section 1(3), baby currently not in the UK

i hope someone has an answer to this rather unsual question.
myself and my wife have indian passports. my twin daughters are born in this country, have UK birth certificate and indian passports. they have hsmp dependent visa till august 2010( visa issued in india). they went to india at the age of 4 months and are still there with grand parents. they are 15 months old now. myself and my wife got ILR stamped (hsmp judicial review) few days ago. my daughters are coming to the UK in 2 months.
now that we (both parents) have ILR, i am planning to apply for my daughters' registration / naturalisation under section 1(3) using MN1 form. my question is can i apply for their registration (MN1 from- section 1(3)) when they are not in the UK. or is there a rule that they have to be in the UK when i apply. also the fact that they have been out of the UK for so long, does it effect the naturalisation process in anyway.

thank you

srd

I think that they are entitled to apply.