Franklin India Smaller Companies Fund*

Franklin India Smaller Companies Fund* Invest in the leaders of tomorrow November 2017 *Please refer Slide 8 for product label.

Smaller Companies: A search beyond the bluechips Smaller Companies Large Caps Top 100 Stocks INR 96 lac crores Market Cap Mid & Small Caps Next 400 Stocks INR 32 lac crores Market Cap Nifty 500 INR 128 lac crores Market Cap India s Equity Market Cap INR 142 lac crores Source: NSE, Capitalline As on 31 st October, 2017 1

Smaller Companies Diverse nature of ideas Small Fish in a Big Pond Big Fish in a Growing Pond Different Fish in Different Pond 2

Small Fish in a Big Pond Competing through market share gain Medium sized businesses in large conventional sectors Banks Utilities Energy Information Technology Materials Growing through market share gain Often differentiated from the larger players Regulations generally tend to play a crucial role in large conventional sectors 3

Big Fish in a growing pond Competing through market growth Leaders in their space Media and Entertainment sector Ancillary manufacturers Niche Engineering companies Logistics Growing with the sector A mix of regulated and not so regulated (Some sectors/companies are more regulated as compared to others) 4

Different Fish in Different Pond Businesses at different stages of evolution Innovating and creating distinct businesses Internet led businesses Retail and consumption sectors Unique services Exploring new opportunities Entrepreneurship led models 5

Smaller Companies Offering a variety Exposure (total sectors) Nifty 50 13 Nifty Free Float Midcap 100 16 Concentration Weightage In top 5 sectors 80.89% 57.52% Nifty Free Float Midcap 100 is more diversified vis-a-vis the Nifty 50 Index at both sector and stock levels Midcaps are represented by Nifty Free Float Midcap 100 and Large Caps are represented by Nifty 50 Source: As on 31 st Oct 17 (latest available data). https://www.nseindia.com/content/indices/ind_nifty50.pdf As on 31 st Oct 17 (latest available data). https://www.nseindia.com/content/indices/ind_niftyfreefloatmidcap100.pdf 6

Why Smaller Companies throw opportunities? The Information Gap Nifty 50 Nifty FF Midcap 100 Average Number of Analysts tracking a stock 18 40 Over 25% of Nifty Midcap Stocks are tracked by < 10 Analysts Smaller Companies are represented by Nifty Free Float (FF) Midcap 100 and Large Caps are represented by Nifty 50 Source: IIFL as on 31 st October 17 7

Presenting Franklin India Smaller Companies Fund Product Label This product is suitable for investors who are seeking* Long term capital appreciation A fund that invests primarily in small and mid cap companies *Investors should consult their financial advisors if in doubt about whether the product is suitable for them. 8

About the Fund 9

Investment Style Box Investment Style Growth Blend Value Large Mid Market Cap Small 10

True to its label Franklin India Smaller Companies Fund (FISCF)- (Allocation to Large Cap and Mid & Small Cap) Average Allocation to mid and small caps has been 91% in the last 10 years 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Oct- 07 Apr- 08 Oct- 08 Apr- 09 Oct- 09 Apr- 10 Oct- 10 Apr- 11 Oct- 11 Mid +Small Cap 94 91 82 91 94 90 95 97 97 92 93 89 93 95 86 83 86 89 90 88 92 Large Cap 6 9 18 9 6 9 5 3 2 7 6 9 7 5 14 17 14 11 10 12 8 Apr- 12 Oct- 12 Apr- 13 Oct- 13 Apr- 14 Oct- 14 Apr- 15 Oct- 15 Apr- 16 Oct- 16 Apr- 17 Oct- 17 Source: Internal Calculations. Month end data from Oct 07 Oct 17 is taken for calculations. As per the Scheme Information Document (SID) of the scheme Smaller Companies are those, which have a market capitalisation below that of the 100th stock in Nifty 500 Index, with the index constituents ranked in terms of market capitalisation and may or may not be a company forming part of the Nifty 500. The graph shows large cap, mid cap and small cap break as a % of the total equity. 11

Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Well Diversified Portfolio Franklin India Smaller Companies Fund 90 In the last 10 years on a monthly average Allocation to top 3 sectors 63% Stocks held in the portfolio 57 80 70 60 50 40 30 20 10 0 Top 3 Sectors (%) No. of Stocks Source: Factset. Data taken from Oct 07 to Oct 17. 12

Stock Selection is the key 5 Years (ending October 31, 17) Attribution Analysis Allocation Effect Selection Effect Interaction Effect Franklin India Smaller Companies Fund 1.12 19.98-0.19 Stock selection clearly the key contributor to performance Stock picking ability has ensured performance holds up well over the medium to long term, irrespective of how allocation decisions fared Allocation Effect: It measures the impact of decisions to overweight (OW) or underweight (UW) a particular sector relative to the benchmark. Positive allocation effect: Fund is (a) OW in a sector that outperforms (OP), and/or (b) UW in a sector that underperforms (UP), total returns of the benchmark. Negative allocation effect: Fund is (a) OW in a sector that UP, and/or (b) UW in a sector that OP, total returns of the benchmark. Selection Effect: It measures the impact of selecting securities that provide different returns for a particular sector, compared to the total benchmark returns. It evaluates the fund manager's skill in choosing securities that outperformed in a particular sector, compared to the benchmark. Interaction Effect: It measures the combined impact of allocation and selection effects. Positive interaction effect: Fund is (a) OW and OP, and/or (b) UW and UP, compared to the weights and returns of a particular sector in the benchmark. Negative interaction effect: Fund is (a) OW and UP, and/or (b) UW and OP, compared to the weights and returns of a particular sector in the benchmark. All attribution effects are computed daily and are linked through time by applying additional multi-period algorithms. Source: Factset as on Oct 31, 17. 13

Contributors and Detractors over last 3 years Sector Average Weight (%) FISCF Nifty Free Float Midcap 100 Total Return (%) Average Weight (%) Total Return (%) Allocation Effect Selection Effect Interaction Effect Contributors Consumer Discretionary 12.41 30.82 12.90 16.98 0.09 2.13 0.09 Industrials 28.96 23.80 16.96 16.70-0.26 1.09 0.87 Utilities 1.33 98.09 6.01 12.89 0.38 5.08-4.20 Health Care 3.01 12.28 13.48 11.37 0.72-0.44 0.42 Materials 16.06 28.61 12.03 28.70 0.57 0.03-0.20 Telecommunication Services 0.81 2.33 1.63-2.78 0.08-0.10 0.17 Information Technology 5.82 9.84 5.12 13.73-0.04-0.10 0.18 Detractors Consumer Staples 1.31-14.24 7.38 20.47-0.15-4.72 4.02 Financials 17.74 19.26 17.90 26.31 0.33-0.78-0.18 Energy 1.11 8.07 5.31 25.44-0.27-2.28 2.21 Real Estate 2.42 13.62 1.27 12.11 0.18 0.15-0.36 Past performance may or may not be sustained in future. Source: Factset as on Oct 31, 2017. Information is historical and may not reflect current or future portfolio characteristics. Portfolio holdings are subject to change. Indicates high contribution to the total effect. 14

Scheme Performance As on October 31, 2017 Scheme Franklin India Smaller Companies Fund (FISCF) - Growth NAV as on Oct 31, 2017 Compounded Annualised Growth Rate Performance (%) Last 1 year (Oct 28, 2016 to Oct 31, 2017) Last 3 Years (Oct 31, 2014 to Oct 31, 2017) Last 5 Years (Oct 31, 2012 to Oct 31, 2017) NAV* Returns NAV* Returns NAV* Returns NAV* Returns Since inception Value of Investment of Inception Date till Oct 31, 2017 Rs.10,000 since inception 58.9589 48.5494 21.25% 33.7388 20.43% 15.5557 30.52% 10 16.22% 58,959 13.1.2006 B: Nifty Free Float Midcap 100 - - 23.38% - 18.23% - 20.31% - 13.90% 46,480 AB:Nifty 50 - - 19.47% - 7.48% - 12.95% - 11.53% 36,257 Performance of other schemes managed by the fund managers of the scheme Franklin India Taxshield (FIT)-Growth 543.3734 469.4899 15.60% 378.8675 12.76% 225.6999 19.20% 10 24.00% 543,373 10.04.1999 B:Nifty 500 - - 21.95% - 11.03% - 15.51% - 14.90% 131,845 AB:Nifty 50 - - 19.47% - 7.48% - 12.95% - 13.44% 104,040 Franklin India Prima Fund (FIPF)-Growth 948.5585 806.0391 17.53% 572.7170 18.30% 297.4943 26.08% 10 20.95% 948,559 1.12.1993 B:Nifty 500 - - 21.95% - 11.03% - 15.51% - 10.47% 108,449 B: Nifty Free Float Midcap 100 - - 23.38% - 18.23% - 20.31% - N.A^^^ N.A^^^ AB:Nifty 50 - - 19.47% - 7.48% - 12.95% - 10.21% 102,537 Franklin India Prima Plus (FIPP) - Growth 574.7561 492.5378 16.55% 392.2717 13.57% 235.0672 19.57% 10 19.17% 574,756 29.9.1994 B:Nifty 500 - - 21.95% - 11.03% - 15.51% - 9.66% 84,116 AB:Nifty 50 - - 19.47% - 7.48% - 12.95% - 9.35% 78,809 Franklin India Flexi Cap Fund (FIFCF) - Growth 78.7374 67.0142 17.34% 56.4235 11.74% 33.0441 18.95% 10 17.68% 78,737 2.3.2005 B:Nifty 500 - - 21.95% - 11.03% - 15.51% - 13.57% 50,148 AB:Nifty 50 - - 19.47% - 7.48% - 12.95% - 13.43% 49,374 Franklin India Opportunities Fund (FIOF) - Growth 73.5217 62.4333 17.60% 51.3001 12.73% 30.6738 19.09% 10 11.93% 73,522 21.2.2000 B:S&P BSE 200# - - 20.77% - 10.20% - 14.81% - 1.68% 13,439 AB:Nifty 50 - - 19.47% - 7.48% - 12.95% - 10.54% 58,941 Past performance may or may not be sustained in future. Fund Managers: FIPF/FISCF: R. Janakiraman (Managing Since 11-Feb-08) & Hari Shyamsunder (Managing Since 02-May-16), FIFCF: Lakshmikanth Reddy (Managing Since 02-May-16) & R. Janakiraman (Managing Since 21-Feb-14), FIT: Lakshmikanth Reddy (Managing Since 02-May-16) & R. Janakiraman (Managing Since 02-May-16), FIPP: Anand Radhakrishnan (Managing Since 31-Mar-07) & R. Janakiraman (Managing Since 01-Feb-11), FIOF: R. Janakiraman (Managing Since 01-Apr-13) & Hari Shyamsunder (Managing Since 02-May-16). B: Benchmark. AB: Additional Benchmark. N.A.: Not Applicable. *NAV (beginning of period). The FISCF fund manager R. Janakiraman & Hari Shyamsunder manages 6 & 3 schemes of Franklin Templeton Mutual Fund respectively. Period for which scheme s performance has been provided is computed basis last day of the month-end preceding the date of advertisement. Different plans have a different expense structure. The performance details provided herein are of Regular Plan. Load is not taken into consideration. Dividends assumed to be reinvested and Bonus is adjusted. On account of difference in the type/category, asset allocation or investment strategy, inception dates, performances of these funds are not strictly comparable. Please refer to www.franklintempletonindia.com for details on performance of all schemes (including Direct Plans). # Index adjusted for the period February 21, 2000 to March 10, 2004 with the performance of ET Mindex. ^^^ As the scheme was launched before the launch of the benchmark index, benchmark index figures since inception are not available. 15

Jan-06 Aug-06 Mar-07 Oct-07 May-08 Dec-08 Jul-09 Feb-10 Sep-10 May-11 Dec-11 Jul-12 Feb-13 Sep-13 Apr-14 Nov-14 Jun-15 Jan-16 Aug-16 Mar-17 Oct-17 Serving investors for over 11 years Movement of Rs. 10,000 invested in FISCF - Growth, Nifty Free Float Midcap 100, and Nifty 50 60000 FISCF: Rs. 58,959 50000 40000 30000 B: Nifty Free Float Midcap 100: Rs. 46,480 AB: Nifty 50 Rs. 36,257 20000 10000 0 FISCF B: Nifty Free Float Midcap 100 AB: Nifty 50 Past performance may or may not be sustained in future. Load is not taken into consideration. Dividends assumed to be reinvested and Bonus is adjusted. Performance is as on October 31, 2017. B: Benchmark, AB: Additional Benchmark. Inception date: 13.01.2006. 16

Absolute Returns (%) Calendar Year Performance 110 80 50 20 (10) (40) (70) 2017 YTD 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 FISCF - Growth 33 10 10 90 13 52 (26) 19 105 (63) 56 B: Nifty FF Midcap 100 36 7 6 56 (5) 39 (31) 19 99 (59) 77 AB: Nifty 50 26 3 (4) 31 7 28 (25) 18 76 (52) 55 Outperformance over B (3) 3 4 34 18 13 5 0 6 (4) (21) Outperformance over AB 7 7 14 59 6 24 (1) 1 29 (11) 1 Past performance may or may not be sustained in future. Inception Date: January 13, 2006. Load is not taken into consideration. Dividends assumed to be reinvested and Bonus is adjusted. Performance is as on October 31, 2017. B: Benchmark, AB: Additional Benchmark. The superlative performance shown in 2009, 2012 and 2014 was on account of an overall sharp rise in the stock prices coupled with stock selection and fund s overweight position in outperforming sectors. 17

The advantage of Long term investing 60.0% 50.0% 49.0% Franklin India Smaller Companies Fund Historical instances of +ve performance Historical instances of ve performance 40.0% 92.9% 33.4% 99.8% 32.5% 100% 30.0% 7.1% 0.2% 0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% 18.6% 17.6% 17.5% 4.8% 3-Year 5-Year -0.3% 7-Year -21.3% Maximum Minimum Average Past performance may or may not be sustained in future. Period 13.1.2006 to 31.10.2017. Load is not taken into consideration. Dividends assumed to be reinvested and Bonus is adjusted. Returns greater than 1 year period are compounded annualized. Note: The above table shows the performance on a daily rolling return basis to compute returns for respective periods (3,5,7) years. 18

The advantage of Long term investing Nifty Free Float Midcap 100* Nifty 50** 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% 37.8% 85.6% 14.4% 97.9% 22.7% 22.8% 100% 2.1% 0% 12.6% 11.0% 11.1% 3.6% 3-Year 5-Year -2.1% 7-Year -13.8% Maximum Minimum Average 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% 27.5% 93.9% 6.1% 20.5% 97.7% 2.3% 18.4% 100% 0% 9.1% 8.9% 9.0% 3.7% 3-Year 5-Year -1.2% 7-Year -6.4% Maximum Minimum Average Historical instances of +ve performance Historical instances of ve performance Past performance may or may not be sustained in future. Period 13.01.2006 to 31.10.2017. Load is not taken into consideration. Dividends assumed to be reinvested and Bonus is adjusted. Returns greater than 1 year period are compounded annualized. *Benchmark**Additional Benchmark. Note: The above table shows the performance on a daily rolling return basis to compute returns for respective periods (3,5 and 7 years) 19

Returns (%) Market Resilience (as of October 31, 2017) 110 90 70 50 30 10 (10) (30) (50) (70) P1 P2 P3 P4 P5 P6 P7 P8 P9 FISCF-Growth 31 (65) 103 (22) 22 67 (10) 38 16 B: Nifty Free Float Midcap 100 50 (63) 105 (24) 4 42 (12) 37 14 AB: Nifty 50 49 (53) 71 (16) 10 28 (21) 26 12 Outperformance over B (19) (2) (2) 3 18 25 2 1 2 Outperformance over AB (18) (11) 32 (6) 12 39 11 11 5 P1: India Re-rating: 13 th Jan 06-8 th Jan 08. P2: Global Crisis Lows: 8 th Jan 08-9 th Mar 09. P3: Post Crisis Peak: 9 th Mar 09 9 th Nov 10. P4: High inflation, slow growth: 9 th Nov 10 30 th Jan 12 P5: Rebound in US and QE3 buoying global rally: 30 th Jan 12 28 th Jun 13 P6: Post European Crisis: 28 th Jun 13 27 th Feb 15 P7: Chinese economic Slowdown: 27 th Feb 15 29 th Feb 16 P8: Global Liquidity and Domestic Reforms: 29 th Feb 16 31 st Oct 17 P9: Since Inception: 13 th Jan 06 31 st Oct 17 Past performance may or may not be sustained in future. Returns are compounded and annualized. Load is not taken into consideration. Dividends are assumed to be reinvested and bonus is adjusted. Refer annexure for market resilience of other funds managed by the fund managers of FISCF. B: Benchmark and AB: Additional Benchmark. Inception Date: January 13, 2006. The above graph depicts performance of the fund vis-à-vis benchmark and additional benchmark in the specified time periods which have displayed significant market movement due to change in domestic/global macroeconomic variables. 20

SIP Returns as on October 31, 2017 If you had invested Rs. 10000 every month in FISCF - Growth FISCF 1 year 3 year 5 year Since Jan 14, 2011 Total amount Invested (Rs) 120,000 360,000 600,000 820,000 Total value as on Oct 31, 2017 (Rs) 138,742 498,292 1,245,995 2,204,262 Returns 30.21% 22.29% 29.72% 28.56% Total value of B:Nifty Free Float Midcap 100 139,407 494,071 1,063,300 1,641,548 B:Nifty Free Float Midcap 100 Returns 31.33% 21.67% 23.08% 19.99% Total value of AB:Nifty 50 135,487 437,096 831,597 1,260,470 AB:Nifty 50 Returns 24.80% 13.01% 13.01% 12.38% Past performance may or may not be sustained in future. B: Benchmark, AB: Additional Benchmark. Inception Date: January 13, 2006. Load is not taken into consideration. Dividends are assumed to be reinvested and bonus is adjusted. The fund was launched as a closed ended scheme and was converted into an open ended scheme effective January 14, 2011. Returns over 1 year period are compounded annualized. Calculations assume investment on the 1st business day of every month. On account of difference in the type/category, asset allocation or investment strategy, inception dates, performances of the fund is not strictly comparable. 21

Underweight Industrials Real Estate Materials Consumer Discretionary Energy Telecommunication Services Information Technology Consumer Staples Health Care Utilities Financials In (%) Overweight Fund Facts Overweights/Underweights as on 31 st October 2017 10 8 7.57 6 4 2 3.97 1.59 1.42 0.92 0-2 -4-6 -8-0.92-1.98-4.57-5.29-5.39-6.05 Source: Factsheet as on 31st October 17. Calculations are done for the portfolio vis a vis its benchmark index Nifty Free Float Midcap 100 for determining overweights and underweights. Information is historical and may not reflect current or future portfolio characteristics. 22

Dividend History Record Date Dividend Per Unit (Rs.) Dividend Per Unit (Rs.) (A) Record Date Nav(Rs.) - Dividend Plan (B) Record Date Nav(Rs.) - Direct Dividend Plan Dividend Yield* (A/B) 2017 February 23 2.25 28.4159 29.8648 8% 2016 February 18 2.00 22.7451 23.5378 9% 2015 February 20 2.00 26.6372 27.1103 8% 2014 February 14 1.50 14.5369 14.6188 10% 2013 February 22 2.50 15.3803 15.3934 16% 2007 August 8 0.90 12.3641 NA 7% The fund was launched as a closed ended scheme and was converted into an open ended scheme effective January 14, 2011. Dividends on face value of Rs.10. Past performance may or may not be sustained in future. Pursuant to payment of dividend, the NAVs of the schemes would fall to the extent of payout and statutory levies (as applicable). *Dividend yield is mentioned for Dividend Plan. 23

Portfolio Composition 24 Top 10 holdings Sector Share of equity AUM Top Sector Allocation Share of equity AUM Finolex Cables Industrial Products 3.76% Gujarat Mineral Development Corp. Ltd Minerals/mining 2.44% HDFC Bank Banks 2.42% Healthcare Global Enterprises Healthcare Services 2.37% Shankara Building Products Ltd Ferrous Metals 2.28% Nesco Ltd Commercial Services 2.15% Voltas Ltd. Construction Project 2.13% Repco Home Finance Ltd. Finance 2.11% Brigade Enterprises Ltd. Construction 2.07% Equitas Holdings Finance 2.02% Total (Top 10) 23.75% Total Equity 91.29% Industrial Products 10.54% Banks 10.55% Construction 8.83% Media & Entertainment 5.77% Construction Project 4.55% Consumer Durables 4.17% Finance 4.13% Chemicals 4.11% Software 3.83% Auto 3.45% Total 59.93% These securities represent the ten largest holdings held in the Fund as of the date indicated. All portfolio holdings are subject to change. The information stated above does not constitute an investment advice or recommendation to subscribe or transact in these securities. Sector classification based on AMFI. As of October 31, 2017 25

Why invest in FISCF 1 Provides an opportunity to participate in smaller companies. Smaller companies defined as companies with market capitalization below that of 100 th Stock of Nifty 500 2 Benefit from Blend Investment style (combination of Growth and Value) 3 Portfolio focus on Bottom-up approach to stock selection strong impetus on quality 4 Long term performance record (over 11 years) 25

Fund Characteristics as on October 31, 2017 Fund Description Open-end fund that primarily invests in small cap and mid cap stocks Inception Date January 13, 2006 (launched as a closed end scheme and converted into an open-end one effective Jan, 14 2011) Assets Rs. 6704.10 crore (October 31, 2017) Managed by Investment Style Minimum Amount R. Janakiraman & Hari Shyamsunder. Srikesh Nair (dedicated fund manager for foreign securities) Blend of growth and value Subscription: Fresh Purchase - Rs.5,000/-. Additional Purchase - Rs.1,000/-. Redemption: Rs.1,000/-. The amount for subscription and redemption in excess of the minimum amount specified above is any amount in multiple of Re. 1/-. Benchmark Nifty Free Float Midcap 100 Volatility Measures (3 years) (October 31, 2017) Portfolio Turnover (October 31, 2017) Exit Load Standard deviation: 3.96% Beta: 0.84 Sharpe Ratio*: 1.05 17.00% 1% if the units are redeemed/switched-out within one year of allotment *Annualised. Risk free rate assumed to be 6.00% (FBIL overnight MIBOR) 26

Reward Risk Reward Matrix for Select FT Equity Funds 27 Thematic Franklin Build India Fund Franklin India Smaller Companies Fund Franklin India Prima Fund Diversified Equity Franklin India High Growth Companies Fund Franklin India Taxshield Hybrid Income Franklin India Prima Plus Fund Franklin India Bluechip Fund Franklin India Flexi Cap Fund Liquid Risk 27

Risk Factors 28 The information contained in this presentation is not a complete representation of every material fact regarding any industry, security or the fund and is neither an offer for units nor an invitation to invest. This communication is meant for use by the recipient and not for circulation/reproduction without prior approval. The views expressed by the portfolio managers are based on current market conditions and information available to them and do not constitute investment advice. Scheme Classification and Objective: Franklin India Smaller Companies Fund (FISCF): An open-end diversified equity fund which seeks to provide long term capital appreciation by investing in mid and small cap companies. Load Structure: FISCF Entry Load: Nil: Exit Load: In respect of each purchase of Units - 1% if the Units are redeemed/switched-out within one year of allotment. Risk Factors: The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market. The Mutual Fund is not guaranteeing or assuring any dividend under any of the schemes and the same is subject to the availability and adequacy of distributable surplus. 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 schemes. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. 28

Franklin Templeton Asset Management (India) Pvt. Ltd. Indiabulls Finance Centre, Tower 2, 12 th and 13 th floor, Senapati Bapat Marg, Elphinstone (W) Mumbai 400013 Tel (91-22) 6751 9100 Fax (91-22) 6639 1281 www.franklintempletonindia.com 2014 Franklin Templeton Investments. All rights reserved.