Abridged Annual Report For 2017-2018 FRANKLIN TEMPLETON MUTUAL FUND - Templeton India Equity Income Fund 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 twenty-second Annual Report of Franklin Templeton Mutual Fund (FTMF) for the financial year 2017-18 (FY18). 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 schemes of Franklin Templeton Mutual Fund. Review of activities of Franklin Templeton Mutual Fund: During the year under review, the mutual fund industry witnessed a substantial increase in Average Assets Under Management (AAUM) on the back of healthy inflows as well as value appreciation. Product launches: FTMF currently has a comprehensive range of products to suit the varied investment objectives of our investors across segments. However, in FY18, we continued to regularly monitor emerging investor needs and changing market dynamics, in order to identify opportunities with respect to the existing product suite or new products. We continued to strengthen our presence in the close-end Fixed Maturity Plan (FMP) space in a selective manner, and launched 8 new FMPs during the year. Product rationalization: SEBI carried out an industry level product categorization and rationalization exercise during the year. FTMF reviewed its entire range of open-end schemes and submitted its scheme categorization and rationalization proposal to SEBI in FY18. As approved by SEBI, FTMF has merged Franklin India Government Securities Fund Composite & PF Plan into Franklin India Government Securities Fund Long Term Plan with effect from June 4, 2018. We were not required to merge any other funds as we have always maintained a well-differentiated yet limited suite of products. Mutual funds as an investment avenue continued to gain popularity across retail as well as high networth investors. This was clearly reflected in the healthy AUM growth of the industry. The total AUM of the industry grew by 26% in FY18. FTMF s AUM also grew at the same rate. (AUM Source: AMFI website, Quarterly Average AUM taken into consideration) During FY18, Franklin Templeton Mutual Fund saw good progress in terms of investment performance and inflows in the fixed income space but faced temporary headwinds in terms of short term performance and inflows in equity and hybrid funds. The firm continuously aims to deliver consistent long term performance. Key Investor Education & Awareness Initiatives undertaken during FY18: 1. The Marathon of Life - We conceptualized this campaign by drawing analogies between completing in a Marathon and investing in Mutual Funds. It features six everyday heroes who go about doing the ordinary in an extra-ordinary way. The theme of the below six videos is similar to the six qualities one should possess for investing in mutual funds, viz., Have a Goal, Start Early, Be Resilient, Step Up, It s never too late to begin and Having the right Guidance helps. We started the campaign in December 2017 and released one video every week for six weeks on our social media pages. A microsite www. thegoodemi.com/marathon was used to host all the videos as well as a special booklet created which provides details of the above six tenets. We also launched a contest wherein people could tell us their own story besides mentioning which of these six stories they liked the most and why. The 6 videos together (across Facebook and Twitter) were viewed over 10 million times with over 113,000 likes, over 10,000 shares, over 1500 comments, over 2200 retweets and over 200 contest entries! Individually, three videos received over 1 million views and one had over 2 million views. 2. e-booklet on 16 Rules of Investment Success by Sir John Templeton We promoted one rule per week across social media channels. Each rule had a link to a digital flipbook where the audience could read all the rules. The campaign received 5.5 lac+ engagements and over 36 lac impressions. Here is the link: http://www.16investmentrules.com/ 3. Financial Independence This was an Independence Day campaign that covered 3 individuals from different walks of life and asked them what Financial Independence means to them. At the end of each video, we asked users their definition of Financial Independence and received an overwhelming response. The campaign generated over 11 million video views and garnered 110 million+ impressions. Here is the link for campaign video: https://bit.ly/2hz5laj 4. Invest for Progress - March 8 is celebrated as International Women s Day. We flagged off #investforprogress, a digital marketing campaign to spread the message on Don t just learn to earn, but learn to invest. The campaign received over 11 million digital impressions and more than 3mn video views. We also received a mention in various reputed publications like Brand Equity, The Mint and The DRUM. Here is the link to watch the film - https://youtu.be/dc9709ngmko 5. Funds have Feelings - In an effort to make mutual funds less daunting, we decided to give them a human twist to develop a connect with existing and potential investors under the tagline #FundsHaveFeelings. The short and shareable nature of the content garnered a reach of over 6.4Lac and over 4000 engagements. Here is the link for the lines - https://bit.ly/2gyyo8m, https://bit.ly/2eikaim, https://bit. ly/2hmdxkw Investor Services: As on 31st March 2018, Franklin Templeton had more than 36 lakh active investor accounts who are being serviced through its 40 Investor Service Centres (ISC) and 149 offices of its collection partners. We continue to encourage our investors and partners to leverage our online offerings and services. There is a continuous effort to mobilize technology to provide enhanced customer satisfaction. During the year, in line with our digital ecosystem strategy, the enhanced website was launched and webchat was introduced as an additional touchpoint for servicing unitholders. Significant Regulatory Changes: During the year various regulatory changes were made. Investors may note the following significant changes: Scheme categorisation and rationalisation We believe that the uniformity brought in the characteristics of similar types of open-ended schemes launched by different Mutual Funds would enable an investor of Mutual Funds to more easily compare the different options available, before taking an informed decision to invest in a scheme. Disclosure of Total Expense Ratio of Mutual Fund Schemes on Mutual Fund s website, notice of change in base TER - We believe these disclosures would help the investors know about various expenses charged on their investments in a more transparent and timely manner. Investor Complaints Report: The Investor Complaints Report of FTMF for FY18 is given in Annexure I to this Report. Valuation policy: Valuation policy and related disclosures are available on our website for reference of the investors. Voting Policy and Disclosures of Votes Cast: Pursuant to SEBI circular no. SEBI/IMD/CIR no. 18/198647/2010 dated March 15, 2010 and subsequent clarifications/circulars issued by SEBI, FTMF has formulated a policy for exercise of voting rights by the Franklin Templeton Asset Management (India) Private Limited (FTAMIL) in companies in whose securities schemes of the Fund have invested. M/s Nipun Sudhir & Associates, Chartered Accountants (Scrutinizer) have independently verified and issued an unqualified certificate regarding the votes cast by FTAMIL. Voting Policy, votes cast during FY18 along with Scrutinizer s certificate is available on the website of the mutual fund www. franklintempletonindia.com. Summary of proxy votes cast by FTMF / AMC during F.Y. 2017-2018 Financial Year 2017-2018 Quarter Total no. of resolutions For Break-up of Vote decision Against Abstained None Quarter 1 1532 1323 90 112 7 Quarter 2 4880 4415 465 0 0 Quarter 3 227 222 2 0 3 Quarter 4 352 285 49 0 18 Total 6991 6245 606 112 28 Page - 1
1. Scheme performance, future outlook and operations of the schemes: Launched in May 2006, Templeton India Equity Income Fund (TIEIF) is an open-end diversified equity fund that follows the value investing philosophy, which is based on the tenets of intrinsic value, bargain hunting and long-term orientation. The fund focuses on Indian and foreign equities that have a current or potentially attractive dividend yield (dividend as a percentage of market price). The fund s performance since inception and in the last one year ended March 2018 is summarized below: Templeton India Equity Income Fund Last 1 Year Since Inception* TIEIF - Growth 14.33% 13.78% B: S&P BSE 200 $ 12.60% 11.63% AB: Nifty 50 11.86% 11.01% TIEIF - Direct - Growth 15.16% 14.62% B: S&P BSE 200 12.60% 13.59% AB: Nifty 50 11.86% 12.02% *Compounded & annualized returns. Inception dates: TIEIF - Growth: May 18, 2006, TIEIF- Direct - Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark Benchmark returns calculated based on Total Return Index Values As TRI data is not available since inception of the scheme, benchmark performance is calculated using composite CAGR of ($ S&P BSE 200 PRI values from 18.05.2006 to 01.08.2006 and TRI values since 01.08.2006) Indian equities rallied in FY2018 led by encouraging global growth trend, up-tick in domestic economic growth, consumption demand, improving corporate results in H2FY18 and conducive policy reform measures. The fund outperformed its benchmark BSE 200 during the period since inception as well as for the 1-year period ended in March 2018. For the 1-year period, healthcare, consumer staples and financials were top 3 relative contributors to portfolio performance. Superior stock selection in healthcare aided outperformance even as the pharmaceutical segment suffered from adverse pricing in the US generic drugs market and observations by the USFDA on select Indian pharma companies. The consumer staples sector rallied on improving consumption demand. Superior stock selection led to relative outperformance in the sector. Within financial sector, exposure to NBFCs and selective exposure within banking space supported relative outperformance. This was despite the fact that earnings of the banking sector banks were rattled by a Reserve Bank of India-directed non-performing loan provisioning increase. Looking forward, we believe that the long-term investment case for emerging markets continues to remain attractive - we expect positive demographics and rising income levels to boost consumption growth. Further, consumption demand and public and private capex spending continue to be key growth themes. In terms of strategy, we will continue to closely scan the investment universe in both domestic and overseas markets for attractive bargains that in our view are poised to do well. In accordance with SEBI s product categorization and rationalization requirements, effective June 4, 2018, changes have been made to certain fundamental attributes of the scheme in accordance with addendum dated April 19, 2018. 2. 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 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 wholly owned subsidiary of Templeton Worldwide Inc., which in turn is a wholly owned subsidiary of Franklin Resources Inc. The sponsor was responsible for setting up and establishing the Franklin Templeton Mutual Fund. The Sponsor is the Settler of the Mutual Fund Trust. Franklin Resources, Inc. is a diversified financial services company based in San Mateo, California, USA. Through its operating subsidiaries, it provides a wide range of investment products and services to clients worldwide. Franklin Resources, Inc. along with its subsidiary entities (commonly known as Franklin Templeton Investments) is one of the world s largest investment management companies. Franklin Templeton Investments provides global and domestic investment management to retail, institutional and sovereign wealth clients in over 170 countries. Through specialized teams, the company has expertise across multiple asset classes including equity, fixed income, alternatives and custom solutions. With offices in over 34 countries, the company has 70 years of investment experience and approximately $732.8 billion in assets under management as of May 31, 2018. 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 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 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, the Association of Mutual Funds in India and other regulatory agencies. Board of Directors of the Trustee Company as on March 31, 2018: Mr. Alok Sethi (Associate Director) Mr. Anand J. Vashi (Independent Director) Mr. Percy J. Pardiwalla (Independent Director) Dr. Indu Shahani (Independent Director) Mrs. Shilpa Shetty (Associate Director) During the year, Mrs. Shilpa Shetty 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 as on March 31, 2018: Mr. Vivek Kudva (Associate Director) Mr. Deepak M. Satwalekar (Independent Director) Mr. Navroz Seervai (Independent Director) Mr. M.B.N. Rao (Independent Director) Mr. Sanjay Sapre (Associate Director) Mr. S. Jayaram (Associate Director) 3. Investment objective of the scheme as on March 31, 2018: Templeton India Equity Income Fund (TIEIF) is an open end diversified equity fund to provide a combination of regular income and long-term capital appreciation by investing primarily in stocks that have current or potentially attractive dividend yield. 4. Significant Accounting Policies The Balance Sheet of schemes of FTMF as on March 31, 2018, the Revenue Account for FY18 and the Auditors Report thereon are annexed to this Report. As mentioned in the Auditors Report the accounting policies are in accordance with Securities Exchange Board of India (Mutual Fund) Regulations 1996. 5. Unclaimed dividends and redemptions as on March 31, 2018: Unclaimed Redemption* Unclaimed Dividend* Amount (Rs.) Count Amount (Rs.) Count 20503762.53 640 28127513.00 25088 *Includes demand drafts lying unclaimed with the banks which were cancelled and brought back in the respective scheme books. 6. Statutory Information: a) The Sponsor, Templeton International Inc. is not responsible or liable Page - 2
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. b) 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. c) Full Annual Report is available on the website of the mutual fund www. franklintempletonindia.com and shall be made available for inspection at the head office of the Mutual Fund. 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. 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/- Alok Sethi Director Date: July 27, 2018 Annexure I to the Trustee Report Franklin Templeton Mutual Fund Investor Complaints Report for the Financial Year 2017-18 Total Number of Folios: 36,38,177 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 6 26 21 9 1 0 0 1 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 3 2 0 1 0 0 0 0 0 0 2 52 45 7 1 0 0 1 0 0 0 0 5 5 0 0 0 0 0 0 0 0 0 4 4 0 0 0 0 0 0 0 0 0 8 8 0 0 0 0 0 0 0 0 II C Data Corrections in Investor details 10 544 536 6 1 0 0 11 0 0 0 II D Non receipt of Annual Report/ Abridged Summary 0 0 0 0 0 0 0 0 0 0 III A Wrong switch between Schemes 1 16 17 0 0 0 0 0 0 0 0 III B Unauthorized switch between Schemes 0 2 1 0 0 0 0 1 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 16 12 3 0 0 0 1 0 0 0 III E Non updation of changes viz. address, PAN, bank details, nomination, etc 1 123 118 3 1 0 0 2 0 0 0 IV Others 46 1256 1175 79 17 0 0 31 0 0 0 Total 66 2055 1944 107 22 0 0 48 0 0 0 Complaints Summary for FY 2017-2018 Particulars Count Total Complaints Received 2055 Total Number of Folios 3638177 Percentage Complaints Against Folios 0.06% # including against its authorized persons/ distributors/ employees, etc. *Non actionable means the complaints that are incomplete / outside the scope of the mutual fund Note: 95% 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 circulation by the Board of Franklin Templeton Trustee Services Private Limited on May 24, 2018. Page - 3
Report of the Auditors To the Trustees of FRANKLIN TEMPLETON MUTUAL FUND - TEMPLETON INDIA EQUITY INCOME FUND The accompanying abridged financial statements, which comprise of the abridged balance sheet as at March 31, 2018 and the abridged revenue account for the year ended March 31, 2018, and related notes of Templeton India Equity Income Fund ( the Scheme ) are derived from the audited financial statements of the Scheme as at March 31, 2018 and for the year ended March 31, 2018. We expressed an unmodified audit opinion on those financial statements in our report dated July 27, 2018. 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 and amendments thereto ( the SEBI Regulations ) and as per the format prescribed by SEBI vide circular number SEBI/IMD/CIR No.8/132968/2008 dated 24 July 2008 ( the Circular ) and are derived from the audited financial statements as at March 31, 2018 and for the year ended March 31, 2018, 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 Templeton India Equity Income Fund 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 24 July 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, 2018 and for the year ended March 31, 2018 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 24 July 2008. Abridged Balance Sheet as at March 31, 2018 LIABILITIES Rupees in Lakhs As at As at March 31, March 31, 2018 2017 1 Unit Capital 37,623.35 39,447.31 2 Reserves and Surplus 2.1 Unit Premium Reserve / (Accumulated Unit Discount) (28,866.55) (28,401.63) 2.2 Unrealised Appreciation Reserve 35,066.57 31,565.86 2.3 Retained Surplus 57,514.58 54,028.52 3 Current Liabilities and Provisions 3.1 Current Liabilities 615.80 387.64 TOTAL 101,953.75 97,027.70 ASSETS 1 Investments 1.1 Listed Securities 1.1.1 Equity Shares 74,060.26 70,672.77 1.2 Foreign Securities 25,704.54 23,228.66 2 Other Current Assets 2.1 Cash and Bank Balances 121.26 83.14 2.2 CBLO/ Reverse Repo Lending 1,997.59 2,855.85 2.3 Others 70.10 187.28 TOTAL 101,953.75 97,027.70 Notes to Accounts - Annexure I For S. R. Batliboi & Co. LLP Chartered Accountants ICAI Firm registration number: 301003E / E300005 per Viren H. Mehta Partner Membership Number: 048749 Place: Mumbai Date: 27 July, 2018 Page - 4
Abridged Revenue Account for the year ended March 31, 2018 1 INCOME Rupees in Lakhs Year ended Year ended March 31, March 31, 2018 2017 1.1 Dividend 1,506.75 1,758.33 1.2 Interest 195.70 187.31 1.3 Realised Gain / (Loss) on Foreign Exchange Transactions (42.32) (14.19) 1.4 Realised Gains / (Losses) on External sale / redemption of investments 11,392.22 14,442.19 1.5 Other Income 10.20 8.67 2 EXPENSES ( A ) 13,062.55 16,382.31 2.1 Management Fees 1,496.38 1,350.85 2.2 Service Tax/GST on Management Fees 258.00 201.51 2.3 Transfer Agents Fees and Expenses 130.77 129.85 2.4 Custodian Fees 35.98 34.26 2.5 Trusteeship Fees 3.10 2.77 2.6 Commission to Agents 550.01 517.02 2.7 Marketing and Distribution Expenses 94.34 52.77 2.8 Investor Education Expenses 20.66 18.44 2.9 Audit Fees 1.51 1.53 2.10 Other Operating Expenses 24.42 29.25 ( B ) 2,615.17 2,338.25 3 NET REALISED GAINS / (LOSSES) FOR THE YEAR (A -B = C) 10,447.38 14,044.06 4 Change in Unrealised Depreciation in value of investments ( D ) 6.96 (5.34) a) Value of Investments - - b) Foreign Exchange Fluctuation 6.96 (5.34) 5 Change in unrealised (appreciation)/ depreciation on translation of other assets and liabilities denominated in foreign currencies ( E ) 0.01 (6.96) 6 NET GAINS / (LOSSES) FOR THE YEAR (C -D-E = F) 10,440.41 14,056.36 7 Change in Unrealised Appreciation in the value of Investments ( G ) 3,500.71 7,000.27 8 NET SURPLUS / (DEFICIT) FOR THE YEAR (F+G = H) 13,941.12 21,056.63 8.1 Add: Balance Transfer from Unrealised Appreciation Reserve 31,565.86 24,565.59 8.2 Less: Balance Transfer to Unrealised Appreciation Reserve 35,066.57 31,565.86 8.3 Add / (Less): Equalisation Credit/(Debit) (3,471.72) (6,902.75) 9 Total 6,968.69 7,153.61 10 Dividend Appropriation 10.1 Income Distributed during the Year (3,482.63) (3,513.49) 11 Retained Surplus / (Deficit) carried forward to Balance sheet 3,486.06 3,640.12 Key Statistics for the year ended March 31, 2018 Year ended Year ended March 31, March 31, 2018 2017 1 NAV per unit (Rs.): Open: Growth Plan 40.5138 32.3321 Dividend Plan 15.6163 13.6382 Direct Growth Plan 41.5272 32.9154 Direct Dividend Plan 16.0833 13.9258 High: Growth Plan 50.5916 40.5138 Dividend Plan 18.7039 16.1267 Direct Growth Plan 52.1599 41.5272 Direct Dividend Plan 19.3945 16.5600 Low: Growth Plan 40.5878 31.5549 Dividend Plan 15.6448 13.3103 Direct Growth Plan 41.6089 32.1268 Direct Dividend Plan 16.1148 13.5920 End: Growth Plan 46.4226* 40.5138 Dividend Plan 16.4694* 15.6163 Direct Growth Plan 47.9269* 41.5272 Direct Dividend Plan 17.1255* 16.0833 2 Closing Assets Under Management (Rs in Lakhs) End 101,337.95 96,640.06 Average (AAuM)** 103,255.17 92,175.60 3 Gross income as % of AAuM** (Gross Income = (A) in Revenue Account): 12.65% 17.77% 4 Expense Ratio: a. Total Expense as % of AAuM** Regular Plan 2.56% 2.56% Direct Plan 1.85% 1.89% b. Management Fee (including service tax/gst) as % of AAuM** Regular Plan 1.70% 1.69% Direct Plan 1.61% 1.60% 5 Net Income as a percentage of AAuM** (Net Income = (C) in Revenue Account): 10.12% 15.24% 6 Portfolio turnover ratio: 15.22% 28.09% 7 Total Dividend per unit distributed during the year : Dividend Plan 1.4000 1.4000 Direct Dividend Plan 1.4000 1.4000 8 Returns: a. Last One Year Scheme Growth Plan: 14.33% 25.31% Direct Growth Plan: 15.16% 26.16% Benchmark (S&P BSE 200) 12.60% 22.47% Additional Benchmark (Nifty 50) 11.86% 18.55% Notes to Accounts - Annexure I Page - 5
Key Statistics for the year ended March 31, 2018 Year ended Year ended March 31, March 31, 2018 2017 b. Since Inception Scheme Growth Plan: 13.78% 13.73% Direct Growth Plan: 14.62% 14.49% Benchmark (S&P BSE 200) 11.63% / 10.06% / 13.59% (DIP) 12.22% (DIP) Additional Benchmark (Nifty 50) 11.01% / 9.59% / 12.02% (DIP) 10.73% (DIP) Key Statistics for the year ended March 31, 2018 *Non-business day NAV computed for disclosure purposes only. **Average Assets Under Management DIP - Direct Plan Benchmarks returns calculated based on Total Return Index Values. As TRI data is not available since inception of the scheme, benchmark performance is calculated using composite CAGR of (B S&P BSE 200 PRI values from 18.05.2006 to 01.08.2006 and TRI values since 01.08.2006) Notes to Accounts - Annexure I to the Abridged Balance Sheet and Revenue Account for the Year ended March 31, 2018 Rupees in Lakhs Particulars 2018 2017 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: NIL NIL 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 28,998.09 26,438.56 - depreciation 1,942.25 110.63 - Net Unrealised Gain/Loss as a percentage of Net assets as on March 31 26.70 27.24 Foreign Securities - appreciation 7,973.77 4,206.80 - depreciation 1,122.23 812.75 - Net Unrealised Gain/Loss as a percentage of Net assets as on March 31 6.76 3.51 Foreign Securities (due to foreign exchange fluctuation) - appreciation 1,595.64 2,383.14 - depreciation 436.94 532.82 - Net Unrealised Gain/Loss as a percentage of Net assets as on March 31 1.14 1.91 1.7 Aggregate Value of Purchase and Sale with Percentage to average assets. Purchases - amount 15,715.88 25,896.45 - as a percentage of average daily net assets 15.22 28.09 Sales - amount 24,738.71 39,955.11 - as a percentage of average daily net assets 23.96 43.35 2 Details of Transaction with Associates under regulation 25(8) : - Brokerage Paid to Associates/Related Parties/Group companies of Sponsor/AMC NIL NIL - Commission Paid to Associates/Related Parties/Group companies of Sponsor/AMC NIL NIL Page - 6
Notes to Accounts - Annexure I to the Abridged Balance Sheet and Revenue Account for the Year ended March 31, 2018 Rupees in Lakhs Particulars 2018 2017 3 Large Holdings (over 25% of the NAV of the Scheme) : NIL NIL 4 Unit Capital movement during the year ended : Units of Rs 10 each fully paid up Quantity Amount 2018 2017 2018 2017 Growth Plan Outstanding, beginning of year 136,188,585.552 163,123,189.842 13,618.87 16,312.33 Issued during the year 9,012,824.256 6,274,192.572 901.28 627.42 Redeemed during the year (19,368,872.337) (33,208,796.862) (1,936.89) (3,320.88) Outstanding, end of year 125,832,537.471 136,188,585.552 12,583.26 13,618.87 Dividend Plan Outstanding, beginning of year 246,695,117.300 251,331,968.046 24,669.50 25,133.19 Issued during the year 30,802,318.792 28,790,495.275 3,080.23 2,879.04 Redeemed during the year (40,624,492.007) (33,427,346.021) (4,062.45) (3,342.73) Outstanding, end of year 236,872,944.085 246,695,117.300 23,687.28 24,669.50 Direct Growth Plan Outstanding, beginning of year 4,230,035.329 4,021,793.849 423.00 402.18 Issued during the year 1,691,475.052 893,432.660 169.15 89.34 Redeemed during the year (744,110.638) (685,191.180) (74.41) (68.52) Outstanding, end of year 5,177,399.743 4,230,035.329 517.74 423.00 Direct Dividend Plan Outstanding, beginning of year 7,359,381.557 5,831,443.232 735.94 583.14 Issued during the year 2,383,279.758 2,217,259.100 238.33 221.73 Redeemed during the year (1,392,008.291) (689,320.775) (139.20) (68.93) Outstanding, end of year 8,350,653.024 7,359,381.557 835.07 735.94 5 Prior year figures have been reclassified, wherever applicable, to conform to current years presentation. 6 Contingent Liability NIL NIL 7 SEBI vide its Circular no. SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 6, 2017 read along with Circular no. SEBI/HO/IMD/DF3/CIR/P/2017/126 dated December 4, 2017 (the Circulars ) had issued directions for categorization and rationalization of all the Mutual Fund Schemes in order to standardize the scheme categories and characteristics of each category. Pursuant to the circulars, the Board of Directors of Franklin Templeton Trustee Services Private Limited and Franklin Templeton Asset Management (India) Private Limited have approved the proposed categorization and changes in name/ features of the schemes. Subsequently, SEBI conveyed it s no objection on the changes in name/ features of this scheme (as applicable) on account of the proposed categorization and the changes were made effective June 4, 2018. 8 In case where the Surplus / (Deficit) for the year (after adjustment of income equalisation) is lower than the amount of distributed income (including tax on income distributed), the income has been distributed by the Scheme to its unitholders out of the distributable surplus available with the Scheme, which consists of the Surplus / (Deficit) for the year (after adjustment of income equalisation) and the retained earnings / accumulated reserves of earlier year(s). 9 Expenses other than management fee is inclusive of service tax/gst where applicable. 10 Other Income, if any indicates mainly on account of load (net of service tax/gst) credited to schemes and clawback of additional expenses charged on account of inflows from beyond top 15 cities. 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 2017-18 have been disclosed on www.franklintempletonindia.com and in full Annual Report for financial year 2017-18. 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 review the prospectus carefully and obtain expert professional advice with regard to specific legal, tax and financial implications of the investment/participation in the scheme. In the event that the investible funds of more than 65% of the total proceeds of the scheme (annual average) are not invested by way of equity shares of domestic companies, then the scheme may not qualify as equity oriented fund. Investments in overseas financial assets are subject to risks associated with currency movements, restrictions on repatriation, transaction procedures in overseas markets and country related risks. Page - 8