Templeton Fixed Horizon
Fund - 3 Months Plan
(TFHF – 3M)
A Closed – end Income Fund
Offer of Units of Rs. 10 each for cash during the New
New Fund Offer Opens on 12th February 2007
New Fund Offer Closes on 13th February 2007
Date of Allotment 15th February 2007
Asset Management Company:
Franklin Templeton Asset Management (India) Pvt. Ltd.
Franklin Templeton Asset Management (India) Pvt. Ltd.
Level 4, Wockhardt Towers Mutual Fund
Bandra Kurla Complex Franklin Templeton Mutual Fund
Bandra (East), Mumbai 400 051
www. franklintempletonindia.com Franklin Templeton Trustee Services Pvt. Ltd.
Templeton Fixed Horizon Page No.
Fund -3 Months Plan HIGHLIGHTS & RISK FACTORS 2
(TFHF – 3M) INTRODUCTION 4
A Closed – end Income Fund DEFINITIONS 4
The particulars of Templeton Fixed Horizon Fund – 3
Months Plan have been prepared in accordance with DUE DILIGENCE CERTIFICATE 6
the Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996 as amended till date, and SUMMARY OF THE SCHEME 7
filed with Securities and Exchange Board of India
(SEBI), the units being offered for public subscription SUMMARY OF EXPENSES AND
have not been approved or disapproved by SEBI nor FINANCIAL INFORMATION 7
has SEBI certified the accuracy or adequacy of the
CONDENSED FINANCIAL INFORMATION 10
This Offer Document is dated February 5, 2007
The Offer Document sets forth concisely the CONSTITUTION / MANAGEMENT
information about the scheme that a prospective OF THE MUTUAL FUND 16
investor ought to know before investing.
This Offer Document shall remain effective until a INVESTMENT OBJECTIVES AND POLICIES 32
'material change' (other than a change in fundamental
attributes and within the purview of the Offer HOW TO INVEST 36
Document) occurs and thereafter Material changes will
be filed with Securities and Exchange Board of India VALUATION OF ASSETS AND
(SEBI) and circulated to the Unit holders along with the NET ASSET VALUE 40
quarterly/half yearly reports or as may be publicly
notified by advertisements in the newspapers subject to
REDEMPTION OF UNITS
the applicable Regulations.
/MATURITY OF THE SCHEME 44
In this Offer Document all references to "U.S.$" or "$"
are to United States of America Dollars and "Rs." are to ASSOCIATE TRANSACTIONS 48
Please retain this Offer Document for future reference. UNITHOLDER INFORMATION 48
Before investing, investors should also ascertain about
any further changes in this Offer Document after the TAX BENEFITS 54
date of Offer Document From the Mutual Fund /
Investor Service Centres / Website / Distributors or
Brokers. INVESTOR SERVICES 57
GENERAL INFORMATION 59
PENDING LITIGATION OR PROCEEDINGS 65
HIGHLIGHTS SCHEME SPECIFIC RISK FACTORS AND SPECIAL
• Templeton Fixed Horizon Fund – 3 Months Plan, an
income fund sponsored by the Franklin Templeton 1) The performance of the scheme may be affected by
Group, one of the world’s largest investment changes in Government policies, general levels of
management companies, which has over 50 years of interest rates and risk associated with trading
experience in international investment management volumes, liquidity and settlement systems in
and manages US$ 552.9 billion in assets securities markets.
(approximately Rs.24,45,477 crores) as on 31st 2) Investments in debt instruments are subject to
December 2006. default risk and interest rate risk. Interest rate risk
results from changes in demand and supply for
• Closed - end income fund with fixed maturity.
money and other macroeconomic factors and
• The Fund offers choice of two Plans – Retail Plan creates price changes in the value of debt
and Institutional Plan each with Growth Option and instruments. Consequently, the Net Asset Value of
Dividend Option (with Payout Facility only). the scheme may be subject to fluctuation.
RISK FACTORS 3) Debt securities are subject to the risk of an issuer’s
inability to meet principal and interest payments on
STANDARD RISK FACTORS the obligations (credit risks) and may also be subject
• Mutual funds and securities investments are subject to price volatility due to such factors as interest
to market risks and there is no assurance or sensitivity, market perception or the credit
guarantee that the objective of the mutual fund will worthiness of the issuer and general market
liquidity (market risk).
4) Investments in debt instruments are subject to
• As with any investment in securities, the Net Asset
reinvestment risks as interest rates prevailing on
Value (NAV) of the units issued under the scheme
interest or maturity due dates may differ from the
can go up or down depending on the factors and
original coupon of the bond, which might result in
forces affecting the capital/debt markets. the proceeds being invested at a lower rate.
• Past performance of the sponsors/the asset 5) The scheme may invest in non-publicly offered debt
management company/mutual fund does not securities. This may expose the scheme to liquidity
indicate the future performance of the scheme of the risks.
6) Derivatives are high risk, high return instruments as
• Templeton Fixed Horizon Fund – 3 Months Plan is they may be highly leveraged. A small price
only the name of the scheme and does not in any movement in the underlying security could have a
manner indicate either the quality of the scheme or large impact on their value and may also result in a
its future prospects and returns. loss.
• The Sponsor is not responsible or liable for any loss 7) Different types of securities in which the scheme
resulting from the operation of the Scheme beyond would invest as given in the offer document carry
the initial contribution of Rs.1 lakh made by it different levels and types of risks. Accordingly the
towards setting up the Fund. scheme's risk may increase or decrease depending
upon its investment pattern. e.g. corporate bonds
• There is no guarantee or assurance on the frequency carry a higher amount of risk than Government
or quantum of dividends (which shall be at the securities. Further even among corporate bonds,
discretion of the AMC/Trustee and shall also depend bonds which are AAA rated are comparatively less
on the availability of adequate distributable surplus) risky than bonds which are AA rated.
although there is every intention to declare
8) Different types of Securitised Debts in which the
dividends in the Dividend Plan.
scheme would invest carry different levels and types
• Investors in the Scheme are not being offered any of risks. Accordingly the scheme's risk may increase
guaranteed / assured returns. or decrease depending upon its investments in
Securitised Debts. e.g. AAA securitised bonds will originator, or the parent or any affiliate of the Seller,
have low Credit Risk than a AA securitised bond. Issuer and Originator. No financial recourse is
Credit Risk on Securitised Bonds may also depend available to the Certificate Holders against the
upon the Originator, if the Bonds are issued with Investors’ Representative. Delinquencies and credit
Recourse to Originator. A Bond with Recourse will losses may cause depletion of the amount available
have a lower Credit Risk than a Bond without under the Credit Enhancement and thereby the
Recourse. Underlying Assets in Securitised Debt Investor Payouts may get affected if the amount
may be the Receivables from Auto Finance, Credit available in the Credit Enhancement facility is not
Cards, Home Loans or any such receipts. Credit risk enough to cover the shortfall. On persistent default
relating to these types of receivables depend upon of an Obligor to repay his obligation, the Seller may
various factors including macro-economic factors of repossess and sell the underlying Asset. However
these industries and economies. To be more specific, many factors may affect, delay or prevent the
factors like nature and adequacy of property repossession of such Asset or the length of time
mortgaged against these borrowings, loan required to realize the sale proceeds on such sales.
agreement, mortgage deed in case of Home Loan, In addition, the price at which such Asset may be
adequacy of documentation in case of Auto Finance sold may be lower than the amount due from that
and Home Loan, capacity of borrower to meet its Obligor
obligation on borrowings in case of Credit Cards 11) Investors are requested to note that the scheme
and intentions of the borrower influence the risks offers limited redemption/repurchase facility, which
relating to the assets (borrowings) underlying the is available only on the 61st day from the date of
Securitised Debts. Holders of Securitised Assets may allotment as mentioned in this offer document
have Low Credit Risk with Diversified Retail Base on
Underlying Assets, especially when Securitised 12) A Unitholder may invest in the schemes and acquire
Assets are created by High Credit Rated Tranches. a substantial portion of the scheme units. The
Risk profiles of Planned Amortisation Class repurchase of units by the Unitholder at the
Tranches (PAC), Principal Only Class Tranches specified periodicity may have an adverse impact on
(PO) and Interest Only Class Tranches (IO) will also the units of the schemes, because the timing of such
differ, depending upon the interest rate movement repurchase may impact the ability of other Unit
and Speed of Pre-payments. A change in market holders to repurchase their units.
interest rates/prepayments may not change the 13) As per SEBI circular No. SEBI/IMD/Cir-10/22701/03
absolute amount of receivables for the investors, but dated December 12, 2003 read with Circular No.
affects the reinvestment of the periodic cashflows SEBI/IMD/Cir-1/42529/05 dated June 14, 2005, each
that the investor receives in the securitised paper. portfolio under a scheme should have a minimum of
9) Presently, secondary market for securitised papers is 20 investors and no single investor should account
not very liquid. There is no assurance that a deep for more than 25% of the corpus of such portfolio.
secondary market will develop for such securities. In case of this scheme, which is a closed end
This could limit the ability of the investor to resell scheme, the above conditions will be complied at
them. Even if a secondary market develops and sales the time of allotment. In case of non-fulfilment with
were to take place, these secondary transactions may the condition of minimum 20 investors, the
be at a discount to the initial issue price due to portfolio shall be wound up by following the
changes in the interest rate structure guidelines prescribed by SEBI. In case of the non-
10) Securitised transactions are normally backed by fulfilment with the condition of 25% holding by a
pool of receivables and credit enhancement as single investor, the allotment would be effective
stipulated by the rating agency, which differ from only to the extent of 25% and the exposure over
issue to issue. The Credit Enhancement stipulated 25% limit will lead to refund within 6 weeks of the
represents a limited loss cover to the Investors. date of the closure of the New Fund offer.
These Certificates represent an undivided beneficial 14) Prospective investors should review / study this
interest in the underlying receivables and there is no Offer carefully and in its entirety and shall not
obligation of either the Issuer or the Seller or the construe the contents hereof or regard the
summaries contained herein as advice relating to time subsequent to the close of the New Fund Offer.
legal, taxation, or financial/ investment matters and The Investor is requested to check the credentials of
are advised to consult their own professional the individual/firm he/she is entrusting his / her
advisor(s) as to the legal or any other requirements application form and payment to, for any
or restrictions relating to the subscription, gifting, transaction with the Fund. The Fund/Trustee or the
acquisition, holding, disposal (sale, transfer, switch AMC shall not be responsible for any acts done by
or redemption or conversion into money) of Units the intermediaries representing or purportedly
and to the treatment of income (if any), representing such investor.
capitalization, capital gains, any distribution, and
other tax consequences relevant to their
subscription, acquisition, holding, capitalization, INTRODUCTION
disposal (sale, transfer, switch or redemption or Templeton Fixed Horizon Find – 3 Months Plan (TFHF
conversion into money) of Units within their – 3M) is a closed - end income fund that seeks to
jurisdiction / of nationality, residence, domicile etc. generate returns and reduce interest rate volatility,
or under the laws of any jurisdiction to which they through a portfolio of fixed income securities with a
or any managed Funds to be used to purchase/gift maturity profile generally in line with the fund's
Units are subject, and (also) to determine possible duration.
legal, tax, financial or other consequences of
subscribing / gifting to, purchasing or holding Units Investors have option of investing in Retail Plan and
before making an application for Units. Institutional Plan, each with Growth Option and
Dividend Option (with Payout Facility only). Both the
15) Neither this Offer Document nor the units have Plan will have a common portfolio.
been registered in any jurisdiction. The distribution
of this Offer Document in certain jurisdictions may Growth Option
be restricted or subject to registration requirements Under the Growth Option, the returns to investors will
and, accordingly, persons who come into possession be available in the form of capital appreciation.
of this Offer Document in certain jurisdictions are
required to inform themselves about, and to
observe, any such restrictions. No person receiving Under the Dividend Option, it is proposed to distribute
a copy of this offer document or any accompanying the returns to the investors in the form of dividends out
application form in such jurisdiction may treat this of distributable profits, if any, available in the Scheme.
Offer Document or such application form as However, there is no assurance or guarantee to the
constituting an invitation to them to subscribe for Unitholders as to the rate or the frequency of dividend
Units, nor should they in any event use any such distribution nor that the dividend will be paid. The
application form, unless in the relevant jurisdiction declaration of the dividend will be at the discretion of
such an invitation could lawfully be made to them the AMC/ Trustee and will be subject to availability and
and such application form could lawfully be used adequacy of distributable surplus. The Dividend Option
without compliance with any registration or other offers Payout Facility only.
16) No person has been authorised to give any DEFINITIONS
information or to make any representations not
confirmed in this Offer Document in connection In this Offer Document the following definitions have
with this Offer or the issue of Units, and any been used:
information or representations not contained herein
must not be relied upon as having been authorised AMC/ Asset Management Company/ Investment
by the Mutual Fund or the Investment Manager. Manager: Franklin Templeton Asset Management
Neither the delivery of this Offer Document nor any (India) Pvt. Ltd., the asset management company, set up
sale made hereunder shall, under any under the Companies Act, 1956 and authorised by SEBI
circumstances, create any implication that the to act as Asset Management Company to the schemes of
information contained herein is correct as of any Franklin Templeton Mutual Fund.
Applicable NAV : The NAV applicable for redemption notice money, certificate of deposit, usance bills, (repos
or switching, based on the time of the Business Day on / reverse repos), CBLO and any other like instruments as
which the application is accepted as evidenced by the specified by the Reserve Bank of India from time to time
electronic date / time stamp affixed at any ISC or including mibor linked securities, fixed deposits, call
Collection Centre. products having unexpired maturity upto one year.
Business Day: A day other than: Mutual Fund : Franklin Templeton Mutual Fund, a trust
(i) Saturday and Sunday. set up under the provisions of Indian Trusts Act 1882, and
registered with SEBI vide Registration No. MF/026/96/8.
(ii) a day on which the banks in Mumbai and/or
RBI are closed for business / clearing. NAV: Net Asset Value of the Units of Templeton Fixed
Horizon Fund – 3 Months Plan.
(iii) a day which is a public and/or bank holiday at a
ISC/Collection Centre where the application is Offer Document: The document issued by Franklin
received. Templeton Mutual Fund offering units of Templeton
Fixed Horizon Fund – 3 Months Plan.
(iv) a day on which sale and repurchase of units is
suspended by the AMC. RBI : Reserve Bank of India established under the
Reserve Bank of India Act, 1934.
(v) a day on which normal business could not be
transacted due to storms, floods, bandhs, strikes Registrars: Registrar for the time being of the Mutual
or such other events as the AMC may specify Fund, which is in-house, Franklin Templeton Asset
from time to time. Management (India) Pvt. Ltd.
(vi) A day on which register of unitholders is closed. Repo / Reverse Repo: Sale/Purchase of Government
Securities as may be allowed by RBI from time to time
The AMC reserves the right to declare any day as a
with simultaneous agreement to repurchase/resell them
Business Day or otherwise at any or all ISC’s or
at a later date.
Scheme / Fund: Templeton Fixed Horizon Fund – 3
CDSC: Contingent Deferred Sales Charge
Months Plan (TFHF – 3M).
Collection Centres: The location (Other than ISC) that
SEBI: Securities and Exchange Board of India
is declared as an official point of acceptance for all
established under Securities and Exchange Board of
transactions but where no Investor or Distributor
India Act, 1992.
services are offered. These locations would only accept
and acknowledge transactions as per SEBI guidelines. SEBI Regulations / Regulations: SEBI (Mutual Funds)
Regulations, 1996, as amended from time to time, for
Custodian: A custodian appointed for holding the
the operation and management of Mutual Funds.
securities and other assets of the scheme, which for the
time being is Citibank, Mumbai branch. Sponsor: Templeton International Inc, a subsidiary of
Franklin Resources Inc., based in San Mateo, California, USA.
Exit Load / Redemption Load: Load on redemption
other than CDSC. Trust Deed: The Trust Deed dated January 4, 1996 of
Investment Management Agreement / IMA Franklin Templeton Mutual Fund, as amended by the
Investment Management Agreement (IMA) dated Supplemental Deed of Trust dated May 30, 1996 and the
January 5, 1996 executed between Franklin Templeton Supplemental Deed of Trust dated August 26, 2005.
Trustee Services Pvt. Ltd. and Franklin Templeton Asset Trustee: Franklin Templeton Trustee Services Pvt. Ltd.,
Management (India) Pvt. Ltd, as amended by the a company set up under the Companies Act 1956, and
Supplemental Investment Management Agreement approved by SEBI to act as the Trustee to the schemes of
dated August 26, 2005. Franklin Templeton Mutual Fund.
ISC: Investor Service Centre of the Asset Management Unit: The interest of an investor, which consists of, one
Company. undivided share in the Net Assets of Templeton Fixed
Money Market Instruments: Commercial papers, Horizon Fund – 3 Months Plan.
commercial bills, treasury bills, Government securities Unitholder: A person holding Unit(s) in Templeton
having an unexpired maturity upto one year, call or Fixed Horizon Fund – 3 Months Plan.
DUE DILIGENCE CERTIFICATE
Templeton Fixed Horizon Fund – 3
It is confirmed that:
i. The Offer Document forwarded to SEBI is in accordance with the
SEBI (Mutual Funds) Regulations, 1996 and the guidelines and
directives issued by SEBI from time to time.
ii. All legal requirements connected with the launching of the scheme as
also the guidelines, instructions, etc, issued by the Government and
any other competent authority in this behalf, have been duly
iii. The disclosures made in the Offer Document are true, fair and
adequate to enable the investors to make a well-informed decision
regarding investment in the proposed scheme.
iv. The intermediaries named in the Offer Document are registered with
SEBI and till date such registrations is valid.
Date : December 14, 2006 Pranita Gramopadhye
Place : Mumbai Compliance Officer
SUMMARY OF THE SCHEME days and released at least once a week. In terms of
Name of the Scheme: Templeton Fixed Horizon Fund SEBI Circular No. MFD/CIR/13/087/2001 dated
– 3 Months Plan (TFHF – 3M) March 28, 2001, the NAV shall be released on
Wednesday. Further, the NAV shall be released on
Nature of the Scheme: A Closed – end Income Fund.
the stipulated redemption date.
Investment Objective: TFHF – 3M is a closed - end
• NAV will be calculated up to 4 decimal places using
income fund that seeks to generate returns and reduce
standard rounding criteria.
interest rate volatility, through a portfolio of fixed
income securities with a maturity profile generally in • The Fund would disclose the half-yearly and annual
line with the fund's duration. results as per the SEBI Regulations.
New Fund Offer (NFO) Opens on 12th Feb. 2007 • Full Portfolio disclosure every half-year as per the
New Fund Offer (NFO) Closes on 13th Feb. 2007 SEBI regulations.
Date of Allotment 15th Feb. 2007 Tax Benefits: There are certain tax benefits available to
the investors under the Scheme (please refer to Section
Tenure/Maturity: 3 Months from the Date of Allotment
(Date of Maturity:15th May 2007)
* The AMC reserves the right to introduce/increase/
Plans and Options: The Scheme offers choice of two
decrease the exit load/CDSC on a prospective basis.
Plans, Retail Plan and Institutional Plan, each with
Growth Option and Dividend Option (with Payout SUMMARY OF EXPENSES AND FINANCIAL
Facility only). Both the Plans will have common INFORMATION
Pricing during Fund Offering (NFO): During the NFO FEE AND EXPENSES OF THE SCHEME
Period, the units will be offered at the face value of
The information that is provided under this section
Rs.10 per unit.
seeks to assist the investor in understanding the
Redemption Price : Redemptions will be done at the following: -
Applicable NAV for redemptions subject to applicable
a) The expense structure of the current Scheme and
load/CDSC*, if any.
types of different fees and their percentage the
Minimum Subscription to be collected by the Fund investor is likely to incur on purchasing and selling
The Scheme seeks to collect Rs. 1 crore as the minimum the units of the Scheme.
subscription and would retain any excess subscription
b) The financial information (condensed) relating to
collected. If the Scheme does not collect the minimum
the previous schemes launched by the Fund.
subscription during the NFO, refund will be made
within 6 weeks from the date of the closure of the New Unitholder Transaction Expenses or Sales Load:
Particulars of Transaction Charge as a % of NAV
Maturity: The Scheme shall be fully redeemed at the end Retail Plan / Institutional Plan
of its maturity period, unless rolled over as per SEBI
i. Maximum sales/Entry load The scheme being close
guidelines. The redemption cheque will be despatched
imposed on purchase ended scheme is not permitted
to the unitholders within the statutory time limit of 10
including switch-in to charge Entry Load
business days prescribed by SEBI.
ii. Sales Load, if any, on issue
Liquidity: To provide liquidity to investors, the Fund
of units in lieu of dividends 0%
proposes to provide repurchase facility on 61st day from
the date of allotment i.e. 17th April, 2007. If such day iii. Contingent Deferred Sales
happens to be a non-business day then the repurchase Charge (‘CDSC’) (based on
facility would be available on the next business day. the period of holding) As mentioned below
Transparency iv. Redemption / Repurchase Load 0%
• NAV will be normally determined for all business v. Switch-out / Exchange Fee 0%
CDSC on Redemption / Repurchase / Switch-out operating expenses in relation to investing overseas as
transactions before maturity of the Scheme: 3% and when SEBI permits.
The repurchase facility will be available on the 61st The AMC has estimated the following maximum
day from the date of allotment. recurring expenses for the first Rs.100 crores of Average
The AMC/Trustee reserves the right to modify the Daily / Weekly Net Assets:
Load/Fee for the items (ii) to (v) above at any time in Particulars % of Net .Assets
future on a prospective basis, subject to the limits
prescribed under the SEBI Regulations. The addendum
Investment Management and Advisory Fee* 0.75 0.75
detailing the changes may be attached to offer documents
and abridged offer documents. The addendum may be Custodial Fees 0.02 0.02
circulated to all the distributors/brokers so that the same Registrar & Transfer Agent Fees including 0.03 0.03
can be attached to all offer documents and abridged offer cost related to providing accounts
documents already in stock. statement, dividend/redemption
All Loads (including CDSC), if any, collected on units cheques/warrants etc.
shall be retained in the Fund and maintained in a Marketing & Selling Expenses 0.85 0.23
separate account and may be utilised by the Investment including Agents Commission, Brokerage &
Manager towards meeting the selling and distribution Transaction Cost pertaining to the
expenses of the Fund. Any surplus in this account may distribution of units and statutory
be credited to the scheme, whenever felt appropriate by advertisement
Audit Fees / Fees and expenses of trustees 0.05 0.05
All the switches/exchanges will be treated as redemption
Costs related to investor communications 0.10 0.05
in one scheme and subscription in the other scheme
with the entry load/exit load as may be applicable. Costs of fund transfer from location
to location 0.10 0.02
ANNUAL SCHEME RECURRING EXPENSES
Other Expenses 0.10 0.10
The total expenses of the Scheme excluding issue or
Total Recurring Expenses 2.00 1.25
redemption expenses, whether initially borne by the
mutual fund or by the asset management company, but *As this is a scheme launched on a no load basis, the
including the investment management and advisory fee asset management company shall be entitled to collect
shall be subject to the following limits stated in an additional management fee not exceeding 1% of the
Regulations 52(6) and subject to a maxim percentage weekly/daily average net assets outstanding in each
limit of Daily / Weekly Average Net Assets as in the table financial year.
First Next Next Over These estimates have been made in good faith as per
Rs.100 crore Rs.300 crore Rs.300 crore Rs.700 crore the information available to the Investment Manager
2.25% 2% 1.75% 1.50% based on past experience and are subject to change
inter-se and types of the expenses charged shall be as
The Investment Manager is entitled to the Investment
per the Regulations.
Management and Advisory fees not exceeding 1.25% on
the first 100 crores of the Daily/Weekly Average Net The above heads and percentages are estimates and may
Assets and 1% of the amount in excess of Rs.100 crores.
vary in practice in line with actual and amendment to
Any excess over these specified ceilings would be borne SEBI regulations but will be subject to the overall ceiling
by the Asset Management Company. of 2.25%. The AMC will bear any expenses in excess of
The Trustee/AMC reserves the right to charge higher the ceiling.
The tables given relating to Unitholder Transaction b) Past schemes (launched during the past one fiscal
Expenses, Initial Issue Expenses and Annual Scheme year)
Recurring Expenses have been given to the investor to
assist him/her in understanding the various costs and The details of initial issue expenses of Franklin India
expenses that an investor of the scheme will bear Flexi Cap Fund (FIFCF), Franklin Templeton Fixed
directly or indirectly. Tenure Fund – Series I (FTFTF-I), Franklin Templeton
Fixed Tenure Fund – Series II – 60 Months Plan
Investment management fees are payable in arrears. The
(FTFTF-II), Franklin Templeton Fixed Tenure Fund –
direct expenses incurred by each scheme of Franklin
Series III – 36 Month Plan (FTFTF-III), Franklin
Templeton Mutual Fund shall be chargeable to that
Templeton Fixed Tenure Fund – Series IV – 60 Month
scheme. The common expenses incurred on various
Plan (FTFTF-IV), Franklin Templeton Fixed Tenure
schemes will be charged on the basis of number of
Fund – Series V – 13 Month Plan (FTFTF-V), Franklin
unitholders, the size of corpus of the scheme and in
Templeton Fixed Tenure Fund – Series VI – 60 Month
conformity with generally accepted accounting
Plan (FTFTF-VI), Franklin India Smaller Companies
Fund (FISCF), Templeton India Equity Income Fund
The total expenses of the Scheme including the
(TIEIF) and Franklin Templeton Capital Safety Fund
investment management and advisory fee (together with
(FTCSF) (Schemes launched during the last one fiscal
additional management fee, if any) shall not exceed the
year) are given below:
limit stated in SEBI Regulation 52(6).
(Rs. in Lakhs)
INITIAL ISSUE EXPENSES Nature of FTFTF-I FTFTF-II FTFTF-III FTFTF-IV FTFTF-V FTFTF-VI
expenses (No Load (No Load (No Load (No Load (No Load (No Load
a) Present Scheme Scheme) Scheme) Scheme) Scheme) Scheme) Scheme)
Total Expenses 228.29 373.94 202.56 215.94 39.22 387.80
All initial issue expenses during the NFO will be
initially borne by the AMC. Hence, as such for every
Nature of expenses FIFCF FISCF TIEIF FTCSF
Rs.100/- contributed by the investor, Rs.100/- will be
(No Load Scheme)
available to the Scheme for investment.
Total Expenses 5,831.13 4,090.66 5,410.36 1,757.34
The total Initial Issue Expenses shall not exceed 6% of
the initial resources raised under the scheme, as
None of the expenses in any of the schemes above have
prescribed in the Regulations.
exceeded 6% of initial resources mobilised. The initial
Being a scheme launched on no-load basis, the asset issue expenses in case of FTFTF-I, FTFTF-II, FTFTF-
management company is entitled to collect an III, FTFTF-IV, FTFTF-V, FTFTF-VI and FISCF are
additional management fee not exceeding 1% of currently paid by the AMC. In case of FIFCF & TIEIF ,
weekly / daily average net assets outstanding in each the amount in excess of the entry load has currently
financial year in terms of Regulation 52(3) of the been borne by the AMC. As the AMC has borne the
SEBI (MF) Regulations. However, such fees shall be expenses initially and in excess of entry load as
charged only till the actual initial issue expenses mentioned above, the comparison of estimated v/s
borne by the AMC, limited to the extent of 6% of the actual figures for these schemes is not mentioned. The
initial mobilisation, are recovered. Further, the total initial issue expenses of FTCSF have been charged to
expenses shall not exceed the limits laid down in the scheme and the same will be amortised over the
Reg. 52(6). Please see the next section for further tenure of the scheme/ respective plans, as mentioned in
details. the Offer Document
CONDENSED FINANCIAL INFORMATION
a) HISTORICAL PER UNIT STATISTICS
Name of the Scheme FIFCF FTDPEF
Date of launch 02.03.2005 31.10.2003
Information as at the end of Mar 2005 Mar 2006 Mar 2004 Mar 2005 Mar 2006
NAV at the beginning of the year 10.00 a 9.64 (GP) 10.00 a 11.8435 (GP) 13.9462 (GP)
9.64 (DP) 11.8435 (DP) 13.9462 (DP)
Net Income per unit (Rs.) (0.35) 8.43 1.37 3.91 17.48
Dividends (Rs.) / Bonus Nil 1.39 Nil Nil Nil
Transfer to Reserves Nil Nil Nil Nil Nil
NAV at the end of the year (Rs.) 9.64 (GP) 18.30 (GP) 11.8435 (GP) 13.9462 (GP) 21.3359 (GP)
9.64 (DP) 16.23 (DP) 11.8435 (DP) 13.9462 (DP) 21.3359 (DP)
Annualised compounded return%@ -3.60%* 75.04% (GP) 18.44%* 26.47% 36.83%
Benchmark Index S&P CNX 500 S&P CNX 500 N.A BSE Sensex/ BSE Sensex/
Crisil Balanced Fund Index Crisil Balanced Fund Index
Benchmark Annualised compounded return% @ -2.87%* 54.06% N.A 21.86%/ 14.42% 41.12%/23.77%
Net Assets (End of period) (Rs. in crores) 1949.72 2885.34 252.01 93.82 49.31
Ratio of Recurring Expenses to Net Assets 1.73% 1.97% Nil Nil Nil
Name of the Scheme TIGF - Growth Plan FTLF
Date of Inception 05.09.2003 1.12.2003
9.7.2004 (50s Plus Floating Rate Plan)
Information as at the end of Mar 2004 Mar 2005 Mar 2006 Mar 2004 Mar 2005 Mar 2006
NAV at the beginning of the year 20.59 29.20 35.61 10.00a 10.9294 (20s Plan) 13.1409 (20s Plan)
10.7121 (30s Plan) 12.1450 (30s Plan)
10.5444 (40s Plan) 11.5734 (40s Plan)
10.4021 (50s Plus Plan) 10.8030 (50s Plus Plan-GP)
10.00 a (50s Plus 10.5131 (50s Plus Plan-DP)
Floating Rate Plan) 10.8471 (50s Plus
Floating Rate Plan-GP)
10.5971 (50s Plus
Floating Rate Plan-DP)
Net Income per unit (Rs.) 12.15 6.25 34.15 0.75(20s Plan) 3.24 (20s Plan) 12.44 (20s Plan)
0.40 (30s Plan) 2.28 (30s Plan) 9.20(30s Plan)
0.30 (40s Plan) 1.28 (40s Plan) 4.22(40s Plan)
0.29 0.21 2.34(50s Plus Plan)
(50s Plus Plan) (50s Plus Plan) 2.63(50s Plus
N. A. 0.70 Floating Rate Plan)
(50s Plus Floating (50s Plus Floating
Rate Plan) Rate Plan)
Dividends (Rs.) / Bonus N. A. N. A. N. A. Nil 0.2564 (I), 3.08 – 40s Plan
0.2398 (O) – 0.5878 (I),
50s Plus Plan 0.5770 (O)
0.2211 (I), – 50s Plus Plan
0.2067 (O) – 0.5152 (I),
50s Plus Floating 0.5080 (O)
Rate Plan – 50s Plus Floating
Transfer to Reserves Nil Nil Nil Nil Nil Nil
NAV at the end of the year (Rs.) 29.20 35.61 58.76 10.9294 (20s Plan) 13.1409 (20s Plan) 20.7136 (20s Plan)
10.7121 (30s Plan) 12.1450 (30s Plan) 16.8502 (30s Plan)
10.5444 (40s Plan) 11.5734 (40s Plan) 14.3724 (40s Plan - GP)
10.4021 10.8030 13.0366 (40s Plan - DP)
(50s Plus Plan) (50s Plus Plan-GP) 12.3386 (50s Plus
(50s Plus Plan-DP) 11.6088 (50s Plus
(50s Plus Floating 12.6401 (50s Plus
Rate Plan-GP) Floating Rate Plan-GP)
10.5971 (50s Plus 11.8600 (50s Plus
Floating Rate Floating Rate Plan-DP)
Annualised compounded return%@ 41.82 %* 41.76% 50.39% 9.29%* (20s Plan) 22.77% (20s Plan) 36.66% (20s Plan)
7.12%* (30s Plan) 15.71% (30s Plan) 25.08% (30s Plan)
5.44%* (40s Plan) 11.60% (40s Plan) 16.83% (40s Plan)
4.02%* (50s Plus Plan) 5.97% (50s Plus Plan) 9.43% (50s Plus Plan)
8.47% (50s Plus Floating 14.54% (50s Plus
Rate Plan) Floating Rate Plan)
Benchmark Index BSE Sensex BSE Sensex BSE Sensex N.A Benchmark *** Benchmark ***
/ MSCI India / MSCI India / MSCI India
Value Value Value
Benchmark Annualised compounded return%@ 26.96%*/ 28.70%/ 25.79% 44.64%/43.77% N.A 16.69% (20s Plan) 32.17% (20s Plan)
33.30%* 12.25% (30s Plan) 22.56% (30s Plan)
8.81% (40s Plan) 15.11% (40s Plan)
5.50% (50s Plus Plan) 9.55% (50s Plus Plan)
8.35% (50s Plus 14.49% (50s Plus
Floating Rate Plan) Floating Rate Plan)
Net Assets (End of period) (Rs. in crores) 72.92 89.70 110.91 204.43 406.66 338.99
Ratio of Recurring Expenses to Net Assets 2.33 2.28 2.28 0.75% (20s Plan) 0.75% (20s Plan) 0.73% (20s Plan)
0.75% (30s Plan) 0.75% (30s Plan) 0.73% (30s Plan)
0.50% (40s Plan) 0.50% (40s Plan) 0.49% (40s Plan)
0.25% (50s Plus Plan) 0.25% (50s Plus Plan) 0.24% (50s Plus Plan)
0.25% (50s Plus 0.24% (50s Plus
Floating Rate Plan)
Name of the Scheme TGSF - PF Plan TITMA – Institutional Plan (I-Plan) & Liquid Plan (LP)
& Super Institutional Plan (SIP)
Date of launch 7.5.2004 22.6.2004 (I Plan); 17.9.2004 (L Plan); 2.9.2005 (SIP)
Information as at the end of Mar 2005 Mar 2006 March 2005 Mar 2006
NAV at the beginning of the year 10.00 a 9.8335 (GP/DP) 1000.0000 a (I Plan, LP) 1037.4229 (GP - I Plan); 1001.2360 (WP - I Plan)
1000.0142 (DDP - I Plan)
1024.2429 (GP - LP); 1001.1692 (WP - LP)
1000.0142 (DDP - LP); 1000.0000 a (GP - SIP)
1000.0000 a (WP - SIP); 1000.0000 a (DDP - SIP)
Net Income per unit (Rs.) (0.31) 0.73 81.61 119.66
Dividends (Rs.) / Bonus Nil Nil LP: 18.86 O (WP); 20.17 I (WP) LP: 20.12 O (WP); 21.60 I (WP)
19.80 O (DDP); 21.18 I (DDP) 19.88 O (DDP); 21.35 I (DDP)
I Plan: 28.36 O (WP) 30.33 I (WP) I Plan: 22.16 O (WP); 22.18 I (WP)
28.75 O (DDP); 27.45 I (DDP) 21.94 O (DDP); 23.53 I (DDP)
SI Plan: 16.89 (WP); 22.59 (DDP)
Transfer to Reserves Nil Nil Nil Nil
NAV at the end of the year (Rs.) 9.8335 (GP/DP) 10.1890 (GP/DP) 1037.4229 (GP - I Plan) 1093.9483 (GP - I Plan);
1001.2360 (WP - I Plan) 1001.2736 (WP - I Plan)
1000.0142 (DDP - I Plan) 1000.2500 (DDP - I Plan)
1024.2429 (GP - LP) 1074.6919 (GP - LP); 1001.1774 (WP - LP)
1001.1692 (WP - LP) 10000.2500 (DDP - LP); 1032.3940 a (GP - SIP)
1000.0142 (DDP - LP) 1007.4861 a (WP - SIP); 1000.2500 a (DDP - SIP)
Annualised compounded return%@ -1.66% * 0.99% * 4.84% & (I Plan); 4.54% & (LP) 5.20% & (I Plan); 4.81% & (LP)
5.63% & (SIP)*
Benchmark Index I-Sec Composite Index I-Sec Composite Index Crisil Liquid Fund Index Crisil Liquid Fund Index
Benchmark Annualised compounded return%@ -1.02% * 1.75% 4.20% & (I Plan); 4.35% & (LP)* 4.58% & (I Plan); 4.70% & (LP); 4.89% & (SIP)*
Net Assets (End of period) (Rs. in crores) 96.40 65.60 972.86 (I Plan) 148.97 (I Plan)
198.73 (LP) 156.20 (LP); 139.26 (SIP)
Ratio of Recurring Expenses to Net Assets 1.24% 1.25% 0.65% (I Plan); 1.00% (LP) 0.50% (I Plan); 1.00% (LP); 0.25% (SIP)
Name of the Scheme TISTIP – IP FTFTF-I FTFTF–II FTFTF–III TFIF – FISCF
Date of launch 6.9.2005 18.5.2005 23.9.2005 23.12.2005 6.9.2005 (LT) 13.1.2006
Information as at the end of Mar 2006 Mar 2006 Mar 2006 Mar 2006 Mar 2006 Mar 2006
NAV at the beginning of the year 1000.00 a 10.00 a 10.00 a 10.00 a 10.00 a (LT – GP/DP) 10.00 a
10.00 a (ST – GP/DP)
Net Income per unit (Rs.) 130.09 2.42 1.22 0.57 1.07(ST):0.87(LT) 0.84
Dividends (Rs.) / Bonus 12.19 (WP); 3.27 (MP) Nil Nil Nil Nil Nil
Transfer to Reserves Nil Nil Nil Nil Nil Nil
NAV at the end of the year (Rs.) - 12.4142 (GP) 11.2111 (GP) 10.5731 (GP) 10.2904 (LT - GP) 10.84 (GP/DP)
12.4142 (DP) 11.2111 (DP) 10.5731 (DP) 10.1898 (LT - DP)
10.3202 (ST - GP)
10.0252 (ST - GP)
Annualised compounded return%@ - 24.14% * 12.11% * 5.73% * 2.90% (LT) * 8.40%*
3.20% (ST) *
Benchmark Index Crisil Short- 25% S&P 25% S&P 25% S&P Crisil Liquid CNX Midcap
Term Bond CNX 500 + 65% CNX 500 + 65% CNX 500 + 75% Fund Index
Fund Index Crisil Composite Crisil Composite Crisil Composite
Bond Fund Index + Bond Fund Index + Bond Fund Index +
10% Crisil Liquid 10% Crisil Liquid 10% Crisil Liquid
Fund Index Fund Index Fund Index
Benchmark Annualised compounded return%@ - 16.60% * 8.67% * 4.08% * 2.76% * (LT) 13.65% *
2.81% * (ST)
Net Assets (End of period) (Rs. in crores) - 103.20 179.32 117.57 7.62 (LT) 1427.30
Ratio of Recurring Expenses to Net Assets 1.03 1.05% 1.50% 1.75% 0.98% (LT) 2.31%
Name of the Scheme FTFTF-IV FTFTF–V
Date of launch 3.3.2006 21.3.2006
Information as at the end of Mar 2006 Mar 2006
NAV at the beginning of the year 10.00 a 10.00 a
Net Income per unit (Rs.) -0.03 0.03
Dividends (Rs.) / Bonus Nil Nil
Transfer to Reserves Nil Nil
NAV at the end of the year (Rs.) 9.9698 (GP); 9.9698 (DP) 10.0291 (GP); 10.0291 (DP)
Annualised compounded return%@ -0.30% * 0.29% *
Benchmark Index 25% S&P CNX 500 + 65% Crisil Composite Crisil Short-Term Bond Fund Index
Bond Fund Index + 10% Crisil Liquid Fund Index
Benchmark Annualised compounded return%@ 1.93% * 0.21% *
Net Assets (End of period) (Rs. in crores) 79.00 391.08
Ratio of Recurring Expenses to Net Assets 1.60% 0.40%
Audited Half Yearly Financials as on September 30, 2006 and NAV & Returns as of January 15, 2007 with the Benchmarks:
Name of the Scheme TIGF - Growth Plan FTDPEF TISTIP – IP TGSF-PF Plan
Date of Inception 5.9.2003 31.10.2003 6.9.2005 7.5.2004
NAV as on September 29, 2006 60.32 23.3467 (GP/DP) 1060.5291 (GP) 10.4156 (GP/DP)
Annualised Returns from the date of inception @ 41.95% 33.76% 5.68% 1.71%
Benchmark Returns @ 40.69% / 39.84% 37.65% / 21.38% 4.82% 2.68%
Benchmark Indices used BSE Sensex / BSE Sensex and Crisil Crisil Short-Term Bond Fund Index I Sec Composite Index
MSCI India Value Balanced fund Index
Net Assets as on September 29, 2006 (Rs. in Crores) 88.13 42.74 347.04 34.25
Ratio of Recurring Expenses 2.33% Nil 0.80% 1.25%
NAV as on January 15, 2007 67.55 25.0174 (GP/DP) 1082.7258(GP) 10.6183 (GP/DP)
Annualised Returns from the date of inception @ 42.35% 33.05% 6.02% 2.25%
Benchmark Returns @ 41.75% / 40.89% 39.01% / 22.35% 4.81% 3.19%
Benchmark Indices used BSE Sensex / BSE Sensex and Crisil Crisil Short-Term Bond Fund Index I Sec Composite Index
MSCI India Value Balanced fund Index
Net Assets as on January 15, 2007 (Rs. in Crores) 82.53 42.68 304.64 30.12
Name of the Scheme FIFCF FTFTF-I FTFTF–II FTFTF–III TFIF – Institutional Option
Date of launch 2.3.2005 18.5.2005 23.9.2005 23.12.2005 6.9.2005 (LT)
NAV as on September 29, 2006 19.11 (GP)
16.95 (DP) 12.6560 (GP) 11.4963 (GP/DP) 10.8458 (GP/DP) 10.6379 (ST-GP)
11.5958 (DP) 10.0181 (ST-DP)
Annualised Returns from the date of inception @ 50.74% (GP) 18.80% 14.70% (GP/DP) 8.46%* (GP/DP) 5.93% (ST) 5.77% (LT)
Benchmark Returns @ 36.67% 14.38% 11.78% 7.21%* 5.51% (ST)
Benchmark Indices used S&P CNX 500 25% S&P CNX 500 25% S&P CNX 500 20% S&P CNX 500 Crisil Liquid Fund Index
+ 65% Crisil Composite + 65% Crisil Composite + 70% Crisil Composite
Bond Fund Index Bond Fund Index Bond Fund Index
+ 10% Crisil Liquid + 10% Crisil Liquid +10% Crisil Liquid
Fund Index Fund Index Fund Index
Net Assets as on September 29, 2006 (Rs. in Crores) 3227.64 101.42 156.38 119.76 38.27 (ST)
Ratio of Recurring Expenses 1.84% 1.50% 1.50% 1.75% 0.55% (LT)
NAV as on January 15, 2007 21.39 (GP) 13.2413(GP) 12.0702(GP) 11.2208 (GP/DP) 10.8676(ST-GP)
18.97 (DP) 12.1322 (DP) 11.0328(DP) 10.0104(ST-DP)
Annualised Returns from the date of inception @ 50.04% (GP) 18.39% 15.42% (GP/DP) 11.44% (GP/DP) 6.26% (ST)
50.03% (DP) 6.23% (LT)
Benchmark Returns @ 39.04% 14.49% 12.51% 10.43% 5.67% (ST)
Benchmark Indices used S&P CNX 500 25% S&P CNX 500 + 25% S&P CNX 500+ 20% S&P CNX 500 + Crisil Liquid Fund Index
65% Crisil Composite 65% Crisil Composite 70% Crisil Composite
Bond Fund Index + 10% Bond Fund Index + 10% Bond Fund Index +10%
Crisil Liquid Fund Index Crisil Liquid Fund Index Crisil Liquid Fund Index
Net Assets as on January 15, 2007 (Rs. in Crores) 3650.91 91.46 157.88 121.18 43.44 (ST)
Name of the Scheme TITMA – Institutional Plan (IP), Liquid Plan (LP) & FTLF
Super Institutional Plan (SIP)
Date of launch 22.6.2004 (I Plan) 1.12.2003
17.9.2004 (L Plan) 9.7.2004 (50s Plus Floating Rate Plan)
NAV as on September 29, 2006 1129.4527 (GP-IP) 21.4153 - 20s Plan (GP/DP)
1001.5843 (WP-IP) 17.3728 - 30s Plan (GP/DP)
1000.2500 (DDP-IP) 14.8429 - 40s Plan (GP)
1106.8185 (GP-LP) 13.4633 - 40s Plan (DP)
1001.4884 (WP-LP) 12.7317 (GP)/11.8749 (DP) - 50s Plus Plan
1000.2500 (DDP-LP) 13.0634 (GP)/12.1319 (DP) - 50s Plus Floating Rate Plan
Annualised Returns from the date of inception @ 5.51% (IP) 30.88% - 20s Plan
5.12% (LP) 21.55% - 30s Plan
6.20% (SIP) & 14.98% - 40s Plan
8.91% - 50s Plus Plan
12.76%- 50s Plus Floating Rate Plan
Benchmark Returns @ 4.93% (IP) 29.27% - 20s Plan
5.06% (LP) 20.91% - 30s Plan
5.51% (SIP) & 14.23% - 40s Plan
9.49% - 50s Plus Plan
13.40% - 50s Plus Floating Rate Plan
Benchmark Indices used Crisil Liquid Fund Index Benchmark***
Net Assets as on September 29, 2006 375.77 (IP) 20.41 - 20s Plan
194.83 (LP) 12.58 - 30s Plan
2901.77 (SIP) 20.05 - 40s Plan
19.05 - 50s Plan
238.25 - 50s Plus Floating Rate Plan
Ratio of Recurring Expenses 0.50% (IP) 0.75% (20s Plan)
1.00% (LP) 0.75% (30s Plan)
0.30% (SIP) 0.50% (40s Plan)
0.25% (50s Plus Plan)
0.25% (50s Plus Floating Rate Plan)
NAV as on January 15, 2007 1153.2868 (GP-IP) 23.4726 - 20s Plan (GP/DP)
1000.7971 (WP-IP) 18.5685 - 30s Plan (GP/DP)
1000.2500 (DDP-IP) 15.4903 - 40s Plan (GP)
1128.4817 (GP-LP) 14.0505 - 40s Plan (DP)
1000.7559 (WP-LP) 13.1660 (GP)/11.7507 (DP) - 50s Plus Plan
1000.2500 (DDP-LP) 13.6101 (GP)/12.0783 (DP) - 50s Plus Floating Rate Plan
Annualised Returns from the date of inception @ 5.71% (IP) 31.38% - 20s Plan
5.33% (LP) 21.89% - 30s Plan
6.48% (SIP) 15.03% - 40s Plan
9.20% - 50s Plus Plan
13.01%- 50s Plus Floating Rate Plan
Benchmark Returns @ 5.08% (IP) 30.42% - 20s Plan
5.21% (LP) 21.66% - 30s Plan
5.67% (SIP) 14.72% - 40s Plan
9.79% - 50s Plus Plan
13.52% - 50s Plus Floating Rate Plan
Benchmark Indices used Crisil Liquid Fund Index Benchmark***
Net Assets as on January 15, 2007 337.71 (IP) 19.56 - 20s Plan
166.99 (LP) 12.41 - 30s Plan
1510.07 (SIP) 22.73 - 40s Plan
18.89 - 50s Plan
222.73 - 50s Plus Floating Rate Plan
Name of the Scheme FISCF FTFTF-IV FTFTF–V TIEIF FTFTF-VI FTCSF
Date of launch 13.1.2006 3.3.2006 21.3.2006 18.5.2006 18.8.2006 29.12.2006
NAV as on September 29, 2006 10.42 (GP/DP) 10.5738 (GP/DP) 10.4528 (GP/DP) 10.56 (GP/DP) 10.3982 (GP/DP) N.A
Annualised Returns from the date of inception @ 4.20%* 5.74%* 4.53% * 5.60% * 3.98%* N.A
Benchmark Returns @ 11.38%* 5.05%* 3.80% * 6.25% * 2.60%* N.A
Benchmark Indices used CNX Midcap 25% S&P CNX 500 Crisil Short Term Bond BSE 200 25% S&P CNX 500 N.A
+ 65% Crisil Composite Fund Index + 65% Crisil Composite
Bond Fund Index Bond Fund Index
+ 10% Crisil Liquid + 10% Crisil Liquid
Fund Index Fund Index
Net Assets as on September 29, 2006
(Rs. in Crores) 1363.06 83.67 407.54 1982.52 167.47 N.A
Ratio of Recurring Expenses 1.97% 1.60% 0.40% 1.90% 1.75% N.A
NAV as on January 15, 2007 11.27 (GP/DP) 11.1049 (GP/DP) 10.7010 (GP/DP) 12.11(GP/DP) 10.9032(GP/DP) 10.08326
Annualised Returns from the date of inception @ 12.63% 11.05%* 7.01% * 21.10% * 9.03%* 0.83%*
Benchmark Returns @ 24.70% 9.49%* 5.25% * 20.45% * 6.95%* 0.55%*
Benchmark Indices used CNX Midcap 25% S&P CNX 500 + Crisil Short Term Bond BSE 200 25% S&P CNX 500 Crisil
65% Crisil Composite Bond Fund Index + 65% Crisil Composite MIP
Fund Index + 10% Crisil Liquid Bond Fund Index + 10% Blended
Fund Index Crisil Liquid Index
Net Assets as on January 15, 2007 1334.66 87.87 417.02 1882.68 175.60 229.21
(Rs. in Crores) (3years)
As of March 31, 2006, the fund had no borrowing.
Note: @ Returns for periods less than one year have been given in absolute terms without annualising the same. Returns for periods greater than one year are on compounded annualised basis
but in case of TITMA less than one year period is annualised. a - Inception/Allotment date NAV, * - Absolute Returns, GP - Growth Plan, DP - Dividend Plan, WP - Weekly Dividend Plan, MP
- Monthly Dividend Plan, DDP - Daily Dividend Plan, I Plan - Institutional Plan, SIP – Super Institutional Plan, LP – Liquid, I – Individuals & HUF, O – Other than Individuals & HUF; FISIP
was launched on 31.10.2003. However, all the plans under the scheme have matured and redeemed. The schemes FIFCF and FTFTF-I have been launched during March 2, 2005 and May 18,
2005 and hence NAVs are not declared. Returns for schemes/plans with dividend distribution are computed assuming re-investing of all payouts at ex-dividend NAV. The above information is
presented scheme wise for all schemes launched by the mutual fund during the last three fiscal years (excluding redeemed schemes). *** Benchmark: The 20s Plan - 65% BSE Sensex + 15%
S&P CNX 500 + 20% Crisil Composite Bond Fund Index; The 30s Plan - 45% BSE Sensex + 10% S&P CNX 500 + 45% Crisil Composite Bond Fund Index; The 40s Plan - 25% BSE Sensex +
10% S&P CNX 500 + 65% Crisil Composite Bond Fund Index; The 50s Plus Plan - 20% BSE Sensex + 80% Crisil Composite Bond Fund Index; The 50s Plus Floating Rate Plan - 20% BSE
Sensex + 80% Crisil Liquid Fund Index.
THE ABOVE INFORMATION IS PRESENTED (TIIBA), Franklin India Maxima Fund (FIMF), Franklin
SCHEME WISE FOR ALL SCHEMES LAUNCHED BY India Growth Fund (FIGF), Franklin India
THE MUTUAL FUND DURING THE LAST THREE Opportunities Fund (FIOF), Franklin Pharma Fund
FISCAL YEARS (EXCLUDING REDEEMED (FPF), Franklin Infotech Fund (FIF), Franklin India
Prima Plus (FIPP), Templeton India Pension Plan
The scheme abbreviations used in this offer document (TIPP), Franklin India Taxshield 97 (FIT97), Franklin
are as follows: India Taxshield (FIT), Franklin India Taxshield 99
Templeton India Growth Fund (TIGF), Franklin India (FIT99), Franklin India Taxshield 98 (FIT98),
Index Fund (FIIF), Franklin India Index Tax Fund Templeton India Government Securities Fund (TGSF),
(FITF), FT India Balanced Fund (FTIBF), Templeton Franklin India International Fund (FINTF) Templeton
Monthly Income Plan (TMIP), FT India Monthly India Liquid Plus (TILP), Templeton India Treasury
Income Plan (FTIMIP), Franklin FMCG Fund (FFF), Management Account (TITMA), Templeton India
Franklin India Bluechip Fund (FIBCF), Franklin India Money Market Account (TIMMA), Templeton India
Prima Fund (FIPF), Franklin India Taxshield 96 Short Term Income Plan (TISTIP), FT India Dynamic PE
(FIT96), Templeton Floating Rate Income Fund - Long Ratio Fund of Funds (FTDPEF), FT India Life Stage
Term Plan (TFIF-LT), Templeton Floating Rate Income Fund of Funds (FTLF). Franklin India Flexi Cap Fund
Fund - Short Term Plan (TFIF-ST), Templeton India (FIFCF), Franklin Templeton Fixed Tenure Fund
Income Fund (TIIF), Templeton India Children’s Asset (FTFTF), Franklin India Smaller Companies Fund
Plan (TICAP), Templeton India Income Builder Account (FISCF), Templeton India Equity Income Fund (TIEIF),
Franklin Templeton Capital Safety Fund (FTCSF), FINANCIAL PERFORMANCE OF THE SPONSOR
Templeton Fixed Horizon Fund (TFHF).
(All figures are in Rupees million except per share data)
(1US$ = Rs.45.79 as on September 29, 2006)
CONSTITUTION / MANAGEMENT OF THE 30-Sep-06 30-Sep-05 30-Sep-04
Total income 231,271.55 197,359.48 157,435.18
Franklin Templeton Mutual Fund (the "Mutual Fund") Profit After Tax 58,043.40 48,427.50 32,359.79
has been constituted as a trust on January 4, 1996 in
Net Worth 306,092.41 260,288.68 233,840.37
accordance with the provisions of the Indian Trusts Act,
1882 (2 of 1882) with Templeton International Inc., as Equity Capital 1,159.40 1,157.30 1,143.28
the Sponsor and Franklin Templeton Trustee Services Earnings per Share 227.58 193.23 130.04
Private Limited as the Trustee. The Trust Deed and the Book Value per Share 1,208.86 1,029.82 936.41
Supplementary Trust Deed have been registered under
Dividend per Share 21.98 109.90 15.57
the Indian Registration Act, 1908. The Mutual Fund was
THE FRANKLIN TEMPLETON GROUP
registered with SEBI on February 19, 1996 under
Registration Code MF-026-96-8. Franklin Resources Inc. is a diversified financial services
company based in San Mateo, California, USA. Through
THE SPONSOR its operating subsidiaries it provides a wide range of
Franklin Templeton Mutual Fund is sponsored by investment products and services to worldwide clients.
Templeton International, Inc. Templeton International Templeton International Inc., the sponsor of the Franklin
Inc., is a wholly owned subsidiary of Templeton Templeton Mutual Fund, is a wholly owned subsidiary of
worldwide Inc., which in turn is a wholly owned Templeton Worldwide Inc., which in turn is a wholly
subsidiary of Franklin Resources Inc. The sponsor was owned subsidiary of Franklin Resources Inc. The Franklin
responsible for setting up and establishing the Franklin Templeton Group is one of the world’s largest investment
management companies. Following are some of the key
Templeton Mutual Fund. The Sponsor is the Settler of
data relating to Franklin Templeton’s Global Operations.
the Mutual Fund Trust. The Sponsor has entrusted a
sum of Rs.1 lakh to the Trustee as the initial contribution 1. Assets Under Management
towards the corpus of the Mutual Fund. The Trustee has US$ 552.9 billion in assets (approximately Rs.24,45,477
appointed Franklin Templeton Asset Management crores) as on 31st December 2006
(India) Private Ltd. as the Investment Manager.
2. Number of Shareholder Accounts
The Sponsor is represented by Directors on the Board of More than 17 million worldwide
the Trustee and the Investment Manager in accordance
3. Number of Schemes Managed Globally
with the Regulations. The Sponsor shall be responsible
About 240 Open End Mutual Funds, Separately
for discharging its functions and responsibilities towards
Managed Accounts and Other Investment Vehicles.
the Fund in accordance with Regulations and the
various constitutive documents of the Fund. 4. Global Offices
There are offices all over the world in over 29 countries
Franklin Templeton Asset Management (India) Pvt. Ltd.
including The United States of America, Bahamas,
(FTAMIL)/Nominees and Franklin Templeton Trustee
Canada, Argentina, France, Germany, Italy, Luxembourg,
Services Pvt. Ltd. (FTTSL) / Nominees had acquired
Poland, Russia, United Kingdom, Hong Kong, Singapore,
100% shares in Pioneer ITI AMC Ltd. and Pioneer ITI
Korea, India, China, Australia & South Africa.
Mutual Fund Pvt. Ltd. respectively, in July 2002 after
obtaining the approval from SEBI. Subsequently the THE FRANKLIN TEMPLETON EDGE
license of Pioneer ITI Mutual Fund was surrendered to Franklin Templeton Investments offers more than 200
SEBI for cancellation. SEBI vide its letter dated February investment products under the Franklin, Templeton,
17, 2003 cancelled the same. Mutual Series, Bissett and Fiduciary Trust names
globally, providing investors with the flexibility to determine domestic and international investment
choose from a great variety of goals-from value to growth strategy. Its objective is to achieve long-term growth of
and sector-specific to international-to meet their income and capital appreciation while managing risk.
individual investment objectives.
Bissett offers a family of Canada-focused equity and
Franklin offers investors both, ‘growth’ and ‘value’ style fixed-income funds, as well as some global funds.
equity products, as well as several focused sector
portfolios. Franklin's growth team looks for companies FRANKLIN TEMPLETON IN INDIA: A LONG TERM
with distinct and sustainable competitive advantages in COMMITMENT
rapidly growing markets, while value-driven analysts
As part of Franklin Templeton’s major thrust on
search for bargains and a catalyst that might unlock the
investing in emerging markets around the world,
companies' hidden worth for shareholders. This group
Franklin Templeton has been investing in India for the
also offers a line of fixed-income funds whose focus is on
income, without speculating on interest rates or buying past several years. These investments are based on
exotic derivatives. Due to Franklin's size and presence in original research and first hand understanding of the
the bond market, portfolio managers receive competitive forces those influence the economic environment.
offerings, which can reduce costs and help boost yields Franklin Templeton has established offices at 33 places
and returns. In fact, among tax-free fund managers, in India with staff strength of about 475.
Franklin is the largest in the nation. The municipal bond
team's success can be attributed to a conservative,
straightforward investment philosophy that emphasizes Franklin Templeton Trustee Services Private Limited
high, current tax-free income, while seeking (the "Trustee"), through its Board of Directors, shall
preservation of capital. Franklin also offers a variety of discharge its obligations to the Franklin Templeton
money funds. Mutual Fund as the Trustee of the Mutual Fund. The
Templeton has more than 45 years of experience in Trustee ensures that the transactions entered into by the
global mutual fund management. Templeton managers AMC are in accordance with the SEBI Regulations and
are bargain hunters, employing a bottom-up, value- reviews the activities carried on by the AMC on a
oriented approach to stock selection. They focus on quarterly basis. The Board of Directors of Franklin
identifying stocks of companies throughout the world Templeton Trustee Services Private Limited held eight
that they believe are selling at the greatest discount to meetings during the year 2005-06.
their five-year potential. They buy at the point of
In accordance with Regulation 18(15) of SEBI
maximum pessimism and sell at the point of maximum
Regulations, the Trustees shall obtain the consent of the
The Mutual Series group of global and domestic equity
a) whenever required to do so by SEBI in the interest of
value funds focus on three types of investment
opportunities: stocks trading at a deep discount to asset the unitholders; or
value; companies in the midst of change such as b) whenever required to so on the requisition made by
mergers, reorganizations, restructuring, division sales or three-fourths of the unitholders of any Scheme; or
purchases, or management changes; and securities that
are distressed or in bankruptcy. While many money c) When the majority of the trustees decide to wind up
managers avoid these situations, Mutual Series' or prematurely redeem the units.
managers believe careful research can uncover In accordance with Regulation 18(15A) of SEBI
exceptional opportunities. Regulations, the trustees shall ensure that no change in
Fiduciary Trust employs an active, disciplined approach the fundamental attributes of any scheme or the trust or
to investment management based on thorough research fees and expenses payable or any other change which
and evaluation of world financial markets. Fiduciary would modify the scheme and affects the interest of
Trust believes a global perspective is essential to unitholders, shall be carried out unless, -
i. a written communication about the proposed Details of other Directorships are as under:
change is sent to each unitholder and an
advertisement is given in one English daily
Franklin Templeton Investments
newspaper having nation wide circulation as well
(Asia) Ltd. Franklin Templeton Management
as a newspaper published in the language of the
region where the head office of the mutual fund
is situated; and Templeton Worldwide, Inc. Templeton Asian Direct
ii. the unitholders are given an option to exit at the
Templeton International, Inc. Templeton Franklin Global
prevailing Net Asset Value without any exit load.
Explanation: In terms of SEBI Regulations and circular Templeton Global
dated February 4, 1998, "Fundamental Attributes" Advisors Limited Templeton Research &
means and includes the following: Management Venezuela, C.A.
(a) Type of scheme. Franklin Templeton Asset
Management S.A. Franklin Templeton Services Ltd.
(b) Investment Objective (objective, investment strategy,
Franklin Templeton International
investment pattern including the tentative
Services S.A. Franklin Templeton Italia SIM SpA
Equity/Debt/Money Market portfolio break-up with
Templeton Global Holdings Ltd. Franklin Templeton France S.A.
minimum and maximum asset allocation, while
retaining the option to alter the asset allocation for a Franklin Templeton Investments
short term period on defensive considerations). Australia Ltd. Franklin Templeton Asset
(c) Terms of the issue (provisions such as listing,
repurchase/redemption, fees, expenses,
Holding Limited Happy Dragon Holdings Ltd.
Franklin Templeton Trustee
The members of the Board of Directors of the Trustee Services Private Ltd. Templeton Research Poland SP.
("the Board of the Trustee") are: - z.o.o.
• Gregory E. McGowan* TRFI Investments Limited
Templeton Worldwide, Inc., 500 East Broward • Anand J. Vashi, Chartered Accountant
Boulevard, Suite 2100, Fort Lauderdale, FL 33394, USA Kalpataru Heritage, 5th Floor, 127 M G Road, Mumbai
Gregory E. McGowan is Executive Vice President, 400 023
Director and General Counsel for International Anand Vashi is a fellow member of the Institute of
Development of Templeton Worldwide, Inc. Mr. Chartered Accountants of India and is in practice from
McGowan serves on various Templeton Boards of 1978. He is a Senior Partner with a firm of Chartered
Directors and also serves as Executive Vice President Accountants. He is also a director on the Board of
and General Counsel of Templeton International Inc., various companies and trustee of charitable institutions.
the Organisation responsible for the expansion and
Details of other Directorships are as under:
operation of Templeton business outside of North
America. Prior to joining the Templeton organisation in Name Details
1986, Mr. McGowan was a senior attorney for the United Lucid Technologies Pvt. Ltd. Director
States Securities and Exchange Commission. He holds a
Millars India Ltd. Director
B.A. Degree in Economics/International Affairs from the
Millars Machinery Co. Pvt. Ltd. Director
University of Pennsylvania, an M.A. Degree from the
University of Paris and a Juris Doctor from Georgetown Pedershaab Millars India Pvt. Ltd. Director
University Law Centre. Uttarak Enterprises Pvt. Ltd. Director
• Percy Jal Pardiwalla, Advocate • Stephen Dover*, International Chief Investment
Officer, Franklin Templeton Advisors,
16, Vishnu Mahal, 'D' Road, Churchgate, Mumbai 400
020 431 Hurlingham Avenue, San Mateo, CA 94402, USA
• Bharat Doshi, Company Executive Stephen H. Dover, CFA, is responsible for overseeing the
8, St. Helen's Court, Dr. Gopalrao Deshmukh Marg, investment functions of the locally managed and
Mumbai 400 026 distributed products outside of the United States and
Canada. Currently he is overseeing the investment areas
Mr. Bharat Doshi is presently the Executive Director, of Franklin Templeton’s local asset management
Finance & Corporate Affairs and President, Trade & companies in: South Korea, Japan, China, Taiwan,
Financial Services Sector of Mahindra & Mahindra Ltd. France, Italy, Hong Kong, Singapore, India, and Brazil.
Mr. Doshi holds a Bachelor's Degree in Commerce and Mr. Dover is a member of the Boards of Directors of
Master's Degree in Law from Mumbai University, and is Franklin Templeton’s Italian asset management
a Fellow Member of the Institute of Chartered
company, Indian Asset Management Company, South
Accountants of India and the Institute of Company
African joint venture, and the Brazilian joint venture.
Secretaries of India. He has also attended the Program
Prior to serving in his current role, Mr. Dover was a
for Management Development (PMD) at the Harvard
founder and Chief Investment Officer of Bradesco
Business School. Mr. Doshi joined Mahindra &
Templeton Asset Management (BTAM), in San Paulo,
Mahindra in 1973 and has held various managerial
Brazil. BTAM, a joint venture formed to serve the
positions over the past 27 years and was elevated to the
institutional market in Brazil, was sold to Bradesco in
Company's Board in 1992. Mr. Doshi serves on the
Boards of several subsidiaries and associate companies in May 2001. While there Mr. Dover specialized in the
the Mahindra Group, including Tech Mahindra Ltd. management of Corporate Governance Funds. Prior to
(formerly Mahindra British Telecom Ltd.) and is a joining Franklin Templeton in 1997, Mr. Dover was a
member of the Board of Governors of The Mahindra portfolio manager and principle at Newell Associates in
United World College of India and the Indian Institute Palo Alto, CA. Newell Associates is a subadvisor for the
of Management, Kozhikode. Vanguard Equity Income Fund well as other
institutional assets. Previously, Mr. Dover worked for
Details of other Directorships are as under: Towers Perrin Consulting in New York, London and San
Name Details Francisco. Prior to graduate school, Mr. Dover was vice
president of Financial Planning at Lefcourt Financial
Mahindra Intertrade Limited Director
Group, a Palo Alto, CA, based money management and
Mahindra & Mahindra Financial Director venture capital firm. Mr. Dover earned a B.A. in business
services Limited administration from Lewis and Clark College in
Mahindra Steel Service Centre Limited Director Portland, OR and a M.B.A in Finance from The Wharton
School of the University of Pennsylvania. He is a
Mahindra & Mahindra Limited Director Chartered Financial Analyst (CFA) as well as a Certified
Mahindra Holdings & Finance Limited Director Financial Planner (CFP). Stephen has worked or studied
in: China, Costa Rica, England, Brazil and the United
Mahindra (China) Tractor Co. Ltd. Director States.
Tech Mahindra Limited Director Details of other Directorships are as under:
Godrej Consumer Product Limited Director
NSE.IT Limited Director
Franklin Resources, San Mateo Managing Director
Bristlecone Limited Director
* These Directors represent sponsors of the Trustee
Mahindra International Limited Director Company and are associates of the sponsor.
RESPONSIBILITIES AND DUTIES OF THE iii) If a majority of the directors of the Trustee
TRUSTEE company decide to wind up the scheme(s) or
prematurely redeem the units
(Substantial Provisions of the Trust Deed and the
Regulations) c) In carrying out his / her responsibilities as a member
of the Board of Trustee each Trustee shall maintain an
Pursuant to the Deed of Trust constituting the Mutual
arms' length relationship with other companies, or
Fund and SEBI (MF) Regulations, the Trustee, inter alia,
institutions or financial intermediaries or any body
has the following responsibilities and duties:
corporate with which he may be associated in any
a) The Trustee shall ensure before the launch of any transaction also involving the Mutual Fund.
scheme that the asset management company has: d) No Trustee shall participate in the meetings of the
i) systems in place for its back office, dealing room Board of Trustee when any decisions for investments
and accounting. in which he / she may be interested are taken.
ii) appointed all key personnel including fund e) All the Trustee shall furnish to the Board of Trustee,
manager(s) for the scheme(s) and market, to the particulars of interest which he/she may have in any
Trustee, within fifteen days of their appointment, other company, or institution or financial
submitted their bio-data, which shall contain the intermediary or any corporate by virtue of his/her
educational qualifications, past experience in the position as director, partner or with which he-she
securities. may be associated in any other capacity.
f) The Trustee shall have the right to obtain from the
iii) appointed auditors to audit the accounts.
AMC such information as is considered necessary by
iv) appointed a compliance officer who shall be the Trustee.
responsible for monitoring the compliance of
g) The Trustee shall ensure that the AMC has been
the Act, rules and regulations, notifications,
diligent in empanelling brokers, in monitoring
guidelines, instructions etc. issued by SEBI or the
securities transactions with brokers and avoiding
Central Government and for redressal of
undue concentration of business with any broker.
h) The Trustee shall ensure that the AMC has not given
v) appointed registrars and laid down parameters any undue or unfair advantage to any associates or
for their supervision. dealt with any of the associates of the AMC in any
vi) prepared a compliance manual and designed manner detrimental to the interest of unitholders.
internal control mechanisms including internal i) The Trustee shall ensure that the transactions entered
audit systems. into by the AMC are in accordance with the SEBI
vii) specified norms for empanelment of brokers and Regulations and the Scheme.
marketing agents. j) The Trustee shall ensure that the AMC has been
managing the Scheme independently of other
b) The Trustee shall obtain consent of the unit holders
activities and have taken adequate steps to ensure
of the Scheme(s):
that the interest of the Scheme are not being
i) When the Trustee is required to do so by SEBI in compromised with those of any other Scheme or of
the interests of the unitholders; or other activities of the AMC.
ii) Upon the request of three-fourths of the unit k) The Trustee shall ensure that all the activities of the
holders of any scheme(s) under the Mutual AMC are in accordance with the provisions of SEBI
Fund; or Regulations.
l) Where the Trustee have reason to believe that the worth by the AMC and the interests of the
conduct of business of the Mutual Fund is not in unitholders.
accordance with SEBI Regulations, they shall
v) The Trustee shall periodically review the investor
forthwith take remedial steps as are considered
complaints received and the redressal of the same by
necessary by them and shall inform the SEBI of the
violation and the action taken by them.
w) The Trust Deed can be amended only with the prior
m) Each Trustee shall file the details of his/her
approval of SEBI and Unitholders, where it affects the
transactions in securities on a quarterly basis with the
interests of the unitholders.
Modifications, if any, in the rights and/or obligations and
n) The Trustee shall be accountable for, and be the
duties of the Trustee are on account of amendments to
custodian of, the funds and property of the Scheme
the Regulations and the Regulations supersede/override
and shall hold the same in trust for the benefit of the
the provisions of the Trust Deed, wherever the two are in
unitholders in accordance with SEBI Regulations and
the provisions of the trust deed.
The Trustee may also consolidate/merge the
o) The Trustee shall take steps to ensure that the
scheme/plan as per SEBI Circular
transactions of the Mutual Fund are in accordance
SEBI/MFD/CIR.No.05/12031/03 dated June 23, 2003
with the trust deed.
and directions issued by SEBI from time to time.
p) The Trustee shall be responsible for the calculation of
The Trustee, in discharge of its duties, and in exercise of
any income due to be paid to the Mutual Fund and
all discretionary powers, may engage, appoint, employ,
also of any income received in the Mutual Fund for
retain, or authorise the AMC to engage, appoint, employ
the holders of the units of the Scheme in accordance
or retain any solicitors, advocates, bankers, brokers,
with the SEBI Regulations and the trust deed.
accountants, professional advisors and consultants as it
q) The Trustee shall call for the transactions in may deem appropriate.
securities of the key personnel of the AMC in his own
Trustee shall exercise due diligence as under:
name or on behalf of the AMC and shall report to
SEBI as and when required. A. General Due Diligence:
r) The Trustee shall review, on a quarterly basis, all i) The Trustee shall be discerning in the appointment of
transactions carried out between the Mutual Fund, the directors on the Board of the asset management
AMC and its associates. company.
s) The Trustee shall review the net worth of the AMC on ii) Trustee shall review the desirability of continuance of
a quarterly basis and in case of any shortfall, ensure the asset management company if substantial
that the AMC make up for the shortfall as per clause irregularities are observed in any of the schemes and
(f) of sub-regulation (1) of regulation 21 of the SEBI shall not allow the asset management company to
Regulations. float new scheme.
t) The Trustee shall periodically review all service iii) The trustee shall ensure that the trust property is
contracts such as custody arrangements, transfer properly protected, held and administered by proper
agency and satisfy itself that such contracts are persons and by proper number of such persons.
executed in the interest of the unitholders.
iv) The trustee shall ensure that all service providers are
u) The Trustee shall ensure that there is no conflict of holding appropriate registrations from the Board of
interest between the manner of deployment of its net concerned regulatory authority.
v) The Trustee shall arrange for test checks of service vi) code of ethics must be designed to prevent
contracts. fraudulent, deceptive or manipulative practices by
insiders in connection with personal securities
vi) Trustee shall immediately report to Board of any
special developments in the Mutual Fund.
B. Specific Due Diligence: vii) the reasonableness of fees paid to sponsors, asset
management company and any others for services
i) Obtain internal audit reports at regular intervals from provided.
independent auditors appointed by the Trustee.
viii)principal underwriting contracts and their renewals.
ii) Obtain compliance certificates at regular intervals
from the asset management company. ix) any service contract with the associates of the asset
iii) Hold meeting of Trustee more frequently.
Pursuant to the Deed of Trust constituting the Mutual
iv) Consider the reports of the independent auditor and
Fund, the Mutual Fund is authorised to pay to the
compliance reports of Asset Management Company
Trustee, which in turn pays to its individual directors, a
at the meetings of Trustee for appropriate action.
fee for their services in such capacity. Out of pocket
v) Maintain records of the decisions of the Trustee at expenses incurred for attending meeting of trustee shall
their meetings and of the minutes of the meetings. be paid separately and shall be charged to the fund
vi) Prescribe and adhere to a code of ethics by the within overall ceiling of 2.25%.
Trustee, Asset Management Company and its Mr. Gregory McGowan and Mr. Stephen Dover, however,
personnel. will not receive any fees to act as Directors of the
vii) Communicate in writing to the asset management Trustee.
company of the deficiencies and checking on the The Trustee has appointed Franklin Templeton Asset
rectification of deficiencies. Management (India) Private Ltd. as the Investment
The Trustee shall not be held liable for acts done in good Manager and Citibank, Mumbai as the Custodian.
faith if they have exercised adequate due diligence RIGHTS OF UNITHOLDERS
1) Unitholders under the Scheme have a proportionate
The independent directors of the Trustee or asset right in the beneficial ownership of the assets of and
management company shall pay specific attention to the to the dividend declared, if any, by the scheme under
following, as may be applicable, namely: the Fund.
i) the Investment Management Agreement and the 2) The Unitholders shall have right to ask the Trustee
compensation paid under the agreement. about any information, which may have an adverse
ii) service contracts with affiliates – whether the asset bearing on their investments, and the Trustee shall be
management company has charged higher fees than bound to disclose such information to the
outside contractors for the same services. Unitholders.
iii) selection of the asset management company’s 3) In case the Mutual Fund declares a dividend under
independent directors. the Scheme, the Unitholders are entitled to receive
dividend warrants within 30 days of the date of
iv) securities transactions involving affiliates to the
declaration of the dividend and in case of
extent such transactions are permitted.
redemptions, unitholders are entitled to receive
v) selecting and nominating individuals to fill redemption proceeds within 10 working days subject
independent directors vacancies. to certain limitations as described under "Right to
Limit Redemptions". In terms of Regulation 53(c) Investment Manager was approved by SEBI to act as the
read with SEBI Circular dated May 19, 2000, in the AMC for the Mutual Fund vide their letter
event of failure to dispatch the redemption or No.IIMARP/406/96 dated February 19, 1996.
repurchase proceeds within the period specified
above, the asset management company shall be liable DUTIES AND OBLIGATIONS OF THE
to pay interest to the unitholders at such rate as may INVESTMENT MANAGER
be specified by SEBI for the period of such delay Under the IMA, the Investment Manager has, inter alia,
(presently @ 15% per annum). the following duties and obligations:
4) The appointment of an AMC for the Fund may, with a) To manage the acquisition, holding and disposal of
the prior approval of SEBI, be terminated by 75% of the assets of the Mutual Fund and the various
the Unitholders or by a majority of the Board of schemes framed thereunder in accordance with the
Directors of the Trustee. investment objectives, policies and restrictions set
5) Unitholders have the right to inspect all the out in each Scheme’s offer document and with the
documents listed under the heading "Documents SEBI Regulations.
Available for Inspection". b) To act as the Investment Manager of the Mutual Fund
with respect to the investment and reinvestment of
PROCEDURE FOR UNITHOLDER APPROVALS
the cash, securities and other properties comprising
The Trustee will call for a meeting of the Unitholders of the assets of each Scheme organized under the
the Scheme or adopt postal ballot or any other Mutual Fund with full discretionary authority in
appropriate method whenever it is required to do so in accordance with the investment policies set forth in
the interest of the Unitholders, or as required by the the Deed of Trust and by the SEBI Regulations from
SEBI Regulations for the time being in force or if the time to time.
Trustee determines to modify the Scheme or prematurely
c) To provide the Trustee or any party designated by the
redeem the Units or wind up the Scheme.
Trustee with: -
INVESTMENT MANAGER • evaluation of current economic conditions;
Franklin Templeton Asset Management (India) Private • evaluation of particular prospects in the securities
Ltd. is a private limited company incorporated under the markets;
Companies Act, 1956 on October 6, 1995, having its
Registered Office at Level 4, Wockhardt Towers, Bandra • investment research and advice for the assets of the
Kurla Complex, Bandra (East), Mumbai 400 051. Franklin Mutual Fund consistent with the provisions of the
Templeton Asset Management (India) Private Ltd. has Deed of Trust and the investment policies and
been appointed as the Asset Management Company of the guidelines adopted and declared by the Trustee; and
Mutual Fund by the Trustee vide Investment Management • any other activities as may be directed by the Trustee.
Agreement (IMA) dated January 5, 1996, executed
d) To assume day to day investment management of the
between Franklin Templeton Trustee Services Pvt. Ltd and
Mutual Fund and, in that capacity, make investment
Franklin Templeton Asset Management (India) Pvt. Ltd.
decisions and manage the Mutual Fund in
Out of the Investment Manager’s total equity paid-up
accordance with the Scheme Objectives, the Deed of
capital of Rs. 59.33 crores, 75% is held by Franklin
Trust and provisions of the SEBI Regulations.
Templeton Holding Ltd., Mauritius with the balance of
about 25% being held by Hathway Investments Pvt. Ltd. e) To ensure that the delivery of scrips purchased is
Hathway Investments is an Indian investment company, a taken and that delivery is given in the case of scrips
member of the Rajan Raheja group of companies. The sold and that the Mutual Fund in no case engages in
short selling or carry-forward transactions or badla duties of the Investment Manager are on account of
finance. amendments to the Regulations and the Regulations
supersede/override the provisions of the IMA, wherever
f) To ensure that no Offer Document of a Scheme, Key
the two are in conflict.
Information Memorandum, abridged half yearly
results and annual results is issued or published The AMC had obtained a certificate from SEBI to act as
without the prior approval of the Trustee. a Portfolio Manager under Securities and Exchange
Board of India (Portfolio Managers) Rules and
g) To report all investments to the Trustee and the
Regulations, 1993, vide registration No.INP000000464
Custodian of the Mutual Fund.
and commenced the activity. The AMC has also obtained
h) To hold all assets of the Mutual Fund separate from a No-Objection letter from SEBI under Regulation 24(2)
its own assets, free and clear of all liens, claims and of Securities and Exchange Board of India (Mutual
encumbrances of any party, except as provided in the Funds) Regulations, 1996 for commencing the Portfolio
IMA and segregate the assets under its management, Managers activity. SEBI has accorded it’s no objection for
Scheme-wise. providing non-binding investment advisory services to
i) To submit such quarterly reports to the Trustee Franklin Templeton Asset Management Ltd. for
regarding the Investment Manager’s activities as Hagstromer & Qviberg Fond I Fond AB (H&Q).
specified in the IMA as the Trustee or SEBI may Further, SEBI has accorded its no objection for providing
prescribe from time to time. non-binding investment advisory services to the group/
subsidiaries of the sponsor company for Franklin
j) To maintain books and registers about the operation Templeton group, which are established outside India
of various schemes of the Mutual Fund under its and invest in securities as FIIs or sub-accounts. The
management to ensure compliance with the SEBI AMC confirms that these activities are not in conflict
Regulations, and demonstrate that such compliance with the activities of the mutual fund as envisaged in
by it has been achieved. Regulation 24(2) of the SEBI (MF) Regulations.
k) To report market prices of the securities in which the
BOARD OF DIRECTORS
Mutual Fund’s assets are invested to the Trustee and
Custodian(s) of the Mutual Fund, as required for the The Board of Directors of the Investment Manager is: -
purpose of determining the NAV of the Mutual Fund.
• Vijay C. Advani*
l) To disclose the basis of calculating the re-purchase
484 Walsh Road, Atherton, CA 9402, USA
price and NAV of the various schemes in the Scheme
particulars and to disclose the same to investors at Mr. Advani is currently Executive Vice President, Global
such intervals as may be specified by the Trustee and Advisor Services, Franklin Templeton Investments. He
SEBI. joined the Templeton organisation in 1995 and was
responsible for developing Templeton's activities in
m) To obtain from the Custodian(s) of the Mutual Fund,
India. Prior to joining the Templeton organisation, Mr.
from time to time, such financial reports, proxy
Advani was employed by the International Finance
statements and other information relating to the
Corporation (IFC), the private sector arm of the World
business and affairs of the Mutual Fund as the
Bank Group, where his primary responsibility was in
Investment Manager may reasonably require in order
providing advisory and technical assistance to
to discharge its duties and obligations as specified in
government authorities on the development of securities
the IMA, or to comply with the SEBI Regulations, or
and financial markets, structuring, establishing and
any applicable law, rules and regulations.
financing specialized financial institutions; and
Modifications, if any, in the rights and/or obligations and mobilizing equity, quasi-equity and debt financing.
During his ten-year career with the IFC, Mr. Advani Mr. Plafker relocated to Franklin Templeton’s
worked on several emerging economies in the former headquarters in the United States.
Soviet Union, Asia, Middle East and Africa. Mr. Advani
Mr. Plafker earned a Bachelor of Arts degree in
received an MBA from the University of Massachusetts,
Economics and Business from Lafayette College in
Amherst, where he graduated as a Foreign Student
Easton, Pennsylvania and a Juris Doctorate from the
Scholar and received a Bachelor's Degree in Accounting
University of Miami in Coral Gables, Florida.
and Finance from the University of Mumbai, India
• Dr. J. Mark Mobius*
• Jed Plafker*
Block 11, Waterside Apartments, No. 06-02 Tanjong
4278 Silver Meadow Court, Danville, CA 94506, USA Rhu Road, Singapore
Mr. Jed Plafker is the Alternate Director to Mr. Vijay J. B. Mark Mobius, born in 1936, joined Templeton in
Advani. He is currently serving as Executive Managing 1987 and is Managing Director of Registrant. He is also
Director of Franklin Templeton International. In this a Director and Executive Vice President of Templeton
capacity, he is responsible for the international retail Global Advisors Limited and an officer or Director of
sales and marketing function. He is also serving as various Templeton investment companies. Prior to
Managing Director of Franklin Templeton Alternative joining Templeton, he was the President of International
Strategies overseeing the sales, marketing and Investment Trust, Taiwan (1/85-2/87), Director of
distribution of FT's alternative investment products. He Research for Vickers da Costa, Hong Kong / Taiwan
is also a Director of various Franklin Templeton (2/80-1/85) and President of Mobius Consultants (6/69-
corporate and investment entities. 2/80). He holds a BA in Fine Arts, an MBA in Mass
Mr. Plafker joined the Franklin Templeton Group in Communications from Boston University and a Ph.D. in
1995 as an attorney in Franklin Templeton's Corporate Economics from Massachusetts Institute of Technology.
Legal Department. In January 1998, Mr. Plafker joined He also studied at the University of Wisconsin,
the International Legal Team as a Vice President University of New Mexico, and Kyoto University in
covering legal issues around the world. In May 2000, he Japan.
moved to Franklin Templeton's Hong Kong office to • Jennifer J. Bolt*
become Chief Legal Counsel, Asia, where he had
550 Eucalyptus Avenue, Hillsborough, CA 94010, USA
responsibility for all legal issues effecting FT's Asia
business, products and people. Ms. Jennifer Bolt is the Alternate Director to Dr. J. Mark
Mobius. She is Executive Vice President of Operations and
In April 2001, Mr. Plafker took on the role of Country
Technology for Franklin Resources, Inc. In this role, Ms.
Head in Hong Kong where he ran the sales and
Bolt oversees the Global Transfer Agency operations,
marketing operations for Hong Kong while continuing
Investment Management Services and has global
in his role as Chief Legal Counsel for Asia. In July 2002
responsibilities for software development and
he became Managing Director of Franklin Templeton
infrastructure/systems support. She serves on the boards of
Alternative Strategies. In January 2003, Mr. Plafker
Fiduciary Trust Company International, Franklin Capital
relocated to London to become one of five Managing
Corporation, Franklin Templeton Bank & Trust, and
Directors of Franklin Templeton's International Retail
Franklin Templeton International Services (India), Pvt. Ltd.
Group where he was responsible for overseeing the sales
and marketing of all FT products in Africa, Middle East, Ms. Bolt was named "E-commerce Executive of the Year"
and parts of Europe including the UK, Spain, in 2002 by mutual fund industry newsletter, Fund
Switzerland and various Nordic countries. In June 2005 Action. She was also instrumental in the creation of
AdvisorCentral.com, a groundbreaking industry-wide Mr. Vaidyanathan, B. Com., FCA, AICWA, ACS, started
portal that provides a single-site solution for investment his career as a practising Chartered Accountant in his
professionals. family Chartered Accountancy firm. After a few years of
Ms. Bolt is a graduate of the American Banker’s practice, he chose to enter into the line of investment
Association’s Stonier Graduate School of Banking. She consultancy. He took up marketing and distribution of
earned her B.A. in economics from the University of financial products and promoted the concept to various
California at Davis. Ms. Bolt is a Board member of investors and companies. Today, this has grown into a
Keynote Systems, Inc. venture now known as "Integrated Enterprises (India)
Ltd." which is acting as a Total Financial Service
• Rajan Raheja*
Provider for investors who constitute the bottom end of
"Rahejas", 87/1, Gangadhar Baskar Marg, Juhu, Mumbai the income pyramid.
• Navroz Seervai
Mr. Raheja is a renowned businessman, who has been
8, Shiv Shanti Bhavan, M. Karve Marg, Mumbai 400 020
involved in the construction business for the past 30
years. The Raheja group is diversified into other Mr. Navroz H. Seervai is a leading Advocate in Mumbai.
business areas that include cement, petrochemicals, He is actively involved in public interest litigation in the
hotels, automotive batteries, ceramic tiles and cable TV field of Environmental Law and Civil Liberties and
network. Human Rights. He started practice in the Bombay High
• Deepak Satwalekar Court in the Chambers of R. J. Joshi and A. M. Setalvad,
specialised in Constitutional and Administrative Law,
9, Nutan Alka Co-op. Hsg. Society Ltd. Relief Road, Company and Corporate Law, and Environmental Law.
Santacruz (West), Mumbai 400 054
He completed his B.A. (Hons) from Elphinstone College
Mr. Satwalekar obtained a Bachelors Degree in in 1977 and earned his Law degree from the
Technology with a Major in Mechanical Engineering
Government Law College, Mumbai in 1981. While
from the Indian Institute Technology, Mumbai. He has
studying law, Navroz won many awards - the Kinloch
completed a Masters Degree in Business Administration
Forbes Gold Medal for Jurisprudence & the Telang
from the American University, Washington D.C. Mr.
Memorial Gold Medal. Navroz also dedicates a lot of his
Satwalekar is currently, the Managing Director and CEO
time and energy to various social activities. He is a
of HDFC Standard Life Insurance Co. Ltd. Until recently,
member of the Peoples’ Union for Civil Liberties & the
he was the Managing Director of Housing Development
Bombay Environmental Action Group since 1981.
Finance Corporation Ltd. He has been a consultant to
the World Bank, the United States Agency for * These Directors are associated with the sponsor or its
International Development (USAID) and the United associates.
Nations Centre for Human Settlements (HABITAT). Mr.
Satwalekar is actively involved in the Confederation of
Indian Industries. Recipient of the "Distinguished Pranita Gramopadhye
Alumnus Award" from IIT, Mumbai. He is also a
Director on the boards of several companies.
Level 4, Wockhardt Towers
• P. Vaidyanathan
Bandra Kurla Complex
7AB, 3rd Block, 7th Floor, Kences Enclave, No. 1
Ramakrishna Street, T. Nagar, Chennai 600017 Bandra (East), Mumbai 400 051, India.
INFORMATION ON KEY PERSONNEL:
Name Age Qualifications Functions & Experience
Vivek Kudva 47 B. Tech (Electrical) President, Franklin Templeton Asset Management
Total Experience 20 years & PGDM (India) Pvt. Ltd. (based at Mumbai)
Responsible for building the AMC’s business in India.
• National Bank of Oman, General Manager - Banking
(2004-2006). Responsible for all business lines.
• HSBC India, Head - Personal Financial Services (2001-
2004). Responsible for the Bank’s Consumer Banking
business in India
• HSBC India, Head - Credit Cards (1997-2000).
Responsible for the Bank’s credit cards business in India
Sanjay Sapre 37 M.B.A (USA) Director, TA Operations - Asia
Total Experience 11 years (based at Mumbai)
Responsible for the company’s Transfer Agency Operations
and Customer Service functions in India (2003 to date).
Franklin Templeton International Services (India) Pvt. Ltd.
(2002 - 2003) Manager, Global Enterprise Consulting (Asia)
(2002-2003), Franklin Templeton Asset Management (India)
Pvt. Ltd (2001 - 2002) eBusiness Manager (Asia).
• Various Management positions at Thomas Cook (India)
Limited (1997 - 2001) including responsibilities in the areas
of Technology, Marketing support, Special projects and
• Operations Manager with Pinnacle Data Systems, Inc. in the
USA (1993 - 1995) handling the purchase and operations
functions of the company.
• Purchasing Manager / Director with Henkel Chemicals
(India) Limited (1990 - 1992).
Vivek Pai 36 B.Com, ACA Director, FTS India AMC (based at Mumbai)
Total Experience 10 years Having joined Templeton in 2000, his role largely involves
general management of several functions within the
operations department such as Fund Accounting, Custody
and Cash Management.
• Prior to this he was the Compliance Officer and was
responsible to Trustees for Compliance and Internal Audit
of the Mutual Fund. (2000-2003).
• He was acting as a Consultant for setting up back office
operations for a new company.
• Birla Sun Life Asset management Company Limited from
(1996-2000) as Head of Fund Accounting.
• Apollo Finvest (India) Ltd as Asst. Manager, Corporate
Finance handling Lease & HP financing (1994-1996).
Pranita Gramopadhye 33 B.Com, ACA Compliance Officer (based at Mumbai)
Total Experience: 7 years Franklin Templeton Trustee Services Private Ltd.
• Having joined Templeton in July 2000, she is responsible
to Trustees for Compliance and Internal Audit of the
Mutual Fund. She is also responsible for compliance of
Portfolio Management Services.
• Franklin Templeton Asset Management (India) Pvt. Ltd.
(2001-2003), Manager Compliance and was handling
compliance of mutual fund regulations and other
• Prior to this she was managing back office cash operations
and custody services (2000-2001).
• Reliance Industries Ltd. (1997-2000)-Manager,
Management Information, Business Analysis and Cost
• P.C Hansotia & Associates (affiliated to Deloitte Haskins &
Sells) (1996 -1997)-Manager, Auditing of corporate clients.
S. Rajagopalan 41 B.Sc. (Maths) Asst. Vice President, Transfer Agency and Customer
Total Experience 17 years Services (based at Chennai)
• Oversees the operations and customer services of the
• From 1999- May 2003-Karvy Consultants- Heading the
Templeton MF unit and supervising all process related
activities. Client co-ordination, regular review meetings
with the internal auditors, internal teams and visiting
• From 1993-1999-MCS Ltd. Mumbai. Handling close
ended Mutual Fund schemes and investor services.
Maintaining relationship with client and co-ordinating
with internal auditors/distributors etc.
Franklin Equity Team
R. Sukumar 42 B.E (Univ. of Roorkee) Chief Investment Officer - Franklin Equity Funds
Total Experience 17 years PGDM (IIM Bangalore) (based at Chennai)
Manages FTDPEF & FIGF He is also a co-fund manager for
FIFCF FIPP & FTLF .
• Vice President and Fund Manager - Pioneer ITI AMC Ltd.
• Asst. Vice President - Indbank Merchant Banking Services
Ltd. (1990-1994) advising Indian Opportunities Fund
• Decision Support Systems Group, Tata Steel (1986 - 1988)
K. N. Siva Subramanian 44 BE (REC Jaipur) Senior Vice President and Portfolio Manager - Equity
Total Experience 17 years PGDM (IIM Calcutta) (Based at Chennai)
Manages FIBCF & FIOF He is also a co-fund manager for
FIFCF FIPF & FFF .
• Vice President and Fund Manager - Pioneer ITI AMC Ltd.
(1993 - 2002)
• Industrial Finance Officer, Industrial Development Bank
of India (1988 - 1993)
Anand Radhakrishnan 37 CFA, Vice President and Portfolio Manager (based at Chennai)
Total Experience 12 years ,
PGDM (IIM), B.Tech Manages equity portions of FTIBF TIPP, TICAP, TMIP,
FTIMIP., FTCSF FTFTF-I/II/III/IV &VI Responsible for
• 2004-2006, Fund Manager for the Portfolio Management
Services of the AMC.
• 1996-2004, Fund Manager – Sundaram Asset management
• 1994-1996, Deputy Manager, Portfolio Manager of Asian
Convertible and Income Fund – SBI Funds Management
Anil Prabhudas 45 CA Assistant Vice President and Portfolio Manager
Total Experience 19 years (based at Chennai)
Manages FIIF & FITF He is a co-fund manager for FFF ,
FIT97, FIT98 & FIT99. He also provides Research support
on Oil & Gas, Petrochemicals, Engineering, Power and Hotel
• Asst. Vice President - Investments - Pioneer ITI AMC Ltd.
• Petrosil Oil Co. Ltd.
• L. U. Krishnan & Co.
Satish Ramanathan 40 B. Tech., MBA Vice President and Portfolio Manager (based at Chennai)
Total Experience 12 years , .
Manages FPF FIT, FISCF He is a co-fund manager for
FIPP, FIPF FIT97, FIT98 & FIT99. Responsible for
analysing some of the key sectors including auto.
• 2000-2004, Vice President - ICICI Securities
• 1997-2000, Senior Analyst - Sundaram Mutual Fund
• 1995-1996, Birla Marlin and Daewoo Securities
• 1993-1995, Asst. Manager - ICRA Limited.
Jyoti Kumar Agarwal 32 B.Com., CA, Assistant Vice President and Portfolio Manager (based at Chennai)
Total Experience 6 years MBA, CFA .
Manages FIF Responsible for research support on
Technology, Media & Telecom sectors.
• 2003-2004, Sr. Associate – The Boston Consulting Group.
Responsible for Consulting.
• 2000-2001, Assistant Manager – Raymond Ltd.
Responsible for Corporate Strategy.
• 1998-2000, Credit & Banking - Bharat Petroleum
Corporation Ltd.. Responsible for Regional Treasury
Templeton Equity Team
Chetan Sehgal 38 B.E. (Mech), PGDBA Director, Research - India and is part of the team
Total Experience 13 years (IIM-Bangalore), CFA managing TIGF & TIEIF (based at Mumbai)
• He joined Templeton in 1995 as Investment Analyst with
the emerging markets group and is currently a Portfolio
• As a Portfolio Manager and Analyst, Chetan analyses
stocks across a wide gamut of sectors, industries and
geographies within the emerging markets group which
invests in about 40 countries under the direct supervision
of Dr. Mark Mobius.
• Before joining Templeton, he had a 3-year stint at CRISIL,
India’s largest rating agency currently affiliated with
Standard & Poor. He has experience in rating corporate
securities across various industries and was also involved
in structuring debt instruments including securitisation
Vikas Chiranewal 26 B.Com.(Hons), Manager, Emerging Markets Group
Total Experience 3 Years PGDM(IIM,Lucknow), (based at Mumbai)
He is Responsible for Investments in ADRs/GDRs/ Foreign
Securities and overseas ETFs (for Templeton Equity Team),
Research for the Emerging Markets Group and related activities.
• Manager, Morgan Stanley Advantage Services Pvt. Ltd.
(April 2004 – January 2006). Handled Equity Research for
US listed REITS.
• Junior Information Analyst, McKinsey Knowledge Center
Pvt. Ltd. (June 2001 – June 2002). He was part of Research
team for Consulting Assignments.
Fixed Income/ Debt Team
Santosh Kamath 38 B. E. (Electronics & Chief Investment Officer – Fixed Income
Total Experience 11 years Telecommunication); (based at Mumbai)
P.G.D.B.M. Manages debt portion of FTCSF .
• ING Investment Management (India) Pvt. Ltd. CIO – Fixed
Income (2003-2006). Responsible for overseeing Fixed
Income Fund Management and managing specific funds.
• Zurich Asset Management Company (India) Pvt. Ltd. –
Fund Manager (2000-2003). Responsible for overseeing
Fixed Income Fund Management and managing specific
• CRISIL Ltd. - Head – Capital Market Research (1997-2000).
Responsible for developing specific tools for financial
markets & Financial Research
• Jardine Fleming India Asset Management Ltd. – Fund
Manager (1995-1997). Responsible for managing specific
funds and research.
• SBI Funds Management Pvt. Ltd. – Fund Manager (1993-
1995). Responsible for managing specific funds and research.
Sachin Padwal-Desai 33 B.E., PGDM
Total Experience 9 years (IIM-Banglore) Assistant Vice President, Fixed Income
(based at Mumbai).
Responsible for Investments and Fund Management
Schemes managed: He is co-fund manager to TIIF TIIBA,
TISTIP, TFIF TITMA, TGSF FINTF and Debt portions of
FTIBF TICAP, TIPP, FTFTF-I/II/III/IV/VI, FTLF & FTDPEF.
• ICICI Bank Ltd - Balance sheet Management, Interest rate
risk management, SLR maintenance, liquidity management
• Infosys Technologies Ltd – Software Engineer
• Thermax Ltd – Designing, testing and approval of
weldments on boilers and other pressure vessels.
Ninad Deshpande 29 B.E., MMS (JBIMS) Senior Manager, Fixed Income (based at Mumbai).
Total Experience 6 years Responsible for Investments and Fund Management.
Schemes managed: He is Co-fund manager to TIIF TIIBA,
TISTIP, TFIF TGSF – PF Plan & Long Term Plan, TITMA,
TIMMA, FINTF TILP and Debt Portions of FTIBF FTIMIP,
TMIP, TICAP, TIPP, FTFTF-V/VI, FTLF & FTDPEF.
• Bank of Bahrain & Kuwait BSC- Deputy Manager managing
the SLR book as well as trading in government bonds and
non-SLR bonds, Maintaining CRR and ALM for the Bank.
SBI Gilts Ltd- Dealer, trading in G-Secs, managing the
funding requirement, handling research on debt market.
Pallab Roy 31 MBA (Fin.), Manager - Fixed Income (based at Mumbai).
Total Experience: 5 Years M.Com., DBF Responsible for Investments and Fund Management.
Schemes managed: He is Co-fund manager to FTFTF
I/II/III/IV/V, TGSF-TP, TMIP, FTIMIP, TIMMA & TILP
• Franklin Templeton Asset Management (India) Pvt. Ltd.
(June 2001 – till date). Responsible for Liquidity
Management & Portfolio MIS – Fixed Income funds.
Fund Manager for the Scheme: Mr. Ninad Deshpande.
PROCEDURE FOR INVESTING The Investment team comprising of CIO and Portfolio
Managers meets every day to discuss market movement
The main aim of the investment process is to meet Fund
specific investment objectives and to develop a well- and analyse events and news. Trading strategy and asset
diversified, high credit portfolio that minimises liquidity allocations are firmed in the daily meetings. Daily
risk and credit risk. The Investment committee meetings are formal in nature and form the basis for
comprising of International CIO, CIO and Portfolio maintaining investment records as per SEBI regulations.
Managers meets every month for a review of performance There is a periodic call with the international CIO for
and risk reports. The performance review includes market update, asset allocation and interaction for global
portfolio holding, peer group review, policy deviation, information. The CIO makes presentations to the Board
performance vis-à-vis peers and benchmark indices etc. of the AMC and the Trustees periodically, indicating the
performance of the scheme(s). The Investment process is the Mutual Fund. The Trustee shall appoint auditors for
intensely research oriented. It comprises of qualitative as each Scheme of the Mutual Fund. Further, the Trustee
well as quantitative measures It is approved by the Boards has the right to change the Auditors. S.R. Batliboi & Co.
of the AMC and the Trustee Company and forms the basis have however, not performed any services in connection
for approach to the Investment management process. It with this Offer Document.
has critical insights from the rich experience gathered by
Franklin Templeton Investments over 50 years across INVESTORS RELATION OFFICER
various markets and asset classes. S. Rajagopalan, Assistant Vice President, Transfer Agency
and Customer Service, Franklin Templeton Centre, Door
# 7, 3rd Cross Street, Adyar Chennai 600020.
The scheme has identified ‘Crisil Liquid Fund Index’ as
The Trustee is satisfied that the investor services division
has adequate capacity and systems to discharge the
The AMC / Trustee reserve the right to change / modify various obligations relating to investor servicing as
the benchmark by issuing an addendum. provided in the regulations and to handle investor
Citibank N.A., Plot C/61, "G" Block, Bandra Kurla
Complex, Bandra (East), Mumbai 400 051 has been INVESTMENT OBJECTIVES AND POLICIES
appointed the custodian (the "Custodian"). The approval Investment Objective
for appointing CitiBank as Custodian has been granted by
SEBI vide their Registration Certificate No. IN/CUS/004 Templeton Fixed Horizon Fund – 3 Months Plan (TFHF
dated April 7, 1998. – 3M) is a closed - end income fund that seeks to generate
returns and reduce interest rate volatility, through a
The Custodian will keep in safe custody all the securities portfolio of fixed income securities with a maturity profile
and other such instruments belonging to the Fund, generally in line with the fund's duration.
ensure smooth inflow-outflow of securities and such
other instruments as and when necessary in the best The investment policies of the scheme shall be as per SEBI
interest of the investors, and ensure that the benefits due (Mutual Funds) Regulations, 1996, and within the
to the holdings are recovered. The Custodian will charge following guidelines in conformity with Investment
the Fund a fee as per the custodial service agreement. The Management Agreement and Trust Deed.
Trustee has the right to change the Custodian, if it deems. Asset Allocation:
REGISTRARS AND TRANSFER AGENTS Under normal market circumstances, the investment
range of the Scheme / each Plan would be as follows:
Sale/Repurchase/transfer/transmission of the scheme
units will be processed in-house and at competitive rates. Instruments Risk Profile % of Net Assets
The fees will be charged to the scheme as a part of annual Debt securities and
ongoing expenses and shall confirm to sub-clause 15 of Money Market Instruments* Low to Medium 100%
Regulation 25 of SEBI (Mutual Funds) Regulations, 1996.
* including Securitised Debt up to 100%, exposure in derivatives
COLLECTING BANKERS up to a maximum of 50%.
The Mutual Fund has not appointed any collecting • The Scheme/ each Plan will invest in a portfolio
bankers for accepting application forms for this scheme predominantly of fixed income securities that are
during the New Fund Offer. During the New Fund Offer, generally maturing in line with the duration of the
the application forms will be accepted at any of the Scheme.
Franklin Templeton Branch offices [Investor Service • The Fund Manager will have flexibility to invest the
Centres (ISC)] as given at the end of the Offer Document. debt component into floating rate debt securities. The
asset allocation pattern described above may alter
from time to time on a short-term basis on defensive
S.R. Batliboi & Co. 6th Floor, Express Towers, Nariman considerations, keeping in view market conditions,
Point, Mumbai 400 021, is the Auditor for this Scheme of market opportunities, applicable regulations and
political and economic factors. However, if the asset government securities and money market
allocation pattern is to be altered for other reasons, as instruments. Further, investment within such limit
this is a fundamental attribute, the procedure outlined can be made in mortgage backed securitised debt
in the paragraph on fundamental attributes below, which are rated not below investment grade by a credit
shall be followed. rating agency registered with SEBI.
INVESTMENT RESTRICTIONS 8. The scheme shall not invest more than 10% of its NAV
in unrated debt instruments issued by a single issuer
In pursuance of the Regulations, the following and the total investment in such instruments shall not
restrictions are currently applicable to the scheme: exceed 25% of the NAV of the scheme. All such
1. Investment in securities from the scheme’s corpus in investment shall be made with the prior approval of
plan would be only in transferable securities in the Trustee and the Board of the AMC.
accordance with Regulation 43 of Chapter VI of SEBI 9. The fund may invest in various type of securitisation
[Mutual Funds] Regulations, 1996. issuances, including but not limited to Asset Backed
2. The Scheme shall buy and sell securities on the basis Securitisation, Mortgage Backed Securitisation,
of deliveries and shall in all cases of purchases, take Personal Loan Backed Securitisation, Collateralised
delivery of relative securities and in all cases of sale, Loan Obligation / Collateralised Bond Obligation and
deliver the securities and shall in no case put itself in so on.
a position whereby it has to make short sale or carry
10. Transfers of investments from one Franklin Templeton
forward transaction or engage in badla finance,
Mutual Fund scheme to another will be done as
provided that mutual funds may enter into derivatives
transactions in a recognised stock exchange, subject to
such guidelines as may be specified by SEBI. - such transfers will be done at the prevailing
market price for quoted instruments on spot basis.
3. The Mutual Fund shall, get the securities purchased or
transferred in the name of the mutual fund on account - the securities so transferred shall be in conformity
of the concerned scheme, wherever investments are with the investment objective of the scheme to
intended to be of long term nature. which such transfer has been made.
4. No investment shall be made in any Fund of Funds 11. No investment shall be made in
- any unlisted security of an associate or group
5. The Scheme may invest in any other scheme with company of the sponsor; or
similar investment objectives without charging any
fees, provided that aggregate interscheme investment - any security issued by way of private placement by
made by all schemes under the management of an associate or group company of the sponsor; or
Franklin Templeton Asset Management (India) Private - the listed securities of group companies of the
Limited or in schemes under the management of any sponsor which is in excess of 25% of the net assets.
other AMC shall not exceed 5% of the net asset value
of the mutual fund. 12. Pending deployment of funds of a scheme in securities
in terms of investment objectives of the scheme a
6. The Scheme may invest in State/Central Government mutual fund can invest the funds of the scheme in
Securities, which are supported by the State/Central short term deposits of scheduled commercial banks.
Government up to the extent of its debt/money market
allocation. 13. The Scheme may consider investment in other
financial market investments as per guidelines issued
7. The Scheme shall not invest more than 15% of its NAV by the Central Government/SEBI from time to time.
in debt instruments issued by a single issuer, which are
rated not below investment grade by a credit rating The AMC/Trustee may alter these investment
agency authorised to carry out such activity under the restrictions from time to time to the extent SEBI
SEBI Act, 1992. Such investment limit may be regulations/applicable rules change/permit so as to
extended to 20% of the NAV with prior approval of the achieve the investment objective of the scheme. Such
Trustees and Board of the AMC, provided that such alterations will be made in conformity with SEBI
limit shall not be applicable for investment in regulations.
The investment restrictions specified as a percentage of in Indian debt markets now. The trading volume in the
net assets will be computed at the time of making the market ranges between Rs.1500 crores to Rs.8000 crores
investment and it is clarified that changes need not be of which about 90% comprises of the government
effected, merely by reason of appreciation or depreciation securities.
in value or by reason of factors beyond the control of the
The various debt instruments currently available for
scheme (such as receipt of any corporate or capital
benefits or amalgamations). In case the limits are
exceeded due to reasons beyond its control, the AMC Instruments Current Yields* Liquidity
shall adopt necessary measures of prudence to reset the Central/State Government securities 7.25% - 8.50% Very high
situation having regard to the interest of the investors.
PSU Bonds/Corporate debentures 7.75% - 10.00% Medium – High
INVESTMENT BY AMC IN THE SCHEME Securitised debt 8.50% - 11.00% Low – Medium
Franklin Templeton Asset Management (India) Private Commercial Papers/Certificate
Limited, the asset management company may invest in of deposits 8.00% - 9.80% High
Templeton Fixed Horizon Fund – 3 Months Plan (TFHF Call/Notice Money 7.75% - 8.00% Very high
– 3M). However, as per SEBI (Mutual Funds) Regulations, Repo / CBLO 7.25% - 7.50% Very high
1996, Franklin Templeton Asset Management (India)
*Yields as of Jan 31, 2007.
Private Limited will not charge any Investment
Management Fee for its investment in TFHF–3M. In The actual yields will, however, vary in line with general
addition, the funds managed by the sponsors, Franklin levels of interest rates and debt/money market conditions
Templeton Group may invest in the TFHF–3M. prevailing from time to time.
PORTFOLIO TURNOVER The securities above could be listed and (subject to SEBI
regulations), unlisted, privately placed, secured,
Portfolio turnover is defined as the lesser of purchases unsecured and of any maturity. The securities may be
and sales as a percentage of the average corpus of the acquired through initial public offerings, secondary
Scheme during a specified period of time. Portfolio market operations, private placement etc. The Scheme
turnover in the scheme will be a function of market may also invest in other fixed income instruments that
opportunities. Consequently it is difficult to estimate with may be available from time to time.
any reasonable measure of accuracy, the likely turnover in
the portfolio. The AMC will endeavour to optimise INVESTMENTS IN DERIVATIVE INSTRUMENTS
portfolio turnover to optimise risk adjusted return
keeping in mind the cost associated with it. A high Brief note on investment in derivative instruments
portfolio turnover rate is not necessarily a drag on As part of the Fund Management process, the Trustee may
portfolio performance and may be representative of permit the use of derivative instruments such as interest
arbitrage opportunities that exist for scrips/securities held rate swaps (IRS), Forward Rate Agreement (FRA),
in the portfolio rather than an indication of change in options on interest rates, warrants, or any other derivative
AMC’s view on a scrip etc. However, the AMC will take instruments that are permissible or may be permissible in
advantage of the opportunities that present themselves future under applicable regulations and such investments
from time to time because of the inefficiencies in the shall be in accordance with the investment objectives of
securities markets. the scheme.
OVERVIEW OF DEBT MARKET • Purpose of investment:
The Indian debt markets are one of the largest markets in - Trading in derivatives by the scheme shall be
Asia. Government and Public Sector enterprises are restricted to hedging and portfolio balancing
predominant borrowers in the market. While interest purposes.
rates were regulated till a few years back, there has been a
- The scheme shall fully cover its positions in the
rapid deregulation and currently both the lending and
derivatives market by holding underlying
deposit rates are market determined.
securities/cash or cash equivalents/option and/or
The bond markets are developing fast with the rapid obligation for acquiring underlying assets to
introduction of new instruments including derivatives. honour the obligations contracted in the
Foreign Institutional Investors are also allowed to invest derivatives market.
- Separate records shall be maintained for holding price in conformity with the stipulations of sub
the cash and cash equivalents/securities for this clauses (i) to (v) of clause 1 of the Eighth Schedule
purpose. to the Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996.
- The securities held shall be marked to market by
the AMC to ensure full coverage of investments - The valuation of untraded derivatives shall be
made in derivative products at all time. done in accordance with the valuation method for
untraded investments prescribed in sub clauses (i)
• Purpose of Interest Rate Swaps:
and (ii) of clause 2 of the Eighth Schedule to the
• The Indian markets have faced high volatility in debt Securities and Exchange Board of India (Mutual
and equity markets. An interest rate swap is a Funds) Regulations, 1996.
contractual agreement between two counter-parties to
• Reporting requirements:
exchange streams of interest amount on a national
principal basis. In this, one party agrees to pay a fixed The AMC shall cover the following aspects in their
stream of interest amount against receiving a variable reports to the Trustees periodically, as provided for in the
or floating stream of interest amount. The variable or Regulations:
floating part is determined on a periodical basis.
- Transactions in derivatives, both in volume and
• The scheme shall use derivative position for hedging value terms.
the portfolio risk on a non-leverage basis. The scheme
- Market value of cash or cash equivalents/securities
shall fully cover their positions in the derivatives
held to cover the exposure.
market by holding underlying securities / cash or cash
equivalents / option and / or obligation for acquiring - Any breach of the exposure limit laid down in the
underlying assets to honour the obligations contracted scheme offer document.
in the derivatives market.
- Short fall, if any, in the assets covering investment
• Exposure to Derivatives – Interest Rate Swaps: in derivative products and the manner of bridging
Interest rate swaps may be used to hedge up to 100% net
assets of the scheme. The details of the nature of the The Trustee shall offer their comments on the above
Interest Rate Swaps instruments to which the Fund aspects in the report filed with SEBI under sub regulation
proposes to be exposed to and the risks attached thereto (23) (a) of regulation 18 of Securities and Exchange
is mentioned herein below: Board of India (Mutual Funds) Regulations, 1996.
• Risks attached with the use of Interest Rate Swaps: • The scheme may enter into derivatives for
hedging/portfolio balancing purposes and in line with
As and when the Schemes enter into Interest rate swaps
the guidelines prescribed by SEBI vide circular number
agreement, there are risk factors and issues concerning
MFD/CIR/011/061/2000 dated 01/02/2000,
the use of this derivative that the investors should
SEBI/MFD/CIR No.03/158/03 dated June 10, 2003,
understand. Interest rate swaps require the maintenance
and SEBI /IMD/CIR4/ 2627/2004 dated February 6,
of adequate controls to monitor the transactions entered
into, the ability to asses the risk that the derivative adds
to the portfolio and the ability to forecast failure of • Derivative instruments offer unique advantages like
another party (usually referred to as the "counter-party") security exposures without the attendant execution
to comply with the terms of the derivatives contract. and settlement risk, e.g. index futures can be an
Other risks in using derivatives include the risk of mis- efficient way of buying/selling an index compared to
pricing or improper valuation of derivatives, the credit buying/selling a portfolio of physical securities
risk where the danger is that of a counter-party failing to representing an index. It is an effective tool to
honor its commitment, liquidity risk where the danger is reduce/mitigate risks. For example, a put option can
that the derivative cannot be sold at prices that reflect the be used to reduce the downside risk of a security and
underlying assets, rates and indices, and price risk where is an effective tool to hedge portfolio risks.
the market price may move in adverse fashion. Furthermore, a put option on an index could
effectively mitigate downside risk of securities which
may not be part of an index but may have a high
- The traded derivatives shall be valued at market degree of correlation with an index.
• The scheme may take exposure in derivatives upto a • Type of scheme – A Closed end Income Fund
maximum of 50% of its corpus.
• Investment objective – It seeks to generate returns
Let us look at an example of an interest rate swap: and reduce interest rate volatility, through a portfolio
of fixed income securities with a maturity profile
Entity A has a Rs.20 crores, 3 month asset which is being
generally in line with the fund's duration.
funded through call. Entity B, on the other hand, has
deployed in overnight call money market a Rs.20 crores, • Investment pattern, minimum and maximum asset
3 month liability. Both the entities are taking on an allocation. - Please refer to the section "Investment
interest rate risk. Objectives and Policies". The fund retains the option
to alter the asset allocation on a short-term basis in the
To hedge against the interest rate risk, both the entities
interest of unitholders on defensive considerations.
can enter into a 3 month swap agreement based on say
MIBOR (Mumbai Inter Bank Offered Rate). Through this • Liquidity provisions such as repurchase or
swap, entity B will receive a fixed pre-agreed rate (say 8%) redemption – Please refer to the section ‘Redemption
and pay NSE MIBOR ("the benchmark rate") which will of Units’.
neutralize the interest rate risk of lending in call.
• Aggregate fees and expenses charged to the scheme -
Similarly, entity A will neutralize its interest rate risk from
Please refer to the section ‘Summary of Expenses and
call borrowing as it will pay 8% and receive interest at the
The Trustee can change the fundamental attributes of the
Assuming the swap is for Rs. 20 crores 1 September to 1
scheme provided that
December, Entity A is a floating rate receiver at the
overnight compounded rate and Entity B is a fixed rate • the unitholders are informed about the proposed
receiver. On a daily basis, the benchmark rate fixed by change in fundamental attribute by sending individual
NSE will be tracked by them communication and an advertisement is given in one
national English newspaper and in a newspaper
On December 1, they will calculate as explained below:
published in the language of the region where the
Entity A is entitled to receive daily compounded call rate Head Office of the mutual funds is situated, and
for 92 days and pay 8% fixed.
• the unitholders are given an option to exit at the
Entity B is entitled to receive interest on Rs.20 crores @ prevailing Net Asset Value without any exit load.
8% i.e. Rs.40.33 lakhs, and pay the compounded
Policy for borrowing
The scheme may borrow upto a maximum of 20% of the
Thus on December 1, if the total interest on the daily
net assets of the scheme for a maximum duration of 6
overnight compounded benchmark rate is higher than
months in order to meet redemption of units/dividends or
Rs.40.33 lakhs, entity B will pay entity A the difference
interest payouts as a temporary liquidity measure as per
and vice versa.
Regulation 44(2) of Chapter VI of SEBI [Mutual Funds]
As is clear from the above examples, engaging in Regulations, 1996, on such terms (as to creation of charge
derivatives has the potential to help the scheme in on the properties of the scheme, rate of interest, margins
minimising the portfolio risk and/or improve the overall etc.) as the Trustee/AMC considers to be in the interest of
portfolio returns. investors. Such borrowings if made may result in interest
cost. The limit of 20% may be revised at the discretion of
Please note these examples are given for illustration
the Fund and to the extent the Regulations hereafter
purposes only and the actual returns may vary depending on permit.
the market conditions. Derivatives are high risk, high return
instruments. As they are highly leveraged, even a small price
movement in the underlying security could have a large HOW TO INVEST
impact on their value and may also result in a loss.
Who Can Buy
The scheme units can be purchased by the following
Please note that the following are the fundamental entities (subject to the applicable legislation/regulation
attributes of the scheme: governing such entities):
1. Adult individuals, either singly or jointly (not subject to conditions set out in the aforesaid
exceeding three), resident in India. regulations.
2. Parents/Guardian on behalf of minors. B. In case of application under a Power of Attorney or by
a limited company or a corporate body or an eligible
3. Companies/ Domestic Corporate Bodies/ Public Sector
institution or a registered society or a trust fund, the
Undertakings registered in India. original Power of Attorney or a certified true copy
4. Charitable, Religious or other Trusts authorised to duly notarised or the relevant resolution or authority
invest in units of mutual funds. to make the application / redemption as the case may
be, or duly notarised copy thereof, along with a
5. Banks, Financial Institutions and Investment certified copy of the Memorandum and Articles of
Institutions. Association and/or bye laws and/or trust deed and/or
6. Non-Resident Indians, Persons of Indian Origin partnership deed and Certificate of Registration
residing abroad (NRIs) on full repatriation basis and should be submitted. The officials should sign the
on non-repatriation basis but not United States application under their official designation. In case of
Persons within the meaning of Regulation S under the a Trust/Fund it shall submit a certified true copy of the
United States Securities Act of 1933, as amended from resolution from the Trustee(s) authorising such
time to time. purchases / redemption.
7. Foreign institutional investors and their sub accounts C. Returned cheques are liable not to be presented again
on full repatriation basis (subject to RBI approval). for collection, and the accompanying Application
Forms are liable to be rejected. In case the returned
8. Hindu Undivided Family (HUF). cheques are presented again, the necessary charges are
9. Wakf Boards or Endowments / Societies (including co- liable to be debited to the investor.
operative societies) / Association of Persons or Body of From Whom
individuals (whether incorporated or not), Trusts and
clubs authorised to invest in units of mutual funds. The scheme units are being offered for subscription
through AMFI registered Agents/distributors and can also
10. Sole Proprietorship, Partnership Firms. be purchased directly from the Fund through various
Branches of Franklin Templeton Mutual Fund during the
11. An association of persons or body of individuals
New Fund Offer.
whether incorporated or not.
12. Army/Air Force/Navy/Para-military funds and other DETAILS OF THE SCHEME
eligible institutions. New Fund Offer Opens on 12th Feb 2007
13. Scientific and/or industrial research organizations. New Fund Offer Closes on 13th Feb 2007
14. Other Associations, Institutions, Bodies etc. Date of Allotment 15th Feb 2007
authorized to invest in the units of mutual funds. Tenure of the Scheme 3 Months from the
Date of Allotment
15. Such other individuals/institutions/body corporate
etc., as may be decided by the AMC from time to time, Maturity Date 15th May 2007
so long as wherever applicable they are in conformity The AMC reserves a right to extend the closing date of the
with SEBI Regulations. New Fund Offer subject to the condition that the Scheme
shall not be kept open for subscription for more than 45
16. Mutual fund Schemes can also invest in Templeton
days. The Trustee also reserve the right to close the
Fixed Horizon Fund – Series I, subject to SEBI
subscription list earlier by giving at least one day’s prior
Regulations applicable from time to time.
notice in one English daily newspaper having nation wide
Note: circulation as well as a newspaper published in the
language of the region where the head office of the
A. NRIs/ PIOs/ FIIs have been granted a general Mutual Fund is situated.
permission by RBI [Schedule 5 of the Foreign
Exchange Management (Transfer or Issue of Security Units outstanding on the Maturity Date under the Scheme
by a Person Resident Outside India) Regulations, will be automatically redeemed on the Maturity Date at
2000] for investing in /redeeming units of the schemes the Applicable NAV for Redemption, without any further
reference from the Unitholder. the application forms will be accepted at any of the
Franklin Templeton Branch offices [Investor Service
Please note that if the Date of Maturity falls on a non-
Centres (ISC)]. No outstation cheques or post-dated
Business Day, then the Scheme will mature and the Units
cheques will be accepted. The ISC will NOT accept cash.
will be redeemed on the following Business Day.
The investors should ensure that the amount invested in
PROCEDURE FOR PURCHASE OF UNITS the Scheme is through legitimate sources only and does
Investors can purchase units of the Scheme by completing not involve and are not designed for the purpose of any
an application form and delivering it at the Investor contravention or evasion of any Act, Rules, Regulations,
Service Centres. Payments will be accepted only by Notifications or Directions of the provisions of Income
cheques/ Draft. Purchases in the Scheme should be for a Tax Act, Anti Money Laundering Act, Anti Corruption
minimum amount as follows: Act and or any other applicable laws enacted by the
Government of India from time to time.
Retail Plan Institutional Plan
As per the directives issued by SEBI, it is mandatory for
Rs. 5,000/- or any amount Rs. 1,00,00,000/- or any amount
applicants to mention their bank account numbers in
thereafter in multiples of Re. 1/-. thereafter in multiples of Re. 1/-.
their applications and therefore, investors are requested
In case of investments of Rs. 50,000/- and above, to fill-up the appropriate box in the application form
Income Tax Permanent Account Number(s) (PAN) (for failing which applications are liable to be rejected.
all unit holders including joint holders irrespective of Mode of Payment: Resident Investors
the mode of holding) are to be furnished. The
applications are liable to be rejected in case of non- Payment may be made by cheque or bank draft and
submission of the same. Please provide a legible copy of crossed "A/c Payee Only" drawn on any bank, which is
either (i) your PAN card or (ii) letter from the Income tax situated at and is a member of the Bankers’ Clearing
authorities intimating PAN or (iii) Income Tax refund House, payable at any of the Investor Service Centres.
order clearly displaying your PAN or (iv) any other Applicants from places where there is no Investor Service
document sent by the Income Tax authorities clearly Centre can deduct DD charges from the application
depicting the PAN, for verification failing which amount provided these drafts are payable at the Investor
transactions will not be processed. Investors not having a Service Centre where the application form is submitted.
PAN are required to submit Form 60/61 along with However, the DD charges shall be limited to the bank
necessary proof of address for each transaction of Rs. charges stipulated by the State Bank of India. The AMC
50,000/- and above. will not accept any request for refund of DD charges.
Presently, it is mandatory for all applications for JOINT APPLICANTS
subscription of value of Rs.50,000/- and above to quote
the Mutual Fund Identification Number (MIN) of all the In the event an Account has more than one registered
applicants (guardian in case of minor) in the application owner, the first-named holder (as determined by
for subscription. The MIN will be validated with the reference to the original Application Form) shall receive
records of the Central Agency before allotting units. the Account Statements, all notices and correspondence
Applications without a valid MIN may be rejected with respect to the Account, as well as the proceeds of any
Redemption requests or dividends or other distributions.
The Scheme seeks to collect Rs.1 crore as the minimum
The Fund shall have no liability in this regard to any
subscription and would retain any excess subscription
Account Owner other than the first named holder of
collected. If the Scheme does not collect the minimum
Units. See "Redemption of Units". In addition, such Unit
subscription during the New Fund Offer, refund will be
holders shall have the voting rights, as permitted,
made within 6 weeks of the date of closure of the New
associated with such Units, as per the applicable
Applicants can specify the ‘mode of holding’ in the
All cheques and drafts should be made out in favour of application form as ‘Joint’ or ‘Any one or Survivor’. In the
"Templeton Fixed Horizon Fund – 3 Months Plan" and case of holding specified as ‘Joint’, Redemptions would
crossed "A/c Payee only". During the New Fund Offer, have to be signed by all joint holders in the same order as
registered with the Mutual Fund. However, in cases of AVAILABILITY OF FORMS
holding specified as ‘Anyone or Survivor’, any one of the
Application Forms and copies of this Offer Document are
Unit holder will have the power to make Redemption available from the Investor Service Centres at their
requests, without it being necessary for all the Unit respective locations set forth in the Application Forms or
holders to sign. However, in all cases, the proceeds of the on the reverse of this Offer Document, in addition to the
Redemption will be paid only to the first-named holder. Head Office of the Mutual Fund. Application Forms are
also available with the approved intermediaries of the
COMPANIES/CORPORATE BODIES ETC.
Mutual Fund as well as on the website of the mutual fund
In case of an application under a Power of Attorney or www.franklintempletonindia.com only during the New
by a limited company, body corporate, registered Fund Offer.
society, trust or partnership, the relevant Power of
Attorney or the relevant resolution or authority to make ISSUANCE OF UNITS/ALLOTMENT/ REFUND
the application or the Trust Deed or the Partnership The period within which allotment and dispatch of
Deed as the case may be, or duly certified copy thereof, certificates will be completed and relevant Regulations in
along with a certified copy of the Memorandum and this regard along with a statement to the effect that an
Articles of Association and/or bye-laws, including the advertisement will be published in a newspaper soon after
certificate of registration/incorporation, list of completion of allotment procedure; provided that if
authorised signatories along with their specimen allotment is assured to all applicants, such disclosure may
signatures, must be lodged at any ISC within three days not be required.
from the date of investments.
Full allotment will be made to all valid applications
received during the New Fund Offer. Issuance of Units on
INVESTMENTS UNDER POWER OF ATTORNEY Application shall be made in the following manner:
a) An Account Statement containing the number of Units
In case investors have issued a Power of Attorney (POA) allotted will be issued within 30 days from the date of
for transacting with Franklin Templeton on their behalf, allotment.
the signatures of the investor and the POA holder must be
clearly available in the POA document for the POA to be b) Refund of subscription money to applicants, in case
accepted as a valid document. Franklin Templeton applications are invalid or rejected will be made within
reserves the right to reject any POA and / or subsequent six weeks from the date of closure of the Scheme. In
case the Scheme fails to receive the minimum targeted
transaction if the signatures as above are not available in
amount of Rs.1 crore during the New Fund Offer,
refund of the subscription money to the applicants
OFFER PRICE (POP) will be made within six weeks from the date of closure
of the Scheme. No interest will be payable on any
All purchases during NFO will be at Face Value of Rs. 10/- subscription money so refunded within six weeks. If
per unit. However, the Trustees reserve the right to the Mutual Fund refunds the amount after six weeks,
introduce an load/CDSC any time thereafter. interest at the rate as may be prescribed by SEBI
(presently 15% p.a.) shall be paid out of the assets of
USE OF SALES LOAD the AMC for the period thereafter. Refund orders will
The sales load (including CDSC), if any, collected on be marked "A/c Payee only" and drawn in the name of
units shall be retained in the Fund and would strictly and the applicant in the case of a sole applicant and in the
fully be used by the Investment Manager towards meeting name of the first applicant in all other cases. All refund
selling and distribution related services of the Fund. cheques will be mailed by Registered Post.
c) The Trustee is entitled, in its sole and absolute
FRACTIONAL UNITS discretion, to reject any Application.
Investors may have Account Statements that show an
issuance of fractional Units. Fractional Units will be
computed and accounted for up to three decimal places The units of the Scheme are not transferable. However, if
using standard rounding criteria. Fractional Units in no a transferee becomes a holder of the Units by operation of
way will affect an investor’s ability to redeem Units. law or upon enforcement of a pledge, then the AMC shall,
subject to production of such evidence, which in their (Market Value of the Scheme’s
opinion is sufficient, proceed to effect the transfer, if the Investments + Other Assets (including
intended transferee is otherwise eligible to hold the Units. accrued interest) + Unamortised Issue
Expenses - All Liabilities except Unit
A person becoming entitled to hold the Units in Capital & Reserves)
consequence of the death, insolvency, or winding up of
NAV = ________________________________________
the sole holder or the survivors of joint holders, upon
producing evidence to the satisfaction of the Fund, shall (Rs. Per unit)
be registered as a holder. Number of Units Outstanding at the end
of the day
TRANSMISSION The NAV will be calculated up to 4 decimals using
The scheme’s units can be transmitted after completion of standard rounding criteria.
necessary formalities to the entitled person(s) in the event The NAV per unit may be different in case of each Plans
of death of unitholder at any time. All the restrictions and (Retail Plan & Institutional Plan) under each of the
limitations specified herein including those relating to Plans on account of difference in recurring expenses.
lock-in period and creation of charge, will be binding also Valuation of Scheme’s assets and calculation of the
on the successors, legal heirs, pledgee or assigns of the Scheme’s NAV will be subject to such rules or regulations
investor. that SEBI may prescribe from time to time and shall be
subject to audit on an annual basis.
LISTING The disclosure on valuation norms, computation and
publication of NAV, repurchase and sale price, accounting
Currently the Units of the Scheme are not listed on any
policies and publication of half yearly accounts shall
stock exchange. The Trustee / AMC may, at its sole
conform to the relevant provisions of SEBI (Mutual
discretion, list the Units of the Scheme on one or more
Funds) Regulations, 1996. Accordingly, the following
stock exchanges at a later date. principles will be adopted:
PLEDGE OF UNITS VALUATION OF ASSETS
The Units under the Scheme may be offered as security by The Fund shall value its investments according to the
way of a pledge/charge in favour of scheduled banks, financial valuation norms, as specified in Schedule VIII of the
Regulations, or such norms as may be prescribed by SEBI
institutions, non-banking finance companies (NBFC’s), or
from time to time. The broad valuation norms are detailed
any other body. The AMC and/or the ISC will note and record
below. These norms are indicated based on the current
such Pledged Units. A standard form for this purpose is Regulations and the Guidelines issued by SEBI.
available on request from any ISC. Disbursement of such
A. Traded Securities:
loans will be at the entire discretion of the bank/financial
institution/NBFC or any other body concerned and the i. When a debt security (other than Government
Mutual Fund assumes no responsibility thereof. Security) of a marketable lot of Rs. 5 crores and
above is traded on any stock exchange on any
The Pledgor will not be able to redeem Units that are particular valuation day, the value at which it was
pledged until the entity to which the Units are pledged traded on the principal stock exchange or any
provides written authorisation to the Mutual Fund that other stock exchange, as the case may be, on that
the pledge/lien charge may be removed. As long as Units day only will be used as the traded price.
are pledged, the pledgee will have complete authority to ii. When a debt security (other than Government
redeem such Units. Security) is purchased by way of private
placement, the value at which it was bought may
be used for a period of fifteen days beginning from
VALUATION OF ASSETS AND NET ASSET VALUE the date of purchase.
B. Thinly Traded Securities:
NET ASSET VALUE CALCULATION
A debt security (other than Government Securiy) shall be
NAV is the actual value of a Unit on any Business Day and considered as a thinly traded security if on the valuation
is computed as shown alongside: date, there are no individual trades in that security in
marketable lots (currently Rs. 5 crore) on the principal maturity basis as described in the applicable SEBI
stock exchange or any other stock exchange. guidelines.
A thinly traded debt security as defined above would be • All Non Government non investment grade
valued as per the norms set for non-traded debt security performing debt securities would be valued at a
in the SEBI circulars dated September 18, 2000, March 28, discount of 25% to the face value.
2001 and February 20, 2002.
• All Non Government non investment grade non
C. Non-Traded Securities: performing debt securities would be valued based on
When a debt security (other than Government Securities) the provisioning norms.
is not traded on any stock exchange on the valuation date, The approach in valuation of non traded debt securities is
the scrip must be treated as a 'non traded' security. based on the concept of using spreads over the
Valuation of Non-Traded / Thinly Traded Securities benchmark rate to arrive at the yields for pricing the non
Non traded/ thinly traded securities shall be valued "in
good faith" by the AMC on the basis of the valuation The Yields for pricing the non traded debt security would
principles laid down in the SEBI circulars dated be arrived at using the process as defined in the applicable
September 18, 2000, March 28, 2001 and February 20, SEBI guidelines.
2002, which are as below: Illiquidity Discount:
(a) Non Traded /Thinly Traded Debt Securities of up to The Yields calculated would be marked-up/marked
182 Days to maturity: –down to account for the ill-liquidity risk, promoter
As the money market securities are valued on the basis of background, finance company risk and the issuer class
amortisation (cost plus accrued interest till the beginning risk. As the level of ill-liquidity risk would be higher for
of the day plus the difference between the redemption non rated securities, the marking process for rated and
value and the cost spread uniformly over the remaining non rated securities would be differentiated as provided
maturity period of the instruments) a similar process in the applicable SEBI guidelines.
should be adopted for non-traded debt securities with
Valuation of securities with Options (Put or Call or Put
residual maturity of up to 182 days, in the absence of any
other standard benchmarks in the market. Debt securities
purchased with residual maturity of up to 182 days are to The option embedded securities would be valued as
be valued at cost (including accrued interest till the follows:
beginning of the day) plus the difference between the
redemption value (inclusive of interest) and cost spread Securities with call option:
uniformly over the remaining maturity period of the • The securities with call option shall be valued at the
instrument. In case of a debt security with maturity lower of the value as obtained by valuing the security
greater than 182 days at the time of purchase, the last to final maturity and valuing the security to call
valuation price plus accrued interest should be used option.
instead of purchase cost. All other non-traded Non
Government debt instruments shall be valued using the • In case there are multiple call options, the lowest value
method suggested in (ii)(b) hereof. obtained by valuing to the various call dates and
valuing to the maturity date is to be taken as the value
(b) Non Traded/ Thinly Traded Debt Securities of Over of the instrument.
182 Days to Maturity.
Securities with Put option
For the purpose of valuation, all Non Traded Debt
Securities would be classified into "Investment grade" • The securities with put option shall be valued at the
and "Non Investment grade" securities based on their higher of the value as obtained by valuing the security
credit ratings. The non-investment grade securities would to final maturity and valuing the security to put option
further be classified as "Performing" and "Non
• In case there are multiple put options, the highest
value obtained by valuing to the various put dates and
• All Non Government investment grade debt securities, valuing to the maturity date is to be taken as the value
classified as not traded, shall be valued on yield to of the instruments.
Securities with both Put and Call option on the same Valuation of Non- Performing Assets
All Non – Performing Assets shall be valued in
The securities with both Put and Call option on the same accordance with the Guidelines for Identification and
day would be deemed to mature on the Put/Call day and Provisioning for Non Performing Assets (Debt Securities)
would be valued accordingly. For Mutual Funds issued by SEBI vide Circular dated
September 18, 2000
An ‘asset’ shall be classified as non performing, if the
The Government securities, held by the scheme will be interest and/or principal amount have not been received
valued based on the prices for Government Securities or remained outstanding for one quarter from the day
released by an agency suggested by AMFI for the sake of such income/ instalment has fallen due. The definition of
uniformity in calculation of NAVs in accordance with NPA may be applied after a quarter past due date of the
circular no. MFD/CIR No.14/442/2002 dated February interest. For e.g. if the due date for interest is 30.06.2000,
20, 2002. it will be classified as NPA from 01.10.2000.
Fixed Income and Money Market Securities The mutual funds shall make scripwise disclosures of
NPAs on half yearly basis along with the half yearly
a) Debt instruments shall generally be valued on a yield
portfolio disclosure. The total amount of provisions made
to maturity basis recommended by the AMC and
against the NPAs shall be disclosed in addition to the total
reviewed periodically by the Trustee on the basis of the
quantum of NPAs and their proportion of the assets of the
capitalization factor for comparable traded securities mutual fund scheme. In the list of investments an asterisk
and with an appropriate discount for a lower liquidity. mark shall be given against such investments which are
b) While investments in call money, bills purchased recognised as NPAs. Where the date of redemption of an
under rediscounting scheme and short term deposits investment has lapsed, the amount not redeemed shall be
with banks shall be valued at cost plus accrual; other shown as ‘Sundry Debtors’ and not investment provided
money market instruments shall be valued at the yield that where an investment is redeemable by instalments
at which they are traded. For this purpose, that will be shown as an investment until all instalments
instruments not traded for a period of seven days will have become overdue.
either be valued at cost plus interest accrued till the D. Valuation of Derivative Products:
beginning of the day plus the difference between the
redemption value and the cost spread uniformly over (i) The traded derivative shall be valued at market price
in conformity with the stipulations of sub clauses (i)
the remaining maturity period of the instruments or
to (v) of clause 1 of the Eighth Schedule to the SEBI
valued on the basis recommended by the AMC, which
will be reviewed by the Trustees periodically.
(ii) The valuation of untraded derivatives shall be done in
Valuation of non-traded/thinly traded debt securities with
accordance with the valuation method for untraded
floating rate of interest
investments prescribed in sub clauses (i) and (ii) of
The securities shall be valued on the basis of the valuation clause 2 of the Eighth Schedule to the SEBI
principles laid down in the SEBI circular Regulations.
No.MFD/CIR/8/92/2000 dated September 18, 2000, E. Valuation of Repo
MFD/CIR/14/088/201 dated March 28, 2001 and
MFD/CIR No.14/442/2002 dated February 20, 2002 as Where instruments have been bought on ‘repo' basis, the
amended from time to time in the absence of any other instrument must be valued at the resale price after
guidelines from SEBI for the valuation of such floating deduction of applicable interest upto date of resale.
rate debt instruments. Where an instrument has been sold on a ‘repo' basis,
adjustment must be made for the difference between the
The non-traded / thinly traded floating rate debt securities repurchase price (after deduction of applicable interest
will be valued at cost or last valuation price plus upto date of repurchase) and the value of the instrument.
difference between the redemption value and the cost or If the repurchase price exceeds the value, the depreciation
last valuation price spread uniformly over the remaining must be provided for and if the repurchase price is lower
maturity period of the instrument. than the value, credit must be taken for the appreciation.
F. Expenses and Incomes Accrued: interest paid for the period from the last interest due
date upto the date of purchase must not be treated as
All expenses and incomes accrued up to the valuation
a cost of purchase but must be debited to Interest
date shall be considered for computation of NAV. For this
Recoverable Account. Similarly, interest received at the
purpose, major expenses like management fees and other
time of sale for the period from the last interest due
periodic expenses would be accrued on a day-to-day
date upto the date of sale must not be treated as an
basis. The minor expenses and income will be accrued on
addition to sale value but must be credited to Interest
a periodic basis, provided the non-daily accrual does not
affect the NAV calculations by more than 1%.
d) In determining the holding cost of investments and
G. Changes in securities and in number of units:
the gains or loss on sale of investments, the "average
Any changes in securities and in the number of units will cost" method must be followed.
be recorded in the books not later than the first valuation
e) Transactions for purchase or sale of investments
date following the date of transaction. If this is not
should be recognised as of the trade date and not as of
possible, given the frequency of NAV disclosure, the
the settlement date, so that the effect of all investments
recording may be delayed up to a period of seven days
traded during a financial year are recorded and
following the date of the transaction, provided as a result
reflected in the financial statements for that year.
of such non-recording, the NAV calculation shall not be
Where investment transactions take place outside the
affected by more than 1%.
stock market, for example, acquisitions through
The valuation guidelines as outlined above are as per private placement or purchases or sales through
prevailing Regulations and are subject to change from private treaty, the transaction should be recorded, in
time to time in conformity with changes made by SEBI. the event of a purchase, as of the date on which the
scheme obtains in enforceable obligation to pay the
SEBI, vide circulars dated September 18, 2000 and March price or, in the event of a sale, when the scheme
28, 2001, has issued (i) Guidelines for Valuation of obtains an enforceable right to collect the proceeds of
Securities and (ii) Guidelines for Identification and sale or an enforceable obligation to deliver the
Provisioning for Non-Performing Assets (NPAs). These instruments sold.
Guidelines are supplementary to the provisions specified
in SEBI Regulations. f) Bonus shares to which the scheme becomes entitled
should be recognised only when the original shares on
ACCOUNTING POLICIES AND STANDARDS which the bonus entitlement accrues are traded on the
stock exchange on an ex-bonus basis. Similarly, rights
In accordance with Regulation 50 read with Ninth
entitlements should be recognised only when the
Schedule to SEBI Regulations, the Fund shall follow the
original shares on which the right entitlement accrues
following accounting policies:
are traded on the stock exchange on an ex-rights basis.
a) For the purposes of the financial statements, mutual
g) Where income receivable on investments has accrued
fund shall mark all investments to market and carry
but has not been received for the period specified in the
investments in the balance sheet at market value.
guidelines issued by SEBI, provision shall be made by
However, since the unrealised gain arising out of
debiting to the revenue account the income so accrued
appreciation on investments cannot be distributed,
in the manner specified by guidelines issued by SEBI.
provision has to be made for exclusion of this item
when arriving at distributable income. h) In a close-ended scheme which provide to the unit
holders the option for an early redemption or
b) Dividend income earned by a scheme should be
repurchase their own units, the par value of the unit
recognised, not on the date the dividend is declared,
has to be debited to Capital Account and the difference
but on the date the share is quoted on an ex-dividend
between the purchase price and the par value, if
basis. For investments which are not quoted on the
positive, should be debited to reserves and, if negative,
stock exchange, dividend income must be recognised
should be credited to reserves. A proportionate part of
on the date of declaration.
the unamortized initial issue expenses should also be
c) In respect of all interest-bearing investments, income transferred to the reserves so that the balance carried
must be accrued on a day to day basis as it is earned. forward on that account is proportional to the number
Therefore when such investments are purchased, of units remaining outstanding.
i) The cost of investments acquired or purchased should All the restrictions and limitations specified herein
include brokerage, stamp charges and any charge including those relating to lock-in period and creation of
customarily included in the broker's bought note. In charge, will be binding also on the successors, legal heirs,
respect of privately placed debt instruments any front- pledgee or assigns of the investor.
end discount offered should be reduced from the cost
of the investment. HOW TO REDEEM UNITS
j) Underwriting commission should be recognised as Except in case of maturity, in order to redeem units,
revenue only when there is no devolvement on the investors must submit a redemption request by filling-up
scheme. Where there is devolvement on the scheme, the pre-printed forms and mail the same to the Investor
the full underwriting commission received and not Service Centres (ISCs). The redemption request should be
merely the portion applicable to the devolvement submitted on the stipulated redemption date (on 61st day
should be reduced from the cost of the investment. from the date of allotment i.e 17th April 2007). No
redemption request shall be accepted after the cut off
The accounting policies and standards as outlined above timing, which is currently 3:00 p.m. All redemption
are as per the SEBI Regulations extant at this time and, request forms must contain the investor’s Account
hence, are subject to change as per any changes in the Number and be duly signed by the Unitholders on record
SEBI Regulations. (all Unitholder where the mode of holding is ‘Joint’) or
their Power of Attorney holders. Redemption requests by
telephone, telegram, fax or other means or that lack valid
REDEMPTION OF UNITS / MATURITY OF THE signatures may not be accepted. The Units requested to be
SCHEME redeemed should be free from any lock-in, lien or
The scheme will offer repurchase facility on the 61st day encumbrance. Units under pledge or those on which any
from the date of allotment i.e. 17th April 2007. lien or encumbrance is marked cannot be redeemed.
The Units can be repurchased/ redeemed at the Applicable If the day on which the redemption request is submitted
NAV subject to applicable CDSC, if any. The Units so is a non-business day for the scheme, the redemption
repurchased shall not be reissued. requests shall be accepted on the next business day for the
Upon maturity, the Units shall be redeemed at the
Applicable NAV subject to applicable load / CDSC, if any. REDEMPTION PRICE
The Scheme will mature and come to an end at the end of For a valid redemption request received on 61st day from
the specified period, which is 3 Months from the Date of the date of allotment before the cut off time, the
Allotment (Date of Maturity: 15th May 2007). On redemption will be on the "Applicable NAV for
maturity, the outstanding Units shall be redeemed and Redemptions" (See "Applicable NAV for Redemptions")
proceeds will be paid to the Unitholder. However, in case adjusted for CDSC, if any. Investors may note that the
of the Units on which any lien or encumbrance is marked Trustee has a right to introduce an exit load subject to the
and such lien or encumbrance is subsisting on the Date of Regulations.
Maturity, the Unitholder will be required to procure a
release of their lien / encumbrance pending which, the The CDSC shall be charged as a percentage of Net Assets
maturity proceeds will not be paid. The Unitholder shall Value (NAV) i.e. applicable CDSC as a percentage of NAV
not be entitled for any interest or compensation for any will be deducted from the NAV to calculate repurchase
price. Further, as per SEBI Circular SEBI/IMD/CIR
delayed or non-payment of the maturity proceeds till such
No.1/64057/06 dated April 4, 2006, in case of closed end
time the Unitholder provides proof of the release of the
schemes where initial issue expenses are amortised, for an
lien / encumbrance to the satisfaction of the AMC/Mutual
investor exiting the scheme before amortisation is
completed, AMC shall redeem the units only after
Please note that if the Date of Maturity/repurchase is a recovering the balance proportionate unamortised issue
day, which is a non-Business Day, then the Scheme will expenses. However, all the initial issue expenses for this
mature/the redemption request may be accepted and the scheme would be borne by the AMC.
units will be redeemed on the next Business Day.
Hence, the redemption price is calculated by deducting
However, the scheme’s units can be transmitted after from the "Applicable NAV for Redemptions", the CDSC,
completion of necessary formalities to the entitled if any. The redemption price will be calculated to four
person(s) in the event of death of unitholder at any time. decimals using standard rounding criteria. For example, if
the "Applicable NAV for Redemption" (rounded) is Rs. to the AMC having necessary arrangements with the
11.3232, the CDSC applicable is 2.5%, the redemption bank. Further redemption proceeds may also be paid
amount will be calculated as follows: through Electronic Clearing System (ECS), which is
subject to applicable policies of the Reserve Bank of India
Redemption Price = [Applicable NAV * (1- CDSC)]
and working of the banking system. All redemption
= [11.3232 * (1-0.0250)] payments will be made, in favour of the registered holder
= Rs. 11.04012 of the Units or, if there is more than one registered holder,
Rounded off to Rs. 11.0401 of the first registered holder on the original application
for Units. Units purchased can be redeemed only after
The NAV per unit may be different in case of each realization of cheques.
Plans(Retail Plan & Institutional Plan) under each of the
Plans on account of difference in recurring expenses. The redemption cheque will be dispatched to the
unitholders within the statutory time limit of 10 business
APPLICABLE NAV FOR REDEMPTIONS days prescribed by SEBI, subject to the Fund’s right to
Pursuant to SEBI Circular SEBI/IMD/CIR No.11/78450/06 limit redemption as described in "Right to Limit
dated October 11, 2006 the cut off timings and the Redemptions".
applicability of Net Asset Value of the scheme is under: To safeguard the interests of the Unitholders from loss
- In respect of valid applications received up to 3:00 or theft of their redemption cheques, SEBI has made it
p.m. on a business day on the 61st day from the mandatory for applicants to mention their bank account
date of allotment, same day’s closing NAV shall be numbers in their application for purchase or
applicable. redemption of Units failing which applications are
liable to be rejected. Investors are required to provide the
- However, no application shall be accepted after name of their bank, branch address and account number
3:00 p.m. on the 61st day from the date of in the Application. Redemption cheques will be sent to
allotment. the investor with reference to the data submitted in the
As per SEBI Circular SEBI/ IMD/CIR No. 11/78450/06 application for Units at the investor’s risk. Dispatch of
dated October 11, 2006, FTMF hereby declares all its 34 redemption cheque shall be made by ordinary mail or
branches [Investor Service Centres (ISC)] as the Official registered mail or courier, as may be deemed appropriate
Points of Acceptance of Transactions. The "cut off time" by the AMC unless otherwise required under any
mentioned in the Offer Document shall be reckoned at applicable regulations, at the risk of the investor. Such
these official points. All redemption/switch applications payments will constitute adequate discharge of the
must be demonstrably received by the Mutual Fund at obligation of the Fund, Trustee and the AMC. The Fund,
these "Official Points of Acceptance of Transactions". Trustee or the AMC will not be responsible for any
delay/non-receipt of redemption proceeds where it is
REDEMPTION AMOUNT attributable to any incorrect/incomplete information
provided by the investor. The Fund/ Trustee/ AMC will
Redemption in the Scheme should be for a minimum
also not be liable for any loss on account of fraudulent
amount as follows:
encashment of the redemption cheque.
Retail Plan Institutional Plan
Rs. 1,000/- or any amount Rs. 1,00,000/- or any
thereafter in multiples amount thereafter in The Trustee may, at its discretion, roll over the Scheme
of Re. 1/-. multiples of Re. 1/-. upon maturity. The Scheme may be allowed to be rolled
over if the purpose, period and other terms of the roll
PAYMENT OF REDEMPTION PROCEEDS over and all other material details of the Scheme
including the likely composition of assets immediately
Redemption proceeds will be paid by cheque and before the roll over, the net assets and net asset value of
payments will be made in favour of the Unitholder’s
the scheme, are disclosed to the unitholders and a copy of
registered name and bank account number. Redemption
the same has been filed with the SEBI.
cheques will be sent to the Unitholder’s address (or, if
there is more than one holder of record, the address of the Provided further, that such roll over will be permitted
first-named holder on the original application for Units) only in case of those unitholders who express their
or the redemption proceeds may be credited to the bank consent in writing and the unitholders who do not opt for
account of the investor if the investor so instructs, subject the roll over or have not given written consent shall be
allowed to redeem their holdings in full at net asset value Document and the scheme from which the amount is
based price. switched out. The Applicable NAV for switching out of
the existing open-end funds will be the NAV of the
EXCHANGES/ SWITCH Business Day on which the switch request, complete in all
Investors can, subject to any applicable restriction (such respects, is accepted by the AMC, subject to the cut-off
as lien/lock-in) exchange investments from one scheme of time and other terms specified in the Offer Documents of
Franklin Templeton to another (e.g. Franklin India the respective existing open-end schemes. Similarly the
Opportunities Fund to Franklin India Prima Fund), and applicable NAV for switching out of the existing close-end
one plan to another (i.e. from Dividend plan to Growth funds will be the applicable NAV (after considering
plan) at the applicable public offering price during the applicable loads) on the specified repurchase date for
stipulated date for redemption provided that such Plan(s), subject to the switch request, complete in
all respects, being accepted by the AMC, and subject to
a. there is no book closure in either of the schemes/plans. the availability of repurchase facility and other terms
specified in the Offer Document of the respective existing
b. the investment sought to be exchanged is not under
closed-end Schemes. Investors should note that the
any lock-in period and are free of any encumbrances.
amount invested under Sections 54EB have to be locked-
c. the amount sought to be exchanged is equal to or in for a period of seven years from the date of allotment
higher than minimum investment amount required for and the Units so allotted cannot be switched to another
opening an account in the other scheme/plan. Scheme/option during the lock-in period of seven years.
This is subject to any change that may be effected in the
For this purpose the units of that Scheme will be Income-tax Act, 1961 or any
redeemed at the applicable repurchase price and the guidelines/amendments/rules/ clarifications issued by the
amount shall be invested in the other scheme/plan at the Central Board of Direct Taxes.
applicable public offering price.
For any application of switch-in from other Franklin
In the event of book closure in any of the schemes, the Templeton Schemes (Source scheme) into TFHF – 3M
relevant exchange will be effected on the working day received on any date during the NFO, the application
immediately following the end of the book closure period. will be deemed to have been received on the last date of
The Trustee/AMC reserves the right to alter/vary the the NFO and will be processed accordingly. However, in
terms of exchanges. case the last date of the NFO is a non-Business Day for
the Source scheme, the application will be deemed to
SWITCH FACILITY have been received on the last Business Day for the
Source scheme immediately preceding the last date of
(i) Switching from any schemes of the Mutual Fund to
the NFO and will be processed accordingly.
(ii) Switch from this Scheme to any other eligible
Investors who hold Units in any open-end schemes
schemes of the Mutual Fund
launched of the Mutual Fund and also investors who hold
Units in any closed-end scheme launched, may switch all Investors who hold Units of the Scheme may switch all or
or part of their holdings (free from any lock-in, lien or part of their holdings to any other open-end/close-end
encumbrance) the Scheme available for subscription Scheme(s) (where switch-in is permitted) of the Mutual
under this Offer Document during the New Fund Offer Fund. Such switch will be permitted only on 61st day
(NFO) Period of the Scheme. The switch from any closed- from the date of allotment or on maturity/redemption of
end fund will be subject to applicable repurchase &/or the Scheme. Investors so desiring to switch may submit a
maturity date of the respective Scheme/(s) or Plan/(s) and switch request, using the Transaction Slip at the bottom of
will be permitted only on such dates. Investors so desiring the Account Statement or the Common Transaction
to switch may submit a switch request, already available Form, indicating therein the details of the Scheme or any
with them along with an application form of the Scheme other Scheme of the Mutual Fund to which the switch is
indicating therein the details of the scheme to which the to be made. Applications for switch as above should
switch is to be made. Applications for switch as above specify the amount/Units to be switched from out of the
should specify the amount/Units to be switched from out Units held. The switch request will be subject to the
of the Units held in any of the existing Schemes of the minimum application size and other terms and conditions
Fund. The switch request will be subject to the minimum under this Offer Document and the terms and conditions
application size and other terms and conditions of the of the Scheme to which the amount is switched into. The
Offer Document of the Scheme under this Offer switch request should be submitted only during the above
mentioned redemption periods. No redemption/ switch ii. Periods of extreme volatility in the equity / debt
request shall be accepted after 3:00 p.m. market, which, in the opinion of the Investment
Manager, is prejudicial to the interest of the investors.
If the day on which redemption request is submitted is
a non-business day for either of the schemes, the switch iii. When there is a strike by the banking community or
requests shall be accepted on the next business day for trading is restricted by RBI or other authority.
both the schemes.
iv. Period of extreme volatility in the equity / debt /
Note: money market, which in the opinion of the Board of
Directors of AMC and Trustee is prejudicial to the
The switch will be effected by redeeming Units from the interest of the scheme’s investors.
Scheme in which the Units are held and investing the net
proceeds in the other Scheme(s)/Plan(s), subject to the v. As and when directed by the Government of India or
minimum balance applicable for the respective RBI or SEBI to do so or conditions relating to natural
Scheme(s)/ Plan(s). The price at which the Units will be calamity/external aggression/internal disturbances etc.
switched out of the scheme(s) /Plan(s) will be based on arises, so as to cause volatile movements in the money
the Applicable NAV of the relevant Scheme(s)/ Plan(s) or debt market, which in the opinion of the AMC, will
and after considering any exit/entry/combination of entry be prejudicial to the interest of the unitholders, if
and exit loads that the Trustee may approve from time to further trading in the scheme is continued.
time. vi. Break down in the information processing
/communication systems affecting the valuation of
RIGHT TO LIMIT REDEMPTIONS
investments/processing of sale/repurchase request.
The Trustee may, in its sole discretion in response to
vii. Natural calamity.
unforeseen circumstances or unusual market conditions,
limit the total number of Units which may be redeemed viii.SEBI, by order, so directs.
on any day or within a Transaction Window to 5% of the
ix. Any other circumstances which in the opinion of the
total number of Units then in issue (or such higher
Board of Directors of AMC and Trustee is prejudicial to
percentage as the Trustee may determine in any particular
the interest of the existing/prospective investors
case). In addition, the Trustee reserves the right, in its
sole discretion, to limit redemptions with respect to any The approvals from the Boards of the AMC and the
single account to an amount of Rs.1 crore in a single day. Trustee giving details of circumstances and justification
Any Units which, by virtue of these limitations, are not for the proposed action shall also be informed to SEBI in
redeemed on a particular Business Day will be carried advance.
forward for redemption on the next following Business
The Trustee also reserves the right in its sole discretion to
Day in order of receipt. Redemptions carried forward will
withdraw sale of Units in the Scheme temporarily or
be made at the NAV in effect on the subsequent Business
indefinitely, if the Trustee views that increasing the
Day(s) on which the condition for redemption request is
Scheme’s size further may prove detrimental to the
fulfilled. To the extent multiple redemptions are being
existing Unitholders of the Scheme.
satisfied in a single day under these circumstances, such
payments will be made pro-rata based on the size of each UNCLAIMED REDEMPTION / DIVIDEND AMOUNT
redemption request. Under such circumstances,
redemption cheques may be mailed out to investors The unclaimed redemption and dividend amount may be
within a reasonable period of time and will not be subject deployed by the mutual fund in call money market or
to the normal response time for redemption cheque money market instruments only and the investors who
mailing. claim these amounts during a period of three years from
the due date shall be paid at the prevailing Net Asset
SUSPENSION OF REDEMPTION OF UNITS Value. After a period of three years, this amount may be
With the approval of the Boards of Directors of the transferred to a pool account and the investor can claim
Trustee and the Asset Management Company, the the amount at NAV prevailing at the end of the third year.
redemption of Units may be suspended temporarily or The income earned on such funds may be used for the
indefinitely when any of the following conditions exist: purpose of investor education. The AMC would make a
continuous effort to remind the investors through letters
i. The equity / debt market stops functioning or trading to take their unclaimed amounts. The investment
is restricted. management fees charged by the AMC for managing
unclaimed amounts will not exceed 50 basis points. The sponsor which is in excess of 25% of the net
Fund shall not be liable to pay any interest or assets.
compensation on unclaimed amount.
7. From time to time, subject to the Regulations, the
Sponsors, the Mutual Funds managed by them, their
ASSOCIATE TRANSACTIONS affiliates-associates, the Sponsors and the AMC may
acquire a substantial portion of the Scheme’s units and
1. The Schemes of Franklin Templeton Mutual Fund, collectively constitute a majority investor in the
from the date of their inception, till the date of this Scheme.
offer document, have not underwritten any issue lead
managed by the associate companies.
2. Franklin Templeton Mutual Fund has not utilized the UNITHOLDER INFORMATION
services of associate companies for purchase-sale of
securities. FOLIO/ACCOUNT NUMBER
3. Franklin Templeton Mutual Fund has utilised the Every investor will have an Folio Number. Within a Folio,
services of the associates as given below: (Rs. in an investor will have an Account Number for each fund
millions) or scheme in which he/she invests. The number of Units
issued to an investor or redeemed by an investor will be
Associate Company For the year ended reflected in his or her Account and a statement to this
31-03-2004 31-03-2005 31-03-2006
effect will be issued to the Unitholder.
Spur Cable and Datacom 0.60 - -
ITI Capital Markets 4.12 2.73 2.22
Integrated Enterprises (India) 3.50 4.14 7.55 Each Unitholder will receive an Account Statement each
4. The AMC may, subject to SEBI regulations, utilize the time a transaction - purchase, redemption, switch - is
services of the associate companies for the following: effected. For Dividends paid out, investors will receive an
account statement in case of dividends paid via Direct
• Purchase or sale of securities. Credit, and a dividend instrument with counterfoil for
• Marketing, sale and distribution of the units of the dividends paid by way of an instrument. Account
Schemes of Franklin Templeton Mutual Fund. statements will be sent either by courier or through the
services of the Indian postal department, or through e-
However, the AMC shall ensure that brokerage paid to mail (if an e-mail address is provided with the consent of
affiliate broker will be in line with what will be paid to
the unitholder) (please also read section on "Receiving
non-affiliate broker and the quantum of business shall be
Account Statement / Correspondence by e-mail), at the
subject to the limits prescribed by SEBI.
option of the AMC taking into consideration the
The AMC shall also ensure that the brokerage - trail fee investor's location so as to provide investors with the best
paid to the affiliate brokers for the sale and distribution of available service. The Unitholders can also obtain an
units is at the same rates offered to the other distributors. Account Statement on request from any of the ISCs. The
5. The AMC may, subject to the regulations, may entry / exit load may be disclosed in the account
subscribe on behalf of the Schemes in the Government statement issued after the introduction of such load.
securities issued and lead managed by any of the The Account Statement is a record of the transaction in
associate. The AMC shall ensure that investments in the scheme of Franklin Templeton Mutual Fund.
such issues will be in line with the investment Investors are requested to review the account statement
objectives of the Scheme. carefully and contact their nearest Investor Service Centre
6. No investment shall be made in in case of any discrepancy. The contents of the statement
will be considered to be correct if no error is reported
- any unlisted security of an associate or group within 30 days from the date of the statement.
company of the sponsor; or
Account statements are available from the fund on
- any security issued by way of private placement by
request. Investors may request an account statement at
an associate or group company of the sponsor; or
any time in confirmation of transactions in their account,
- the listed securities of group companies of the or the current status of their holdings with the fund.
RESPONSE TIMES redemption and issue prices daily and make press releases
once a week to newspapers widely circulated for
The fund will endeavour to adhere to the following
publication. In terms of SEBI Circular No.
response times with regard to various investor services
MFD/CIR/13/087/2001 dated March 28, 2001, the NAV
from the time of receipt of correct and complete request
shall be released on Wednesday. Further, during the
at Franklin Templeton Asset Management (India) Pvt.
stipulated redemption period(s), the NAV shall be
released on all business days.
Activity From date of receipt Regulatory limits
The publishing of NAV and redemption and Issue Prices
Account Statement 4 working days 6 weeks
as outlined above are as per the extant SEBI Regulations
and are subject to change from time to time.
Redemption cheque 10 working days 10 working days
mailing/e-mailing ANNUAL FINANCIAL REPORTS
Address change 3 working days -
As required by the SEBI Regulations, the Fund will
Ownership transmission 4 weeks 30 days
mail/e-mail (if an e-mail address is provided with the
These response times do not include postal delivery time, consent of the unitholder), as soon as practical after 31st
acts of God or disruptions beyond the control of the AMC. March each year but not later than six months thereafter,
as the Trustee may decide, an abridged scheme-wise
NAV, REDEMPTION AND ISSUE PRICES annual report to all the unitholders. The full annual
report of the Fund will be furnished to the Unitholders
The disclosure on valuation norms, computation and
upon a written request and will be available at the Head
publication of NAV, repurchase and sale price, accounting
Office of the Investment Manager for inspection. The
policies, investment restrictions and publication of half yearly
Fund will make all disclosures required by the SEBI
accounts shall conform to the relevant provisions of SEBI
Regulations, including information about the entire
(Mutual Funds) Regulations, 1996, and are subject to change
from time to time in conformity with changes made by SEBI. portfolio held by the Fund under this Scheme.
Following are the statutory provisions governing the HALF YEARLY DISCLOSURES
repurchase and resale prices of units of Mutual Funds: The Fund shall before the expiry of one month from the
a) The Mutual Fund, in case of closed-end scheme, shall close of each half year that is on 31st March and 30th
publish in two daily newspapers of all India September, publish its financial results, containing details
circulation, the NAV, sale and repurchase price of units specified in Regulation 59 read with Twelfth Schedule of
atleast once in a week. SEBI Regulations, in one English newspaper circulating in
b) While determining the prices of the units, the scheme the whole of India and in one regional newspaper
shall ensure that the repurchase price is not lower that circulating in the region where the head office of the Fund
95% of the Net Asset Value and the sale price is not is situated. In addition, the Scheme shall mail/e-mail (if an
higher that 107% of the Net Asset Value. e-mail address is provided with the consent of the
unitholder) or publish the complete portfolio to the
Provided further that the difference between the investors before the expiry of one month from 31st March
repurchase price and the sale price of the unit shall not and 30th September each year. These shall also be displayed
exceed 7% calculated on the sale price. on the web site of the Mutual Fund and that of AMFI.
c) The price of units shall be determined with reference
to the last determined Net Asset Value unless, DISCLOSURE UNDER REGULATION 25(11) OF SEBI
(MF) REGULATIONS, 1996
- the scheme announces the Net Asset Value on a
daily basis; and Disclosure as to whether any company has invested more
than 5% of the NAV of any Franklin Templeton Mutual
- the sale price is determined with or without a Fund scheme and investment made by that scheme or any
fixed premium added to the future NAV. other Franklin Templeton Mutual Fund scheme in such
The Scheme shall comply with Regulations 48 and 49 of company or its subsidiaries (as on January 15, 2007).
SEBI Regulations regarding computation and publication
Franklin Templeton Mutual Fund made the following
of NAV, redemption and re-sale prices.
investments in Companies which hold /have held units
Notwithstanding what is contained in the foregoing in excess of 5% of the Net Assets of any scheme of the
paragraph the Fund would normally compute NAV, Fund:
Investor Company Scheme/s invested in Franklin Templeton's Aggregate investment Outstanding# as at
scheme/s which have made during the period 15-Jan-2007 at
invested in the Investor 01-April-2006 Market/ Fair Value
Company to 15-January-2007@ (Rs. in Crores)
at cost (Rs. in Crores)
Bharti Airtel Ltd. TISTIP FTIBF, FIIF, TICAP, FIIF, TIEIF, 191.79 382.07
FITF, TMIP, FTIMIP, TIPP, TIGF,
FIT, FIBCF, FIPP, FIT97, FIT98,
FISCF, FTFTF-I/ II/III/IV,
Birla Corporation TISTIP FTFTF-II 0.64 0.00
Glaxosmithkline TISTIP FIBCF, FIFCF, FIIF, FITF, 103.04 31.20
Pharmaceuticals Ltd FPF, FIPP, FIT97, FIT98,
FTFTF-I/II/III/IV/VI, FTCSF, FIT
Hero Honda Ltd. FTMIP FIPP, FIBCF, FIIF, TIEIF, FITF 180.60 22.48,
Hindalco Industries Ltd. TGSF, TISTIP, TITMA FIPP, FIIF, TIEIF, FIOF, FITF, 208.28 162.16
TITMA, FIT, TIIF, FTFTF-II/III,
FIBCF, TIIBA, FIFCF, TISTIP,
FTIMIP, TIGF, TIPP, FTIBF,
Hindustan Lever Ltd. FTFTF-V, TISTIP FIIF, FFF, FIFCF, FITF, 41.58 24.29
FISCF, FIT, FTCSF, FIBCF
Infosys Technologies Ltd TITMA FIPP, FIIF, FIFCF, FIBCF, 61.41 556.93
FTFTF-I/II/III/IV/VI, FITF, FIT97,
TIPP, FIT98, FIF, FTCSF, FIT99,
FIT, FTIBF, FTMIP, TMIP, TICAP
Finance Co Ltd. TISTIP FIOF, FIFCF, FIBCF, FIPP, 280.76 289.41
FTFTF-I/II/III/IV/VI, FIT, FTIBF,
TIIBA, FTIMIP, TITMA, TISTIP,
FTCSF, TIPP, FIT99
ITC Ltd. TFIF, TISTIP, TITMA FIIF, FFF, TMIP, TIPP, FITF, 4.83 107.89
FTIMIP, FIBCF, FIT, FTIBF, TICAP
Maruti Udyog Ltd. TFIF, TFIF, TITMA FIPP, FIIF, FITF, 90.60 228.78
FTFTF-I/II/III/IV/VI, FISCF, TICAP,
TIPP, FTCSF, FIT, FIBCF, FIT97,
FIT99, FTIBF, FTIMIP, TMIP,
Reliance Industries Ltd TITMA FIIF, FIFCF, FIBCF, FISCF, 558.70 403.44
FTFTF-I/II/III/IV/VI, FIPP, FIT,
FTIBF, FITF, TIPP, TITMA, FTCSF,
FIOF, TIGF, FIT97, FIT98, FIT99,
FTIMIP, TMIP, TICAP
Reliance Petroleum Ltd TITMA FTIMIP, TMIP, FIFCF, TICAP, 20.04 0.00
FISCF, FTFTF-IV, FIBCF, FIPP,
FIOF, FIT, FTIBF, TIPP, FIT97,
Tata Chemicals Ltd TISTIP FIIF, TIEIF 58.91 57.46
Tata Steel Ltd TITMA FIIF, TIEIF, FIFCF, FIBCF, 248.77 253.59
FITF, TIGF, TITMA
Ultratech Cemco Ltd TISTIP TFIF, TIIBA, FTIMIP, 159.61 72.15
FTFTF-I/II/III/IV, TIIF, TMIP, TIPP,
Videsh Sanchar Nigam Ltd TISTIP FIIF, FITF, FIOF 8.65 0.33
Wipro Ltd TFIF, TISTIP FIIF, FITF, FIF, FIT99 0.95 12.80
@ This is the aggregate of all investments made during the period ended 15-January-2007 in accordance with Regulation 25(11) without
considering sale/redemptions and interscheme transactions, which might have occurred.
# Outstanding value of investments indicates the current value of all the investments in the company. These investments have been made
because of their value at these prices in case of equity shares and for high credit quality for comparable yield for the investment in fixed income
instruments, the investments made are in accordance with the investment objectives of the scheme.
NOMINATION & TRANSFER FACILITY 4. Nomination in respect of the units stands rescinded
SEBI has inserted a new Regulation 29A in the SEBI upon the transfer of units.
(Mutual Fund) Regulations 1996 vide its circular 5. Transfer of units in favour of a Nominee shall be valid
MFD/CIR/ 07/213/2002 dated July 2, 2002 and discharge by the asset management company against
SEBI/IMD/CIR.No.5/265/2004 dated February 16, 2004 the legal heir.
(Gazette Notification dated January 15, 2004)
permitting the Asset Management Company to provide 6. The cancellation of nomination can be made only by
an option to the investor for nomination as follows: those individuals who hold units on their own behalf
singly or jointly and who made the original
a) The unit holder may nominate a person in whom the
units held by him shall vest in the event of his death.
b) In case where more than one person holds the units 7. On cancellation of the nomination, the nomination
jointly, the joint unit holders may together nominate shall stand rescinded and the asset management
a person in whom all the rights in the units shall vest company shall not be under any obligation to transfer
in the event of death of all the joint unit holders. the units in favour of the Nominee.
Further the following regulations have to be complied However, the investors should be aware that the nominee
with by the unit holder/joint unit holders who wish to may not acquire title or beneficial interest in the property
nominate a person in whom the units held by him/them by virtue of the nomination and that neither the Mutual
shall vest in the event of his/their death: Fund or the Investment Manager or the Registrar and
Transfer Agent of the Fund will be bound to transfer the
1. The nomination can be made only by individuals
units to the nominee in the event of any dispute in
applying for/holding units on their own behalf singly
relation to the nominee’s entitlement to the units.
or jointly. Non-individuals including society, trust,
body corporate, partnership firm, Karta of Hindu If the Mutual Fund or the Investment Manager or the
Undivided Family, holder of Power of Attorney Trustee were to incur, suffer or any claim, demand,
cannot nominate. If the units are held jointly, all joint liabilities, proceedings or actions are filed or made or
holders will sign the nomination form. initiated against any of them in respect of or in
2. A minor can be nominated and in that event, the connection with the nomination, they shall be entitled
name and address of the guardian of the minor to be indemnified absolutely for any loss, expenses,
nominee shall be provided by the unit holder. costs, and charges that any of them may suffer or incur
Nomination can also be in favour of the Central absolutely from the investor’s estate.
Government, State Government, a local authority, The following documents are required in the case of
any person designated by virtue of his office or a Death:
religious or charitable trust.
a. Death certificate
3. The Nominee shall not be a trust, other than a
religious or charitable trust, society, body corporate, b. Identity of the nominee
partnership firm, Karta of Hindu Undivided Family
c. Proof of guardianship in case the nominee is a minor
or a Power of Attorney holder A non-resident Indian
and or an unsound person
can be a Nominee subject to the exchange controls in
force, from time to time. d. Indemnity in the prescribed format
RECEIVING ACCOUNT STATEMENT / Institutional Investors ('FIIs') in the Schemes of the
CORRESPONDENCE BY E-MAIL Mutual Fund and is based on the relevant provisions of
the Income-tax Act, 1961 ('the Act'), regulations issued
The AMC will encourage the Unit holder to provide
under the Foreign Exchange Management Act, 1999 and
their e-mail addresses for receiving Account Statements
and other correspondence. The Mutual Fund’s Website the Wealth-tax Act, 1957 (collectively called 'the
would facilitate request for Account Statement by Unit relevant provisions'), as they stand on the date of this
holders. For those unitholders who have provided an e- Offer Document.
mail address, the AMC will send the Account Statements THE FOLLOWING INFORMATION IS PROVIDED
and other correspondence, including without limitation FOR GENERAL INFORMATION ONLY. HOWEVER, IN
the annual report, half yearly portfolio statement and VIEW OF THE INDIVIDUAL NATURE OF THE
other services subscribed for by the unitholder by e- IMPLICATIONS, EACH INVESTOR IS ADVISED TO
mail. Alternatively, the AMC may also send an e-mail to CONSULT WITH HIS OR HER OWN TAX
the investor giving the link to the website of the Mutual ADVISORS/AUTHORISED DEALERS WITH RESPECT
Fund for the aforesaid statements, wherever applicable. TO THE SPECIFIC TAX AND OTHER IMPLICATIONS
By providing an e-mail address, the unitholder shall be ARISING OUT OF HIS OR HER PARTICIPATION IN
deemed to have agreed to receive the account statements
and other correspondence by e-mail. However, if the
unitholder wishes to receive account statement PURCHASE APPLICATIONS:
otherwise than by e-mail, he/she may request the AMC
in writing for the same. NRIs and other overseas investors can invest in Franklin
Templeton Schemes on Repatriable/ Non-Repatriable
The Unit holder may download and print the Account basis as per the provisions of Schedule 5 of the Foreign
Statement and other communication after receiving e- Exchange Management (Transfer or issue of Security by
mail from the Mutual Fund. Should the Unit holder a Person Resident Outside India) Regulations, 2000 ('the
experience any difficulty in accessing the electronically Regulations') as explained below. An Application Form
delivered Account Statement, the Unit holder shall
duly completed together with cheques or bank drafts
promptly advise the Mutual Fund to enable the Mutual
should be remitted through Franklin Templeton
Fund to make the delivery through alternative means.
Investor Service Centres ('ISC'). All cheques/ demand
Failure to advise Franklin Templeton Mutual Fund or
drafts accompanying the application form must be made
the AMC of such difficulty within 24 hours of receiving
in favour of "Templeton Fixed Horizon Fund – 3 Months
the e-mail, will serve as an affirmation regarding the
Plan" and crossed "A/c payee only" and should be made
acceptance by the Unit holder of the Account Statement.
payable at a city where the application is accepted by any
For the investors who have opted to receive Account Franklin Templeton ISC. No outstation cheques or post-
Statements, Annual Reports and other correspondence dated cheques will be accepted. The ISC will NOT
by e-mail, the AMC/Mutual Fund will not be responsible accept cash.
for e-mail not reaching the investors and for all
consequences thereof. The investors shall from time to REPATRIABLE BASIS - NRIs, PIOs
time intimate the AMC/Mutual Fund about any changes
In case of NRIs/ PIOs seeking to apply for purchase of
in their e-mail address.
units on a repatriable basis, payments may be made by
The Unitholders are requested to make themselves way of wire transfer/ inward remittances to Franklin
aware of all security risks including possible third party Templeton Mutual Fund’s account with Citibank, Fort,
interception of the Account Statement and content of the Mumbai, or by way of cheque drawn on the NRE
Account Statement becoming known to third parties. Account of the investor [Clause 3(2) of the
Regulations]/ Rupee draft purchased abroad, payable at
INVESTMENTS BY NRIs, PIOs, FIIs
the city where the application form is accepted by any
The following summary outlines the various provisions Franklin Templeton ISC. Please provide a photocopy of
related to investments by Non-Resident Indians ('NRIs'), the cheque along with the application form if investment
Persons of Indian Origin ('PIOs') and Foreign is made through a NRE account.
NON-REPATRIABLE BASIS - NRIs, PIOs INVESTMENTS MADE ON REPATRIABLE BASIS
In case of NRIs/ PIOs seeking to apply for units on a The investments shall carry the right of repatriation
non-repatriable basis, payments may be made by way of of capital invested and capital appreciation so long as
wire transfer/ inward remittances to Franklin Templeton the investor continues to be a resident outside India.
Mutual Fund’s account with Citibank, Fort, Mumbai, or In the case of a FII, the designated branch of the
by way of cheques drawn on the NRE//NRO account of
authorised dealer may allow remittance of net
the investor [Clause 3(3) of the Regulations]/ Rupee
sale/maturity proceeds (after payment of taxes) or
draft purchased abroad, payable at the city where the
credit the amount to the Foreign Currency account
application form is accepted by any Franklin Templeton
or Non-resident Rupee account of the FII maintained
ISC. Please provide a photocopy of the cheque along
in accordance with the approval granted to it by the
with the application form if investment is made through
RBI [Clause 5(i) of the Regulations]. In any other
a NRE/NRO account.
case, where the investment is made out of inward
FII INVESTORS remittance or from funds held in NRE account of the
investor, the maturity proceeds/repurchase price of
FIIs may pay for their subscription amounts by way of
units (after payment of taxes) may be credited to
wire transfer/ inward remittances to Franklin
NRE/NRO/NRSR account of the non-resident
Templeton Mutual Fund’s account with Citibank, Fort,
investor maintained with an authorised dealer in
Mumbai, or out of funds held in special Non-resident
India [Clause 5(ii) of the Regulations].
Rupee Account maintained in a designated branch of
an authorised dealer [Clause 3(1) of the Regulations]
by way of cheques payable at a city where the INVESTMENTS MADE ON NON-REPATRIABLE
application is accepted by any Franklin Templeton BASIS
ISC, or Rupee draft purchased abroad payable at the
city where the application is accepted by any Franklin Where the purchase of units is made on a non-
Templeton ISC. repatriable basis, the maturity proceeds/repurchase price
of units (after payment of taxes) will not qualify for
Similarly, in case of an application under a Power of repatriation out of India and the same may be credited to
Attorney or by an FII, the original Power of Attorney or the NRO/NRSR account of the non-resident investor
the relevant resolution/authority to make the application [Clause 5(ii) of the Regulations].
(or a duly notarised certified true copy thereof), along
with a certified copy of the Memorandum and Articles of Where the investment is made out of funds held in a
Association and/or bye laws and Certificate of NRSR account, the maturity proceeds/ repurchase price
Registration should be submitted to the Mumbai ISC of units (after payment of taxes) may be credited to the
within 7 days from the date of the application. The
NRSR account maintained by the investor with an
officials should sign the application under their official
authorised dealer in India [Clause 5(ii) of the
FIIs/ Trusts must also provide the Overseas Auditor’s
Certificate. The NRIs/ PIOs/ FIIs shall also be required to Similarly, investments in units purchased in Rupees
furnish such other documents as may be desired by the while the investor was resident of India and becomes
Fund in connection with the investment in the Schemes. non-resident subsequently will not qualify for
repatriation of repurchase proceeds of units.
REDEMPTIONS & INCOME DISTRIBUTION
Redemption proceeds/repurchase price and/or dividend The entire income distribution on investment will
or income earned (if any) will be payable in Indian however qualify for full repatriation. Investors are
Rupees only. The Scheme will not be liable for any loss advised to contact their banks/tax consultants if they
on account of exchange fluctuations, while converting desire remittance of the income distribution on units
the rupee amount in US Dollar or any other currency. abroad.
TAX BENEFITS On sale of the units of an equity oriented fund (as
defined below) on a recognised stock exchange or to the
(As per laws currently in force)
Mutual Fund, the investor will also be charged with
A) TAX IMPLICATIONS TO UNITHOLDERS securities transaction tax (‘STT’) as per the rates
specified in para on STT, provided the transaction is also
The following summary outlines the key tax considered as a taxable securities transaction. In other
implications applicable to unit holders based on the cases, STT is not levied.
relevant provisions under the Income-tax Act, 1961
(‘Act’), the Wealth-tax Act, 1957 and the Finance Act, Further, the investor is not allowed any deduction of
2006 (collectively called ‘the relevant provisions’). STT paid for the purposes of computing his business
income. However, a rebate under section 88E of the Act
THE FOLLOWING INFORMATION IS PROVIDED is available in respect of STT paid. The rebate is
FOR GENERAL INFORMATION ONLY. HOWEVER, IN available in form of a deduction of the STT paid from the
VIEW OF THE INDIVIDUAL NATURE OF THE tax payable on the income from the taxable securities
IMPLICATIONS, EACH INVESTOR IS ADVISED TO transaction. The tax payable on the income from taxable
CONSULT WITH HIS OR HER OWN TAX securities transaction is computed by applying the
ADVISORS/AUTHORISED DEALERS WITH RESPECT average rate of income-tax on the total income. The
TO THE SPECIFIC TAX AND OTHER IMPLICATIONS rebate in respect of STT paid cannot, however, exceed
ARISING OUT OF HIS OR HER PARTICIPATION IN the tax payable. Also, this rebate can be claimed by an
investor only if appropriate evidences are furnished in
UNDER THE INCOME-TAX ACT, 1961 Form No. 10DB along with the Return of Income.
The following summary outlines the key tax If the units are held as investments:
implications applicable to unit holders based on the If the units are held as investments, the tax rates
relevant provisions under the Act, taking into account applicable will depend on whether the gain on sale of
the amendments made by the Finance Act, 2006. units is classified as a short term capital gain or a long
The tax implications of the following income received by term capital gain. As per section 2(42A) of the Act, units
the investors are discussed below: of the scheme held as a capital asset, for a period of more
than 12 months immediately preceding the date of
i) Income on units (other than sale/redemption); transfer, will be treated as long-term capital assets for the
ii) Income on sale/redemption of the units. computation of capital gains; in all other cases, they
would be treated as short-term capital assets.
Taxability of income on units (other than sale):
The tax rates applicable on short term or long term capital
The income received by an investor (other than income gains arising on transfer of units of a scheme, being an
on sale/redemption) in respect of units of a mutual fund equity oriented fund are stated in the following table:
specified under Section 10(23D) of the Act, is exempt
Nature of income Tax rate$
under the Act.
Short-term capital gains on sale Capital gains tax payable at 10
As the income is exempt from tax, no tax is withheld by
either to the Mutual Fund or on a percent* [applicable to all
the Mutual Fund upon distribution of such income.
recognised stock exchange investors including Foreign
Taxability of income on sale/redemption of units: Institutional Investors (FII)]
The taxability of the income on sale/redemption of units and Long- term capital gains on sale No capital gains tax payable by
the rates at which such income is taxed is discussed below: either to the Mutual Fund or on a any investor
recognised stock exchange .
If the units are held as stock-in-trade:
* plus surcharge and education cess as may be applicable (refer
If the units are held by an investor as stock-in-trade of a Note 2). In case of non-resident investors, the above rates
business, the said income will be taxed at the rates at
would be subject to applicable treaty relief.
which the normal income of that investor is taxed. The
rates applicable to different investors are discussed at $ Additionally, STT would be payable at the rates specified in
length in Note 1. para on STT
"Equity oriented fund" is defined to mean a fund - (i) Foreign Institutional Investors: No tax has to be
deducted on redemption/sale proceeds [Section
• where the investible funds are invested by way of
equity shares in domestic companies to the extent of
more than sixty five percent of the total proceeds of (ii) Non-Resident Indian (‘NRI’) / Person of Indian origin
such fund; and (‘PIO’): Tax on short term capital gains arising out of
redemption of units is deducted at the rate of 10%
• which has been set up under a scheme of a Mutual
(plus surcharge) for an equity oriented fund and at
Fund specified in section 10 (23D) of the Act.
30% (plus surcharge) for a non equity oriented fund.
TFHF – 3M is not an equity oriented fund. Tax, on long term capital gains is deducted at the rate
The tax rates applicable on short term or long term of 20% (plus surcharge). However, in case of long
capital gain arising on transfer of units of a scheme, not term capital gains on redemption of units of an equity
being an equity oriented fund as discussed above are oriented fund, no tax would be deducted. For
stated in the following table: administrative purpose the Fund will deduct 10%
Nature of income Tax rate
(iii)Non-Resident Corporates: Tax is deducted at the rate
Short-term capital gains In case of FIIs, 30 percent*
of 40 percent on short term capital gains and 20
For others, taxed at normal tax
percent on long-term capital gains. The said rates at
rates (as explained in Note 1).
which capital gains are charged to tax would be
Long-term capital gains In case of FII’s, 10 percent* further increased by the applicable surcharge and
(without indexation) education cess stated in Note 2 below. No tax would,
In case of others, 20 percent* however, be deducted in case of long term capital
(with indexation#) or, 10 gains on redemption of units of an equity oriented
percent* (without indexation), fund.
All the above non-resident investors may also claim the
* plus surcharge and education cess as may be applicable (refer tax treaty benefits available, if any. For details of
Note 2). In case of non-resident investors, the above rates applicability and eligibility of such benefits, the
would be subject to applicable treaty relief. investors are requested to consult their tax advisors.
# no indexation benefit for non-resident investors if investment Provisions regarding Dividend income and Bonus
made is in foreign currency.
According to the provisions of Section 94(7) of the Act,
The withholding tax implication (i.e. TDS) in respect of losses arising from the sale/redemption of units
the capital gains explained above is discussed below: purchased within 3 months prior to the record date (for
(a) Resident Investors: entitlement of dividends) and sold within 9 months after
such date, is disallowed to the extent of income on such
No tax is required to be deducted at source from capital units (other than on sale/redemption) claimed as tax
gains arising to resident investors at the time of
repurchase or redemption of the units.
According to the provisions of Section 94(8) of the Act,
(b) Non-Resident Investors:
if an investor purchases units within 3 months before
As per the provisions of Act [Section 195], tax is the record date (for entitlement of bonus) and
required to be deducted at source from the sale proceeds sells/redeems the units within 9 months after that date,
or redemption proceeds paid to non-resident investors. and by virtue of holding the original units, he becomes
This withholding is in addition to the STT payable, if entitled to bonus units, then the loss arising on transfer
any, by the investor. The rates are: of original units shall be ignored for the purpose of
computing his income chargeable to tax. In fact, the loss Assessee Rate of surcharge applicable
so ignored will be treated as cost of acquisition of such Domestic Companies 10 percent basic surcharge. An
additional surcharge by way of
Note 1: education cess of 2 percent is
payable on the total amount of tax
The individuals (including NRIs / PIOs) and HUFs, are
to be taxed in respect of their total income at the
following rates: Foreign Companies 2.5 percent basic surcharge. An
(including corporate FII) additional surcharge by way of
Slab Tax rate *
education cess of 2 percent is
Total income upto Rs.1,00,000# Nil
payable on the total amount of tax
More than Rs.100,000# but 10 percent of excess over plus surcharge.
upto Rs.150,000 Rs.100,000
UNDER THE WEALTH TAX ACT, 1957
More than Rs.150,000 but 20 percent of excess over .
upto Rs.250,000 Rs.150,000 + Rs.5,000$
Units are not to be treated as assets as defined under
Section 2(ea) of the Wealth-Tax Act, 1957 and hence
Exceeding Rs.250,000 30 percent of excess over
will not be liable to wealth-tax.
Rs 250,000+ Rs.25,000$
* plus surcharge and education cess as may be applicable (refer B) TAX IMPLICATIONS ON MUTUAL FUND
Note 2). INCOME EARNED OR RECEIVED BY THE MUTUAL FUND
# for females below sixty-five years of age, Rs. 100,000 has to be Franklin Templeton Mutual Fund is registered with SEBI
read as Rs. 135,000 and for senior citizens above sixty-five years and as such, the entire income of the Fund is exempt
of age, Rs. 100,000 has to be read as Rs. 185,000. from income tax under Section 10(23D) of the Act. In
$for females below sixty-five years of age, Rs. 5,000 has to be read view of the provisions of Section 196(iv) of the Act, no
as Rs. 1,500 and Rs 25,000 has to be read as Rs 21,500. Similarly income tax is deductible at source on the income earned
for senior citizens above sixty-five years of age, Rs. 5,000 has to by the mutual fund.
be read as nil and Rs 25,000 has to be read as Rs. 13,000. INCOME DISTRIBUTED BY THE MUTUAL FUND
The corporate tax rate for domestic companies is 30 per As per provisions of the Act (Section 115R), Franklin
cent [plus applicable surcharge (as per note 2) and Templeton Mutual Fund will be required to pay dividend
education cess]. However, the tax rate applicable to distribution tax (‘DDT’) as follows:
foreign companies is 40 per cent [plus applicable
• No DDT to be paid on equity oriented funds;
surcharge and education cess (as per note 2)].
• DDT to be paid on other funds at the following rates:
- at 14.025 percent (including a surcharge of 10
Assessee Rate of surcharge applicable
percent and an additional surcharge by way of
Individuals (including NRIS/ A surcharge by way of education education cess of 2 percent on the amount of tax
PIOs), HUFs, Non-Corporate cess of 2 percent is payable on the plus surcharge) on dividend distributed to
FIIs where the taxable income total amount of tax individuals and HUFs; and
is up to Rs. 1,000,000 per annum
- at 22.44 percent (including a surcharge of 10
Individuals (including NRIs/ 10 percent basic surcharge. An percent and an additional surcharge by way of
PIOs), HUFs and Non-corporate additional surcharge by way of education cess of 2 percent on the amount of tax
FIIs where the taxable income education cess of 2 percent is plus surcharge) on dividend distributed to
is in excess of Rs. 1,000,000 payable on the total amount of tax persons other than individuals and HUFs, for
per annum plus surcharge. instance, corporates.
SECURITIES TRANSACTION TAX "Taxable securities transaction" means a transaction of –
Franklin Templeton Mutual Fund, is liable to pay a • purchase or sale of an equity share in a company or a
securities transaction tax as follows: derivative or a unit of an equity oriented fund,
entered into in a recognised stock exchange; or
Sr. Taxable securities transaction Current Tax Rate
No (per cent) • sale or an equity oriented fund to the Mutual Fund
1 Purchase of an equity share in a company or a 0.125
RELIGIOUS AND CHARITABLE TRUSTS
unit of an equity oriented fund, where
Investments in the units of the Fund by Religious and
(a) the transaction of such purchase is entered
Charitable Trusts is an eligible investment under Section
into in a recognised stock exchange; and
11(5) of the Act, read with Rule 17C of the Income-tax
(b) the contract for the purchase of such
share or unit is settled by the actual delivery
or transfer of such share or unit
2 Sale of an equity share in a company or a 0.125 INVESTOR SERVICES
unit of an equity oriented fund, where - The Scheme is not registered in the United States of
(a) the transaction of such sale is entered America under the Investment Company Act of 1940.
into in a recognised stock exchange; and The Units of the Scheme have not been registered in the
(b) the contract for the sale of such share or
United States of America under the Securities Act of
unit is settled by the actual delivery or
1933. The units made available under this offer may not
transfer of such share or unit
be directly or indirectly offered or sold in the United
States of America or any of its territories or possessions
Sr. Taxable securities transaction Current Tax Rate
or areas subject to its jurisdiction or to or for the benefit
No (per cent)
of nationals or residents thereof, unless pursuant to an
3 Sale of a derivative, where the transaction 0.017 exemption from registration requirements available
of such sale is entered into in a recognised under the U.S. law, any applicable statute, rule or
stock exchange interpretation. Applicants for Units may be required to
4 Sale of unit of an equity oriented fund to 0.25 declare that they are not a U.S. Person and are not
the Mutual Fund applying for Units on behalf of any U.S. Person. Hence,
the units of the scheme can be purchased by persons
The value of a taxable securities transaction will be as
other than "U. S. Person".
The term "U.S. Person" shall mean any person that is a
• in the case of a taxable securities transaction relating
United States Person within the meaning of Regulation S
to "option in securities", the aggregate of the strike
under the United States Securities Act of 1933, as the
price and the option premium of such "option in
definition of such term may be changed from time to
time by legislation, rules, regulations or judicial or
• in the case of taxable securities transaction relating to administrative agency interpretations.
"futures", the price at which such "futures" are
To resolve investor queries, the fund has set up an
Investor Service Cell that ensures prompt response to all
• in the case of any other taxable securities transaction, investor complaints. The number of complaints received
the price at which such securities are purchased or and redressed for the last three financial years are
sold. detailed below:
Scheme 01.04.2003 to 31.03.2004 01.04.2004 to 31.03.2005 01.04.2005 to 31.03.2006 Scheme 01.04.2006 to 15.01.2007
Received Redressed Pending Received Redressed Pending Received Redressed Pending Received Redressed Pending
FFF 45 44 1
TIGF 64 64 Nil 28 28 Nil 237 237 Nil
FIGF 36 36 Nil 11 11 Nil 28 28 Nil FIBCF 1456 1431 25
FIIF 35 35 Nil 7 7 Nil 34 34 Nil FTIBF 144 139 5
FIBF 54 54 Nil 4 4 Nil 23 23 Nil FIF 328 318 10
TIIF 61 61 Nil 36 36 Nil 156 156 Nil FIFCF 3682 3603 79
TMIP 26 26 Nil 9 9 Nil 75 75 Nil
FIIF 28 28 Nil
TGSF 54 54 Nil 22 22 Nil 51 1 Nil
FIMF 62 62 Nil
TILF 120 120 Nil 11 11 Nil 1 51 Nil
FITF 2 2 Nil 1 1 Nil 23 23 Nil FINTF 2 2 Nil
TFIF 6 6 Nil 23 23 Nil 258 258 Nil FIOF 465 413 52
FIPF 206 206 Nil 125 125 Nil 2,010 2,010 Nil FIPF 1469 1445 24
FIPP 424 424 Nil 93 93 Nil 962 962 Nil FIPP 902 860 42
FIT95 217 217 Nil 51 51 Nil 32 32 Nil
FISCF 410 399 11
FIT96 106 106 Nil 29 29 Nil 53 53 Nil
FIT 1284 1266 18
FIT97 33 33 Nil 9 9 Nil 10 10 Nil
FIT95 21 15 6
FIT98 7 7 Nil 0 0 Nil 0 0 Nil
FIT99 79 79 Nil 22 22 Nil 4 4 Nil FIT96 308 301 7
FIT 444 444 Nil 166 166 Nil 1,051 1,051 Nil FIT97 4 4 Nil
FIBCF 495 495 Nil 182 182 Nil 1,671 1,671 Nil FIT98 3 3 Nil
TIGIP 1 1 Nil 4 4 Nil 2 2 Nil FIT99 3 3 Nil
TIMMA 10 10 Nil 14 14 Nil 23 23 Nil
FITF 7 7 Nil
TIPP 82 82 Nil 49 49 Nil 136 136 Nil
FPF 70 67 3
TIIBA 308 308 Nil 60 60 Nil 156 156 Nil
TICAP 15 15 Nil 0 0 Nil 21 21 Nil FTDPEF 13 13 Nil
TITMA 13 13 Nil 10 10 Nil 128 128 Nil FTFTF–Series I 11 11 Nil
FIVF 1 1 Nil 0 0 Nil 6 6 Nil FTFTF–Series II 15 14 1
FIF 352 352 Nil 92 92 Nil 414 414 Nil FTFTF–Series III 9 9 Nil
FPF 91 91 Nil 11 11 Nil 103 103 Nil
FTFTF–Series IV 37 37 Nil
FFF 46 46 Nil 5 5 Nil 55 55 Nil
FTFTF–Series V 1 1 Nil
FIMF 1 1 Nil 0 0 Nil 0 0 Nil
FTFTF–Series VI 17 17 Nil
FTIBF 103 103 Nil 31 31 Nil 135 135 Nil
FIOF 444 444 Nil 149 149 Nil 836 836 Nil FTIMIP 313 298 15
FTIMIP 60 60 Nil 53 53 Nil 372 372 Nil FTLF 59 59 Nil
FTIIF 12 12 Nil 3 3 Nil 0 0 Nil TFIF 199 196 3
FTIGF 33 33 Nil 7 7 Nil 2 2 Nil TGSF 36 36 Nil
TISTIP 1 1 Nil 0 0 Nil 23 23 Nil
TICAP 23 21 2
FTIPERF 13 13 Nil 0 0 Nil 3 3 Nil
TIEIF 6528 6479 49
FTIAAF 8 8 Nil 4 4 Nil 0 0 Nil
FINTF 1 1 Nil 0 0 Nil 1 1 Nil TIIBA 97 95 2
FTDPEF 1 1 Nil 0 0 NIL 25 25 Nil TIIF 150 148 2
FTLF 2 2 Nil 9 9 Nil 112 112 Nil TIMMA 18 18 Nil
FIFCF N.A. N.A. N.A. 757 757 Nil 3,946 3,946 Nil TIPP 147 143 4
FTFTF-I N.A. N.A. N.A. N.A. N.A. N.A. 15 15 Nil
TISTIP 13 12 1
FTFTF-II N.A. N.A. N.A. N.A. N.A. N.A. 55 55 Nil
TITMA 123 116 7
FTFTF-III N.A. N.A. N.A. N.A. N.A. N.A. 27 27 Nil
TMIP 79 78 1
FTFTF-IV N.A. N.A. N.A. N.A. N.A. N.A. 17 17 Nil
FISCF N.A. N.A. N.A. N.A. N.A. N.A. 1,105 1,105 Nil FTCSF 17 8 9
Others (*) 168 168 Nil 24 24 Nil 970 970 Nil Others (*) 3975 3912 63
(*): Inlcudes investors who have not furnished their by the AMC unless otherwise required under any
account numbers / scheme names. applicable regulations, at the risk of the investor. Such
There were 2 SEBI Complaint pending as on January 15, payments will constitute adequate discharge of the
2007. obligation of the Fund, Trustee and the AMC. The Fund,
Trustee or the AMC will not be responsible for any
Investors Relation Officer: Mr. S. Rajagopalan
delay/non-receipt of dividend proceeds where it is
Investor Services: Franklin Templeton Centre, attributable to any incorrect/incomplete information
Door #7, 3rd Cross Street, provided by the investor. The Fund/Trustee/the AMC
Adyar, Chennai 600020. will also not be liable for any loss on account of
fraudulent encashment of the dividend cheque. The
Tel: 2440 7000 / 1-800-425 4255 Trustee may not declare a dividend at all in the event of
Fax: (044) 2445 2323 inadequacy of distributable income. There is no
E-mail: firstname.lastname@example.org assurance or guarantee to Unitholders as to the
Most queries were related to general / additional periodicity of dividend; rate of dividends distribution
information on the fund. Complaints regarding non- nor that dividend will be regularly paid.
receipt of Account Statement were resolved by issuing RECORD DATES FOR DECLARATION OF
duplicate Account Statement and arranging for duplicate DIVIDEND
cheques/ DDs in cases where redemptions were not The procedure of declaring dividend and fixing of record
received. dates will be in accordance with SEBI circular dated
April 4, 2006. In terms of the circular, the public notice
GENERAL INFORMATION for dividend and record date will not be necessary where
the frequency of the dividend is from daily up to
DIVIDENDS AND DISTRIBUTION monthly.
The Trustee may declare dividends in the scheme at any
time and at such frequency (such as daily, weekly,
monthly, quarterly etc.) as it deems appropriate though The trustees may at their discretion, approve
there is no assurance or guarantee to the Unitholders as distribution of dividends under the dividend plan of the
to the rate of dividend distribution nor that the dividend scheme as per the procedure described under the
will be regularly paid. The Trustees may declare paragraph Record Dates for Declaration of Dividend
dividends at any time to Unitholders, whose names above.
appear on the Unitholders’ register on the record date. Dividends so declared, will be distributed within 30 days
Dividends will be paid by cheque, net of taxes as may be of the declaration of the dividends and payments will be
applicable, and payments will be in favour of the sent to the unit holder’s registered name and if provided,
Unitholder’s registered name and, if provided, bank bank account number.
account number. The dividend may also be credited to As per current provisions of Income Tax Act, any income
the bank account of the investor if the investor so received from the scheme by the investors is exempt
instructs, subject to the AMC having necessary from tax. The dividend amount paid out will accordingly
arrangements with the bank or may also be paid through be exempt from tax in the hands of the investor.
Electronic Clearing System (ECS), which is subject to
applicable policies of the Reserve Bank of India and GROWTH OPTION
working of the banking system. All dividend payments There will be no dividend declaration under this Plan.
will be made in favour of the registered holder of Units Instead the growth in NAV will reflect the appreciation
or, if there is more than one registered holder, of the of the value of investment.
first-named registered holder on the original Application
Form. To safeguard the interest of Unitholders from loss DEFAULT OPTION
or theft of dividend cheques, investors are encouraged to The investors must clearly and unambiguously indicate
provide the details of their bank account in the their choice of the Plan (Retail Plan or Institutional)
Application Form. Dividend cheques will be sent to the and/or Option (Growth or Dividend) in the relevant
investor with reference to the data submitted in the space provided for in the Application Form. In the
application for Units at the investor’s risk. Dispatch of absence of such clear and unambiguous instructions, it
dividend cheque shall be made by ordinary mail or will be assumed that the investor has opted for the
registered mail or courier, as may be deemed appropriate following Default Options and the application will be
processed accordingly: SCHEME TO BE BINDING ON THE UNITHOLDERS
Default Plan: Retail Plan The Trustee may, from time to time, add to or otherwise
Default Option: Growth Option vary or alter all or any of the features, investment plans
and terms of this Scheme after obtaining the prior
The Trustee/AMC reserves the right to alter/ vary the approval of SEBI and the Government of India where
default plan/ option, after giving notice. necessary and the Unitholders in accordance with the
UNAMBIGUOUS AND UNCONDITIONAL SEBI Regulations, and the same shall be binding on each
REQUESTS Unitholder and any person or persons claiming through
or under him as if each Unitholder or such person
Any application for redemption, purchase or exchange
expressly agreed that such features, plans and terms
or any other instruction must be correct, complete, clear
should be so binding.
and unambiguous in all respects and should conform to
the prescribed procedure/documentation requirements, PREVENTION OF MONEY LAUNDERING
failing which the Trustee/AMC reserve the right to reject Prevention of Money Laundering Act, 2002 ('PML Act')
the same and in such a case the Trustee/AMC will not be came into effect from July 1, 2005 vide Notification No.
responsible for any consequence therefrom. The GSR 436(E) dated July 1, 2005 issued by Department of
Investor shall ensure that any overwriting or correction Revenue, Ministry of Finance, Government of India.
shall be countersigned by the investor, failing which the Further, SEBI vide its circular No. ISD/CIR/RR/AML/1/06
Fund/Trustee/AMC may at its sole discretion reject such dated January 18, 2006 mandated that all intermediaries
transaction request. Further, any requests for purchase / including Mutual Funds should formulate and
redemption / switch or other transactions must be implement a proper policy framework as per the
unconditional. The Fund/Trustee/AMC shall not be guidelines on anti money laundering measures and also
bound to take cognizance of any conditions placed on to adopt a "Know Your Customer" (KYC) policy. The
the transaction request and may at its sole discretion, intermediaries may, according to their requirements
reject such transaction request, or process the same as if specify additional disclosures to be made by clients for
the condition were not mentioned. the purpose of identifying, monitoring and reporting
incidents of money laundering and suspicious
UNDERWRITING transactions undertaken by clients. SEBI has further
Subject to Franklin Templeton Mutual Fund obtaining issued circular no. ISD/CIR/RR/AML/2/06 dated March
the necessary approval-registration under the Securities 20, 2006 advising all intermediaries to take necessary
and Exchange Board of India (Underwriters) steps to ensure compliance with the requirement of
Regulations, 1993 and the Securities and Exchange section 12 of the PML Act requiring inter alia
Board of India (Underwriters) Rules, 1993, the Scheme maintenance and preservation of records and reporting of
may accept obligations for underwriting issue of information relating to cash and suspicious transactions
Securities consistent with its investment objectives. The to Financial Intelligence Unit-India (FIU-IND). The PML
total underwriting obligations will not exceed the Act, the Rules issued thereunder and the
scheme’s total net asset value. guidelines/circulars issued by SEBI thereto, as amended
from time to time, are hereinafter collectively referred to
POWER TO MAKE RULES as 'AML Laws'.
Subject to the prior approval of SEBI, if required, the
The investor(s), including guardian(s) where investor is
Trustee may, from time to time, prescribe such terms and
a minor, should ensure that the amount invested in the
make such rules for the purpose of giving effect to the
scheme is through legitimate sources only and does not
provisions of this Scheme with power to the Investment
involve and is not designated for the purpose of any
Manager to add to, alter or amend all or any of the terms
contravention or evasion of the provisions of the Income
and rules that may be framed from time to time. Tax Act, AML Laws, Prevention of Corruption Act and/or
POWER TO REMOVE DIFFICULTIES any other applicable law in force and also any laws
enacted by the Government of India from time to time or
If any difficulty arises in giving effect to the provisions of
any rules, regulations, notifications or directions issued
this Scheme, the Trustee may do anything not
inconsistent with such provisions, which appear to them
to be necessary, desirable or expedient, for the purpose To ensure appropriate identification of the investor(s)
of removing the difficulty. under its KYC policy and with a view to monitor
transactions in order to prevent money laundering, in nature within the purview of the AML Laws and/or for
Franklin Templeton Asset Management (India) Pvt. Ltd. reporting the same to FIU-IND.
('the AMC')/Franklin Templeton Mutual Fund ('the
With a view to implement the Customer Identification
Mutual Fund') / Franklin Templeton Trustee Services Pvt.
Ltd. ('the Trustees') reserves the right to seek Procedure in a manner which is easy and convenient for
information, record investor's telephonic calls and/or the investors, Mutual Fund Industry has collectively
obtain and retain documentation for establishing the entrusted the responsibility of collection of documents
identity of the investor, proof of residence, source of relating to identity and address and record keeping to an
funds, etc. It may re-verify identity and obtain any independent agency (presently CDSL Ventures Limited)
incomplete or additional information for this purpose, that will act as central record keeping agency ('Central
including through the use of third party databases, Agency'). As a token of having verified the identity and
personal visits, or any other means as may be required for address and for efficient retrieval of records, the Central
the AMC/the Mutual Fund/the Trustees to satisfy Agency will issue a Mutual Fund Identification Number
themselves of the investor(s) identity, address and other ('MIN') to each investor who submits an application and
personal information. the prescribed documents to the Central Agency.
The investor(s) and their attorney(ies), if any, shall Investors who have obtained the MIN can invest in the
produce reliable, independent source documents such as schemes of the mutual fund by quoting the MIN in lieu
photographs, certified copies of ration of submitting information and documents required under
card/passport/driving license/PAN card, etc. and/or such AML Laws.
other documents or produce such information as may be Mutual Fund Identification Number (MIN)
required from time to time for verification of the personal
details of the investor(s) including inter alia identity, Investors who wish to obtain a MIN have to submit a
residential address(es), occupation and financial completed Application Form for MIN ('MIN Form')
information by the AMC/Mutual Fund. If the investor(s), along with all the prescribed documents listed in the MIN
their attorney(ies) or the person making payment on Form, at any of the Point of Service ('POS'). The MIN
behalf of the investor(s), refuses/fails to provide the Form is made available at our website
required documents/information within the period (www.franklintempletonindia.com) and AMFI website
specified by the AMC/Mutual Fund then the AMC shall (www.amfiindia.com). POS are the designated centres
have absolute discretion to freeze the folios of the appointed by the Central Agency for receiving
investor(s), reject any application(s)/allotment of units application forms, processing data and allotment of MIN.
and effect mandatory redemption of unit holdings of the List of and location of POS is made available at our
investor(s) at the applicable NAV subject to entry/exit website (www.franklintempletonindia.com) and at
loads, if any. The AMC/Mutual Fund/Trustees shall also, www.amfiindia.com. On submission of application,
after application of appropriate due diligence measures, documents and information to the satisfaction of the
have absolute discretion to report any transactions to POS, the investor will be allotted a provisional MIN
FIU-IND that it believes are suspicious in nature within across the counter. Subsequently, the Central Agency will
the purview of the AML Laws and/or on account of scrutinize the information and documents submitted by
deficiencies in the documentation provided by the the investor, and confirm the MIN. However, the Central
investor(s) and the AMC/Mutual Fund/Trustees shall Agency may cancel the MIN within 15 working days from
have no obligation to advise investors or distributors of the date of allotment of provisional MIN, in case of any
such reporting. The KYC documentation requirements deficiency in the document/information. Intimation on
shall also be complied with by the holders entering the cancellation of MIN will be dispatched by the Central
Register of Unitholders by virtue of operation of law e.g. Agency to the investor immediately. No communication
transmission, etc. will be sent to the investor if the MIN as allotted is
The AMC/Mutual Fund/Trustees, and their Directors,
employees, agents and service providers shall not be Presently, it is mandatory for all applications for
liable in any manner for any claims arising whatsoever on subscription of value of Rs.50,000/- and above to quote
account of freezing the folios/rejection of any the MIN of all the applicants (guardian in case of minor)
application/allotment of units or mandatory redemption in the application for subscription. The MIN will be
of units due to non-compliance with the provisions of the validated with the records of the Central Agency before
AML Laws and KYC policy and/or where the allotting units. Applications without a valid MIN may be
AMC/Mutual Fund believes that transaction is suspicious rejected.
In case of subscriptions in the New Fund Offer, allotment change is not submitted, such transactions accompanied
will be done only on confirmation from the Central by duly certified copy of the revised Certificate of
Agency that the MIN is final and if the Central Agency Incorporation with a copy of the Old Pan Card and
informs that the MIN is cancelled, the original amount confirmation of application made for new PAN Card will
invested will be refunded. be required as a documentary proof.
All investors (both individual and non-individual) can CLIENT INFORMATION
apply for a MIN. However, applicants should note that
The Mutual Fund shall presume that the identity of the
minors cannot apply for a MIN and any investment in the
investor and the information disclosed by him is true
name of minors should be through a Guardian, who
and correct. It will also be presumed that the funds
should obtain a MIN for the purpose of investing with a
invested by the investor in the Schemes of the Mutual
Mutual Fund. Also, applicants / unit holders intending to
Fund come from legitimate sources / manner and the
apply for units / currently holding units and operating
investor is duly entitled to invest the said funds.
their Mutual Fund folios through a Power of Attorney
(PoA) must ensure that both, the issuer of the PoA and Where the funds invested are for the benefit of a person
the holder of the PoA, must mention their respective (beneficiary) other than the person in whose name the
MIN at the time of investment above the threshold. PoA units are issued and registered, the Mutual Fund shall
holders are not permitted to apply for a MIN on behalf of assume that the investor holding the Units in his name
the issuer of the PoA. Separate procedures are prescribed is legally authorized / entitled to invest the said funds in
for change in name, address and other MIN related the Units of the Mutual Fund, for the benefit of the
details, should the applicant desire to change such beneficiaries.
information. POS will extend the services of effecting Units of the Schemes are not offered, nor is the Fund
such changes. managed or intended to serve, as a vehicle for frequent
trading that seeks to take advantage of short-term
ACTS DONE IN GOOD FAITH fluctuations in the securities market. This type of
Any act, thing or deed done in good faith in pursuance of trading activity is often referred to as "market timing"
or with reference to the information provided in the and could result in actual or potential harm to the Unit
application or other communications received from the Holders. Accordingly, the Mutual Fund (MF) at it’s sole
investor/ unit holder will constitute good and full discretion may reject any purchase or exchange of Units
discharge of the obligation of the Fund, Trustee and the that the MF reasonably believes may represent a pattern
AMC. of market timing activity involving the Schemes of the
In cases of copies of the documents / other details such as
list of authorized signatories, that are submitted by a LIEN
limited company, body corporate, registered society, trust The fund will have a first and paramount right of
or partnership, if the same are not specifically lien/set-off with respect to every unit/dividend under
authenticated to be certified true copies but are attached any scheme of the Fund for any money that may be
to the application form and / or submitted to the Fund, owed by the unit holder, to it.
the onus for authentication of the documents so
DURATION OF THE SCHEME
submitted shall be on such investors and the AMC/Fund
will accept and act on these in good faith wherever the The Scheme will have a fixed maturity as specified
documents are not expressly authenticated. Submission herein and it will be fully redeemed at the end of the
of these documents / details by such investors shall be maturity period unless rolled over as per SEBI
full and final proof of the corporate investor’s authority to guidelines. However, in terms of the SEBI Regulations,
invest and the AMC/Fund shall not be liable under any the Scheme may be wound up if:
circumstances for any defects in the documents so i. There are changes in the capital markets, fiscal laws
submitted. or legal system, or any event or series of events
occurs, which, in the opinion of the Trustee, requires
In cases where there is a change in the name of such
the Scheme to be wound up; or
investor, such a change will be effected by the AMC/Fund
only upon receiving the duly certified copy of the revised ii. 75% of the Unitholders of the Scheme pass a
Certificate of Incorporation issued by the relevant resolution that the Scheme be wound up;
Registrar of Companies / registering authority. In cases iii. SEBI directs the Scheme to be wound up in the
where the changed PAN Number reflecting the name interests of the Unitholders; or
Where a scheme is to be wound up pursuant to the ELECTRONIC CLEARING SERVICE (ECS)
above, the Trustee shall give notice of the ECS is a facility offered by RBI, for facilitating better
circumstances leading to the winding up of the customer service by direct credit of dividend/redemption
Scheme - to an investor’s bank account through electronic credit.
i. to SEBI; and This helps in avoiding loss of dividend/redemption
ii. in two daily newspapers having circulation all over warrant in transit or fraudulent encashment. The
India and also in a vernacular newspaper circulating Mutual Fund will endeavour to arrange such facility for
at the place where the Fund is established. payment of dividend/redemption proceeds to the Unit
holders. However, this facility is optional for the
PROCEDURE AND MANNER OF WINDING UP investors.
i) The Trustee shall call a meeting of the Unitholders to It may be noted that there is no commitment from the
consider and pass necessary resolutions by simple Mutual Fund that this facility will be made available to
majority of the Unitholders present and voting at the the Unit holders for payment of dividend/redemption
meeting for authorizing the Trustees or any other proceeds. While the Mutual Fund will endeavour in
person to take steps for winding up the Scheme/plan. arranging the facility it will be dependent on various
ii) a) The Trustee or the person authorized as above, factors including sufficient demand for the facility from
shall dispose of the assets of the Scheme concerned in Unit holders at any centre, as required by the authorities.
the best interest of the Unitholders of that Scheme. In places where such a facility is not available or if the
b) The proceeds of the sale made in pursuance of facility is discontinued by the Scheme for any reason, the
the above, shall, in the first instance be utilized AMC shall despatch to the Unit holders the dividend
towards discharge of such liabilities as are warrants within 30 days of the declaration of the
properly due under the Scheme and after making dividend and the redemption proceeds within 10
appropriate provision for meeting the expenses business days.
connected with such winding up, the balance
shall be paid to the Unitholders in proportion to
their respective interest in the assets of the The website of Franklin Templeton Mutual Fund (the
Scheme as on the date when the decision for the said Website) is intended solely for the use of Resident
winding up was taken. Indians, Non Resident Indians, persons of Indian Origin
and Foreign Institutional Investors registered with
iii) On the completion of the winding up, the Trustee
Securities and Exchange Board of India. It should not be
shall forward to the Board and the Unitholders, a
regarded as a solicitation for business in any jurisdiction
report on the winding up containing particulars such
other than India. In particular the information is not for
as circumstances leading to the winding up, the steps
distribution and does not constitute an offer to sell or
taken for disposal of assets of the Fund before
the solicitation of an offer to buy securities in any
winding up, expenses of the Fund for winding up,
jurisdiction where such activity is prohibited including
net assets available for distribution to the Unitholders
the United States of America. Any persons resident
and a certificate from the Auditors of the Fund.
outside India who nevertheless intend to respond to this
iv) Notwithstanding anything contained herein, the material must first satisfy themselves that they are not
application of the provisions of the SEBI Regulations subject to any local requirements, which restrict or
in respect of disclosures of half-yearly reports and prohibit them from doing so.
annual reports shall continue to apply.
Information other than that relating specifically to
After the receipt of the report referred to above under
Franklin Templeton Asset Management (India) Pvt. Ltd.,
‘Procedure and Manner of Winding Up’, if SEBI is
Franklin Templeton Mutual Fund and its products, is for
satisfied that all measures for winding up of the Scheme
information purposes only and should not be relied
have been completed, the Scheme shall cease to exist.
upon as a basis for investment decisions. Franklin
UNITS WITH DEPOSITORY Templeton Asset Management (India) Pvt. Ltd. shall not
Units of the Plan may, if decided by the AMC, be held be responsible, nor be held liable, for any information
with a Depository. Under such circumstances, Units will contained in any website linked from the said Website.
be transferable in accordance with the provisions of Franklin Templeton makes no representations
Depositories Act, 1996 and the Securities and Exchange whatsoever about any such website which the user may
Board of India (Depositories and Participants) access through the said Website. A link to a non-
Regulations, 1996 as may be amended from time to time. Franklin Templeton website does not mean that
Franklin Templeton endorses or accepts any offering each unitholder access to a unique Household
responsibility for the content, or the use, of such Personal Identification Number (HPIN) for purposes of
website. It is the responsibility of the user to take conducting such Online Transactions (hereinafter
precautions to ensure that whatever is selected for use is referred to as the "HPIN Facility").
free of such items as viruses and other items of a Upon execution of necessary documentation by the
destructive nature. Unitholder, including the signing of an agreement in a
The investors are requested to read the Terms and form and manner as specified by the Fund, the terms
Conditions given on the said Website carefully before and conditions of which shall bind the Unitholder, as is
using the said Website. By using the said Website, the required by the Fund for subscription to this facility, the
investor will be deemed to have agreed that the Terms Fund will dispatch to the Unitholder, an HPIN by post
and Conditions specified apply to the use of the investor or courier entirely at the risk of the Unitholder. The
of the said Website, any information obtained from the Unitholder shall use the HPIN to generate a user name
site, and our products and services. If the investor does and password to carry out Online Transactions and shall
not agree to the specified Terms, the investor may not keep the HPIN, User ID and Password confidential at all
use the said Website or download any content from it. times. Please note that currently the HPIN Facility is
available on FTMF’s website for all schemes for
WEB TRANSACTIONS AND HPIN FACILITY
subscription, redemption or exchange other than Liquid
In the new era of liberalisation and modernisation, the Schemes.
Fund wishes to take optimum advantage of the modern
The Unitholder shall be solely responsible for
techniques of communication and transactions to serve
confidentiality of the user name and password as well as
its investors in a more efficient manner.
the HPIN and shall not disclose his user name, password
As a step towards the same, the Fund has introduced and or the HPIN to any third party and shall take all possible
is allowing certain online transactions, including care to prevent discovery of the user name, password or
subscription and redemption/repurchase of the Units of HPIN by any person.
the Fund or any other transaction such as change in
The Online Transactions shall be carried out against his
address, change in bank details, change in mode of
bank account, the details of which are provided by the
payment etc., as may be specified by the Mutual Fund
Unitholder to, and are accordingly recorded with, the
from time to time, through use of the HPIN facility as
described below. Online transactions will save cost &
time of the investor and will also enable the Fund to All other norms prescribed by the Fund to issue an
serve its clients in a faster and efficient way. HPIN will have to be adhered to from time to time.
However investors intending to take benefit of the web- The Fund shall not be liable for any misuse of data
based transaction facility should note that the investor placed on the Internet, by third parties "hacking" or
shall use this service at their own risk. The Fund, the unauthorized accessing of the server. The Fund will not
AMC, the Trustee, along with its directors, employees be liable for any failure to act upon electronic
and representatives shall not be liable for any damages or instructions or to provide any facility for any cause that
injuries arising out of or in connection with the use of is beyond the control of the Fund.
the website or its non-use including, without limitation, However, this facility is currently not available for the
non-availability or failure of performance, loss or Scheme.
corruption of data, loss of or damage to property
(including profit and goodwill), work stoppage, TRANSACTION BY DISTRIBUTOR
computer failure or malfunctioning, or interruption of Franklin Templeton has introduced a facility for
business; error, omission, interruption, deletion, defect, distributors to transact on the web on behalf of their
delay in operation or transmission, computer virus, clients, provided the client has authorised the
communication line failure, unauthorised access or use distributors to do so by executing a Power of Attorney
of information. (PoA) in favour of the distributor for this purpose. In
Currently this facility is not available for the Scheme. such event, the Power of Attorney should be submitted
to the Fund.
Household Personal Identification Number (HPIN)
As stated above, the Fund is currently offering a facility BROKERS
for conducting certain transactions through the Fund’s The Fund intends to utilize the services of select
website on the Internet ("Online Transactions"), and is financial intermediaries for distribution and may pay
brokerage depending upon the efficiency and other the Mutual Fund or any company associated with the
factors as may be decided by the AMC. The Investment Sponsor in any capacity including the Asset
manager is the sole authority to select such financial Management Company, Trustee Company/Board of
intermediary/intermediaries who would distribute the Trustees, or any of the directors or key personnel
product. Further, the AMC may appoint one or more (specifically the fund managers) of the Asset
exclusive distributors, at its discretion, based on the Management Company and Trustee Company. The
parameters decided by the AMC. nature of the penalty must be disclosed. For Sponsor
The Fund may use the services of associate brokers or and its associates, other than the penalties as
take the sale of its units into account when allocating mentioned above, the penalties awarded by any
brokerage. However, the brokerage paid to Associate financial regulatory body, including stock exchanges,
Brokers shall be at the same rate offered to any other for defaults in respect of shareholders,
broker who procures subscription. debentureholders and depositors shall also be
disclosed. Additionally, penalties awarded for any
BOOKS AND RECORDS economic offence and violation of any securities laws
The books and records of the Fund will be maintained at shall be disclosed:
the Registered Office of the Investment Manager. The • SEBI had in January 2000 referred to adjudication
fiscal year of the Fund ends on 31st March in each year. certain allegations relating to non-disclosure of
The Register of Unitholders of the Scheme shall be three items in the abridged offer documents of
maintained at the Registered office of the Investment Balanced Fund, Pharma Fund, FMCG Fund and
Manager along with that of the Registrars at their office Taxshield and non-filing of the abridged offer
at Franklin Templeton Centre, Door # 7, 3rd Cross document of Balanced Fund.
Street, Adyar Chennai 600020 and such other places as
the Trustees may decide. The adjudicating officer by his order dated 14th
June 2001 levied a penalty of Rs.2 lakhs against
DOCUMENTS AVAILABLE FOR INSPECTION the Asset Management Company (erstwhile
The following documents will be available for inspection Pioneer ITI AMC Ltd.) and the same was paid.
by the prospective investors between 11.00 a.m. and • On August 2, 2004, Franklin Resources, Inc.
1.00 p.m. on any day (excluding Saturdays, Sundays and (Franklin Templeton Investments) (NYSE: BEN)
public holidays), at the Head Office of the Fund at announced that an agreement has been reached
Mumbai: - by its subsidiary, Franklin Advisers, Inc.
• Copy of Registration Certificate from SEBI (Franklin Advisers), with the U.S. Securities and
• Copy of the Trust Deed and Supplementary Trust Exchange Commission (SEC) that resolves the
Deed issues resulting from the SEC's investigation of
market timing activity.
• Copy of Investment Management Agreement
Under the terms of an Order issued by the SEC,
• Copy of Memorandum & Articles of Association of pursuant to which Franklin Advisers neither
Trustee Company admits nor denies any wrongdoing, the Company
• Copy of Memorandum & Articles of Association of has agreed to pay US $50 million to be
the Investment Manager distributed to Franklin Templeton fund
• Copy of the Custodian Agreement shareholders, of which US$20 million is a civil
• Consent of Auditors and Legal Advisors to act in the penalty. The settlement had been accrued by the
said capacity Company in its fiscal quarter ended March 31,
2004 and will not result in an additional charge
• A copy of this Offer Document to income. In the Order, the SEC recognized that
• SEBI (Mutual Funds) Regulations, 1996 Franklin Templeton has generally sought to
• Copy of Indian Trust Act, 1882 detect, discourage and prevent market timing in
• Annual Report of the Asset Management Company its funds and began to increase its efforts to
control market timing in 1999.
• On September 20, 2004, Franklin Resources, Inc.
PENDING LITIGATION OR PROCEEDINGS announced that an agreement has been reached
■ All cases of penalties awarded by SEBI under the SEBI by two of its subsidiaries, Franklin Advisers, Inc.
Act or any of its regulations against the Sponsor of and Franklin Templeton Alternative Strategies,
Inc.("FTAS"), with the Securities Division of the announced that a panel of the Ontario Securities
Office of the Secretary of the Commonwealth of Commission ("OSC") approved FTIC-Canada's
Massachusetts (the "State of Massachusetts") agreement with the Staff of the OSC resolving the
related to an administrative complaint filed issues resulting from the OSC's investigation
February 4, 2004, concerning one instance of concerning frequent trading market timing
market timing. activity. In settlement, FTIC-Canada will pay the
Under the terms of the settlement consent order U.S. dollar equivalent (including related
issued by the State of Massachusetts, Franklin distribution costs) approximating $42 million.
Advisers and FTAS have consented to the entry of a The settlement monies will be distributed to
cease and desist order and agreed to pay a $5 million investors who held the relevant funds during the
administrative fine to the State of Massachusetts. time period outlined in the agreement in
The consent order has multiple sections, including accordance with a plan to be developed by FTIC-
"Statements of Fact" and "Violation of Canada and overseen by an independent
Massachusetts Securities Laws." Franklin admitted distribution consultant to be retained by FTIC-
the facts in the Statement of Fact but did not admit Canada. FTIC-Canada is one of a group of five
or deny that those facts constituted violations of companies to reach agreements with the OSC
Massachusetts securities laws. concerning frequent trading market timing
• On November 17, 2004, Franklin Resources activity.
announced that Company subsidiary Franklin ■ Any pending material litigation proceedings
Templeton Distributors, Inc. ("FTDI") has incidental to the business of the Mutual Fund to
reached an agreement with the California which the Sponsor of the Mutual Fund or any
Attorney General's Office ("CAGO"), resolving company associated with the Sponsor in any capacity
the issues resulting from the CAGO's including the AMC, Board of Trustees / Trustee
investigation concerning marketing support Company or any of the directors or key personnel is
payments to securities dealers who sell fund a party. Any pending criminal cases against the
shares. Under the terms of the settlement with Sponsor or any company associated with the Sponsor
the CAGO, in which FTDI neither admitted nor in any capacity including the AMC, Board of
denied the allegations in the complaint, it agreed Trustees/Trustee Company or any of the directors or
to pay $2 million as a civil penalty, $14 million to key personnel should also be disclosed separately:
Franklin Templeton funds and $2 million to the
CAGO. INTERNATIONAL OPERATIONS
• On December 13, 2004, Franklin Resources, Inc. • Three individual plaintiffs filed a consolidated class
announced that Company subsidiaries Franklin action and derivative complaint in the U.S. District
Templeton Distributors, Inc. ("FTDI") and Court for the Southern District of Florida, against
Franklin Advisers, Inc. ("Franklin Advisers") Templeton Vietnam Opportunities Fund, Inc. (later
reached a settlement with the Securities and known as Templeton Vietnam and Southeast Asia
Exchange Commission ("SEC") that resolves the Fund, Inc.); Templeton Asset Management, Ltd., an
issues resulting from the SEC's investigation indirect wholly-owned subsidiary of Franklin
concerning marketing support payments to Resources, Inc. ("FRI") and the investment manager
securities dealers who sell fund shares. Under the of the closed-end investment company; certain of the
terms of the settlement, in which FTDI and fund’s officers and directors; FRI; and Templeton
Franklin Advisers neither admitted nor denied Worldwide, Inc., an FRI subsidiary. The plaintiffs in
the findings contained in the SEC's Order issued that action, captioned In re: Templeton Securities
on that date, they agreed to pay a total penalty of Litigation (Civil Action No. 98-6059) moved to
$20 million and $1.00 (one dollar) in certify a class with respect to certain claims raised in
disgorgement to certain Franklin Templeton the consolidated complaint. The District Court
funds. denied the plaintiffs' motion to certify a class with
• On March 3, 2005, Franklin Templeton respect to their claims. Plaintiffs then filed a petition
Investments Corp. ("FTIC-Canada"), a to the Eleventh Circuit Court of Appeals to hear an
Canadian, indirect, wholly-owned investment interlocutory appeal of that decision of the District
management subsidiary of Franklin Resources, Court.
Thereafter, while the petition was pending, an 2000. The Tribunal dismissed the appeal vide its
agreement was reached in writing settling the action. order dated February 15, 2001 and upheld the stand
Under the terms of the settlement agreement, the of the Mutual Fund. The investor has filed a petition
plaintiffs and defendants agreed to resolve all claims in the Delhi High Court challenging the order of the
for $6.5 million, including plaintiffs’ attorneys fees Securities Appellate Tribunal and challenging the
and the costs of administering the settlement. On Central Board of Direct Taxes (CBDT) order.
April 3, 2002, the settlement was approved by the • The AMC is involved from time to time in litigation
District Court. The Fund received $2 million in the relating to claims arising in the normal course of
settlement, which was reflected in the Fund's net
business. The Company is of the opinion that the
asset value as of April 3, 2002. The defendants agreed
ultimate resolution of such claims will not materially
to the settlement to avoid the further expense,
affect its business or financial position.
inconvenience and distraction of the proceedings in
this protracted case. The settlement did not contain, ■ Any deficiency in the systems and operations of the
and specifically denies, any admission of wrongdoing Sponsor of the Mutual Fund or any company
or violation of law by any of the defendants. associated with the sponsor in any capacity including
the AMC or the Trustee Company which SEBI has
• Templeton International Inc. is involved from time to
specifically advised to be disclosed in the offer
time in litigation relating to claims arising in the
document, or which has been notified by any other
normal course of business. Management is of the
regulatory agency, shall be disclosed: Nil
opinion that the ultimate resolution of such claims
will not materially affect Franklin Templeton ■ Any enquiry/adjudication proceedings under the
Investments' business or financial position. SEBI Act and the Regulations made thereunder, that
are in progress against the Sponsor of the Mutual
Fund or any company associated with the Sponsor in
• One of the investors under Templeton India Growth any capacity including the AMC, Board of
Fund had made investment to the tune of Trustees/Trustee Company or any of the Directors or
Rs.1,00,00,001/- under Section 54EB of the Income key personnel of the Asset Management Company
Tax Act, 1961. In accordance with the legal opinion shall be disclosed: Nil
of the counsel of the Fund, the Fund is of the view
The above information has been disclosed in good faith
that investments under Section 54EB of the Income
as per the information available to the AMC.
Tax Act, 1961 read with CBDT Notification
No.10247 dated December 19, 1996, the units had to Notwithstanding anything contained in the offer
be locked-in for a period of seven years from the date document, the provisions of the SEBI (Mutual Funds)
of investment. However, the investor had disputed Regulations, 1996 and the Guidelines thereunder shall
this stand and had filed a writ petition in the High be applicable.
Court of Delhi seeking the direction of the court for The scheme under this Offer Document has been
premature redemption of units, with Franklin approved by the Board of Trustees of Franklin
Templeton Mutual Fund as one of the respondents. Templeton Mutual Fund on December 15, 2006.
The Honourable Delhi High Court vide its order
dated 3rd August 2000 directed SEBI to dispose of For FRANKLIN TEMPLETON ASSET
the representation filed by the investor. The investor MANAGEMENT (INDIA) PVT. LTD.
then filed a representation with SEBI. After hearing (Investment Manager of FRANKLIN TEMPLETON
the petitioner and the respondents, SEBI rejected the MUTUAL FUND)
representation vide order dated September 4, 2000
upholding the stand of the Mutual Fund.
Subsequently, the investor had filed a Memorandum
of Appeal with the Securities Appellate Tribunal, Date: Februay 5, 2007
Mumbai against the SEBI order dated September 4, Place: Mumbai
Sponsor Investment Manager Trustee
Templeton International, Inc. Franklin Templeton Asset Franklin Templeton Trustee
500 East Broward Boulevard, Suite Management (India) Pvt. Ltd. Services Pvt. Ltd.
2100, Fort Lauderdale, Florida 4th Floor, Wockhardt Towers, 4th Floor, Wockhardt Towers,
33394 – 3091, USA. Bandra Kurla Complex, Bandra Kurla Complex,
Bandra (East), Bandra (East),
Mumbai 400 051 Mumbai 400 051
Registrars Custodians Auditors
Franklin Templeton Asset Citibank, N.A. S. R. Batliboi & Co.
Management (India) Pvt. Ltd. Plot C/61, 6th Floor, Express Towers,
Franklin Templeton Centre Bandra Kurla Complex, Nariman Point,
Door # 7, 3rd Cross Street ‘G’ Block, Bandra (East) Mumbai 400 021
Adyar, Chennai 600020 Mumbai 400 051
J. Sagar Associates
18 Sprott Road, Ballard Estate
Mumbai 400 001
FRANKLIN TEMPLETON BRANCH OFFICES
Ahmedabad: 202, 2nd Floor, Abhijeet-III, Opp. Mayor’s Bungalow, (Near Mithakali Six Roads), Ahmedabad 380 009. Tel: (079)
26462815/ 26460195, Fax: (079) 26462685; Bangalore: Niton Compound, 11, Palace Road, Entrance from Cunningham Road, Near
Carmel College, Bangalore 560 052. Tel: (080) 22385613/ 22354594 Fax:(080) 22355886; Bhubaneswar: No.77, Kharavel Nagar, Unit
III, Janapath, Bhubaneswar 751 001. Tel: (0674) 2535141/2531745, Fax: (0674) 2531026; Chandigarh: S.C.O. 373-374, 1st Floor,
Sector 35-B, Chandigarh 160 022. Tel: (0172) 2662136/2622341/ 2613371/ 2645291, Fax: (0172) 2622341; Chennai: Century Centre,
75, T.T.K Road, Alwarpet, Chennai 600 018. Tel: (044) 24679203, Fax: (044) 24987790; Cochin: 41/418-C, First Floor, Chicago Plaza,
Rajaji Road, Ernakulam, Cochin - 682035. Tel: (0484) 2370380/2373076 Fax: (0484) 2373078; Coimbatore: 424-C, Red Rose Towers,
2nd Floor, D.B.Road, R.S.Puram, Coimbatore 641 002. Tel: (0422) 2474616, Fax: (0422) 2470277; Dehradun: 67/3(New No 375),
Pokhriyal House, Rajpur Road, (Opposite Meedo Plaza)Dehradun-248001. Tel: (0135) 3257273, 2748306, Fax: 0135-2748306;
Hyderabad: 501, Regency House, Somajiguda, Hyderabad 500 082. Tel: (040) 66665915/16/ 66667384 Fax: (040) 66665770; Indore:
101, Starlit Towers, 29/1 Y.N Road, Opp. State Bank Of Indore Head Office, Indore - 452001. Tel : 0731- 2436324/4201507; Telefax:
0731-4201507; Jaipur: 250, 2nd Floor, Ganpati Plaza, M I Road, Jaipur 302 001. Tel: (0141) 5114177/2389104 Telefax: (0141) 5114178;
Jalandhar: Rachnaa Chambers, (Next to Hotel Centre Point) BMC Chowk, G.T.Road, Jalandhar 144 001. Tel: (0181) 5080784/2456033,
Fax: (0181) 5080783; Kanpur: Office No.208-09, 14/113, KAN Chambers, Civil Lines, Kanpur- 208001. Tel: (0512) 3295858/2332273
Telefax: (0512) 2332271; Kolkatta: 2D & 2E, Landmark Building, 2nd Floor, 228-A, A.J.C Bose Road, Kolkatta 700 020.
Tel:(033)22826517/ 22825555, Fax: (033) 22826459; Lucknow: 2, Uttam Palace, 1st Floor, 3 Sapru Marg, Lucknow 226 001. Tel:
(0522)2285172, Telefax: (0522) 2285301; Ludhiana: SCO-37, 1st Floor, Feroze Gandhi Market, Ludhiana 141 001. Tel: (0161)
2406198/2406191, Telefax: (0161) 3012101; Madurai: 210/20, 1st Floor, Petchiamman Padithurai Road, Upstairs to Kumaran Auto
Stores, Madurai 625 001. Tel: (0452) 2343008/ Fax: (0452) 2350144; Mangalore: 4th Floor, Sanu Palace, Kodialbail, Mangalore 575 003.
Tel: (0824) 2492796/2493749, Telefax: (0824) 2493749; Mumbai: Mittal Towers Office No. A/31, A/32 & A/35, 3rd Floor Mittal Tower
– ‘A’ Wing Opp. Vidhan Bhavan Nariman Point, Mumbai 400021 Tel: 6000 4255 Fax: (022) 2281 0923 Bandra Kurla Complex, Level 4,
Wockhardt Towers, East Wing, Bandra Kurla Complex, Bandra East, Mumbai 400 051. Tel. : 022 - 6751 9100; Nagpur: 126, (Opp. SBI
Personalised Branch) FarmLand, Ramdaspeth, Nagpur 440 010. Tel: (0712) 2555074/ 6585874, Telefax: (0712) 2553794; Nasik: S-6,
Suyojit Trade Centre, Opp. Rajiv Gandhi Bhavan, Sharanpur Road, Nasik 422 002. Tel: (0253) 2574329/2574327, Telefax: (0253)
2574327; New Delhi: F-126, 12th Floor, Himalaya House, Kasturba Gandhi Marg, New Delhi 110 001. Tel: (011) 41510080/ 41510081/
41510082 Fax: (011) 23353213; Patna: 505, Ashiana Hariniwas Apartments, Dak Bungalow Road, Patna 800 001. Tel: (0612)
2212277/2213170, Fax: (0612) 2201762; Pune: 401, Karan Salene, 187, Bhandarkar Road, Pune 411 004. Tel: (020) 66033511/ 12/14,
Telefax: (020) 25665221; Rajkot: 528, Star Plaza, 5th Floor, Phulchhab Chowk, Rajkot 360 001. Tel: (0281) 2471395/3041207, Telefax:
(0281) 3041207; Raipur: 244, Rishabh Complex, 2nd Floor, M.G. Road, Raipur 492 001. Tel: (0771) 4033244, Telefax: (0771)
4033614; Salem: 1/31-A Anna Salai, 1st Floor, Swarnapuri, Salem 636 004. Tel: (0427) 2430506/ 2446854, Telefax: (0427) 2446854;
Surat: 404-405, Lalbhai Contractor Complex, Opp. Library, Nanpura, Surat 395 001. Tel: (0261) 2473766, Fax: (0261) 2473744;
Trichy: Jenne Plaza, Ground Floor, 5/C, 28 Bharathiar Salai, Contonment, Trichy 620 001. Tel: (0431) 2464022/ 9894214691, Fax:
(0431) 2414691; Vadodara: 306, Dwarkesh Complex, R.C.Dutta Road, Alkapuri, Vadodara 390 007. Tel: (0265) 2356036/37, Fax:
(0265) 2356038; Varanasi: 4th Floor, Kuber Complex, Rathyatra Crossing, Varanasi 221 010. Tel: (0542) 2226684, Telefax: (0542)
2226245; Vijayawada: "White House" 1st Floor, Room #2 M.G.Road, Vijayawada 520 010. Tel: (0866) 6661301/ 6695550, Telefax:
(0866) 2472594; Visakhapatnam: C-9 IInd Floor, Pavan Palace, Dwaraka Nagar, Visakhapatnam 530 016. Tel: (0891) 6665351/2704705,
Fax: (0891) 6666806.