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">As
      of December 31, 2005, the Fund is managed by Punita Kumar-Sinha, who has
      primary responsibility
      for the day-to-day implementation of the Fund&#146;s
investment strategies. Ms. Kumar-Sinha has been the portfolio manager for the Fund since 1997. Ms. Kumar-Sinha has been a Managing Director of Blackstone Asia Advisors L.L.C. (the &#147;Investment Manager&#148;) since December 2005. Prior to joining
the Investment Manager, Ms. Kumar-Sinha was a Managing Director and Senior Portfolio Manager at Oppenheimer Asset Management Inc. and CIBC World Markets, where she was also the portfolio manager for the Fund. Prior to December 4, 2005, Advantage
Advisers, a subsidiary of Oppenheimer Asset Management Inc., served as the Fund&#146;s
Investment Manager. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Other Accounts Managed by Portfolio
Manager</B></font></p>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">Currently,
      in addition to managing the Fund, Ms. Kumar-Sinha also is primarily responsible
      for the day-today portfolio management of The Asia Tigers Fund, Inc. As
      of January 31, 2006, the total assets of The Asia Tigers Fund, Inc. were &#36;90,177,942.
      The Asia Tigers Fund, Inc. is a closed-end management investment company
      registered under the 1940 Act that primarily invests in Asian securities.
Neither the Fund nor The Asia Tigers Fund, Inc. have fees based on performance. </FONT></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Aside
      from the Fund and The Asia Tigers Fund, Inc., Ms. Kumar-Sinha manages no
      other
      registered investment companies, pooled investment vehicles or accounts.
      However, in the future, Ms. Kumar-Sinha may manage other funds or accounts
      for, or work in conjunction with, Blackstone&#146;s private equity group,
which may also invest in the same securities as the Fund. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Portfolio Manager Compensation</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      portfolio manager&#146;s overall compensation is determined by Blackstone&#146;s Management Committee. Blackstone&#146;s compensation structure is
designed to pay competitive salaries to attract and retain top quality investment professionals. Ms. Kumar-Sinha&#146;s compensation consists of two elements&#151;base
salary and bonus. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Base Salary</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      base salary is generally a fixed amount. The base salary is reviewed annually
      and may
      be adjusted based on a variety of factors, including competitive market
      factors and the skill, experience and responsibilities of the individual.
      While investment performance is a factor in determining the portfolio manager&#146;s
compensation, it is not necessarily a decisive factor. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Bonus</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Ms.
      Kumar-Sinha is also eligible to receive an annual cash bonus. The level
      of this bonus
      is based upon evaluations and determinations made by the portfolio
manager&#146;s supervisor. These reviews and evaluations often take into account a variety of factors, including the effectiveness of the portfolio manager&#146;s investment strategies, the performance of the accounts for which she serves as
portfolio manager relative to any benchmarks established for those accounts, the amount of the Investment Manager&#146;s
total assets under management, her ability to work with colleagues and to supervise
her investment staff and her overall contribution to the Investment Manager in
achieving its business objectives. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Potential Conflicts of Interest</B></font></p>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">Potential conflicts
    of interest may arise when a fund&#146;s portfolio manager has day-to-day
    management responsibilities with respect to one or more other  funds or other
    accounts, as is the case for Ms. Kumar-Sinha. Ms. Kumar-Sinha&#146;s simultaneous
    management of the Fund and The Asia Tigers Fund, Inc. may present actual
    or apparent conflicts of interest with respect to the allocation of Ms.
    Kumar-Sinha&#146;s time and attention as well as with respect to the allocation
    and aggregation of securities orders placed on behalf of the two funds. The
    Fund and The Asia
    Tigers Fund, Inc. have partially overlapping investment objectives since
    both may invest in
Indian securities. Potential conflicts may arise, for example, when there is
a limited quantity of an investment that may be suitable for both funds and the
investment must be allocated between them. It is also possible that, in light
of different objectives, benchmarks, industry and sector exposures and time horizons,
the portfolio manager may take differing positions in the two funds. In the future,
Ms. Kumar-Sinha may manage other funds or accounts which may also invest in the
same securities as the Fund.</FONT></p>
</div>

  <p align="center"><FONT size=2 face="Times New Roman, Times, serif">77</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Investment Manager believes that such potential conflicts are mitigated by the fact that the Investment Manager has adopted policies that address
potential conflicts of interest, including strict adherence to investment objectives, policies and guidelines as well as best execution and trade allocation policies that are designed to ensure (1) that portfolio management is seeking the best price
for portfolio securities under the circumstances, (2) fair and equitable allocation of investment opportunities among accounts over time and (3) compliance with applicable regulatory requirements. All accounts are treated in a non-preferential
manner, such that allocations are not based upon account performance, fee structure or preference of the portfolio manager. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Portfolio Manager Securities Ownership</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">As
      of March 31, 2006, Ms. Kumar-Sinha beneficially owned between &#36;10,001 and &#36;50,000
in the common stock of the Fund. </FONT></p></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> </font><font face="Times New Roman, Times, serif"><a name="p78"></a></font><font size="2" face="Times New Roman, Times, serif"><B>CUSTODIANS,
  TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR</B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Deutsche Bank AG, whose address is Kodak House, 222, Dr. D. N. Road, Fort Mumbai 400 001, India, acts as custodian of the assets of the Fund. Deutsche Bank
(Mauritius) Limited, whose address is 4th Floor, Barkly Wharf East, Le Caudan Waterfront, Port Louis, Mauritius, acts as custodian of the cash assets of the Fund. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">PFPC
      Inc., whose address is 103 Bellevue Parkway, Wilmington Delaware 19809,
      acts
      as transfer agent and registrar for the Fund&#146;s shares. It also acts as
dividend paying agent under the dividend reinvestment and cash purchase plan. PFPC Inc.&#146;s
address is P.O. Box 43027, Westborough, Massachusetts 01581. </FONT></p></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> </font><font face="Times New Roman, Times, serif"><a name="p78a"></a></font><font size="2" face="Times New Roman, Times, serif"><B>EXPERTS</B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">PricewaterhouseCoopers
      LLP, independent accountants, is the independent registered public accounting
      firm of the Fund. The audited financial statements of the Fund and certain
      of the information appearing under the caption &#147;Financial Highlights&#148; included in this prospectus and appearing elsewhere herein have been audited by PricewaterhouseCoopers LLP for the periods indicated and are
included in reliance upon such reports and upon the authority of such firm as experts in accounting and auditing. PricewaterhouseCoopers LLP also performs tax and other professional services for the Fund. PricewaterhouseCoopers LLP&#146;s
address is
Two Commerce Square, 2001 Market Street, Philadelphia, PA 19103. </FONT></p></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> </font><font face="Times New Roman, Times, serif"><a name="p78b"></a></font><font size="2" face="Times New Roman, Times, serif"><B>LEGAL
  MATTERS</B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      validity of the shares offered hereby will be passed upon for the Fund
      by Simpson
      Thacher &amp; Bartlett LLP, which will rely as to matters of Maryland
law on DLA Piper Rudnick Gray Cary US LLP. The Fund is represented with respect to matters of Indian law by AZB &amp; Partners,
Mumbai, India. </FONT></p></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> </font><font face="Times New Roman, Times, serif"><a name="p78c"></a></font><font size="2" face="Times New Roman, Times, serif"><B>ENFORCEABILITY
  OF CIVIL LIABILITIES</B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Some
      of the Fund&#146;s Directors (J. Marc Hardy, Stephane R.F. Henry and Luis Rubio) reside and maintain most of their assets outside the United States.
These Directors have not appointed an agent for service of process in the United States. In addition, Blackstone India, the Fund&#146;s Country Adviser, is organized under the laws of India, and AZB &amp; Partners, the Fund&#146;s
Indian counsel, has its principal office in India. It may not be possible, therefore,
for investors to effect service of process within the United States upon these
persons or entities to enforce against them, in United States courts or foreign
courts, judgments
obtained in United States courts predicated upon the civil liability provisions
of the federal securities laws of the United States. In addition, it is not certain
that a foreign court would enforce, in original actions, liabilities against
these persons or entities predicated
solely upon the U.S. securities laws.</FONT></p>
  <p align="center"><FONT size=2 face="Times New Roman, Times, serif">78</FONT><font face="Times New Roman, Times, serif">

  </font></p>
</div>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page> </font><font face="Times New Roman">
<p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back
  to Contents</a></font></p>
<p align="center"><font face="Times New Roman, Times, serif"><a name="p79"></a></font><font size="2" face="Times New Roman, Times, serif"><B>OFFICIAL
  DOCUMENTS</B></font></p>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Certain of the tabular and other statistical information set forth in this prospectus is based upon or derived from official public documents of the Indian
government and its ministries, the Reserve Bank of India, the National Stock Exchange and the Mumbai Stock Exchange. </FONT></p></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> </font><font face="Times New Roman, Times, serif"><a name="p79a"></a></font><font size="2" face="Times New Roman, Times, serif"><B>ADDITIONAL
  INFORMATION</B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">This
      registration statement and other information can be inspected and copied
      at the Public
      Reference Room of the SEC located at 100 F Street, N.E., Washington, D.C.
      20549. Copies of such materials, including copies of all or a portion of
      the Registration Statement can be obtained from the Public Reference Room
      of the SEC at prescribed rates. You can call the SEC at 1-800-SEC-0330
      to obtain
information on the operation of the Public Reference Room. Such materials may
      also be accessed electronically by means of the SEC&#146;s home page on
      the Internet at http://www.sec.gov. </FONT> </p>
  <p align="center">&nbsp;</p>
  <p align="center">&nbsp;</p>
  <p align="center">&nbsp;</p>
  <p align="center"><FONT size=2 face="Times New Roman, Times, serif">79</FONT></p>
</div>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p80"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
<B>TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION</B></font></P>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
	<TD align=left>&nbsp;

	</TD>
	<TD width=5% align=center><font size="1" face="Times New Roman, Times, serif">
<B>Page</B>&nbsp;	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD align=left><hr size="1" noshade>

	</TD>
</TR>
<TR valign="bottom">
	  <TD align=left><a href="#pvm"><font face="Times New Roman, Times, serif"> <font size=2>Proxy Voting Procedures</font></font></a></TD>
  <TD align=right><a href="#pvm"><font face="Times New Roman, Times, serif"> <font size=2>1</font></font></a></TD>
</TR>
</TABLE>

<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">80</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pf1"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
<B>FINANCIAL STATEMENTS</B></font></P>
</font>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">The
      audited financial statements for the year ended December 31, 2005 are included
      in the Fund&#146;s 2005 Annual Report and are incorporated by reference
      into this prospectus. These statements include: the Report of Independent
      Registered Public Accounting Firm; Schedule of Investments as of December
      31, 2005; Statement of Assets and Liabilities as of December 31, 2005;
      Statement
      of Operations
      for the
      fiscal year ended
December 31, 2005; Statements of Changes in Net Assets for the fiscal years ended
      December 31, 2005 and December 31, 2004; Notes to Financial Statements;
      and Financial Highlights for a share of common stock outstanding during
      each of the fiscal years ended December 31, 2005, 2004, 2003, 2002 and
      2001. Copies of the Fund&#146;s 2005 Annual Report were filed with the
      SEC on March 10, 2006 and are available on the SEC&#146;s website at http://www.sec.gov.
      They may also be obtained without  charge upon written or oral request
      from the Fund&#146;s information agent at
866-297-1264. </FONT></p>
</div>
<P align="center"><FONT size=2 face="Times New Roman, Times, serif">F-1 </FONT></P>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pa1"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<p align="right"><font size="2" face="Times New Roman, Times, serif"> <B>Appendix
A</B></font></p>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
<B>GENERAL CHARACTERISTICS AND RISKS OF HEDGING</B></font></P>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Fund is authorized to use various hedging and investment strategies. From time to time and as permitted by the 1940 Act, the Fund may engage in certain
hedging activities described below to hedge various market risks (such as broad or specific market movements and interest rates and currency exchange rates). </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">A
      detailed discussion of the hedging (which we define below) that may be
      done by the
      Investment Manager on behalf of the Fund follows below. The Fund will not
      be obligated, however, to do any hedging and makes no representation as
      to the availability of these techniques at this time or at any time in
      the future. &#147;Hedging,&#148; as used in this appendix, refers to entering
      into interest rate, currency or stock index futures contracts, currency
      forward contracts and currency swaps, the purchase and sale (or writing)
      of exchange listed and over-the-counter put and call options on debt and
      equity securities, currencies, interest rate,
currency or stock index futures and fixed income and stock indices and other
      financial instruments, entering into various interest rate transactions
      such as swaps, caps, floors, collars, entering into equity swaps, caps,
      floors or trading in other
types of derivatives. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund&#146;s
      ability to pursue certain of these strategies may be limited by the federal
      income tax requirements applicable to regulated investment companies that
are not operated as commodity pools. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Put and Call Options on Securities
and Indices</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund may purchase and sell put and call options on debt and equity securities
      and
      indices based upon the prices of debt or equity securities. A put option
      on a security gives the purchaser of the option the right to sell, and
      the writer the obligation to buy, the underlying security at the exercise
      price during the option period. The Fund may also purchase and sell options
      on indices based upon
the prices of debt or equity securities (&#147;index options&#148;). Index options
are similar to options on securities except that, rather than taking or making
delivery of securities underlying the option at a specified price upon exercise,
an index option gives the holder the right to receive cash upon exercise of the
option if the level of the index upon which the option is based is greater, in
the case of a call, or less in the case of a put, than the exercise price of
the option. The
purchase of a put option on a security would be designed to protect against a
substantial decline in the market value of a security held by the Fund. A call
option on a security gives the purchaser of the option the right to buy and the
writer the obligation to sell the underlying security at the exercise price during
the option period. The purchase of a call option on a security would be intended
to protect the Fund against an increase in the price of a security that it intended
to purchase
in the future. In the case of either put or call options that it has purchased,
if the option expires without being sold or exercised, the Fund will experience
a loss in the amount of the option premium plus any related commissions. When
the Fund sells put and call options, it receives a premium as the seller of the
option. The premium that the Fund receives for writing the option will serve
as a partial hedge, in the amount of the option premium, against changes in the
value of the
securities in its portfolio. During the term of the option, however, a covered
call seller has, in return for the premium on the option, given up the opportunity
for capital appreciation above the exercise price of the option if the value
of the underlying security increases, but it has retained the risk of loss should
the price of the underlying security decline. Conversely, a secured put seller
retains the risk of loss should the market value of the underlying security decline
below the
exercise price of the option, less the premium received on the sale of the option.
The Fund is authorized to purchase and sell exchange listed options and over-the-counter
options that are privately negotiated with the counterparty to such contract.
Listed options are issued by the Options Clearing Corporation (&#147;OCC&#148;),
which guarantees the performance of the obligations of the parties to such options. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">All
      such call options sold (written) by the Fund will be &#147;covered&#148; as
      long as the call is outstanding </FONT><font face="Times New Roman, Times, serif"><I><FONT size=2>(</FONT></I><FONT size=2>i.e.,<I> </I>the Fund will own the instrument subject to the call or other securities or assets acceptable under applicable segregation and coverage rules). All such put options sold (written) by the Fund will be
secured by segregated assets consisting of cash or liquid debt securities having a value not less than the exercise price. </FONT></font></p></div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">A-1</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pa2"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<p><FONT size=2 face="Times New Roman, Times, serif">The
      Fund&#146;s ability to close out its position as a purchaser or seller
      of an exchange listed put or call option is dependent upon the existence
      of
      a liquid secondary market. Among the possible reasons for the absence of
      a liquid secondary market on an exchange are:</FONT></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    insufficient trading interest in certain options;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    restrictions on transactions imposed by an exchange;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif">
    <FONT size=2>trading halts, suspensions or other restrictions imposed with respect to particular classes or series</FONT> <FONT size=2>of options or
underlying securities;</FONT></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    interruption of the normal operations on an exchange;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">
    inadequacy of the facilities of an exchange or the OCC to handle current
    trading volume; or</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"><FONT size=2>a decision by
          one or more exchanges to discontinue the trading of options (or a particular
          class or series of  options), in which event the secondary market on
          that exchange (or in that class or series of options) would cease to
          exist, although outstanding options on that exchange that had
been listed by the OCC as a result of trades on that exchange would generally
          continue to be exercisable in
accordance with their terms.</FONT></font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Over-the-counter options are purchased from or sold to dealers, financial institutions or other counterparties that have entered into direct agreements with
the Fund. With over-the-counter options, such variables as expiration date, exercise price and premium will be agreed upon between the Fund and the counterparty, without the intermediation of a third party such as the OCC. If the counterparty fails
to make or take delivery of the securities underlying an option that it has written or otherwise settle the transaction in accordance with the terms of that option as written, the Fund would lose the premium paid for the option as well as any
anticipated benefit of the transaction. As the Fund must rely on the credit quality of the counterparty rather than the guarantee of the OCC, it will only enter into OTC options with counterparties with the highest long-term credit ratings and with
primary U.S. government securities dealers recognized by the Federal Reserve Bank of New York. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The hours of trading for options on securities may not conform to the hours during which the underlying securities are traded. To the extent that the option
markets close before the markets for the underlying securities, significant price and rate movements can take place in the underlying markets that cannot be reflected in the option markets. </FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Futures Contracts and Options on
Futures Contracts</B></font></p>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Characteristics. </FONT></I><FONT size=2>The
        Fund may purchase and sell futures contracts on interest rates and indices
        of debt and equity securities and purchase and sell (write) put and call
        options on such futures contracts traded on recognized domestic exchanges
        as a hedge against anticipated interest rate changes or movements in
        equity
markets. The sale of a futures contract creates an obligation by the Fund, as
        seller, to deliver the specific type of financial instrument called for
        in the contract at a specified future time for a specified price. Options
        on futures contracts are similar to options on securities except that
        an option on a futures contract gives the purchaser the right in return
        for the premium paid to assume a position in a futures contract. That
        position is a &#147;long&#148; position if the option is a
call and a &#147;short&#148; position if the option is a put. </FONT></font></p></div>
<div style="text-indent:3%"><p><font face="Times New Roman, Times, serif"><I><FONT size=2>Margin Requirements. </FONT></I><FONT size=2>At
        the time a futures contract is purchased or sold, the Fund must allocate
        cash or securities as a deposit payment, or an &#147;initial margin.&#148; It is expected that the initial margin that the Fund will pay may range from approximately 1% to approximately 5% of the value of the instruments
underlying the contract. In certain circumstances, however, such as during periods of high volatility, the Fund may be required by an exchange to increase the level of its initial margin payment. Additionally, initial margin requirements may be
increased in the future pursuant to regulatory action. An outstanding futures contract is valued daily and the payment in cash of &#147;variation margin&#148; may be required, a process known as &#147;marking to the market.&#148; Transactions
in listed options and futures are usually settled by entering into an offsetting
transaction, and are subject to the risk that the position may not be able to
be closed if no offsetting transaction can be arranged. </FONT></font></p></div>
<div style="text-indent:3%"><p align="center"><FONT size=2 face="Times New Roman, Times, serif">A-2</FONT></p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pa3"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif"><I>No Regulatory Limitations
    on Use of Futures Contracts and Options on Futures Contracts. </I>The Fund&#146;s
    futures transactions will be entered into for hedging purposes. There is,
    however, no limit on the amount of the Fund&#146;s assets that can be put
    at risk through the use of futures contracts and options thereon, and the
    value of the Fund&#146;s futures contracts and options thereon may equal or
    exceed 100% of the Fund&#146;s total assets. When required, a segregated account
    of cash or cash equivalents will be maintained and marked to market in an
    amount equal to the market value of the contract. The Investment Manager reserves
    the right to comply with such different standards as may be established from
    time to time by rules and regulations of the U.S. Commodity Exchange Commission
    (&#147;CFTC&#148;) with respect to the purchase and sale of futures contracts
    and options thereon. </FONT></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund is operated by
    persons who have claimed exclusions from the definition of the term &#147;commodity
    pool operator&#148; under the U.S. Commodity Exchange Act and, therefore,
    are not subject to registration or regulation as commodity pool operators
    under such Act. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Currency Transactions</B>
  </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may engage in
    currency transactions with counterparties to hedge the value of portfolio
    securities denominated in particular currencies against fluctuations in relative
    value. Currency transactions include currency forward contracts, exchange
    listed currency futures contracts, exchange listed and over-the-counter options
    on currencies and currency swaps. A forward currency contract involves a privately
    negotiated obligation to purchase or sell (with delivery generally required)
    a specific currency at a future date, which may be any fixed number of days
    from the date of the contract agreed upon by the parties, at a price set at
    the time of the contract. A currency swap is an agreement to exchange cash
    flows based on the notional difference among two or more currencies and operates
    similarly to an interest rate swap, which is described below. The Fund may
    enter into currency transactions with counterparties that have received (or
    the guarantors of the obligations of that have received) a credit rating of
    P-1 or A-1 by Moody&#146;s Investors Service, Inc. or Standard &amp; Poor&#146;s
    Ratings Services, a division of the McGraw Hill Companies, Inc., respectively,
    or that have an equivalent rating from an nationally recognized statistical
    rating organization or (except for OTC currency options) are determined to
    be of equivalent credit quality by the Investment Manager. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund&#146;s dealings
    in forward currency contracts and other currency transactions such as futures
    contracts, options, options on futures contracts and swaps will be limited
    to hedging involving either specific transactions or portfolio positions.
    Transaction hedging is entering into a currency transaction with respect to
    specific assets or liabilities of the Fund, which will generally arise in
    connection with the purchase or sale of the Fund&#146;s portfolio securities
    or the receipt of income from them. Position hedging is entering into a currency
    transaction with respect to portfolio security positions denominated or generally
    quoted in that currency. The Fund will not enter into a transaction to hedge
    currency exposure to an extent greater, after netting all transactions intended
    wholly or partially to offset other transactions, than the aggregate market
    value (at the time of entering into the transaction) of the securities held
    in the Fund&#146;s portfolio that are denominated or generally quoted in or
    currently convertible into the currency, other than with respect to proxy
    hedging as described below. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may cross-hedge
    currencies by entering into transactions to purchase or sell one or more currencies
    that are expected to decline in value relative to other currencies to which
    the Fund has or in which the Fund expects to have portfolio exposure. To reduce
    the effect of currency fluctuations on the value of existing or anticipated
    holdings of portfolio securities, the Fund may also engage in proxy hedging.
    Proxy hedging is often used when the currency to which the Fund&#146;s portfolio
    is exposed is difficult to hedge or to hedge against the dollar. Proxy hedging
    entails entering into a forward contract to sell a currency, the changes in
    the value of which are generally considered to be linked to a currency or
    currencies in which some or all of the Fund&#146;s portfolio securities are
    or are expected to be denominated, and to buy dollars. The amount of the contract
    would not exceed the value of the Fund&#146;s securities denominated in linked
    currencies. Currency hedging involves some of the same risks and considerations
    as other transactions with similar instruments, Currency transactions can
    result in losses to the Fund if the currency being hedged fluctuates in value
    to a degree or in a direction that is not anticipated. Further, the risk exists
    that the perceived linkage between various currencies may not be present or
    may not be present during the particular time that the Fund is engaging in
    proxy hedging. If the Fund enters into a currency hedging transaction, the
    Fund will comply with the asset segregation requirements described below.
    </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">A-3</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pa4"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">Currency transactions are
    subject to risks different from those of other portfolio transactions. Because
    currency control is of great importance to the issuing governments and influences
    economic planning and policy, purchases and sales of currency and related
    instruments can be adversely affected by government exchange controls, limitations
    or restrictions on repatriation of currency and manipulations or exchange
    restrictions imposed by governments. These forms of governmental actions can
    result in losses to the Fund if it is unable to deliver or receive currency
    or monies in settlement of obligations and could also cause hedges it has
    entered into to be rendered useless, resulting in full currency exposure as
    well as incurring transaction costs. Buyers and sellers of currency futures
    are subject to the same risks that apply to the use of futures generally.
    Further, settlement of a currency futures contract for the purchase of most
    currencies must occur at a bank based in the issuing nation. The ability to
    establish and close out positions on these options is subject to the maintenance
    of a liquid market that may not always be available. Currency exchange rates
    may fluctuate based on factors extrinsic to that country&#146;s economy. </FONT></P>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Interest Rate Transactions</B>
  </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may enter into
    interest rate swaps and may purchase or sell interest rate caps and floors.
    The Fund would enter into these transactions to preserve a return or spread
    on a particular investment or portion of its portfolio or to protect against
    any increase in the price of the securities the Fund anticipates purchasing
    at a later date. The Fund will not sell interest rate caps or floors that
    it does not own. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may enter into
    interest rate swaps, caps and floors on either an asset-based or liability-based
    basis, depending on whether it is hedging its assets or liabilities, and it
    will usually enter into interest rate swaps on a net basis, i.e., the two
    payment streams are netted out, with the Fund receiving or paying, as the
    case may be, only the net amount of the two payments on the payment date.
    The Fund will not enter into any interest rate swap, cap or floor transaction
    unless the unsecured senior debt or the claims-paying ability of the other
    party thereto is rated in the highest rating category of at least one nationally
    recognized statistical rating organization at the time of entering into such
    transaction. If there is a default by the other party to such a transaction,
    the Fund will have contractual remedies pursuant to the agreements related
    to the transaction. The swap market has grown substantially in recent years
    with a large number of banks and investment banking firms acting both as principals
    and as agents utilizing standardized swap documentation. Caps and floors are
    less liquid than swaps. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Equity Swaps and Related
  Transactions</B> </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may enter into
    equity swaps and may purchase or sell equity caps and floors. The Fund would
    enter into these transactions to preserve a return or spread on a particular
    investment or portion of its portfolio or to protect against any increase
    in the price of the securities that the Fund anticipates purchasing at a later
    date. The Fund will not sell equity caps or floors that it does not own. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Fund may enter into
    equity swaps, caps and floors on either an asset-based or liability-based
    basis, depending on whether it is hedging its assets or liabilities, and it
    will usually enter into equity swaps on a net basis, i.e., the two payment
    streams are netted out, with the Fund receiving or paying, as the case may
    be, only the net amount of the two payments on the payment date. The Fund
    will not enter into any equity swap, cap or floor transaction unless the unsecured
    senior debt or the claims-paying ability of the other party thereto is rated
    in the highest rating category of at least one nationally recognized statistical
    rating organization at the time of entering into such transaction. If there
    is a default by the other party to such a transaction, the Fund will have
    contractual remedies pursuant to the agreements related to the transaction.
    The swap market has grown substantially in recent years with a large number
    of banks and investment banking firms acting both as principals and as agents
    utilizing standardized swap documentation. Caps and floors, as noted above,
    are less liquid than swaps. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">A-4</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pa5"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p><b><font size=2>Risks of Hedging</font></b></p>
</font>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">Hedging involves special
    risks, including the possible default by the other party to the transaction,
    illiquidity and, to the extent the Investment Manager&#146;s view as to certain
    market movements is incorrect, the risk that the use of hedging could result
    in losses greater than if such investment strategies had not been used. Use
    of put and call options could result in losses to the Fund, force the sale
    or purchase of portfolio securities at an inopportune time or for prices higher
    than (in the case of put options) or lower than (in the case of call options)
    current market values, or cause the Fund to hold a security it might otherwise
    sell. The use of currency transactions could result in the Fund&#146;s incurring
    losses as a result of the imposition of exchange controls, suspension of settlements
    or the inability to deliver or receive a specified currency. The use of options
    and futures transactions entails certain special risks. In particular, the
    variable degree of correlation between price movements of futures contracts
    and price movements in the related portfolio position of the Fund could create
    the possibility that losses on the hedging instrument are greater than gains
    in the value of the Fund&#146;s position. In addition, futures and options
    markets could be illiquid in some circumstances and certain over-the-counter
    options could have no markets. As a result, in certain markets, the Fund might
    not be able to close out a position without incurring substantial losses.
    Although the Fund&#146;s use of futures and options transactions for hedging
    purposes should tend to minimize the risk of loss due to a decline in the
    value of the hedged position, at the same time, it will tend to limit any
    potential gain to the Fund that might result from an increase in value of
    the position. There is, however, no limit on the amount of the Fund&#146;s
    assets that can be put at risk through the use of futures contracts and options
    thereon, an the value of the Fund&#146;s futures contracts and options thereon
    may equal or exceed 100% of the Fund&#146;s total assets. Finally, the daily
    variation margin requirements for futures contracts create a greater ongoing
    potential financial risk than would purchases of options, in which case the
    exposure is limited to the cost of the initial premium and transaction costs.
    Losses resulting from hedging will reduce the Fund&#146;s net asset value,
    and possibly its income, and the losses can be greater than if the hedging
    had not been used. </FONT></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">When conducted outside
    the United States, hedging may not be regulated as rigorously as in the United
    States, may not involve a clearing mechanism and related guarantees, and will
    be subject to the risk of governmental actions affecting trading in, or the
    prices of, foreign securities, currencies and other instruments. The value
    of positions taken as part of non-U.S. hedging also could be adversely affected
    by: </FONT></p>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">other complex foreign
      political, legal and economic factors;</FONT></TD>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">lesser availability
      of data on which to make trading decisions than in the United States;</FONT></TD>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">delays in the Fund&#146;s
      ability to act upon economic events occurring in foreign markets during
      non-</FONT> <FONT size=2 face="Times New Roman, Times, serif">business hours
      in the United States;</FONT></TD>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">the imposition of different
      exercise and settlement terms and procedures and margin requirements</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">than in the United States;
      and</FONT></TD>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">lower trading volume
      and liquidity.</FONT></TD>
  </tr>
</table>
<p><font size="2" face="Times New Roman, Times, serif"><B>Segregation and Cover
  Requirements</B> </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Much of the hedging that
    the Fund may enter into is subject to segregation and coverage requirements
    established by either the CFTC or the SEC, with the result that, if the Fund
    does not hold the instrument underlying the futures contract or option, the
    Fund will be required to segregate on an ongoing basis with its custodian
    cash, U.S. government securities or other liquid debt obligations in an amount
    at least equal to the Fund&#146;s obligations with respect to such instruments.
    Such amounts will fluctuate as the market value of the obligations increases
    or decreases. The segregation requirement can result in the Fund maintaining
    positions that it would otherwise liquidate and consequently segregating assets
    with respect thereto at a time when it might be disadvantageous to do so.
    The Fund will accrue the net amount of the excess, if any, of the Fund&#146;s
    obligations over its entitlements with respect to each swap on a daily basis,
    and it will segregate with a custodian an amount of cash, U.S. government
    securities, or other liquid debt obligations or liquid securities having an
    aggregate net asset value at least equal the accrued excess. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Other Limitations</B>
  </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The degree of the Fund&#146;s
    use of hedging may be limited by certain provisions of the Internal Revenue
    Code. See &#147;Taxation.&#148; </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">A-5</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb1"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<P align="right"> <font size="2" face="Times New Roman, Times, serif"><B>Appendix
  B</B></font></P>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>REPUBLIC
  OF INDIA</B> </font></P>
<div style="text-indent:3%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>The information set
    forth in this Appendix B has been extracted from various government and private
    publications. The Fund, its Board of Directors, the Investment Manager and
    the Country Adviser make no representation as to the accuracy of the information,
    nor has the Fund or its Board of Directors attempted to verify the statistical
    information presented in this Appendix B. Furthermore, no representation is
    made that any correlation exists between the Republic of India or its economy
    in general and the performance of the Fund. Reference in the text below to
    consecutive years (for example, 2004/2005) means the fiscal year beginning
    April 1 of the first year listed and ending March 31 of the second year listed.
    </I></font></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>THE COUNTRY</B></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><B>Geography </B> </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Situated in Southern Asia
    and covering an area of approximately 1.3 million square miles, India is the
    seventh largest country in the world. Bounded by the Himalayas in the north,
    it stretches southwards into the Indian Ocean between the Bay of Bengal to
    the southeast and the Arabian Sea to the west. India is bordered by the People&#146;s
    Republic of China, Nepal and Bhutan to the north, Pakistan to the west, and
    Myanmar and Bangladesh to the east. Sri Lanka lies off its southern shores.
    The Andaman and Nicobar Islands in the Bay of Bengal and the Lakshadweep Islands
    in the Arabian Sea are also part of India. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Population</B> </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India is the world&#146;s
    second most populous country. The 2001 census estimated the total population
    of India as approximately 1.03 billion, and that figure is projected to increase
    to 1.11 billion by 2006, 1.19 billion by 2011 and 1.27 billion by 2016. Although
    migration from rural to urban centers has increased steadily, India&#146;s
    population remains predominantly rural. The 2001 census reported that 72.2%
    of the total population still lives in rural areas. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Control of population growth
    is a declared objective of government policy. India&#146;s population growth
    rate has occurred despite an intensive birth control program. The 2001 census
    reported a population growth rate of approximately 1.96% during the years
    from 1991 to 2001, which is lower than the 2.15% growth rate from 1981 to
    1991. Approximately 35.6% of the Indian population is below 14 years of age.
    </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The following table sets
    forth information regarding the total population and its rate of growth during
    the period from 1951 to 2001:</FONT></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"><b>Dynamics
  of Population Growth<br>
  1951 &#150; 2001</b>&nbsp;</font><font face="Times New Roman, Times, serif"></font></p>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD rowspan="4" align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;
      </FONT><font size="1" face="Times New Roman, Times, serif">&nbsp;
      </FONT><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT><font size="1" face="Times New Roman, Times, serif">&nbsp;
      </FONT></TD>
    <TD rowspan="4" align=center><font size="1" face="Times New Roman, Times, serif"><b>Total
      Population</b><br>
	  <b>(millions)
      at the</b><br>
	  <b>End
      of the Period</b><br>
	  <B>(As
      of March 31)</b></font></TD>
    <TD rowspan="4" align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;
      </FONT></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;
      </FONT></TD>
    <TD rowspan="4" align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan=3 align=right><div align="center"><font size="1" face="Times New Roman, Times, serif">
        <B>Growth Rate (%)</B></font></div></TD>
  </TR>
  <TR valign="bottom">
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>Decadal</b></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT></TD>
    <TD align=right><font size="1" face="Times New Roman, Times, serif"> <B>Annual</b>
      </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT></TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=right><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">1951-1961</FONT></TD>
    <TD width=15% align=right> <FONT size=2 face="Times New Roman, Times, serif">439</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=15% align=right> <FONT size=2 face="Times New Roman, Times, serif">21.6</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=15% align=right> <FONT size=2 face="Times New Roman, Times, serif">1.98</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">1961-1971</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">548</FONT></TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">24.8</FONT></TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.24</FONT></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">1971-1981</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">684</FONT></TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">24.8</FONT></TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.24</FONT></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">1981-1991</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">846</FONT></TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">23.7</FONT></TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.15</FONT></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">1991-2001</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,027</FONT></TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">21.4</FONT></TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.96</FONT></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="6" align=left> <font size=1 face="Times New Roman, Times, serif">Source:
      Economic Survey 2002/2003, Government of India Ministry of Finance and Central
      Statistical Organisation Data</FONT></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
</TABLE>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Life expectancy has increased
    from 32.5 years for males and 31.7 years for females in 1950/1951 to 63.87
    and 66.91 years, respectively, in 2000/2001. Literacy during the same period
    increased from 18.33% to 65.38% of the population, and the per capita net
    national product at factor cost (in 1993/94 prices) increased from Rs. 3,687
    to Rs. 10,754. The Indian government estimated that 26.10% of the population
    lived below the poverty line in 1999/2000, as compared with 38.9% in 1987/88.
    </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">B-1</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb2"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Hindi is the official national
    language and is spoken by approximately 40% of the population. English is
    recognized as an &#147;official language&#148; under the Indian Constitution
    and is widely used as the language of jurisprudence, commercial transactions
    and higher and technical education. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Ethnic and Cultural
  Diversity and Conflict</B> </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India has a diverse mix
    of ethnic and cultural groups. Many religions are practiced in India, and
    Hinduism is the principal religion, followed by an estimated 82% of the total
    population. The other principal religious groups are Muslims, Christians,
    Sikhs, Buddhists and Jains. Muslims constitute an estimated 12.12% of the
    total population. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Religious and ethnic differences
      are a recurring source of conflict in India throughout its post-independence
      era and on several occasions have erupted in violence. Terrorist bombings
    occur from time to time in a number of Indian cities. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In March 2002, the state
    of Gujarat experienced communal violence between Hindus and Muslims, and approximately
    800 people died. The Indian government has controlled the separatist movement
    in the state of Punjab and has achieved some success at controlling the movement
    in the state of Assam. However, the states of Nagaland, Mizoram and Manipur
    in the northeastern part of India continue to experience insurgencies and
    separatist movements. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Since 1990, the Indian
    government has been involved in a struggle with separatist guerilla groups
    in the states of Jammu and Kashmir, which has strained India&#146;s relations
    with its neighbors. Recent peace initiatives led by former Indian Prime Minister
    Atal Bihari Vajpayee and Pakistani President Pervez Musharraf have improved
    relations between the two countries. The Congress-led UPA government set up
    in 2004 initiated further improvements in relations and both countries agreed
    to extend a nuclear testing ban and to set up a hotline between their foreign
    secretaries aimed at preventing misunderstandings that might lead to a nuclear
    war. See &#147;Politics&#151;International Relations&#148; in this Appendix
    B. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>GOVERNMENT</B></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><B>Constitutional Structure</B>
  </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India gained its independence
    from the United Kingdom in August 1947, and the Indian Constitution took effect
    on January 26, 1950. India is a federal republic with certain powers reserved
    to its twenty-nine states and six &#147;union territories.&#148; The Indian
    Constitution separates the responsibilities of the national and state governments
    and also provides for the separation of executive, legislative and judicial
    powers. It also delineates areas where the national and state governments
    exercise joint jurisdiction. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>National Government</B>
  </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Indian Constitution
    vests legislative power in a bicameral parliament consisting of the Lok Sabha
    (House of the People) and the Rajya Sabha (Council of States). All but two
    members of the Lok Sabha (who are nominated by the President to represent
    Anglo-Indians) are directly elected in single-member constituencies for a
    term of five years on the basis of universal adult suffrage. The Indian Constitution
    provides that the Rajya Sabha cannot consist of more than 250 members, twelve
    of whom are nominated by the president and the remainder of whom are elected
    indirectly by representatives of the states and union territories. Elected
    members of the Rajya Sabha serve six-year terms, and one-third of its members
    stand for election every two years. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The executive branch is
    headed by a president who, as the head of state, exercises power under the
    Indian Constitution with the advice of the Council of Ministers, which is
    headed by the prime minister. The president is elected for five-year terms
    by an electoral college, which consists of elected members of the national
    and state legislatures. The president performs a primarily ceremonial function.
    Executive power in practice resides with the prime minister, who is responsible
    to the Lok Sabha. The president appoints the prime minister, and the president
    appoints other ministers on the advice of the prime minister. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">B-2</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb3"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The highest appellate court
    is the Supreme Court of India. The judicial system of India is primarily based
    on common law. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>State Government and
  Union Territories</B> </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The system of state government
    closely resembles that of the national government, with each state having
    a legislature, governor, chief minister and a council of ministers. There
    are twenty-nine states in India. India has an extensive system of local government
    that reaches down to the municipality and village level. The national government
    administers the six union territories, and rural and urban local bodies, which
    were empowered by 1993 amendments to the Indian Constitution, serve as further
    institutions of self-government. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>POLITICS</B></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><B>Domestic </B> </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India is the largest democracy
    in the world. Since its independence in 1947, the Congress (I) Party and its
    prime ministers selected from its leadership have dominated politics at the
    national level. Previous Congress (I) Party prime ministers include: Jawaharlal
    Nehru (1947 to 1964); Lad Bahadur Shastri (1964 to 1966); Mr. Nehru&#146;s
    daughter, Indira Gandhi (1966 to 1977 and 1980 to 1984); Ms. Gandhi&#146;s
    son, Rajiv Gandhi (1984 to 1989); P.V. Narasimha Rao (1991 to 1996); H.D.
    Deva Gowda of Janata Dal (1996 to 1997); and I.K. Gujaral (1997 to 1998).
    Atal Bihari Vajpayee of the Bhartiya Janta Party served as India&#146;s prime
    minister from March 1998 until May 2004, at which time he led a twenty-five
    party coalition called the National Democratic Alliance. Following the Indian
    general elections held in April and May of 2004, the Congress (I) Party again
    leads the Indian government under the leadership of Prime Minister Manmohan
    Singh. The Congress (I) Party leads a coalition based on support from leftist
    and other secular parties. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Indian Constitution
    requires general elections to the Lok Sabha every five years. There have been
    three different controlling parties since 1989. The Janata Dal Party defeated
    the Congress (I) Party in a general election in 1989. The Samajwadi Janata
    Party briefly replaced the Janata Dal Party less than one year later, and
    the Congress (I) Party returned to power in 1991. Although the Congress (I)
    Party was unable to gain a majority in the parliamentary elections held that
    year, it formed a minority government under the leadership of then-Prime Minister
    Rao. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Congress (I) Party
    historically represents a secular, socialist platform. However, since the
    formation of Prime Minister Rao&#146;s government in 1991, the party has promoted
    private sector and market-oriented reforms. These economic reforms have received
    broad-based political support, including that of the Bhartiya Janta Party.</FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>International Relations</B>
  </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India is one of the charter
    members of the United Nations and its affiliated bodies and is a founding
    member of the International Monetary Fund, the International Bank for Reconstruction
    and Development, the Asian Development Bank and the African Development Bank.
    India is also a member of the British Commonwealth of Nations, the Non-Aligned
    Movement, the South Asian Association for Regional Cooperation and the World
    Trade Organization. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">With the exception of
      Pakistan,  India&#146;s foreign relations have generally remained stable.
      In 1993, India  renegotiated its foreign debt to Russia and undertook to
      rebuild its trade
    ties with the Central Asian states emerging from the break-up of the former
       Soviet Union. In addition, India and China in September 1993 agreed to
      pursue
    a negotiated settlement of the two countries&#146; longstanding border dispute.
     India&#146;s external affairs minister visited China in June 1999</FONT><font face="Times New Roman, Times, serif"><I><FONT size=1>,
    </FONT></I><FONT size=2>which marked the resumption of high level dialogue,
     and both sides agreed on the need for a bilateral security dialogue. The
    Indian
    president visited China in 2001, and the Chinese premier visited India in
     2002. India and China agreed to establish a bilateral dialogue mechanism
    to
    fight terrorism and to accelerate the process of clarification and confirmation
     of the &#147;line of actual control&#148; along the India-China boundary.
    The execution of six memorandums of understanding between the two countries
    has also led to improvements in India-China relations. Relations with the
    United States have also generally improved since the breakup of the former
    Soviet Union. The visit by President Bush in February 2006 further strengthened
    Indo-US ties. India entered into an agreement with the United States
    wherein the United States agreed to share nuclear reactors, fuel and expertise
    in return for India&#146;s acceptance of international safeguards. This deal
     however needs to be approved by the U.S. Congress before it becomes operational.
    </FONT></font></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">B-3</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb4"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India&#146;s relations
    with Pakistan have been tense for many years. The two countries have fought
    three major wars since their partition in 1947. The principal dispute between
    India and Pakistan relates to the claim on the Indian border states of Jammu
    and Kashmir. India fought two wars with Pakistan (from 1947-1948 and in 1965)
    in order to retain its control over Jammu and Kashmir, and a third war with
    Pakistan in 1971 resulted in the secession of Pakistan&#146;s eastern province,
    which is now the People&#146;s Republic of Bangladesh. More recently, India
    accused Pakistan of involvement in a terrorist attack on the Indian parliament
    in December 2001, and another large-scale war was threatened. Although that
    war was averted, the two countries downgraded their diplomatic ties from an
    ambassadorial level to the level of </FONT><font face="Times New Roman, Times, serif"><I><FONT size=2>charge
    d&#146;affaires </FONT></I><FONT size=2>and discontinued their land and air
    links and trade ties. A massive troop build up took place on the India-Pakistan
    border. The two summits whose purpose was to improve relations failed. </FONT></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Relations between India
    and Pakistan have improved in the recent past. In 2003, former Prime Minister
    Vajpayee announced his willingness to commence a dialogue between the countries,
    and the Pakistani prime minister responded positively to Prime Minister Vajpayee&#146;s
    offer. Ambassadorial ties and land and air-traffic ties have been restored.
    Pakistan announced a ceasefire along the India-Pakistan border, and the ensuing
    truce between the two nations led to an end to cross-border hostilities for
    the first time since an insurgency began in 1989. The Indian cricket team
    visited Pakistan in 2004 in yet another step toward the thawing of relations
    between the two countries. Manmohan Singh and Parvez Musharraf met and issued
    a joint statement in New York in September, 2004. The joint statement reiterated
    the commitment of both of the countries to implementation of confidence building
    measures and agreed that possible options for a peaceful, negotiated settlement
    of the Kashmir issue should be explored in a sincere spirit and purposeful
    manner. This was followed by Pervez Musharraf&#146;s three day visit to India
    in April 2005 where both the countries restated their commitment to the joint
    statement issued in New York. The recent release of prisoners on both sides
    and starting of the second rail link (Thar Express Train) connecting the border
    towns of India and Pakistan point towards improving relations between the
    two countries. A new bus service between Amritsar and Nankana Sahib in Pakistan,
    the birthplace of founder of Sikh religion Guru Nanak Dev, was also started
    in March 2006. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>THE INDIAN ECONOMY</B></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><B>Overview</B> </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Following independence,
    India pursued a developmental policy based on strong centralized planning,
    regulation and control of private enterprise, state ownership, trade protectionism
    and strict limits on the penetration of foreign capital and technology. This
    protectionist regime limited India&#146;s economic development until the mid-1980s,
    at which time a movement towards liberalization and market orientation of
    the economy began. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India experienced a crisis
    in its balance of payments in early 1991, which threatened to destabilize
    the economy. At that time, India was running a current account deficit of
    approximately &#36;10 billion. Reserve levels were down to two weeks of imports
    despite an International Monetary Fund loan of &#36;1.8 billion. India&#146;s
    financial credibility was very low; commercial borrowing was impossible; inflation
    was high; and an inflow of foreign currency from non-resident Indians had
    been reversed. A number of factors contributed to this crisis, including the
    continuing drain of the government&#146;s deficit spending, an increase in
    petroleum imports accompanied by increases in oil prices that resulted from
    tensions in the Persian Gulf, the collapse of the Soviet and Eastern European
    economies and the resulting pressures on India&#146;s exports, domestic political
    instability and the reduction of workers&#146; remittances from the Persian
    Gulf states at the time of the Persian Gulf crisis. In response to this crisis,
    then-Prime Minister Rao and Finance Minister Singh instituted a program of
    structural reforms aimed at stabilizing the economy and promoting reliance
    on market mechanisms. The main components of the structural reform program
    are exchange and trade liberalization, financial sector reform and control
    of budget deficits, inflation and currency supplies. The program promotes
    foreign technology transfers and foreign investment in certain sectors of
    the economy as well as further development of the private sector. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">B-4</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb5"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Despite political instability
    between 1996 and 1999, the Indian economy grew by 6.6% . The Indian government
    instituted significant reform initiatives such as deregulation of the petroleum
    sector and the rationalization of income tax rates during this period. From
    1999 to the present, India&#146;s politics have largely stabilized, and further
    reform initiatives have been promoted. Among other laws and programs: </FONT></p>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">The Indian Electricity
      Act was passed in 2003, which aims at introducing competition into the power</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">sector;</FONT></TD>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">The Indian Fiscal Responsibility
      Act was passed in 2003, which provides a legal and institutional</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">framework for controlling
      deficits and stabilizing debt;</FONT></TD>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">The government has
         also implemented a scheme called States fiscal reform facility (2000/01
        to 2004/05) to  incentivize the states to undertake fiscal reforms; also
        as a measure of
         tax reform, 25 states/UT&#146;s
      had introduced VAT (Value Added Tax) to replace the sales tax by December
          31, 2005; and</FONT></TD>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td valign="top"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">The Indian National
      Highway Development Program was created, under which the construction of</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">17,161 kilometers of highways
      will take place.</FONT></TD>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In addition, foreign direct
    investment limits in the telecommunications, refining and banking sectors
    have been raised, and the Indian government now allows such investment in
    the insurance and broadcasting sectors. Between 1991/92 and 2003/2004, the
    government has privatized assets worth &#36;10 billion including &#36;3.5
    billion in fiscal 2003/2004.</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Indian government&#146;s
    policies have resulted in improved economic performance. Average gross domestic
    product (&#147;GDP&#148;) grew 6% from 1993/1994 to 2002/2003 and at 8% during
    2003/2004 and 2005/2006. Inflation has been reduced from double to single
    digits, and fiscal deficits as a proportion of GDP have also been reduced.
    Foreign exchange reserves have increased substantially and, as of March 10,
    2006, were approximately &#36;143.9 billion. The Indian rupee was made fully
    convertible on the trade account in 1993 and has since been generally stable
    against the U.S. dollar. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Economic Planning</B>
  </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India began the process
    of planned development with the start of the First Five-Year Plan in 1951.
    The essential goals of Indian planning are the elimination of poverty, development
    of self-reliance, growth in national and per capita income, industrialization
    and expansion of employment opportunities. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The principal planning
    body is the Planning Commission, which was established in 1950. The Planning
    Commission undertakes the formulation of a five-year plan every five years
    in consultation with the various departments of the national and state governments.
    After extensive debate and discussions, the plan is made effective by parliamentary
    approval. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Tenth Five-Year Plan,
    which covers the period from 2002 to 2007, aims for 8% average GDP growth
    in order to double per capita income within the next ten years and to create
    100 million employment opportunities during the same period. Planning commission
    anticipates further GDP growth to 10% per year during the Eleventh Five-Year
    Plan period. The growth strategy relies upon a combination of increased investment
    and improvement in economic efficiency, policy constraints, procedural rigidities
    and price distortions. The Tenth Five-Year Plan also emphasizes privatization
    of public enterprises and the easing of legal and procedural barriers to transfers
    of assets. It also emphasizes qualitative factors relating to poverty, employment,
    social issues and the environment. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">B-5</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb6"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Gross Domestic
    Product</I></font></p>
</div>
<div style="text-indent:3%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>GDP Growth </I> </font></p>
</div>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">Average yearly real GDP
    growth from 2000/2001 to 2005/2006 was 6.3% and in the last three years (2003/2004
    to 2005/2006), it averaged at 8%. The growth momentum of 2003/2004 and 2004/2005
    continued in 2005/2006. The Indian government estimates real GDP growth for
    the economy at 8.1% in 2005/2006 with agriculture, industry and service growing
    at 2.3%, 9.0% and 9.8% respectively. The average annual growth rate of 8%
    in the three consecutive years starting 2003/2004 is the highest ever-achieved
    in India. High oil prices and volatility in the agricultural sector have failed
    to slow the overall growth performance. </FONT></P>
</div>
<div style="text-indent:3%">
  <P align="left"><FONT size=2 face="Times New Roman, Times, serif">The following
    table sets forth changes in India&#146;s GDP for the period 2000/2001 through
    2005/2006:</FONT></P>
</div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"><b>Changes
  in Gross Domestic Product (a)</b> </font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="3"> <font size="1" face="Times New Roman, Times, serif"><B>GDP
      (Absolute Values)</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="3"> <font size="1" face="Times New Roman, Times, serif"><B>%
      Change over Previous Year</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="3"><hr size="1" noshade></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="3"><hr size="1" noshade></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD> <font size="1" face="Times New Roman, Times, serif"><B>1999/2000</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD> <font size="1" face="Times New Roman, Times, serif"><B>1999/2000</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD> <font size="1" face="Times New Roman, Times, serif"><B>Current Prices</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD> <font size="1" face="Times New Roman, Times, serif"><B>Prices</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD> <font size="1" face="Times New Roman, Times, serif"><B>Current Prices</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD> <font size="1" face="Times New Roman, Times, serif"><B>Prices</B></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><hr size="1" noshade></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><hr size="1" noshade></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><hr size="1" noshade></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><hr size="1" noshade></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="3"> <font face="Times New Roman, Times, serif"><B><FONT size="1">(Rs.
      billion)</FONT></B><font size="1">&nbsp;</font></font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="3"> <font face="Times New Roman, Times, serif"><B><FONT size="1">(per
      cent)</FONT></B><font size="1">&nbsp;</font></font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="3" align=right><hr size="1" noshade></TD>
    <TD align=right><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD colspan="3" align=right><hr size="1" noshade></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2000/2001</FONT></TD>
    <TD width=12% align=right> <FONT size=2 face="Times New Roman, Times, serif">19302</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=12% align=right> <FONT size=2 face="Times New Roman, Times, serif">18704</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=12% align=right> <FONT size=2 face="Times New Roman, Times, serif">7.7</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=12% align=right> <FONT size=2 face="Times New Roman, Times, serif">4.4</FONT></TD>
    <TD width=2% align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2001/2002</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">20974</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">19781</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.7</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.8</FONT></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2002/2003</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">22556</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">20526</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.5</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.8</FONT></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2003/2004(b)</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">25434</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">22260</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.8</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.5</FONT></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2004/2005(c)</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">28439</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">23937</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11.8</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.5</FONT></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2005/2006(d)</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">32006</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">25866</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.5</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.1</FONT></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=3% align=left valign="top"> <FONT size=1 face="Times New Roman, Times, serif">(a)</FONT></TD>
    <TD align=left> <FONT size=1 face="Times New Roman, Times, serif">At factor
      cost.</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"> <FONT size=1 face="Times New Roman, Times, serif">(b)</FONT></TD>
    <TD align=left> <FONT size=1 face="Times New Roman, Times, serif">Provisional.</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"> <FONT size=1 face="Times New Roman, Times, serif">(c)</FONT></TD>
    <TD align=left> <FONT size=1 face="Times New Roman, Times, serif">Quick estimate.</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"> <FONT size=1 face="Times New Roman, Times, serif">(d)</FONT></TD>
    <TD align=left> <FONT size=1 face="Times New Roman, Times, serif">Advance
      estimates.</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan=2 align=left valign="top"> <FONT size=1 face="Times New Roman, Times, serif">Source:
      Central Statistical Organisation Data</FONT></TD>
  </TR>
</TABLE>
<font face="Times New Roman, Times, serif"><BR>
</font>
<P> <font size="2" face="Times New Roman, Times, serif"><B>Composition of GDP
  </B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Agriculture has been the
    largest historical contributor to GDP. However, since the post-independence
    era, the Indian economy has progressively depended less on agricultural output
    and more on the manufacturing and services sectors. </FONT></p>
</div>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">The following table sets
    forth changes in the Indian economy by economic sector:</FONT></P>
</div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"><b>Sectoral
  Distribution of Gross Domestic Product<br>
  (% of total GDP) </b></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD rowspan="2"> <font size="1" face="Times New Roman, Times, serif"><B>1951/52 to</B>
      </font> <font size="1" face="Times New Roman, Times, serif"><B>1955/56</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD rowspan="2"> <font size="1" face="Times New Roman, Times, serif"><B>1956/57 to</B>
      </font> <font size="1" face="Times New Roman, Times, serif"><B>1960/61</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD rowspan="2"> <font size="1" face="Times New Roman, Times, serif"><B>1961/62 to</B>
      </font> <font size="1" face="Times New Roman, Times, serif"><B>1965/66</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD rowspan="2"> <font size="1" face="Times New Roman, Times, serif"><B>1966/67 to</B>
      </font> <font size="1" face="Times New Roman, Times, serif"><B>1970/71</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD rowspan="2"> <font size="1" face="Times New Roman, Times, serif"><B>1971/72 to</B>
      </font> <font size="1" face="Times New Roman, Times, serif"><B>1975/76</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD rowspan="2"> <font size="1" face="Times New Roman, Times, serif"><B>1976/77 to</B>
      </font> <font size="1" face="Times New Roman, Times, serif"><B>1980/81</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD rowspan="2"> <font size="1" face="Times New Roman, Times, serif"><B>1981/82 to</B>
      </font> <font size="1" face="Times New Roman, Times, serif"><B>1985/86</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD rowspan="2"> <font size="1" face="Times New Roman, Times, serif"><B>1986/87 to</B>
      </font> <font size="1" face="Times New Roman, Times, serif"><B>1990/91</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD rowspan="2"> <font size="1" face="Times New Roman, Times, serif"><B>1991/92 to</B>
      </font> <font size="1" face="Times New Roman, Times, serif"><B>1995/96</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD rowspan="2"> <font size="1" face="Times New Roman, Times, serif"><B>1996/97 to</B>
      </font> <font size="1" face="Times New Roman, Times, serif"><B>2000/01</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD rowspan="2"> <font size="1" face="Times New Roman, Times, serif"><B>2001/02 to</B>
      </font> <font size="1" face="Times New Roman, Times, serif"><B>2004/05</B> </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font> </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD colspan="21" align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Agriculture</FONT></TD>
    <TD width=6% align=right> <FONT size=2 face="Times New Roman, Times, serif">52.45</FONT></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=6% align=right> <FONT size=2 face="Times New Roman, Times, serif">48.94</FONT></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=6% align=right> <FONT size=2 face="Times New Roman, Times, serif">45.19</FONT></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=6% align=right> <FONT size=2 face="Times New Roman, Times, serif">47.03</FONT></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=6% align=right> <FONT size=2 face="Times New Roman, Times, serif">44.21</FONT></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=6% align=right> <FONT size=2 face="Times New Roman, Times, serif">38.94</FONT></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=6% align=right> <FONT size=2 face="Times New Roman, Times, serif">35.76</FONT></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=6% align=right> <FONT size=2 face="Times New Roman, Times, serif">31.94</FONT></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=6% align=right> <FONT size=2 face="Times New Roman, Times, serif">30.41</FONT></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=6% align=right> <FONT size=2 face="Times New Roman, Times, serif">27.17</FONT></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=6% align=right> <FONT size=2 face="Times New Roman, Times, serif">21.15</FONT></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Mining and
      Quarrying</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.83</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.98</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.11</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.07</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.13</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.57</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.91</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.80</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.51</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.31</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.58</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Manufacturing</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11.31</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.69</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">14.47</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">13.20</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">14.80</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">16.30</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">16.34</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">16.69</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">16.67</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">16.22</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">15.42</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif">Electricity
      Gas &amp; Water Supply</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.31</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.48</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.67</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.92</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.06</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.59</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.80</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.09</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.47</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.50</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.25</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Construction</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.96</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.44</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.07</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.65</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.41</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.79</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.85</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.43</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.27</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.69</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.23</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Trade
      Hotels &amp; Restaurants</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.59</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.19</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.85</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.39</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.40</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10.82</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.21</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.46</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.84</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">13.96</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">15.52</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><div style="margin-left:3%; text-indent:-3%"><font size="2" face="Times New Roman, Times, serif">Transport,
        Storage &amp; Communications</font></div></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.67</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.09</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.25</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.08</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.18</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.81</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.01</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.84</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.44</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.03</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.10</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Finance</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11.69</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.32</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11.90</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10.35</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.98</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.72</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.52</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10.25</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11.32</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11.73</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">14.35</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><div style="margin-left:3%; text-indent:-3%"> <font size="2" face="Times New Roman, Times, serif">Public
        Administration and Defense</font></div></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.45</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.76</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.42</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.59</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.94</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.15</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.37</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.04</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.60</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.06</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.22</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Other Services</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.73</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.11</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.07</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.72</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.89</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.32</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.24</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.45</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.46</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.32</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.18</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="22" align=left><font size="1" face="Times New Roman, Times, serif"><i>Source:
      National Accounts Statistics, 2005</i></font></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">B-6</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb7"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Growth rates of the various
    economic sectors (measured in 1999/2000 prices) during the period from 2000/2001
    to 2005/2006 are set forth below.</FONT></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"><b>Growth
  in GDP by Sector<br>
  (% Annual real change)</b></font></p>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;
      </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;
      </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;
      </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;
      </font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;
      </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>2003/2004</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>2004/2005</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>2005/2006</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> &nbsp;</font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2000/2001</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2001/2002</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2002/2003</B>
      </font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;
      </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>(a)</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>(b)</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>(c)</B></font></TD>
    <TD align=right><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Agriculture,
      forestry, logging, mining <br>&nbsp;&nbsp;and quarrying</font></TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">0.2</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">5.8</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">(5.6</FONT></TD>
    <TD width=2% align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">9.6</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">1.2</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">2.1</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Manufacturing,
      construction, gas and <br>&nbsp;&nbsp;water supply</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.7</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.8</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.8</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.9</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.9</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.8</FONT></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Transport,
      communication and trade</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.1</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.2</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.1</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.0</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10.6</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11.1</FONT></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif">
        Banking, insurance, real estate and <br>&nbsp;&nbsp;business services</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.1</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.3</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.0</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.5</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.2</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.5</FONT></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Community,
      social and personal <br>&nbsp;&nbsp;services</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.7</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.9</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.8</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.4</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.2</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.9</FONT></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Total GDP</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.4</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.8</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.8</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.5</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.5</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.1</FONT></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
</TABLE>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr valign="bottom">
    <td colspan=2 align=left> <font face="Times New Roman, Times, serif"><i><font size=1>Source:
      Central Statistical Organisation Data</font></i>&nbsp; </font></td>
  </tr>
  <tr valign="bottom">
    <td width=3% align=left valign="top"> <font size=1 face="Times New Roman, Times, serif">(a)</font></td>
    <td align=left> <font size=1 face="Times New Roman, Times, serif">Provisional</font></td>
  </tr>
  <tr valign="bottom">
    <td align=left valign="top"> <font size=1 face="Times New Roman, Times, serif">(b)</font></td>
    <td align=left> <font size=1 face="Times New Roman, Times, serif">Quick estimate</font></td>
  </tr>
  <tr valign="bottom">
    <td align=left valign="top"> <font size=1 face="Times New Roman, Times, serif">(c)</font></td>
    <td align=left> <font size=1 face="Times New Roman, Times, serif">Advance
      Estimates</font></td>
  </tr>
</table>
<p><font size="2" face="Times New Roman, Times, serif"><B>Public Sector Enterprises</B>
  </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The national and state
       governments own or control a substantial number of enterprises that account

    for a significant portion of the country&#146;s non-agricultural economic
    activity. State ownership is prevalent in the mining, public utilities, railway,
    banking, insurance, communications, heavy engineering, chemicals, shipbuilding,
    paper and financial services sectors. Sectors of total GDP attributable to
    state ownership rose rapidly in the 1960s and 1970s and less rapidly in the
    1980s and the 1990s. State ownership accounted for 24% to 25% of GDP during
    the period 1993/1994 to 2004/2005. State ownership is now less dominant
    in many critical sectors and is likely to decline further in the future. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Through the 1990s, there
    has been an increasing consensus on the merits of privatization. Beginning
    in 1991/1992, minority holders began to sell some of their interests in state-owned
    industries, but the majority of those companies&#146; ownership was still
    state-owned. From 1999/2000 onwards, however, the emphasis shifted to &#147;strategic
    sales&#148; whereby even those majority stakes have been privatized. To date,
    the Indian central government controls 240 companies; since 1991, it has divested
    its equity in forty-eight companies and raised Rs. 450.66 billion from such
    sales. In 2003/2004, the Indian government collected Rs. 160.48 billion in
    divestiture sales. However, disinvestment receipts were at a modest Rs.44.24
    billion during 2004/2005. Disinvestment targets were modestly budgeted in
    2005/2006 budget. Budget 2006/2007 has set a target of raising Rs. 38.4 billion
    for the National Investment Fund, which gets resources from sale of government
    equity in Public Sector Undertakings. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Inflation</B> </font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Inflation has decreased
    over the past several years due to adequate food stocks, adequate foreign
    exchange reserves and a stronger rupee in an environment of subdued global
    inflationary expectations. Indian monetary policy has also contained inflationary
    expectations. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">From 2001/2002 to 2005/2006,
    the inflation rate was 4.7% per annum, as compared to 6% per annum from 1994/1995
    to 2000/2001. The inflation rate as measured by the consumer price index for
    industrial workers, which measures changes in prices for goods and services
    consumed by industrial workers, has been marginally below 4% level in last
    3 years. The wholesale price index, which measures changes in prices of all
    commodities in India, was quite benign averaging at 4.5% for the first 11
    months of 2005/2006 despite high oil and metal prices. Although part of the
    reason for low inflation is the incomplete pass through of global crude price
    increases, increased competition and productivity enhancements have also played
    an important role in keeping the inflation under check. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">B-7</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb8"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The following table sets
    forth annual percentage changes in the rate of inflation during the period
    from 2000/2001 to 2005/2006: </FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=center colspan=15> <font size="2" face="Times New Roman, Times, serif"><B>Annual
      Rates of Inflation</B> </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=center colspan=15> <font size="2" face="Times New Roman, Times, serif"><B>(%
      change over previous year)</B> </font></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left>&nbsp; </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2000/2001</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2001/2002</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2002/2003</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2003/2004</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2004/2005</B></font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2005/2006*</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Wholesale
      Price Index</FONT></TD>
    <TD width=2% align=center><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">7.1</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">3.6</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">3.4</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">5.5</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">6.5</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">4.5</FONT>
    </TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Consumer
      Price Index for</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left><FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Industrial
      Workers</FONT></TD>
    <TD align=center><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.8</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.3</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.0</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.9</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.8</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.9</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left><hr align="left" width="100" size="1"></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=3% align=left valign="top"><font size=1 face="Times New Roman, Times, serif">*</font></TD>
    <TD colspan="14" align=left><font size=1 face="Times New Roman, Times, serif">WPI
      Inflation is for the period April-February 2005/2006 and CPI inflation is
      for the period April-January 2005/2006 </font></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="15" align=left valign="top"><font size=1 face="Times New Roman, Times, serif">Source:
      Ministry of Industry and Ministry of Labour</font></TD>
  </TR>
</TABLE>
<P><font size="2" face="Times New Roman, Times, serif"><B>Wages and Employment</B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The rate of growth of employment,
    on current daily status (CDS) basis, declined from 2.7% per annum in 1983
    to 1994 to 1.07% per annum in 1994 to 2000. The decline in the overall growth
    rate of employment in 1994 to 2000 was largely attributable to a near stagnation
    of employment in agriculture. As a result, the share of agriculture in total
    employment dropped from 60% in 1993/1994 to 57% in 1999/2000. The total labor
    force grew by 1.31% during 1993/1994 to 1999/2000. Hence, the unemployment
    rate went up from 5.99% during 1993/1994 to 7.32% during 1999/2000.</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The unemployment rate went
    up further till 2004. On the basis of current daily status (unemployed on
    an average in the reference week), during the reference period, unemployment
    rate for males increased from 5.6% to 9.0% in rural areas, and from 6.7% to
    8.1% in urban areas. Similarly, unemployment rate for females increased from
    5.6% in 1993/1994 to 9.3% in 2004 in rural areas and from 10.5% to 11.7% in
    urban areas. Furthermore, unemployment rates on the basis of current daily
    status were much higher than those on the basis of usual status (unemployed
    on an average in the reference year) implying a high degree of intermittent
    unemployment. This may be mainly because of the absence of regular employment
    for many workers. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">While unions attempt to
    increase wages through trade unions, their overall effect on labor costs and
    prices is small due to their weak bargaining power in a labor-surplus economy.
    Although India has a minimum wage, its rates vary from state to state and
    are not applicable to small companies. Unemployment rates varied sharply across
    States. States, where wages are higher than in neighboring ones because of
    strong bargains or social security provisions, such as high minimum wage,
    had high incidence of unemployment, in general. </FONT></p>
</div>
<font face="Times New Roman, Times, serif"><B><FONT size=2>Agriculture</FONT></B><BR>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The growth rate of GDP
    was in the past strongly influenced by the agricultural sector. More recently,
    the sector&#146;s share of GDP has fallen significantly, and, as a result,
    aggregate GDP has become less sensitive to fluctuations in agricultural performance.
    </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Nevertheless, agriculture
    remains a key sector of the Indian economy, providing food security to the
    population, employment to the rural populations and consequently, a large
    domestic market for manufactured goods. Agriculture accounts for approximately
    13-14% of total export earnings and provides raw material such as textiles,
    silk, sugar, rice and dairy products to many Indian industries. Rural areas
    are the largest market for low and mid-priced durable and non-durable consumer
    goods. The agricultural sector is growing annually at approximately 2.2% .</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Within the last forty years,
    India has expanded irrigation capabilities, improved its technical and mechanical
    production capabilities and introduced an extensive hybridization program.
    India figures prominently in the production of many agricultural goods. For
    example: </FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">Among cereals production,
      India is placed third, having the second largest production in wheat and</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">rice, the largest production
      in pulses, and the fourth largest production in coarse grains;</FONT></td>
  </tr>
</table>
<div align="center">
  <p><FONT size=2 face="Times New Roman, Times, serif">B-8</FONT> </p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb9"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">India is among the
         world&#146;s largest producers of cotton, sugar, sugarcane, peanuts,
         jute,  tea and spices; India,
      the largest producer and consumer of tea in the world, accounts for around
          27% of world production
      and 13% of world trade;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">India is the second
         largest producer of both fruits and vegetables in the world. India occupies

      first position
      in the production of cauliflower, second in onion and third in cabbage.
         Among fruits, India ranks
      first in the production of mangos, bananas, sapota and acid lime;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">India owns one of
        the  largest livestock populations in the world. It accounts for 57%
        of the world&#146;s buffalo population and
      16% of the cattle population. It ranks first in respect of cattle and buffalo
        population, third in sheep  and second in goat population in the world;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">India&#146;s milk production,
      estimated at 90.7 million tons, is the highest in the world;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">India is the fifth
      largest producer of eggs and seventh largest producer of meat. The livestock
      sector</FONT> <FONT size=2 face="Times New Roman, Times, serif">produced
      45.2 billion eggs and 2.12 million tons of meat in 2004/2005;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">India is the third
      largest producer of fish and second largest producer of inland fish in the
      world;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">India is the largest
      producer of coconuts, areca nuts, cashew nuts, ginger, turmeric and black
      pepper; and</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">In terms of the real
      value added, the Indian agriculture sector ranks third, after China and
      the United</FONT> <FONT size=2 face="Times New Roman, Times, serif">States.</FONT></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In recent years, there
    has been a considerable emphasis on crop diversification, and horticulture
    </FONT><font face="Times New Roman, Times, serif"><I><FONT size=2>(i.e., </FONT></I><FONT size=2>fruits,
    vegetables, ornamental crops, medicinal and aromatic plants and spices) and
    plantation crops (<I>i.e.</I>, coconut, cashew nut and cocoa) have been promoted.
    Critical infrastructure for cold storage, refrigerated transportation, rapid
    transit, grading, processing, packaging and quality control has aided these
    new initiatives of crop diversification. </FONT></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The annual monsoon rainfall
    still plays a very crucial role in the country&#146;s agriculture performance.
    With only about 40% of total cultivable land under irrigation, such a dependence
    on rainfall is indisputable. Not only is the total quantum of rain an important
    factor shaping agricultural production, its spatial and temporal distribution
    too is equally important. The 2005 monsoon season ended with an overall rainfall
    deficiency of just 1% compared to normal. However, monsoon rains were spatially
    not well distributed. The events contributed to a 2.1% growth in agricultural
    GDP despite a low base. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The following table sets
    forth the results of agricultural production during the period 2000/2001 through
    2004/2005: </FONT></p>
</div>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>Performance
  of Agricultural Production</B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2000/2001</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2001/2002</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2002/2003</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2003/2004</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2004/2005(c)</B></font></TD>
    <TD align=left> <font size="1" face="Times New Roman, Times, serif">&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>(Million
      tons)</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Rice</FONT></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">84.98</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">93.34</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">71.82</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">88.28</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">85.31</FONT>
    </TD>
    <TD width=2% align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Wheat</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">69.68</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">72.77</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">65.76</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">72.11</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">72.00</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Coarse cereals</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">31.08</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">33.37</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">26.07</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">38.12</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">33.92</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Total pulses</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11.07</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">13.37</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11.13</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">14.94</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">13.38</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Total food
      grains</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">196.81</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">212.85</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">174.77</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">213.46</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">204.61</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Total nine
      oilseeds</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">184.40</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">206.62</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">148.38</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><FONT size=2 face="Times New Roman, Times, serif">252.9</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">261.03</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Sugarcane
      (cane)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2959.60</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2972.08</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2873.83</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2373.08</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2323.18</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Cotton (a)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">95.20</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">99.97</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">86.24</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">138.66</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">170.02</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Jute and
      mesta (b)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">105.60</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">116.78</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">112.76</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">112.27</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">104.89</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="Times New Roman, Times, serif">B-9</FONT></P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb10"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD colspan="2" align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2000/2001</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2001/2002</B></font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2002/2003</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2003/2004</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2004/2005(c)</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD colspan=6 align=center> <font size="1" face="Times New Roman, Times, serif"><B>(%
      change in production over the previous year)</B></font></TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Rice</FONT></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">(5.2</FONT>
    </TD>
    <TD width=1% align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">9.8</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">(23.1</FONT>
    </TD>
    <TD width=1% align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">22.9</FONT>
    </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">(3.4</FONT>
    </TD>
    <TD width=1% align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Wheat</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(8.8</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.4</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(9.6</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.7</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.2</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Coarse
      cereals</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.4</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.4</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(21.9</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">46.2</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(11.0</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Pulses</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(17.4</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">20.8</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(16.8</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">34.2</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(10.4</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Total
      food grains</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(6.2</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.1</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(17.9</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">22.1</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(4.1</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Oilseeds</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(11.0</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.0</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(28.2</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">70.4</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.2</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Sugarcane</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(1.1</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.4</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(3.3</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(17.4</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(2.1</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Cotton</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(17.4</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.0</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(13.7</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">60.8</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">22.6</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Jute
      and mesta</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">0.1</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10.6</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(3.4</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(0.4</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">(6.6</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">)</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left><hr align="left" width="100" size="1"></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD width=3%><font size=1 face="Times New Roman, Times, serif">(a)</font></TD>
    <TD><font size=1 face="Times New Roman, Times, serif">Million bales of 170
      kilograms each.</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size=1 face="Times New Roman, Times, serif">(b)</font></TD>
    <TD><font size=1 face="Times New Roman, Times, serif">Million bales of 180
      kilograms each.</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size=1 face="Times New Roman, Times, serif">(c)&nbsp;</font></TD>
    <TD><font size=1 face="Times New Roman, Times, serif">Fourth Advance Estimate.</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan="2"><font size=1 face="Times New Roman, Times, serif">Source:
      <i>Ministry of Agriculture</i></font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
</TABLE>
<p><font size="2" face="Times New Roman, Times, serif"><B>Industry</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The strategy of Indian
    industrialization did not change significantly prior to 1990. It emphasized
    heavy industry, public ownership, and import substitution. Most of India&#146;s
    industry during the early years of the post-independence era revolved around
    the processing of primary goods such as textiles. The government&#146;s import
    substitution policies have contributed to the development of a large industrial
    base, which produces, among other items, capital goods and components, cement,
    steel, consumer durables and consumer products. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Indian government introduced
    a new industrial policy in 1991 that was designed to promote industrial expansion
    and greater participation by the private sector. The new industrial policy
    has abolished a licensing system for industrial activity that previously existed
    in all but fifteen strategic industries, including industries relating to
    defense equipment, aerospace and petroleum. In addition, since 1991, the Indian
    government has permitted the private sector to participate in industrial activity
    relating to the core and basic sectors of the economy (i.e., electricity,
    coal, petroleum, petroleum refining, steel and cement), which were previously
    reserved for the public sector enterprises only. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The following table sets
    forth changes in the Index of Industrial Production, which is an index that
    measures the growth of industrial activity in the Indian economy: </FONT></p>
</div>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>Annual
  Percentage Growth Rates in Major Sectors of Industry</B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD colspan="2" align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>Weighting
      (a)</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2000/2001</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2001/2002</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2002/2003</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2003/2004</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2004/2005</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2005/2006(b)</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Mining</FONT></TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">104.73</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">2.84</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">1.26</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">5.80</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">5.28</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">4.38</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">0.54</FONT>
    </TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Manufacturing</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">793.58</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.35</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.85</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.01</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.38</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.13</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.97</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Electricity</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">101.69</FONT></TD>
    <TD align=center><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.97</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.10</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3.22</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.04</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.15</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4.91</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">General</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,000</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.02</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.69</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5.78</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6.98</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.37</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7.97</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left><hr align="left" width="100" size="1"></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width="3%" align=left valign="top"><font size=1 face="Times New Roman, Times, serif">(a)</font></TD>
    <TD colspan="16" align=left valign="top"><font size=1 face="Times New Roman, Times, serif">% of General Index of Industrial Production accounted for by particular industrial
      sector.</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"><font size=1 face="Times New Roman, Times, serif">(b)</font></TD>
    <TD colspan="16" align=left valign="top"><font size=1 face="Times New Roman, Times, serif">For April-January
      2005/2006</font></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left valign="top"><font size=1 face="Times New Roman, Times, serif">Source:
      </font><font size="1" face="Times New Roman, Times, serif"><i>CSO Data</i></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">As the above table indicates,
    the period 2002/2003 and beyond represent the current industrial expansion.
    Between 2001/2002 and 2004/2005 industry has been growing consistently along
    with the manufacturing sector. The manufacturing sector largely contributed to the performance of the industry. Business
    confidence improved in all sectors against the backdrop of improved performance
    in the corporate sector, less inventory accumulation and an expansion in capacity
    utilization and order books. The target growth of industry during the Tenth
    Plan was put at 10% consistent with an overall GDP growth of 8%. However,
    overall industrial growth so far has remained well short of the target. </FONT></p>
</div>
<div align="center"><FONT size=2 face="Times New Roman, Times, serif">B-10</FONT></div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb11"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:0%">
  <P> <font size="2" face="Times New Roman, Times, serif"><I>Textile</I>
    </font></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The textile industry is
    a labor intensive industry with a low cost of labor. India is one of the largest
    producers of textiles in the world and competes with countries like China,
    Bangladesh and Pakistan in this field. Textiles contribute significantly to
    India&#146;s exports. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The textile industry was
    one of the first industries privatized in connection with the Indian government&#146;s
    structural reform program, and the industry has undergone a major restructuring
    in recent years. Specifically, textile mills have modernized their plants
    and machinery and devoted greater attention to exports. To promote garment
    exports, the Indian government has begun a program called the Apparel Park
    for Exports, which subsidizes the construction and development of apparel
    manufacturing facilities. The end of the quota regime is expected to hasten
    the pace of outsourcing of textiles from the markets such as the United States
    and the European Union. This would lead to a major shift in outsourcing destinations
    &#151; low-cost developing countries like India, China and Pakistan may
    be the biggest gainers. </FONT></p>
</div>
<div style="text-indent:0%">
  <P> <font size="2" face="Times New Roman, Times, serif"><I>Chemicals</I>
    </font></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India is a major producer
    of fertilizer and produced 15,603 thousand tons of major fertilizers (NPK-Nitrogenous,
    Phosphatic and Potassic) in 2005/2006, as compared with 9,045 thousand tons
    during 1990/1991. It imported 2,753 thousand tons of NPK during 2004/2005
    to meet its demand requirement. India is largely self-sufficient in its requirements
    of caustic soda, soda ash, potash, paints and varnishes, soaps, detergents
    and drugs, pharmaceuticals and other chemicals. Its production of petrochemicals
    is not sufficient to meet demand. </FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Electronics and
    Software</I> </font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The electronics industry
    has experienced high growth since the 1960s. Software exports have become
    increasingly important to India&#146;s exports and international image and
    rely upon public investments in human capital, decreased trade barriers and
    a highly competitive private sector. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">A unique feature of this
    industry is its emphasis on exports. Software and services exports have grown
    at a rate of 34% in 2004/2005 over 2003/2004. The information technology exports
    are likely to grow by 30% to 32% in the current year. Electronics hardware
    exports also grew sharply in 2004/2005 as compared to the previous year and
    reached a level of Rs. 80 billion in 2004/2005. Output of the Indian electronics
    and information technology industry was Rs. 1,483.60 billion during 2004/2005
    from 1,182.90 billion in 2003/2004.</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Other important electronic
    segments include the information technology-enabled services sector and business
    process outsourcing. Export revenues from these segments grew rapidly from
    US&#36;2.5 billion in 2002/2003 to US&#36;5.1 billion in 2004/2005. </FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Steel</I> </font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India&#146;s developmental
    policies have historically promoted the steel industry, and those policies
    have resulted in the construction of a series of integrated plants. In the
    late 1990s, the steel industry experienced slow output growth due to a combination
    of weak domestic demand growth and competition from imports. Over the past
    few years, the situation has improved. World steel prices have risen since
    January 2002. Domestic steel demand has also risen due in part to a highway
    construction project undertaken under the National Highway Authority of India.
    The buoyancy of the steel sector continued in the last few years also. In
    2004/2005, India has produced 40 million tons of finished carbon steel.</FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Cement</I>
    </font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The cement industry has
    recovered since 2001/2002. It registered a growth rate of 9.52% during 2001/2002
    and maintained that trend in 2002/2003 due to an increase in capital expenditures.
    In 2003/2004, this industry recorded 6.15% growth. During 2004/2005, growth
    in cement production increased to 8.15% . The growth of the housing sector
    and highway projects has increased demand for cement. Export of cement for
    2003/2004 and 2004/2005 was 9 and 10.6 million tons, respectively.</FONT></p>
</div>
<div align="center">
  <p><FONT size=2 face="Times New Roman, Times, serif">B-11</FONT></p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb12"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p><B><FONT size=2>Energy</FONT></B></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Energy is one of the major
    factors in Indian economic development. An important recent development in
    the energy sector is the privatization of power distribution in the Indian
    cities.</FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Electricity</I>
    </font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Total power generation
    in during April-December 2005 was 458.6 billion kilowatt hours, an increase
    of only 4.7% over the same period of the previous year. Thermal and hydro-generation
    grew by 1.4% and 19.1% respectively during April-December 2005. Nuclear power
    generation though declined during April-December 2004, it increased during
    the corresponding period of 2005. Total electricity generation recorded a
    growth of 5.2% in 2004/2005 as compared with the previous year. The &#147;plant
    load factor,&#148; which is a measure of operational efficiency of thermal
    power plants, improved from 69% in 2000/2001 to 74.5% in 2004/2005. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">To address the problems
    of energy and peak shortages of power, the Tenth Five-Year Plan aims to increase
    generation capacity by 36,956 megawatts. However, the likely achievement is
    expected to be around 34,000 megawatts. In power transmission, an All-India
    power grid, also called the &#147;National Grid&#148;, is envisaged to be
    developed in a phased manner&#151;first by integrating a cluster of regions,
    and subsequently all the regions by the year 2012. The total interregional
    transmission capacity is planned to increase from its present 9,450 megawatts
    to about 37,150 megawatts by 2012. Strong regional grids presently exist in
    all the five regions. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The basic problem faced
    by this sector is the gap between the cost of user charges and the cost of
    supply. The Electricity Act, 2003 provides that the State Electricity Regulatory
    Commissions (SERC) shall adopt the tariffs through a transparent process of
    bidding in accordance with the guidelines issued by the central government.
    This Act has helped enhance investment in the power sector.</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">However, in view of the
    concerns expressed by several States, the review of the Act has been carried
    out and it has been proposed to bring certain amendments. The Electricity
    (Amendment) Bill, 2005 on the proposed amendments has been introduced in the
    Lok Sabha in December 2005. </FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Coal</I> </font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The total production of
    coal increased from 319 million tons in 1997/1998 to 413 million tons in 2004/2005.
    The production of coal grew at 3.9% in 2004/2005 as compared to a growth of
    5.8% in the previous year. India was a net exporter of coal until 1978/1979,
    after which the import level increased significantly. The net imports of coal
    increased over the years and in 2005/2006 the shortfall of coal likely to
    be around 20.34 million tons. </FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Petroleum and Natural
    Gas</I> </font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The oil and natural gas
    industry has experienced major efforts at liberalization. In refined petroleum
    products India continues to have a net exportable surplus. While the imports
    of petroleum products were 8.83 million tons in 2004/2005 and 7.32 million
    tons in April to November 2005, the exports of the same were 18.21 million
    tons and 12.68 million tons during the corresponding period respectively.
    Refining capacity has increased from 118.37 million tons per annum (MTPA)
    as on April 1, 2003 to 127.37 MTPA as on October 1, 2005. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">From April 2005 to December
    2005, crude oil production registered a negative growth (-5.9%) compared with
    a growth of 2.8% in the same period of the previous year. Net imports of crude
    oil grew from 20.7 million tons in 1990/1991 to about 95.9 million tons in
    2004/2005.</FONT></p>
</div>
<div align="center">
  <p><FONT size=2 face="Times New Roman, Times, serif">B-12</FONT></p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb13"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Natural gas is an important
    alternative to liquid fuels, which have increased in importance in the last
    decade. Demand for gas is outstripping supply in India and the power stations
    are not getting the required allocation of gas.</FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Infrastructure</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Indian government efforts
    have substantially improved some areas of Indian infrastructure over the past
    decade. Its efforts involved new institutional arrangements like a &#147;build-operate-transfer&#148;
    program whereby a private company builds and operates a public infrastructure
    project and later sells it to the government, user charges, new technologies,
    private sector production and a regulatory framework that fosters competition.
    The Indian government implemented the &#147;Central Sector Projects&#148;
    to promote infrastructure development in the power, petroleum and coal sectors.
    Most projects relate to the railways and the surface transport sectors. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Economic growth in the
    1980s and 1990s highlighted weaknesses in Indian infrastructure, especially
    gaps relating to power, roads, highways, ports and telecommunications. Despite
    a diminishing demand-supply gap in the second half of the 1990s, infrastructural
    weaknesses remain the major impediment to higher growth. Financing continues
    to be a critical issue in the infrastructure development. </FONT></p>
</div>
<div style="text-indent:3%">
  <P align="left"> <FONT size=2 face="Times New Roman, Times, serif">Energy transport
    infrastructure can restrict significant acceleration in GDP growth in the
    near future.</FONT></P>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><i>Railway</i></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India&#146;s rail system
    is among the largest railway systems in the world. India&#146;s railway system
    has an extensive network covering about 63,140 kilometers, of which approximately
    25% is electrified. Between the freight and passenger segments of the Indian
    railways, the former accounts for roughly two-thirds of revenues. Within the
    freight segment, bulk traffic accounts for nearly 95%, of which about 50%
    is coal.</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Indian railways have instituted
    several reforms in the face of competition from other modes of transportation
    in an attempt to increase its share in the transportation sector. Some of
    these initiatives include: </FONT></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">a rationalization of
      its freight structure;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">undertaking operational
      improvements; and</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">private investment.</FONT></td>
  </tr>
</table>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Roads</I> </font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">India&#146;s road network
    includes 65,569 Km of National Highways, 131,899 km of state highways, 467,763
    major district roads, and 2,650,000 rural roads as of March 2005.</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">There are three sources
    of finance&#151;fuel cess, external assistance and borrowings from the domestic
    market through bonds that qualify for capital gains tax exemption&#151;for
    the National Highway Authority of India (NHAI). The external assistance is
    provided by the multilateral agencies such as World Bank, Asian Development
    Bank, Japan Bank of International Co-operation. The government has included
    rural road development program as part of the rural development program, &#147;Bharat
    Nirman&#148;.</FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Ports</I></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Twelve major and 187 minor
    and intermediate ports service the Indian coastline. Major ports service approximately
    three-fourths of the total traffic of India&#146;s port while minor and intermediate
    ports service the remainder. In 2005/2006 up to December 2005, cargo handled
    by major ports registered a 12.4% growth, compared to 11.3% observed in 2004/2005.
    The annual aggregate cargo handling capacity of major ports increased from
    389.5 million tones per annum in 2003/2004 to 397.5 million tones per annum
    during 2004/2005. </FONT></p>
</div>
<div align="center">
  <p><FONT size=2 face="Times New Roman, Times, serif">B-13</FONT></p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb14"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Air Transport</I></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The civil aviation sector
    has made significant improvements in coping with the growth of international
    and domestic traffic. Airports and other civil aviation infrastructure were
    under tight government control until recently. Significant policy changes,
    including recently the end of Air India&#146;s monopoly on international flights
    by Indian carriers, are encouraging entrants to come. A number of new low-cost
    airlines have entered recently into the Indian air
    travel market. The Indian Airlines is planning to lease additional aircrafts.
    Jet Airways and Deccan Airlines are also planning aggressive fleet expansion.
    Jet Airways, after the acquisition of Air Sahara, recently, has become the
    largest airlines operating in India. Private operators carry more than 61%
    of the domestic air-traffic.</FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Telecommunications</I>
    </font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The telecommunications
    sector has grown since 1995. The total number of telephones (basic and mobile)
    rose from 22.8 million in 1999 to more than 125 million at the end of December
    2005. Overall teledensity (telephones per 100 people) has risen from a mere
    2.32 in 1999 to 11.32 in December 2005. Mobile connections and fixed connections
    grew by 78% and 48%, respectively, in 2005/2006 (first nine months) as compared
    with the previous year.</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Indian telecom sector
    ranked fourth in terms of actual foreign direct investment inflow from August
    1991 to September 2005. The sector attracted foreign direct investment valued
    at US&#36;2,863 million from August 1991 to September 2005. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Fiscal Policy</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Indian fiscal policy plays
    a key role in the country&#146;s macroeconomic stability. However, India&#146;s
    increasing competition and economic transparency complicate its fiscal policy
    formulation because the government is unable to predict certain economic elements,
    including the magnitude, speed and direction of foreign trade and capital
    flows. In an increasingly privatized and open economy, fiscal policy depends,
    among other things, upon the nature of India&#146;s monetary and exchange
    rate policies, capital market transparency and prevailing macroeconomic conditions.
    </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Fiscal reforms in the 1990s
    substantially restructured the Indian tax system. The reforms focused on the
    stability of tax rates, rationalization and simplification of tax laws and
    tax compliance. Marginal income tax rates were reduced substantially, and
    compliance costs have been reduced. The Indian government reduced customs
    and input and output tariff rates in order to align the tariff structure with
    that of the other developing countries in the region. The tax reforms during
    this period have laid the foundation of a more rational and widespread tax
    net, conferring benefits to almost all sectors and classes and simultaneously
    augmenting the resources available to the central government. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The upswing in GDP growth
    in the last three years has been accompanied and enabled by a reduction in
    fiscal deficit from 5.9% in 2002/2003 to 4.1% in RE 2005/2006. During the
    same period, revenue deficit has declined from 4.4% to 2.6% . The Fiscal Reform
    and Budget Management Act (FRBM) which prescribed a graded reduction in the
    deficit ratios from 2004/2005 played a role in stabilising the deficit ratios.
    The year 2004/2005 was the first year of implementation of the FRBM. The final
    figures for 2004/2005 show that targets for the fiscal deficit were achieved.
    This improvement in deficit indicators has been achieved through improvement
    in the tax/GDP ratio and moderation in growth of non-developmental revenue
    expenditure, in the backdrop of sluggish growth in non-tax revenues and pressures
    on account of expenditure requirements for social sector flagship programs
    of the government. An expanded coverage of services tax has also aided the
    tax collection. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The fiscal policy for 2006/2007
    emphasizes increased spending on social sectors, including rural employment,
    education and health. Along with larger allocations for infrastructure facilities
    like rural roads, housing and rural electrification, it is expected to realize
    the untapped potential of the rural areas so that the growth would become
    all encompassing and inclusive. </FONT></p>
</div>
<div align="center">
  <p><FONT size=2 face="Times New Roman, Times, serif">B-14</FONT></p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb15"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">With the  weakness in
    non-tax receipts of the government arising from unavoidable factors, the burden
    of fiscal corrections is expected to be mainly on tax revenues. However, the
    measures to increase the tax/GDP ratio may not hurt the growth momentum.
    The measures consistent with such objective would comprise a rational and
    stable tax rate regime, expansion in the tax payer base by inclusion of hitherto
    exempted sectors such as agriculture, etc. increase tax compliance and improvement
    in the efficiency of tax administration. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The following table sets
    forth government expenditures:</font></p>
</div>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>Total
  Expenditures of the National Government</B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2002/2003</B></font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2003/2004</B></font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2004/2005</B></font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2005/2006(a)</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2006/2007(b)</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>(Rs.
      billion)</B></font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Total Expenditures</FONT></TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">4003.97</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">4713.68</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">4976.82</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">5087.05</FONT>
    </TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">5639.91</FONT>
    </TD>
    <TD width=2% align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Non-Plan
      Expenditures, including</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2889.42</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3490.88</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3654.06</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3649.14</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3912.63</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <font size="2" face="Times New Roman, Times, serif">&nbsp;
      &nbsp;(a) Interest Payments</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1178.04</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1240.88</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1269.34</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1300.32</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1398.23</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <font size="2" face="Times New Roman, Times, serif">&nbsp;
      &nbsp;(b) Defense Expenditures*</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">556.62</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">600.66</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">758.56</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">817</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">890</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <font size="2" face="Times New Roman, Times, serif">&nbsp;
      &nbsp;(c) Subsidies</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">435.33</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">443.23</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">436.53</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">468.74</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">462.13</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Plan Expenditures</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1114.55</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1222.8</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1322.76</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1437.91</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1727.28</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Revenue
      Expenditures</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3396.28</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3621.4</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3843.51</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4402.95</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4881.92</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Capital
      Expenditures</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">607.69</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1092.28</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1133.31</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">684.1</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">757.99</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
</TABLE>
<font face="Times New Roman, Times, serif"><BR>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=center colspan=13> <font size="2" face="Times New Roman, Times, serif"><B>As
      % of Total Expenditures (%)</B> </font></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2002/2003</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2003/2004</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2004/2005</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2005/2006(a)</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2006/2007(b)</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Non-Plan
      Expenditures, including</FONT></TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">72.2</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">74.1</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">73.4</FONT></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">71.7</FONT>
    </TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">69.4</FONT>
    </TD>
    <TD width=2% align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <font size="2" face="Times New Roman, Times, serif">&nbsp;
      &nbsp;(a) Interest Payments</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">29.4</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">26.3</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">25.5</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">25.6</FONT>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">24.8</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <font size="2" face="Times New Roman, Times, serif">&nbsp;
      &nbsp;(b) Defense Expenditures</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">13.9</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12.7</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">15.2</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">16.1</FONT>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">15.8</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <font size="2" face="Times New Roman, Times, serif">&nbsp;
      &nbsp;(c) Subsidies</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10.9</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.4</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.8</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9.2</FONT>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8.2</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Plan
      Expenditures</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">27.8</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">25.9</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">26.6</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">28.3</FONT>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">30.6</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Revenue
      Expenditures</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">84.8</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">76.8</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">77.2</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">86.6</FONT>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">86.6</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">Capital
      Expenditures</FONT></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">15.2</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">23.2</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">22.8</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">13.4</FONT>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">13.4</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left><hr align="left" width="100" size="1"></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=3% align=left><font size=1 face="Times New Roman, Times, serif">(a)</FONT></TD>
    <TD align=left><font size=1 face="Times New Roman, Times, serif">Revised estimate</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=1 face="Times New Roman, Times, serif">(b)</font></TD>
    <TD align=left><font size=1 face="Times New Roman, Times, serif">Budget estimate</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=1 face="Times New Roman, Times, serif">*</font></TD>
    <TD align=left><font size=1 face="Times New Roman, Times, serif">Net of defense
      receipts. Includes defense capital expenditure</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="2" align=left><font size="1" face="Times New Roman, Times, serif"><i>Source:
      Annual Budget, 2006/2007</i></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">As a proportion of GDP,
    outstanding liabilities of the central government (including external debt
    at historical exchange rate) declined from 55.3% in 1990/1991 to reach 49.4%
    in 1996/1997, reflecting the lower fiscal deficit in the intervening years.
    This trend got reversed subsequently and outstanding liabilities as a proportion
    of GDP rose to 63.9% in 2004/2005. Internal liabilities as a proportion of
    GDP stood at 61.9% during 2004/2005. The Indian government&#146;s increasing
    reliance on borrowing has led to a continuous growth in total outstanding
    debt. However, with a check on fiscal deficit to GDP in recent years, the
    outstanding internal liabilities as a proportion of GDP was at 60.3% during
    2005/2006 revised estimates. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Greater internal liabilities
    had raised interest rates in 1990s. The average rate of interest on internal
    government debt rose from 7.35% in 1991/1992 to 9.08% in 1997/1998 and increased
    further to 10% in 2000/2001. More recently however, the average interest rate
    on internal debt fell to 6.7% in 2005/2006 revised estimates. </FONT></p>
</div>
<P align="center"> <font face="Times New Roman, Times, serif"><B><FONT size=2>Outstanding
  Liabilities of the Government of India</FONT></B><BR>
  </font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2002/2003</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2003/2004</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2004/2005</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2005/2006(a)&nbsp;</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2006/2007(b)</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>(Rs.
      billion)</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width="2%" align=right> <FONT size=2 face="Times New Roman, Times, serif">1</FONT>
    </TD>
    <TD width="2%" align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Internal
      liabilities</FONT></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">14995.9</FONT></TD>
    <TD width="2%" align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">16905.5</FONT></TD>
    <TD width="2%" align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">19335.4</FONT></TD>
    <TD width="2%" align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">21269.9</FONT>
    </TD>
    <TD width="2%" align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width=8% align=right> <FONT size=2 face="Times New Roman, Times, serif">23968.5</FONT>
    </TD>
    <TD width="2%" align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">a)&nbsp;
      </FONT> <FONT size=2 face="Times New Roman, Times, serif">Internal debt</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10206.9</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11417.1</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12759.7</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">13559.4</FONT>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">15220.3</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">b)&nbsp;
      </FONT> <FONT size=2 face="Times New Roman, Times, serif">Other internal
      liabilities</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4789.0</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5488.5</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6575.7</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7710.5</FONT>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8748.2</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">External
      debt (outstanding)*</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">596.1</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">461.2</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">608.8</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">683.9</FONT>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">767.2</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Total outstanding
      liabilities (1+2)</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">15592.0</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">17366.8</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">19944.2</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">21953.9</FONT>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">24735.6</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Amount due
      from Pakistan on account&nbsp; of share of partition debt</FONT></TD>
    <TD align=right><font size=2 face="Times New Roman, Times, serif">3.0</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size=2 face="Times New Roman, Times, serif">3.0</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size=2 face="Times New Roman, Times, serif">3.0</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size=2 face="Times New Roman, Times, serif">3.0</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right><font size=2 face="Times New Roman, Times, serif">3.0</FONT></TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Net liabilities
      (3-4)</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">15589.0</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">17363.8</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">19941.2</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">21950.9</FONT>
    </TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">24732.6</FONT>
    </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Total assets&nbsp;
      </FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8407.7</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9035.6</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10834.2</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11893.4</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">13812.9</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Excess of
      liabilities over assets(5-6)&nbsp; </FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7181.3</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8328.2</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">9107.0</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10057.5</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10919.7</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="Times New Roman, Times, serif">B-15</FONT></P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb16"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2002/2003</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2003/2004</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2004/2005</B></font></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2005/2006(a)</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2006/2007(b)</B>
      </font></TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1> </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1> </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1> </TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><HR noshade size=1> </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right><HR noshade size=1> </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD colspan=6 align=center> <font size="1" face="Times New Roman, Times, serif"><B>As
      % of GDP at current prices</B> </font></TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left> </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width="2%" align=right> <FONT size=2 face="Times New Roman, Times, serif">1</FONT>
    </TD>
    <TD width="2%" align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD colspan=2 align=left> <FONT size=2 face="Times New Roman, Times, serif">Internal
      liabilities (outstanding)</FONT></TD>
    <TD width="2%" align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width="8%" align=right> <FONT size=2 face="Times New Roman, Times, serif">61.2</FONT></TD>
    <TD width="2%" align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width="8%" align=right> <FONT size=2 face="Times New Roman, Times, serif">61.2</FONT></TD>
    <TD width="2%" align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width="8%" align=right> <FONT size=2 face="Times New Roman, Times, serif">61.9</FONT></TD>
    <TD width="2%" align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width="8%" align=right> <FONT size=2 face="Times New Roman, Times, serif">60.3</FONT>
    </TD>
    <TD width="2%" align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD width="8%" align=right> <FONT size=2 face="Times New Roman, Times, serif">60.5</FONT>
    </TD>
    <TD width="2%" align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">a)&nbsp;
      </FONT> <FONT size=2 face="Times New Roman, Times, serif">Internal debt</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">41.7</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">41.4</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">40.9</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">38.4</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">38.4</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD colspan="2" align=left> <FONT size=2 face="Times New Roman, Times, serif">b)&nbsp;
      </FONT> <FONT size=2 face="Times New Roman, Times, serif">Other internal
      liabilities</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">19.5</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">19.9</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">21.1</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">21.8</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">22.1</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD colspan=2 align=left> <FONT size=2 face="Times New Roman, Times, serif">External
      debt (outstanding)*</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.4</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.7</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2.0</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.9</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1.9</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD colspan=2 align=left> <FONT size=2 face="Times New Roman, Times, serif">Total
      outstanding liabilities</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">63.6</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">62.9</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">63.9</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">62.2</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">62.4</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD colspan=2 align=left> <FONT size=2 face="Times New Roman, Times, serif">Total
      assets</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">34.3</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">32.7</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">34.7</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">33.7</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">34.9</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">7</FONT>
    </TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">.</FONT></TD>
    <TD colspan=2 align=left> <FONT size=2 face="Times New Roman, Times, serif">Excess
      of liabilities over assets</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">29.3</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">30.2</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">29.2</FONT></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">28.5</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">27.6</FONT>
    </TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font>
    </TD>
  </TR>
</TABLE>
<font face="Times New Roman, Times, serif"><BR>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD colspan="2" valign=top><hr align="left" width="100" size="1"></TD>
  </TR>
  <TR valign="top">
    <TD width="3%"> <FONT size=1 face="Times New Roman, Times, serif">(a)</FONT></TD>
    <TD> <FONT size=1 face="Times New Roman, Times, serif">Revised estimate</FONT>
    </TD>
  </TR>
  <TR valign="top">
    <TD> <FONT size=1 face="Times New Roman, Times, serif">(b)</FONT></TD>
    <TD> <FONT size=1 face="Times New Roman, Times, serif">Budget estimate</FONT>
    </TD>
  </TR>
  <TR valign="top">
    <TD><FONT size=1 face="Times New Roman, Times, serif">*</FONT></TD>
    <TD><P> <FONT size=1 face="Times New Roman, Times, serif"> External debt figures
        represent borrowings by the government from external sources and are based
    upon historical rates of exchange</FONT></P></TD>
  </TR>
  <TR valign="top">
    <TD colspan="2"><FONT size=1 face="Times New Roman, Times, serif"> Source:
      </FONT><font size="1" face="Times New Roman, Times, serif"><I>Annual Budget,
      2006/2007 </I></font></TD>
  </TR>
</TABLE>
<P> <font size="2" face="Times New Roman, Times, serif"><B>Monetary Policy </B></font></P>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Indian monetary policy
    changed in recent years in response to financial sector reforms and the growing
    external orientation of the Indian economy. Current monetary policy aims to
    enhance financial sector efficiency, preserve financial stability and improve
    transmission mechanisms by transitioning from direct to indirect monetary
    instruments. Current monetary policy seeks to ensure adequate monetary &#147;liquidity&#148;
    that can meet credit growth and support investment demand while at the same
    time controlling inflation and promoting softer interest rates and greater
    medium-term flexibility in India&#146;s interest rate structure. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Bank rate changes, combined
    with the repo-rate and reverse repo-rate changes, have emerged as important
    liquidity and monetary management tools. India&#146;s &#147;liquidity adjustment
    facility&#148; (LAF) has evolved as an effective mechanism for absorbing and
    increasing day-to-day monetary liquidity, providing a corridor for the &#147;call&#148;
    money market. During 2002/2003, government reforms in the banking sector promoted
    a soft interest rate regime and greater bank operational efficiency, as well
    as stronger bank regulatory mechanisms and better banking technology. However,
    recently interest rates have started firming up.</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The following table sets
    forth stock in the &#147;M1&#148; and &#147;M3&#148; money supply from 2000/2001
    to 2004/2005. &#147;M1&#148; includes all currency in circulation as well
    as demand and other deposits with the public. &#147;M3&#148; includes all
    components of M1 as well as fixed deposits and savings deposits. </FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left> <font size="2" face="Times New Roman, Times, serif"><B>Money
      Supply</B></font></TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2000/2001</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2001/2002</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2002/2003</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2003/2004</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>2004/2005</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>(Rs.
      Billion)</B></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Currency
      in circulation</font></TD>
    <TD width=8% align=right><font size="2" face="Times New Roman, Times, serif">
      2,182.1</font></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right><font size="2" face="Times New Roman, Times, serif">
      2,509.7</font></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right><font size="2" face="Times New Roman, Times, serif">
      2,824.7</font></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right><font size="2" face="Times New Roman, Times, serif">
      3270.3</font></TD>
    <TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD width=8% align=right><font size="2" face="Times New Roman, Times, serif">
      3686.6</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Demand
      deposits</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 1,662.7</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 1,792.0</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 1,987.6</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2586.3</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2840.2</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Money
      (M1)</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 3,794.5</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 4,228.4</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 4,735.8</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 5,787.2</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 6,462.6</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> M1 growth
      (%)</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 11.0</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 11.4</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 11.9</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 22.2</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 11.7</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Time deposits
      with banks</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 9,337.7</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 10,755.1</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 12,443.8</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 14269.6</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 16076.8</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Broad
      money supply (M3)</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 13,132.2</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 14,983.6</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 17,179.6</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 20,056.8</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 22,539.4</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> M3 growth
      (%)</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 16.8</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 14.2</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 15.0</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 16.7</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> 12.4</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD valign=top><hr align="left" width="100" size="1"> </TD>
  </TR>
  <TR>
    <TD valign=top> <font size="1" face="Times New Roman, Times, serif"><I>Source:
      Reserve Bank of India</I></font></TD>
  </TR>
</TABLE>
<p> <font size="2" face="Times New Roman, Times, serif"><B>Banking and Finance</B></font></p>

  <p align="left"><font face="Times New Roman, Times, serif"><i><font size=2>The Reserve
    Bank of India</font></i></font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Reserve Bank of India
    is the central bank of India and is entrusted with monetary stability, currency
    management and supervision of the financial and payments systems. It was established
    in 1935, and its functions and focus have evolved in response to India&#146;s
    changing economic environment. As the central bank of India, it acts as the
    banker to the state and national governments, the lender of last resort and
    the controller of the country&#146;s money supply and foreign exchange. The
    Reserve Bank of India is the sole authority for the issue of bank notes and
    <I>the supervisory body of all banking operations in the country. </I></FONT></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">B-16</FONT>
</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb17"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><i>Commercial Banks</i></font></div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Commercial banks in India
    provide term finance and working capital for industry, agriculture and trade.
    Commercial banks are categorized as either &#147;scheduled&#148; or &#147;non-scheduled&#148;
    banks. Scheduled Banks in India constitute those banks which have been included
    in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. Of late,
    public sector banks have contained their interest expenses within reasonable
    levels due to high liquidity conditions. Declining interest rates also allowed
    banks to realize gains on the sale of appreciated securities. Provisions and
    contingencies increased for most domestic bank groups, reflecting their attempts
    to improve their credit portfolio, but declined for most foreign banks, reflecting
    improvements in their asset portfolio. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Capital levels of the banking
    sector improved with the overall capital adequacy of scheduled banks rising
    from 10.4% in March 1997 to 12.8% in March 2005 due to the increased reinvestment
    of profits into reserves. All banks, other than two old private sector banks,
    had capital adequacy above the stipulated minimum level of 9%. To enable banks
    operating in India to acquire Basel II framework, the RBI in January, 2006
    issued detailed guidelines for raising capital funds to meet market as well
    as credit risks. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Bank credit risk management
    has also improved due to improved risk management practices, greater recovery
    efforts and the Indian Securitisation and Reconstruction of Financial Assets
    and Enforcement of Security Interest Act. A significant improvement in recovery
    of NPAs by Scheduled Commercial Banks led to a sharp decline in gross NPAs
    to gross advances ratio to 5.2% at the end of March 2005 from 7.2% at the
    end of March 2004. During 2004/2005, several banks and some financial institutions
    sold their NPAs to the Asset Reconstruction Company (India) Ltd to the extent
    of Rs. 15,3.43 billion. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Increased competition has
    also affected the Indian banking system. Interest margin for scheduled banks,
    which is the excess of interest income over interest expense normalized by
    total assets, has declined. Banks have also curtailed expenditures, decreased
    operating expenses and increased worker productivity. </FONT></p>
</div>

  <p><font size="2" face="Times New Roman, Times, serif"><i>Other Financial
    Institutions</i></font></p>

<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Most Indian financial institutions
    were initially established when Indian capital markets were relatively underdeveloped
    and incapable of adequately meeting the long-term financing needs of the economy.
    With the improvement of the long-term funds market though and increased financial
    sector reform, the subsidized credit from financial institutions that previously
    existed is no longer as important. Further, as concessional sources of finance
    decrease and Indian financial institutions and banks become more alike, Indian
    financial institutions not only must raise funds at prevailing market rates
    but must also compete in their asset and liability aspects. Structural changes
    in the Indian financial system have diminished the business volume and profitability
    of Indian financial institutions. As a result, Indian financial institutions
    are adjusting their businesses, diversifying their client bases, activities
    and products. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Indian financial institution
    sector includes term-lending institutions, investment institutions, specialized
    financial institutions and refinance institutions. Several financial institutions
    fall within the regulatory and supervisory domain of the Reserve Bank of India.
    These are the IFCI Ltd., the Industrial Investment Bank of India Ltd. (IIBI),
    the Small Industries Development Bank of India, the Export-Import Bank of
    India, the Tourism Finance Corporation of India Ltd., Infrastructure Development
    Finance Company Ltd., the National Bank for Agriculture and Rural Development
    and the National Housing Bank. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In contrast to the rising
    trend in financial assistance sanctioned and disbursed by financial institutions
    from 1996 to 2000, a sharp decline in such assistance occurred in 2001/2002
    and 2002/2003. During 2004/2005 also financial assistance sanctioned and disbursed
    by all-India financial institutions declined. Consolidation in the banking
    sector has also encompassed the Development Finance Institutions, which have
    been the traditional provider of long-term finance.</FONT></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">B-17</FONT>
</p>
<hr noshade align="center" width="100%" size="2">


<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb18"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Significant improvement in the financial performance of the All-India financial institutions was recorded during the year ended March 2005. Net interest
income increase significantly on account of increase in interest income on the one hand and decline in interest expenditure on the other. On the whole, operating profits of the financial institutions improved as well as the net profits, despite net
losses incurred by IFCI and IIBI. The asset quality of the financial institutions also improved significantly during 2004/2005, reflecting the combined impact of recovery of dues and increase provisioning. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Strengthening the financial sector and improving the financial markets are the core objectives of financial reform in India. Specifically, the reforms aim to
create greater accountability and market discipline. They also promote improved capital adequacy, asset classification and provisioning, accounting standards, exposure and disclosure norms, investment and risk management and asset liability
management. </FONT></p></div>
<div style="text-indent:3%"><font size="2" face="Times New Roman, Times, serif"><b><i>Credit
        Allocation</i></b> </font> </div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">India&#146;s
      bank rate, repo rate and reverse repo rate changes have emerged as important
      tools of Indian monetary policy. Indian monetary policy has traditionally
      reflected a policy bias for soft interest rates and a flexible interest
      rate structure. Bank rates have been kept unchanged at 6% since April 2003,
      while the fixed repo and fixed reverse repo rate under LAF have undergone
      several
changes.</FONT></p></div>
<div style="text-indent:3%">
<p><font face="Times New Roman, Times, serif"><b><font size="2"><I>Capital Markets</I></font>
</b></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Indian government has instituted many measures since 1991 to promote the development of the Indian capital markets, including the decontrol of offering
prices, the opening of an over-the-counter market and development of a national stock exchange. Recent policies aim to enhance market efficiency and improve investor protection by promoting greater transparency and improved trading and settlement
systems. 2004/2005 began with an active debt market that was backed by robust liquidity and substantial debt instrument demand. Equity markets also recorded large volumes and touched new highs as strong economic fundamentals, robust corporate
performance and healthy foreign inflows backed a strong market. The commodity futures markets have been experiencing strong growth through the introduction of nationwide electronic trading and market access. Because of this, the turnover rose
sharply from a level of Rs. 670 billion in 2002/2003 to a level of Rs. 13870 billion in 2005. </FONT></p></div>
<font face="Times New Roman, Times, serif"><B><FONT size=2>Balance of Payments</FONT></B><BR>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">India&#146;s overall balance of payments position has improved significantly in the past decade. Its foreign exchange reserves have improved substantially
from a draw down of US&#36;1.28 billion in 1990/1991 to a reserve build-up of US&#36;5.8 in 2000/2001and a further reserve increment of US&#36;26.2 billion in 2004/2005. The Current account deficit, which signifies a country&#146;s
overall current liabilities, improved from 3.1% of GDP in 1990/1991 to a surplus
worth 2.3%of GDP in 2003/2004. However in 2004/2005, rising demand for investment
in the domestic economy, drew in greater merchandise imports relative to exports
and net inflow of
invisibles, and led to the reversal of the surplus in the current account balance
to a deficit of 0.8% of GDP. Through the decade, inflows have generally remained
buoyant.</FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      improvement in India&#146;s external sector position is in part due to increasing openness in terms of the share of tradeables in the economy. The ratio
of exports to GDP has increased from 9.9% in 2000/2001 to 11.8% in 2004/2005. But the share of imports in GDP has increased at a faster rate from 12.6% in 2000/2001 to 17.1% in 2004/2005. With a widening trend in recent years, the trade deficit
reached a high of US&#36;28.6 billion (as per customs data) in 2004/2005, and this high was surpassed by a record US&#36;33.8 billion in April to January 2005/2006 itself. While this is a cause for concern, it may reflect a lag between export growth
and growth in import of capital, intermediate and basic goods. Even as the merchandise deficit has soared in the last five years, it has been constantly cushioned by increasing contribution of service sector exports, in particular of exports of
information technology-related services. Software exports have surged from US&#36;6.3 billion in 2000/2001 to an estimated US&#36;17.2 billion in 2004/2005 and to US&#36;10.3
billion in the first half of 2005/2006 itself. The rise in current receipts has
had positive effects on debt service capabilities and on import purchasing power.</FONT></p></div>
<p align="center"><font size="2" face="Times New Roman, Times, serif">      B-18</font></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb19"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      2004/2005, a combination of low global interest rate spreads, U.S. dollar
      weakness
      and a step-up in industrial activity since 2004/2005 resulted in a surge
      in external commercial borrowings. Private transfers have also been buoyant
      through 2000/2001 to 2003/2004, but declined to US&#36;20.65 billion in 2004/2005. Buoyancy in equity markets hit record high foreign institutional investor inflows in
2004/2005. At the end of 2004/2005 India&#146;s foreign exchange reserves were worth US&#36;141.5
billion. As of mid-February 2006, reserves were at levels equal to 12.2 months
of imports. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">India
      initiated a gradual process of capital account liberalization in the early
      1990s.
      The government&#146;s initial reform measures following a balance of
payments crisis in 1991 were predominantly aimed at current account convertibility.
      Thereafter, the government further liberalized its policies regarding foreign
      direct investment, portfolio investment and long-term commercial borrowings.
      As the external sector increasingly consolidates, the government has also
liberalized its restrictions on outflows. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Although restrictions still exist in several sectors, during 2004/2005 the Indian government furthered its objective to encourage foreign direct investment
inflows, new technologies and improved management practices. It has permitted FDI up to 100% on the automatic route in all sectors/activities, with fewer exemptions. FDI in development of township, housing, built-up infrastructure and construction
development projects are now included in this category. Additionally, further measures have been taken towards simplification of procedures in FDI by placing certain activities under general permission route of the RBI. These include transfer of
shares in an existing Indian firm from residents to non-residents and vice-versa, except in the financial sector and where the SEBI code is attracted, and conversion of the ECB/Loan into equity and preference shares into equity, provided the
activity is covered in the automatic route and after conversion it would fall within the sectoral cap, amongst others. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      following table sets forth the main components of India&#146;s balance
      of payments
from 2000/2001 to 2004/2005: </FONT></p></div>
<P align="center"><font face="Times New Roman, Times, serif">
<B><FONT size=2>Balance of Payments: Main Components</FONT></B><BR>
<B><FONT size=2>(US&#36;million) </FONT></B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="center" valign="bottom">
	<TD>&nbsp;

	</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Items</B></font></TD>
	<TD>&nbsp;</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2000-01</B>
	</font></TD>
	<TD>&nbsp;

	</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2001-02</B>
	</font></TD>
	<TD>&nbsp;

	</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2002-03</B>
	</font></TD>
	<TD>&nbsp;

	</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2003-04</B>
	</font></TD>
	<TD>&nbsp;

	</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2004-05 PR</B>
	</font></TD>
	<TD>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD width=3% align=left><font size="2" face="Times New Roman, Times, serif">
1</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Export f.o.b</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    45,452
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    44,703
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    53,774
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    66,285
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    82,150
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Import c.i.f</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    57,912
	</font></TD>
	<TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    56,277
	</font></TD>
	<TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    64,464
	</font></TD>
	<TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    80,003
	</font></TD>
	<TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    118,779
	</font></TD>
	<TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
3</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Trade Balance (1-2)</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (12,460
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (11,574
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (10,690
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (13,718
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (36,629
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)
	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
4</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Invisibles, net</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    9,794
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    14,974
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    17,035
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    27,801
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    31,229
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
5</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Current Account (3+4)</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (2,666
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    3,400
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    6,345
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    14,083
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (5,400
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
6</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Foreign Investment, net</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    5,862
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    6,686
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    4,161
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    13,744
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    12,147
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
7</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
External Assistance, net</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    410
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1,117
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (3,128
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (2,858
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1,923
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
8</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Commercial Borrowings, net</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    4,303
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (1,585
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (1,692
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (2,925
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    5,040
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
9</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Short Term Capital, net</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    551
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (793
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    970
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1,419
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    3,792
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
10</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Banking Capital, net</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (1,961
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2,864
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    10,425
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    6,033
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    3,874
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
11</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Rupee Debt Service, net</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (617
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (519
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (474
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (376
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (417
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
12</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Other Capital, net</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    292
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    781
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    578
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1,699
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    4,668
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
13</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Capital Account Balance (6+12)</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    8,840
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    8,551
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    10,840
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    16,736
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    31,027
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
14</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> Errors &amp; Omissions</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (305
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (194
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (200
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    602
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    532
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
15</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Overall Balance (5+13)</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    5,868
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    11,757
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    16,985
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    31,421
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    26,159
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
16</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
I.M.F.</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> (&nbsp;&nbsp;) </font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> (&nbsp;&nbsp;) </font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
17<br>
<br>
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Foreign Exchange Reserves<br>
(-Increase/+Decrease)</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (5,842
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (11,757
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (16,985
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (31,421
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> )&nbsp;
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (26,159
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
  <TD colspan=2 align=left><hr align="left" width="100" size="1" noshade></TD>
  <TD align=left></TD>
  <TD align=left></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left></TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD colspan=2 align=left><font size="1" face="Times New Roman, Times, serif">
    <I>Source: Reserve Bank of India</I></font></TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
</TABLE>
<font size="2" face="Times New Roman, Times, serif">
<P align="center"> <B>As a % of GDP </B></P>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="center" valign="bottom">
  <TD>&nbsp;</TD>
	<TD><font size="1" face="Times New Roman, Times, serif"><B>Items</B></font></TD>
	<TD>&nbsp;</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2000-2001</B>
	</font></TD>
	<TD>&nbsp;

	</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2001-02</B>
	</font></TD>
	<TD>&nbsp;

	</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2002-03</B>
	</font></TD>
	<TD>&nbsp;

	</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2003-04</B>
	</font></TD>
	<TD>&nbsp;

	</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2004-05</B>
	</font></TD>
	<TD>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD width=3% align=left><font size="2" face="Times New Roman, Times, serif">1</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
 Exports</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    9.9
	</font></TD>
	<TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    9.4
	</font></TD>
	<TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    10.6
	</font></TD>
	<TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    11
	</font></TD>
	<TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    11.8
	</font></TD>
	<TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="2" face="Times New Roman, Times, serif">2</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
 Imports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    12.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    11.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    12.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    13.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    17.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="2" face="Times New Roman, Times, serif">3</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
 Trade Balance</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (2.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (2.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (2.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)
	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (2.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (5.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="2" face="Times New Roman, Times, serif">4</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
 Invisibles Balance</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    3.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    3.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    4.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    4.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="2" face="Times New Roman, Times, serif">5</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
 Current Account Balance</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (0.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (0.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="2" face="Times New Roman, Times, serif">6</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
 External debt</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    22.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    21.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    20.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    17.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    17.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left><hr align="left" width="100" size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left><font size="1" face="Times New Roman, Times, serif"> <i>Source:
    Economic Survey 2005-06 </i></font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
</TABLE>
<p align="center"><font size="2" face="Times New Roman, Times, serif">      B-19</font></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb20"></a><font size="2" face="Times New Roman, Times, serif"><p><a href="#contents">Back
    to Contents</a></p>
</font></font>

<p><font size="2" face="Times New Roman, Times, serif"><I>Foreign Trade</I></font></p>

<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">India
      has experienced persistent trade deficits since the early 1980s. Prior
      to the
      introduction of a structural reform program in 1991, India&#146;s
economic policy did not encourage exports and aimed instead for broad self-sufficiency in most products through import substitution. The government gradually recognized its need to correct this &#147;anti-export&#148; bias,
and several export
promotion measures were instituted. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Apart
      from a move to a unified market-determined exchange rate system in 1993,
      India&#146;s new trade policy emphasizes lower nominal tariffs, less import
restrictions and the gradual removal of &#147;import licensing&#148; requirements. The trade policy reforms also emphasize export incentives and move away from direct subsidies toward indirect export promotion. In the Union Budget 2005/2006, the
peak rate of customs duty on non-agricultural goods was further reduced from 20% to 15%. Furthering the cause of export promotion, the Indian Parliament passed the bill on Special Economic Zones (&#147;SEZ&#148;)
in June 2005, to implement the provisions of the SEZ Act 2005 that provides very
attractive fiscal incentives and tax concessions for developers and manufacturers.
Its features also relate to establishment of free trade and warehousing zones
to create world-class trade related
infrastructure, among others. At present there are 15 functional SEZs and in
principle approval has been given to 62 others. Furthering its policy on greater
trade integration within the Asian region, India signed a Comprehensive Export
Cooperation Agreement with Singapore, which came into implementation on August
1, 2005. Negotiation on all aspects of the SAFTA (South Asian Association for
Regional Cooperation) was concluded recently and the tariff liberalization program
is scheduled to be
implemented from July 1, 2006 onwards.</FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      following table sets forth changes in the composition of India&#146;s trade
      balance
during the period 2000/2001 through 2004/2005: </FONT></p></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
<B>Foreign Trade Balance </B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="center" valign="bottom">
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Trade</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;
	</font></TD>
</TR>
<TR align="center" valign="bottom">
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Exports</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Imports</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Deficit</B></font></TD>
	<TD colspan=4><font size="1" face="Times New Roman, Times, serif">
    <B>% Growth</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD rowspan="3"><font size="1" face="Times New Roman, Times, serif"><b>Trade deficit</B></font><font size="1" face="Times New Roman, Times, serif"><b><br>
	  as % of</B></font><font size="1" face="Times New Roman, Times, serif">
    <B><br>
    Exports</B></font></TD>
</TR>
<TR align="center" valign="bottom">
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD><hr size="1" noshade></TD>
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD><hr size="1" noshade></TD>
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD><hr size="1" noshade></TD>
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD colspan="3"><hr size="1" noshade></TD>
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
<TR align="center" valign="bottom">
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>US&#36;million</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Exports</B>
	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Imports</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
<TR align="center" valign="bottom">
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD><hr size="1" noshade></TD>
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD><hr size="1" noshade></TD>
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD><hr size="1" noshade></TD>
  <TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD><hr size="1" noshade></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2000-2001</font></TD>
	<TD width="10%" align=right><font size="2" face="Times New Roman, Times, serif">
44,560</font></TD>
	<TD width="2%" align=right>&nbsp;</TD>
	<TD width="10%" align=right><font size="2" face="Times New Roman, Times, serif">
50,536</font></TD>
	<TD width="2%" align=right>&nbsp;</TD>
	<TD width="10%" align=right><font size="2" face="Times New Roman, Times, serif">
5,976</font></TD>
	<TD width="2%" align=right>&nbsp;</TD>
	<TD width="10%" align=right><font size="2" face="Times New Roman, Times, serif">
    21.0
	</font></TD>
	<TD width="2%" align=left>&nbsp;

	</TD>
	<TD width="10%" align=right><font size="2" face="Times New Roman, Times, serif">
1.7</font></TD>
	<TD width="2%" align=center>&nbsp;</TD>
	<TD width="10%" align=right><font size="2" face="Times New Roman, Times, serif">
13.4</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2001-02</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
43,827</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
51,413</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
7,586</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (1.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.7</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
17.3</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2002-03</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
52,719</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
61,412</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
8,693</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    20.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
19.4</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
16.5</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2003-04</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
63,843</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
78,149</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
14,306</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    21.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
27.3</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
22.4</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2004-05</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
80,540</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
109,173</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
28,633</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    26.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
39.7</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
35.6</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2005-06*</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
88,760</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
126,336</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
37,576</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    26.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
33.0</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
42.3</font></TD>
</TR>
</TABLE>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2"><hr align="left" width="100" size="1" noshade></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">*</font></td>
    <td><font size="1" face="Times New Roman, Times, serif"> Trade for April-February 2005-06 </font></td>
  </tr>
  <tr>
    <td colspan="2"><font size="1" face="Times New Roman, Times, serif"> <i>Source: Ministry
    of Commerce and Industry, Government of India </i></font></td>
  </tr>
</table>
<font size="2" face="Times New Roman, Times, serif">
<P align="center"> B-20</P>
</font>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb21"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<P><font size="2" face="Times New Roman, Times, serif">
<B>Composition of Imports </B></font></P>
<div style="text-indent:3%">
<P><font size="2" face="Times New Roman, Times, serif"> The following tables
    set forth the composition of India&#146;s imports and
exports during the indicated periods:</font></P></div>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD colspan=5 align=center><font size="1" face="Times New Roman, Times, serif">
    <B>Imports in Rs. billion</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD colspan=5 align=center><font size="1" face="Times New Roman, Times, serif"> <b>Imports
    in US&#36;billion</B></font></TD>
	<TD align=left></TD>
	<TD colspan="5" align=center><font size="1" face="Times New Roman, Times, serif">	  <B>%
      Growth</B> </font>	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD colspan="5" align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD colspan="5" align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD colspan="5" align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;

	</TD>
	<TD align=left><font size="1" face="Times New Roman, Times, serif">
    <B>Commodity</B></font></TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2002/03</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2003/04</B></font></TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;
	</font></TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif"><b>2004/05P</b></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif"><b>2002/03</b></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif"><b>2003/04</b></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif"><b>2004/05P</b></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif"><b>2002/03</b></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif"><b>2003/04</b></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif"><b>2004/05P</b></font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD width=3% align=left><font size="2" face="Times New Roman, Times, serif">
    <B>I.</B></font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Bulk imports</B></font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
117.60</font></TD>
	<TD width=1% align=right>&nbsp;</TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
135.38</font></TD>
	<TD width=1% align=right>&nbsp;</TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
188.17</font></TD>
	<TD width=1% align=right>&nbsp;</TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
243.0</font></TD>
	<TD width=1% align=right>&nbsp;</TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
294.6</font></TD>
	<TD width=1% align=right>&nbsp;</TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
418.8</font></TD>
	<TD width=1% align=right>&nbsp;</TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
    19.9
	</font></TD>
	<TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
    21.2
	</font></TD>
	<TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
    42.2
	</font></TD>
	<TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>A.</B></font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Petroleum, crude and products</B></font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
85.37</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
94.52</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
134.09</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
176.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
205.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
298.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    26.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    16.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    45.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>B.</B></font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Bulk consumption goods</B></font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
11.67</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
14.12</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
13.54</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
24.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
30.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
30.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    18.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    27.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (1.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>C.</B></font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Other bulk items</B></font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
20.56</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
26.74</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
40.54</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
42.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
58.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
90.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    37.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    55.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Fertilizers</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.03</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.31</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.53</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
7.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
12.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (7.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    15.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    70.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Non-ferrous metals</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.23</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.36</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.63</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
9.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
12.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    3.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    42.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    32.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif">
      3</font></TD>
	<TD align=left><div style="margin-left:3%; text-indent:-3%"><font size="2" face="Times New Roman, Times, serif"> Paper,
	      paper boards, manufactures including
	      news prints</font></div></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.18</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.02</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.16</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6.6</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
7.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    46.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    6.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left valign="top"><font size="2" face="Times New Roman, Times, serif">
      4</font></TD>
	<TD align=left><div style="margin-left:3%; text-indent:-3%"><font face="Times New Roman, Times, serif"> <font size="2"> Crude
	        rubber, including synthetic and</font> <font size=2>reclaimed</font></font></div></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.88</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.29</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.77</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    4.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    53.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    40.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
5</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Pulp and waste paper</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.66</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.88</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.13</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    16.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    19.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    15.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
6</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Metalliferrous ores, metal scrap, etc</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.02</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.95</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
10.65</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
10.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
13.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
23.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (9.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    24.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    82.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
7</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Iron and steel</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.57</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6.92</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
11.67</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
9.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
15.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
26.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    13.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    59.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    72.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>II.</B></font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Non-bulk imports</B></font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
179.61</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
223.73</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
292.89</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
371.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
486.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
651.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    19.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    31.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    33.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>A.</B></font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Capital goods</B></font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
65.33</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
83.99</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
101.40</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
135.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
182.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
225.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    36.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    35.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    23.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Manufactures of metals</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.36</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.17</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.99</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
8.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    20.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    41.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    28.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Machine tools</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.20</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.11</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.66</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.6</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    27.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    86.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    28.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">

	  3</font></TD>
	<TD align=left><font face="Times New Roman, Times, serif"><font size="2">Machinery
    except electrical and</font> <FONT size=2>electronic</FONT></font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
17.26</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
21.80</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
29.43</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
35.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
47.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
65.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    20.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    33.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    38.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
4</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Electrical machinery except electronic</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.21</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.01</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.14</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6.6</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
8.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
11.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    11.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    31.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    31.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
5</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Electronic goods</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
27.10</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
34.49</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
43.76</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
56.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
75.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
97.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    48.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    34.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    29.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
6</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Transport equipment</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
9.18</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
14.83</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
10.89</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
19.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
32.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
24.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    65.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    70.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (24.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
7</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Project goods</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.63</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.82</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.61</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (4.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (27.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    46.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>B.</B></font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Mainly export related items</B></font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
49.91</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
58.44</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
74.81</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
103.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
127.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
166.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    24.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    23.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    30.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Pearls, precious and semi-precious stones</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
29.34</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
32.76</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
42.34</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
60.6</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
71.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
94.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    31.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    17.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    32.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Organic and inorganic chemicals</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
14.64</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
18.53</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
23.97</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
30.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
40.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
53.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    8.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    33.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    32.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
3</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Textile yarn, fabrics, made-ups, etc</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.70</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.78</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6.74</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
9.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
12.6</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
15.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    29.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    29.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    19.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
4</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Cashew nuts</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.24</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.37</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.76</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.6</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    182.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    16.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    31.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>C.</B></font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Others</B></font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
64.37</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
81.30</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
116.69</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
133.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
176.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
259.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    33.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    46.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Total Imports</B></font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
297.21</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
359.11</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
481.06</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
614.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
781.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1070.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    19.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    27.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    37.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left><hr align="left" width="100" size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left>    <font size="1" face="Times New Roman, Times, serif">
      <p>P: Provisional estimates </p>
    </font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left><font size="1" face="Times New Roman, Times, serif"> <i>Source:
    RBI Handbook of Statistics, 2005-06 </i></font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD colspan=5 align=center><font size="1" face="Times New Roman, Times, serif">
    <B>Exports in Rs. Billion</B></font><font face="Times New Roman, Times, serif">&nbsp;	</font></TD>
	<TD align=center>&nbsp;

	</TD>
	<TD colspan=5 align=center><font size="1" face="Times New Roman, Times, serif">
    <B>Exports in US&#36;billion</B></font><font face="Times New Roman, Times, serif">&nbsp;	</font></TD>
	<TD align=center>&nbsp;

	</TD>
	<TD colspan="5" align=center><font size="1" face="Times New Roman, Times, serif">
    <B>% Growth</B>
	</font>	</TD>
	<TD align=center>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD colspan="5" align=center><hr size="1" noshade></TD>
  <TD align=center>&nbsp;</TD>
  <TD colspan="5" align=center><hr size="1" noshade></TD>
  <TD align=center>&nbsp;</TD>
  <TD colspan="5" align=center><hr size="1" noshade></TD>
  <TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;

	</TD>
	<TD align=left><font size="1" face="Times New Roman, Times, serif">
    <B>Commodity</B></font></TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2002/03</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2003/04</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2004/05P</B>&nbsp;
	</font></TD>
	<TD align=center><font face="Times New Roman, Times, serif">&nbsp;
    </font></TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2002/03</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2003/04</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2004/05P</B>&nbsp;
	</font></TD>
	<TD align=center><font face="Times New Roman, Times, serif">&nbsp;
    </font></TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2002/03</B>
	</font></TD>
	<TD align=center>&nbsp;

	</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2003/04</B>
	</font></TD>
	<TD align=center>&nbsp;

	</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2004/05P</B>&nbsp;
	</font></TD>
	<TD align=center><font face="Times New Roman, Times, serif">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD width=3% align=left><font size="2" face="Times New Roman, Times, serif">
I.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Primary products</font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
421.3</font></TD>
	<TD width=1% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
455.0</font></TD>
	<TD width=1% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
    548.1
	</font></TD>
	<TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
87.1</font></TD>
	<TD width=1% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
99.0</font></TD>
	<TD width=1% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
    122.0
	</font></TD>
	<TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
    21.5
	</font></TD>
	<TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
    13.7
	</font></TD>
	<TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=6% align=right><font size="2" face="Times New Roman, Times, serif">
    23.2
	</font></TD>
	<TD width=1% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
A.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Agriculture and allied products</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
324.7</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
346.2</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    359.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
67.1</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
75.3</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    80.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    13.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    12.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    6.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Tea</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
16.5</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
16.4</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    17.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.4</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.6</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    4.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (5.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    4.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    11.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Coffee</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
9.9</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
10.9</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    10.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.1</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.4</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (10.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    15.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (5.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
3</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Rice</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
58.3</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
41.7</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    66.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
12.0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
9.1</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    14.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    81.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (24.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    63.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
4</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Oil meals</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
14.9</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
33.5</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    31.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.1</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
7.3</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    6.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (35.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    137.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (5.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
5</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Marine products</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
69.3</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
61.1</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    57.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
14.3</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
13.3</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    12.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    15.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (7.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (4.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
B.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Ores and minerals</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
96.6</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
108.8</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    188.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
20.0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
23.7</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    41.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    58.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    18.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    77.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
II.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Manufactured goods</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1947.6</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2228.3</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2613.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
402.4</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
484.9</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    581.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    20.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    20.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    20.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
A.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Leather and manufactures</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
89.5</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
99.4</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    102.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
18.5</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
21.6</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    22.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (3.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    17.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    5.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
B.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Chemicals and Related products</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
360.8</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
434.1</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    533.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
74.6</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
94.5</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    118.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    23.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    26.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    25.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
C.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Engineering goods</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
437.2</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
v570.0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    738.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
90.3</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
124.1</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    164.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    29.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    37.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    32.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
D.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Textile and Textile Products</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
562.2</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
587.8</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    566.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
116.2</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
127.9</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    126.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    13.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    10.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (1.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
E.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Gems and jewellery</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
437.0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
485.9</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    615.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
90.3</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
105.7</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    137.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    23.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    17.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    29.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif"> F.</font></TD>
	<TD align=left><font face="Times New Roman, Times, serif">
    <font size="2"> Handicrafts (excluding handmade</font> <FONT size=2>carpets)</FONT></font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
38.0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
23.0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    15.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
7.9</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    3.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    43.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (36.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (31.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
G.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Other Manufactured Goods</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
23.0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
28.2</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    40.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.8</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6.1</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    9.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    22.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    29.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    47.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
III.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Petroleum products</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
124.7</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
164.0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    305.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
25.8</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
35.7</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    67.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    21.6
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    38.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    90.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
IV.</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Others</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
57.7</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
86.4</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    93.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
11.9</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
18.8</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    20.9
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    57.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    11.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Total exports</B></font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2551.4</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2933.7</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    3560.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
527.2</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
638.4</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    792.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    20.3
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    21.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    24.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="2" noshade>
  </TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD colspan="20" align=left><hr align="left" width="100" size="1" noshade></TD>
</TR>
<TR valign="bottom">
  <TD colspan="20" align=left><font size="1" face="Times New Roman, Times, serif">Composition
    of Exports </font></TD>
  </TR>
<TR valign="bottom">
  <TD colspan="20" align=left><font size="1" face="Times New Roman, Times, serif">P: Provisional
    estimates </font></TD>
</TR>
<TR valign="bottom">
  <TD colspan="20" align=left><font face="Times New Roman, Times, serif"><i><font size="1">Source:
    RBI Handbook of Statistics, 2005-06 </font> </i></font></TD>
</TR>
</TABLE>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">During
      the 1990s, India was increasingly consistent in its exports to the Organization
      for Economic Cooperation and Development (OECD countries) and the European
      Union. India has also increased exports to OPEC countries, Eastern Europe
      and more strongly to other developing countries. In particular, the efforts
      towards greater Asian trade integration reflect in the buoyant export figures.
      The United
States has remained India&#146;s main trading partner, although its share has
declined consistently over the last five years. In fact, in 2005/2006 (April-October)
China has emerged as the second major trading partner of India. The share of
Singapore has also been increasingly steadily over the past few years, and it
has emerged to be a significant trading partner. </FONT></p></div>
<p align="center"><font size="2" face="Times New Roman, Times, serif">      B-21</font><font face="Times New Roman, Times, serif">
</font></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb22"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
<B>Direction of Foreign Trade<br>
Rs billion </B></font></P>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="center" valign="bottom">
	<TD><font size="1" face="Times New Roman, Times, serif"><B>Group/country</B></font></TD>
	<TD>&nbsp;</TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2000/01</B>
	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2001/02</B>
	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2002/03</B>
	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2003/04</B>
	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2004/05P</B>
	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left></TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>OECD countries</B></font></TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Exports</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    1072.4
	</font></TD>
	<TD width=2% align=left>&nbsp;

	</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    1031.2
	</font></TD>
	<TD width=2% align=left>&nbsp;

	</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    1276.8
	</font></TD>
	<TD width=2% align=left>&nbsp;

	</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    1361.5
	</font></TD>
	<TD width=2% align=left>&nbsp;

	</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    1565.9
	</font></TD>
	<TD width=2% align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Imports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    920.9
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    984.4
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1127.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1358.9
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1686.9
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Trade Balance</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    151.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    46.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    149.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (121.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>OPEC members</B></font></TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Exports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    221.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    249.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    333.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    438.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    571.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Imports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    122.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    141.4
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    168.4
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    257.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    438.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Trade Balance</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    98.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    107.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    164.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    180.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    133.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Eastern Europe</B></font></TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Exports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    60.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    59.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    60.4
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    71.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    76.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Imports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    38.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    45.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    55.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    74.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    107.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Trade Balance</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    21.4
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    14.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    5.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (3.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (31.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Developing countries</B></font></TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Exports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    594.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    645.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    864.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1047.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1328.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Imports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    509.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    609.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    759.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    945.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1220.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Trade Balance</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    84.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    36.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    105.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    101.9
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    108.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Asia</B></font></TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Exports</FONT></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    458.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    492.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    676.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    846.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1041.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Imports</FONT></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    386.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    441.9
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    547.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    747.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    968.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Trade Balance</FONT></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    72.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    50.9
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    129.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    99.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    73.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<B><FONT size=2>Africa</FONT></B></font></TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Exports</FONT></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    89.4
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    107.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    124.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    142.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    193.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Imports</FONT></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    91.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    119.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    162.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    142.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    165.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Trade Balance</FONT></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (1.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (11.5
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (37.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (0.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    28.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Latin American countries</B></font></TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Exports</FONT></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    46.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    44.9
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    63.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    58.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    93.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Imports</FONT></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    32.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    48.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    50.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    54.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    87.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Trade Balance</FONT></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    14.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (3.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    13.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    3.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    6.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Others/unspecified</B></font></TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Exports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    87.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    104.4
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    16.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    15.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    18.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Imports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    716.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    671.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    861.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    954.5
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1357.4
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Trade Balance</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (629.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (567.2
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (845.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (939.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (1339.1
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Total Trade</B></font></TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Exports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2035.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2090.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2551.4
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2933.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    3560.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Imports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2308.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2452.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2972.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    3591.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    4810.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Trade Balance</B></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (273.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (361.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (420.7
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (657.4
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (1250.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left><hr align="left" width="100" size="1" noshade></TD>
  <TD align=left></TD>
  <TD align=left></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left></TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="1" face="Times New Roman, Times, serif"><i> Source:
    RBI Handbook of Statistics, 2005-06</i></font></TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
</TABLE>
<font size="2" face="Times New Roman, Times, serif">
<P align="center"> <B>Direction of Foreign Trade<br>
(% of total) </B></P>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="center" valign="bottom">
	<TD><font size="1" face="Times New Roman, Times, serif"> <B>Group/Country</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2000/01</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2001/02</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2002/03</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2003/04</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>2004/05P</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;
    </font></TD>
</TR>
<TR valign="bottom">
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left></TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>OECD countries</B></font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Exports</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
52.7</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
49.3</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
50.0</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
46.4</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    44.0
	</font></TD>
	<TD width=2% align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Imports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
39.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
40.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
37.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
37.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    35.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>OPEC</B></font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Exports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
10.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
11.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
13.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
14.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    16.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Imports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
7.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    9.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Eastern Europe</B></font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Exports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Imports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B>Developing countries</B></font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Exports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
29.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
30.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
33.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
35.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    37.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Imports</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
22.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
24.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
25.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
26.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    25.4
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
    <B> &nbsp; &nbsp; Asia</B></font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left></TD>
	<TD align=left>

	</TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Exports</FONT></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
22.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
23.6</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
26.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
28.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    29.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Imports</FONT></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
16.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
18.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
18.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
20.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    20.1
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Africa</FONT></font></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Exports</FONT></font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 4.4</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 5.2</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 4.9</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 4.8</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 5.4</font></TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Imports</FONT></font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 3.9</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 4.9</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 5.5</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 4.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 3.4</font></TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<B><FONT size=2>Latin
          American countries</FONT></B></font></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Exports</FONT></font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2.3</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2.1</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2.5</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2.6</font></TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Imports</FONT></font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 1.4</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 1.7</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 1.5</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 1.8</font></TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> <B>Others/unspecified</B></font></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Exports</FONT></font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 4.3</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 5.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 0.6</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 0.5</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 0.5</font></TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font face="Times New Roman, Times, serif"> &nbsp; &nbsp;<FONT size=2>Imports</FONT></font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 31.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 27.4</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 29.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 26.6</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 28.2</font></TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> <B>Total Trade</B></font></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp; </TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> Exports</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 100.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 100.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 100.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 100.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 100.0</font></TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> Imports</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 100.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 100.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 100.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 100.0</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 100.0</font></TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><hr align="left" width="100" size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="1" face="Times New Roman, Times, serif"> <i>Source: RBI Handbook
    of Statistics, 2005-06 </i></font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
</TABLE>

<P align="center"><font size="2" face="Times New Roman, Times, serif">
B-22</font></P>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb23"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font><font face="Times New Roman"><div style="text-indent:0%">
<P><font size="2" face="Times New Roman, Times, serif"><I>Foreign Exchange
  Reserves </I></font></P>
</div>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      following table indicates India&#146;s foreign exchange reserves, which
      have improved
steadily since September 2000:</FONT></p></div>
  <p align="center"><font size="2" face="Times New Roman, Times, serif"> <b>Foreign Exchange Reserves</b> </font></p>

<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
	<TD align=left><font size="1" face="Times New Roman, Times, serif">
    <B>End of</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD colspan="7" align=center><font size="1" face="Times New Roman, Times, serif">	  <B>Rs
    billion</B>	</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD colspan=7 align=center><font size="1" face="Times New Roman, Times, serif"> <b>US&#36;billion</b></font><font face="Times New Roman, Times, serif">&nbsp;	</font></TD>
  </TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=center>&nbsp;</TD>
  <TD colspan="7" align=center><hr size="1" noshade></TD>
  <TD align=center>&nbsp;</TD>
  <TD colspan="7" align=center><hr size="1" noshade></TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;

	</TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>Foreign currency Assets</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>Gold</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>SDRs</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>Total</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>Foreign currency Assets</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>Gold</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>SDRs</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>Total</B></font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=center>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=center>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=center>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Jun-03</font></TD>
	<TD width="2%" align=left>&nbsp;</TD>
	<TD width="12%" align=right><font size="2" face="Times New Roman, Times, serif">3650.0</font></TD>
	<TD width="2%" align=left>&nbsp;</TD>
	<TD width="8%" align=right><font size="2" face="Times New Roman, Times, serif"> 171.8</font></TD>
	<TD width="2%" align=center>&nbsp;</TD>
	<TD width="8%" align=right><font size="2" face="Times New Roman, Times, serif">
0.1</font></TD>
	<TD width="2%" align=right>&nbsp;</TD>
	<TD width="8%" align=right><font size="2" face="Times New Roman, Times, serif">
3867.2</font></TD>
	<TD width="2%" align=right>&nbsp;</TD>
	<TD width="12%" align=right><font size="2" face="Times New Roman, Times, serif">
78.5</font></TD>
	<TD width="2%" align=center>&nbsp;</TD>
	<TD width="8%" align=right><font size="2" face="Times New Roman, Times, serif">
3.7</font></TD>
	<TD width="2%" align=right>&nbsp;</TD>
	<TD width="8%" align=right><font size="2" face="Times New Roman, Times, serif">
0.001</font></TD>
	<TD width="2%" align=center>&nbsp;</TD>
	<TD width="8%" align=right><font size="2" face="Times New Roman, Times, serif">
83.2</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Sep-03</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">3998.7</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 179.7</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4233.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
87.2</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.004</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
92.3</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Dec-03</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 4452.3</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 192.3</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4704.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
97.6</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.003</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
103.2</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Mar-04</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 4662.2</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 182.2</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4901.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
107.4</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.002</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
113.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Mar-04</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 4662.2</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 182.2</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4901.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
107.4</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.002</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
113.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Jun-04</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 5248.7</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 186.6</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5495.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
114.2</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.002</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
119.5</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Sep-04</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 5266.1</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 193.5</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.1</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5519.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
114.1</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.001</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
119.6</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Dec-04</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 5454.7</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 199.7</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5716.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
125.2</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.6</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.005</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
131.2</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Mar-05</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 5931.2</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 196.9</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6191.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
135.6</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.005</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
141.5</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Jun-05</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 5758.6</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 193.8</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6020.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
132.4</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.004</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
138.4</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Sep-05</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 6023.1</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 207.3</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6293.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
136.9</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.004</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
143.1</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Dec-05</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 5905.0</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif"> 237.7</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
6183.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
131.0</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0.005</font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
137.2</font></TD>
</TR>
<TR valign="bottom">
  <TD colspan="17" align=left><hr align="left" width="100" size="1" noshade></TD>
</TR>
<TR valign="bottom">
  <TD colspan="17" align=left><font size="1" face="Times New Roman, Times, serif"> <b><i>Source:
    RBI Handbook of Statistics, 2005-06 </i></b></font></TD>
  </TR>
</TABLE>
<font size="2" face="Times New Roman"><div style="text-indent:0%"><P><font face="Times New Roman, Times, serif"> <I>Foreign Investment </I></font></P>
</div>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Foreign
      investment has historically had a limited role in India&#146;s economic
      development. However, after the Persian Gulf crisis in the early 1990s,
      India government
      policy began emphasizing and encouraging non-debt creating capital inflows
      over debt-creating capital inflows. Progressively liberal policies related
      thereto have led to increasing inflows of foreign investment in India,
      both in terms of
foreign direct investment as well as portfolio investment. Foreign investment
      is now allowed in all sectors, including the services sector, but continues
      to be subject to government-imposed foreign investment limits that still
      exist in certain
industries. </FONT></p></div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">To encourage
      foreign direct investment inflows, the Indian government has also granted
      permission for 100% foreign direct investment in the development of integrated
      townships and regional urban infrastructure, the tea sector and advertising
      and film production. In January 2004, the Indian government revised foreign
      direct investment limits in several sectors, including the banking, petroleum
      and
natural gas sectors. In 2004/2005 it enhanced the cap on FDI in the domestic
      airlines sector and the basic and cellular telecom services. FDI has been
      permitted in FM Radio Broadcasting. Foreign direct investment in India,
      which was US&#36;97.0
million in 1990/1991, reached a peak of US&#36;6.1 billion in 2001/2002. These inflows moderated in the next two years, before rebounding to US&#36;5.6 billion in 2004/2005, taking a jump of US&#36;1
billion in year.</FONT></p></div>
<p align="center"><font size="2" face="Times New Roman, Times, serif">      B-23</font><font face="Times New Roman, Times, serif">
</font></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb24"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><font size="2" face="Times New Roman, Times, serif">The table
      below sets forth trends in foreign direct investment in India since 1994/1995:</font></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> <b>Trend in Foreign Institutional Investment</b> </font></p>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="center" valign="bottom">
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Gross</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Cumulative Net</B></font></TD>
</TR>
<TR align="center" valign="bottom">
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Purchases</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Gross Sales</B></font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Net Investment</B>
	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Net Investment</B>
	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">
    <B>Investment*</B></font></TD>
</TR>
<TR align="center" valign="bottom">
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD><hr size="1" noshade></TD>
  <TD>&nbsp;</TD>
  <TD><hr size="1" noshade></TD>
  <TD></TD>
  <TD><hr size="1" noshade></TD>
  <TD>&nbsp;</TD>
  <TD><hr size="1" noshade></TD>
  <TD>&nbsp;</TD>
  <TD><hr size="1" noshade></TD>
</TR>
<TR align="center" valign="bottom">
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD colspan="5"><font size="1" face="Times New Roman, Times, serif">&nbsp; &nbsp;
        <B>Rs. billion</B>&nbsp;&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;	</font></TD>
	<TD><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD colspan=3><font size="1" face="Times New Roman, Times, serif">
    <B>US&#36;million</B></font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD colspan="5" align=right><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD colspan="3" align=right><hr size="1" noshade></TD>
  </TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1992/93</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
0.2</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
0.0</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    0.1
	</font></TD>
	<TD width=2% align=left>&nbsp;

	</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    4.0
	</font></TD>
	<TD width=2% align=left>&nbsp;

	</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
4.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1993/94</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
55.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    51.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1634.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1638.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1994/95</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
76.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
28.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    48.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1528.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3167.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1995/96</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
96.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
27.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    69.4
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2036.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5202.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1996/97</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
155.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
69.8</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    85.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2432.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
7634.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1997/98</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
187.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
127.4</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    59.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1650.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
9284.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1998/99</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
161.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
177.0</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (15.8
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    (386.0
	</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
)</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
8898.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1999/00</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
568.6</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
467.3</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    101.2
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2339.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
11237.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2000/01</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
740.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
641.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    99.3
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    2159.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
13396.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2001/02</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
499.2</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
411.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    87.6
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    1846.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
15242.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2002/03</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
470.6</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
443.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    26.9
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    562.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
15805.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2003/04</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1448.6</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
990.9</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    457.7
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    9950.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
25755.0</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2004/05</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2169.5</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
1710.7</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    458.8
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    10172.0
	</font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
35927.0</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><hr align="left" width="100" size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left valign="top"><font size="1" face="Times New Roman, Times, serif">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
    monthly exchange rates </font> </TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left valign="top"><font size="1" face="Times New Roman, Times, serif">Source: Annual
    Report, 2004/2005, Securities and Exchange Board of India</font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
</TABLE>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Prior
      to 1992, only non-resident Indians and &#147;overseas corporate bodies&#148; were allowed to make portfolio investments in India. In September 1992,
the Indian government issued guidelines which, subject to certain limits noted above, allow foreign institutional investors, such as pension funds, mutual funds, investment trusts, asset management companies, nominee companies and
incorporated/institutional portfolio managers or their agents, to invest in securities traded on the primary and secondary markets. See &#147;Investment in India&#148; in
the prospectus. The Reserve Bank of India monitors foreign investment limits
for the companies to ensure compliance.</FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">As of March 31, 2005, approximately 685 foreign institutional investors were registered with SEBI, with an accretion of 145 investors over one year.
</FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>External Debt</B></font><font face="Times New Roman, Times, serif">
</font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">India&#146;s external debt situation has improved considerably since the crisis in the early 1990s. India&#146;s external debt stock stood at US&#36;123.3
billion in 2004/2005 as against US&#36;101.3 billion in 2001. Despite the trend
toward external debt in recent years, the key debt indicators have improved considerably
over time. The external debt to GDP ratio, signifying the extent of external
debt </FONT><font face="Times New Roman, Times, serif"><I><FONT size=2>vis-&agrave;-vis </FONT></I><FONT size=2>domestic
output, has almost halved from its peak of 33.8% in March 1994 to 17.3% in March
2005. Similarly, the debt service ratio has more than halved from its peak of
35.3% in 1990/91 to 16.3% in 2003/2004 before plunging to 6.2% in 2004/2005.
In the recent period, improvement in India&#146;s external debt position is
attributable to a conscious debt management policy that continued to focus on
raising loans from least expensive sources with longer maturities, monitoring
of short-term debt, keeping commercial debt under manageable limits with end-use
stipulations and options to convert external commercial borrowings into equity,
restriction on trade credits, encouraging non-debt creating capital flows and
accelerating the growth of exports. </FONT></font></p></div>
<P align="center"><font face="Times New Roman, Times, serif">
<B><FONT size=2>External Debt (As of end-March)</FONT></B><BR>
<B><FONT size=2>In US&#36;million </FONT></B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
	<TD align=left>&nbsp;

	</TD>
	<TD align=left><font size="1" face="Times New Roman, Times, serif">
    <B>Item</B></font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2001</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2002</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2003</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2004</B></font></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
    <B>2005</B></font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right><hr size="1" noshade></TD>
</TR>
<TR valign="top">
	<TD width=3% align=left><font size="2" face="Times New Roman, Times, serif">
1</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Multilateral</font></TD>
	<TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
31105</font></TD>
	<TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
31899</font></TD>
	<TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
30002</font></TD>
	<TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
29288</font></TD>
	<TD width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
31763</font></TD>
</TR>
<TR valign="top">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
A</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Government borrowing</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
27414</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
28290</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
27271</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
26826</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
29143</font></TD>
</TR>
<TR valign="top">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
B</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
B. Non-government borrowing</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3691</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3609</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2731</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2462</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
2620</font></TD>
</TR>
<TR valign="top">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Bilateral</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
15975</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
15323</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
16802</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
17278</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
17222</font></TD>
</TR>
<TR valign="top">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
A</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Government borrowing</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
12176</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
11540</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
12664</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
12988</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
13067</font></TD>
</TR>
<TR valign="top">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
B</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Non-government borrowing</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3799</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
3783</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4138</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4290</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4155</font></TD>
</TR>
<TR valign="top">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
3</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
International Monetary Fund</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
0</font></TD>
</TR>
<TR valign="top">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
4</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Trade credit</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5923</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
5368</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4973</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4680</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
4960</font></TD>
</TR>
<TR valign="top">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
5</font></TD>
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
Commercial borrowing</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
24408</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
23320</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
22530</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
22101</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
26942</font></TD>
</TR>
<TR valign="top">
  <TD align=left><font size="2" face="Times New Roman, Times, serif">6&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
  <TD align=left><font face="Times New Roman, Times, serif"> <font size="2"> NRI &amp; FC
    (B&amp;O) deposits (above one-year</font> <FONT size=2>maturity)</FONT></font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 16568</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 17154</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 23160</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 31216</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 32599</font></TD>
</TR>
<TR valign="top">
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> 7</font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> Rupee debt</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 3719</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 3034</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2822</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2721</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2300</font></TD>
</TR>
<TR valign="top">
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> 8</font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> Total long-term debt
      (1 TO 7)</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 97698</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 96098</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 100289</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 107284</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 115786</font></TD>
</TR>
<TR valign="top">
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> 9</font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> Short-term debt</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 3628</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 2745</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 4669</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 4431</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 7524</font></TD>
</TR>
<TR valign="top">
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> 10</font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> Gross total</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 101326</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 98843</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 104958</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 111715</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 123310</font></TD>
</TR>
<TR valign="top">
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> Debt indicators</font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
</TR>
<TR valign="top">
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> Debt stock to GDP ratio
      (%)</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 22.6</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 21.1</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 20.2</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 17.8</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 17.4</font></TD>
</TR>
<TR valign="top">
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif"> Debt-service ratio (%)*</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 16.6</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 13.4</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 16.4</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 16.3</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif"> 6.2</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left><hr align="left" width="100" size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left><font face="Times New Roman, Times, serif"><FONT size=1>*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
    fiscal year; including debt servicing on non-civilian credits</FONT><br>
    </font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left><font size="1" face="Times New Roman, Times, serif"><i>Source:
    RBI Handbook 2005-06</i></font></TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
</TABLE>

<P align="center"><font size="2" face="Times New Roman, Times, serif">
B-24</font></P>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pb25"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<p><font size="2" face="Times New Roman, Times, serif"><B>Foreign Exchange</B></font></p>
<div style="text-indent:0%"><p><font face="Times New Roman, Times, serif"><font size="2"><I>Exchange
          Rates</I> </font>
</font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The exchange rate for the Indian rupee is market-based, except for occasional counter-cyclical operations by the Reserve Bank of India. The Indian exchange
rate management policy continues to emphasize exchange rate stability without a fixed rate target and allows underlying demand and supply conditions to determine exchange rate movements. The Reserve Bank of India monitors financial market
developments in India and abroad to coordinate market operations with its regulatory measures. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Indian rupee depreciated against the U.S. dollar from Rs. 31.398 per U.S. dollar in 1993/1994 to Rs. 44.93 per U.S. dollar in 2004/2005. In 2003/2004,
the Reserve Bank of India became a net purchaser of U.S. dollars in order to maintain the exchange rate in the face of foreign investment inflows and private remittances. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The following table sets forth changes in the Indian rupee-U.S. dollar exchange rate during the indicated periods:</FONT></p></div>
  <p align="center"><font size="2" face="Times New Roman, Times, serif"><b>Exchange Rates (a)<br>
(Rupees per U.S. Dollar)</b></font></p>
<TABLE width="100%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1994/95</font></TD>
	<TD width="10%" align=right><font size="2" face="Times New Roman, Times, serif">    31.3986</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1995/96</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">    33.4498</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1996/97</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">    35.4999</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1997/98</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">    37.1648</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1998/99</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">    42.0706</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
1999/00</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">    43.3327</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2000/01</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">    45.6844</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2001/02</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">    47.6919</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2002/03</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">    48.3953</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2003/04</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">    45.9516</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="2" face="Times New Roman, Times, serif">
2004/05</font></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">44.9315</font></TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><hr align="left" width="100" size="1" noshade></TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="1" face="Times New Roman, Times, serif">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annual/monthly
    averages </font></TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="1" face="Times New Roman, Times, serif"><i>Source:
    Reserve Bank of India Bulletin, Reserve Bank of India</i></font></TD>
  <TD align=right>&nbsp;</TD>
</TR>
</TABLE>
<div style="text-indent:0%"><p><font face="Times New Roman, Times, serif"><font size="2"><I>Exchange
          Controls</I></font><b><font size="2"><I> </I></font>
          </b></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      Reserve Bank of India administers India&#146;s exchange control system
      and has broad powers to regulate both inbound and outbound remittances
      of foreign
      exchange. The central government may also, in consultation with the Reserve
Bank of India, impose reasonable restrictions on current account transactions. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Reserve Bank of India promotes foreign currency exchange to resident Indians and non-resident Indians. It has relaxed exchange limits for study abroad,
travel, medical treatment, employment and foreign currency denominated accounts in India. In addition, a person residing in India is free to hold, own, transfer or invest in foreign currency, foreign securities or any immovable property situated
outside India if such currency, security or property was acquired, held or owned by that person when he resided outside India. </FONT></p></div>
<p align="center"><font size="2" face="Times New Roman, Times, serif">      B-25</font><font face="Times New Roman, Times, serif">
</font></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc1"></a>
</font><font face="Times New Roman"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<P align="right"><font size="2" face="Times New Roman, Times, serif"> <B>Appendix
C</B></font></P>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> <B>THE
INDIAN SECURITIES MARKET</B></font></P>
</font>
<p><font size="2" face="Times New Roman, Times, serif"><B>BACKGROUND</B></font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      earliest recorded capital market dealings in India were transactions in
      loan stocks
      of the East India Company at the end of the eighteenth century. By 1830,
      a wide range of bank and cotton mill securities were traded in Bombay and
      Calcutta. In 1875, the first stockbrokers&#146; organization, which later became the Bombay Stock Exchange Limited (the &#147;BSE&#148;),
was formally established. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Growth in stock market activity in the two decades following independence in 1947 was slow. Public sector enterprises played a primary role in Indian
government central planning during this period, and private sector growth suffered. The enactment of the Indian Foreign Exchange Regulation Act of 1973 significantly affected the Indian securities market. Under the Act, Indian corporations with
foreign shareholders were generally required to reduce the equity stake of foreign shareholders to less than 40%. As a result, many such corporations offered equity to the Indian public, which diluted the interests of foreign equity holders. These
offerings, most of which were made by well-known consumer goods manufacturers, were heavily oversubscribed and served to increase the liquidity and broaden the investor base of the Indian securities market. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Activity
      and broad interest in the market have increased in recent years compared
      to
      historical norms. This increase reflects the growth of the private sector
      in the Indian economy and greater participation in the market by individual
      investors. This has been accompanied by reforms and initiatives taken by
      the government and regulators. In addition, the Indian government has actively
      promoted
expanded capital market activity by both foreign and domestic investors and has
      adopted policies designed to increase domestic companies&#146; reliance
on the capital markets as a source of financing.</FONT></p></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Recent Developments</B></font><font face="Times New Roman, Times, serif">
</font></p>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">To
      keep pace with the global markets, the financial markets in India have
      gone through
      various stages of liberalization that have increased India&#146;s
degree of integration with global markets. Liberalization has included measures
      such as opening up the economy for investment and trade, decontrolling
      interest and exchange rates and creating regulatory institutions to ensure
      the safety and
integrity of the financial markets. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      an effort to improve the efficiency of Indian markets, the Indian central
      authority
      discontinued its practice of allocating resources among companies and instead
      allowed companies to issue their securities and raise funds at market-determined
      rates. Screen-based trading began, and the secondary markets were able
      to overcome previously existing geographical barriers. Counter-party guarantees
      encouraged trading, derivative securities were allowed, and trading cycles
      were shortened. All &#147;deferral&#148; products, which enabled speculative
      brokers to borrow securities in amounts far in excess of their net worth
      at pre-determined
interest rates, were banned.</FONT></p></div>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">In
      view of protecting the investor&#146;s interest and to increase transparency
      and efficiency of primary market, stringent disclosure and eligibility
      norms
      have been issued. In this regard, SEBI has been issuing amendments to the
      DIP (Disclosure and Investor Protection) Guidelines. SEBI also issued guidelines
stipulating the minimum number of investors in each mutual fund scheme.</FONT></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      March 2001, the Indian government announced the demutualization of Indian
      stock exchanges
      as a measure to improve institutional mechanisms and trading practices,
      and it also &#147;corporatized&#148; Indian stock exchanges such that ownership, management and trading membership are separate. It also instituted &#147;straight through processing,&#148; which Indian markets have adopted and which has
increased market efficiency. The Securities and Exchange Board of India (&#147;SEBI&#148;)
has also instituted more rigorous corporate governance standards through company
listing agreements. To enhance market and investment decision transparency, in
July 2000, SEBI also advised all Indian mutual funds to create records of their
investment decisions. In September 2001, SEBI issued guidelines that require
the agents and distributors of mutual funds to receive certification by the Indian
Association of Mutual Funds. </FONT></p></div>
<p align="center"><font size="2" face="Times New Roman, Times, serif">      C-1</font><font face="Times New Roman, Times, serif">
</font></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc2"></a><font size="2" face="Times New Roman">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Based on the recommendations of the Working Group of SEBI on dematerialization of securities, the number of scrips for compulsory demat trading by all
investors was increased in 2000. It was subsequently decided to achieve compulsory trading in demat form in respect of all actively traded scrips by March 31, 2001. As per the data furnished by the National Securities Depository Limited (NSDL) and
Central Depository Services Limited (CDSL), there has been significant progress in dematerialization since then. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      view to avoid market failures a comprehensive risk management system has
      been developed
      by the regulator/ exchanges. The clearing corporation has also put in place
      a system tacking online real time client level portfolio based upfront
      margining. The central government established a fund called Investor Education
      and Protection Fund (IEPF) in October 2001 for promotion of awareness amongst
      investors
and protection of investor&#146;s interest. With increased integration of Indian
securities market with the rest of the world, Indian companies have been permitted
to raise resources from abroad through issue of ADRs, GDPs, FCBs and ECBs. RBI
permitted two-way fungibility for ADRs and GDRs. Further, foreign companies have
also been allowed to tap the domestic stock markets.</FONT></p></div>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">In
      2002, the Indian government also enacted the Indian Securitization and
      Reconstruction
      of Financial Assets and Enforcement of Security Interest Act, 2002 and
      the Indian Security Interest (Enforcement) Rules, 2002. These laws allow
      for the enforcement of security interests without the need for judicial
      intervention and promote the creditors&#146; ability to enforce their security
      interests and recover
amounts owing from borrowers. The concept of a &#147;central listing authority&#148; has
also been promoted so that issuers would be subject to a more uniform application,
review and delisting process. As per the announcement in the 2004-05 Budget,
an ordinance was passed amending the Securities Contracts (Regulation) Act to
provide
an
appropriate trading platform for small and mid-cap companies. This is expected
to create
liquidity
in small
and mid-cap companies and provide better opportunities for small investors. Following
the 2005-06 Budget recommendations, the RBI released its final guidelines in
February 2006 governing the securitization of performing assets in India in response
to a high-level committee report. These final guidelines are expected to enable
the
development of a vibrant and robust securitization market. </FONT></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">SEBI issued the SEBI (Interest Liability Regularisation) Scheme, 2004 in an attempt to bring a satisfactory solution to the problem of registration fees
payable by brokers in the cash segments of the Exchanges. SEBI amended the clause 49 of the listing agreement to improve the standards of corporate governance.</FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Unit Trust of India (Transfer of Undertaking and Repeal) Ordinance 2002 was promulgated on October 29, 2002 to repeal the UTI Act 1963, which has now
become an Act. Further, observed shortcomings in the legal provisions of the SEBI Act, 1992 along with increasing importance of the securities market resulted in amendment of the Act to strengthen the investigation and enforcement mechanisms. SEBI
(Amendment) Ordinance was thus promulgated on October 29, 2002 which has now become an Act.</FONT></p></div>
<div style="text-indent:3%">
<p><FONT size=2 face="Times New Roman, Times, serif">SEBI
      revised eligibility criteria for introducing futures and options contracts
      on stocks and indices effective September 1, 2004. SEBI also stated the
      methodology
      for calculating the quarter sigma order size. It further specified the
      criterion for discontinuance of derivative contracts on stocks and indices.
      Further, SEBI approved certain provisions with regards to the position
      limits for FIIs in
equity index derivative contracts.</FONT></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Indian government has recently amended many market regulations. It has promoted disinvestment by state public sector units, created new corporate
disclosure requirements and eased restrictions on corporate changes in control. With respect to the latter, the government now allows for changes of control by special resolution instead of ordinary resolution and has eliminated the requirement that
acquiring companies submit public announcements to SEBI, the Indian stock exchanges and target companies in advance of their release. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">SEBI
      issued the SEBI (Delisting of Securities) Guidelines, 2003 on February
      17, 2003.
      The Guidelines provide that companies could delist from stock exchanges
      only by offering an exit route to remaining shareholders through a reverse
      book building process. This mechanism would leave the option of pricing
      to the investors and would be transparent to the market. Further,
      the promoter shall offer a
floor price on the basis of the average of the previous 26 weeks&#146; high and
low prices to investors. These guidelines were aimed at protecting the interests
of the small investors in the wake of any company delisting from the exchanges. </FONT></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif">      C-2</font><font face="Times New Roman, Times, serif">
</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc3"></a> </font><font face="TimesNewRoman,Times New Roman,Times,serif"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><i>Policy Developments</i></font></p>
</div>
</font>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">The following policy
    developments in regard to the capital markets have also occurred:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">A specific quota
          of 5% to the  mutual funds registered with SEBI in terms of SEBI (Mutual
          Funds) Regulation will be provided within the Qualified Institutional
         Buyer (QIB) category was introduced since September
          2005. The amendment is expected to ensure minimal sale of shares to
         mutual
      funds in IPO auctions.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">The allotment system
        of QIBs, whereby the allotment was decided by the Issuer in consultation
      with the Book Running Lead Managers (BRLMs) has been withdrawn.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">The Union Budget 2006/2007
      increased the limit on FII investment in government securities from &#36;1.75 billion to &#36;2 billion and the limit on FII investment
      in corporate debt from &#36;0.5 billion to &#36;1.5 billion.</font> </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">To broaden the market
        participation  base in the debt market, the Budget 2006-07 now allows
        the trade of qualified mutual funds, provident funds and pension funds

      on the NDS-OM which is the electronic order matching
      debt trading module introduced by the RBI. The Budget also proposed the
         setting up of a unified platform for exchange based
      trading in corporate bonds.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> Long-term capital gains tax on
      securities transactions has been abolished.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">The securities transactions
        tax was increased by 25% in the 2006/2007 Budget.</font></td>
  </tr>
</table>
<p><font size="2" face="Times New Roman, Times, serif"><b>Recent Banking and Securities Market
  Scandals</b></font></p>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Despite a number of market reforms noted
    above, periodic financial and banking scandals have nevertheless occurred.
    For example: </font></p>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> In 1997, the CRB mutual fund, a
      SEBI-licensed fund, stole invested funds.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <font size=2>In 1998, Mr. Harshad Mehta
      was accused of manipulating stock prices with the assistance of several</font>
        <font size=2>companies&#146; management and the BSE.</font></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">Between 1997 and 2001, according
      to a government-appointed committee, the Unit Trust of India made
      unauthorized investments equal to Rs. 30 billion in the securities of twenty-four
      companies. This mismanagement and poor investment approval
      process has allegedly contributed to its low net asset value.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <font size=2>In 1998, the
          Unit Scheme 1964,  which is an Indian savings and retirement banking
          instrument,</font> <font size=2>reported
      a significant net asset value drop. Corruption was alleged, and the Indian
           government was</font> <font size=2>forced to contribute Rs. 18 billion
           to  avoid its collapse. The Unit Scheme 1964 paid a dividend yield
           of</font>
      <font size=2>18% in 1993/1994 UTI suspended fresh sales and repurchase
      under  US-64 in June 2001.</font></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">On February 28, 2001, the BSE
      index rose initially but thereafter crashed. Nearly 700 points were lost in eight trading sessions leading to erosion in market capitalization
      of Rs 1,460 billion. This erratic behavior was traced
      to a handful of brokers, led by Ketan Parekh, who had manipulated prices
      of shares of a few select companies in information technology,
      communication and entertainment sector.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">In December 2005,
        SEBI unearthed massive irregularities in the allotment of the Yes Bank
        IPO. The YES Bank IPO for Rs 3 billion, which was oversubscribed 30 times,
        SEBI discovered a single investor with 6,500 demat accounts and another
    with about 1,300.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">In January 2006,
        another multiple  demat account scam was unearthed. Fictitious applications
        cornered
      8.29% of the retail shares allotted in the IDFC public issue
      The allotments made in the IPOs to various applicants
      were transferred in off-market deals to these beneficiaries just ahead
        of  the listing of shares, and the involved parties had
      made huge profits by selling the shares immediately on listing. High net
        worth individuals tried to masquerade as small investors so  that they
        could get a higher allotment in the various
      public issues that enter the market. In book built public issues, under
         the present guidelines, 35% shares are reserved for
      retail investors (those who apply for shares worth less than Rs 100,000)
        and 15% for high net worth individuals, who invest more than  that.</font></td>
  </tr>
</table>
<p align="center"><font size=2 face="Times New Roman, Times, serif">C-3</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc4"></a> </font><font face="TimesNewRoman,Times New Roman,Times,serif"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><b>CAPITAL STRUCTURE</b></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><b>Public and Private Companies</b></font></p>
</font>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Indian law permits three
      types of companies&#151;companies
    limited by shares, companies limited by guarantees and companies with unlimited
    liability. Only limited share companies may be publicly traded. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Indian law regulates public
      companies with respect to public offerings, management, borrowing and interactions
      with
    shareholders and creditors. Public companies must register with the Indian
      Registrar of Companies and distribute to security holders audited annual
      financial
    statements that comply with the minimum disclosure requirements and regulations
      that govern their manner of presentation. Each company&#146;s listing agreement
      regulates corporate governance and requires that listed companies submit
      quarterly
    financial statements to their stock exchange as well as immediately notify
    their stock exchange of any information that would affect their stock price. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The Indian accounting profession is self-regulated
    by the Institute of Chartered Accountants of India, which follows the accounting
    system and procedures prevalent in the United Kingdom. All accountants must
    comply with its standards. The Institute and SEBI require Indian companies
    to account for deferred taxation, consolidate their financial reports and
    disclose related party transactions. They also require Indian companies to
    account for intangible assets and impairments of assets. </font></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><b>Equity</b></font></p>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Under the Indian Companies
      Act, 1956, Indian companies may issue only &#147;ordinary (equity) shares&#148; and &#147;preference
    shares.&#148; Ordinary shares may have voting rights or preferential rights
    to dividends or voting, and preferential shares may have preferential rights
    to dividends or repayment of capital. Preference shares have no voting rights
    except when their dividends are in arrears for a period of two years or when
    a company proposal would affect their rights. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Subject to its charter,
      Indian companies may also issue &#147;redeemable preference shares&#148; that are redeemable
    within twenty years of their issuance. A company may only redeem such shares
    out of its profits or from the proceeds of a new share issuance designed specifically
    for the purposes of the redemption. Moreover, a company may not redeem any
    redeemable preference share unless all shares are fully paid in and the premium,
    if any, was provided for out of the company&#146;s profits of or a &#147;share
    premium account.&#148; In some instances, a company must also transfer the
    redemption amount to a special &#147;capital redemption reserve account.&#148;
    Companies may also issue &#147;sweat&#148; equity shares to employees and
    directors so long as the shareholders authorize the issue. Companies may
    not
    issue such shares prior to the end of the first year after which they commenced
    operations. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Shareholders of public
      Indian companies possess preemptive rights by statute, which any shareholder
      may decline, and
    shares obtained pursuant to such rights are known as &#147;rights&#148; shares,
    which are offered to existing and registered shareholders in proportion to
    their paid-in capital as of a certain date. Preference shareholders have no
    preemptive rights. In addition, neither the issuance nor the conversion of
    convertible debenture will trigger a preemptive right if the company&#146;s
    shareholders approved the issuance of the debenture. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Indian companies may not make market
    purchases of their own shares, but they may buy back their securities and
    reduce their share capital in compliance with certain Indian laws.</font></p>
  <p align="center"><font size=2 face="Times New Roman, Times, serif">C-4</font></p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc5"></a> </font><font face="TimesNewRoman,Times New Roman,Times,serif"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><b>Dividends</b></font></p>
</font>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Under Indian law, shareholders have no
    power to declare a dividend without recommendation of the board of directors.
    The dividend must be distributed and paid to shareholders in proportion to
    their paid-in capital as of a certain record date. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">An Indian company may,
      pursuant to a shareholder resolution, issue &#147;bonus shares,&#148; or stock dividends,
    to existing stockholders. Bonus shares must be issued pro rata to the shareholder&#146;s
    paid in capital, and no company shall, pending the conversion of any convertible
    security, issue bonus shares unless it confers a similar benefit to convertible
    security holders. In order to issue such shares, a company may not be in
    payment
    default on any fixed deposits and outstanding debentures. A company must
    also not have reason to believe that it has defaulted in the payment of any
    statutory
    employee dues, </font><font face="Times New Roman, Times, serif"><i><font size=2>i.e.</font></i><font size=2>,
    contribution to a provident fund, a gratuity or a bonus. Bonus shares must
    be issued within six months of their approval by the company&#146;s board
    of directors or its stockholders, whichever occurs later. </font></font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">A company may also pay
      interim cash dividends. Under the Indian Companies Act, such dividends
      may only be paid in cash to
    shareholders listed on the register of shareholders as of a specified record
      date. A shareholder may not receive dividends so long as any lien in respect
      of unpaid calls on any of their shares remains outstanding. Cash dividends
      must be paid within thirty days from the date that they are declared, and
      any dividend that remains unpaid or unclaimed after that period will be
      transferred
    to a special &#147;unpaid dividend&#148; account. Any money that remains unpaid
    or unclaimed for seven years thereafter will be transferred to the Indian
    governments&#146; Investor Education and Protection Fund, and the shareholder
    will lose all rights or claims to the dividend. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Under the Indian Companies
      Act, an Indian company can only pay a cash dividend in excess of 10% of
      its paid-in capital
    out of its profits and after it has transferred to a reserve account a percentage
      of its profits ranging from 2.5% to 10%. The Indian Companies Act also
      provides
    that, if a company&#146;s profit for a year is insufficient to meet the dividend,
    the dividend may be paid out of the company&#146;s accumulated profits from
    prior years, subject to the following conditions: </font></p>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <font size=2>the dividend rate may not exceed
      the lesser of (a) the average dividend rate for the preceding five years</font>
        <font size=2>or (b) 10% of paid-in capital;</font></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">the total amount
        to be paid  out of accumulated profits from previous years may not exceed
        an amount equal to 10% of paid-in capital and reserves, and the amount

      to be paid must first be used to offset any losses incurred
      in the prior financial year; and</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> the balance of reserves after withdrawals
      may not be below 15% of paid-in capital.</font></td>
  </tr>
</table>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><i>Dividend Declaration by Banks</i></font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The Reserve Bank of India revised guidelines
    on dividends payable by banks in consultation with the standing Technical
    Advisory Committee in Financial Regulation (STACFR). To be eligible to declare
    dividends without prior approval of RBI, banks need to comply with the minimum
    prudential requirements of (a) CRAR of at least 11% for the preceding two
    completed years and the accounting year for which it proposes to declare a
    dividend and (b) net NPA less than 3%. The bank also needs to comply with
    the provisions of Sections 15 and 17 of the Banking Regulation Act, 1949.</font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The bank has to comply with the prevailing
    guidelines issued by the RBI, including creating adequate provisions for impairment
    of assets and staff retirement benefits, transfer of profits to statutory
    Reserves and Investment Fluctuation Reserves. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Banks qualifying to declare
      dividends shall pay dividends subject to further compliance with the following:
      (a)
    dividend payout ratio shall not exceed 33.33%; (b) proposed dividend shall
      be payable out of the current years profit; (c) dividend pay out ratio
      is
    calculated as a percentage of &#145;dividend payable in a year&#146; to &#145;net
    profit during the year&#146;; (d) in case the profit for the relevant period
    includes any extra-ordinary profits/income, the payout ratio shall be computed
    after excluding extra-ordinary items for reckoning compliance with the prudential
    payout ratio ceiling of 33.33%; (e) the financial statements pertaining to
    the financial year for which the bank is declaring a dividend should be free
    of any qualifications by the statutory auditors, which have an adverse bearing
    on profit during that year.</font></p>
</div>
<p align="center"><font size=2 face="Times New Roman, Times, serif">C-5</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc6"></a> </font><font face="TimesNewRoman,Times New Roman,Times,serif"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<p><font size="2" face="Times New Roman, Times, serif"><b>Corporate Debt</b></font></p>
</font>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The Indian corporate sector relies heavily
    on raising capital through debt issues, including bonds, debentures, fixed
    deposits and commercial paper. The securitized debt market has grown at more
    than 60% in the last four years, and more than 90% of recent Indian corporate
    debt bond issues have been effected through private placements. Nevertheless,
    while some corporate debt securities trade on the Indian stock exchanges,
    the Indian secondary market for such securities is not yet mature. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Issuers with outstanding debt securities
    must make regular disclosures pursuant to SEBI guidelines and their listing
    agreement with their securities exchange. Issuers must also appoint a SEBI-registered
    debenture trustee in respect of all debt securities, and the debt securities
    can be traded and issued in demat form. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">All listed debt securities, regardless
    of their maturity period, must carry a credit rating from a SEBI-registered
    Indian credit rating agency that is not below investment grade. Four credit
    rating agencies currently operate in India: CRISIL Ltd., Indian Credit Rating
    Agency, Credit Analysis and Research Limited and Fitch Rating India Pvt. Limited.
    </font></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><b>Government Securities</b></font></p>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Indian government securities form the
    oldest and most dominant part of the debt market in India. The market for
    Indian government securities includes securities issued by the Indian central
    government and the Indian state governments. Interest rates in this market
    provide benchmarks for other segments of the financial market. Historically,
    the impetus for development of the government securities market in India has
    come from the large government borrowing requirements while an additional
    reason during the 1990s was the increased capital flows and the need for sterilization.
    </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Recently, municipalities have also begun
    to access the Indian debt markets. The Indian central government conducts
    its issues principally through dated securities and treasury bills, and Indian
    state governments rely solely on state development loans. The major investors
    in Indian government securities are banks, insurance companies, primary dealers
    and financial institutions. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The Reserve Bank stepped up efforts to
    deepen and broaden the government securities market in the country. The measures
    to improve functional efficiency through improved technological infrastructure
    were accompanied by an assessment of the risk management systems in place
    under the new institutional arrangements. The Fiscal Responsibility and Budget
    Management (FRBM) Act, 2003 prohibits the Reserve Bank from participating
    in primary issuances of government securities with effect from April 1, 2006,
    except under exceptional circumstances. </font></p>
</div>
<p align="center"><font face="Times New Roman, Times, serif"> <b><font size=2>Issuance of Government
  Securities</font></b><br>
  <b><font size=2>(Rs. billions) </font></b></font></p>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr valign="bottom">
    <td align=left><font size="1" face="Times New Roman, Times, serif"> <b>Year Ended March
      31</b>&nbsp; </font></td>
    <td align=center>&nbsp;</td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>Central Government</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>State Governments</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>Total</b></font></td>
    <td align=center>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><hr size="1" noshade></td>
    <td align=center>&nbsp;</td>
    <td align=center><hr size="1" noshade></td>
    <td align=left>&nbsp;</td>
    <td align=left><hr size="1" noshade></td>
    <td align=center>&nbsp;</td>
    <td align=center><hr size="1" noshade></td>
    <td align=center>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> 2001</font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=10% align=right><font size="2" face="Times New Roman, Times, serif"> 1,151.83</font></td>
    <td width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td width=10% align=right><font size="2" face="Times New Roman, Times, serif"> 133.00</font></td>
    <td width=2% align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td width=10% align=right><font size="2" face="Times New Roman, Times, serif"> 1,284.83</font></td>
    <td width=2% align=center>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> 2002</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1,338.01</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 187.07</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1,525.08</font></td>
    <td align=center>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> 2003</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1,511.26</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 308.53</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1,819.79</font></td>
    <td align=center>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> 2004</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1,476.36</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 505.21</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1,981.57</font></td>
    <td align=center>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> 2005</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1,065.01</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 391.01</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1,456.02</font></td>
    <td align=center>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font face="Times New Roman, Times, serif"><i> <font size=1>Source: ISMR
      2005, SEBI</font>&nbsp; </i></font></td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
  </tr>
</table>
<p align="center"><font size=2 face="Times New Roman, Times, serif">C-6</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc7"></a> </font><font face="TimesNewRoman,Times New Roman,Times,serif"><p><font size="2" face="Times New Roman, Times, serif"><a href="#contents">Back to Contents</a></font></p>
<p><font size="2" face="Times New Roman, Times, serif"> <b>REGULATORY STRUCTURE
  </b></font></p>
<p><font size="2" face="Times New Roman, Times, serif"> <b>Introduction </b></font></p>
</font>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Although the government&#146;s
      Department of Economic Affairs, its Department of Company Affairs, the
      Reserve Bank of
    India and SEBI collectively regulate the Indian securities markets, SEBI
    is the principal regulator.</font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">SEBI was established in
      1988 and was given statutory authority to promulgate and enforce regulations
      in April 1992.
    It was created because the regulatory framework existing prior to its creation
      was fragmented, making regulatory supervision of the markets and the enforcement
      of statutes and regulations difficult and ineffective. SEBI&#146;s framework
    provides for investor safeguards through disclosure requirements and accounting
    standards, arbitration procedures and the establishment of a small investors&#146; protection
    fund. It also promulgates rules against insider trading and other market
    abuses. </font></p>
</div>
<div style="text-indent:3%">
  <p align="left"><font size="2" face="Times New Roman, Times, serif"> Some of the principal
    legislation governing the Indian securities markets includes the following:</font></p>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size=2 face="Times New Roman, Times, serif"><b>The Indian
          SEBI Act, </b>1992, which establishes SEBI and its objectives and powers.
          The Act empowers SEBI to (a) protect the investors&#146; interests (b) promote
      development of securities market and (c) regulate the
      Indian securities markets. SEBI&#146;s regulatory jurisdiction covers corporations
      that issue equity or transfer securities as well as
      all market intermediaries. In addition to the above, SEBI also
      regulates self-regulatory organizations, merchant banks, mutual funds,
      venture capital funds, foreign institutional investors, custodians,
      underwriters, debenture trustees, share registrars and transfer agents,
      portfolio managers, stockbrokers and sub-brokers.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size=2 face="Times New Roman, Times, serif"><b>Securities Contracts (Regulation)
      Act, 1956 </b>provides for direct and indirect control
      of virtually all aspects of the securities trading including
      the running of stock exchanges which aims to prevent undesirable
      transactions in securities. It gives the central government regulatory judiciary
      over (a) stock exchanges through a process of recognition
      and continued supervision, (b) contracts in securities and
      (c) listing of securities on stock exchanges. Stock exchanges comply with
      the requirements prescribed by the central government
      as a condition of recognition. The stock exchanges frame their own
      listing regulations consistent with the minimum listing criteria set out
      in the Rules.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size=2 face="Times New Roman, Times, serif"><b>The Indian Depositories
      Act, 1996</b>, which provides for establishment of depositories
      for securities to ensure transferability of securities
      with speed, accuracy and security by making securities of public limited companies more freely transferable subject to exceptions.
      Further by dematerializing the securities in the depository
      mode and by providing for maintenance of ownership records in a book entry form. By making the securities of all public limited
      companies more freely transferable, this Act has restricted
      a company&#146;s right to exercise discretion in effecting transfers in
      its securities.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font face="Times New Roman, Times, serif"> <b><font size=2>The Indian Companies Act,
      1956</font></b><font size=2>, which is described in more detail above under &#147;Capital
      Structure.&#148;</font></font></td>
  </tr>
</table>
<p><font size="2" face="Times New Roman, Times, serif"> <b>Public Offerings </b></font></p>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Indian companies can raise
      capital in the primary market through initial public offerings, rights
      issues or private
    placements, the latter of which is discussed under &#147;&#151;Private Offerings&#148;
    below. An issuer may conduct its initial public offering through several methods,
    including the &#147;fixed price&#148; method, a &#147;book building&#148;
    method or a combination thereof. Under the book building method, underwriters
    must keep the &#147;book&#148; open for a specified period, during which
    time investors submit bids at various prices above or equal to a set price
    floor.
    Once the book closes, the issue price is determined based on certain criteria
    and calculations. Under the fixed price method, the issue price is pre-determined. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Primary issues may be
      managed by domestic merchant bankers, which generally are merchant banking
      divisions of commercial
    banks and major financial institutions or affiliates of large brokerage houses
      or financial services companies. All organizations that conduct merchant
      banking
    or underwriting activities must register with SEBI and are subject to its
      regulations. SEBI will review offering documentation before it is distributed
      to the investing public, and an issuer&#146;s board of directors must approve
    all draft prospectuses and related resolutions prior thereto. </font></p>
</div>
<div align="center">
  <p><font size=2 face="Times New Roman, Times, serif">C-7</font></p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc8"></a><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The amount of funds raised through public
    equity issues declined from Rs. 89 billion in 1995/1996 to Rs. 10.4 billion
    in 2002/2003, before increasing to Rs. 214 billion in 2004/2005. The funds
    raised through public debt issues increased from Rs. 29 billion in 1995/1996
    to Rs. 41.4 billion in 2000/2001. The total amount remained stable at Rs.
    41 billion in 2004/2005.</font></p>
</div>
<div style="text-indent:3%">
  <p align="left"><font size="2" face="Times New Roman, Times, serif"> The following table sets
    out the amount of new issues listed on the BSE from 1999 through 2003:</font></p>
  <p align="center"><font size="2" face="Times New Roman, Times, serif"><b>(Rs. billions)</b></font></p>
</div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> <b>Issues</b></font></td>
    <td align=center>&nbsp;</td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2000/01</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2001/02</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2002/03</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2003/04</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2004/05</b></font></td>
    <td align=left>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> <b>Corporate Securities</b></font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 784.0 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 744.0 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 752.4 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 748.5 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 1093.0 </font></td>
    <td width=2% align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Domestic Issues</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 742.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 720.6 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 718.1 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 717.5 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1059.4 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Public Issues</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 63.6 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 71.1 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 48.7 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 78.5 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 218.9 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Private Placement</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 678.4 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 649.5 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 669.5 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 639.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 840.5 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Euro Issues</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 42.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 23.4 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 34.3 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 31.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 33.5 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> <b>Government Securities</b></font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1284.8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1525.1 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1819.8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1981.6 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1456.0 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Central Governments</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1151.8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1338.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1511.3 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1476.4 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1065.0 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> State Governments</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 133.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 187.1 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 308.5 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 505.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 391.0 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> <b>Total</b></font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2068.8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2269.1 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2572.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2730.1 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2549.0 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="1" face="Times New Roman, Times, serif"> <i>Source: RBI </i></font></td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
  </tr>
</table>
<p><font size="2" face="Times New Roman, Times, serif"> <b>Private Offerings </b></font></p>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Private placements involve the issue
    of debt or equity securities to no more than 50 qualified subscribers, such
    as banks, financial institutions, mutual funds and high net worth individuals.
    Merchant bankers arrange the placements and act as agents of the issuer in
    soliciting potential investors. The number of privately placed debt issues
    declined from 558 in 2001/2002 to 319 in 2004/2005, with the total amount
    raised increasing from R.s 462 billion to 552 billion in the corresponding
    period.</font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The share of funds raised by the corporate
    sector through private placements of debt issues increased from 77% in 1995/1996
    to 93% in 2004/2005, with the remaining being mobilized by the public issues.</font></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> <b>Resource mobilization
  by the corporate sector through private placement of Debt</b></font></p>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr valign="bottom">
    <td align=left>&nbsp; </td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2001/02</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2002/03</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2003/04</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2004/05</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2005
    (Apr&#150;Dec)</b></font></td>
    <td align=left>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left>&nbsp;</td>
    <td align=center><hr size="1" noshade></td>
    <td align=center>&nbsp;</td>
    <td align=center><hr size="1" noshade></td>
    <td align=center>&nbsp;</td>
    <td align=center><hr size="1" noshade></td>
    <td align=center>&nbsp;</td>
    <td align=center><hr size="1" noshade></td>
    <td align=left>&nbsp;</td>
    <td align=left><hr size="1" noshade></td>
    <td align=left>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Number of Issues</font></td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 558</font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 485</font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 364</font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 319</font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font face="Times New Roman, Times, serif"> &nbsp; &nbsp; &nbsp;<font size=2>222</font></font></td>
    <td width=2% align=left>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Amount Issued (Rs billion)</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 462</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 484</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 484</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 552</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font face="Times New Roman, Times, serif"> &nbsp; &nbsp; &nbsp;<font size=2>476</font></font></td>
    <td align=left>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font face="Times New Roman, Times, serif"> <i><font size=1>Source: SEBI</font></i>&nbsp;
      </font></td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The Banking and term lending sector mobilized
    a significant share of 65% of the total issuances in 2005-06 (Apr-Dec). Notably,
    the share of issuances by the financial sector has grown considerably over
    the years. Most of the corporate bond issuances have been by the financial
    intermediaries. </font></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> <b>Sectoral Distribution
  of Resource Mobilized by Private Placements<br>
  (% Share) </b></font></p>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr valign="bottom">
    <td align=left>&nbsp; </td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2001/02</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2002/03</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2003/04</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2004/05</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2005/06 (Apr-Dec)</b></font></td>
    <td align=center>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Banking/term lending</font></td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 40.1</font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 41.4</font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 57.6 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 55.3 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 64.9 </font></td>
    <td width=2% align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Power</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 15.6 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size=2 face="Times New Roman, Times, serif">16.2</font><font face="Times New Roman, Times, serif">&nbsp;
      </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 17.3 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 15.8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 5.9 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Financial services</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 10.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 9.6 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 9.8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 9.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 9.3 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Water resources</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 4.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 3.5 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 4.9 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.2 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Telecommunications</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1.1 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.9 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Oil exploration refining</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 5.3 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2.3 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 4.8 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Steel/iron</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 3.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.9 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Road &amp; highways</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 3.1 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 12.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.0 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Aluminium</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1.6 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.6 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.0 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Engineering</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0.1 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="1" face="Times New Roman, Times, serif"> <i>Source: SEBI</i></font></td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
    <td align=right>&nbsp;</td>
  </tr>
</table>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> C-8</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc9"></a><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">While the total number of issuances through
    private placements has declined from 558 in 2001/2002 to 319 in 2004/2005,
    the share of issuances that went for credit rating increased from 80% to 93%
    during the respective period. Further, of the total amount raised in 2004-05,
    Rs. 535.5 billion (97%) was credit-rated. </font></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><b>International Offerings</b></font></p>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Indian companies also
      raise resources internationally through Foreign Currency Convertible Bonds,
      Global Depository
    Receipts (&#147;GDRs&#148;) and American Depository Receipts (&#147;ADRs&#148;).
    ADRs and GDRs are foreign currency denominated instruments traded on a stock
    exchange in Europe or the United States. In India, GDRs and ADRs are considered
    foreign direct investment and thus must conform to the existing foreign direct
    investment policies and limits. Since the 1990s, Indian companies have increasingly
    raised funds through Euro issues by way of Foreign Currency Convertible Bonds,
    GDRs and ADRs. The amount raised through Euro issues by Indian companies
    declined
    from Rs. 342.6 billion in 2002/2003 to Rs.309.8 billion in 2003/2004 and
    Rs 296 billion during 2004/2005. </font></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><b>Secondary Markets</b></font></p>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><i>Equities</i></font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The number of stock exchanges in India
    has increased from eleven in 1990 to twenty-three today, and all exchanges
    are fully computerized and offer full on-line trading. As of March 31, 2005,
    the number of companies whose securities were traded at the NSE was 931 as
    compared to securities of 2,906 companies traded at the BSE. As of March 31,
    2005, the NSE accounted for approximately 68.4% of the trading volume among
    the 23 stock exchanges, and the BSE accounted for approximately 31%. Of the
    total 23 exchanges, 2 dealt in derivative trading while 1 was involved in
    debt trading.</font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">India has a very large number of transactions,
    thus making its trading intensity comparable to other global exchanges. In
    2002, the NSE displaced Shanghai to take 3rd place, and the BSE moved up from
    8th rank in 2001 to 5th rank in 2003. The NSE and the BSE were stable at ranks
    3 and 5, respectively, in 2004 and 2005. </font></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> <b>Biggest Exchanges
  by number of transactions</b></font></p>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr valign="bottom">
    <td align=left>&nbsp; </td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2001</b> </font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2002</b> </font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2003</b> </font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2004</b> </font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2005</b> </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> NASDAQ</font></td>
    <td width=7% align=right><font size="2" face="Times New Roman, Times, serif"> 1 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=7% align=right><font size="2" face="Times New Roman, Times, serif"> 1 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=7% align=right><font size="2" face="Times New Roman, Times, serif"> 1 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=7% align=right><font size="2" face="Times New Roman, Times, serif"> 1 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=7% align=right><font size="2" face="Times New Roman, Times, serif"> 2 </font></td>
    <td width=2% align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> NYSE</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 2 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 1 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> NSE</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 4 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 3 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 3 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 3 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 3 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Shanghai</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 3 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 5 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 4</font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 4 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 6 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> BSE</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 7 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 5 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 5 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 5 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Korea</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 6 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 4 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 7 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 6 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 4 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Taiwan</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 7 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 6 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 6 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 7 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 8 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Shenzhen</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 5 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 8 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 7 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Deutsche
    B&ouml;rse</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 9 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 9 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 9 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 9 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 9 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> London/Euronet</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 14 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 12 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 11 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 10 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 10 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="1" face="Times New Roman, Times, serif"> <i>Source: Economic
      Survey.</i></font></td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
  </tr>
</table>
<div style="text-indent:0%">
  <p><font face="Times New Roman, Times, serif"> <i><font size=2>Corporate debentures</font></i><b><i><font size=2> </font></i></b></font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">While some corporate debentures
      trade on stock exchanges, the secondary market for corporate debt debenture
      has
    yet to fully develop. Corporate debentures are short and medium-term obligations
      issued by private sector companies. The typical maturity of a corporate
      debenture
    is between three and twelve years, and all public issues of debentures with
      maturities over eighteen months must be rated by one of India&#146;s credit
    rating agencies, which are noted above under &#147;Capital Structure&#151;Corporate
    Debt.&#148; Debentures with maturities of less than three years are typically
    issued as debentures convertible partly or fully into equity. Trading in
    such
    debentures is mainly over-the-counter, though an increasing proportion is
    traded through the debt market segment of the NSE. </font></p>
</div>
<p align="center"><font size=2 face="Times New Roman, Times, serif">C-9</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc10"></a><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The Indian corporate sector relies in
    part on raising capital through debt issues, including bonds and commercial
    paper, the former of which occurs increasingly through private placements.
    Over the past few years, Indian issuers have increasingly issued corporate
    bonds with embedded put and call options. </font></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><i>Government securities</i></font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">As noted above under &#147;Capital Structure&#151;Government
    Securities,&#148; the various levels of Indian government are regular issuers
    of fixed-income debt securities. Since the 1990s, as the Indian capital markets
    have grown, the investor base for government securities has also grown. In
    addition to banks and insurance companies, which were the traditional investors
    in government securities, Indian companies and individual investors are also
    now investing in these securities. The increasing liberalization of the financial
    markets and the gradual lowering of the statutory liquidity requirement and
    cash reserve ratio, as described in &#147;The Indian Economy&#151;Monetary
    Policy&#148; in Appendix B, enabled the Indian government to borrow at near-market
    rates. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The government securities market has
    witnessed significant transformation in the nineties. There have been major
    institutional and operational changes in the government securities market.
    In the primary market, securities are issued through the auction system at
    market related rates. The type of bonds issued have diversified include floating
    rate bonds, capital index bonds and zero coupon bonds. The reforms in the
    secondary market include setting up a system of primary dealers, setting up
    of CCIL as the central clearing agency wherein DVP system is used for settlement,
    and negotiated dealing screen for reporting of all trades.</font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Trading in non-repo government securities
    declined marginally in 2004/2005 as compared to the previous year. The aggregate
    volume in the non-repo central and state government dated securities on SGL
    declined from Rs 17,013 billion in 2003/2004 to Rs 12,608 billion in 2004/2005.</font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">With continuation of substantial fiscal
    deficits, significant bond issuance has taken place every year. However, the
    growth in the market size has not translated into increased liquidity and
    market efficiency. Impact cost is not observed in the bond market due to non-transparent
    trading procedures. The turnover ratio dropped from 197.5% in 2002 to 71.4%
    in 2005. The number of bonds with turnover ratio in excess of 75% dropped
    to 13% in 2005.</font></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"><b>GOI Issuance <br>
  (Rs billion)</b></font></p>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr valign="bottom">
    <td align=left>&nbsp; </td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2001</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2002</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2003</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2004</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2005</b></font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Gross issuance</font></td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 1110 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 1202 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 1130 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 1195 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=8% align=right><font size="2" face="Times New Roman, Times, serif"> 1294 </font></td>
    <td width=2% align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> End-year market cap</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 5142 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 6551 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 9599 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 9963 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 10515 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> SGL turnover</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 10370 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 12938 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 15981 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 10709 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 7510 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Turnover ratio- TR (per
      cent)</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 210.67 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 197.48 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 166.48 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 107.48 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 71.42 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> Number
      of bonds with TR &gt; 75%</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 36 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 33 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 40 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 28 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 13 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="1" face="Times New Roman, Times, serif"> <i>Source: Economic
      Survey</i></font></td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
  </tr>
</table>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><i>CCIL</i></font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The RBI has been encouraging
      establishment of a clearing corporation so as to radically upgrade the
      settlement standards
    of the wholesale debt market. From February 15, 2002, the Clearing Corporation
      of India Limited (CCIL) initiated its operations in clearing and settlement
      of transactions in government securities. The CCIL provides not only definite
      settlement but has put in place risk management systems to limit settlement
      risk. It furthermore operates a settlement guarantee fund backed by lines
    of credit from commercial banks.</font></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> C-10</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc11"></a><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The Collateralized Borrowing and Lending
    Obligation (CBLO) was operationalized as a money market instrument by the
    CCIL on January 20, 2003. The CBLO is a discounted instrument issued in electronic
    book entry form a for maturity period ranging from one-day to one year. The
    CBLO is an obligation by the borrower to return that money borrowed, at a
    specified future date and an authority to the lender to receive money lent,
    at a specified future date with an option to transfer the authority to another
    person for value received and an underlying charge on securities held in custody
    (with the CCIL) for the amount borrowed/lent. The CBLO marks the first successful
    use of anonymous electronic trading in the bond market in India.</font></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><i>Commodity Futures</i> </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The commodity futures market is a key
    component of organized trading of standardized products in the country. Drawing
    upon the success of nationwide electronic trading on the equity market three
    new exchanges have come about in recent years: the National Commodity Derivatives
    Exchange (NCDEX), the Multi Commodity Exchange (MCX) and the National Multi
    Commodity Exchange (NMCE). The turnover increased from Rs. 670 billion in
    2002/2003 to Rs. 13,870 billion in 2005.</font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Trading in gold and silver futures was
    initiated in 2003-04. Turnover has grown from 223 kilograms of gold in October
    2003 to 21,413 kilograms of gold in March 2004. Silver turnover grew from
    3.6 metric tons in October 2003 to 395 metric tons in March 2004. </font></p>
</div>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> <b>Turnover in Commodity
  Futures Markets</b><br>
  <b>(Rs billion) </b></font></p>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr valign="bottom">
    <td align=left>&nbsp; </td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2001/02</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2002/03</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2003/04</b></font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align=center><font size="1" face="Times New Roman, Times, serif"> <b>2004/05</b></font></td>
    <td align=center>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
    <td align=right><hr size="1" noshade></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> NCDEX</font></td>
    <td width=7% align=right><font size="2" face="Times New Roman, Times, serif"> 0 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=7% align=right><font size="2" face="Times New Roman, Times, serif"> 0 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=7% align=right><font size="2" face="Times New Roman, Times, serif"> 15 </font></td>
    <td width=2% align=right>&nbsp;</td>
    <td width=7% align=right><font size="2" face="Times New Roman, Times, serif"> 540 </font></td>
    <td width=2% align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> NBOT</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 143 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 344 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 530 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 510 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> MCX</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 25 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 307 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> NMCE</font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 0 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 46 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 238 </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> 79 </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="2" face="Times New Roman, Times, serif"> <b>All exchanges</b></font></td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> <b>45</b> </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> <b>665</b> </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> <b>1,294</b> </font></td>
    <td align=right>&nbsp;</td>
    <td align=right><font size="2" face="Times New Roman, Times, serif"> <b>1,707</b> </font></td>
    <td align=right>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left><font size="1" face="Times New Roman, Times, serif"> <i>Source: Economic
      Survey</i></font></td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp;</td>
  </tr>
</table>
<div style="text-indent:0%">
  <p><font face="Times New Roman, Times, serif"> <i><font size=2>Real Time Gross Settlement
    System </font></i></font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Earlier payments transactions
      between finance companies were generally settled through an inter-bank
      multilateral
    net settlement mechanism. The Real Time Gross Settlement system ensures transfer
      of funds on a real time and on a one-to-one basis (between a sender and
      a
    beneficiary) in an electronic mode. The RTGS system led to reduced settlement
      and systematic risks, especially in high-value inter-bank transactions.
      RBI&#146;s
    RTGS system was operational from March 26, 2004.</font></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><i>Unique Identification Number</i></font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">SEBI is developing a database about market
    participants and investors, called the MAPIN database, to give a Unique Identification
    Number (UIN) to individuals and entities participating in the capital market.
    Once the database is built, SEBI will mandate that transactions of concerned
    participants (primary market, secondary market, etc.) are identified with
    the UIN. The MAPIN databases utilize fingerprints as an identifier, apart
    from traditional identifiers such as photographs, name and address. It has
    now been decided to resume fresh registrations for obtaining a UIN in a phased
    manner.</font></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><i>Exchange Traded Funds</i></font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The Nifty Benchmark Exchange
      Traded Scheme (Nifty BeES) is the first ETF in India based on the S&amp;P CNX Nifty launched
    by the Benchmark Mutual Fund in December 2001. A number of ETF&#146;s like
    the Junior Nifty BeES based on the CNX Nifty Junior, the S&amp;P CNX Nifty
    UTI Depository Receipts Scheme (SUNDER), the Bank BeES and SPICE (Sensex
    Prudential
    ICICI Exchange Traded Fund) have been introduced over the years. As of the
    end of March 2005, there were five ETFs listed on the NSE. The total trading
    volume during the month of March 2005 of the five ETFs listed on the NSE
    was
    Rs 256 million. </font></p>
</div>
<p align="center"><font size=2 face="Times New Roman, Times, serif">C-11</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc12"></a><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
<p><a href="#contents">Back to Contents</a></p>
</font></font>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The Union Budget 2005/2006 announced
    the introduction of the Gold Exchange Traded Fund (GETF) along with creation
    of a market for gold traders. A SEBI constituted committee recommended implementation
    of GETF in India based on two models: (i) the Mutual Fund Custodian Bank Integrated
    Model and (ii) the Mutual Fund Warehouse Receipt model.</font></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><i>Participants
  and brokers</i></font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">SEBI regulates the registration
      of stockbrokers. Under SEBI guidelines, stockbrokers must be certified
      in order to buy, sell
    or deal in securities. SEBI regulations also create broker codes of conduct
      and rules that require fair treatment of each other and of investors and
      certain
    recordkeeping, and the regulations also allow SEBI to inspect all stockbroker
      books. In the event of a violation, SEBI may suspend or revoke the broker&#146;s
      license. As of March 31, 2005, there were 9,128 brokers, 3,733 corporate
      brokers
    and 13,684 sub-brokers (including multiple registrations) registered with
    SEBI.</font></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><b>Listing</b></font></p>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Listing implies admission of the securities
    to dealings on a recognized stock exchange. The securities may be of any public
    limited company, central or state government, quasi-governmental and other
    financial institutions/corporations, municipalities, etc. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The objectives of listing are mainly
    to</font></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%" align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> provide liquidity to securities;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> mobilize savings for economic development;</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> protect interest of investors by
      ensuring full disclosures.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The exchange has a separate listing department
    to grant approval for listing of securities of companies in accordance with
    the provisions of the Securities Contracts (Regulation) Act, 1956, Securities
    Contracts (Regulation) Rules, 1957, Companies Act, 1956, Guidelines issued
    by SEBI and rules, by-laws and regulations of the exchange. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">A company intending to have its securities
    listed on an exchange has to comply with the listing requirements prescribed
    by the exchange. Some of the requirements dealing with minimum listing requirements
    for new companies, minimum listing requirements for companies listed on other
    stock exchanges, minimum requirements for companies delisted by this exchange
    seeking relisting of the exchange. The direct listing norms for companies
    listed on other stock exchange(s) and seeking listing at the BSE have been
    amended by the Governing Board of the Exchange August 6, 2002.</font></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><b>Trading</b></font></p>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">Trading on the online
      trading system - BOLT - is conducted from Monday to Friday between
      9:55 a.m. and 3:30
    p.m. The scrips traded on the exchange have been classified into &#147;A&#148;,
    &#147;B1&#148;, &#147;B2&#148;, &#147;T&#148;, &#147;S&#148;, &#147;TS&#148;
    &#147;F&#148;, &#147;G&#148; and &#147;Z&#148; groups. </font></p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="Times New Roman, Times, serif">The scrips in the Equity
      Segment have been classified into &#147;A&#148;, &#147;B1&#148;, &#147;B2&#148;, &#147;T&#148;,
    &#147;S&#148;, &#147;TS&#148; and &#147;Z&#148; groups on certain qualitative
    and quantitative parameters which include number of trades, value traded,
    etc. </font></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> The &#147;F&#148; Group
      represents the Fixed Income Securities.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> The &#147;T&#148; Group
        represents scrips which are settled on a trade-to-trade basis as a surveillance
      measure.</font></td>
  </tr>
</table>
<p align="center"><font size=2 face="Times New Roman, Times, serif">C-12</font></p>
<hr noshade align="center" width="100%" size="2">
<font face="Times New Roman, Times, serif"><page><a name="pc13"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">The &#147;S&#148; Group
      represents scrips forming part of the &#147;BSE-Indonext&#148; segment.
      The &#147;TS&#148; Group consist
      of scrips in the &#147;BSE-Indonext&#148; segment settled on a trade-to-trade
      basis as a surveillance measure.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">Trading in Govt. Securities
      for retail investors is done under &#147;G&#148; group.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">The &#147;Z&#148; group
      was introduced by the Exchange in July 1999 and includes the companies which
      have failed to
      comply with the listing requirements of the Exchange and/or have failed
      to resolve investor complaints
      or have not made the required arrangements with both the Depositories, viz.,
      Central Depository
      Services (I) Ltd. (CDSL) and National Securities Depository Ltd. (NSDL)
      for dematerialization
      of their securities.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">The Exchange also
        provides  a facility to the market participants for on-line trading of
        odd-lot securitiesc in physical form in &#147;A&#148;,
      &#147;B1&#148;, &#147;B2&#148; &#147;T&#148;, &#147;S&#148;, &#147;TS&#148;
      and &#147;Z&#148; groups and Rights renunciations in all the groups
      of scrips in the Equity Segment.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">With effect from December
      31, 2001, trading in all securities listed on the equity segment of the Exchange takes place in
      one market segment, viz., Compulsory Rolling Settlement Segment (CRS).</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">The scrips of the companies
      which are in demat can be traded in market lot of one but the securities
      of companies which
      are still in the physical form are traded on the Exchange in market lots
      of generally either
      50 or 100. However, the investors having quantities of securities less than
      the market lot are required
      to sell them as &#147;Odd Lots&#148;. The facility of trading in odd lots
      of securities not only offers an exit
      route to investors to dispose of their odd lots of securities but also provides
      them an opportunity to consolidate
      their securities into market lots.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">This facility of selling
         physical shares in compulsory demat scrips is called an Exit Route Scheme.
        This facility can also be used by small investors for selling up to 500
        shares in physical form

      in respect of
      scrips  of companies where trades are required to be compulsorily settled
      by all
      investors in demat mode.</FONT></td>
  </tr>
</table>
<p><font size="2" face="Times New Roman, Times, serif"><B>Listed Securities</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The securities of companies
    which have a signed listing agreement with an exchange are traded at the exchange
    as &#147;listed securities&#148;. Barring a few scrips, all scrips traded
    in the Equity Segment at the exchange fall in this category. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Permitted Securities</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">To facilitate the market
    participants to trade in securities of the companies which are actively traded
    at other regional stock exchanges but are not listed on the exchange, the
    exchange in April 2002 decided to permit trading in such securities as &#147;Permitted
    Securities&#148; provided they meet the relevant norms specified by the exchange.</FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Non-Certificated Securities</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">While investors have a
    right to hold securities in either certificated or uncertificated form, SEBI
    has required that trading and settlement in certain securities occur only
    in uncertificated form. In addition, Indian companies making initial public
    offerings in excess of Rs. 100 million must issue the securities in uncertificated
    form. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">As of March 2005, 5,068
    and 5,536 companies transacted through the Central Depository Services (I)
    Ltd. and National Securities Depository Ltd., respectively. The number of
    dematerialized securities increased from 97.7 billion in March 2004 to 147.7
    billion in March 2005. The value of dematerialized securities as on March
    2005 was at Rs. 15686 billion. Demat settlement accounts for 99.9% of turnover
    settled by delivery.</FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">C-13</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc14"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p><B><FONT size=2>Derivative Trading</FONT></B></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Indian law now includes
    derivatives in the definition of &#147;securities,&#148; and the regulatory
    framework now covers trading in derivatives securities. The prohibition on
    forward trading in securities was also withdrawn in March 2000. SEBI allows
    the NSE, the BSE and their respective clearinghouses to trade and settle in
    derivative contracts that it approves. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">&#147;Basket trading&#148;
    began on the BSE in August 2000. In basket trading, investors can trade all
    thirty Sensex securities at one time in proportion to their respective Sensex
    weights without the need to calculate the quantity of Sensex securities to
    be traded. Investors can also create their own &#147;baskets&#148; by removing
    certain securities from their thirty Sensex securities or modifying the weights
    assigned to each Sensex security. This system allows arbitrageurs to take
    advantage of the price differences in Sensex securities and their futures,
    which the BSE hopes will balance prices in both the cash and futures markets.
    All trades executed under the basket trading system on BSE&#146;s online trading
    system are subject to intra-day trading and gross exposure limits. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Earlier, SEBI approved
    trading in index futures contracts based on the S&amp;P CNX Nifty Index and
    the BSE Sensitive Index (the &#147;Sensex&#148;). It had also approved option
    trading based on these two indices and as well as option trading in individual
    securities, future contracts on individual stocks, interest rate derivatives,
    91-day notional T-Bills and coupon bonds. Now futures and options based on
    S&amp;P CNX Nifty, CNX IT index, Bank Nifty index along with options and futures
    on single stocks has also been approved. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The BSE launched a new
    product, Weekly Options, on September 13, 2004 to cater the demand of options
    of shorter maturity. The BSE permitted trading in weekly contracts in options
    in the shares of four leading companies, namely Reliance, Satyam, State Bank
    of India, and Tisco in addition to the flagship index, Sensex. Weekly options
    have the same characteristics as that of the Monthly Stock Options (stocks
    and indices) except that these options settle on Friday of every week. These
    options are introduced on Monday of every week and have a maturity of 2 weeks,
    expiring on Friday of the expiring week. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Settlement Period</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Rolling settlement on a
    T+5 basis was made compulsory in all stock exchanges for 200 actively traded
    securities and was extended to cover all such securities after December 2001.
    The settlement cycle was further shortened to T+3 after April 2002 and T+2
    in April 2003. From May 24, 2005, the RBI adopted a standardized settlement
    on a T+1 basis of all outright secondary market transactions in government
    securities. In case of repo transactions in government securities, market
    participants have a choice of settling the first leg on T+0 basis or T+1 basis
    as per their requirements.</FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Insider Trading Regulations</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">SEBI promulgated India&#146;s
    first restrictions on insider trading in November 1992. The regulations prohibit
    an &#147;insider&#148; from dealing in listed securities on the basis of &#147;unpublished
    price sensitive information,&#148; the communication of such information or
    the counsel or procurement of any other person to deal in securities on the
    basis of such information. The term &#147;insider&#148; includes directors,
    officers, certain employees, professionals affiliated with the company, affiliated
    companies, members of the securities market community and relatives of any
    of the foregoing. SEBI may initiate criminal proceedings if it believes insider
    trading has occurred. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Any person who holds more
    than 5% of the equity or voting rights of any listed company is required to
    regularly and promptly disclose to the company the number of shares or voting
    rights held as well as any change in excess of 2% of that person&#146;s shareholding
    or voting rights. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">SEBI has also required
    listed companies to adopt codes of conduct that address trading on price sensitive
    information, market rumors and the disclosure of shareholder ownership. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">C-14</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc15"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p><B><FONT size=2>Depositories</FONT></B></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">In August 1996, the Indian
    Parliament enacted the Indian Depositories Act, 1996, which established securities
    depositories to record ownership and transfer securities in book-entry form.
    The depository system has significantly improved the operations of the Indian
    securities markets. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Trading in book-entry form
    commenced in December 1996. In January 1998, SEBI required various companies
    to commence trading in uncertificated securities only for certain categories
    of investors, including foreign institutional investors and other institutional
    investors. Other investors are permitted to trade in certificated securities
    outside stock exchanges in lots of less than 500 securities and when exchange
    reporting requirements are not imposed. SEBI requires Indian companies to
    extend security holders the option to receive and hold securities in uncertificated
    form with a depository. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Book-entry transfers require
    both the seller and the purchaser of a security to establish accounts with
    registered depository participants. Transaction and custodian charges vary
    depending upon the practice of the depository participant and are paid by
    the account holder. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Upon delivery, shares are
    registered in the name of the relevant depository on the company&#146;s books,
    and the depository records the investor in its records as the beneficial owner.
    All transfers in beneficial ownership are effected through the depository.
    Beneficial owners are entitled to all rights and benefits and subject to all
    liabilities of security holders. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Takeover Regulations</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The restructuring of companies
    through takeover is governed by the SEBI (Substantial Acquisition of Shares
    and Takeovers) Regulations, 1997. The Regulations aimed to carry out the process
    of acquisitions and takeovers in a well-defined and orderly manner following
    the principles of fairness and transparency. As per regulations, the mandatory
    public offer is triggered on:</FONT></p>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">Crossing the threshold
      limit of 15%;</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">Crossing the acquisition
      limit of 15% or more but less than 75% of shares or voting rights of a target</FONT>
      <FONT size=2 face="Times New Roman, Times, serif">company; or</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">Attempts by persons
      having 75% or more to acquire more shares.</FONT></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">SEBI approved important
    amendments to SEBI Takeover Regulations in December 2005 so as to provide
    flexibility to corporate restructuring. Further to ensure maintenance of minimum
    public shareholding for continuous listing, it has been decided that if in
    the process of corporate restructuring under the Takeover Regulations, the
    target company&#146;s public shareholding falls below prescribed minimum,
    the restoration of minimum public shareholding will take place through the
    framework provided in the revised Clause 40A of the listing agreement. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Restrictions on market
    purchase and preferential allotments as in the Takeover Regulations have been
    removed. It has also been provided that the outgoing shareholder (promoter)
    can sell the entire stake to the incoming acquirer in case of a takeover.
    Stakeholders holding more than 55% of equity would be able to make further
    acquisitions subject to making an open offer. </FONT></p>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><B>STOCK EXCHANGES</B></font></p>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><em>Background </em></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The last five years have
    seen the Indian equity market emerge as among the strongest in the &#147;emerging
    economies group&#148; and the trading intensity of Indian stock exchanges
    has been impressive by world standards. Among the biggest exchanges, measured
    by the number of trades per calendar year, the National Stock Exchange (NSE)
    retained rank 3 for the period 2002-2005. In 2005-06, the capital market trading
    volumes of Indian stock Exchanges was Rs 15,152.6 billion as compared to Rs
    9,689.1 billion in 2002/2003. </FONT></p>
</div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">C-15</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc16"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>Indian
  Stock Exchanges* </B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD rowspan="4" align=left>&nbsp;</TD>
    <TD rowspan="2" align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD rowspan="4" align=center></TD>
    <TD rowspan="2" align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD rowspan="4" align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font> <font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD rowspan="4" align=center>&nbsp;</TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"><B>Total</B></font></TD>
    <TD rowspan="4" align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font>
      <font size="1" face="Times New Roman, Times, serif">&nbsp;</font> <font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>Listed</B></font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>Capitalization</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>Year
      Established</B></font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>Members
      (1)</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>Corporations</B></font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>(Rs.
      billion)</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=right><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">BSE</FONT></TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">1875</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">713</FONT></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">4,772</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">24,894</FONT></TD>
    <TD width=2% align=left> <FONT size=2 face="Times New Roman, Times, serif">(a)</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">NSE</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1994</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">891</FONT></TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">(c)</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,051</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">27,172</FONT></TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">(b)</FONT></TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD colspan="2" align=right><hr align="left" width="100" size="1"></TD>
  </TR>
  <TR valign="bottom">
    <TD width=3%><font size="1" face="Times New Roman, Times, serif"> *(a)</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> As on
      December, 2005</font></TD>
  </TR>
  <TR valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"> &nbsp;&nbsp;(b)</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> As on
      March, 2006</font></TD>
  </TR>
  <TR valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"> &nbsp;&nbsp;(c)</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> As on
      March, 2005</font></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan=2 align=left><font size="1" face="Times New Roman, Times, serif">
      <I>Source: BSE, NSE</I>&nbsp;</font></TD>
  </TR>
</TABLE>
<p> <font size="2" face="Times New Roman, Times, serif"><B>Bombay Stock Exchange
  (BSE)</B></font></p>
<div style="text-indent:0%">
  <p> <font size="2" face="Times New Roman, Times, serif"><I>Introduction</I></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Bombay Stock Exchange
       Limited is the oldest stock exchange in Asia. Established as &#147;The
       Native  Share &amp; Stock Brokers Association&#148; in 1875, it is the
       first stock  exchange in the country to obtain permanent recognition in
       1956 from the government
    of India under the Securities Contracts (Regulation) Act, 1956. The Exchange&#146;s
     pivotal and pre-eminent role in the development of the Indian capital market

    is widely recognized and its index, </FONT><font face="Times New Roman, Times, serif"><I><FONT size=2>SENSEX</FONT></I><FONT size=2>,
     is tracked worldwide. Earlier an Association of Persons (AOP), the Exchange

    is now a demutualized and corporatized entity incorporated under the provisions
     of the Companies Act, 1956, pursuant to the BSE (Corporatisation and Demutualisation)

    Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI).</FONT></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">With demutualization,
      the trading rights and ownership rights have been de-linked effectively
      addressing
    concerns regarding perceived and real conflicts of interest. The Exchange
      is professionally managed under the overall direction of the Board of Directors.
      The Board is comprised of professionals, representatives of Trading Members
      and the Managing Director of the Exchange. The Board  is
      designed
    to benefit from the participation of market intermediaries. In terms of organization
      structure, the Board formulates larger policy issues and exercises over-all
      control. The committees constituted by the Board are broad-based. The day-to-day
      operations of the Exchange are managed by the Managing Director and a management
    team of professionals. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Exchange has a nationwide
    reach with a presence in 421 cities and towns of India. The systems and processes
    of the Exchange are designed to safeguard market integrity and enhance transparency
    in operations. During the year 2004/2005, the trading volumes on the Exchange
    showed robust growth. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Exchange provides an
    efficient and transparent market for trading in equity, debt instruments and
    derivatives. The BSE&#146;s On Line Trading System (BOLT) is a proprietary
    system of the Exchange and is BS 7799-2-2002 certified. The surveillance and
    clearing &amp; settlement functions of the Exchange are ISO 9001:2000 certified.</FONT></p>
</div>
<P align="center"> <FONT size=2 face="Times New Roman, Times, serif">C-16</FONT></P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc17"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:0%">
  <P><font face="Times New Roman, Times, serif"> <I><FONT size=2>Liquidity
    of the BSE</FONT></I></font></P>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD colspan="3"><font size="2" face="Times New Roman, Times, serif"><B>Number
      of shares traded on the Mumbai Stock Exchange<br>
      (in billion)</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <font size="1" face="Times New Roman, Times, serif"><B>Calendar
      Year*</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>Annual
      figures</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr size="1" noshade></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><hr size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left> <FONT size=2 face="Times New Roman, Times, serif">2000</FONT></TD>
    <TD width=80% align=right>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">21.75</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2001</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">22.23</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2002</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">23.03</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2003</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">34.30</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2004</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">39.30</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2005</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">68.61</FONT></TD>
  </TR>
</TABLE>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr align="left">
    <td colspan="2"><hr align="left" width="100" size="1" noshade></td>
  </tr>
  <tr>
    <td width="3%"><font size=1 face="Times New Roman, Times, serif">*</font></td>
    <td width="97%"><font size=1 face="Times New Roman, Times, serif"> For the
      period January 1 to December 31.</font></td>
  </tr>
  <tr>
    <td><font size=1 face="Times New Roman, Times, serif">Note:</font></td>
    <td><font size=1 face="Times New Roman, Times, serif"> Figures for 2005 are
      from April 2005</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif"><i>Source:</i></font></td>
    <td><font size="1" face="Times New Roman, Times, serif"><i>BSE</i></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Bombay Stock Exchange
      has 4,772 companies listed on it as of December 2005. Its market capitalization
      on that date was approximately Rs. 24,894 billion. In 2005/2006, its average
      daily trading volume was Rs. 26.3 billion, and its total number of trades
      executed was approximately 1,87,38,223 for the year 2005 (April to December).
      However, the BSE is not extremely liquid because BSE trading
    is highly concentrated in the securities of relatively few issuers and the
      vast majority of securities listed on the BSE are traded infrequently or
      not
    at all. In addition, only a limited portion of many companies&#146; shares
     are part of the public float.</FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>BSE Indices</I></font></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I><u>The Sensex</u></I></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The Sensex is a market
    capitalization-weighted index of thirty stocks that represent large, well-established
    and leading Indian companies. Its base year is 1978/1979, and, while its initial
    calculations were based on full market capitalization, it shifted to the free-float
    methodology in September 2003. Its equity review policy aims to be transparent,
    and the float of all Sensex equities should represent at least 0.5% of the
    index. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The last five years saw
    the SENSEX gain close to 4,952 points. As a result of the increase in Sensex
    value, the index offered an average return of 27% over the period 2000 to
    2005 with the bulk of the increase being seen in the years 2004 and 2005.
    P/E ratios fell from 24.45 in the calendar year 2000 to 16.21 in the calendar
    year of 2005. </FONT></p>
</div>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>Sensex
  Market Capitalization<br>
  (Rs. billion)</B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left> <font size="1" face="Times New Roman, Times, serif"><B>Year
      Ending March 31,</B></font></TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>High</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>Low</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>Average
      (a)</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="150" size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><hr size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2000</FONT></TD>
    <TD width="10%" align=right> <FONT size=2 face="Times New Roman, Times, serif">5,934</FONT></TD>
    <TD width="2%" align=right>&nbsp;</TD>
    <TD width="10%" align=right> <FONT size=2 face="Times New Roman, Times, serif">4,659</FONT></TD>
    <TD width="2%" align=center>&nbsp;</TD>
    <TD width="10%" align=center> <FONT size=2 face="Times New Roman, Times, serif">3,245</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2001</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5,542</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4,270</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">3,541</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2002</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3,742</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3,332</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">2,600</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2003</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3,513</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3,206</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">2,834</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2004</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6,955</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4,228</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">5,750</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2005</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11,017</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6,118</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <FONT size=2 face="Times New Roman, Times, serif">8,197</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=1 face="Times New Roman, Times, serif">Source:
      BSE</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="Times New Roman, Times, serif">C-17</FONT></P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc18"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<P align="center"><B><FONT size=2>Constituents of the BSE Sensex as on March 2006
  </FONT></B></P>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Company</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>Industry</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="150" size="1" noshade> </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><hr size="1" noshade> </TD>
  </TR>
  <TR valign="bottom">
    <TD width=50% align=left> <FONT size=2 face="Times New Roman, Times, serif">Associated
      Cement Companys Ltd.</FONT></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Housing
      Related</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Bajaj Auto
      Ltd.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Transport
      Equipments</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Bharat Heavy
      Electricals Ltd.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Capital
      Goods</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Bharti Tele
      Ventures Ltd.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Telecom</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Cipla Ltd.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Healthcare</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Dr Reddy&#146;s
      Laboratories Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <font size=2 face="Times New Roman, Times, serif">Healthcare</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Grasim Industries
      Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Diversified</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Gujarat Ambuja
      Cements Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <font size=2 face="Times New Roman, Times, serif">Housing
      Related</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">HDFC</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Finance</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">HDFC Bank
      Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <font size=2 face="Times New Roman, Times, serif">Finance</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Hero Honda
      Motors Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <font size=2 face="Times New Roman, Times, serif">Transport
      Equipments</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Hindalco
      Industries Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <font size=2 face="Times New Roman, Times, serif">Metal, Metal
      Products &amp; Mining</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Hindustan
      Lever Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size=2 face="Times New Roman, Times, serif">FMCG</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">ICICI Bank
      Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Finance</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Infosys Technologies
      Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Information
      Technology</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">ITC Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><font size=2 face="Times New Roman, Times, serif">FMCG</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Larsen &amp;
      Toubro Limited</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <font size=2 face="Times New Roman, Times, serif">Capital
      Goods</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Maruti Udyog
      Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left> <font size=2 face="Times New Roman, Times, serif">Transport
      Equipments</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">National
      Thermal Power Corpn. Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Power</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">ONGC Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Oil
      &amp; Gas</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Ranbaxy Laboratories
      Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Healthcare</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Reliance
      Energy Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Power</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Reliance
      Industries Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Oil
      &amp; Gas</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=2 face="Times New Roman, Times, serif">Satyam Computer
      Services Ltd.</font></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Information
      Technology</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><FONT size=2 face="Times New Roman, Times, serif">State Bank
      of India Finance</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Finance</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><FONT size=2 face="Times New Roman, Times, serif">Tata Consultancy
      Services Limited</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Information
      Technology</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><FONT size=2 face="Times New Roman, Times, serif">Tata Motors
      Ltd.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Transport
      Equipments</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><FONT size=2 face="Times New Roman, Times, serif">Tata Power
      Co. Ltd.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Power</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><FONT size=2 face="Times New Roman, Times, serif">Tata Steel
      Ltd.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Metal,Metal
      Products &amp; Mining</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><FONT size=2 face="Times New Roman, Times, serif">Wipro Ltd.</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD width=44% align=left> <FONT size=2 face="Times New Roman, Times, serif">Information
      Technology</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="1" face="Times New Roman, Times, serif"><I>Source:
      BSE</I></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
  <p><font size="2" face="Times New Roman, Times, serif"><I>The BSE 100 Index
    </I></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The BSE 100 Index is based
    on the prices of certain BSE-traded equities. All 30 Sensex companies are included in
    the BSE 100 Index, and all major Indian industries are represented. Like the
    Sensex, the BSE 100 Index switched to a free-float methodology in April 2004
    and has followed a trend similar to the movement of the Sensex. Over the period
    2000 to 2005, the index gained a total of 2,193.4 points recording an increase
    of 96%. The average return for the period stood at 21.5% . </FONT></p>
</div>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>BSE
  100 Index Market Capitalization (Rs. billion)</B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD> <font size="1" face="Times New Roman, Times, serif"><B>Year Ending March
      31</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>High</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>Low</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>Average
      (a)</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="150" size="1" noshade></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><hr size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2000</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">3,839.1</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">1,408.8</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=10% align=right> <font face="Times New Roman, Times, serif">&nbsp;
      &nbsp; &nbsp;<FONT size=2>2,278.2</FONT></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2001</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3,044.8</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,678.0</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp; &nbsp;
      &nbsp;<FONT size=2>2,170.5</FONT></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2002</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,826.1</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,216.4</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp; &nbsp;
      &nbsp;<FONT size=2>1,587.7</FONT></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2003</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,793.0</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,413.6</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp; &nbsp;
      &nbsp;<FONT size=2>1,597.8</FONT></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2004</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3,756.1</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2,226.4</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp; &nbsp;
      &nbsp;<FONT size=2>3,101.5</FONT></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2005</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5,768.8</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5,410.9</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <font face="Times New Roman, Times, serif">&nbsp; &nbsp;
      &nbsp;<FONT size=2>4,471.6</FONT></font></TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD colspan="2" align=left><hr align="left" width="100" size="1" noshade>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD width=3% align=left><font size=1 face="Times New Roman, Times, serif">(a)
      </font></TD>
    <TD align=left> <FONT size=1 face="Times New Roman, Times, serif">Weighted
      average is calculated on a daily basis.</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=1 face="Times New Roman, Times, serif">Source: </font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"><I>BSE</I></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<div style="text-indent:3%">
  <div align="center"><FONT size=2 face="Times New Roman, Times, serif">C-18</FONT></div>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc19"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">As of March 21, 2006, the
    BSE 100 Index consisted of equities from the following sectors of the Indian
    economy:</FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD> <font size="1" face="Times New Roman, Times, serif"><B>Industry</B></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <font size="1" face="Times New Roman, Times, serif"><B>No.
      of companies</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="150" size="1" noshade> </TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><hr size="1" noshade> </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Power Generation
      and Supply</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">4</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Banking
      and Financial Institutions</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">18</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Transport
      and Transport Equipment</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Textiles</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Oil and
      Gas</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">10</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Chemicals,
      Fertilizer, Pharmaceuticals, Paints and Dyes</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Housing
      Related</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Capital
      Goods</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Telecom</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">4</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Diversified</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Healthcare</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">12</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Information
      Technology</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Metal, metal
      products and mining</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">8</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Fast Moving
      Consumer Goods</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Media and
      Publishing</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Tourism</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">Agriculture</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=3% align=left><font size=1 face="Times New Roman, Times, serif">(a)
      </font></TD>
    <TD align=left> <FONT size=1 face="Times New Roman, Times, serif">Weighted
      average is calculated on a daily basis.</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size=1 face="Times New Roman, Times, serif">Source:</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif"><I>BSE</I></font></TD>
  </TR>
</TABLE>
<P> <font size="2" face="Times New Roman, Times, serif"><B>Mumbai Stock Exchange
  Trading Mechanics </B></font></P>
<div style="text-indent:0%">
  <P><font face="Times New Roman, Times, serif"> <I><FONT size=2>Trading hours</FONT></I></font></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Trading on the BSE &#147;online
    trading system&#148; may occur Monday to Friday from 9:55 a.m. to 3:30 p.m.
    The BSE is closed on bank holidays and certain religious holidays. </FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Non-certificated
    securities</I> </font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Due to the Indian government&#146;s
    emphasis on trading in uncertificated securities in order to improve the markets&#146;
    efficiency and transparency, the movement toward &#147;decertification&#148;
    of equity securities has been swift. All BSE-listed equity securities must
    now settle in uncertificated form. The market capitalization of these companies
    is now 80% of the total BSE market capitalization. As of March 31, 2002, 377
    companies were depository participants in the National Securities Depository
    Ltd. and Central Depository Services (India) Ltd. Uncertificated securities
    represent 99.7% of all security deliveries on the BSE and NSE. </FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Trading procedures</I>
    </font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Before March 1995, the
    BSE used a live trading floor where member-brokers assembled in a trading
    ring to execute securities transactions. Since 1995, the BSE has become fully
    automated through its online trading system. Member-brokers now execute orders
    from work stations installed in their offices rather than a live trading ring.
    </FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Clearing house</I></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Since December 2001, trading
    all BSE-traded equities trade on a so-called &#147;compulsory rolling settlement
    segment.&#148; All trades executed by member-brokers in this segment are settled
    on a T+2 basis. Settlement is generally routed through BSE&#146;s clearing
    house, which is BOI Shareholding Ltd. The Bank of India is a 51% equity owner
    of BOI Shareholding Ltd. The BSE owns the remainder of the BOI Shareholding
    Ltd.&#146;s equity. </FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Transaction costs</I></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The BSE has not established
    minimum brokerage fees for securities transactions. The maximum brokerage
    fee cannot exceed 2.5% of the value of the trade. Otherwise, brokerage fees
    are negotiable, and the average brokerage fee charged by broker-members is
    typically below the 2.5% limit. </FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Stamp duties on trades
    involving certificated securities are imposed and are typically paid by the
    buyer when registering the securities in his name. The duty is Rs. 0.5 for
    every Rs. 100 traded. The stamp duty payable upon transfers of debentures
    varies depending on the Indian state in which the issuer&#146;s registered
    office is located. </FONT></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">C-19</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc20"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Circuit breakers</I></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Previously, &#147;circuit
    breakers&#148; in the Indian markets applied to specific securities and restricted
    those securities from moving excessively in any direction within a specified
    time period. Now, only market-wide circuit breakers exist, and all BSE
    trading is suspended for varying periods when the Sensex&#146;s price volality
    exceeds a 10%, 15% or 20% threshold. For example:</FONT></p>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">In the event of a
        10%  price movement before 1:00 p.m., the BSE will suspend trading for
        one hour.
      If the movement
      occurs after 1:00 p.m. but before 2:30 p.m., the BSE will suspend trading
         for thirty minutes.
      If the movement occurs at or after 2:30 p.m., the BSE will not suspend
        trading.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">In the event of a
        15%  price movement before 1:00 p.m., the BSE will suspend trading for
        two hours.
      If the movement
      occurs after 1:00 p.m. but before 2:00 p.m., the BSE will suspend trading
         for one hour.
      If the movement occurs at or after 2:00 p.m., the BSE will suspend trading
         for the remainder of the day.</FONT></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif">&#8226;</font></td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">In the event of a 20%
      price movement, the BSE will suspend trading for the remainder of the day.</FONT></td>
  </tr>
</table>
<p><font size="2" face="Times New Roman, Times, serif"><B>National Stock Exchange
  (NSE)</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The National Stock Exchange
      of India Limited has its genesis in the report of the High Powered Study
      Group
    on Establishment of New Stock Exchanges, which recommended promotion of a
      National Stock Exchange by financial institutions (FIs) to provide access
      to investors from all across the country on an equal footing. Based on
      the
    recommendations, NSE was promoted by leading financial Institutions at the
      behest of the government of India and was incorporated in November 1992
      as
    a tax-paying company unlike other stock exchanges in the country.</FONT></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">On its recognition as a
    stock exchange under the Securities Contracts (Regulation) Act, 1956 in April
    1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment
    in June 1994. The Capital Market (Equities) segment commenced operations in
    November 1994 and operations in Derivatives segment commenced in June 2000.</font></p>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">C-20</FONT></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc21"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>NSE
  Listings</B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD rowspan="3" align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;&nbsp;</font></TD>
    <TD rowspan="2" align=center><font size="1" face="Times New Roman, Times, serif"> <B>Market
      Capitalization</B></font><font size="1" face="Times New Roman, Times, serif"> <B>(Rs.
      billion)</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Year*</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>No.
      of companies listed*</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="150" size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2000</FONT></TD>
    <TD width=12% align=right> <FONT size=2 face="Times New Roman, Times, serif">785</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=12% align=right> <FONT size=2 face="Times New Roman, Times, serif">6,578.47</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2001</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">793</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">6,368.61</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2002</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">818</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">5,371.33</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2003</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">909</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">11,209.76</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2004</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">970</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">15,855.85</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2005</FONT></TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,051</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">27,172.25</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=right><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"> <font size=1 face="Times New Roman, Times, serif">Source:
      <i>NSE</i><br>
      </font></TD>
    <TD align=right><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
</TABLE>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The number of companies
    listed in the NSE increased from 785 in 2000 to 1051 as on March 2006 and
    the market capitalization increased by a significant 313% over the period
    2000-2005. This was backed by an increase in liquidity on the NSE with the
    annual volume of trade increasing by 147% from 2000. Consequently, average
    daily volume increased from Rs. 53.37 billions in 2000 to Rs. 59.6 billion
    in 2005.The total number of trades increased from Rs. 167.6 million in 2000
    to Rs. 543 million in 2005 (April-March). </FONT></p>
</div>
<P align="center"> <font face="Times New Roman, Times, serif"><B><FONT size=2>Number
  of trades on the National Stock Exchange</FONT></B><BR>
  <B><FONT size=2>(in million)</FONT></B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> <B>Year
      Ended March 31,</B>&nbsp;</font></TD>
    <TD rowspan="2" align=center>&nbsp;</TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>Annual
      figures</B>&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="150" size="1" noshade></TD>
    <TD align=right><hr size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2000</FONT></TD>
    <TD width=3% align=center>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">167.60</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2001</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">175.30</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2002</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">239.80</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2003</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">378.00</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2004</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">451.00</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2005</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">594.50</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <font size=1 face="Times New Roman, Times, serif">Source:
      </font><font size="1" face="Times New Roman, Times, serif"><i>NSE </i></font></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
</TABLE>
<div style="text-indent:0%">
  <P><font face="Times New Roman, Times, serif"> <I><FONT size=2>The S&amp;P
    CNX Nifty </FONT></I></font></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The daily average of the S&amp;P CNX Nifty increased from
    1,368.62 in 2000 to 2,486.77 in 2005. This translated to an 82% increase over
    2000 levels, 95% of which was on account of an increase in the Nifty value
    over the year 2005/2006. Thus, growth in the value of the Nifty for the period
    2000 to 2004 was only 4.3% . At the end of calendar year 2005, the market
    capitalization of the Nifty was estimated at Rs. 13,500 billion and the Nifty
    Junior at Rs. 2,200 billion, added up to Rs.15,700 billion or roughly two-thirds
    of the broad Indian equity market (2,540 companies with Rs. 24,700 billion
    of market value). This implies that the available index funds cover two-thirds
    of the Indian equity market. </FONT></p>
</div>
<P align="center"> <font size="2" face="Times New Roman, Times, serif"><B>Values
  of the S&amp;P CNX Nifty*</B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> <b>Year
      Ended March 31,</b>&nbsp;</font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>High</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> &nbsp;<B>Low</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>Daily
      Average</B></font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="150" size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center><hr size="1" noshade></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right><hr size="1" noshade></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><hr size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2000</FONT></TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">1,818.15</FONT></TD>
    <TD width=2% align=right>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">916.00</FONT></TD>
    <TD width=2% align=center>&nbsp;</TD>
    <TD width=10% align=right> <FONT size=2 face="Times New Roman, Times, serif">1,368.62</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2001</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,636.95</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,098.75</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,334.76</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2002</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,207.00</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">849.95</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,077.03</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2003</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,153.30</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">920.10</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,037.23</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2004</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2,014.65</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">920.00</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,427.50</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=2 face="Times New Roman, Times, serif">2005</FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">3,292.15</FONT></TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">1,896.30</FONT></TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right> <FONT size=2 face="Times New Roman, Times, serif">2,486.77</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=1 face="Times New Roman, Times, serif">* High/Low
      values correspond to the maximum/minimum value of the Index during the year.
      Daily average corresponds to the average of the daily closing values. </FONT></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <FONT size=1 face="Times New Roman, Times, serif">Source:
      </FONT><font size="1" face="Times New Roman, Times, serif"><I>NSE </I></font></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="Times New Roman, Times, serif">C-21</FONT></P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc22"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<P><B><FONT size=2>National Stock Exchange Trading Mechanics</FONT></B></P>
</font>
<div style="text-indent:0%">
  <P><font size="2" face="Times New Roman, Times, serif"><I>Trading Mechanism</I></font></P>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The trading system, known
      as the National Exchange for Automated Trading (NEAT) system, is an on-line,
      anonymous, order-driven, screen-based trading system. In this system, a
      member
    can key into the computer quantities of securities and the prices at which
      he would transact and the transaction is executed as soon as it finds a
      matching
    sale or buy order from a counter party. The system electronically matches
      orders on a price/time priority. It allows
    faster incorporation of price sensitive information into prevailing prices.
      It enables market participants to see the market on a real-time basis.
      It allows a large number of participants, irrespective of their
    geographical locations, to trade with one another simultaneously improving
      the depth and liquidity of the market. The trading
      platform
    of the CM segment is accessed not only from the computer terminals from the
      premises of brokers spread over approximately 345 cities, but also from
      the
    personal computers in the homes of investors through the Internet and through
    hand held WAP enabled devices. </FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Transaction Charges
    and Brokerage</I></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The maximum brokerage chargeable
    by trading member in respect of trades effected in the securities admitted
    to dealing on the CM segment of the Exchange is fixed at 2.5% of the contract
    price, exclusive of statutory levies like, securities transaction tax, SEBI
    turnover fee, service tax and stamp duty. This maximum brokerage is inclusive
    of the brokerage charged by the sub-broker which shall not exceed 1.5% of
    contract price. A member is required to pay the exchange transaction charges
    at the rate of 0.004% (Rs. 4 per Rs. 0.1 mln) of the turnover. Trading members
    are also required to pay securities transaction tax (STT) on all delivery
    based transactions at the rate of 0.15% and in case of non-delivery transactions
    at the rate of 0.015% for equities (also true of the Mumbai Stock Exchange).
    </FONT></p>
</div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Clearing and Settlement</I></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">While the NSE provides
    a platform for trading to its trading members, the National Securities Clearing
    Corporation Ltd. (NSCCL) determines the funds/securities obligations of the
    trading members and ensures that trading members meet their obligations. The
    core processes involved in clearing and settlement are: </FONT></p>
</div>
<div style="text-indent:3%">
  <P> <FONT size=2 face="Times New Roman, Times, serif"><i>(a</i></FONT><font face="Times New Roman, Times, serif"><i><FONT size=2>)
    Trade Recording</FONT></i><FONT size=2>: The key details about the trades
    are recorded to provide basis for settlement. These details are automatically
    recorded in the electronic trading system of the exchanges. </FONT></font></P>
</div>
<div style="text-indent:3%">
  <P> <FONT size=2 face="Times New Roman, Times, serif"><i>(b) </i></FONT><font face="Times New Roman, Times, serif"><i><FONT size=2>Trade
    Confirmation:</FONT></i><FONT size=2> The parties to a trade agree upon the
    terms that trade, such as security, quantity, price, and settlement date,
    but not the counterparty which is the NSCCL. The electronic system automatically
    generates confirmation by direct participants. </FONT></font></P>
</div>
<div style="text-indent:3%">
  <P> <FONT size=2 face="Times New Roman, Times, serif"><i>(c) </i></FONT><font face="Times New Roman, Times, serif"><i><FONT size=2>Determination
    of Obligation: </FONT></i><FONT size=2>The next step is determination of what
    counter-parties owe, and what counter-parties are due to receive on the settlement
    date. The NSCCL interposes itself as a central counterparty between the counterparties
    to trades and nets the positions so that a member has security wise net obligation
    to receive or deliver a security and has to either pay or receive funds. </FONT></font></P>
</div>
<p align="center"> <FONT size=2 face="Times New Roman, Times, serif">C-22</FONT></p>
<hr noshade align="center" width="100%" size="2">


<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc23"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<div style="text-indent:3%">
<P>
    <FONT size=2><i>(d) Pay-in of Funds and Securities</i>:
  The members bring in their funds/securities to the NSCCL. They make available
  required securities in designated accounts with the depositories by the prescribed
  pay-in time. The depositories move the securities available in the accounts
    of members
  to the account of the NSCCL. Likewise members with funds obligations make available
  required funds in the designated accounts with clearing banks by the prescribed
  pay-in time. The NSCCL sends electronic instructions to the clearing banks
    to debit
  member&#146;s accounts to the extent of payment obligations. The banks process
  these instructions and debit accounts of members and credit accounts of the
  NSCCL. </FONT></P>
</div>
<div style="text-indent:3%"><P>
    <FONT size=2><i>(e) Pay-out of Funds and Securities</i>:
  After processing for shortages of funds/securities and arranging for movement of funds from surplus banks to deficit banks through the RBI clearing, the NSCCL sends electronic instructions to the depositories/clearing banks to release pay-out of
  securities/funds. The depositories and clearing banks debit accounts of the NSCCL and credit accounts of members. Settlement is complete upon release of pay-out of funds and securities to custodians/members. </FONT></P>
</div>
</font>
<div style="text-indent:0%">
<p><font size="2" face="Times New Roman, Times, serif"><I>Settlement Cycles</I></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Since
      the beginning of the financial year 2003, all securities are being traded
      and settled under T+2 rolling settlement. The NSCCL notifies the consummated
      trade details to clearing members/ custodians on the trade day. The custodians
      affirm back the trades to NSCCL by T+1 day. Based on the affirmation, NSCCL
      nets the positions of counterparties to determine their obligations. A
      clearing member has to
pay-in/pay-out funds and/or securities. A member has a security-wise net obligation
      to receive/deliver a security. The obligations are netted for a member
      across all securities to determine his fund obligations and he has to either
      pay or receive
funds. Members&#146; pay-in/pay-out obligations are determined latest by T+1
day and are forwarded to them on the same day so that they can settle their obligations
on T+2 day. The securities/funds are paid-in/ paid-out on T+2 day and the settlement
is complete in 3 days from the end of the trading day. </FONT></p></div>
<div style="text-indent:0%">
  <p><font size="2" face="Times New Roman, Times, serif"><I>Trading and Exposure
  Limits</I></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The NSCCL imposes limits on turnover and exposure in relation to the base minimum capital or additional base capital of a member, which is the amount of
funds, and securities that a member keeps with the Exchange/NSCCL. The members are subject to limits on trading volumes in a day as well as exposure at any point of time. Gross intra-day turnover of a member shall not exceed 25 times the net capital
(cash deposit plus security deposit). Gross exposure (aggregate of net cumulative outstanding positions in each security) of a member at any point of time shall not exceed 8.5 times the total base capital (not utilized towards margin) up to Rs. 10
million. If a member has free capital in excess of Rs. 10 million, his exposure shall not exceed Rs. 85 million plus 10 times of the capital in excess of Rs. 10 million. Members exceeding these limits are automatically and instantaneously disabled
by the automated trading system. A penalty of Rs. 5,000 is levied for each violation of gross exposure limit and intra-day turnover limit. In case of second and subsequent violation during the day the, penalty will be in multiples of Rs. 5,000 for
each such instance. </FONT></p></div>
<div style="text-indent:0%">
<p><font size="2" face="Times New Roman, Times, serif"><I>Margin Requirements</I></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The NSCCL imposes stringent margin requirements as a part of its risk containment measures. The categorization of stocks for imposition of margins has the
structure as given below: </FONT></p></div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">C-23</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc24"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top>&nbsp;</TD>
	<TD width="3%" valign=top><font size="2" face="Times New Roman, Times, serif">
    1.</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    The stocks which have traded at least 80% of the days for the previous 18
    months shall constitute the Group I and Group II.</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    2.</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    Out of the scrips identified above, the scrips having mean impact cost of
    less than or equal to 1% shall be categorized under Group I and the scrips
    where the impact cost is more than 1,
shall be categorized under Group II.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    3.</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    The remaining stocks shall be categorized under Group III.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    4.</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    The impact cost shall be calculated at the 15th of each month on a rolling
    basis considering the order book snapshots of the previous six months. On
    the calculated impact cost, the scrip shall move from one group to another
    group from the 1st of the next month. The impact cost is required to be calculated
    for an order value of Rs. 100 thousands. The daily margin comprises the sum
    of Mark to Market Margin (MTM margin) and Value at Risk-based Margin (VaR-based
    margin). VaR-based margin is applicable for all securities in rolling settlement.
    All securities are classified into three groups for the purpose of VaR-based
    margin.	</font></TD>
</TR>
</TABLE>
<div style="text-indent:0%">
<p><font size="2" face="Times New Roman, Times, serif"><I>VaR-Based Margins</I></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">For the securities listed in Group I, Scrip wise daily volatility is calculated using the exponentially weighted moving average methodology that is used in
the index futures market and the scrip wise daily VaR would be 3.5 times the volatility so calculated. For the securities listed in Group II the VaR-based margin shall be higher of scrip VaR (3.5 sigma) or three times the index VaR, and it shall be
scaled up by root 3. For the securities listed in Group III, the VaR-based margin would be equal to five times the index VaR and scaled up by square root of 3. VaR margin rate for a security constitute the following: </FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top>&nbsp;</TD>
	<TD width="3%" valign=top><font size="2" face="Times New Roman, Times, serif">
    1.</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    VaR-based margin, which is arrived at, based on the methods stated above.
    The index VaR, for the purpose, would be the higher of the daily Index VaR
    based on S&amp;P CNX NIFTY or BSE SENSEX. The index VaR would be subject
    to a minimum of 5%.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    2.</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    Additional VaR-based Margin: 6% as specified by SEBI.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    3.</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    Security-specific margin : NSCCL may stipulate security specific margins
    for the securities from time to time.	</font></TD>
</TR>
</TABLE>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The VaR-based margin would be rounded off to the next higher integer (e.g., if the VaR-based margin rate is 10.01, it would be rounded off to 11.00) and
capped at 100%. The VaR-based margin rate computed as mentioned above will be charged on the net outstanding position (buy value-sell value) of the respective clients on the respective securities across all open settlements. The net position at a
client level for a member are arrived at and thereafter, it is grossed across all the clients for a member to compute gross exposure for margin calculation. </FONT></p></div>
<div style="text-indent:0%">
<p><font size="2" face="Times New Roman, Times, serif"><I>Mark-to-Market Margin</I></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Mark to market margin is computed on the basis of mark to market loss of a member. Mark to market loss is the notional loss which the member would incur in
case the cumulative net outstanding position of the member in all securities, at the end of the relevant day were closed out at the closing price of the securities as announced at the end of the day by the NSE. Mark to market margin is calculated by
marking each transaction scrip to the closing price of the scrip at the end of trading. In case the security has not been traded on a particular day, the latest available closing price at the NSE is considered as the closing price. In the event of
the net outstanding position of a member in any security being nil, the difference between the buy and sell values would be considered as notional loss for the purpose of calculating the mark to market margin payable. MTM profit/loss across
different securities within the same settlement is set off to determine the MTM loss for a settlement. Such MTM losses for settlements are computed at client level. Non-payment of the margin attracts penal charge of 0.07% per day of the amount not
paid throughout the period of non-payment. Trades done by trading members on behalf of institutions are, however, exempt from margin and exposure requirements. </FONT></p></div>
<div align="center">
  <p><FONT size=2 face="Times New Roman, Times, serif">C-24</FONT></p>
</div>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc25"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:0%">
<p><font size="2" face="Times New Roman, Times, serif"><I>Index-based Circuit
  Filters</I></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">An
      index based market-wide circuit breaker system applies at three stages
      of the index movement either way at 10%, 15% and 20%. These circuit breakers
      bring about a coordinated trading halt in all equity and equity derivatives
      markets nation wide. The breakers are triggered by movement of either S&amp;P
CNX Nifty or Sensex, whichever is breached earlier. In case of a 10% movement of either of these indices, there would be a one-hour market halt
	if the movement
    takes place before 1:00 p.m. In case the movement takes place at or after
    1:00 p.m. but before
2:30 p.m. there would be trading halt for &frac12; hour. In case movement takes
place at or
after 2:30 p.m. there will be no trading halt at the 10% level and market shall
continue
trading.</FONT></p></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td><div style="text-indent: 3%"><font size="2" face="Times New Roman, Times, serif">In case of a 15%
        movement of either index, there shall be a two-hour halt if the movement
        takes place before 1 p.m. If  the 15% trigger is reached on or after
        1:00 p.m. but before 2:00 p.m., there shall
be a one-hour halt. If the 15% trigger is reached on or after 2:00 p.m. the trading
        shall halt  for remainder of the day. In case of a 20%
        movement of the index, trading shall be halted for the remainder of the
        day. The NSE may suo moto
cancel the orders in the absence of any immediate confirmation from the members
        that these orders are genuine or for any other reason as it may deem
        fit. The Exchange
views entries
of non-genuine orders with utmost seriousness as this has
market-wide repercussion. As an additional measure of
safety, individual scrip-wise price bands have been fixed as below:
    Daily price bands of 2% (either way) on a set of specified securities, Daily
        price bands of 5% (either way) on a set of specified securities, Price
        bands of 20% (either way) on all remaining securities, No price bands
        are applicable on scrips on which derivative products are available or
        on scrips included in indices
    on
which derivatives products are available.  For auction market
        the price bands of 20% are applicable. In order to prevent members from
        entering orders at
non-genuine prices in such securities, the Exchange has fixed operating range
    of 20% for such securities.</FONT></div></td>
  </tr>
</table>
<P><font size="2" face="Times New Roman, Times, serif">
<B>Review of Policy developments since 2000 </B></font></P>
<P><font size="2" face="Times New Roman, Times, serif">
<B>Securities Transaction Tax </B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In the Union Budget 2004/2005, the government proposed a package of tax measures relating to securities transactions. The tax on long-term capital gains from
securities transactions was abolished while the short-term capital gains tax was reduced to a flat rate of 10%. Moreover, it was proposed to levy a tax on buyers at the rate of 0.15% of the value of securities transacted on the stock exchanges in
the form of securities transaction tax (STT).Pursuant to the representations received from the market participants, the STT was modified by the government in consultation with SEBI. The revised STT includes </FONT><font face="Times New Roman, Times, serif"><I><FONT size=2>inter alia</FONT></I><FONT size=2> the following: </FONT></font></p></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%">&nbsp;</td>
    <td width="3%" valign="top"><font size=2 face="Times New Roman, Times, serif">(a)</font></td>
    <td><p><font size=2 face="Times New Roman, Times, serif">        The delivery-based transactions would attract STT of 0.15% (i.e., 15
    basis points) to be shared equally between the buyer and the seller; </font></p></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><font size=2 face="Times New Roman, Times, serif">(b)</font></td>
    <td><p><font size="2" face="Times New Roman, Times, serif"> For day traders
          and arbitrageurs, the STT of 0.015% (1.5 basis points) would be imposed
          on sellers of equities and settled on net basis </font></p></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><font size=2 face="Times New Roman, Times, serif">(c)</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> For units of equity
        oriented mutual funds, the STT of 0.15% (15 basis points) would be imposed
    on sellers; </font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><font size=2 face="Times New Roman, Times, serif">(d)</font></td>
    <td><P><font size="2" face="Times New Roman, Times, serif"> The rate of STT
          on sale of derivatives (Futures and Options) would be 0.01% (1 basis
          point) </font></P></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><font size=2 face="Times New Roman, Times, serif">(e)</font></td>
    <td><FONT size=2 face="Times New Roman, Times, serif">No
        STT would be levied on buying and selling of bonds, including government
        bonds, units of MFs other than equity oriented funds. In the Union Budget
        2005/2006 and then in 2006/2007,
the STT was further revised as under:</FONT></td>
  </tr>
</table>
<P align="center"><font size="2" face="Times New Roman, Times, serif">  C-25</font></P>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc26"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<P align="center"><B><FONT size=2>Security
  Transaction Tax rates</FONT></B></P>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
	<TD align=left><font size="1" face="Times New Roman, Times, serif"> <B>Type
	      of Transactions</B></font></TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
<B>2004/05</B>&nbsp;
	</font></TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
<B>2005/06</B>&nbsp;
	</font></TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
	<TD align=center><font size="1" face="Times New Roman, Times, serif">
<B>2006/07</B>&nbsp;
	</font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
    <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
  <TD align=left><hr size="1" noshade></TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><FONT size=2 face="Times New Roman, Times, serif">A.
	    Equity</FONT></TD>
	<TD width=2% align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD width=2% align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD width=2% align=left>&nbsp;

	</TD>
    <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><FONT size=2 face="Times New Roman, Times, serif">1)
 Delivery-based Transactions*</FONT></TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    0.150</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    0.200</font></TD>
	<TD width=2% align=right>&nbsp;</TD>
	<TD width=10% align=right><font size="2" face="Times New Roman, Times, serif">
    0.250</font></TD>
    <TD width=2% align=center>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><FONT size=2 face="Times New Roman, Times, serif">2)
 Non-delivery-based Transactions</FONT></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0.015</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0.020</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0.025</font></TD>
    <TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><FONT size=2 face="Times New Roman, Times, serif">B.
 Derivative Transactions</FONT></TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0.010</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0.013</font></TD>
	<TD align=right>&nbsp;</TD>
	<TD align=right><font size="2" face="Times New Roman, Times, serif">
    0.017</font></TD>
    <TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><font size="1" face="Times New Roman, Times, serif">
    <I>Source:
www.sebi.gov.in</I></font></TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>&nbsp;

	</TD>
    <TD align=left>&nbsp;</TD>
</TR>
</TABLE>
<P><font size="2" face="Times New Roman, Times, serif">
<B>Decoupling of Spot Market for Institutional Investors</B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Until
      recently, a core principle of the Indian equity market had been that all
      orders&#150; large or small &#150; were matched on a single platform in
      a unified price discovery. Institutional investors were able to discuss
      a large transaction on telephone, but the orders had to be exposed to the
      order book on the screen, thus disciplining the price at which institutional
      transactions take place.
This had given full transparency, unified price discovery, and opportunities
      for retail investors who had orders on the screen to participate in the
prices at which an institutional transaction was taking place. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">However, this mechanism was found to be cumbersome for institutional investors, who seek to match orders at prices without constraints from the underlying
order book of the country. Stock exchanges have now been advised by SEBI to put in place a separate trading window for the execution of large transactions (minimum quantity of 500,000 shares or a minimum value of Rs. 50 million) subject to certain
conditions. Furthermore, in an attempt at improving the information flow about such transactions to the broad market, SEBI
      has specified that stock exchanges shall disseminate information on such
      block deals, such as the name of the scrip, name of the client, quantity
      of shares bought/sold, traded price, etc., to the general public on the
      transaction date, after market hours. Though the dissemination of the information
      after market hours has limited utility, none-the-less it induces greater
      transparency in some ways &#150; since institutional transactions are now
      not anonymous. This separate window for execution of block deals has been
operationalized in the BSE and the NSE with effect from November 14, 2005. </FONT></p></div>
<P><font size="2" face="Times New Roman, Times, serif">
<B>Revision of Trading Member Position Limits for Stock Based Derivatives </B></font></P>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Owing to higher stock prices, position limits expressed in rupees had effectively dropped considerably. The trading member position limits for stock-based
derivatives has been revised on the basis of the recommendations of the Secondary Market Advisory Committee. The new limits are as follows: </FONT></p></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%">&nbsp;</td>
    <td width="3%" valign="top"><font size=2 face="Times New Roman, Times, serif">i)</font></td>
    <td><font size=2 face="Times New Roman, Times, serif">For stocks
      having applicable market wide position limit of Rs. 5 billion or more, the
      combined futures and options position limit is 20% of applicable market-wide
      position limit or Rs. 3 billion, whichever is lower and within which stock
      futures position cannot exceed 10% of applicable market-wide position limit
      or Rs. 1.5 billion, whichever is lower. </font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><font size=2 face="Times New Roman, Times, serif">ii)</font></td>
    <td><font size="2" face="Times New Roman, Times, serif"> For stocks having
        applicable market-wide position limit less than Rs. 5 billion, the combined
        futures and options position limit is 20% of applicable market-wide position
        limit, and futures position cannot exceed 20% of applicable market-wide
      position limit or Rs. 0.50 billion which ever is lower. </font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><font size=2 face="Times New Roman, Times, serif">iii)</font></td>
    <td><font size=2 face="Times New Roman, Times, serif"> The market-wide
      position limit and client level position limits, however, remain the same
      as prescribed.</font></td>
  </tr>
</table>
<div style="text-indent:3%"><P><font size="2" face="Times New Roman, Times, serif"> The
      enhanced limits will enable participants to hedge their positions more
      effectively, especially for stocks with large market capitalization and
      higher liquidity. Separate position limits have been built in for stock
      options to provide an impetus for the options market. </font> </P>
</div>
<P align="center"><FONT size=2 face="Times New Roman, Times, serif">C-26</FONT></P>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc27"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:0%">
<p><font size="2" face="Times New Roman, Times, serif"><I>Central Listing
  Authority</I></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Securities and Exchange Board of India (SEBI) notified the SEBI (Central Listing Authority) Regulations, 2003 on February 13, 2003 to provide for the
setting up of a Central Listing Authority (CLA) to bring about uniformity in the exercise of due diligence in scrutinising listing applications of companies/mutual funds/collective investment schemes.</FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The
      CLA shall give a &#147;letter of recommendation&#148; to any corporate/mutual
      fund or collective investment scheme to get itself listed on a particular
exchange, after examining its listing application.</FONT></p></div>
<div style="text-indent:0%">
<p><font size="2" face="Times New Roman, Times, serif"><I>Margin Trading</I></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In
      March 2004, SEBI began allowing brokers to provide margin-trading facilities
      to their clients in the BSE&#146;s cash segment. Margin trading is however
only allowed for certain types of securities and is subject to other restrictions, including margin requirements, certain record maintenance procedures and rules regarding the sources of broker funds and broker eligibility. SEBI had clarified, inter
alia, that borrowing and lending of funds by a trading member in connection with or incidental to or consequential upon the securities business would not be disqualified under rule/s 8(1)(f) &amp; 8(3)(f)
of Securities Contract (Regulations) Rules, 1957. In continuation of the said
circular, it was decided to allow the member-brokers to provide margin trading
facility to their clients, in the cash segment, subject to the conditions mentioned
in this Circular. </FONT></p></div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">In 2000, SEBI constituted a Committee to review the entire risk management system comprising the margin system, exposure norms, circuit filter, capital
adequacy, etc. and make recommendations designed to simplify the system without in any way diluting safety and efficiency aspects. The salient features of the system implemented by SEBI based on the recommendations made by this Committee were:
</FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top>&nbsp;</TD>
	<TD width="3%" valign=top><font size="2" face="Times New Roman, Times, serif">
    i)</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    Price band of 200 scrips and scrips under the compulsory rolling settlement
    has been relaxed to 16%.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    ii)</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    Scrip-limit in carry forward position under the Modified Carry Forward System
    (MCFS) or on the trade positions in the Automated Lending and Borrowing Mechanism
    (ALBM) has been placed at Rs.50 million per scrip for a member in account
    period and also in
rolling settlement.</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    iii)</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    Member-wise carry forward position under MCFS or on the trade positions under
    ALBM has been raised from Rs. 0.20 billion to Rs. 0.40 billion as an aggregate
    exposure of account period and
rolling settlement.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    iv)</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    The slabs for volatility margins and the margin rates for account period
    have been revised: for volatility range of more than 80% but up to 100% at
    10%, more than 100% but up to 150% at
15% and more than 150% at 25%.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    v)</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    No volatility margin has been prescribed under compulsory rolling settlement
    system.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    vi)</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    The minimum cash component to be deposited by the broker has been fixed at
    30% of the total margin.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    vii)</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    To encourage delivery-based transactions, it has been decided that the margins
    can be provided as bank guarantee; cash component need not be insisted.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<p><font size="2" face="Times New Roman, Times, serif"><B>Regulatory Framework
to Check Market Misconduct</B></font></p>
<div style="text-indent:0%">
<p><font size="2" face="Times New Roman, Times, serif"><I>Empowering SEBI</I></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">Increased episodes of market misconduct revealed many legal provisions of the SEBI Act. As a result on October 28, 2002, an ordinance was passed to better
empower SEBI. This ordinance involved organizational strengthening of SEBI, giving SEBI more powers for investigation, brought in larger penalties and defined concepts like insider trading and market manipulation in a more comprehensive manner.
</FONT></p></div>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">C-27</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc28"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:0%">
<p><font size="2" face="Times New Roman, Times, serif"><I>Serious Fraud Office</I></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The events of market misconduct in 2001 also highlighted the need for better mechanisms through which investigations and enforcement actions would take
place. With a view to investigate such frauds using a multidisciplinary team of experts, it was decided to set up a Serious Fraud Office in the Department of Company Affairs. </FONT></p></div>
<div style="text-indent:0%">
<p><font size="2" face="Times New Roman, Times, serif"><I>Internet Trading</I></font></p>
</div>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">The SEBI Committee
    on Internet-Based Securities Trading recommended internet trading through
       order routing system for execution of trade on the existing stock exchanges.

    In 2000, both the BSE and the NSE allowed their brokers who are registered
       with SEBI to start internet-based trading. SEBI prescribed minimum technical

    standards to be enforced by the stock exchanges for ensuring safety and security
       of transactions via the Internet. Internet trading volume in 2000 stood
      at
    Rs. 73 billion which increased to Rs. 810 billion by March, 2005. </FONT></p>
</div>
<div style="text-indent:0%">
<p><font size="2" face="Times New Roman, Times, serif"><I>Money Laundering</I></font></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="Times New Roman, Times, serif">The Prevention of Money Laundering Act, 2002 (PMLA) was brought into force with effect from July 1, 2005. As per the provisions of the Act, every banking
company, financial institution and intermediary shall have to maintain a record of all transactions. Such transactions include:</FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top>&nbsp;</TD>
	<TD width="3%" valign=top><font size="2" face="Times New Roman, Times, serif">
    i)</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    All cash transactions of the value of more than Rs. 1 million or its equivalent
    in foreign currency.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    ii)</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    All series of cash transactions integrally connected to each other, which
    have been valued below Rs. 1 million or its equivalent in foreign currency
    where such series of transactions take
place within one calendar month.	</font></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
	<TD valign=top><font size="2" face="Times New Roman, Times, serif">
    iii)</font></TD>
	<TD><font size="2" face="Times New Roman, Times, serif">
    All suspicious transactions whether or not made in cash.	</font></TD>
</TR>
</TABLE>
<p align="center"><FONT size=2 face="Times New Roman, Times, serif">C-28</FONT></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p??"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<P align="center">
<B><FONT size=4>The India Fund, Inc.</FONT></B></P>
</font>
<P align="center">&nbsp;</P>
<P align="center"><font face="Times New Roman, Times, serif"> &nbsp;&nbsp;<font size="3">&nbsp;&nbsp;&nbsp;<B>[ ] Shares of Common Stock<br>
Issuable Upon Exercise of Transferable<br>
Rights to Subscribe for Shares of Common Stock</B></font></font></P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><hr width="150" size="1" noshade></td>
  </tr>
  <tr>
    <td align="center"><font size="2" face="Times New Roman, Times, serif"><b>PROSPECTUS<br>
[ &nbsp;&nbsp;], 2006</b></font></td>
  </tr>
  <tr>
    <td align="center"><hr width="150" size="1" noshade></td>
  </tr>
  <tr>
    <td align="center">&nbsp;</td>
  </tr>
</table>

<p>&nbsp;</p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p??"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<P align="center">
  <B><FONT size=2>SUBJECT
  TO COMPLETION, APRIL 7, 2006</FONT></B></P>
<P align="center">
<B><FONT size=2>THE INDIA FUND, INC.</FONT></B></P>
<P align="center">
<B><FONT size=2>STATEMENT OF ADDITIONAL INFORMATION</FONT></B></P>
</font>
<div style="text-indent:3%">
<P><FONT size=2 face="Times New Roman, Times, serif">This Statement
  of Additional Information does not constitute a prospectus but should be read
  in conjunction with the Fund's prospectus relating thereto dated [ _________
   __ ],
  2006, as it may be supplemented. This Statement of Additional Information does
  not include all information that a prospective investor ought to know before
  investing in the Fund, and investors are advised to read the Fund's prospectus
  and retain it for future reference. You may obtain a copy of the Fund's prospectus
  or this Statement of Additional Information without charge by contacting the
  Fund at 1-866-800-8933. </FONT></P></div>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">This Statement of Additional Information is not complete and may be changed. The Fund may not sell the securities offered by the prospectus until the registration statement relating
  thereto that has been filed with the Securities and Exchange Commission is effective. </FONT></P></div>
<div style="text-indent:3%">
<P><FONT size=2 face="Times New Roman, Times, serif">This Statement
  of Additional Information is dated [ _________
  __ ], 2006.</FONT></P>
</div>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="p??"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<P align="center">
<B><FONT size=2>TABLE OF CONTENTS</FONT></B></P>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
	<TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font face="Times New Roman, Times, serif">&nbsp;

	</font></TD>
	<TD width=8% align=center><font size="1" face="Times New Roman, Times, serif">
    <B>Page</B></font></TD>
</TR>
<TR valign="bottom">
  <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  <TD align=center><hr size="1" noshade></TD>
</TR>
<TR valign="bottom">
	<TD align=left><font face="Times New Roman, Times, serif"><a href="#pvm">
    <B><FONT size=2>Proxy Voting
Procedures</FONT></B></a></font></TD>
	<TD align=right><font face="Times New Roman, Times, serif"><a href="#pvm">
    <FONT size=2>1</FONT></a></font></TD>
</TR>
</TABLE>
<p>&nbsp;</p>
<hr noshade align="center" width="100%" size="2">


<div style="page-break-before:always"></div><page><a name="pvm"></a>

<p>&nbsp;</p>
<P align="center">
<FONT size=5 face="Arial,Arial,Helvetica,sans-serif">BLACKSTONE</FONT><FONT size=4 face="Arial,Arial,Helvetica,sans-serif"> </FONT><FONT size=5 face="Arial,Arial,Helvetica,sans-serif">ASIA</FONT><FONT size=4 face="Arial,Arial,Helvetica,sans-serif">
</FONT><FONT size=5 face="Arial,Arial,Helvetica,sans-serif">ADVISORS</FONT><FONT size=4 face="Arial,Arial,Helvetica,sans-serif"> </FONT><FONT size=5 face="Arial,Arial,Helvetica,sans-serif">L.L.C.</FONT></P>
<P align="center">
  <FONT size=5 face="Arial,Arial,Helvetica,sans-serif">P</FONT><FONT size=4 face="Arial,Arial,Helvetica,sans-serif">ROXY </FONT><FONT size=5 face="Arial,Arial,Helvetica,sans-serif">V</FONT><FONT size=4 face="Arial,Arial,Helvetica,sans-serif">OTING
</FONT><FONT size=5 face="Arial,Arial,Helvetica,sans-serif">M</FONT><FONT size=4 face="Arial,Arial,Helvetica,sans-serif">ANUAL</FONT><FONT size=5 face="Arial,Arial,Helvetica,sans-serif"><b> </b></FONT></P>




<div style="page-break-before:always"></div>
<page>
<hr noshade align="center" width="100%" size="2">

<a name="Acontents"></a>
<p align="center"><font size=2 face="serif"><b>TABLE
      OF CONTENTS</b></font></p>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width="8%" align=left>&nbsp;</TD>
<TD align=left>&nbsp;

</TD>
<TD align=center>
      <FONT size=1 face="serif"><b>Page</b></FONT><font size="1">&nbsp;</FONT></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right><HR noshade size=1></TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD colspan="2" align=left><a href="#pp1">
  <B><FONT size=2 face="serif">INTRODUCTION</FONT></B></a></TD>
<TD width="5%" align=right><a href="#pp1">
    <B><FONT size=2 face="serif">1</FONT></B></a></TD>
    <TD width="2%" align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD width="12%" align=left><a href="#pp2"><b><font size=2 face="serif">CHAPTER 1</font></b></a></TD>
<TD align=left><a href="#pp2">
    <B><FONT size=2 face="serif"> BOARD OF DIRECTORS</FONT></B></a></TD>
<TD align=right><a href="#pp2">
    <B><FONT size=2 face="serif">2</FONT></B></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp2">
    <FONT size=2 face="serif">Voting on Director Nominees In Uncontested Elections</FONT></a></TD>
<TD align=right><a href="#pp2">
    <FONT size=2 face="serif">2</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp2">
    <FONT size=2 face="serif">Chairman and CEO are the same person</FONT></a></TD>
<TD align=right><a href="#pp2">
    <FONT size=2 face="serif">2</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp3">
    <FONT size=2 face="serif">Independence of Directors</FONT></a></TD>
<TD align=right><a href="#pp3">
    <FONT size=2 face="serif">3</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp4">
    <FONT size=2 face="serif">Stock Ownership Requirements</FONT></a></TD>
<TD align=right><a href="#pp4">
    <FONT size=2 face="serif">4</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp5">
    <FONT size=2 face="serif">Charitable Contributions</FONT></a></TD>
<TD align=right><a href="#pp5">
    <FONT size=2 face="serif">5</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp6">
    <FONT size=2 face="serif">Director and Officer Indemnification And Liability Protection</FONT></a></TD>
<TD align=right><a href="#pp6">
    <FONT size=2 face="serif">6</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><font face="serif">&nbsp;</FONT></TD>
<TD align=left><a href="#pp8">
    <FONT size=2 face="serif">Size of the Board</FONT></a></TD>
<TD align=right><a href="#pp8">
    <FONT size=2 face="serif">8</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp9">
    <FONT size=2 face="serif">Voting on Director Nominees in Contested Elections</FONT></a></TD>
<TD align=right><a href="#pp9">
    <FONT size=2 face="serif">9</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp10">
    <FONT size=2 face="serif">Term Of Office</FONT></a></TD>
<TD align=right><a href="#pp10">
    <FONT size=2 face="serif">10</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp11">
    <FONT size=2 face="serif">Compensation Disclosure</FONT></a></TD>
<TD align=right><a href="#pp11">
    <FONT size=2 face="serif">11</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><a href="#pp12"><b><font size=2 face="serif">CHAPTER 2</font></b></a></TD>
<TD align=left><a href="#pp12">
    <B><FONT size=2 face="serif"> AUDITORS</FONT></B></a></TD>
<TD align=right><a href="#pp12">
    <B><FONT size=2 face="serif">12</FONT></B></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp13">
    <FONT size=2 face="serif">Ratifying Auditors</FONT></a></TD>
<TD align=right><a href="#pp13">
    <FONT size=2 face="serif">13</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><a href="#pp14"><b><font size=2 face="serif">CHAPTER 3</font></b></a></TD>
<TD align=left><a href="#pp14">
    <B><FONT size=2 face="serif"> TENDER OFFER DEFENSES</FONT></B></a></TD>
<TD align=right><a href="#p14">
    <B><FONT size=2 face="serif">14</FONT></B></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp15">
    <FONT size=2 face="serif">Poison Pills</FONT></a></TD>
<TD align=right><a href="#pp15">
    <FONT size=2 face="serif">15</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp16">
    <FONT size=2 face="serif">Greenmail</FONT></a></TD>
<TD align=right><a href="#pp16">
    <FONT size=2 face="serif">16</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp17">
    <FONT size=2 face="serif">Supermajority Vote</FONT></a></TD>
<TD align=right><a href="#pp17">
    <FONT size=2 face="serif">17</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><a href="#pp18"><b><font size=2 face="serif">CHAPTER 4</font></b></a></TD>
<TD align=left><a href="#pp18">
    <B><FONT size=2 face="serif"> MERGERS AND CORPORATE RESTRUCTURING</FONT></B></a></TD>
<TD align=right><a href="#pp18">
    <B><FONT size=2 face="serif">18</FONT></B></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp19">
    <FONT size=2 face="serif">Changing Corporate Name</FONT></a></TD>
<TD align=right><a href="#pp19">
    <FONT size=2 face="serif">19</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp20">
    <FONT size=2 face="serif">Reincorporation</FONT></a></TD>
<TD align=right><a href="#pp20">
    <FONT size=2 face="serif">20</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><a href="#pp21"><b><font size=2 face="serif">CHAPTER 5</font></b></a></TD>
<TD align=left><a href="#pp21">
    <B><FONT size=2 face="serif"> PROXY CONTEST DEFENSES</FONT></B></a></TD>
<TD align=right><a href="#pp21">
    <B><FONT size=2 face="serif">21</FONT></B></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp22">
    <FONT size=2 face="serif">Board Structure: Staggered vs. Annual Elections</FONT></a></TD>
<TD align=right><a href="#pp22">
    <FONT size=2 face="serif">22</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
</TABLE>

<p align="center"><font size=2 face="serif">i</font> </p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<page>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=8% align=left>&nbsp;</TD>
    <TD align=left><a href="#pp23"> <FONT size=2 face="serif">Cumulative
        Voting</FONT></a></TD>
    <TD width=5% align=right><a href="#pp26"> <FONT size=2 face="serif">23</FONT></a></TD>
    <TD width=2% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp24"> <FONT size=2 face="serif">Shareholders&#146; Ability
        to Call Special Meeting</FONT></a></TD>
    <TD align=right><a href="#pp24"> <FONT size=2 face="serif">24</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp25"> <FONT size=2 face="serif">Shareholders&#146; Ability
        to Alter Size of the Board</FONT></a></TD>
    <TD align=right><a href="#pp25"> <FONT size=2 face="serif">25</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
  <TD width="12%" align=left><a href="#pp26"><b><font size=2 face="serif">CHAPTER 6</font></b></a></TD>
<TD align=left><a href="#pp26">
    <B><FONT size=2 face="serif"> MISCELLANEOUS CORPORATE GOVERNANCE PROVISIONS</FONT></B></a></TD>
<TD align=right><a href="#pp26">
    <B><FONT size=2 face="serif">26</FONT></B></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp27">
    <FONT size=2 face="serif">Confidential Voting</FONT></a></TD>
<TD align=right><a href="#pp27">
    <FONT size=2 face="serif">27</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
  <TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp28">
    <FONT size=2 face="serif">Shareholder Advisory Committees</FONT></a></TD>
<TD align=right><a href="#pp28">
    <FONT size=2 face="serif">28</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
  <TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp29">
    <FONT size=2 face="serif">Foreign Corporate Matters</FONT></a></TD>
<TD align=right><a href="#pp29">
    <FONT size=2 face="serif">29</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
  <TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp30">
    <FONT size=2 face="serif">Government Service List</FONT></a></TD>
<TD align=right><a href="#pp30">
    <FONT size=2 face="serif">30</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
  <TD align=left><a href="#pp31"><b><font size=2 face="serif">CHAPTER 7</font></b></a></TD>
<TD align=left><a href="#pp31">
    <B><FONT size=2 face="serif"> SOCIAL AND ENVIRONMENTAL ISSUES</FONT></B></a></TD>
<TD align=right><a href="#pp31">
    <B><FONT size=2 face="serif">31</FONT></B></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp32">
    <FONT size=2 face="serif">Energy and Environmental Issues (CERES Principles)</FONT></a></TD>
<TD align=right><a href="#pp32">
    <FONT size=2 face="serif">32</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
  <TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp33">
    <FONT size=2 face="serif">Northern Ireland (MacBride Principles)</FONT></a></TD>
<TD align=right><a href="#pp33">
    <FONT size=2 face="serif">33</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
  <TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp34">
    <FONT size=2 face="serif">Maquiladora Standards and International Operations and Policies</FONT></a></TD>
<TD align=right><a href="#pp34">
    <FONT size=2 face="serif">34</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
  <TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp35">
    <FONT size=2 face="serif">Equal Employment Opportunity And Discrimination</FONT></a></TD>
<TD align=right><a href="#pp35">
    <FONT size=2 face="serif">35</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
  <TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp36">
    <FONT size=2 face="serif">Animal Rights</FONT></a></TD>
<TD align=right><a href="#pp36">
    <FONT size=2 face="serif">36</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
  <TD align=left><a href="#pp37"><b><font size=2 face="serif">CHAPTER 8 </font></b></a></TD>
<TD align=left><a href="#p37">
    <B><FONT size=2 face="serif">CAPITAL STRUCTURE</FONT></B></a></TD>
<TD align=right><a href="#pp37">
    <B><FONT size=2 face="serif">37</FONT></B></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp38">
    <FONT size=2 face="serif">Common Stock Authorization</FONT></a></TD>
<TD align=right><a href="#pp38">
    <FONT size=2 face="serif">38</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp39">
    <FONT size=2 face="serif">Blank Check Preferred Stock</FONT></a></TD>
<TD align=right><a href="#pp39">
    <FONT size=2 face="serif">39</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp40">
    <FONT size=2 face="serif">Preemptive Rights</FONT></a></TD>
<TD align=right><a href="#pp40">
    <FONT size=2 face="serif">40</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp41">
    <FONT size=2 face="serif">Stock Distributions: Splits and Dividends</FONT></a></TD>
<TD align=right><a href="#pp41">
    <FONT size=2 face="serif">41</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp41">
    <FONT size=2 face="serif">Stock Splits</FONT></a></TD>
<TD align=right><a href="#pp41">
    <FONT size=2 face="serif">41</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp42">
    <FONT size=2 face="serif">Reverse Stock Splits</FONT></a></TD>
<TD align=right><a href="#pp42">
    <FONT size=2 face="serif">42</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp43">
    <FONT size=2 face="serif">Adjustments to Par Value of Common Stock</FONT></a></TD>
<TD align=right><a href="#pp43">
    <FONT size=2 face="serif">43</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp44">
    <FONT size=2 face="serif">Debt Restructurings</FONT></a></TD>
<TD align=right><a href="#pp44">
    <FONT size=2 face="serif">44</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left><a href="#pp45"><b><font size=2 face="serif">CHAPTER 9</font></b></a></TD>
<TD align=left><a href="#pp45">
    <B><FONT size=2 face="serif"> EXECUTIVE AND DIRECTOR COMPENSATION</FONT></B></a></TD>
<TD align=right><a href="#pp45">
    <B><FONT size=2 face="serif">45</FONT></B></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
<TD align=left><a href="#pp46">
    <FONT size=2 face="serif">Director Compensation</FONT></a></TD>
<TD align=right><a href="#pp46">
    <FONT size=2 face="serif">46</FONT></a></TD>
    <TD align=right>&nbsp;</TD>
</TR>
</TABLE>
<P align="center">
<FONT size=2 face="serif">ii</FONT></P>

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<div style="page-break-before:always"></div>
<page>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width="8%" align=left>&nbsp;</TD>
    <TD align=left><a href="#pp47"><FONT size=2 face="serif">Shareholder Proposal
          to Limit Executive and Director Pay</FONT></a></TD>
    <TD width="5%" align=right><a href="#pp47"> <FONT size=2 face="serif">47</FONT></a></TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp48"> <FONT size=2 face="serif">Employee
        Stock Ownership Plans (ESOPs)</FONT></a></TD>
    <TD align=right><a href="#pp48"> <FONT size=2 face="serif">48</FONT></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp49"> <FONT size=2 face="serif">Options
        Expensing</FONT></a></TD>
    <TD align=right><a href="#pp49"> <FONT size=2 face="serif">49</FONT></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp50"> <FONT size=2 face="serif">Golden
        Parachutes</FONT></a></TD>
    <TD align=right><a href="#pp50"> <FONT size=2 face="serif">50</FONT></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp51"> <FONT size=2 face="serif">Proposal
        to Ban Golden Parachutes</FONT> </a></TD>
    <TD align=right><a href="#pp51"> <FONT size=2 face="serif">51</FONT> </a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp52"> <FONT size=2 face="serif">Outside
        Directors&#146; Retirement Compensation</FONT>&nbsp; </a></TD>
    <TD align=right><a href="#pp52"> <FONT size=2 face="serif">52</FONT> </a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width="12%" align=left><a href="#pp53"> <b><font size=2 face="serif">CHAPTER 10</font></b></a></TD>
    <TD align=left><a href="#pp53"> <b><font size=2 face="serif">STATE OF INCORPORATION</font></b>&nbsp; </a></TD>
    <TD align=right><a href="#pp53"><font size=2 face="serif"><b>53</b></font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp54"> <font size=2 face="serif">Control Share Acquisition Statutes</font>&nbsp; </a></TD>
    <TD align=right><a href="#pp54"><font size=2 face="serif">54</font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp55"> <font size=2 face="serif">Opt-Out of State Takeover Statutes</font>&nbsp; </a></TD>
    <TD align=right><a href="#pp55"><font size=2 face="serif">55</font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp56"> <font size=2 face="serif">Corporate Restructuring, Spin-Offs
    Asset Sales, Liquidations</font>&nbsp; </a></TD>
    <TD align=right><a href="#pp56"><font size=2 face="serif">56</font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><a href="#pp57"><b><font size=2 face="serif">CHAPTER 11</font></b></a></TD>
    <TD align=left><a href="#pp57"> <b><font size=2 face="serif">CONFLICTS OF INTEREST</font></b>&nbsp; </a></TD>
    <TD align=right><a href="#pp57"><font size=2 face="serif"><b>57</b></font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp58"><font size=2 face="serif">Conflicts</font></a></TD>
    <TD align=right><a href="#pp58"><font size=2 face="serif">58</font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><a href="#pp60"><b><font size=2 face="serif">CHAPTER 12</font></b></a></TD>
    <TD align=left><a href="#pp60"> <b><font size=2 face="serif">GOVERNANCE COMMITTEE AND PROXY
    MANAGERS</font></b>&nbsp; </a></TD>
    <TD align=right><a href="#pp60"><font size=2 face="serif"><b>60</b></font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp61"><font size=2 face="serif">Governance Committee</font></a></TD>
    <TD align=right><a href="#pp61"><font size=2 face="serif">61</font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp62"><font size=2 face="serif">Proxy Managers</font></a></TD>
    <TD align=right><a href="#pp62"><font size=2 face="serif">62</font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><a href="#pp63"><b><font size=2 face="serif">CHAPTER 13</font></b></a></TD>
    <TD align=left><a href="#pp63"> <b><font size=2 face="serif">SPECIAL ISSUES WITH VOTING FOREIGN
    PROXIES</font></b>&nbsp; </a></TD>
    <TD align=right><a href="#pp63"><font size=2 face="serif"><b>63</b></font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp64"> <font size=2 face="serif">Special
    Issues with Voting Foreign Proxies</font> </a></TD>
    <TD align=right><a href="#pp64"><font size=2 face="serif">64</font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><a href="#pp65"><b><font size=2 face="serif">CHAPTER 14</font></b></a></TD>
    <TD align=left><a href="#pp65"> <b><font size=2 face="serif">RECORD KEEPING</font></b>&nbsp; </a></TD>
    <TD align=right><a href="#pp65"><font size=2 face="serif"><b>65</b></font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><a href="#pp66"><font size=2 face="serif">Record Keeping</font></a></TD>
    <TD align=right><a href="#pp66"><font size=2 face="serif">66</font></a></TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align="center">
<FONT size=2 face="serif">iii</FONT></P>

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<div style="page-break-before:always"></div>
<page>
<a name="pp1"></a><p><a href="#acontents"><font size="2">Back to Contents</font></a></p>


<B><FONT size=2 face="serif">INTRODUCTION</FONT></B>

<P><FONT size=2 face="serif">Rule 206(4)-6 ( the &#147;Rule&#148;) adopted under
    the Investment Advisers Act of 1940, as amended (the &#147;Advisers Act&#148;)
    requires all registered investment advisers that exercise voting discretion
    over securities  held in client portfolios to adopt proxy voting policies
    and procedures.</FONT></P>

<P><FONT size=2 face="serif">Blackstone Asia Advisors, LLC (the &#147;Adviser&#148;)
    is a registered investment adviser under the Advisers Act and is therefore
    required to adopt proxy voting policies and procedures pursuant to the Rule.</FONT></P>


<P><FONT size=2 face="serif">When the Adviser has investment discretion over
    a client&#146;s investment portfolio, then the Adviser votes proxies for
    the Account pursuant to the policies and procedures set forth herein.</FONT></P>

<P align="center">
<FONT size=2 face="serif">1</FONT></P>

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<P align="center">
<FONT size=2 face="serif"><b>CHAPTER 1</b></FONT><b>
</b></P>
<P align="center"><b>
<FONT size=2 face="serif">BOARD OF DIRECTORS</FONT></b>
</P>
<FONT size=2 face="serif"><a name="p5a"></a><b>Voting on Director Nominees In Uncontested
Elections</b></FONT>

<P><FONT size=2 face="serif">These proposals seek shareholder votes for persons
    who have been nominated by a corporation&#146;s board of directors to stand
    for election to serve as members of that board. No candidates are opposing
    these board  nominees.</FONT></P>

<P><FONT size=2 face="serif">In each analysis of an uncontested election of directors you should review:</FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">(1)</FONT></TD>
<TD>
<FONT size=2 face="serif">Company performance</FONT></TD>
</TR>
<TR valign="bottom"><TD colspan=3>&nbsp;</TD></TR><TR valign="bottom">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">(2)</FONT></TD>
<TD>
<FONT size=2 face="serif">Composition of the board and key board committees</FONT></TD>
</TR>
<TR valign="bottom"><TD colspan=3>&nbsp;</TD></TR><TR valign="bottom">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">(3)</FONT></TD>
<TD>
<FONT size=2 face="serif">Attendance at board meetings</FONT></TD>
</TR>
<TR valign="bottom"><TD colspan=3>&nbsp;</TD></TR><TR valign="bottom">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">(4)</FONT></TD>
<TD>
<FONT size=2 face="serif">Corporate governance provisions and takeover activity</FONT></TD>
</TR>
<TR valign="bottom"><TD colspan=3>&nbsp;</TD></TR></TABLE>
<p><FONT size=2 face="serif">We may also consider:</FONT></p>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD nowrap>&nbsp;</TD>
  <TD nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">(1)</FONT></TD>
<TD>
<FONT size=2 face="serif">Board decisions concerning executive compensation</FONT></TD>
</TR>
<TR valign="bottom"><TD colspan=3>&nbsp;</TD></TR><TR valign="bottom">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">(2)</FONT></TD>
<TD>
<FONT size=2 face="serif">Number of other board seats held by the nominee</FONT></TD>
</TR>
<TR valign="bottom"><TD colspan=3>&nbsp;</TD></TR><TR valign="bottom">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">(3)</FONT></TD>
<TD>
<FONT size=2 face="serif">Interlocking directorships</FONT></TD>
</TR>
<TR valign="bottom"><TD colspan=3>&nbsp;</TD></TR></TABLE>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendation</font></b> </td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td> <font size=2 face="serif">It is our policy to vote </font><b><font size=2 face="serif">IN
          FAVOR </font></b><font size=2 face="serif">of<br>
          the candidates proposed
          by the
board.</font> </td>
  </tr>
</table>

<P><FONT size=2 face="serif">We will look carefully at each candidate&#146;s
    background contained in the proxy statement. In the absence of unusual circumstances
    suggesting a nominee is clearly not qualified to serve as a member of the
    board, we will  vote with management.</FONT></P>

<p><FONT size=2 face="serif"><a name="p5b"></a><b>C</b>hairman and CEO are the
same person</FONT></p>

<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%">&nbsp;</td>
    <td> <font size=2 face="serif">Shareholders may propose that different persons
    hold the positions of the chairman and the CEO.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td> <font size=2 face="serif">We would evaluate these proposals on a case
        by case basis depending on the size of the company and performance of
    management.</font></td>
  </tr>
</table>
<P align="center">
<FONT size=2 face="serif">2</FONT></P>

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<page>
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<p><font size=2 face="serif">Independence of Directors</font></p>

<P><FONT size=2 face="serif">Shareholders may request that the board be comprised
    of a majority of independent directors and that audit, compensation and nominating
    committees of the Board consists exclusively of independent directors. We
    believe that
independent directors are important to corporate governance.</FONT></P>

<p><B><FONT size=2 face="serif">Vote Recommendation</FONT></B></p>
<div style="margin-left:52%">
<p><FONT size=2 face="serif">It is our policy to vote </FONT><B><FONT size=2 face="serif">FOR </FONT></B><FONT size=2 face="serif">proposals
    requesting that a majority of the Board be independent and that the audit,
    compensation and nominating committees of the board include only independent
    directors.</FONT></p>
</div>
<P align="center"><FONT size=2 face="serif">3</FONT></P>

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<p><font size=2 face="serif">Stock Ownership Requirements</font></p>
<div style="text-indent:3%"><p><FONT size=2 face="serif">Shareholders may propose that directors be required to own a minimum amount of company stock or that directors should be paid in company stock, not cash. This proposal is based on the view that
directors will align themselves with the interest of shareholders if they are shareholders themselves. We believe that directors are required to exercise their fiduciary duty to the company and its shareholders whether or not they own shares in the
company and should be allowed to invest in company stock based on their own personal considerations.</FONT></p></div>
<B><FONT size=2 face="serif">Vote Recommendation</FONT></B>
<div style="margin-left:52%">
<P><FONT size=2 face="serif">Vote <B>AGAINST </B>proposals
    that require director stock ownership.</FONT></P>
</div><P align="center"><FONT size=2 face="serif">4</FONT></P>

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<p><b><font size=2 face="serif">Charitable Contributions</font></b></p>
<div style="text-indent:3%"><p><FONT size=2 face="serif">Charitable contributions by companies are generally useful for assisting worthwhile causes and for creating goodwill between the company and its community. Moreover, there may be certain
long-term financial benefits to companies from certain charitable contributions generated from, for example, movies spent helping educational efforts in the firm&#146;s primary employment areas. Shareholders should not decide what the most
worthwhile charities are.</FONT></p></div>
<p><B><FONT size=2 face="serif">Vote Recommendation</FONT></B></p>
<div style="margin-left:52%">
<p><FONT size=2 face="serif">(Shareholders Proposals)<br>
  Vote <B>AGAINST </B>proposals
    regarding charitable contribution.</FONT></p>
</div>
<div style="text-indent:3%"><p><FONT size=2 face="serif">Shareholders have differing and equally sincere views as to which charities the company should contribute to, and the amount it should contribute. In the absence of bad faith, self-dealing, or
gross negligence, management should determine which contributions are in the best interest of the company.</FONT></p></div>
<P align="center">
<FONT size=2 face="serif">5</FONT></P>

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<P align="left">
<B><FONT size=2 face="serif">Director and Officer Indemnification And Liability Protection</FONT></B></P>
<div style="text-indent:3%">
  <p> <font size=2 face="serif">These proposals typically provide for protection
    (or additional protection) which is to be afforded to the directors of a corporation
    in the form of indemnification by the corporation, insurance coverage or limitations
    upon their liability in connection with their responsibilities as directors.</font></p>

</div>
<div style="text-indent:3%">
  <p> <font size=2 face="serif">When a corporation indemnifies its directors and
    officers, it means the corporation promises to reimburse them for certain
    legal expenses, damages, and judgments incurred as a result of lawsuits relating
    to their corporate actions. The corporation becomes the insurer for its officers
    and directors.</font></p>

</div>
<p><B><FONT size=2 face="serif">Vote Recommendation</FONT></B></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="48%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="48%"><font size=2 face="serif">Vote <b>AGAINST </b>proposals that
      eliminate entirely director and officers&#146; liability for monetary damages
      for violating the duty of care.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote <b>AGAINST </b>indemnification proposals
      that would expand coverage beyond just legal expenses to acts, such as negligence,
      that are more serious violations of fiduciary obligations than mere carelessness.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote <b>FOR </b>only those proposals providing
      such expanded coverage in cases when a director&#146;s or officer&#146;s
      legal defense was unsuccessful if: a) the director was found to have acted
      in good faith, and b) only if the director&#146;s legal expenses would be
      covered.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size=2 face="serif">The following factors should be considered:</font>
  </p>

</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD width="3%" valign=top>&nbsp;</TD>
    <TD width="3%" valign=top> <FONT size=2 face="serif">(A)</FONT></TD>
    <TD> <FONT size=2 face="serif">The present environment in which directors
      operate provides substantial risk of claims or suits against them in their
      individual capacities arising out of the discharge of their duties.</FONT>
    </TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="serif">6</FONT></P>

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<page>
<a name="pp7"></a>
<p><a href="#acontents"><font size="2">Back to Contents</font></a></p>


<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%">&nbsp;</td>
    <td width="3%"><font size=2 face="serif">(B)</font></td>
    <td><font size=2 face="serif"> Attracting and retaining the most qualified
      directors enhances shareholder value.</font></td>
  </tr>
</table>
<P align="center">
<FONT size=2 face="serif">7</FONT></P>

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<B><FONT size=2 face="serif">Size of the Board</FONT></B>
<div style="text-indent:3%">
  <p> <font size=2 face="serif">Typically there are three reasons for changing
    the size of the board. The first reason may be to permit inclusion into the
    board of additional individuals who, by virtue of their ability and experience,
    would benefit the corporation. The second reason may be to reduce the size
    of the board due to expiration of terms, resignation of sitting directors
    or, thirdly, to accommodate the corporation&#146;s changing needs.</font></p>

</div>
<p><B><FONT size=2 face="serif">Vote Recommendation</FONT></B></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="48%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="48%"> <font size=2 face="serif">Vote </font><b><font size=2 face="serif">FOR
      </font></b><font size=2 face="serif">the board&#146;s recommendation to
      increase or decrease the size of the board.</font> </td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size=2 face="serif">The following factors should be considered:</font>
  </p>

</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD width="3%" valign=top>&nbsp;</TD>
    <TD width="3%" valign=top> <FONT size=2 face="serif">1.</FONT></TD>
    <TD> <FONT size=2 face="serif">These proposals may aim at reducing or increasing
      the influence of certain groups of individuals.</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD valign=top>&nbsp;</TD>
    <TD valign=top> <FONT size=2 face="serif">2.</FONT></TD>
    <TD> <FONT size=2 face="serif">This is an issue with which the board of directors
      is uniquely qualified to deal, since they have the most experience in sitting
      on a board and are up-to-date on the specific needs of the corporation.</FONT>
    </TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="serif">8</FONT></P>

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<page>
<a name="pp9"></a>
<p><a href="#acontents">Back to Contents</a></p>
<P><b><FONT size=2 face="serif">Voting on Director Nominees in Contested Elections</FONT></b></P>

<div style="text-indent:3%"><P> <FONT size=2 face="serif">Votes in contested elections of directors are evaluated
  on a </FONT><font size="2"><B><FONT face="serif">CASE-BY-CASE </FONT></B><FONT face="serif">basis.</FONT></font></P></div>
<div style="text-indent:3%"><P> <FONT size=2 face="serif">The following factors are considered:</FONT></P></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD width="3%" valign=top nowrap>&nbsp;</TD>
    <TD width="3%" valign=top nowrap> <FONT size=2 face="serif">1.</FONT></TD>
    <TD> <FONT size=2 face="serif">management&#146;s track record</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="serif">2.</FONT></TD>
    <TD> <FONT size=2 face="serif">background to the proxy contest</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="serif">3.</FONT></TD>
    <TD> <FONT size=2 face="serif">qualifications of director nominees</FONT>
    </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="serif">9</FONT></P>
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<div style="page-break-before:always"></div>
<font size="2"><page><a name="pp10"></a>
<p><a href="#acontents">Back to Contents</a></p>
<B><FONT face="serif">Term Of Office</FONT></B> </font>

<P> <FONT size=2 face="serif">This is a shareholder&#146;s proposal to limit
    the  tenure of outside directors. This requirement may not be an appropriate
    one.
  It is an artificial imposition on the board, and may have the result of removing
     knowledgeable directors from the board.</FONT></P>

<p><font size="2" face="serif"><B>Vote Recommendation</B></font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="48%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="48%" align="left" valign="bottom"><font size=2 face="serif">Vote
      </font><font size="2"><b><font face="serif">AGAINST </font></b><font face="serif">shareholder
      proposals to limit the tenure of outside directors.</font></font> </td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="serif">The following factors should be considered:</FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD width="3%" valign=top nowrap>&nbsp;</TD>
    <TD width="3%" valign=top nowrap> <FONT size=2 face="serif">1.</FONT></TD>
    <TD> <FONT size=2 face="serif">An experienced director should not be disqualified
      because he or she has served a certain number of years.</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="serif">2.</FONT></TD>
    <TD> <FONT size=2 face="serif">The nominating committee is in the best position
      to judge the directors&#146; terms in office due to their understanding
      of a corporation&#146;s needs and a director&#146;s abilities and experience.</FONT>
    </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="serif">3.</FONT></TD>
    <TD> <FONT size=2 face="serif">If shareholders are not satisfied with the
      job a director is doing, they can vote him/her off the board when the term
      is up.</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="serif">10</FONT></P>
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<font size="2"><page><a name="pp11"></a>
<p><a href="#acontents">Back to Contents</a></p>
<B><FONT face="serif">Compensation Disclosure</FONT></B> </font>
<div style="text-indent:3%"><P> <FONT size=2 face="serif">These proposals seek shareholder approval of a request
  that the board of directors disclose the amount of compensation paid to officers
  and employees, in addition to the disclosure of such information in the proxy
  statement as required by the SEC regulations.</FONT></P></div>
<p><font size="2" face="serif"><B>Vote Recommendation</B></font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="48%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="48%" align="left" valign="bottom"><font size="2" face="serif"> (shareholders
        policy)<br>
Vote <b>AGAINST </b>these proposals that require disclosure, unless we have reason
to believe that mandated disclosures are insufficient to give an accurate and
meaningful account of senior management compensation. </font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><font size="2" face="serif">The following factors
      should be considered:</font>
</p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD width="3%" valign=top nowrap>&nbsp;</TD>
    <TD width="3%" valign=top nowrap> <FONT size=2 face="serif">1.</FONT></TD>
    <TD> <FONT size=2 face="serif">Federal securities laws require disclosure
      in corporate proxy statements of the compensation paid to corporate directors
      and officers.</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="serif">2.</FONT></TD>
    <TD> <FONT size=2 face="serif">Employees other than executive officers and
      directors are typically not in policy-making roles where they have the ability
      to determine, in a significant way, the amount of their own compensation.</FONT>
    </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="serif">3.</FONT></TD>
    <TD> <FONT size=2 face="serif">The disclosure of compensation of lower-level
      officers and employees infringes upon their privacy and might create morale
      problems.</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="serif">11</FONT></P>
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<P align="center">
<B><FONT size=2 face="serif">CHAPTER 2</FONT></B></P>
<P align="center">
<B><FONT size=2 face="serif">AUDITORS</FONT></B></P>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P align="center">
<FONT size=2 face="serif">12</FONT></P>

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<FONT size=2 face="serif">Ratifying Auditors</FONT>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">Shareholders must make certain that auditors are responsibly examining the financial statements of a company, that their reports adequately express any legitimate financial concerns, and that the auditor is independent of
the company it is serving.</FONT></P></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td align="left" valign="middle"><b><font size=2 face="serif">Vote Recommendation</font></b> </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
  </tr>
</table>
<p>&nbsp;</p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="48%">&nbsp;</td>
    <td width="4%" align="right" valign="bottom">&nbsp;</td>
    <td width="48%" align="left" valign="bottom"> <font size=2 face="serif">Vote </font><b><font size=2 face="serif">FOR </font></b><font size=2 face="serif">proposal
    to ratify auditors.</font> </td>
  </tr>
</table>
<div style="text-indent:3%">
<p> <FONT size=2 face="serif">The following factors should be considered:</FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">Although lawsuits are sometimes filed against accounting firms, including those nationally recognized, these firms typically complete their assignments in a lawful and professional manner.</FONT></TD>
</TR>
<TR valign="top">
  <TD>&nbsp;</TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
</TR><TR valign="top">
<TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">Sometimes it may be appropriate for a corporation to change accounting firms, but the board of directors is in the best position to judge the advantages of any such change and any disagreements with former auditors must be
fully disclosed to shareholders.</FONT></TD>
</TR>
<TR valign="top">
  <TD>&nbsp;</TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
</TR><TR valign="top">
<TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">3.</FONT></TD>
<TD><font size="2" face="serif">
    If there is a reason to believe the independent auditor has rendered an opinion
    which is neither accurate nor indicative of the company&#146;s financial
    position, then in this case vote <B>AGAINST </B>ratification.</font></TD>
</TR>
<TR valign="top">
  <TD>&nbsp;</TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
</TR></TABLE>
<P align="center">
<FONT size=2 face="serif">13</FONT></P>

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<P align="center">
<B><FONT size=2 face="serif">CHAPTER 3</FONT></B></P>
<P align="center">
<B><FONT size=2 face="serif">TENDER OFFER DEFENSES</FONT></B></P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center">
<FONT size=2 face="serif">14</FONT></P>

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<p align="left"><B><FONT size=2 face="serif">Poison Pills</FONT></B></p>

<P>
<FONT size=2 face="serif">Poison pills are corporate-sponsored financial devices
that, when triggered by potential acquirers, do one or more of the following:
a) dilute the acquirer&#146;s equity in the target company, b) dilute the acquirer&#146;s

voting interests in the target company, or c) dilute the acquirer&#146;s equity
holdings in the post-merger company. Generally, poison pills accomplish these
tasks by issuing rights or warrants to shareholders that are essentially worthless
unless
triggered by a hostile acquisition attempt.</FONT></P>

<P>
<FONT size=2 face="serif">A poison pill should contain a redemption clause that
would allow the board to redeem it even after a potential acquirer has surpassed
the ownership threshold. Poison pills may be adopted by the board without shareholder
 approval. But shareholders must have the opportunity to ratify or reject them
at least every two years.</FONT></P>

<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendation</font></b></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td width="50%"><font size=2 face="serif">Vote </font><b><font size=2 face="serif">FOR </font></b><font size=2 face="serif">shareholder
        proposals asking that a company submit its poison pill for shareholder
    ratification.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote on a </font><b><font size=2 face="serif">CASE-BY-CASE </font></b><font size=2 face="serif">basis
    regarding shareholder proposals to redeem a company&#146;s poison pill.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote
        on a </font><b><font size=2 face="serif">CASE-BY-CASE </font></b><font size=2 face="serif">basis
    regarding management proposals to ratify a poison pill.</font> </td>
  </tr>
</table>
<P align="center">
<FONT size=2 face="serif">15</FONT></P>

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<p align="left"><B><FONT size=2 face="serif">Greenmail</FONT></B>
</p>

<P>
<FONT size=2 face="serif">Greenmail payments are targeted share repurchases by
management of company stock from individuals or groups seeking control of the
company. Since only the hostile party receives payment, usually at a substantial
premium
over the market, the practice discriminates against all other shareholders.</FONT></P>

<P>
<FONT size=2 face="serif">Greenmail payments usually expose the company to negative
press and may result in lawsuits by shareholders. When a company&#146;s name
is associated with such a practice, company customers may think twice about future

purchases made at the expense of the shareholders.</FONT></P>

<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendation</font></b></td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote </font><b><font size=2 face="serif">FOR </font></b><font size=2 face="serif">proposals
        to adopt anti Greenmail or bylaw amendments or otherwise restrict a company&#146;s
    ability to make Greenmail payments</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote on a </font><b><font size=2 face="serif">CASE-BY-CASE </font></b><font size=2 face="serif">basis
        regarding anti- Greenmail proposals when they are bundled with other
    charter or bylaw amendments. </font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<div style="text-indent:3%">
<p><font size=2 face="serif">The following factors should be considered:</font></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top >&nbsp;</TD>
<TD width="3%" valign=top >&nbsp;</TD>
<TD width="3%" valign=top >
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">While studies by the SEC and others show that Greenmail devalues the company&#146;s stock price, an argument can be made that a payment can enable the company to pursue plans that may provide long-term gains to the
shareholders.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">16</FONT></P>

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<p align="left"><B><FONT size=2 face="serif">Supermajority Vote</FONT></B>
</p>

  <p><FONT size=2 face="serif">Supermajority provisions violate the principle
      that a simple majority of voting shares should be all that is necessary
      to effect change regarding a company and its corporate governance provisions.
      These proposals seek  shareholder approval to exceed the normal level of
      shareholder participation and approval from a simple majority of the outstanding
      shares to a much higher percentage.</FONT></p>

<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendations</font></b></td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote </font><b><font size=2 face="serif">AGAINST </font></b><font size=2 face="serif">management
        proposals to require a Supermajority shareholder vote to approve mergers
    and other significant business combinations.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote </font><b><font size=2 face="serif">FOR </font></b><font size=2 face="serif">shareholder
        proposals to lower Supermajority vote requirements for mergers and other
    significant business combinations.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
<p><FONT size=2 face="serif">The following
    factors should be considered:</FONT>
</p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top >&nbsp;</TD>
<TD width="3%" valign=top >&nbsp;</TD>
<TD width="3%" valign=top >
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">Supermajority requirements ensure broad agreement on issues that may have a significant impact on the future of the company.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">Supermajority vote may make action all but impossible.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>
<FONT size=2 face="serif">3.</FONT></TD>
<TD>
<FONT size=2 face="serif">Supermajority requirements are counter to the principle of majority rule.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">17</FONT></P>

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<P align="center">
<B><FONT size=2 face="serif">CHAPTER 4</FONT></B></P>
<P align="center">
<B><FONT size=2 face="serif">MERGERS AND CORPORATE RESTRUCTURING</FONT></B></P>
<P align="center">&nbsp;</P>
<P align="center"><FONT size=2 face="serif">18</FONT></P>
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<B><FONT size=2 face="serif">Changing Corporate Name</FONT></B>

<P>
<FONT size=2 face="serif">This proposal seeks shareholder approval to change
the corporation&#146;s name. It is probably better to vote for the proposed name
change before management goes back to the drawing board and spends another small
fortune
attempting again to change the name.</FONT></P>

<table width="100%"  border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="60%"><b><font size=2 face="serif">Vote Recommendation</font></b></td>
    <td width="40%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><FONT size=2 face="serif">Vote </FONT><B><FONT size=2 face="serif">FOR </FONT></B><FONT size=2 face="serif">changing
    the corporate name.</FONT> </td>
  </tr>
</table>


<div style="text-indent:3%"><p><FONT size=2 face="serif">The following factors should be considered:</FONT>
</p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top nowrap>&nbsp;</TD>
<TD width="3%" valign=top nowrap>&nbsp;</TD>
<TD width="3%" valign=top nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">A name of a corporation symbolizes its substance.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">There are many reasons a corporation may have for changing its name, including an intention to change the direction of the business or to have a contemporary corporate image.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>
<FONT size=2 face="serif">3.</FONT></TD>
<TD>
<FONT size=2 face="serif">The board of directors is well-positioned to determine the best name for the corporation because, among other reasons, it usually seeks professional advice on such matters.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">19</FONT></P>

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<div style="page-break-before:always"></div><page><a name="pp20"></a><p><a href="#acontents"><font size="2">Back to Contents</font></a></p>


<B><FONT size=2 face="serif">Reincorporation</FONT></B>

<P>
<FONT size=2 face="serif">These proposals seek shareholder approval to change
the state in which a company is incorporated. Sometimes this is done to accommodate
the company&#146;s most active operations or headquarters. More often, however,
the  companies want to reincorporate in a state with more stringent anti-takeover
provisions. Delaware&#146;s state laws, for instance, including liability and
anti-takeover provisions, are more favorable to corporations.</FONT></P>

<table width="100%"  border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="60%"><b><font size=2 face="serif">Vote Recommendation</font></b></td>
    <td width="40%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><FONT size=2 face="serif">Vote on a </FONT><B><FONT size=2 face="serif">CASE-BY-CASE </FONT></B><FONT size=2 face="serif">basis,
        carefully reviewing the new state&#146;s laws and any significant changes
    the company makes in its charter and by- laws.</FONT></td>
  </tr>
</table>

<div style="text-indent:3%"><p><FONT size=2 face="serif">The following factors should
      be considered:</FONT>
</p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top nowrap>&nbsp;</TD>
<TD width="3%" valign=top nowrap>&nbsp;</TD>
<TD width="3%" valign=top nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">The board is in the best position to determine the company&#146;s need to incorporate.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">Reincorporation may have considerable implications for shareholders, affecting a company&#146;s takeover defenses, its corporate structure or governance features.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>
<FONT size=2 face="serif">3.</FONT></TD>
<TD>
<FONT size=2 face="serif">Reincorporation in a state with stronger anti-takeover laws may harm shareholder value.</FONT></TD>
</TR></TABLE>
<P align="center">
<FONT size=2 face="serif">20</FONT></P>

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<P align="center">
<B><FONT size=2 face="serif">CHAPTER 5</FONT></B></P>
<P align="center">
<B><FONT size=2 face="serif">PROXY CONTEST DEFENSES</FONT></B></P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center">
<FONT size=2 face="serif">21</FONT></P>

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<p align="left"><B><FONT size=2 face="serif">Board Structure: Staggered vs. Annual Elections</FONT></B>
</p>

<P>
<FONT size=2 face="serif">A ompany that has a classified, or staggered, board is one in which directors are typically divided into three classes, with each class serving three-year terms; each class&#146;s reelection occurs in different years. In
contrast, all directors of an annually elected board serve one year and the entire board stands for election each year.</FONT></P>

<P>
<FONT size=2 face="serif">Classifying the board makes it more difficult to change
control of a company through a proxy contest involving election of directors.
Because only a minority of the directors are elected each year, it will be more
difficult
to win control of the board in a single election.</FONT></P>

<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendations</font></b></td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote </font><b><font size=2 face="serif">AGAINST </font></b><font size=2 face="serif">proposals
        to classify the board. Vote </font><b><font size=2 face="serif">FOR </font></b><font size=2 face="serif">proposals
    to repeal classified boards and to elect all directors annually.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
<p><FONT size=2 face="serif"> The following factors should be considered:</FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top >&nbsp;</TD>
<TD width="3%" valign=top >&nbsp;</TD>
<TD width="3%" valign=top >
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">The annual election of directors provides an extra check on management&#146;s performance. A director who is doing a good job should not fear an annual review of his/her directorship.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">22</FONT></P>

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<p align="left"><B><FONT size=2 face="serif">Cumulative Voting</FONT></B>
</p>
<div style="text-indent:3%">
<P>
<FONT size=2 face="serif">Most companies provide that shareholders are entitled to cast one vote for each share owned, the so-called &#147;one share, one vote&#148; standard. This proposal seeks to allow each shareholder to cast votes in the
election of directors proportionate to the number of directors times the number of shares owned by each shareholder for one nominee.</FONT></P></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendation</font></b></td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote </font><b><font size=2 face="serif">AGAINST </font></b><font size=2 face="serif">proposals
    that permit cumulative voting.</font> </td>
  </tr>
</table>
<div style="text-indent:3%">
<P align="left"><FONT size=2 face="serif">The following factors should be considered:</FONT>
</P></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top >&nbsp;</TD>
<TD width="3%" valign=top >&nbsp;</TD>
<TD width="3%" valign=top >
<FONT size=2 face="serif">1.</FONT></TD>
<TD valign="top">
<FONT size=2 face="serif">Cumulative voting would allow a minority owner to create an impact disproportionate to his/her holdings.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
<TD valign=top>
<FONT size=2 face="serif">2.</FONT></TD>
<TD valign="top">
<FONT size=2 face="serif">Cumulative voting can be used to elect a director who would represent special interests and not those of the corporation and its shareholders.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
<TD valign=top>
<FONT size=2 face="serif">3.</FONT></TD>
<TD valign="top">
<FONT size=2 face="serif">Cumulative voting can allow a minority to have representation.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
  <TD valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
<TD valign=top>
<FONT size=2 face="serif">4.</FONT></TD>
<TD valign="top">
<FONT size=2 face="serif">Cumulative Voting can lead to a conflict within the board which could interfere with its ability to serve the shareholders&#146; best interests.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">23</FONT></P>

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<B><FONT face="serif" size="2">Shareholders&#146; Ability to Call Special Meeting</FONT></B>
<div style="text-indent:3%"><P> <FONT size=2 face="serif">Most state corporation statutes allow shareholders
  to call a special meeting when they want to take action on certain matters that
  arise between regularly scheduled annual meetings.</FONT></P></div>
<p><font size="2" face="serif"><B>Vote Recommendation</B> </font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="48%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="48%" align="left" valign="bottom"><font size="2" face="serif">Vote <b>AGAINST </b>proposals
      to restrict or prohibit shareholder ability to call special meetings. </font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left" valign="bottom"><font size="2" face="serif">Vote <b>FOR </b>proposals
        that remove restrictions on the right of shareholders to act independently
      of management.</font> </td>
  </tr>
</table>
<P align="center"> <FONT size=2 face="serif">24</FONT></P>
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<p><a href="#acontents">Back to Contents</a></p>
<B><FONT face="serif">Shareholders&#146; Ability to Alter Size of the Board</FONT></B>
</font>
<div style="text-indent:3%"><P> <FONT size=2 face="serif">Proposals which would allow management to increase
  or decrease the size of the board at its own discretion are often used by companies
  as a takeover defense.</FONT></P></div>
<div style="text-indent:3%"><P> <FONT size=2 face="serif">Shareholders should support management proposals
  to fix the size of the board at a specific number of directors, preventing management
  from increasing the size of the board without shareholder approval. By increasing
  the size of the board, management can make it more difficult for dissidents
  to gain control of the board.</FONT></P></div>
<p><font size="2" face="serif"><B>Vote Recommendations</B></font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="48%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="48%" align="left" valign="bottom"><font size="2" face="serif">Vote <b>FOR </b>proposal
      which seek to fix the size of the board. </font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left" valign="bottom"><font size="2" face="serif">Vote <b>AGAINST </b>proposals
        which give management the ability to alter the size of the board without
      shareholder approval.</font> </td>
  </tr>
</table>
<P align="center"> <FONT size=2 face="serif">25</FONT></P>
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<p><a href="#acontents">Back to Contents</a></p>
</font>
<P align="center"> <font size="2" face="serif"><B>CHAPTER 6</B></font></P>
<P align="center"> <font size="2" face="serif"><B>MISCELLANEOUS CORPORATE GOVERNANCE
  PROVISIONS</B></font></P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center"> <FONT size=2 face="serif">26</FONT></P>
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<B><FONT size=2 face="serif">Confidential Voting</FONT></B>
<div style="text-indent:3%">
<P><FONT size=2 face="serif">Confidential voting, also known as voting by secret
    ballot, is one of the key structural issues in the proxy system. All proxies,
    ballots, and voting tabulations that identify individual shareholders are
    kept  confidential.</FONT></P>
</div>
<table width="100%"  border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="48%"><b><font size=2 face="serif">Vote Recommendations</font></b></td>
    <td width="4%">&nbsp;</td>
    <td width="48%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td> <font size=2 face="serif">Vote <b>FOR </b>shareholder proposals
    requesting that corporations adopt confidential voting.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote <b>FOR </b>management proposals to adopt
    confidential voting. </font></td>
  </tr>
</table>
<div style="text-indent:3%">
<p><font size=2 face="serif">The following factors should be considered:</font></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="left" valign="top">
<TD width="3%" nowrap>&nbsp;</TD>
<TD width=3%><font size=2 face="serif">1.</font></TD>
    <TD> <font size=2 face="serif">Some shareholders elect to have the
    board not know how they voted on certain issues.</font> </TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
<TD nowrap>&nbsp;</TD>
<TD><font size=2 face="serif">2.</font></TD>
    <TD> <font size=2 face="serif">Should the board be aware of how a shareholder
        voted, the board could attempt to influence the shareholder to change
        his/her vote, giving itself an advantage over those that do not have
        access to this
information.</font> </TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
<TD nowrap>&nbsp;</TD>
<TD><font size=2 face="serif">3.</font></TD>
    <TD> <font size=2 face="serif">Confidential voting is an important element
    of corporate democracy which should be available to the shareholder.</font> </TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR></TABLE>
<P align="center">
<FONT size=2 face="serif">27</FONT></P>

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<B><FONT size=2 face="serif">Shareholder Advisory Committees</FONT></B>
<div style="text-indent:3%">
<P><FONT size=2 face="serif">These proposals request that the corporation establish a shareholder advisory committee to review the board&#146;s performance. In some instances, it would have a budget funded by the corporation and would be composed of
  salaried committee members with authority to hire outside experts and to include reports in the annual proxy statement.</FONT></P></div>
<table width="100%"  border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="48%"><b><font size=2 face="serif">Vote Recommendation</font></b> </td>
    <td width="4%">&nbsp;</td>
    <td width="48%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td> <font size=2 face="serif">Vote </font><b><font size=2 face="serif">AGAINST </font></b><font size=2 face="serif">proposals
    to establish a shareholder advisory committee.</font> </td>
  </tr>
</table>
<div style="text-indent:3%">
<P><FONT size=2 face="serif">The following factors should be considered:</FONT></P></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="left" valign="top">
<TD width="3%" nowrap>&nbsp;</TD>
<TD width=3%><font size=2 face="serif">1.</font></TD>
    <TD> <font size=2 face="serif">Directors already have fiduciary
        responsibility to represent shareholders and are accountable to them
    by law, thus rendering shareholder advisory committees unnecessary.</font> </TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
<TD nowrap>&nbsp;</TD>
<TD><font size=2 face="serif">2.</font></TD>
    <TD> <font size=2 face="serif">Adding another layer to the current corporate
    governance system would be expensive and unproductive.</font> </TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">28</FONT></P>

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<B><FONT size=2 face="serif">Foreign Corporate Matters</FONT></B>
<div style="text-indent:3%">
<P><FONT size=2 face="serif">These proposals are usually submitted by companies incorporated outside of the United States seeking shareholder approval for actions which are considered ordinary business and do not require shareholder approval in the
United States (i.e., declaration of dividends, approval of financial statements, etc.).</FONT></P></div>
<table width="100%"  border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="48%"><b><font size=2 face="serif">Vote Recommendation</font></b> </td>
    <td width="4%">&nbsp;</td>
    <td width="48%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td> <font size=2 face="serif">Vote </font><b><font size=2 face="serif">FOR </font></b><font size=2 face="serif">proposals
    that concern foreign companies incorporated outside of the United States.</font> </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<div style="text-indent:3%">
<p><FONT size=2 face="serif">The following factors should be considered:</FONT>
</p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="left" valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">The laws and regulations of various countries differ widely as to those issues on which shareholder approval is needed, usually requiring consent for actions which are considered routine in the United States.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD></TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">The board of directors is well positioned to determine whether or not these types of actions are in the best interest of the corporation&#146;s shareholders.</FONT></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">29</FONT></P>

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<p><b><font size=2 face="serif">Government Service List</font></b></p>
<div style="text-indent:3%"><P><FONT size=2 face="serif">This proposal requests that the board of directors prepare a list of employees or consultants to the company who have been employed by the government within a specified period of time and the substance of their
involvement.</FONT></P></div>
<div style="text-indent:3%">
<P><FONT size=2 face="serif">Solicitation of customers and negotiation of contractual or other business relationships is traditionally the responsibility of management. Compilation of such a list does not seem to serve a useful purpose, primarily
because existing laws and regulations serve as a checklist on conflicts of interest.</FONT></P>
</div>
<P><b><font size=2 face="serif">Vote Recommendation</font></b></P>
<div style="margin-left:52%">
<P><font size=2 face="serif">Vote </font><b><font size=2 face="serif">AGAINST </font></b><font size=2 face="serif">these
      proposals which request a list of employees having been employed by the
    government.</font></P>
</div>
<div style="text-indent:3%"><p><font size=2 face="serif">The following factors should be considered:</font></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">For certain companies, employing individuals familiar with the regulatory agencies and procedures is essential and, therefore, is in the best interests of the shareholders.</FONT></TD>
</TR>
<TR valign="top"><TD colspan=3>&nbsp;</TD></TR><TR valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">Existing laws and regulations require enough disclosure and serve as a check on conflicts of interest.</FONT></TD>
</TR>
<TR valign="top"><TD colspan=3>&nbsp;</TD></TR><TR valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">3.</FONT></TD>
<TD>
<FONT size=2 face="serif">Additional disclosure would be an unreasonable invasion of such individual&#146;s privacy.</FONT></TD>
</TR>
<TR valign="top"><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">30</FONT></P>

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<P align="center">
<B><FONT size=2 face="serif">CHAPTER 7</FONT></B></P>
<P align="center">
<B><FONT size=2 face="serif">SOCIAL AND ENVIRONMENTAL ISSUES</FONT></B></P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center"><FONT size=2 face="serif">31</FONT></P>

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<p><B><FONT size=2 face="serif">Energy and Environmental Issues<br>
(CERES Principles)</FONT></B></p>
<div style="text-indent:3%"><P><FONT size=2 face="serif">CERES proposals ask management to sign or report on process toward compliance with ten principles committing the company to environmental stewardship. Principle 10 directs companies to fill out the CERES report. This report
requires companies to disclose information about environmental policies, toxic emissions, hazardous waste management, workplace safety, energy use, and environmental audits.</FONT></P></div>
<p><b><font size=2 face="serif">Vote Recommendation</font></b></p>
<div style="margin-left:52%">
<P><FONT size=2 face="serif">Vote </FONT><B><FONT size=2 face="serif">AGAINST </FONT></B><FONT size=2 face="serif">proposals requesting that companies sign the CERES Principles.</FONT></P>
</div>
<div style="text-indent:3%"><p><font size=2 face="serif">The following factors should be considered:</font></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">We do not believe a concrete business case is made for this proposal. In our opinion, the company will be best served by continuing to carry on its business as it did before the proposal was made.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size=2 face="serif">32</FONT></P>

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<p align="left"><B><FONT size=2 face="serif">Northern Ireland</FONT></B>
  <B><FONT size=2 face="serif">(MacBride Principles)</FONT></B>
</p>
<div style="text-indent:3%">
<P>
<FONT size=2 face="serif">It is well documented that Northern Ireland&#146;s Catholic community faces much higher unemployment figures then the Protestant community. Most proposals ask companies to endorse or report on progress with respect to the
MacBride Principles.</FONT></P></div>
<div style="text-indent:3%">
<P>
<FONT size=2 face="serif">In evaluating a proposal to adopt the MacBride Principles, you must decide if the principles will cause the company to divest, and worsen unemployment problems.</FONT></P></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendation</font></b> </td>
    <td width="40%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><b><font size=2 face="serif">REFRAIN </font></b><font size=2 face="serif">from
    voting on proposals that request companies to adopt the MacBride Principles.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
<P align="left"><FONT size=2 face="serif">The following factors should be considered:</FONT>
</P></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top >&nbsp;</TD>
  <TD width="3%" valign=top >&nbsp;</TD>
<TD width="3%" valign=top >
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">We believe that human and political rights are of the utmost importance for their own sake as well as for the enhancement of economic potential of a nation.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
  <TD  valign=top>&nbsp;</TD>
  <TD  valign=top>&nbsp;</TD>
<TD  valign=top>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">We do not believe a concrete business case has been made for this proposal. We will refrain from making social or political statements by voting for these proposals. We will only vote on proposals that maximize the value of
the issuers&#146; status without regard to (i.e., we will not pass judgement upon) the non-economic considerations.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">33</FONT></P>

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<p align="left"><B><FONT size=2 face="serif">Maquiladora Standards and</FONT></B>
  <B><FONT size=2 face="serif">International Operations and Policies</FONT></B>
</p>
<div style="text-indent:3%">
<P>
<FONT size=2 face="serif">Proposals in this area generally request companies to report on or to adopt certain principles regarding their operations in foreign countries.</FONT></P></div>
<div style="text-indent:3%">
<P>
<FONT size=2 face="serif">The Maquiladora Standards are a set of guidelines that outline how U.S. companies should conduct operations in Maquiladora facilities just across the U.S.-Mexican border. These standards cover such topics as community
development, environmental policies, health and safety policies, and fair employment practices.</FONT></P></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendation</font></b> </td>
    <td width="40%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><b><font size=2 face="serif">ABSTAIN </font></b><font size=2 face="serif">from
        providing a Vote Recommendation on proposals regarding the Maquiladora
        Standards and international
    operating policies.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
<p><FONT size=2 face="serif">The following factors should be considered:</FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%"  valign=top>&nbsp;</TD>
  <TD width="3%"  valign=top>&nbsp;</TD>
<TD width="3%"  valign=top>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">We believe that human rights are of the utmost importance for their own sake as well as for the enhancement of economic potential of a nation.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
  <TD  valign=top>&nbsp;</TD>
  <TD  valign=top>&nbsp;</TD>
<TD  valign=top>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">We do not believe that a concrete business case has been made for these proposals. We will refrain from making social statements by voting for these proposals. We will not only vote on proposals that maximize the value of
the issuers&#146; securities without regard to (i.e., we will not pass judgement upon) the non-economic considerations.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">34</FONT></P>

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<a name="pp35"></a>
<p><a href="#acontents"><font size="2">Back to Contents</font></a></p>
<p align="left"><B><FONT size=2 face="serif">Equal Employment Opportunity</FONT></B>
  <B><FONT size=2 face="serif">And Discrimination</FONT></B>
</p>
<div style="text-indent:3%">
<P>
<FONT size=2 face="serif">In regards to equal employment and discrimination,
companies without comprehensive EEO programs will find it hard to recruit qualified
employees and find them at a long-term competitive disadvantage.
Companies who are not carefully watching their human resource practices could
also face lawsuits.</FONT></P>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendation</font></b></td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td> <b><font size=2 face="serif">REFRAIN </font></b><font size=2 face="serif">from
        voting on any proposals regarding equal employment opportunities and
    discrimination.</font> </td>
  </tr>
</table>
<div style="text-indent:3%">
<P><FONT size=2 face="serif">The following factors should be considered:</FONT></P></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%"  valign=top>&nbsp;</TD>
  <TD width="3%"  valign=top>&nbsp;</TD>
<TD width="3%"  valign=top>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">We feel that the hiring and promotion of employees should be free from prohibited discriminatory practices. We also feel that many of these issues are already subject to significant state and federal
regulations.</FONT></TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT size=2 face="serif">35</FONT></P>

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<B><FONT size=2 face="serif">Animal Rights</FONT></B>
<div style="text-indent:3%">
  <p> <font size=2 face="serif">A Corporation is requested to issue a report on
    its progress towards reducing reliance on animal tests for consumer product
    safety.</font></p>

</div>
<p><B><FONT size=2 face="serif">Vote Recommendation</FONT></B></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="48%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="48%"> <b><font size=2 face="serif">REFRAIN </font></b><font size=2 face="serif">from
      making Vote Recommendations on proposals regarding animal rights.</font>
    </td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size=2 face="serif">The following factors should be considered:</font></p>

</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD width="3%" valign=top>&nbsp;</TD>
    <TD width="3%" valign=top> <FONT size=2 face="serif">1.</FONT></TD>
    <TD> <FONT size=2 face="serif">Needless cruelty to animals should never be
      tolerated. However, the testing of products on animals may be very important
      to the health and safety of consumers.</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD valign=top>&nbsp;</TD>
    <TD valign=top> <FONT size=2 face="serif">2.</FONT></TD>
    <TD> <FONT size=2 face="serif">We also feel that this issue is already subject
      to significant state and federal regulation.</FONT> </TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="serif">36</FONT></P>

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<P align="center">
<B><FONT size=2 face="serif">CHAPTER 8</FONT></B></P>
<P align="center"> <B><FONT size=2 face="serif">CAPITAL STRUCTURE</FONT></B></P>
<P align="center">&nbsp;</P>
<P align="center">
<FONT size=2 face="serif">37</FONT></P>

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<B><FONT size=2 face="serif">Common Stock Authorization</FONT></B>
<div style="text-indent:3%">
  <p> <font size=2 face="serif">The ability to increase the number of authorized
    shares could accommodate the sale of equity, stock splits, dividends, compensation-based
    plans, etc. The board can usually be trusted to use additional shares for
    capital-raising and other transactions that are in the corporation&#146;s
    best interests.</font></p>

</div>
<div style="text-indent:3%">
  <p> <font size=2 face="serif">However, excessive escalation in the number of
    authorized shares may allow the board to radically change the corporation&#146;s
    direction without shareholder approval. Be careful to view that the increased
    number of shares will not enable the company to activate a poison pill.</font></p>

</div>
<p><b><font size=2 face="serif">Vote Recommendation</font></b></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="48%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="48%"><font size=2 face="serif">Vote </font><b><font size=2 face="serif">Case-By-Case
      </font></b><font size=2 face="serif">on proposals to increase the number
      of shares of common stock authorized for issue.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote </font><b><font size=2 face="serif">AGAINST
      </font></b><font size=2 face="serif">proposed common share authorization
      that increase existing authorization by more then 100 percent unless a clear
      need for the excess shares is presented by the company.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p> <font size=2 face="serif"> The
    following factors should be considered:</font></p>

</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD width="3%" valign=top>&nbsp;</TD>
    <TD width="3%" valign=top> <FONT size=2 face="serif">1.</FONT></TD>
    <TD> <FONT size=2 face="serif">Is this company going to make frequent business
      acquisitions over a period of time?</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD valign=top>&nbsp;</TD>
    <TD valign=top> <FONT size=2 face="serif">2.</FONT></TD>
    <TD> <FONT size=2 face="serif">Is the company expanding its operations?</FONT>
    </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD valign=top>&nbsp;</TD>
    <TD valign=top> <FONT size=2 face="serif">3.</FONT></TD>
    <TD> <FONT size=2 face="serif">Within the company, are there any debt structuring
      or prepackaged bankruptcy plans?</FONT> </TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="serif">38</FONT></P>

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<B><FONT size=2 face="serif">Blank Check Preferred Stock</FONT></B>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">The terms of blank check preferred stock give the board of directors the power to issue shares of preferred stock at their discretion, with voting, conversion, distribution and other rights to be determined by the board at
the time of the issue.</FONT></P></div>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">Blank check preferred stock can provide corporations with the flexibility to meet changing financial conditions. However, once the blank check preferred stock has been authorized, the shareholders have no further power over
how or when it will be allocated.</FONT></P></div>
<p><B><FONT size=2 face="serif">Vote Recommendation</FONT></B> </p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td width="40%"><FONT size=2 face="serif">Vote </FONT><B><FONT size=2 face="serif">AGAINST </FONT></B><FONT size=2 face="serif">proposals
        authorizing the creation of new classes of preferred stock with unspecified
    voting, conversion, dividend distribution, and other rights.</FONT></td>
  </tr>
</table>
<p>&nbsp;    </p>
<div style="text-indent:3%">
<p><FONT size=2 face="serif"> The following factors should be considered:</FONT>
</p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%"><font size=2 face="serif">1.</font></TD>
<TD>
<FONT size=2 face="serif">Blank check preferred stock can be used as the vehicle for a poison pill defense against hostile suitors, or it may be placed in friendly hands to help block a takeover bid.</FONT></TD>
</TR>
</TABLE>
<P align="center">
<FONT size=2 face="serif">39</FONT></P>

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<B><FONT size=2 face="serif">Preemptive Rights</FONT></B>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">These proposals request that the corporation provide existing shareholders with an opportunity to acquire additional shares in proportion to their existing holdings whenever new shares are issued. In companies with a large
shareholder base and ease in which shareholders could preserve their relative interest through purchases of shares on the open market, the cost of implementing preemptive rights does not seem justifiable in relation to the benefits.</FONT></P></div>
<p><B><FONT size=2 face="serif">Vote Recommendation</FONT></B>
</p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td width="40%"><FONT size=2 face="serif">Vote </FONT><B><FONT size=2 face="serif">AGAINST </FONT></B><FONT size=2 face="serif">proposals
    seeking preemptive rights.</FONT></td>
  </tr>
</table>
<div style="text-indent:3%">
<p><FONT size=2 face="serif">The following factors should be considered:</FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap><font size=2 face="serif">1.</font></TD>
<TD>
<FONT size=2 face="serif">The existence of preemptive rights can considerably slow down the process of issuing new shares due to the logistics involved in protecting such rights.</FONT></TD>
</TR>
<TR valign="top"><TD colspan=4>&nbsp;</TD></TR><TR valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>&nbsp;</TD>
<TD nowrap><font size=2 face="serif">2.</font></TD>
<TD>
<FONT size=2 face="serif">Preemptive rights are not necessary for the shareholder in today&#146;s corporations, whose stock is held by a wide range of owners and is, in most cases, highly liquid.</FONT></TD>
</TR>
</TABLE>
<P align="center">
<FONT size=2 face="serif">40</FONT></P>

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<p><b><FONT size=2 face="serif">Stock Distributions: Splits and Dividends</FONT></b></p>
<div style="text-indent:3%"><p><i><b><FONT size=2 face="serif"><a name="p44a"></a>Stock Splits</FONT>
</b></i></p>
</div>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">The corporation requests authorization for a stock split.</FONT></P></div>
<p><B><FONT size=2 face="serif">Vote Recommendation</FONT></B>
</p>

<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td width="40%"><FONT size=2 face="serif">Vote </FONT><B><FONT size=2 face="serif">FOR </FONT></B><FONT size=2 face="serif">management
        proposal to authorize stock splits unless the split will result in an
        increase of authorized but unissued shares of more than 100% after giving
    effect to the shares needed for the split.</FONT> </td>
  </tr>
</table>
<p align="center"><FONT size=2 face="serif">41</FONT></p>
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<div style="text-indent:3%"><p><b><i><font size=2 face="serif">Reverse Stock Splits</font></i></b></p></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><B><FONT size=2 face="serif">Vote Recommendation</FONT></B></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><FONT size=2 face="serif">Vote </FONT><B><FONT size=2 face="serif">FOR </FONT></B><FONT size=2 face="serif">management
        proposal to authorize reverse stock split unless the reverse stock split
        results in an increase of authorized but unissued shares of more than
    100% after giving effect to the shares needed for the reverse split.</FONT> </td>
  </tr>
</table>

<P align="center">
<FONT size=2 face="serif">42</FONT></P>

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<div align="left"><B><FONT size=2 face="serif">Adjustments to Par Value of Common Stock</FONT></B>
</div>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">The purpose of par value stock is to establish the maximum responsibility of stockholder in the event that a corporation becomes insolvent. It represents the maximum amount that a shareholder must pay the corporation if the
stock is to be fully paid when issued.</FONT></P></div>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">The corporation requests permission to reduce the par value of its stock. In most cases, adjusting par value is a routine financing decision and should be supported.</FONT></P></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><B><FONT size=2 face="serif">Vote Recommendation</FONT></B> </td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td> <font size=2 face="serif">Vote </font><b><font size=2 face="serif">FOR </font></b><font size=2 face="serif">management
    proposals to reduce the par value of common stock.</font> </td>
  </tr>
</table>

<div style="text-indent:3%">
<p><FONT size=2 face="serif">The following factors should be considered:</FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top nowrap>&nbsp;</TD>
  <TD width="3%" valign=top nowrap>&nbsp;</TD>
<TD width="3%" valign=top nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">State laws sometimes prohibit issuance of new stock priced below that of the outstanding shares.</FONT></TD>
</TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
</TR><TR>
<TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">A corporation may be unable to raise capital if the par value is overstated.</FONT></TD>
</TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
</TR></TABLE>
<P align="center">
<FONT size=2 face="serif">43</FONT></P>

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<b><FONT size=2 face="serif">Debt Restructurings</FONT></b>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">The corporation may propose to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan.</FONT></P></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendation</font></b> </td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td> <font size=2 face="serif">It is our policy to vote </font><b><font size=2 face="serif">CASE-BY-CASE </font></b><font size=2 face="serif">on
    debt restructuring.</font> </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<div style="text-indent:3%">
<P><FONT size=2 face="serif">The following factors should be considered:</FONT></p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="left" valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">Dilution &#150; How much will ownership interest of
existing shareholders be reduced and how extreme will dilution to future earnings
be?</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=4>&nbsp;</TD>
</TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">Change in Control &#150; Will the transaction result in a change of control of the company?</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=4>&nbsp;</TD>
</TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">3.</FONT></TD>
<TD>
<FONT size=2 face="serif">Bankruptcy &#150; Is the threat of bankruptcy, which would result in severe losses in shareholder value, the main factor driving the debt restructuring?</FONT></TD>
</TR>
</TABLE>
<P align="center">
<FONT size=2 face="serif">44</FONT></P>

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<P align="center">
<B><FONT size=2 face="serif">CHAPTER 9</FONT></B></P>
<P align="center">
<B><FONT size=2 face="serif">EXECUTIVE AND DIRECTOR COMPENSATION</FONT></B></P>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P align="center">
<FONT size=2 face="serif">45</FONT></P>

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<B><FONT size=2 face="serif">Director Compensation</FONT></B>


<div style="text-indent:3%">
<P><FONT size=2 face="serif">Directors represent shareholders and are responsible for protecting shareholder interests. Companies state in the proxy material that they pay directors well in order to attract the most qualified candidates. All
  compensation packages for any executive, director or employee should include a pay-for-performance component.</FONT></P></div>
<p><B><FONT size=2 face="serif">Vote Recommendation</FONT></B>
</p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td>&nbsp;</td>
    <td width="25%" align="left"><FONT size=2 face="serif">Vote on a </FONT><B><FONT size=2 face="serif">CASE-BY-CASE </FONT></B><FONT size=2 face="serif">basis
    for director compensation.</FONT> </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="left"><FONT size=2 face="serif">&nbsp; </FONT></td>
  </tr>
</table>
<div style="text-indent:3%">
<p><FONT size=2 face="serif">The following factors should be considered:</FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top>&nbsp;</TD>
<TD width="3%" valign=top>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">As directors take an increasingly active role in corporate decision-making and governance, their compensation is becoming more performance-based.</FONT></TD>
</TR></TABLE>
<P align="center">
<FONT size=2 face="serif">46</FONT></P>

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<P align="left">
<B><FONT size=2 face="serif">Shareholder Proposal to Limit Executive and Director Pay</FONT></B></P>
<div style="text-indent:3%">
<P>
<FONT size=2 face="serif">Shareholder compensation proposals that set limits or reduce executive compensation should be closely scrutinized. Many of these proposals may be flawed in their emphasis on an absolute dollar figure in
compensation.</FONT></P></div>
<B><FONT size=2 face="serif">Vote Recommendation</FONT></B>
<P align="right">
<FONT size=2 face="serif">Vote on a </FONT><B><FONT size=2 face="serif">CASE-BY-CASE </FONT></B><FONT size=2 face="serif">basis.</FONT>
</P>
<FONT size=2 face="serif">The following factors should be considered:</FONT>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD valign=top>&nbsp;</TD>
  <TD valign=top>&nbsp;</TD>
  <TD>&nbsp;</TD>
</TR>
<TR>
  <TD width="3%" valign=top>&nbsp;</TD>
<TD width="3%" valign=top>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">Executive compensation is established by a committee that consists of independent directors who have fiduciary responsibility to act in the best interest of the shareholders and who are best placed to make compensation
decisions.</FONT></TD>
</TR></TABLE>
<P align="center">
<FONT size=2 face="serif">47</FONT></P>

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<B><FONT size=2 face="serif">Employee Stock Ownership Plans (ESOPs)</FONT></B>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">These proposals ask for stockholder endorsement of compensation plans for key employees which involve the issuance of company shares by granting of stock options, SARs, restricted stock, etc. These plans help attract and
retain best-qualified corporate personnel and tie their interests more closely to those of the shareholders.</FONT></P></div>
<table width="100%"  border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="60%"><b><font size=2 face="serif">Vote Recommendation</font></b></td>
    <td width="40%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote </font><b><font size=2 face="serif">FOR </font></b><font size=2 face="serif">proposals
        to adopt share-based compensation plans when the following items are
    involved:</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>

<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="left" valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">The exercise price for stock options is less than 85% of fair market value on the date of the grant.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">It is an omnibus stock plan which gives directors broad discretion in deciding how much and what kind of stock to award, when and to whom.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">3.</FONT></TD>
<TD>
<FONT size=2 face="serif">The shares for issue exceed 8% of the company&#146;s outstanding shares; or, in the case of the evergreen plans, the amount of increase exceeds 1.5% of the total number of shares outstanding.</FONT></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<table width="100%"  border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="60%">&nbsp;</td>
    <td width="40%"><font size=2 face="serif">Vote </font><b><font size=2 face="serif">AGAINST </font></b><font size=2 face="serif">proposals
        adopting share based compensation plans when the following items are
    involved:</font> </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>

<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="left" valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">Re-load options (new options issued for any exercised).</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">The plan would allow for management to pyramid their holdings by using stock to purchase more stock, without having to lay out cash. Vote </FONT><B><FONT size=2 face="serif">YES </FONT></B><FONT size=2 face="serif">if this
is for directors.</FONT></TD>
</TR></TABLE>
<P align="center">
<FONT size=2 face="serif">48</FONT></P>

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<p><B><FONT size=2 face="serif">Options Expensing</FONT></B>
</p>
<div style="text-indent:3%"><p><FONT size=2 face="serif">Shareholder proposal to expense options.</FONT></p></div>
<table width="100%"  border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendation</font></b></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%">&nbsp;</td>
    <td width="40%"><FONT size=2 face="serif">It is our policy to vote </FONT><B><FONT size=2 face="serif">FOR </FONT></B><FONT size=2 face="serif">proposals
    to expense options.</FONT> </td>
  </tr>
</table>

  <P align="center">
<FONT size=2 face="serif">49</FONT></P>

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<B><FONT size=2 face="serif">Golden Parachutes</FONT></B>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">Golden parachutes are designed to protect the employees of a corporation in the event of a change in control. The change in control agreement will specify the exact payments to be made under the golden parachutes. The
calculation for payout is usually based on some multiple of an employee&#146;s annual or monthly compensation. Golden parachutes are generally given to employees whose annual compensation exceeds &#36;112,000.</FONT></P></div>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">Recent experience has shown a willingness of many managements to treat severance agreements as equal to equity investments and to reward themselves as if substantial amounts of equity were at risk.</FONT></P></div>
<table width="100%"  border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="60%"><b><font size=2 face="serif">Vote Recommendation</font></b></td>
    <td width="40%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote </font><b><font size=2 face="serif">FOR </font></b><font size=2 face="serif">proposals
    which seek to limit additional compensation payments.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote </font><b><font size=2 face="serif">FOR </font></b><font size=2 face="serif">shareholder
    proposals to have golden parachutes submitted for shareholder ratification.</font></td>
  </tr>
</table>

<div style="text-indent:3%"><p><FONT size=2 face="serif"> The
    following factors should be considered:</FONT>
</p>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR>
  <TD width="3%" valign=top nowrap>&nbsp;</TD>
<TD width="3%" valign=top nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">The stability of management may be affected by an attempted acquisition of the corporation.</FONT></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
<TD nowrap valign=top>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">There is a tendency on the part of an entrenched management to overstate the value of their continuing control of and influence on the day-to-day functions of a corporation.</FONT></TD>
</TR></TABLE>
<P align="center">
<FONT size=2 face="serif">50</FONT></P>

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<page>
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<p><B><FONT face="serif">Proposal to Ban Golden Parachutes</FONT></B> </p>
</font>
<div style="text-indent:3%"><p><FONT size=2 face="serif">Based on the foregoing information:</FONT> </p></div>
<p><font size="2" face="serif"><B>Vote Recommendation</B> </font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="48%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="48%" align="left" valign="bottom"><font size=2 face="serif">We
      are </font><font size="2"><b><font face="serif">FOR </font></b><font face="serif">this
      proposal, which essentially bans golden parachutes, because we feel management&#146;s
      compensation should be solely based on real-time contributions to the corporation
      while they are serving it. Deferred current compensation is viewed differently
      than future, contingent compensation for current services.</font></font>
    </td>
  </tr>
</table>
<p align="center"><FONT size=2 face="serif">51</FONT></p>
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<p><B><FONT face="serif">Outside Directors&#146; Retirement Compensation</FONT></B>
</p>
</font>
<div style="text-indent:3%"><P> <FONT size=2 face="serif">We believe that directors should only be compensated
  while serving the company.</FONT></P></div>
<p><font size="2" face="serif"><B>Vote Recommendations</B> </font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="48%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="48%" align="left" valign="bottom"><font size="2" face="serif">Vote <b>AGAINST </b>proposals
      establishing outside directors&#146; retirement compensation. </font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left" valign="bottom"><font size="2" face="serif">Vote <b>FOR </b>proposals
        that revoke outside directors&#146; retirement compensation.</font>
    </td>
  </tr>
</table>
<P align="center"> <FONT size=2 face="serif">52</FONT></P>
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</font>
<P align="center"> <font size="2" face="serif"><B>CHAPTER 10</B></font></P>
<P align="center"> <font size="2" face="serif"><B>STATE OF INCORPORATION</B></font></P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center"> <FONT size=2 face="serif">53</FONT></P>
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<div align="left"><B><FONT size=2 face="serif">Control Share Acquisition Statutes</FONT></B>
</div>
<div style="text-indent:3%">
<P><FONT size=2 face="serif">These proposals suggest that the board of directors solicit shareholder approval before committing acquisitions or divestiture of a business exceeding stipulated threshold levels. Such statutes function by denying shares
  their voting rights when they contribute to ownership in excess of certain thresholds.</FONT></P></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendation</font></b></td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote </font><b><font size=2 face="serif">AGAINST </font></b><font size=2 face="serif">proposals
        which request the board to seek shareholder approval before committing
    to an acquisition. </font></td>
  </tr>
</table>
<div style="text-indent:3%">
<p><font size=2 face="serif">The following factors should be considered:</font></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="left" valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">These proposals deprive the board of directors of its ability to act quickly in propitious circumstances.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">Conforming to these requirements can be expensive.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">3.</FONT></TD>
<TD>
<FONT size=2 face="serif">The board of directors is uniquely qualified and positioned to be able to make these decisions without prior shareholder approval.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">4.</FONT></TD>
<TD>
<FONT size=2 face="serif">The threshold levels usually imposed by these proposals are much more stringent than required by law.</FONT></TD>
</TR>
<TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
  <TD nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
</TR>
</TABLE>
<P align="center">
<FONT size=2 face="serif">54</FONT></P>

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<div align="left"><B><FONT size=2 face="serif">Opt-Out of State Takeover Statutes</FONT></B>
</div>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">These proposals seek shareholder approval to opt-out (not be governed by) certain provisions of the anti-takeover laws of various states. Delaware law, for instance, dictates that a bidder has to acquire at least 85% of a
company&#146;s stock before exercising control, unless he or she has board approval. This means that a company may thwart an otherwise successful bidder by securing 15% of its stock in friendly hands.</FONT></P></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size=2 face="serif">Vote Recommendation</font></b> </td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size=2 face="serif">Vote on a </font><b><font size=2 face="serif">CASE-BY-CASE </font></b><font size=2 face="serif">basis
    for these proposals.</font> </td>
  </tr>
</table>
<div style="text-indent:3%"><p><FONT size=2 face="serif">The following factors should be considered:</FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="left" valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">It is the directors&#146; responsibility to act on behalf of the shareholders in opposing coercive takeover attempts.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">Creating deterrents to corporate takeovers may allow for entrenchment of inefficient management.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">3.</FONT></TD>
<TD>
<FONT size=2 face="serif">These statutes strengthen the board&#146;s ability to deal with potential buyers on fair and reasonable terms.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">4.</FONT></TD>
<TD>
<FONT size=2 face="serif">Shareholders should have the final say on whether the company should be merged or acquired.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD>
</TR></TABLE>
<P align="center">
<FONT size=2 face="serif">55</FONT></P>

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<P><b>
<FONT size=2 face="serif">Corporate Restructuring, Spin-Offs Asset Sales, Liquidations</FONT></b></P>

<div style="text-indent:3%"><P>
<FONT size=2 face="serif">Votes on corporate restructuring, spin-offs, asset sales and liquidations are evaluated on a </FONT><B><FONT size=2 face="serif">case by case </FONT></B><FONT size=2 face="serif">basis.</FONT></P></div>
<P align="center">
<FONT size=2 face="serif">56</FONT></P>

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<P align="center">
<B><FONT size=2 face="serif">CHAPTER 11</FONT></B></P>
<P align="center">
<B><FONT size=2 face="serif">CONFLICTS OF INTEREST</FONT></B></P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center">
<FONT size=2 face="serif">57</FONT></P>

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<b><FONT size=2 face="serif">Conflicts</FONT>
</b>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">From time to time, proxy voting proposals may raise conflicts between the interests of the Advisers clients and the interests of the Adviser, its affiliates and its employees. Conflicts of interest may arise when:</FONT></P></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="left" valign="top">
  <TD width="3%" nowrap><font size="2">&nbsp;</font></TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">Proxy votes regarding non-routine matters are solicited by an issuer that may have a separate account relationship with an affiliate of the Adviser.</FONT></TD>
</TR>
<TR align="left" valign="top">
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
</TR><TR align="left" valign="top">
<TD nowrap><font size="2">&nbsp;</font></TD>
<TD nowrap>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">A proponent of a proxy proposal has a business relationship with the Adviser or one of its affiliates or the Adviser or one of its affiliates has a business relationship with participants in proxy contests, corporate
directors or director candidates.</FONT></TD>
</TR>
<TR align="left" valign="top">
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
</TR><TR align="left" valign="top">
<TD nowrap><font size="2">&nbsp;</font></TD>
<TD nowrap>
<FONT size=2 face="serif">3.</FONT></TD>
<TD>
<FONT size=2 face="serif">An employee of the Adviser has a personal interest in the outcome of a particular matter before shareholders.</FONT></TD>
</TR>
<TR align="left" valign="top">
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
</TR></TABLE>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">If the Adviser receives a proxy that to the knowledge of the Proxy Manager raises a conflict of interest, the Proxy Manager shall advise the Governance Committee which shall determine whether the conflict is
&#147;material&#148; to any specific proposal involved in the proxy. The Governance Committee will determine whether the proposal is material as follows:</FONT></P></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width="3%" nowrap><font size="2">&nbsp;</font></TD>
<TD width="3%" valign="top"><FONT size=2 face="serif">1.</FONT></TD>
<TD valign="bottom"><FONT size=2 face="serif">Routine proxy proposals are presumed not to involve a material conflict of interest.</FONT></TD>
</TR>
<TR valign="bottom">
  <TD><font size="2">&nbsp;</font></TD>
  <TD valign="top"><font size="2">&nbsp;</font></TD>
  <TD valign="top"><font size="2">&nbsp;</font></TD>
</TR><TR valign="bottom">
<TD nowrap><font size="2">&nbsp;</font></TD>
<TD valign="top" nowrap>
<FONT size=2 face="serif">2.</FONT></TD>
<TD valign="top">
<FONT size=2 face="serif">Non-routine proxy proposals. Proxy proposals that are &#147;non-routine&#148; will be presumed to involve a material conflict of interest unless the Governance Committee determines that the conflict is unrelated to the
proposal. Non-routine proposals would include a merger, compensation matters for management and contested elections of directors.</FONT></TD>
</TR>
<TR valign="bottom">
  <TD><font size="2">&nbsp;</font></TD>
  <TD valign="top"><font size="2">&nbsp;</font></TD>
  <TD valign="top"><font size="2">&nbsp;</font></TD>
</TR></TABLE>
<P align="center">
<FONT size=2 face="serif">58</FONT></P>

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<p><B><FONT size=2 face="serif">Conflicts cont&#146;d</FONT></B></p>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="top">
  <TD width="3%" nowrap><font size="2">&nbsp;</font></TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">3.</FONT></TD>
<TD colspan=2>
<FONT size=2 face="serif">The Governance Committee may determine on a case-by-case basis that particular non- routine proposals do not involve a material conflict of interest because the proposal is not directly related to the Adviser&#146;s
conflict vis-&agrave;-vis the issue. The Governance Committee will record the basis for any such determination. With respect to any proposal that the Governance Committee determines presents a material conflict of interest, the Adviser may vote
regarding that proposal in any of the following ways:</FONT></TD>
</TR>
<TR valign="top">
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD width="3%"><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
</TR><TR valign="top">
<TD><font size="2">&nbsp;</font></TD>
<TD><font size="2">&nbsp;</font></TD><TD nowrap>
<FONT size=2 face="serif">a)</FONT></TD>
<TD>
<FONT size=2 face="serif">Obtain instructions from the client on how to vote.</FONT></TD>
</TR>
<TR valign="top">
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
</TR><TR valign="top">
<TD><font size="2">&nbsp;</font></TD>
<TD><font size="2">&nbsp;</font></TD><TD nowrap>
<FONT size=2 face="serif">b)</FONT></TD>
<TD>
<FONT size=2 face="serif">Use existing proxy guidelines if the policy with respect to the proposal is specifically addressed and does not involve a case-by-case analysis.</FONT></TD>
</TR>
<TR valign="top">
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
</TR><TR valign="top">
<TD><font size="2">&nbsp;</font></TD>
<TD><font size="2">&nbsp;</font></TD><TD nowrap>
<FONT size=2 face="serif">c)</FONT></TD>
<TD>
<FONT size=2 face="serif">Vote the proposal that involves the conflict according to the recommendations of an independent third party such as Institutional Share Services Inc. or Investor Responsibility Research Center.</FONT></TD>
</TR>
<TR valign="top">
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
  <TD><font size="2">&nbsp;</font></TD>
</TR></TABLE>
<P align="center">
<FONT size=2 face="serif">59</FONT></P>

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<P align="center">
<B><FONT size=2 face="serif">CHAPTER 12</FONT></B></P>
<P align="center">
<B><FONT size=2 face="serif">GOVERNANCE COMMITTEE<br>
AND<br>
</FONT></B><B><FONT size=2 face="serif">PROXY MANAGERS</FONT></B></P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center">
<FONT size=2 face="serif">60</FONT></P>

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<p><FONT size=2 face="serif"><b>Governance Committee</b></FONT>
</p>
<div style="text-indent:3%">
<P>
<FONT size=2 face="serif">The Governance Committee is responsible for the maintenance of the Proxy Voting Policies and Procedures and will determine whether any conflict between the interest of clients and the Advisers in voting proxies is material.
The Governance Committee includes the following: (1) Brian Chase, (2) Barbara Pires, and (3) Punita Kumar-Sinha.</FONT></P></div>
<P align="center">
<FONT size=2 face="serif">61</FONT></P>

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<p><FONT size=2 face="serif"><b>Proxy Managers</b></FONT>
</p>
<div style="text-indent:3%">
<P>
<FONT size=2 face="serif">The Proxy Manager for the Adviser is Punita Kumar-Sinha, Portfolio Manager. The Proxy Manager will determine how votes will be cast on proposals that are evaluated on a case-by case basis.</FONT></P></div>
<P align="center">
<FONT size=2 face="serif">62</FONT></P>

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<P align="center">
<B><FONT size=2 face="serif">CHAPTER 13</FONT></B></P>
<P align="center"> <B><FONT size=2 face="serif">SPECIAL ISSUES WITH VOTING<br>
  FOREIGN
       PROXIES</FONT></B></P>
<P align="center">&nbsp;</P>
<P align="center">
<FONT size=2 face="serif">63</FONT></P>

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  <p><b><font size="2" face="serif">Special Issues with Voting Foreign Proxies</font>
  </b></p>
  <div style="text-indent:3%">
  <p> <font size=2 face="serif">Voting proxies with respect to shares of foreign
    stock may involve significantly greater effort and corresponding cost than
    voting proxies in the U.S domestic market. Issues in voting foreign proxies
    include the following:</font></p>

</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="top">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%"> <FONT size=2 face="serif">1.</FONT></TD>
    <TD> <FONT size=2 face="serif">Each country has its own rules and practices
      regarding shareholder notification, voting restrictions, registration conditions
      and share blocking.</FONT> </TD>
  </TR>
  <TR valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD> <FONT size=2 face="serif">2.</FONT></TD>
    <TD> <FONT size=2 face="serif">In some foreign countries shares may be &#147;blocked&#148;
      by custodian or depository or bearer shares deposited with specific financial
      institutions for a certain number of days before or after the shareholders
      meeting. When blocked, shares typically may not be traded until the day
      after the blocking period. Blackstone may refrain from voting shares of
      foreign stocks subject to blocking restrictions where in the Adviser&#146;s
      judgment the benefit from voting the shares is outweighed by the interest
      in maintaining client liquidity in the shares. This decision is made on
      a case-by-case basis based on a relevant factors including the length of
      the blocking period, the significance of the holding and whether the stock
      is considered by a long- term holding.</FONT> </TD>
  </TR>
  <TR valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD> <FONT size=2 face="serif">3.</FONT></TD>
    <TD> <FONT size=2 face="serif">Time frames between shareholder notification,
      distribution of proxy materials, book closures and the actual meeting date
      may be too short to allow timely action.</FONT> </TD>
  </TR>
  <TR valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD> <FONT size=2 face="serif">4.</FONT></TD>
    <TD> <FONT size=2 face="serif">In certain countries, applicable regulations
      require that votes must be made in person at the shareholder meeting. The
      Adviser will weigh the costs and benefits of voting on proxy proposals in
      countries that require in-person voting on a case-by-case basis and make
      decisions on whether voting on a given proxy proposal is prudent. Generally,
      the Adviser will not vote shares in countries that require in person voting
      on routine matters such as uncontested elections of directors, ratification
      of auditors.</FONT> </TD>
  </TR>
</TABLE>
<P align="center"> <FONT size=2 face="serif">64</FONT></P>

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<P align="center">
<B><FONT size=2 face="serif">CHAPTER 14</FONT></B></P>
<P align="center"> <B><FONT size=2 face="serif">RECORD KEEPING</FONT></B></P>
<P align="center">&nbsp;</P>
<P align="center">
<FONT size=2 face="serif">65</FONT></P>

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<p><b><FONT size=2 face="serif">Record Keeping</FONT></b></p>
<div style="text-indent:3%"><p><FONT size=2 face="serif">Blackstone will maintain the following
    records:</FONT></p></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR align="left" valign="top">
  <TD width="3%" nowrap>&nbsp;</TD>
<TD width="3%" nowrap>
<FONT size=2 face="serif">1.</FONT></TD>
<TD>
<FONT size=2 face="serif">Copies of these policies</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD></TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">2.</FONT></TD>
<TD>
<FONT size=2 face="serif">A copy of each proxy statement that the Adviser receives regarding client securities. The Adviser may satisfy this requirement by relying on a third party to keep copies of proxy statements provided that the Adviser has an
undertaking from the third party to provide a copy of the proxy statement promptly upon request.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD></TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">3.</FONT></TD>
<TD>
<FONT size=2 face="serif">A record of each vote cast on behalf of a client. A third party may keep these voting records provided that the Adviser has an undertaking from the third party to provide a copy of the record promptly upon
request.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD></TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">4.</FONT></TD>
<TD>
<FONT size=2 face="serif">A copy of any document created by the Adviser that was material to making a decision on how to vote proxies or that memorializes the basis for that decision.</FONT></TD>
</TR>
<TR align="left" valign="top"><TD colspan=3>&nbsp;</TD></TR><TR align="left" valign="top">
  <TD nowrap>&nbsp;</TD>
<TD nowrap>
<FONT size=2 face="serif">5.</FONT></TD>
<TD>
<FONT size=2 face="serif">A copy of each written client request for information on how an Adviser voted proxies on behalf of the client and a copy of written response by the Adviser to any client request for information on how the Adviser voted
proxies on behalf of the client.</FONT></TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<div style="text-indent:3%">
<P><FONT size=2 face="serif">The above records shall be maintained for five years from the end of the fiscal year during which the last entry was made on such record, the first two years in an appropriate office of the Adviser.</FONT></P></div>
<P align="center">
<FONT size=2 face="serif">66</FONT></P>
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<font face="Times New Roman, Times, serif"><page><a name="p??"></a>
<p><a href="#acontents"><font size="2">Back to Contents</font></a></p>
<P>
<B><FONT size=2>PART C&#151;OTHER INFORMATION</FONT></B></P>
<P>
<B><FONT size=2>Item 25. Financial Statements and Exhibits</FONT></B></P>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD width="3%"><font size="2" face="Times New Roman, Times, serif"> 1.</font></TD>
    <TD colspan=3><font size="2" face="Times New Roman, Times, serif"> The audited
        financial statements for the year ended December 31, 2005 are included
        in the Fund&#146;s 2005 Annual Report and are incorporated herein by
      reference. These statements include: </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD colspan=3><font size="2" face="Times New Roman, Times, serif"> Report
      of Independent Auditors; </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD colspan=3><font size="2" face="Times New Roman, Times, serif"> Portfolio
      of Investments as of December 31, 2005; </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD colspan=3><font size="2" face="Times New Roman, Times, serif"> Statement
      of Assets and Liabilities as of December 31, 2005; </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD colspan=3><font size="2" face="Times New Roman, Times, serif"> Statement
      of Operations for the fiscal year ended December 31, 2005; </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD colspan=3><font size="2" face="Times New Roman, Times, serif"> Statements
        of Changes in Net Assets for the fiscal years ended December 31, 2005
      and December 31, 2004; </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD colspan=3><font size="2" face="Times New Roman, Times, serif"> Notes
      to Financial Statements; and </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD colspan=3><font size="2" face="Times New Roman, Times, serif"> Financial
        Highlights for a share of common stock outstanding during each of the
      fiscal years ended December 31, 2005, 2004, 2003, 2002 and 2001. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> 2.</font></TD>
    <TD colspan=3><font size="2" face="Times New Roman, Times, serif"> Exhibits:
    </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD width="3%"><font size="2" face="Times New Roman, Times, serif"> (a)</font></TD>
    <TD colspan="2"><font size="2" face="Times New Roman, Times, serif"> Articles
      of Amendment and Restatement dated February 14, 1994. (3) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (b)</font></TD>
    <TD colspan="2"><font size="2" face="Times New Roman, Times, serif"> Amended
      and Restated By-Laws. (2) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (c)</font></TD>
    <TD colspan="2"><font size="2" face="Times New Roman, Times, serif"> Not
      applicable. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (d)</font></TD>
    <TD colspan="2"><font size="2" face="Times New Roman, Times, serif"> Form
        of specimen certificate representing shares of common stock. (1)
    </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (e)</font></TD>
    <TD colspan="2"><font size="2" face="Times New Roman, Times, serif"> Dividend
      Reinvestment and Cash Purchase Plan. (1) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (f)</font></TD>
    <TD colspan="2"><font size="2" face="Times New Roman, Times, serif"> Not
      applicable. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (g)</font></TD>
    <TD width=3%><font size="2" face="Times New Roman, Times, serif"> (1) </font> </TD>
    <TD><font size=2 face="Times New Roman, Times, serif">Management
      Agreement dated March 16, 2006 between the Fund and Blackstone Asia Advisors
      L.L.C. (&#147;Blackstone Advisors&#148;). (filed herewith)</font><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (2)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Country Advisory
        Agreement dated March 16, 2006 between Blackstone Advisors and Blackstone
        Fund Services India Private Limited. (filed herewith)
    </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%"><font size="2" face="Times New Roman, Times, serif"> (h)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Not applicable. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (i)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Not applicable. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (j)</font></TD>
    <TD width=3%><font size=2 face="Times New Roman, Times, serif">(1)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Custody Agreement
      dated September 28, 2000 between the Fund and Deutsche Bank AG. (3) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (2)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Cash Custody Agreement
        dated September 28, 2000 between the Fund and Deutsche Bank (Mauritius)
      Limited. (3) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (k)</font></TD>
    <TD><font size=2 face="Times New Roman, Times, serif">(1)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Form of Subscription
      Certificate. (filed herewith) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (2)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Form of Notice of
      Guaranteed Delivery. (filed herewith) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (3)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Form of Subscription
      Agent Agreement. (4) </font></TD>
  </TR>
</TABLE>

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<font face="Times New Roman, Times, serif"><page><a name="pc2"></a>
<p><a href="#acontents"><font size="2">Back to Contents</font></a></p>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%"><font size="2" face="Times New Roman, Times, serif"> (4)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Form of Information
      Agent Agreement. (4) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%"><font size="2" face="Times New Roman, Times, serif"> (5)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Administration Agreement
        effective January 1, 2006 between the Fund and Blackstone Advisors. (filed
        herewith) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (l)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (1) </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif">Opinion and Consent
    of Simpson Thacher &amp; Bartlett LLP. (4) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (2)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Opinion and Consent
      of DLA Piper Rudnick Gray Cary US LLP. (4) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (m)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Not applicable. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (n)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Consent
        of PricewaterhouseCoopers LLP, independent registered public accounting
      firm for the Fund. (filed herewith) </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (o)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Not applicable. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (p)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Not applicable. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (q)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Not applicable. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (r)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Code of
        Ethics dated December 4, 2005, as amended February 28, 2006. (5)
    </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size=2 face="Times New Roman, Times, serif">(s)</font></TD>
    <TD colspan=2><font size=2 face="Times New Roman, Times, serif">
      Power of Attorney. (included on signature page)</font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3><hr align="left" width="100" size="1" noshade></TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD width="3%"><font size="1" face="Times New Roman, Times, serif"> (1)</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif">Incorporated by
        reference to the Fund&#146;s Registration Statement on Form N-2, filed
      with the SEC on February 14, 1994 (File No. 33-73652). </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=2><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="1" face="Times New Roman, Times, serif"> (2)</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> Incorporated by
        reference to the Fund&#146;s Form N-SAR-B, filed with the SEC on March
      1, 2006. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=2><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="1" face="Times New Roman, Times, serif"> (3)</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> Incorporated by reference to the Fund&#146;s Registration Statement on Form N-2, filed with the SEC on June 22, 2004. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=2><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="1" face="Times New Roman, Times, serif"> (4)</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> To be filed by amendment. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=2><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="1" face="Times New Roman, Times, serif"> (5)</font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> Incorporated by
        reference to the Fund&#146;s Form N-CSR, filed with the SEC on March
      10, 2006.</font></TD>
  </TR>
</TABLE>
<P><font size="2" face="Times New Roman, Times, serif"> <B>Item 26. Marketing
  Arrangements</B></font></P>
<div style="text-indent:3%">
<P><FONT size=2 face="Times New Roman, Times, serif">Not applicable.
  </FONT></P></div>
<P><font size="2" face="Times New Roman, Times, serif">
<B>Item 27. Other Expenses of Issuance and Distribution</B></font></P>
<div style="text-indent:3%"><P><font size="2" face="Times New Roman, Times, serif">
The following table sets forth the estimated expenses to be incurred in connection
with the offering described in this Registration Statement: </font></P>
</div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;&nbsp; </font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;&nbsp; </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>Estimated</B>&nbsp; </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="1" face="Times New Roman, Times, serif"> <B>Category</B>&nbsp; </font></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;&nbsp; </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif"> <B>Expenses</B>&nbsp; </font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><hr align="left" width="100" size="1" noshade></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
    <TD align=right><hr align="left" size="1" noshade></TD>
    <TD align=left><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Registration
    </font></TD>
    <TD width=1% align=left><font size="2" face="Times New Roman, Times, serif"> &#36;
    </font></TD>
    <TD width=10% align=right><font size="2" face="Times New Roman, Times, serif"> &#8226;</font></TD>
    <TD width=2% align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Blue
      Sky Qualification Fees (Including Fees of Counsel) </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;
    </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&#8226; </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> New York
      Stock Exchange Listing Fees </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;
    </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&#8226; </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Printing
      Expenses </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;
    </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&#8226; </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Subscription
      Agent Fees and Expenses </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;
    </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&#8226; </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Information
      Agent Fees and Expenses </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;
    </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&#8226; </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Accounting
      Fees and Expenses </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;
    </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&#8226; </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Legal
      Fees and Expenses </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;
    </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&#8226; </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> NASD
      Fees </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36;
    </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif">&#8226; </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Miscellaneous </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> &#8226;</font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> Total </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif"> &#36; </font></TD>
    <TD align=right><font size="2" face="Times New Roman, Times, serif"> &#8226; </font></TD>
    <TD align=left><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></TD>
  </TR>
</TABLE>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> C-2 </font></P>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc3"></a>
<p><a href="#acontents"><font size="2">Back to Contents</font></a></p>
</font>
<P><font size="2" face="Times New Roman, Times, serif"> <B>Item 28. Persons Controlled
  by or Under Common Control</B></font></P>
<div style="text-indent:3%">
<P><FONT size=2 face="Times New Roman, Times, serif">None </FONT></P></div>
<P><font size="2" face="Times New Roman, Times, serif">
<B>Item 29. Number of Holders of Securities (as of April 5, 2006)</B></font></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD align=center><font size="1" face="Times New Roman, Times, serif"><B>Title
    of Class</B></font></TD>
    <TD align=center><font size="1" face="Times New Roman, Times, serif">&nbsp; </font></TD>
    <TD><font size="1" face="Times New Roman, Times, serif"> <B>Number of<br>
Record Holders,
      Rounded to the<br>
Nearest Whole
      Share</B>&nbsp; </font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD><hr align="center" width="100" size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD><hr align="center" size="1" noshade></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD colspan="2" align=left><font size="2" face="Times New Roman, Times, serif"> Common
    Stock, par value &#36;.001 per share </font></TD>
    <TD width="25%"><font size="2" face="Times New Roman, Times, serif">52,399
    </font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
</TABLE>
<P><font size="2" face="Times New Roman, Times, serif"> <B>Item 30. Indemnification
  and Limitation of Liability</B></font></P>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">Reference is
    made to Sections 2-405.2 and 2-418 of the Maryland General Corporation Law,
      Article VII of the Fund&#146;s Charter, Article VI of the Fund&#146;s Amended
    and Restated By-Laws (the &#147;By-Laws&#148;), the management agreement dated
    March 16, 2006 and the administration agreement dated January 1, 2006 between
    the Fund and Blackstone Asia Advisors L.L.C. (&#147;Blackstone Advisors&#148;),
    each of which provide for indemnification.
    </FONT></P>
</div>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">Section 2-405.2
    of the Maryland General Corporation Law permits a Maryland corporation to
    include in its charter a provision limiting the liability of its directors
    and officers to the corporation and its stockholders for money damages except
    for liability resulting from (a) actual receipt of an improper benefit or
    profit in money, property or services or (b) active and deliberate dishonesty
    established by a final judgment as being material to the cause of action.
    The charter of the Fund contains such a provision which eliminates such liability
    to the maximum extent permitted by Maryland law, provided that such limitation
    may not protect a director or officer against any liability to the Fund or
    its stockholders to which he would otherwise be subject by reason of willful
    misfeasance, bad faith, gross negligence or reckless disregard of his duties.
    </FONT></P>
</div>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">Section 2-418
    of the Maryland General Corporation law requires a corporation (unless its
    charter provides otherwise, which the Fund's charter does not) to indemnify
    a director or officer who has been successful on the merits or otherwise,
    in the defense of any proceeding to which he is made a party by reason of
    his service in that capacity, or in the defense of any issue, claim or matter
    in any such proceeding.
    </FONT></P>
</div>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">Section 2-418
    of the Maryland General Corporation Law permits a corporation, subject to
      certain limitations, to indemnify its directors, officers, employees and
      agents
    against expenses (including attorneys&#146; fees, judgments, penalties, fines
    and settlements) actually and reasonably incurred by them in connection with
    any suit or proceeding to which they are a party by reason of their service
    in those or other capacities unless it is established that (a) the act or
    omission of the director or officer was material to the matter giving rise
    to the proceeding and (i) was committed in bad faith or (ii) was the result
    of active and deliberate dishonesty, (b) the director or officer actually
    received an improper personal benefit in money, property or services or (c)
    in the case of any criminal proceeding, the director or officer had reasonable
    cause to believe that the act or omission was unlawful. However, under the
    Maryland General Corporation Law, a Maryland corporation may not indemnify
    for an adverse judgment in a suit by or in the right of the corporation or
    for a judgment of liability on the basis that personal benefit was improperly
    received, unless in either case a court orders indemnification and then only
    for expenses. In addition, the Maryland General Corporation Law permits a
    corporation to advance reasonable expenses to a director or officer upon
    the
    corporation's receipt of (a) a written affirmation by the director or officer
    of his good faith belief that he has met the standard of conduct necessary
    for indemnification by the corporation and (b) a written undertaking by him
    or on his behalf to repay the amount paid or reimbursed by the corporation
    if it shall ultimately be determined that the standard of conduct was not
    met.
    </FONT></P>
</div>

<div style="text-indent:3%">
<P><FONT size=2 face="Times New Roman, Times, serif">Article VII of
  the Fund's Charter provides that the Fund shall indemnify and advance expenses
    to its currently acting and former directors and officers to the fullest
    extent
  permitted by the Maryland General Corporation Law. The Fund&#146;s board of
  directors may make further provision for indemnification of directors, officers,
  employees and agents to the fullest extent permitted by Maryland law. The Charter
  provides, however, that the
  Fund's directors and officers shall not be indemnified against liability arising
  from willful misfeasance, bad faith, gross negligence or reckless disregard
  of the duties involved in the conduct of their office. </FONT></P></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
C-3 </font></P>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc4"></a>
<p><a href="#acontents"><font size="2">Back to Contents</font></a></p>
</font>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">Article VI
    of the Fund&#146;s By-Laws requires the Fund to indemnify and advance expenses
    to current and former directors and officers of the Fund to the extent permissible
    under the Maryland General Corporation Law and other applicable law, provided
    that, prior to advancing any expenses, in addition to the affirmation and
    undertaking required by the Maryland General Corporation Law, (a) the person
    seeking indemnification shall provide to the Fund a security in form and amount
    acceptable to the Fund for his undertaking, (b) the Fund is insured against
    losses arising by reason of the advance or (c) either (i) a majority of a
    quorum of directors of the Corporation who are neither &#147;interested persons&#148; as
    defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended,
    nor parties to the proceeding, or (ii) independent legal counsel, in a written
    opinion, shall determine that there is reason to believe that the person
    seeking
    indemnification will ultimately be found to be entitled to indemnification.
    Employees and agents who are not officers or directors of the Fund may be
    indemnified in the same manner and to such further extent as permissible
    under
    Maryland General Corporation Law.
    </FONT></P>
</div>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">The Management
    Agreement obligates the Fund to indemnify Blackstone Advisors against, and
    hold it harmless from, any and all losses, claims, damages, liabilities or
    expenses (including reasonable counsel fees and expenses), including any amounts
    paid in satisfaction of judgments, in compromise or as fines or penalties,
    not resulting from disabling conduct by Blackstone Advisors.
    </FONT></P>
</div>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">The Administration
    Agreement obligates the Fund to indemnify and hold harmless Blackstone Advisors
      and its stockholders, officers, directors, employees and agents against
      any
    liability for any damages, expenses (including reasonable value of time spend
      by Blackstone Advisors employees) or direct losses reasonably incurred
      as
    a result of any failure by the Fund to comply with the U.S. Investment Advisers
      Act of 1940, as amended, the Internal Revenue Code of 1986, as amended,
      and
    with its investment policies and limitations as in effect, or as a result
      of Blackstone Advisor&#146;s acting as an administrator pursuant to the
      Administration Agreement, and not resulting from disabling conduct by Blackstone
      Advisors.
    </FONT></P>
</div>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">Insofar as
    indemnification for liability arising under the Securities Act, may be permitted
    to directors, officers and controlling persons of the Fund pursuant to the
    foregoing provisions or otherwise, the Fund has been advised that, in the
    opinion of the SEC, such indemnification is against public policy as expressed
    in the Securities Act and is, therefore, unenforceable. In the event that
    a claim for indemnification against such liabilities (other than the payment
    by the Fund of expenses incurred or paid by a director, officer or controlling
    person of the Fund in the successful defense of any action, suit or proceeding)
    is asserted by such director, officer or controlling person in connection
    with the securities being registered, the Fund will, unless in the opinion
    of its counsel the matter has been settled by controlling precedent, submit
    to a court of appropriate jurisdiction the question whether such indemnification
    by it is against public policy as expressed in the Securities Act and will
    be governed by the final adjudication of such issue.
    </FONT></P>
</div>
<div style="text-indent:3%">
<P><FONT size=2 face="Times New Roman, Times, serif">The Fund, its
  officers and directors, Blackstone Advisors and certain others are presently
    insured under a Adviser/Mutual Fund Professional Liability Policy issued
    by
  American International Specialty Lines, Inc. that generally covers claims by
    the Fund's stockholders and third persons based on or alleging negligent
    acts,
  misstatements or omissions by the insureds and the costs and expenses of defending
    those claims, up to a limit of &#36;10,000,000, with a deductible amount of
  &#36;250,000. </FONT></P></div>
<p><font size="2" face="Times New Roman, Times, serif"><B>Item 31. Business and
      Other Connections of the Advisers</B>
  </font> </p>
<div style="text-indent:3%">
<P><FONT size=2 face="Times New Roman, Times, serif">Information as
  to directors and officers of each of the Investment Manager and Country Adviser
  is included in their respective Forms ADV filed with the SEC (File Nos. 801-64715
  and 801-64919, respectively) and incorporated herein by reference. </FONT></P></div>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
C-4 </font></P>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc5"></a>
<p><a href="#acontents"><font size="2">Back to Contents</font></a></p>
</font>
<p><font size="2" face="Times New Roman, Times, serif"><B>Item 32. Location of
Accounts and Records</B></font></p>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="top">
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"><font size="2" face="Times New Roman, Times, serif"> 1.</font></TD>
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> The India Fund,
        Inc.<br>
345 Park Avenue New York,<br>
New York 10154 </font></TD>
  </TR>
</TABLE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD colspan="3" valign=top>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD colspan="3"><font size=2 face="Times New Roman, Times, serif">(Records
      relating to its functions as Investment Manager)</font></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"><font size="2" face="Times New Roman, Times, serif"> 2.</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Blackstone Asia
        Advisors L.L.C.<br>
345 Park Avenue New York,<br>
New York 10154 </font></TD>
  </TR>
  <TR valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD colspan=3><font size=2 face="Times New Roman, Times, serif">(Records
      relating to its functions as Country Adviser)</font></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> 3.</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Blackstone Fund
        Services India Private Limited<br>
Taj President-Mumbai<br>
Room 802<br>
90, Cuffe Parade Mumbai-400 005, India </font></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD colspan=3><font size=2 face="Times New Roman, Times, serif">(Records
      relating to its functions as Subscription Agent for the Fund)</font></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> 4.</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> The Colbent Corporation<br>
225 Franklin Street<br>
Boston, Massachusetts 02110<br>
Attention: The India Fund, Inc. </font></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD colspan=3><p><font size="2" face="Times New Roman, Times, serif"> (Records
          relating to its functions as Information Agent for the Fund)</font></p></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> 5.</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Georgeson Shareholder
        Communications Inc.<br>
17 State Street<br>
New York, New York 10004
    </font></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD colspan=3><p><font size="2" face="Times New Roman, Times, serif"> (Records
          relating to its functions as Administrator of the Fund)</font></p></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> 6.</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Blackstone Asia
        Advisors L.L.C.<br>
345 Park Avenue<br>
New York, New York 10154 </font></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD colspan=3><font size=2 face="Times New Roman, Times, serif">(Records
      relating to its functions as Mauritian Administrator to the Fund)</font></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size=2 face="Times New Roman, Times, serif">7</FONT></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Multiconsult Ltd. <br>
	De Chazal Du Mee
        (DDM) Building<br>
10, Frere Felix de Valois Street<br>
Port Louis, Mauritius </font></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD colspan=3><font size=2 face="Times New Roman, Times, serif">(Records
      relating to its Transfer Agent and Plan Agent for the Fund)</font></TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> 8.</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> PFPC Inc.
    </font><br>
<font size="2" face="Times New Roman, Times, serif"> 103 Bellevue Parkway<br>
Wilmington, Delaware 19809<br>
 <br>
P.O. Box 43027<br>Westborough,
    Massachusetts 01581<br>
<br>
	4400 Computer
      Drive<br>
      Westborough,
    Massachusetts 01581</font></TD>
  </TR>
</TABLE>
<p><font size="2" face="Times New Roman, Times, serif"><B>Item 33. Management
  Services</B></font></p>
<div style="text-indent:3%">
  <p><FONT size=2 face="Times New Roman, Times, serif">Not Applicable.</FONT></p>
</div>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> C-5 </font></P>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc6"></a>
<p><a href="#acontents"><font size="2">Back to Contents</font></a></p>
<p><B><FONT size=2>Item
  34. Undertakings</FONT></B></p>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD width="3%"><font size="2" face="Times New Roman, Times, serif"> (1)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> The Fund
        undertakes to suspend the offering of its shares until it amends its
        prospectus if (a) subsequent to the effective date of the Registration
        Statement, the net asset value of its shares declines more than 10% from
        its net asset value as of the effective date of the Registration Statement
        or (b) the net asset value increases to an amount greater than its net
      proceeds as stated in the prospectus. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (2)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Not applicable. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (3)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Not applicable. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (4)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (a) </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif">The Fund undertakes
        to file, during any period in which offers or sales are being made, a
        post-effective amendment to the Registration Statement: (i) to include
        any prospectus required by Section 10(a)(3) of the Securities Act; (ii)
        to reflect in the prospectus any facts or events after the effective
        date of the Registration Statement (or the most recent post-effective
        amendment thereof) that, individually or in the aggregate, represent
        a fundamental change in the information set forth in the Registration
        Statement; and (iii) to include any material information with respect
        to the plan of distribution not previously disclosed in the Registration
        Statement or any material change to such information in the Registration
    Statement. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD width="3%"><font size="2" face="Times New Roman, Times, serif"> (b)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> The Fund undertakes
        that, for the purpose of determining any liability under the Securities
        Act, each such post-effective amendment shall be deemed to be a new registration
        statement relating to the securities offered therein, and the offering
        of those securities at that time shall be deemed to be the initial bona
      fide offering thereof. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (c)</font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> The Fund undertakes
        to remove from registration by means of a post-effective amendment any
        of the securities that remain unsold at the termination of the offering.
    </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (5)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Not applicable. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (6)</font></TD>
    <TD colspan=2><font size="2" face="Times New Roman, Times, serif"> Not applicable. </font></TD>
  </TR>
</TABLE>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> C-6 </font></P>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc7"></a>
<p><a href="#acontents"><font size="2">Back to Contents</font></a></p>
<P align="center"> <B><FONT size=2>SIGNATURES</FONT></B></P>
</font>
<div style="text-indent:3%">
  <P><FONT size=2 face="Times New Roman, Times, serif">Pursuant to
    the requirements of the Securities Act of 1933, as amended, and the Investment
    Company Act of 1940, as amended, the Fund has duly caused this Registration
    Statement to be signed on its behalf by the undersigned, thereunto duly authorized,
    in the City of New York and State of New York on the 6th day of April, 2006.</FONT></P></div>
  <table width="100%" border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td>&nbsp;</td>
      <td colspan="2"><font size=2 face="Times New Roman, Times, serif">THE
        INDIA FUND, INC.</font><font face="Times New Roman, Times, serif">&nbsp; </font></td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td width="3%"><FONT size=2 face="Times New Roman, Times, serif">By:</FONT></td>
      <td width="30%"><FONT size=2 face="Times New Roman, Times, serif">/s/ Prakash A. Melwani</font></td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td><hr size="1" noshade></td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td><font size=2 face="Times New Roman, Times, serif">Prakash
        A. Melwani</font><font face="Times New Roman, Times, serif">&nbsp; </font></td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td><font size=2 face="Times New Roman, Times, serif">Director
        and President</font></td>
    </tr>
  </table>

<P align="center"><font size="2" face="Times New Roman, Times, serif">
  <b>POWER
  OF ATTORNEY</b>&nbsp; </font></P>
<div style="text-indent:3%">
  <P><font size="2" face="Times New Roman, Times, serif"> Each person whose signature
      appears below hereby constitutes and appoints Prakash A. Melwani and Brian
      S. Chase, and each of them, the true and lawful attorneys-in-fact and agents
      of the undersigned, with full power of substitution and resubstitution,
      for and in the name, place and stead of the undersigned, in any and all
      capacities, to sign any and all amendments (including post-effective amendments)
      to this Registration Statement and to file the same, with all exhibits
      thereto, and all other documents in connection therewith, with the Securities
      and Exchange Commission, and hereby grants to such attorneys-in-fact and
      agents full power and authority to do and perform each and every act and
      anything necessary to be done, as fully to all intents and purposes as
      the undersigned might or could do in person, hereby ratifying and confirming
      all that said attorneys-in-fact and agents or their substitute, or substitutes,
    may lawfully do or cause to be done by virtue hereof.</font></P>
</div>
<div style="text-indent:3%">
<P><FONT size=2 face="Times New Roman, Times, serif">Pursuant to the
  requirements of the Securities Act of 1933, as amended, this Registration Statement
  has been signed below by the following persons in the capacities indicated and
  on the dates indicated. </FONT></P></div>
<TABLE width="100%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD><p><font size="2" face="Times New Roman, Times, serif"><B><u>Signature</u></B></font></p></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> <B><u>Title</u></B>
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> <B><u>Date</u></B></font></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="center" valign="top">
      <TD width="28%"><font size=2 face="Times New Roman, Times, serif">/s/ Prakash A. Melwani</font>        <hr size="1" noshade>        <font size="2" face="Times New Roman, Times, serif"> Prakash
      A. Melwani </font></TD>
    <TD><font size=2 face="Times New Roman, Times, serif">Director
        and President (Principal<br>
      </font><font face="Times New Roman, Times, serif"> <FONT size=2>Executive
        Officer)</FONT> <FONT size=2>&nbsp;
      </FONT></font></TD>
      <TD width="20%"><font size=2 face="Times New Roman, Times, serif">April 6,
      2006</font> </TD>
  </TR>
  <TR align="center" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="center" valign="top">
      <TD><font size="2" face="Times New Roman, Times, serif">/s/ Brian S. Chase </font>        <hr size="1" noshade>        <font size="2" face="Times New Roman, Times, serif"> Brian S. Chase </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Treasurer
          and Vice President (Principal<br>
  </font><FONT size=2 face="Times New Roman, Times, serif">Financial
      and Accounting Officer)</FONT><font face="Times New Roman, Times, serif">&nbsp; </font></TD>
      <TD><font size="2" face="Times New Roman, Times, serif"> April 6, 2006 </font> </TD>
  </TR>
  <TR align="center" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="center" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif">/s/ Lawrence K. Becker </font>      <hr size="1" noshade>      <font size="2" face="Times New Roman, Times, serif"> Lawrence K. Becker </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Director
    </font> </TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> April 6, 2006 </font> </TD>
  </TR>
  <TR align="center" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="center" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif">/s/ Leslie H. Gelb </font>      <hr size="1" noshade>      <font size="2" face="Times New Roman, Times, serif"> Leslie H. Gelb </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Director
    </font> </TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> April 6, 2006 </font> </TD>
  </TR>
  <TR align="center" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="center" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif">/s/ J. Marc Hardy </font>      <hr size="1" noshade>      <font size="2" face="Times New Roman, Times, serif"> J. Marc Hardy </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Director
    </font> </TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> April 6, 2006 </font> </TD>
  </TR>
  <TR align="center" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="center" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif">/s/ Stephane R.F. Henry </font>      <hr size="1" noshade>      <font size="2" face="Times New Roman, Times, serif"> Stephane R.F. Henry </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Director
    </font> </TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> April 6, 2006 </font> </TD>
  </TR>
</TABLE>
<P align="center"><font size="2" face="Times New Roman, Times, serif"> C-7 </font></P>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc8"></a>
<p><a href="#acontents"><font size="2">Back to Contents</font></a></p>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD><u><font size="2" face="Times New Roman, Times, serif"><B>Signature</B></font></u></TD>
    <TD><u><font size="2" face="Times New Roman, Times, serif"> <B>Title</B></font></u></TD>
    <TD><u><font size="2" face="Times New Roman, Times, serif"> <B>Date</B></font></u></TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="center" valign="top">
    <TD width="28%"><font size="2" face="Times New Roman, Times, serif">/s/ Peter
      G. Peterson </font>      <hr size="1" noshade>      <font size="2" face="Times New Roman, Times, serif"> Peter
    G. Peterson </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Director
    </font> </TD>
    <TD width="20%"><font size="2" face="Times New Roman, Times, serif"> April
    6, 2006 </font> </TD>
  </TR>
  <TR align="center" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="center" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif">/s/ Luis F. Rubio </font>      <hr size="1" noshade>      <font size="2" face="Times New Roman, Times, serif"> Luis F. Rubio </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Director
    </font> </TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> April 6, 2006 </font> </TD>
  </TR>
  <TR align="center" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="center" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif">/s/ Jeswald W. Salacuse </font>      <hr size="1" noshade>      <font size="2" face="Times New Roman, Times, serif"> Jeswald W. Salacuse </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Director
    </font> </TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> April 6, 2006 </font> </TD>
  </TR>
</TABLE>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
C-8 </font></P>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font face="Times New Roman, Times, serif"><page><a name="pc9"></a>
<p><a href="#acontents"><font size="2">Back to Contents</font></a></p>
<p align="center"><b><font size=2>EXHIBIT
  INDEX</font></b></p>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD width=3%><font size="2" face="Times New Roman, Times, serif"> (2)
    </font></TD>
    <TD width=3%><font size="2" face="Times New Roman, Times, serif"> (g)
    </font></TD>
    <TD width=3%><font size="2" face="Times New Roman, Times, serif"> (1)
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Management Agreement
        dated March 16, 2006 between the Fund and Blackstone Asia Advisors L.L.C.
      (&#147;Blackstone Advisors&#148;). </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (2)
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (g)
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (2)
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Country Advisory
        Agreement dated March 16, 2006 between Blackstone Advisors and Blackstone
      Fund Services India Private Limited. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD> </TD>
    <TD>&nbsp; </TD>
    <TD> </TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (2)
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (k)
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (1)
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Form of Subscription
      Certificate. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (2)
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (k)
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (2)
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Form of Notice of
      Guaranteed Delivery. </font></TD>
  </TR>
  <TR align="left" valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR align="left" valign="top">
    <TD><font size="2" face="Times New Roman, Times, serif"> (2)
    </font></TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> (n)
    </font></TD>
    <TD>&nbsp;</TD>
    <TD><font size="2" face="Times New Roman, Times, serif"> Consent
        of PricewaterhouseCoopers LLP, independent registered public accounting
      firm for the Fund. </font></TD>
  </TR>
</TABLE>
<P align="center"><font size="2" face="Times New Roman, Times, serif">
C-9 </font></P>

<hr noshade align="center" width="100%" size="2">
</body>

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<DOCUMENT>
<TYPE>EX-99.2G.1
<SEQUENCE>4
<FILENAME>b412592_ex99-2g1.txt
<DESCRIPTION>EXHIBIT 2(G)(1)
<TEXT>
<PAGE>

                                                                 Exhibit 2(g)(1)

                                                                  EXECUTION COPY


                              MANAGEMENT AGREEMENT

                  Management Agreement dated and effective as of March 16, 2006,
between The India Fund, Inc., a Maryland corporation (herein referred to as the
"Fund"), and Blackstone Asia Advisors L.L.C., a Delaware limited liability
company (herein referred to as the "Investment Manager") (this "Agreement").

                  1. Appointment of Investment Manager. The Investment Manager
hereby undertakes and agrees, upon the terms and conditions herein set forth, to
provide overall investment management services for the Fund and in connection
therewith to: (i) supervise the Fund's investment program, including advising
and consulting with the Fund's Board of Directors regarding the Fund's overall
investment strategy; (ii) make, in consultation with the Fund's Board of
Directors, investment strategy decisions for the Fund; (iii) manage the
investing and reinvesting of the Fund's assets; (iv) place purchase and sale
orders on behalf of the Fund; (v) advise the Fund with respect to all matters
relating to the Fund's use of leveraging techniques; (vi) provide or procure the
provision of research and statistical data to the Fund in relation to investing
and other matters within the scope of the investment objective and limitations
of the Fund; (vii) monitor the performance of the Fund's outside service
providers, including the Fund's administrator, transfer agent and custodian;
(viii) be responsible for compliance by the Fund with U.S. federal, state and
other applicable laws and regulations; and (ix) pay the salaries, fees and
expenses of such of the Fund's directors, officers or employees who are
directors, officers or employees of the Investment Manager or any of its
affiliates, except that the Fund will bear travel expenses or an appropriate
portion thereof of directors and officers of the Fund who are directors,
officers or employees of the Investment Manager to the extent that such expenses
relate to attendance at meetings of the Board of Directors or any committees
thereof. The Investment Manager may delegate any of the foregoing
responsibilities to a third party with the consent of the Fund.

                  2. Expenses. In connection herewith, the Investment Manager
agrees to maintain a staff within its organization to furnish the above services
to the Fund. The Investment Manager shall bear all expenses arising out of its
duties hereunder.

                  Except as provided in Section 1 hereof, the Fund shall be
responsible for all of the Fund's expenses and liabilities, including
organizational and offering expenses (which include out-of-pocket expenses, but
not overhead or employee costs of the Investment Manager); expenses for legal,
accounting and auditing services; taxes and governmental fees; dues and expenses
incurred in connection with membership in investment company organizations; fees
and expenses incurred in connection with listing the Fund's shares on any stock
exchange; costs of printing and distributing shareholder reports, proxy
materials, prospectuses, stock certificates and distribution of dividends;
charges of the Fund's custodians and sub-custodians, administrators and
sub-administrators, registrars, transfer agents, dividend disbursing agents and
dividend reinvestment plan agents; payment for portfolio pricing services to a
pricing agent, if any; registration and filing fees of the Securities and
Exchange Commission (the "Commission"); expenses of registering or qualifying
securities of the Fund for sale in the various states; freight and other charges
in connection with the shipment of the Fund's portfolio securities; fees and
expenses of non-interested directors or non-interested members of any advisory
or investment board, committee or panel of the Fund; travel expenses or an
appropriate portion thereof of directors and officers of the Fund, or members of
any advisory or investment board, committee or panel of the Fund, to the extent
that such expenses relate to attendance at meetings of the Board of Directors or
any committee thereof, or of any such advisory or investment board, committee or
panel; salaries of shareholder relations personnel; costs of shareholders
meetings; insurance; interest; brokerage costs; and litigation and other
extraordinary or non-recurring expenses.

<PAGE>

                                                                               2


                  3. Transactions with Affiliates. The Investment Manager is
authorized on behalf of the Fund, from time to time when deemed to be in the
best interests of the Fund and to the extent permitted by applicable law, to
purchase and/or sell securities in which the Investment Manager or any of its
affiliates underwrites, deals in and/or makes a market and/or may perform or
seek to perform investment banking services for issuers of such securities. The
Investment Manager is further authorized, to the extent permitted by applicable
law, to select brokers (including any brokers affiliated with the Investment
Manager) for the execution of trades for the Fund.

                  4. Best Execution; Research Services. The Investment Manager
is authorized, for the purchase and sale of the Fund's portfolio securities, to
employ such dealers and brokers as may, in the judgment of the Investment
Manager, implement the policy of the Fund to obtain the best results, taking
into account such factors as price, including dealer spread, the size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities and the firm's risk in positioning the securities
involved. Consistent with this policy, the Investment Manager is authorized to
direct the execution of the Fund's portfolio transactions to dealers and brokers
furnishing statistical information or research deemed by the Investment Manager
to be useful or valuable to the performance of its investment advisory functions
for the Fund. It is understood that in these circumstances, as contemplated by
Section 28(e) of the Securities Exchange Act of 1934, as amended, the
commissions paid may be higher than those which the Fund might otherwise have
paid to another broker if those services had not been provided. Information so
received will be in addition to and not in lieu of the services required to be
performed by the Investment Manager. It is understood that the expenses of the
Investment Manager will not necessarily be reduced as a result of the receipt of
such information or research. Research services furnished to the Investment
Manager by brokers who effect securities transactions for the Fund may be used
by the Investment Manager in servicing other investment companies and accounts
which it manages. Similarly, research services furnished to the Investment
Manager by brokers who effect securities transactions for other investment
companies and accounts which the Investment Manager manages may be used by the
Investment Manager in servicing the Fund. It is understood that not all of these
research services are used by the Investment Manager in managing any particular
account, including the Fund.

                  5. Remuneration. In consideration of the services to be
rendered by the Investment Manager under this Agreement, the Fund shall pay the
Investment Manager a monthly fee in United States dollars on the fifth business
day of each month for the previous month at an annual rate of: (i) 1.10% of the
Fund's average weekly net assets for the first $500,000,000 of the Fund's
average weekly net assets; (ii) 0.90% of the Fund's average weekly net assets
for the next $500,000,000 of the Fund's average weekly net assets; (iii) 0.85%
of the Fund's average weekly net assets for the next $500,000,000 of the Fund's
average weekly net assets; and (iv) 0.75% of the Fund's average weekly net
assets in excess of $1,500,000,000 of the Fund's average weekly net assets. If
the fee payable to the Investment Manager pursuant to this Section 5 begins to
accrue before the end of any month or if this Agreement terminates before the
end of any month, the fee for the period from such date to the end of such month
or from the beginning of such month to the date of termination, as the case may
be, shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs. For purposes of
calculating each such monthly fee, the value of the Fund's net assets shall be
computed at the time and in the manner specified in the Registration Statement
on Form N-2, as in effect from time to time, filed with the Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Securities
Act of 1933, as amended.
<PAGE>

                                                                               3

                  6. Representations and Warranties. The Investment Manager
represents and warrants that it is duly registered and authorized as an
investment adviser under the Investment Advisers Act of 1940, as amended, and
the Investment Manager agrees to maintain effective all requisite registrations,
authorizations and licenses, as the case may be, until the termination of this
Agreement.

                  7. Services Not Deemed Exclusive. The services provided
hereunder by the Investment Manager are not to be deemed exclusive, and the
Investment Manager and any of its affiliates or related persons are free to
render similar services to others and to use the research developed in
connection with this Agreement for other clients or affiliates. Nothing herein
shall be construed as constituting the Investment Manager an agent of the Fund.

                  8. Limit of Liability. The Investment Manager shall exercise
its best judgment in rendering the services in accordance with the terms of this
Agreement. The Investment Manager shall not be liable for any error of judgment
or mistake of law or for any act or omission or any loss suffered by the Fund in
connection with the matters to which this Agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect the Investment
Manager against any liability to the Fund or its shareholders to which the
Investment Manager would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under this Agreement
("disabling conduct"). The Fund will indemnify the Investment Manager against,
and hold it harmless from, any and all losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses), including any amounts
paid in satisfaction of judgments, in compromise or as fines or penalties, not
resulting from disabling conduct by the Investment Manager. Indemnification
shall be made only following: (i) a final decision on the merits by a court or
other body before which the proceeding was brought that the Investment Manager
was not liable by reason of disabling conduct or (ii) in the absence of such a
decision, a reasonable determination, based upon a review of the facts, that the
Investment Manager was not liable by reason of disabling conduct by (a) the vote
of a majority of a quorum of directors of the Fund who are neither "interested
persons" of the Fund nor parties to the proceeding ("disinterested non-party
directors") or (b) an independent legal counsel in a written opinion. The
Investment Manager shall be entitled to advances from the Fund for payment of
the reasonable expenses (including reasonable counsel fees and expenses)
incurred by it in connection with the matter as to which it is seeking
indemnification in the manner and to the fullest extent permissible under law.
Prior to any such advance, the Investment Manager shall provide to the Fund a
written affirmation of its good faith belief that the standard of conduct
necessary for indemnification by the Fund has been met and a written undertaking
to repay any such advance if it should ultimately be determined that the
standard of conduct has not been met. In addition, at least one of the following
additional conditions shall be met: (a) the Investment Manager shall provide a
security in form and amount acceptable to the Fund for its undertaking; (b) the
Fund is insured against losses arising by reason of the advance; or (c) a
majority of a quorum of disinterested non-party directors or independent legal
counsel, in a written opinion, shall have determined, based on a review of facts
readily available to the Fund at the time the advance is proposed to be made,
that there is reason to believe that the Investment Manager will ultimately be
found to be entitled to indemnification.
<PAGE>

                                                                               4

                  9. Duration and Termination. This Agreement shall remain in
effect until March 16, 2008, and shall continue in effect thereafter for
successive annual periods, but only so long as such continuance is specifically
approved at least annually by the affirmative vote of (i) a majority of the
members of the Fund's Board of Directors who are not parties to this Agreement
or "interested persons" (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
the Fund's Board of Directors or the holders of a majority of the outstanding
voting securities (as defined in the 1940 Act) of the Fund.

                  Notwithstanding the above, this Agreement (a) may nevertheless
be terminated at any time, without penalty, by the Fund's Board of Directors, by
vote of the holders of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund or by the Investment Manager, upon 60 days'
written notice delivered to each party hereto, and (b) shall automatically be
terminated in the event of its assignment (as defined in the 1940 Act). Any such
notice shall be deemed given when received by the addressee.

                  10. Governing Law. This Agreement shall be governed, construed
and interpreted in accordance with the laws of the State of New York, provided,
however, that nothing herein shall be construed as being inconsistent with the
1940 Act.

                  11. Notices. Any notice hereunder shall be in writing and
shall be delivered in person or by telex or facsimile (followed by delivery in
person) to the parties at the addresses set forth below.

                  If to the Fund:

                           The India Fund, Inc.
                           345 Park Avenue
                           New York, New York 10154
                           Attn:    Joshua R. Rovine, Secretary
<PAGE>

                                                                               5


                  If to the Investment Manager:

                           Blackstone Asia Advisors L.L.C.
                           345 Park Avenue
                           New York, New York 10154
                           Attn:    Robert Friedman, Chief Legal Officer and
                                    Vice President

                  with a copy to:

                           Blackstone Asia Advisors L.L.C.
                           345 Park Avenue
                           New York, New York 10154
                           Attn:    Joshua R. Rovine, Secretary

or to such other address as to which the recipient shall have informed the other
party in writing.

                  Unless specifically provided elsewhere, notice given as
provided above shall be deemed to have been given, if by personal delivery, on
the day of such delivery, and, if by facsimile and mail, on the date on which
such facsimile or mail is sent.

                  12. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.


                  [Remainder of Page Intentionally Left Blank.]

<PAGE>



                  IN WITNESS WHEREOF, the parties hereto caused their duly
authorized signatories to execute this Agreement as of the day and year first
written above.


                          THE INDIA FUND, INC.


                               By: /s/ Prakash A. Melwani
                                   ----------------------
                                   Name:  Prakash A. Melwani
                                   Title: Director and President


                               BLACKSTONE ASIA ADVISORS L.L.C.


                               By: /s/ Robert L. Friedman
                                   ----------------------
                                   Name:  Robert L. Friedman
                                   Title: Chief Legal Officer and Vice President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2G.2
<SEQUENCE>5
<FILENAME>b412592_ex99-2g2.txt
<DESCRIPTION>EXHIBIT 2(G)(2)
<TEXT>
<PAGE>

                                                                 Exhibit 2(g)(2)

                                                                  EXECUTION COPY

                           COUNTRY ADVISORY AGREEMENT


                         Blackstone Asia Advisors L.L.C.
                                 345 Park Avenue
                            New York, New York 10154


                                                                  March 16, 2006

Blackstone Fund Services India Private Limited
Taj President--Mumbai
Room 802
90 Cuffe Parade
Mumbai, India 400005

Ladies and Gentlemen:

                  This will confirm that the agreement among the undersigned
(the "Investment Manager") and you (the "Country Adviser") is as follows:

                  1. The Investment Manager has been employed pursuant to a
management agreement dated and effective as of March 16, 2006, between The India
Fund, Inc. (the "Company"), an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Investment
Manager (the "Management Agreement"). The Company engages in the business of
investing and reinvesting its assets in the manner and in accordance with the
investment objective and limitations specified in the Company's articles of
incorporation, as amended from time to time in the registration statement on
Form N-2, as in effect from time to time, and in such manner and to such extent
as may from time to time be authorized by the Board of Directors of the Company.
Copies of the documents referred to in the preceding sentence have been
furnished to the Country Adviser. Any amendments to these documents shall be
furnished to the Country Adviser.

                  2. Subject to the approval by the Company, the Investment
Manager engages the Country Adviser on an independent contractor relationship
basis to: (a) provide and procure statistical and factual information and
research regarding economic and political factors and trends in India and its
surrounding region and (b) provide or procure research and statistical data in
relation to investing and other opportunities in India and its surrounding
region. The Country Adviser will not make any investment decisions with respect
to the Company.

                  3. The Country Adviser shall, at its expense, provide office
space, office facilities and personnel reasonably necessary for performance by
it of the services to be provided by the Country Adviser pursuant to this
Agreement.

                  4. The Country Adviser may contract on its own behalf with or
consult with such banks, other securities firms, brokers or other parties
without additional expense to the Company, as it may deem appropriate regarding
research and statistical data or otherwise.

                  5. In consideration of the services to be rendered by the
Country Adviser under this Agreement, the Investment Manager shall pay the
Country Adviser a monthly fee in United States dollars on the fifth business day
of each month for the previous month at an annual rate of: 0.10% of the Fund's
average weekly net assets. If the fee payable to the Investment Adviser pursuant
to this Section 5 begins to accrue before the end of any month or if this
Agreement terminates before the end of any month, the fee for the period from
such date to the end of such month or from the beginning of such month to the
date of termination, as the case may be, shall be prorated according to the
proportion which such period bears to the full month in which such effectiveness
or termination occurs.
<PAGE>

                                                                               2


                  6. The Country Adviser represents and warrants that it will be
duly registered and authorized as an investment adviser under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"), and the Country Adviser
agrees to maintain effective all requisite registrations, authorizations and
licenses, as the case may be, until termination of this Agreement.

                  7. This Agreement shall continue in effect until March 16,
2008, and shall continue in effect thereafter for successive annual periods,
provided that such continuance is specifically approved at least annually (a) by
the vote of a majority of the Company's outstanding voting securities (as
defined in the 1940 Act) or by the Company's Board of Directors and (b) by the
vote, cast in person at a meeting called for the purpose, of a majority of the
Company's directors who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of any such party. Notwithstanding the
above, this Agreement (a) may nevertheless be terminated at any time, without
penalty, by the Company's Board of Directors, by vote of holders of a majority
of the outstanding voting securities (as defined in the 1940 Act) of the Company
or by the Investment Manager upon 60 days' written notice delivered to each
party hereto and (b) shall automatically be terminated in the event of its
assignment (as defined in the 1940 Act). Any such notice shall be deemed given
when received by the addressee.

                  8. Nothing herein shall be deemed to limit or restrict the
right of the Country Adviser, any affiliate of the Country Adviser or any
employee of the Country Adviser to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, firm, individual or association. Nothing herein shall be
construed as constituting the Country Adviser an agent of the Investment Manager
or the Company.

                  9. This Agreement shall be governed by the laws of the State
of New York; provided, however, that nothing herein shall be construed as being
inconsistent with the 1940 Act.

                  10. Notices. Any notice hereunder shall be in writing and
shall be delivered in person or by telex or facsimile (followed by delivery in
person) to the parties at the addresses set forth below.

<PAGE>

                                                                               3


If to the Country Adviser:

                           Blackstone Fund Services India Private Limited
                           Taj President--Mumbai
                           Room 802
                           90 Cuffe Parade
                           Mumbai, India 400005
                           Attn:    Barbara F. Pires, Director

If to the Investment Manager:

                           Blackstone Asia Advisors L.L.C.
                           345 Park Avenue
                           New York, New York 10154
                           Attn:    Robert Friedman, Chief Legal Officer and
                                    Vice President

with a copy to:

                           Blackstone Asia Advisors L.L.C.
                           345 Park Avenue
                           New York, New York 10154
                           Attn:    Joshua R. Rovine, Secretary

or to such other address as to which the recipient shall have informed the other
party in writing.

                  Unless specifically provided elsewhere, notice given as
provided above shall be deemed to have been given, if by personal delivery, on
the day of such delivery, and, if by facsimile and mail, on the date on which
such facsimile is sent or mailed.

                  11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.

                  If the foregoing correctly sets forth the agreement between
the Investment Manager and the Country Adviser, please so indicate by signing
and returning to the Investment Manager the enclosed copy hereof.

                                            Very truly yours,

                                            BLACKSTONE ASIA ADVISORS L.L.C.



                                            By: /s/ Robert L. Friedman
                                                ----------------------
                                                Name:  Robert L. Friedman
                                                Title: Chief Legal Officer and
                                                       Vice President

<PAGE>

                                                                               4


ACCEPTED:

BLACKSTONE FUND SERVICES INDIA
PRIVATE LIMITED


By: /s/ Barbara F. Pires
    --------------------
    Name:  Barbara F. Pires
    Title: Director
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K.1
<SEQUENCE>6
<FILENAME>b412592_ex99-2k1.txt
<DESCRIPTION>EXHIBIT 2(K)(1)
<TEXT>
<PAGE>

                                                                         2(k)(1)


                            SUBSCRIPTION CERTIFICATE

             THIS OFFER EXPIRES AT 5:00 P.M., EASTERN DAYLIGHT TIME,
                           ON [EXPIRATION DATE], 2006,
                                 UNLESS EXTENDED

                              THE INDIA FUND, INC.

                      SUBSCRIPTION RIGHTS FOR COMMON STOCK

Dear Stockholder:

         As the registered owner of this Subscription Certificate, you are
entitled to exercise the rights issued to you as of [RECORD DATE], 2005, the
record date (the "Record Date") for the rights offering of The India Fund, Inc.
(the "Fund"), to subscribe for the number of shares of common stock of the Fund
shown on this Subscription Certificate pursuant to the primary subscription upon
the terms and conditions and at the subscription price for each share of common
stock as specified in the Fund's Prospectus (the "Prospectus"). The terms and
conditions of the rights offering set forth in the Prospectus are incorporated
herein by reference. In accordance with the over-subscription privilege
described in the Prospectus, you are entitled to subscribe for additional shares
if shares remaining after exercise of rights pursuant to primary subscription
are available and you have fully exercised your primary subscription rights. If
there are not sufficient shares remaining to satisfy all over-subscriptions, the
available shares will be allocated among you and the other shareholders who
oversubscribe generally in proportion to the number of shares you own on the
record date. As described in the Prospectus, the Fund may in its discretion
issue up to an additional 25% of the shares available pursuant to the rights
offering to satisfy over-subscriptions.

        In order to exercise your rights, you must present to The Colbent
Corporation, prior to 5:00 p.m., Eastern Daylight Time, on [EXPIRATION DATE],
2006 (the "Expiration Date"), unless the rights offering is extended, either (1)
a properly completed and executed Subscription Certificate and a money order or
check drawn on a bank located in the United States of America and payable to The
India Fund, Inc. for an amount equal to the number of shares subscribed for
under the primary subscription and over-subscription privilege (if applicable)
multiplied by the estimated subscription price of $[ ], or (2) a Notice of
Guaranteed Delivery guaranteeing delivery of (i) a properly completed and
executed Subscription Certificate and (ii) a money order or check drawn on a
bank located in the United States of America and payable to The India Fund, Inc.
for an amount equal to the number of shares subscribed for under the primary
subscription and over-subscription privilege (if applicable) multiplied by the
estimated subscription price of $[ ].

         If a Notice of Guaranteed Delivery is used, a properly completed
Subscription Certificate, together with payment in full, as described above,
must be received by The Colbent Corporation by no later than [DATE], 2006,
unless the rights offering is extended. See "The Offer--Method for Exercising
Rights" and "--Payment for Shares" in the Prospectus.

         No later than [CONFIRMATION DATE], 2006, The Colbent Corporation will
send you a confirmation (or, if you own your shares through a depository or
nominee, to such depository or nominee), showing (i) the number of shares
acquired pursuant to the primary subscription, (ii) the number of shares, if
any, acquired pursuant to the over-subscription privilege, (iii) the per share
and total purchase price for the shares, and (iv) any additional amount payable
by you or any excess to be refunded to you. You will not receive any other
evidence of title unless you have requested a stock certificate pursuant to this
certificate (See Item C of Section 1 below.) Shares subscribed for pursuant to
the primary subscription and over-subscription privilege will be evidenced by
book-entry registration only. Any refund in connection with your subscription
will be delivered as soon as practicable after [DELIVERY DATE], 2006, unless the
rights offering is extended.



                                                  Control #:

                                                  Rights Represented by this
                                                  Subscription Document:

                                                  Maximum Primary Shares:

<PAGE>



                               SAMPLE CALCULATION
- --------------------------------------------------------------------------------
                      FULL PRIMARY SUBSCRIPTION ENTITLEMENT
                       (One Share for Every [    ] Rights)


<TABLE>
<S>                     <C>                     <C>                    <C>
       1,000         =          1,000           DIVIDED BY [    ]  =          333
- -------------------     ----------------------                         ---------------------
No. of Whole Shares     (No. of Rights Issued)                         (No. of New Shares
Owned on the Record                                                    Issued) (Rounded Down
Date                                                                   to Nearest Whole Share)
</TABLE>


                          METHOD OF EXERCISE OF RIGHTS

                    The Subscription Agent for the Offer is:

                             The Colbent Corporation

<TABLE>
<S>                                       <C>                                         <C>
          By First Class Mail:            By Express Mail or Overnight Courier:                By Hand:

        The Colbent Corporation                  The Colbent Corporation               The Colbent Corporation
        Attn: Corporate Actions                  Attn: Corporate Actions               Attn: Corporate Actions
            P.O. Box 859208                       161 Bay State Drive                    161 Bay State Drive
       Braintree, MA 02185-9208                Braintree, MA 02184-5203               Braintree, MA 02184-5203

                                     Confirm by Telephone: (781) 843-1833, Ext. 200
</TABLE>

SECTION 1:  DETAILS OF SUBSCRIPTION

<TABLE>
<S>     <C>                     <C>             <C>                  <C>                  <C>  <C>            <C>   <C>
A.      Primary Subscription    ______________  (divided by) 3  =    ______________       x        $[ ]       =     $______
                                    (Rights                          (Full Shares of            (Estimated           (Amount
                                  Exercised)                           Common Stock            Subscription          Required)
                                                                     Requested, Rounded           Price**)
                                                                       Down to Nearest
                                                                        Whole Share)
B.      Over-Subscription
        Privilege*                                                    ______________      x        $[ ]       =     $_______
                                                                      (Full Number of           (Estimated           (Amount
                                                                      Shares of Common         Subscription          Required)
                                                                      Stock Requested)           Price**)
</TABLE>

TOTAL AMOUNT OF CHECK OR MONEY ORDER ENCLOSED (TOTAL OF A + B) = $_____________

*  You can only over-subscribe if you have fully exercised your primary
   subscription rights.

** $[ ] per share is an estimated price only. The final subscription price
   will be determined on [PRICING DATE], 2006, the pricing date (which is also
   the date when your rights will expire), and could be higher or lower
   depending on changes in the net asset value and share price of the common
   stock.

C.  I wish to receive stock certificates for the shares I have applied for.
    ____  (Please check if yes)

SECTION 2:  TO SUBSCRIBE:

     I ACKNOWLEDGE THAT I HAVE RECEIVED THE PROSPECTUS FOR THE RIGHTS OFFERING,
AND I HEREBY IRREVOCABLY SUBSCRIBE FOR THE NUMBER OF NEW SHARES INDICATED ABOVE
ON THE TERMS AND CONDITIONS SET FORTH IN THE PROSPECTUS.

     I UNDERSTAND AND AGREE THAT I WILL BE OBLIGATED TO PAY ANY ADDITIONAL
AMOUNT TO THE FUND IF THE SUBSCRIPTION PRICE AS DETERMINED ON THE PRICING DATE
IS IN EXCESS OF THE $22.69 ESTIMATED SUBSCRIPTION PRICE PER SHARE.

     I HEREBY AGREE THAT IF I FAIL TO PAY IN FULL FOR THE SHARES FOR WHICH I
HAVE SUBSCRIBED, THE FUND MAY EXERCISE ANY OF THE REMEDIES PROVIDED FOR IN THE
PROSPECTUS.

Signature of Subscriber(s):
                             ---------------------------------------------------

Please give your telephone number:
                                   ---------------------------------------------

     If you wish to have your confirmation and refund check (if any) delivered
to an address other than that listed on this Subscription Certificate you must
have your signature guaranteed by a member of the New York Stock Exchange or a
bank or trust company. Please provide the delivery address below and note if it
is a permanent change.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K.2
<SEQUENCE>7
<FILENAME>b412592_ex99-2k2.txt
<DESCRIPTION>EXHIBIT 2(K)(2)
<TEXT>
<PAGE>

                                                                         2(k)(2)

                          NOTICE OF GUARANTEED DELIVERY
               FOR SHARES OF CAPITAL STOCK OF THE INDIA FUND, INC.
               SUBSCRIBED FOR PURSUANT TO THE PRIMARY SUBSCRIPTION
                       AND THE OVER-SUBSCRIPTION PRIVILEGE

                      THE INDIA FUND, INC. RIGHTS OFFERING

         As set forth in the Prospectus of The India Fund, Inc. (the "Fund")
under the "The Offer--Method for Exercising Rights" and "--Payment for Shares,"
this form or one substantially equivalent hereto may be used as a means of
effecting subscription and payment for all shares of the Fund's capital stock
subscribed for by exercise of rights pursuant to the primary subscription and
the over-subscription privilege. Such form may be delivered by hand or sent by
facsimile transmission, express mail, overnight courier or first-class mail to
The Colbent Corporation, the subscription agent, and must be received prior to
5:00 p.m. New York City time on [expiration date], 2006.* The terms and
conditions of the rights offering set forth in the Prospectus are incorporated
by reference herein. Capitalized terms not defined here have the meanings
attributed to them in the Prospectus.

                           THE SUBSCRIPTION AGENT IS:

                             THE COLBENT CORPORATION

<TABLE>
<S>                             <C>                                          <C>
By First Class Mail:            By Express Mail or Overnight Courier:        By Hand:
The Colbent Corporation         The Colbent Corporation                      The Colbent Corporation
Attn: Corporate Actions         Attn: Corporate Actions                      Attn: Corporate Actions
P.O. Box 859208                 161 Bay State Drive                          161 Bay State Drive
Braintree, MA 02185-9208        Braintree, MA 02184-5203                     Braintree, MA 02184-5203
</TABLE>

                           By Facsimile Transmission:
                                 (781) 380-3388

                              Confirm by Telephone:
                            [781) 843-1833, Ext. 200

          DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF
                INSTRUCTIONS VIA A TELECOPY OR FACSIMILE NUMBER,
       OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY

         The New York Stock Exchange member firm or bank or trust company which
completes this form must communicate the guarantee and the number of shares
subscribed for under both the primary subscription and the over-subscription
privilege to The Colbent Corporation and must deliver this Notice of Guaranteed
Delivery guaranteeing delivery prior to 5:00 p.m., New York City time, on
[expiration date], 2006 of (i) payment in full for all subscribed shares and
(ii) a properly completed and executed Subscription Certificate to The Colbent
Corporation.* The Subscription Certificate and full payment must then be
delivered by 5:00 p.m., New York City time, on [payment date], 2006* to The
Colbent Corporation. Failure to do so will result in a forfeiture of the rights.


- ----------------------------
    *        Unless extended by the Fund.
<PAGE>

                                    GUARANTEE

         The undersigned, a member firm of the New York Stock Exchange or a bank
or trust company guarantees delivery to The Colbent Corporation by 5:00 p.m.,
New York City time, on [payment date], 2006 (unless extended) of (i) a properly
completed and executed Subscription Certificate and (ii) payment of the full
subscription price for shares subscribed for on primary subscription and
pursuant to the over-subscription privilege, if applicable, as subscription for
such shares is indicated herein or in the Subscription Certificate.

<TABLE>
<S>                        <C>                   <C>    <C>                 <C>    <C>
A. Primary Subscription    ________________      X            $[ ]          =       $______
                           (Number Of Primary                (Estimated             (Estimated
                           Subscription Shares          Subscription Price)        Payment to Be
                           of Which You Are                                           Made in
                           Guaranteeing                                             Connection
                           Delivery Of Rights                                        with the
                           And Payment)                                               Primary
                           (Rounded Down to                                        Subscription
                           Nearest Whole Share)                                       Shares)

B. Over-Subscription       ________________      X            $[ ]          =       $_______
   Privilege               (Number of Over-                (Estimated               (Estimated
                           Subscription Shares         Subscription Price)          Payment to Be
                           of Which You Are                                           Made in
                           Guaranteeing                                              Connection
                           Delivery Of                                             with the Over-
                           Payment)                                                  Subscription
                                                                                       Shares)
</TABLE>

TOTAL NUMBER OF RIGHTS
TO BE DELIVERED:    ___________________________________________________________

TOTAL AMOUNT ENCLOSED:   $_____________________________________________________

Method of Delivery of Rights (circle one)

A. through The Depository Trust Company ("DTC")**

B. direct to The Colbent Corporation, as Subscription Agent

- --------------------------------------------------------------------------------


<TABLE>
<S>                                                <C>
Name of Firm: ___________________________          Authorized Signature: ____________________



Address: ________________________________          Title: ___________________________________



City, State and ZIP: ____________________          Name: ____________________________________
                                                              (Please Type or Print)


Name of Registered Holder
(If Applicable):_________________________

Telephone Number: _______________________          Date: ____________________________________
</TABLE>




- -----------------------
         **  If the rights are to be delivered through DTC, a representative of
             The Colbent Corporation will phone you with a protect
             identification number, which needs to be communicated by you
             to DTC.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K.5
<SEQUENCE>8
<FILENAME>b412592_ex99-2k5.txt
<DESCRIPTION>EXHIBIT 2(K)(5)
<TEXT>
<PAGE>
                                                                 Exhibit 2(k)(5)

                            ADMINISTRATION AGREEMENT



                  Agreement effective as of the 1st day of January 2006, by and
between The India Fund, Inc., a Maryland corporation (the "Fund"), and
Blackstone Asia Advisors L.L.C., a Delaware limited liability company (the
"Administrator") (this "Agreement").

                  WHEREAS, the Fund operates as a closed-end non-diversified
management investment company, and is so registered under the Investment Company
Act of 1940, as amended (the "1940 Act"); and

                  WHEREAS, the Fund desires to retain the Administrator to
provide certain administrative services to the Fund, under the terms and
conditions stated below, and the Administrator is willing to provide such
services for the compensation set forth below;

                  NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties agree as follows:

                  1. Appointment. The Fund hereby appoints the Administrator as
administrator of the Fund on the terms set forth in this Agreement, subject to
the overall supervision of the Fund's Board of Directors (the "Board"), and the
Administrator accepts such appointment and agrees that it will be responsible
for the provision of the services set forth in paragraph 2 below.

                  2. Services and Duties of the Administrator. Subject to the
supervision of the Board, the Administrator will, on a continuing basis, be
responsible for the provision of facilities for meetings of the Board and
shareholders of the Fund and personnel and office facilities sufficient for the
provision of the following services to the Fund:

                  (a) preparation for review by an officer of the Fund and
         filing with the Securities and Exchange Commission (the "SEC") and the
         New York Stock Exchange the Fund's annual, semiannual and quarterly
         reports and periodic reports to shareholders, preparation for review by
         an officer of the Fund of information and reports as may be required by
         the New York Stock Exchange and assisting in the preparation of the
         financial information relating to the Fund for the Fund's proxy
         material and earnings press releases.

                  (b) preparation of all reports required to be filed with the
         SEC based on information provided to it by the Fund or an agent of the
         Fund, or such other form as the SEC may substitute, and the filing of
         such completed form with the SEC.

                  (c) coordinating with the Fund's independent accountants and
         any sub-administrator in providing the information necessary for such
         accountants to complete and audit the Fund's financial statements and
         such other reports as may be necessary and to prepare and file the
         Fund's federal income and excise tax returns and the Fund's state and
         local tax returns and any other required tax returns.

                  (d) arrangement for the printing and dissemination to
         shareholders of the Fund's proxy materials and supervision of the
         tabulation of proxies by the Fund's transfer agent.
<PAGE>
                                                                               2

                  (e) negotiation of contractual arrangements with the Fund's
         agents, including the custodians, transfer agents, dividend paying
         agents, accounting agents, independent accountants, any
         sub-administrators and printing companies, and monitoring the
         performance of such agents pursuant to such arrangements, including
         making such reports and recommendations to the Board concerning the
         performance and fees of such agents as the Board may reasonably request
         or deems appropriate.

                  (f) overseeing of the calculation of the Fund's net asset
         value in accordance with the Fund's registration statement under the
         1940 Act and Securities Act of 1933, as amended, by the Fund's
         accounting agent and monitoring the performance of such agent in making
         the Fund's net asset value available for public dissemination.

                  (g) overseeing of the maintenance of the Fund's books and
         records under Rule 31a-1 under the 1940 Act by the custodian and
         accounting agent, as applicable.

                  (h) establishment of the accounting policies of the Fund,
         establishment of and monitoring of the Fund's operating expense
         budgets, processing the payment of bills that have been approved by an
         authorized officer of the Fund and reporting to the Fund's management
         monthly the amount of expenses incurred and paid during the prior
         month.

                  (i) advising the Board as to the amounts available for
         distribution of any periodic dividends and annual distributions that
         are to be declared and paid by the Fund to its shareholders;
         preparation and arrangement for the printing of dividend notices to
         shareholders; and providing the transfer and dividend disbursing agent
         and custodian with such information as is required for such parties to
         effect the payment of dividends and distributions and to implement the
         Fund's dividend reinvestment plan.

                  (j) if requested by the Board, designating one or more of its
         employees to serve as treasurer and/or assistant treasurers of the
         Fund.

                  (k) forwarding promptly to the Fund's counsel any
         communications (including notices received under any agreement to which
         the Fund is a party) received by the Administrator or its agents on
         behalf of the Fund.

                  (l) assisting the Fund in responding to requests for
         information concerning the Fund made by representatives of regulatory
         entities having jurisdiction over the Fund.

                  (m) assisting the Fund in responding to requests for
         information concerning the Fund made by shareholders of the Fund and
         assisting the Fund in developing a shareholder relationship program.

                  (n) assisting the Fund's investment adviser, custodian,
         counsel, auditors and other agents as generally may be required to
         properly carry on the business and operations of the Fund.

                  (o) monitoring compliance procedures for the Fund, which will
         include, without limitation, procedures to monitor compliance with the
         Fund's investment objective, policies and limitations, tax matters and
         applicable laws and regulations.
<PAGE>
                                                                               3

The Administrator will, as applicable, provide the foregoing services and duties
in conjunction with the Fund's accountants, custodian, legal counsel and other
agents and professionals retained by the Fund.

                  3. Public Inquires. Except as otherwise provided herein, the
Administrator will not be responsible for replying to requests for information
concerning the Fund from shareholders, brokers or the public. The Fund shall
notify the Administrator of the appropriate party to whom such requests should
be directed, and the Administrator will refer such requests to the party
designated by the Fund.

                  4. Services Not Exclusive. The Administrator's services
hereunder are not deemed to be exclusive, and the Administrator is free to
render administrative or other services to other funds or clients so long as the
Administrator's services under this Agreement are not impaired thereby.

                  5. Administrative Expenses. During the term of this Agreement,
the Administrator will assume all other expenses incurred by it in connection
with its services under this Agreement, except that the Fund shall reimburse the
Administrator for out-of-pocket expenses incurred by employees of the
Administrator in connection with their attendance at meetings of the Board or
any committee thereof or any other meeting at which the Fund requires the
attendance of any the Administrator employee or employees.

                  6. Employment of Sub-Administrator. Upon the prior approval of
the Board, the Administrator may employ the services of third parties in
connection with the performances of its obligations under this Agreement.
Without limitation of any of the foregoing, the Administrator may retain one or
more parties to serve as sub-administrators and may subcontract with such
sub-administrators on such terms and conditions as may be agreed to by the
Administrator and such sub-administrator(s) with respect to the performance of
the Administrator's obligations hereunder.

                  7. Compensation. For the services provided and expenses
assumed by the Administrator under this Agreement, the Fund will pay the
Administrator a fee that is computed monthly and paid quarterly at an annual
rate of: (i) 0.20% of the value of the Fund's average monthly net assets for the
first $1,500,000,000 of the Fund's average monthly net assets and (ii) 0.15% of
the value of the Fund's average monthly net assets in excess of $1,500,000,000
of the Fund's average monthly net assets.

                  8. Representations and Warranties of the Administrator. The
Administrator represents and warrants to the Fund that:

                  (a) it is a limited liability company duly organized and
         existing under the laws of Delaware;

                  (b) it is duly qualified to carry on its business in New York;

                  (c) it is empowered under applicable laws and by its
         certificate of formation and operating agreement to enter into and
         perform this Agreement;
<PAGE>
                                                                               4

                  (d) all requisite corporate proceedings have been taken to
         authorize it to enter into and perform this Agreement; and

                  (e) it has or will continue to have access to the necessary
         facilities, equipment and personnel to perform its duties and
         obligations under this Agreement.

                  9. Representations and Warranties of the Fund. The Fund
represents and warrants to the Administrator that:

                  (a) it is a corporation duly organized and existing and in
         good standing under the laws of Maryland;

                  (b) it is empowered under applicable laws and by its articles
         of incorporation and by-laws to enter into and perform this Agreement;

                  (c) all requisite corporate proceedings have been taken to
         authorize it to enter into and perform this Agreement; and

                  (d) it is currently, and will use its best efforts to continue
         to be, in compliance in all material respects with all securities laws
         applicable to it.

                  10. Limitation of Liability. The Administrator will not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund or its shareholders in connection with the performance of its duties
under this Agreement, except a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its duties under this Agreement ("disabling
conduct"). The Fund agrees to indemnify and hold harmless the Administrator and
its shareholders, officers, directors, employees and agents against any
liability for any damages, expenses (including the reasonable value of time
spent by the Administrator employees) or direct losses reasonably incurred as a
result of any failure of the Fund to comply with the 1940 Act, the Internal
Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder, and other legal requirements, and with its investment policies and
limitations as in effect, or as a result of the Administrator's acting as an
administrator pursuant to this Agreement, and not resulting from disabling
conduct; provided that nothing herein shall constitute a waiver or limitation of
any rights which the Fund may have under applicable securities or other laws.

                  11. Duration and Termination. This Agreement will become
effective the date first above written, and shall continue in effect thereafter
until termination by the Administrator on 90 days' written notice to the Fund or
the Fund upon 60 days' written notice to the Administrator without payment of
any penalty. This Agreement shall automatically terminate upon its assignment by
the Administrator to any entity.

                  12. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.

<PAGE>
                                                                               5

                  13. Miscellaneous.

                  (a) The captions in this Agreement are included for
         convenience of reference only and in no way define or delimit any of
         the provisions hereof or otherwise affect their construction or effect.

                  (b) If any provision of this Agreement shall be held or made
         invalid by a court decision, statute, rule or otherwise, the remainder
         of this Agreement shall not be affected thereby.

                  (c) This Agreement shall be binding upon and inure to the
         benefit of the parties hereto and their respective successors.

                  (d) This Agreement may be executed in any number of
         counterparts, each of which shall be deemed to be an original; but such
         counterparts shall, together, constitute only one instrument.

                  (e) All books, records, dates and other information pertaining
         to the Fund shall be maintained as confidential by the Administrator
         and the Administrator shall not disclose or turn over any of such
         information to any other person or entity unless required by law or
         requested by the Fund to do so; provided, that the Administrator shall
         have no liability for disclosure after the termination of this
         Agreement of information concerning the Fund which has already been
         disclosed through no fault of the Administrator.

                  (f) This Agreement shall be governed by and construed in
         accordance with the laws of the State of New York; provided, however,
         that nothing herein shall be construed as being inconsistent with the
         1940 Act.

<PAGE>
                                                                               6

                  IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.


                                            THE INDIA FUND, INC.


                                            By:   /s/ Prakash A. Melwani
                                                  __________________________
                                                  Name: Prakash A. Melwani
                                                  Title: President


                                            BLACKSTONE ASIA ADVISORS L.L.C.


                                            By:   /s/ Robert L. Friedman
                                                  __________________________
                                                  Name: /s/ Robert L. Friedman
                                                  Title: Chief Legal Officer
                                                         & VP
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2N
<SEQUENCE>9
<FILENAME>b412592_ex99-2n.txt
<DESCRIPTION>EXHIBIT 2(N)
<TEXT>
<PAGE>

                                                                    Exhibit 2(n)



            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


We hereby consent to the incorporation by reference in this Registration
Statement on Form N-2 of our report dated February 28, 2006, relating to the
financial statements and financial highlights which appears in the December 31,
2005 Annual Report to Shareholders of The India Fund, Inc., which are also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the headings "Financial Highlights" and "Experts" in
such Registration Statement.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
April 5, 2006
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
