Abridged Annual Report For

Abridged Annual Report For 2014-2015 FRANKLIN TEMPLETON MUTUAL FUND - Franklin India Fixed Tenure Fund - Series XVII (formerly known as Franklin Templeton Fixed Tenure Fund - Series XVII) Head Office : Indiabulls Finance Center, Tower 2, 12th and 13th Floor, Senapati Bapat Marg, Elphinstone (West), Mumbai - 400 013. Trustee Report to Investors Dear Investor, The Board of Directors of Franklin Templeton Trustee Services Pvt. Ltd., Trustee to Franklin Templeton Mutual Fund, have the pleasure of presenting before you the Nineteenth Annual Report of Franklin Templeton Mutual Fund for the financial year 2014-15 (FY15). Along with the general information on the background and highlights of Franklin Templeton Mutual Fund, investor services, etc., the Board of Directors of Franklin Templeton Trustee Services Pvt. Ltd. have specifically provided information on the scheme. Brief background of Trust, Sponsor, Trustee Company and Asset Management Company: Franklin Templeton Mutual Fund Franklin Templeton Mutual Fund ( FTMF / Mutual Fund ) has been constituted as a Trust on January 04, 1996 in accordance with the provisions of the Indian Trusts Act, 1882 and the Deed of Trust is registered under the Indian Registration Act, 1908. FTMF has been sponsored by Templeton International Inc. (liability restricted to the seed corpus of INR l lakh) with Franklin Templeton Trustee Services Pvt. Ltd. as the Trustee. Franklin Templeton Trustee Services Pvt. Ltd. has entered into an Investment Management Agreement dated January 05, 1996 with Franklin Templeton Asset Management (India) Pvt. Ltd. appointing it as the Investment Manager for all the schemes of FTMF. FTMF is registered with SEBI vide Registration No. MF/026/96/8 dated February 19, 1996. Templeton International Inc. Templeton International Inc. is a part of the Franklin Templeton Group, which is one of the world s largest investment managers with USD 888.40 bn in assets under management and around 24.8 million Shareholder Accounts as at March 31, 2015. Franklin Templeton has offices in over 30 countries including the United States of America, Bahamas, Canada, Argentina, France, Germany, Italy, Luxembourg, Poland, Russia, the United Kingdom, Hong Kong, Singapore, South Korea, India, China, UAE, Malaysia, Japan, Australia and South Africa. Franklin Templeton Trustee Services Pvt. Ltd. Franklin Templeton Trustee Services Pvt. Ltd. ( Trustee / Trustee Company ), a company incorporated under the Companies Act, 1956 and having its registered office at Indiabulls Finance Center, Tower 2, 12th and 13th Floor, Senapati Bapat Marg, Elphinstone (West), Mumbai 400013 is the Trustee to FTMF. The Trustee ensures that FTMF and the schemes floated thereunder are managed by the investment manager in accordance with the Trust Deed, SEBI (Mutual Funds) Regulations, 1996 (the Regulations), directions and guidelines issued by SEBI, the stock exchanges and other regulatory agencies. Board of Directors of the Trustee Company: Mr. Vivek Kudva (Associate Director) Mr. Anand J. Vashi (Independent Director) Mr. Percy J. Pardiwalla (Independent Director) Dr. Indu Shahani (Independent Director) During the year, Mr. Gregory E. McGowan and Mr. Stephen Dover resigned from the Board of Directors of the Trustee Company. The Board of Directors of the Trustee Company would like to thank them for their continued support as members of the Board. Mr. Vivek Kudva was appointed as a director on the Board of the Trustee Company. Franklin Templeton Asset Management (India) Pvt. Ltd. Franklin Templeton Asset Management (India) Pvt. Ltd. ( AMC /FTAMIL ), a company incorporated under the Companies Act, 1956 and having its registered office at Indiabulls Finance Center, Tower 2, 12th and 13th Floor, Senapati Bapat Marg, Elphinstone (West), Mumbai 400013 is the Investment Manager of FTMF. The investment manager is approved by SEBI to act as the asset management company of FTMF vide letter No.IIMARP/406/96 dated February 19, 1996. Board of Directors of the AMC: Mr. Vijay C. Advani (Associate Director) Mr. Deepak M. Satwalekar (Independent Director) Mr. Navroz Seervai (Independent Director) Mr. M.B.N. Rao (Independent Director) Mr. Harshendu Bindal (Associate Director) Mr. S. Jayaram (Associate Director) During the year, Dr. J. Mark Mobius, Mr. Jed Plafker (Alternate Director to Dr. J. Mark Mobius) and Mr. Vivek Kudva resigned from the Board of Directors of the AMC. The Board of Directors of the AMC would like to thank them for their continued support and years of commitment during their tenure as members of the Board. Mr. Harshendu Bindal and Mr. S. Jayaram were appointed as Directors on the Board of the AMC. Review of activities of Franklin Templeton Mutual Fund: During the year under review, the mutual fund industry saw substantial increase in inflows compared to previous year. The average assets under management (AAUM) at the industry level also increased on account of value appreciation. New product launches: During the year, three new schemes were launched by FTMF. Franklin India Banking & PSU Debt Fund, an open end income fund was launched on April 02, 2014. The scheme seeks to provide regular income through a portfolio of debt and money market instruments consisting predominantly of securities issued by entities such as Banks and Public Sector Undertakings (PSUs). The scheme mobilized subscriptions for more than INR 91 crores during the new fund offer period and the average assets under management as at May 31, 2015 stood at INR 130.23 crores. Franklin India Feeder - Franklin European Growth Fund, an open end fund of funds scheme investing overseas, was launched on April 24, 2014. The scheme seeks to provide capital appreciation by investing predominantly in units of Franklin European Growth Fund, an overseas equity fund which primarily invests in securities of issuers incorporated or having their principal business in European countries. The scheme mobilized subscriptions for more than INR 59 crores during the new fund offer period and the average assets under management as at May 31, 2015 stood at INR 50.88 crores. Franklin India Multi-Asset Solution Fund, an open end fund of funds scheme was launched on November 07, 2014. The scheme seeks to achieve capital appreciation and diversification through a mix of strategic and tactical allocation to various asset classes such as equity, debt, gold and cash by investing in funds investing in these asset classes. The scheme mobilized subscriptions for more than INR 123 crores during the new fund offer period and the average assets under management as at May 31, 2015 stood at INR 128. 42 crores. Product rationalization: FTMF s constant endeavour has been to align products and services in line with changing investor preferences. Product offerings are regularly reviewed to assess their viability and scalability. As a part of the product rationalization exercise during the year, asset allocation pattern of a scheme was changed and mergers of few schemes were carried out. Asset allocation pattern of Franklin India Dynamic PE Ratio Fund of Funds was changed to allow greater flexibility in managing volatility of interest Page - 1

rates. Further, alternative underlying schemes were also included in the asset allocation pattern of the scheme. In order to provide greater operational efficiencies and create an optimal asset size towards better fund management opportunities benefitting the unitholders, following mergers were carried out during the year: Franklin India Government Securities Fund - Treasury Plan was merged into Franklin India Government Securities Fund - Composite Plan Templeton India Children s Asset Plan - Education Plan was merged into Franklin India Monthly Income Plan Templeton India Children s Asset Plan - Gift Plan was merged into Franklin India Balanced Fund Franklin India Index Fund - BSE Sensex Plan was merged into Franklin India Index Fund - NSE Nifty Plan During FY15, Franklin Templeton Mutual Fund saw a good progress in terms of investment performance, investor communication and product innovation. The firm continuously aims to deliver consistent long term performance. The total assets under management (AUM) grew by 44.3% in FY15, as against industry growth of 31.3% over the same period. The growth in AUM of schemes of Franklin Templeton Mutual Fund has been driven by growth in equity and income schemes. (AUM Source: AMFI website) Key Investor Education & Awareness Initiatives undertaken during FY15: Franklin Templeton Academy: An extensive digital marketing plan was undertaken to promote the investor section of the Franklin Templeton Academy (FTA) website (www. franklintempletonacademy.com). Twenty two (22) animated videos followed by a quiz were uploaded on various forums. These videos received 0.73 million views during the FY15. Fundtastic Cup: A cricket themed online quiz game aimed at educating public at large on investments and mutual funds was launched in July 2014. The game was played over a period of 6 months and garnered over 108,000 registrations. The game has won numerous awards for innovation in marketing both at a national and international level. Webinar series with Economic Times: As part of our Investor Awareness Initiative, webinar series called Investments Simplified in association with www.economictimes.com was launched in December 2014. A series of 4 webinars were initiated with an objective to educate existing and potential mutual fund investors. Each webinar was a 15-20 minutes presentation hosted by a subject expert from Franklin Templeton and was followed by a question and answer session. On ground Investor Education meets: More than 700 investor education seminars were conducted since June 2014 to connect with employees from corporates and college students. About 26,500 people attended these seminars. On-ground programs were followed by continuous education through emails. District Adoption Program (DAP): As part of the DAP project to reach out and develop under-penetrated markets, Investor Education and Awareness programs were held in the 10 districts adopted by Franklin Templeton. The project branded Shubh Laabh has seen us co-partner with various distributors to reach out to potential investors of mutual funds in a bid to promote the concept of investing. 135 investor meets covering over 4,200 attendees were conducted till March 31, 2015. This was followed with emails on investor education to the attendees to keep them engaged. Scheme performance, future outlook and operations of the scheme: Franklin India Fixed Tenure Fund - Series XVII (FIFTF XVII) is a closed end fund investing in high quality fixed income securities in line with portfolio duration alongside taking marginal exposure to equities. Both the debt and equity portfolios are conservatively managed. On the equities front, the closed end nature of the fund helps the fund managers take a long term view on investments. Typically, the fund holds the debt investments till maturity, in order to reduce/minimize interest rate risks. On the equity side, the scheme utilizes a blend of value and growth style of investing to identify investment opportunities. Given below is the summary of returns delivered by the fund since inception and last 1 year along with the benchmarks: Last 1 Year Since Inception* FIFTF XVII - Growth 14.79% 10.71% Benchmark ** 14.79% 11.55% AB: Crisil 10 Year Gilt Index 14.57% 7.51% *compounded and annualized returns. **20% CNX 500 + 80% Crisil Short Term Bond Fund Index. Inception date: 02 November 2012. B: Benchmark, AB: Additional Benchmark At the end of year the debt and equity allocation stood at close to 66% and 19% respectively. Investor Services: As on March 31, 2015, the Mutual Fund served nearly 20 lakh active investor accounts through its 34 branches and 120 offices of our collection partners across India. We continue leveraging technology to provide enhanced customer and distributor satisfaction: Launch of Imaging and Workflow, an image based transaction processing system Launch of Kiosks as part of our direct customer engagement strategy where investors can seek help from our team by connecting through videoconferencing and also view fund manager videos Regular customer experience surveys to gauge investor experience and take appropriate actions for continuous improvement Further, in the interest of all stakeholders, various initiatives were taken to reduce cost through effective utilisation of infrastructure and resources. During the year, AMC also entered into an agreement with MF Utilities India Private Limited (MFUI), for usage of MF Utility (MFU) - a shared services initiative of various asset management companies, which acts as a transaction aggregator for transacting in multiple schemes of various mutual funds with a single form and a single payment instrument. Investors can now transact in schemes of Franklin Templeton Mutual Fund through MFUI authorized Points of Services also. Investor Complaints Report: The Investor Complaints Report of FTMF for FY15 is given in Annexure to this Report. Valuation policy: Valuation policy and related disclosures are available on our website for reference of the investors. Responsibility of the Trustees: The Trustee is the exclusive owner of the trust fund and holds the same in trust for the benefit of the unitholders. The Trustee has been discharging its duties and carrying out the responsibilities as provided in the Regulations and the Trust Deed. The Trustee seeks to ensure that the Mutual Fund and the schemes floated there under are managed by the AMC in accordance with the Trust Deed, the Regulations, directions and guidelines issued by the SEBI, the stock exchanges, the Association of Mutual Funds in India, other regulatory agencies and the Scheme Information Documents of the respective schemes. The Balance Sheet as on March 31, 2015, the Revenue Account for FY15 and the Auditors Report thereon are annexed to this Report. As mentioned in the Auditors Report the accounting policies are in accordance with the Regulations. Investment objectives of the scheme: The fund is a closed end income scheme that seeks to provide investors returns along with capital appreciation through equity exposure. Unclaimed dividends and redemptions of more than 90 days as on March 31, 2015: Unclaimed Redemption* Unclaimed Dividend* Amount (Rs.) Count Amount (Rs.) Count - - 14,330.86 9 *Includes demand drafts lying unclaimed with the banks which were cancelled and brought back in the respective scheme books. Page - 2

Disclosures of Votes Cast: M/s Nipun Sudhir & Associates, Chartered Accountants have independently verified and issued an unqualified certificate regarding the report on the votes cast by FTAMIL. A copy of the same is available on the website of the mutual fund www.franklintempletonindia.com. Summary of proxy votes cast by FTAMIL during FY15 F.Y. Quarter ending 2014-2015 Total no. of resolutions Break-up of Vote decision For Against Abstained None June 2014 3,274 2,930 307 5 32 September 2014 8,213 7,014 1,093 0 106 December 2014 479 448 31 0 0 March 2015 1,069 903 152 9 5 Statutory Information: The Sponsor, Templeton International Inc. is not responsible or liable for any loss resulting from the operation of the schemes of the Mutual Fund beyond its initial contribution of INR 1 lakh for setting up the Mutual Fund, and such other accretions/additions to the same. In view of the fact that the amounts collected under the various schemes are deployed in securities markets, the price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. Full Annual Report is available on the website of the mutual fund www. franklintempletonindia.com and shall be made available for inspection at its head office. Present and prospective investors can request for copies of the Trust Deed, detailed annual accounts of the schemes and of the AMC upon payment of the prescribed fee. Acknowledgments: The Board of Directors of Trustee Company wish to place on record their appreciation for the dedication and sincerity of the employees of the AMC and Trustee Company. The Board would also like to thank the Government of India, the Securities and Exchange Board of India, the Reserve Bank of India and the Association of Mutual Funds in India for their ongoing support, co-operation and guidance during the year under review. The Board would like to take this opportunity to thank its family of investors for their confidence and wholehearted faith reposed in the Franklin Templeton Mutual Fund. In addition, the Trustee Company would also like to thank the Auditors, Custodians, Bankers, Registrar, and all other service providers for their valuable support. We look forward to your continued support and assure you of our commitment to quality products and services from Franklin Templeton Mutual Fund. Yours sincerely, for Franklin Templeton Trustee Services Private Limited (Trustee to Franklin Templeton Mutual Fund) Sd/- Vivek Kudva Director Date: July 06, 2015 Annexure to the Trustee Report Franklin Templeton Mutual Fund Investor Complaints Report for the Financial Year 2014-15 Total Number of Folios: 20,16,859 Complaint Code Type of Complaint# (a) No. of complaints pending at the beginning of the year (b) No. of Complaints received during the year Within 30 days Resolved 30-60 days Action on (a) and (b) 60-180 days Beyond 180 days Non Actionable * 0-3 mths Pending I A Non receipt of Dividend on Units 1 31 29 1 2 0 0 0 0 0 0 I B I C I D II A II B Interest on delayed payment of Dividend Non receipt of Redemption Proceeds Interest on delayed payment of Redemption Non receipt of Statement of Account/Unit Certificate Discrepancy in Statement of Account 3-6 mths 6-9 mths 9-12 mths 0 2 1 1 0 0 0 0 0 0 0 4 63 66 1 0 0 0 0 0 0 0 0 7 6 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 24 24 0 0 0 0 0 0 0 0 II C Data Corrections in Investor details 26 1022 1032 2 1 0 0 13 0 0 0 II D Non receipt of Annual Report/ Abridged Summary 0 0 0 0 0 0 0 0 0 0 0 III A Wrong switch between Schemes 0 10 10 0 0 0 0 0 0 0 0 III B Unauthorized switch between Schemes 0 4 3 0 1 0 0 0 0 0 0 III C Deviation from Scheme attributes 0 0 0 0 0 0 0 0 0 0 0 III D Wrong or excess charges/load 0 4 4 0 0 0 0 0 0 0 0 III E Non updation of changes viz. address, PAN, bank details, nomination, etc. 7 164 170 0 0 0 0 1 0 0 0 IV Others* 39 1127 1101 23 8 0 0 33 0 0 1 Total 77 2458 2446 28 12 0 0 48 0 0 1 # including against its authorized persons/ distributors/ employees, etc. *Non actionable means the complaints that are incomplete / outside the scope of the mutual fund Note: 98.38% of the complaints have been resolved within 30 days. The time shown above is the average time for resolution of complaints from receipt of initial complaint till eventual closure. Delays could be caused by a variety of factors including the need to receive information from clients, due process followed by banks in cases where payment instruments have been lost and delays due to verification of certain facts received from clients. This Report has been approved by the Board of Franklin Templeton Trustee Services Private Limited on May 21, 2015. Page - 3

Report of the Auditors To the Trustees of FRANKLIN TEMPLETON MUTUAL FUND - FRANKLIN INDIA FIXED TENURE FUND - SERIES XVII The accompanying abridged financial statements, which comprise of the abridged balance sheet as at 31 March 2015 and the abridged revenue account for the year ended 31 March 2015, and related notes of Franklin India Fixed Tenure Fund - Series XVII (formerly known as Franklin Templeton Fixed Tenure Fund - Series XVII) ( the Scheme ) are derived from the audited financial statements of the Scheme as at 31 March 2015 and for the year ended 31 March 2015. We expressed an unmodified audit opinion on those financial statements in our report dated 6th July 2015. These abridged financial statements have been prepared by Franklin Templeton Asset Management (India) Private Limited, the Scheme s Asset Manager ( the AMC ) pursuant to Regulation 56 (1) of Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 ( the SEBI Regulations ) and as per the format prescribed by SEBI vide circular number SEBI/IMD/CIR No.8/132968/2008 dated July 24, 2008 and are derived from the audited financial statements as at 31 March 2015 and for the year ended 31 March 2015, prepared in accordance with the accounting policies and standards specified in the Ninth Schedule to the SEBI Regulations and Generally Accepted Accounting Principles in India to the extent applicable and covered by our report of even date to the Trustees of Franklin Templeton Mutual Fund. The abridged financial statements do not contain all the disclosures required by the accounting principles generally accepted in India, including the accounting policies and standards specified in the Ninth Schedule to the SEBI Regulations. Reading the abridged financial statements, therefore, is not a substitute for reading the audited financial statements of the Scheme. Management s Responsibility for the Abridged Financial Statements Management of the AMC is responsible for the preparation of the abridged financial statements from the audited financial statements of Franklin India Fixed Tenure Fund - Series XVII pursuant to Regulation 56 (1) of the SEBI Regulations, and in accordance with the format prescribed by SEBI vide circular number SEBI/IMD/CIR No.8/132968/2008 dated July 24, 2008. Auditor s Responsibility Our responsibility is to express an opinion on the abridged financial statements based on our procedures, which were conducted in accordance with Standard on Auditing (SA) 810, Engagements to Report on Summary Financial Statements issued by the Institute of Chartered Accountants of India. Opinion In our opinion, the abridged financial statements, derived from the audited financial statements of the Scheme as at March 31, 2015 and for the year ended March 31, 2015 are a fair summary of those financial statements, and are in accordance with the accounting policies and standards specified in the Ninth Schedule to the SEBI Regulations and Generally Accepted Accounting Principles in India to the extent applicable and as per the format prescribed by SEBI circular number SEBI/IMD/CIR No.8/132968/2008 dated July 24, 2008. For S. R. Batliboi & Co. LLP ICAI Firm registration number: 301003E Chartered Accountants per Shrawan Jalan Partner Membership No.: 102102 Place: Mumbai Dated: 6th July 2015 Abridged Balance Sheet as at March 31, 2015 LIABILITIES Rupees in Lakhs As at As at March 31, March 31, 2015 2014 1 Unit Capital 8,292.10 8,292.10 2 Reserves and Surplus 2.1 Unrealised Appreciation Reserve 854.33 294.12 2.2 Retained Surplus 1,174.45 543.86 3 Current Liabilities and Provisions 3.1 Current Liabilities 33.82 30.44 TOTAL 10,354.70 9,160.52 ASSETS 1 Investments 1.1 Listed Securities 1.1.1 Equity Shares 1,993.24 1,599.63 1.1.2 Other Debentures and Bonds 6,854.56 6,970.24 1.2 Unlisted Securities 1.2.1 Privately Placed Debentures and Bonds - - 2 Other Current Assets 2.1 Cash and Bank Balances 8.87 96.60 2.2 CBLO/ Reverse Repo Lending 1,099.15 129.88 2.3 Others 398.88 364.17 TOTAL 10,354.70 9,160.52 Notes to Accounts - Annexure I Page - 4

Abridged Revenue Account for the year ended March 31, 2015 1 INCOME Rupees in Lakhs Year ended Year ended March 31, March 31, 2015 2014 1.1 Dividend 19.81 28.44 1.2 Interest 706.75 643.37 1.3 Realised Gain on Interscheme Sale of Investments, net 0.01 0.11 1.4 Realised Gains / (Losses) on External sale / redemption of investments 287.87 (2.41) 1.5 Other Income - 0.10 2 EXPENSES ( A ) 1,014.44 669.61 2.1 Management Fees 209.89 181.30 2.2 Service Tax on Management Fees 25.94 22.41 2.3 Transfer Agents Fees and Expenses 5.27 3.60 2.4 Custodian Fees 1.36 1.17 2.5 Trusteeship Fees 0.29 0.26 2.6 Commission to Agents - 0.02 2.7 Investor Education Expense 1.96 1.74 2.8 Marketing and Distribution Expenses 0.17 0.05 2.9 Audit Fees 0.20 0.20 2.10 Other Operating Expenses 0.37 0.97 ( B ) 245.45 211.72 3 NET REALISED GAINS / (LOSSES) FOR THE PERIOD (A -B = C) 768.99 457.89 4 Change in Unrealised Depreciation in value of Investments ( D ) (16.14) (3.73) 5 NET GAINS / (LOSSES) FOR THE PERIOD (C -D = E) 785.13 461.62 6 Change in Unrealised Appreciation in the value of Investments ( F ) 560.21 282.85 7 NET SURPLUS / (DEFICIT) FOR THE PERIOD (E + F = G) 1,345.34 744.47 7.1 Add: Balance Transfer from Unrealised Appreciation Reserve 294.12 11.27 7.2 Less: Balance Transfer to Unrealised Appreciation Reserve 854.33 294.12 8 Total 785.13 461.62 9 Dividend Appropriation 9.1 Income Distributed during the Year (111.87) (74.00) 9.2 Tax on Income Distributed during the Year (42.67) (21.11) 10 Retained Surplus/(Deficit) carried forward to Balance sheet 630.59 366.51 Notes to Accounts - Annexure I Key Statistics for the Year ended March 31, 2015 Year Year ended ended March 31, March 31, 2015 2014 1 NAV per unit (Rs.): Open: Growth Plan 11.1305 10.2274* Dividend Plan 10.7123 10.2274* High: Growth Plan 12.7777 11.1305 Dividend Plan 11.8949 10.7123 Low: Growth Plan 11.1315 10.0600 Dividend Plan 10.7133 10.0600 End: Growth Plan 12.7767 11.1305 Dividend Plan 11.6256 10.7123 2 Closing Assets Under Management (Rs in Lakhs) End 10,320.88 9,130.08 Average (AAuM)** 9,811.42 8,722.78 3 Gross income as % of AAuM** (Gross Income = (A) in Revenue Account): 10.34% 7.68% 4 Expense Ratio: a. Total Expense as % of AAuM** 2.50 2.43 b. Management Fee (including service tax) as % of AAuM** 2.40 2.34 5 Net Income as a percentage of AAuM** (Net Income = (C) in Revenue Account): 7.84% 5.25% 6 Portfolio turnover ratio: 9.86% 6.68% 7 Total Dividend per unit distributed during the year (Rs.): Individuals/HUF 0.4718 0.3117 Others 0.4375 0.2985 8 Returns: a. Last One Year Scheme Growth Plan: 14.79% 8.87% Benchmark (20% CNX 500 + 80% Crisil Short Term Bond Fund Index) 14.79% 10.76% Standard Benchmark (Crisil 10 year Gilt Index) 14.57% -0.96% b. Since Inception Scheme Growth Plan: 10.71% 7.90% Benchmark (20% CNX 500 + 80% Crisil Short Term Bond Fund Index) 11.55% 9.31% Standard Benchmark (Crisil 10 year Gilt Index) 7.51% 2.27% *Non-business day NAV computed for disclosure purposes only. **Average Assets Under Management. Page - 5

Notes to Accounts - Annexure I to the Abridged Balance Sheet and Revenue Account for the Year ended March 31, 2015 Rupees in Lakhs Particulars 2015 2014 1 Investments: 1.1 Investments of the Scheme are held in trust by the trustees for the benefits of the Schemes Unitholders. 1.2 Exposure to Derivative Instruments: NIL NIL 1.3 Investments in Associates and Group Companies: Issuer Nature of Instrument Amount Aggregate investments by all schemes (includes Equity, debentures and bonds) 2015 2014 2015 2014 Asian Paints Limited Equity - 23.90 79.84 14,909.10 1.4 Securities Borrowed and/or Lend by the scheme: NIL NIL 1.5 Non performing assets (NPA): NIL NIL 1.6 Aggregate Unrealised Gain / Loss as at the end of the Financial Year and percentage to net assets. Listed Securities / Securities Awaited Listing / Unlisted Securities / Foreign Securities: (Equity shares / Preference shares / Foreign securities) - appreciation 852.77 320.38 - depreciation 0.74 21.38 - Net Unrealised Gain/Loss as a percentage of Net assets as on March 31 8.26 3.09 Listed Securities / Securities Awaited Listing: (Equity linked debentures / Other debentures and bonds / Securitised debt securities) - appreciation 5.87 0.30 - depreciation 3.56 21.32 - Net Unrealised Gain/Loss as a percentage of Net assets as on March 31 0.02 (0.23) 1.7 Aggregate Value of Purchase and Sale with Percentage to average assets. Purchases - amount 1,814.73 912.57 - as a percentage of average daily net assets 18.50 10.46 Sales - amount 967.35 582.68 - as a percentage of average daily net assets 9.86 6.68 1.8 Aggregate value of Non-Traded securities and percentage to Net assets: Debt 6,854.56 6,970.24 Total 6,854.56 6,970.24 Percentage of Non Traded securities to Net Assets as on March 31 66.41 76.34 2 Details of Transaction with Associates under regulation 25(8) : NIL NIL 3 Large Holdings (over 25% of the NAV of the Scheme) : NIL NIL Page - 6

Notes to Accounts - Annexure I to the Abridged Balance Sheet and Revenue Account for the Year ended March 31, 2015 Rupees in Lakhs Particulars 2015 2014 4 Unit Capital movement during the year ended : Units of Rs 10 each fully paid up Quantity Amount 2015 2014 2015 2014 Growth Plan Outstanding, beginning of year 59,144,683.000 59,144,683.000 591,447 591,447 Issued during the year - - - - Redeemed during the year - - - - Outstanding, end of year 59,144,683.000 59,144,683.000 591,447 591,447 Dividend Plan Outstanding, beginning of year 23,776,360.000 23,776,360.000 237,763 237,763 Issued during the year - - - - Redeemed during the year - - - - Outstanding, end of year 23,776,360.000 23,776,360.000 237,763 237,763 5 Prior year figures have been reclassified, wherever applicable, to conform to current years presentation. 6 Contingent Liability NIL NIL 7 Expenses other than management fee is inclusive of service tax where applicable. 8 Effective June 30, 2014, Franklin Templeton Fixed Tenure Fund - Series XVII was renamed as Franklin India Fixed Tenure Fund - Series XVII Proxy Voting: The general voting policies and procedures of Franklin Templeton Asset Management (India) Private Limited for the Schemes of Franklin Templeton Mutual Fund and the actual exercise of votes in the general meetings of investee companies for financial year 2013-14 have been disclosed on www.franklintempletonindia.com and in full Annual Report for financial year 2013-14. Page - 7

Book -Post If undelivered, please return to: FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PVT. LTD. C/o Avon Global Solutions Private Limited, No. 42, Jaleel Towers, KB Dasan Road, Teynampet, Chennai - 600018. The contents of this document are only for informative purposes and are not to be used or considered to be an offer to sell or buy units of Franklin Templeton Mutual Fund schemes. Risk Factors: Mutual Fund investments are subject to market risks, read all scheme related documents carefully. The NAV of the scheme may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds managed by the Franklin Templeton Group and its affiliates is not necessarily indicative of future performance of the scheme. The Mutual Fund is not guaranteeing or assuring any dividend under the scheme and the same is subject to the availability and adequacy of distributable surplus. The Mutual Fund is also not assuring that it will make any dividend distributions under the dividend plan of the scheme though it has every intention of doing so and payment of dividend is at the sole discretion of Trustees. The investments made by the scheme are subject to external risks. Investors are requested to note that, as per SEBI guidelines, the Scheme does not offer redemption/repurchase facility before maturity of the Scheme. The Units of the Scheme are listed on NSE. Buying or selling of Units by investors can be done on NSE at market prices. Although Units are listed on NSE, there can be no assurance that an active secondary market will develop or be maintained. Page - 8