Franklin Templeton Mutual Fund Dear Investor, The Board of Directors of Franklin Templeton Trustee Services Pvt. Ltd., Trustee to Franklin Templeton Mutual Fund, have the pleasure of presenting before you the Twentieth Annual Report of Franklin Templeton Mutual Fund for the financial year 2015-16 (FY16). Along with the general information on the background and highlights of Franklin Templeton Mutual Fund, investor services, etc., the Board of Directors of Franklin Templeton Trustee Services Pvt. Ltd. have specifically provided information on the schemes of Franklin Templeton Mutual Fund.

Brief background of Trust, Sponsor, Trustee Company and Asset Management Company: Franklin Templeton Mutual Fund Franklin Templeton Mutual Fund (‘FTMF’/’Mutual Fund’) has been constituted as a Trust on January 04, 1996 in accordance with the provisions of the Indian Trusts Act, 1882 and the Deed of Trust is registered under the Indian Registration Act, 1908. FTMF has been sponsored by Templeton International Inc. (liability restricted to the seed corpus of INR l lakh) with Franklin Templeton Trustee Services Pvt. Ltd. as the Trustee. Franklin Templeton Trustee Services Pvt. Ltd. has entered into an Investment Management Agreement dated January 05, 1996 with Franklin Templeton Asset Management (India) Pvt. Ltd. appointing it as the Investment Manager for all the schemes of FTMF. FTMF is registered with SEBI vide Registration No. MF/026/96/8 dated February 19, 1996. Templeton International Inc. Templeton International Inc. is a part of the Franklin Templeton Group, which is one of the world’s largest investment managers with USD 742.60 bn in assets under management and around 24.6 million Shareholder Accounts as at March 31, 2016. Franklin Templeton has offices in over 35 countries including the United States of America, Bahamas, Canada, Argentina, France, Germany, Italy, Luxembourg, Poland, Russia, the United Kingdom, Hong Kong, Singapore, South Korea, India, China, UAE, Malaysia, Japan, Australia and South Africa. Franklin Templeton Trustee Services Pvt. Ltd. Franklin Templeton Trustee Services Pvt. Ltd. (‘Trustee’/‘Trustee Company’), a company incorporated under the Companies Act, 1956 and having its registered office at Indiabulls Finance Center, Tower 2, 12th and 13th Floor, Senapati Bapat Marg, Elphinstone (West), Mumbai 400013 is the Trustee to FTMF. The Trustee ensures that FTMF and the schemes floated thereunder are managed by the investment manager in accordance with the Trust Deed, SEBI (Mutual Funds) Regulations, 1996 (the Regulations), directions and guidelines issued by SEBI, the stock exchanges and other regulatory agencies. Board of Directors of the Trustee Company:  Mr. Vivek Kudva (Associate Director)  Mr. Anand J. Vashi (Independent Director)  Mr. Percy J. Pardiwalla (Independent Director)  Dr. Indu Shahani (Independent Director)

Franklin Templeton Asset Management (India) Pvt. Ltd. Franklin Templeton Asset Management (India) Pvt. Ltd. (‘AMC’/FTAMIL’), a company incorporated under the Companies Act, 1956 and having its registered office at Indiabulls Finance Center, Tower 2, 12th and 13th Floor, Senapati Bapat Marg, Elphinstone (West), Mumbai 400013 is the Investment Manager of FTMF. The investment manager is approved by SEBI to act as the asset management company of FTMF vide letter No. IIMARP/406/96 dated February 19, 1996. Board of Directors of the AMC:  Mr. Vijay C. Advani (Associate Director)  Mr. Deepak M. Satwalekar (Independent Director)  Mr. Navroz Seervai (Independent Director)  Mr. M.B.N. Rao (Independent Director)  Mr. Harshendu Bindal (Associate Director)  Mr. S. Jayaram (Associate Director)

Review of activities of Franklin Templeton Mutual Fund: During the year under review, the mutual fund industry saw a moderation in inflows compared to the previous year. The Average Assets Under Management (AAUM) at the industry level also increased on account of value appreciation. Product launches: In the backdrop of three new product launches in the previous year, FTMF currently has a comprehensive range of products to suit varied investment objective of our investors across segments. However, in FY16, we regularly kept a watch on the developing needs and changing market dynamics, in order to identify any opportunities with respect to changes in the existing product suite or new products. Product rationalization: FTMF’s constant endeavour has been to align products and services in line with changing investor preferences. Product offerings are regularly reviewed to assess their viability and scalability. The bonus plans/option which were available for some of the Franklin Fixed Income funds, were closed and merged with the respective growth plans/options, to avoid any tax arbitrage potential and to comply with the spirit of regulations. During FY16, Franklin Templeton Mutual Fund saw a good progress in terms of investment performance in the equity and hybrid space but faced temporary headwinds in corporate bonds funds under the fixed income space. The firm continuously aims to deliver consistent long term performance. The total assets under management (AUM) fell by 5% in FY16, as against industry growth of 14% over the same period. The fall in AUM of schemes of Franklin Templeton Mutual Fund was primarily due to redemptions from some of the fixed income schemes. (AUM Source: AMFI website)

Key Investor Education & Awareness Initiatives undertaken during FY16: Good EMI campaign for SIPs To simplify the concept of Systematic Investment Plans or SIPs, an Investor Education Campaign on TV was launched during February and March. The first ad was played during the India versus Pakistan T-20 Asia Cup cricket match on February 27. The campaign presented SIP as “the Good EMI,” an investment rather than an installment. The campaign was first rolled out in print and 2

digital via Facebook, Twitter and LinkedIn in November 2015. The campaign was also launched across personal finance publications including magazines and newspapers with a set of teasers followed by the revealer ads. The ad ran throughout the Asia Cup and then moved to being played on prime time slots on popular channels across multiple genres post the Asia Cup. 800,000 views of the ad were recorded in less than 24 hours of launch. In fact, till end of March, over 4.7 million views were recorded. To supplement the ad campaign, ‘The Good EMI Blog’ was also started on the microsite (www.thegoodemi.com). The blogs covered various aspects of investing besides explaining the benefits of discipline and longevity in case of investing in mutual funds via SIPs in very simple language. Product Campaign - AskWhatELSS To improve awareness about equity oriented tax saving products like Equity Linked Savings Scheme (ELSS), a largely online campaign titled #AskWhatELSS! was launched. While most tax saving investments offer only tax benefits, through this campaign investors were informed that ELSS offers much more like - i) Shorter lock-in period of 3 years ii) Potential to provide higher inflation adjusted returns over the long run iii) Tax-free returns post lock-in. Our aim was that investors should ask the question ‘What Else?’ before investing in a tax-saving product and compare the benefits on offer with that of ELSS.

Scheme performance, future outlook and operations of the schemes: Brief commentary on the schemes, one year and since inception performance vis-à-vis benchmarks, future outlook of the Fund and operations of the schemes are given in Annexure I to this Report.

Investor Services: As on 31st March 2016 Franklin Templeton had more than 25 lakh active investor accounts who are being serviced through its 34 branch offices and 123 offices of its collection partners. We continue to encourage our investors and partners to leverage our online offerings and services. There is a continuous effort to mobilize technology to provide enhanced customer satisfaction.  Tied up with NSE NMFII & BSE StAR MF to provide opportunity to non-demat investors who wish to invest through a platform  Distributors can now initiate transactions online on behalf of their investors through distributor login on our website.  We have provided investors the facility to view their transactions status online  Apart from the online offerings we have extended the facility to provide printed statements to investors through our vendor partners from 49 locations to around 100 locations at no incremental cost. Investor Complaints Report: The Investor Complaints Report of FTMF for FY16 is given in Annexure II to this Report.

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Valuation policy: Valuation policy and related disclosures are available on our website for reference of the investors. Significant Regulatory Changes: During the year various regulatory changes from investor disclosure perspective were implemented. Important amongst them are implementation of five scale riskometer for product labelling, disclosure of unclaimed dividend and redemption on mutual funds website and additional disclosures in Scheme Information Document and mutual fund website. We believe these disclosures would help the investors in taking an informed investment decision. Responsibility of the Trustees: The Trustee is the exclusive owner of the trust fund and holds the same in trust for the benefit of the unitholders. The Trustee has been discharging its duties and carrying out the responsibilities as provided in the Regulations and the Trust Deed. The Trustee seeks to ensure that the Mutual Fund and the schemes floated there under are managed by the AMC in accordance with the Trust Deed, the Regulations, directions and guidelines issued by the SEBI, the stock exchanges, the Association of Mutual Funds in India, other regulatory agencies and the Scheme Information Documents of the respective schemes. The Balance Sheet of schemes of FTMF as on March 31, 2016, the Revenue Account for FY16 and the Auditors’ Report thereon are annexed to this Report. As mentioned in the Auditors’ Report the accounting policies are in accordance with the Regulations.

Investment objectives of the schemes: The investment objectives of the schemes of FTMF and related risk factors are given in Annexure III to this Report.

Unclaimed dividends and redemptions of more than 90 days as on March 31, 2016: The data on unclaimed dividends and redemptions for more than 90 days as on March 31, 2016 is given in Annexure IV to this Report.

Disclosures of Votes Cast: Please refer to Annexure V for the summary of proxy votes cast by FTAMIL during FY16. M/s Nipun Sudhir & Associates, Chartered Accountants have independently verified and issued an unqualified certificate regarding the report on the votes cast by FTAMIL. A copy of the same is available on the website of the mutual fund www.franklintempletonindia.com.

Statutory Information: The Sponsor, Templeton International Inc. is not responsible or liable for any loss resulting from the operation of the schemes of the Mutual Fund beyond its initial contribution of INR 1 lakh for setting up the Mutual Fund, and such other accretions/additions to the same.

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In view of the fact that the amounts collected under the various schemes are deployed in securities markets, the price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. Full Annual Report is available on the website of the mutual fund www.franklintempletonindia.com and shall be made available for inspection at its head office. Present and prospective investors can request for copies of the Trust Deed, detailed annual accounts of the schemes and of the AMC upon payment of the prescribed fee. Acknowledgments: The Board of Directors of Trustee Company wish to place on record their appreciation for the dedication and sincerity of the employees of the AMC and Trustee Company. The Board would also like to thank the Government of India, the Securities and Exchange Board of India, the Reserve Bank of India and the Association of Mutual Funds in India for their ongoing support, co-operation and guidance during the year under review. The Board would like to take this opportunity to thank its family of investors for their confidence and wholehearted faith reposed in the Franklin Templeton Mutual Fund. In addition, the Trustee Company would also like to thank the Auditors, Custodians, Bankers, Registrar, and all other service providers for their valuable support. We look forward to your continued support and assure you of our commitment to quality products and services from Franklin Templeton Mutual Fund.

Yours sincerely, for Franklin Templeton Trustee Services Private Limited (Trustee to Franklin Templeton Mutual Fund)

Vivek Kudva Director Date: June 30, 2016

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Annexure I Performance, future outlook and operations of the schemes Franklin India Prima Plus Launched in Sep 1994, Franklin India Prima Plus (FIPP) is a diversified equity fund with a mandate to invest in wealth creating companies whose competitive advantages we believe will translate into superior return on capital. The portfolio comprises mainly of large cap stocks with some exposure to mid and small cap stocks. The fund utilizes a bottom-up approach to stock picking and to that end the portfolio management team conducts in-depth research/analysis of companies before investing. Given below is the summary of returns delivered by the fund since inception and last 1 year along with the benchmarks: Last 1 Year Since Inception* -2.25% 19.13% FIPP - Growth -7.54% 8.62% B: NIFTY 500 -8.86% 8.60% AB: Nifty 50 -1.15% 18.83% FIPP - Direct - Growth -7.54% 9.64% B: NIFTY 500 -8.86% 8.43% AB: Nifty 50 *compounded and annualized returns. Inception date: FIPP - Growth: September 29, 1994, FIPP- DirectGrowth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

During the year, Indian equity markets corrected owing to volatility in international and domestic market. However, the fund outperformed its benchmark and the additional benchmark by a substantial margin. On an absolute basis, materials and energy were the top contributors to the fund performance. While on a sector level, materials and energy sector exhibited a weak performance due to overall slowdown and sliding crude oil prices, they were contributors to the portfolio on an absolute basis led by efficient stock picking. Financials was the top detractor owing to high NPAs in the banking system. Industrials was another key detractor on account of weakness in global commodity prices and concerns regarding falling demand. Looking ahead, the fund will continue to seek out well-run firms that have clear and sustainable business models backed by solid finances and a healthy regard for minority shareholders. Franklin Build India Fund Franklin Build India Fund (FBIF) is an open-end equity fund that seeks to provide long term appreciation by investing in companies that are taking advantage of multiple development themes in the Indian economy viz., infrastructure, resources, financial services, social development and agriculture. The fund combines a bottom-up approach for security selection with a top-down sector views. Given below is the summary of returns delivered by the fund since inception and last 1 year along with the benchmarks: Last 1 Year Since Inception* -6.60% 16.62% FBIF - Growth -7.54% 8.22% B: NIFTY 500 -8.86% 7.95% AB: Nifty 50 -5.14% 25.50% FBIF - Direct - Growth -7.54% 9.64% B: NIFTY 500 -8.86% 8.43% AB: Nifty 50 *compounded and annualized returns. Inception date: FBIF - Growth: September 4, 2009, FBIF- DirectGrowth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

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Indian equity markets as represented by S&P BSE Sensex and Nifty 50 ended the year down by 9.4% and -8.9%, marginally underperforming the broader indices like BSE 500 (-7.8%) and BSE 200 (-7.9%). Most sectoral indices ended the year lower on account of the sell-off seen as a result of global risk aversion. However, on the domestic front, macroeconomic data was supportive in the form of lowering inflation and deficits in control even as industrial production remained weak. CPI inflation moderated from a 17-month high in March. WPI inflation continued to be deflationary even as it firmed up slightly from the earlier months. The government continued its focus on infrastructure creation and laid out various measures in the Union Budget FY17 which included: developing rural infrastructure such as roads, electrification and irrigation apart from boosting highways and state roads spends. We believe that execution of these initiatives will bode well for infrastructure and its allied sectors. In line with the fund’s investment focus, our endeavor would be to invest in companies that are likely to benefit from investment in the building blocks of the economy and have an attractive risk/reward profile.

Franklin India Bluechip Fund Launched in 1993, Franklin India Bluechip Fund (FIBCF) is an open-end fund primarily investing in large-cap stocks. The fund follows a bottom-up approach to stock selection based on fundamental research with a medium to long term perspective. The evaluation of individual businesses is not restricted to only quantitative parameters, but qualitative factors such as competitive strategy, business objectives etc. are also analyzed. Given below is the summary of returns delivered by the fund since inception and last 1 year along with the benchmarks: Last 1 Year Since Inception* -3.17% 21.84% FIBCF - Growth -9.36% 9.56% B: S&P BSE Sensex -8.86% 9.55% AB: Nifty 50 -2.33% 12.90% FIBCF - Direct - Growth -9.36% 8.27% B: S&P BSE Sensex -8.86% 8.43% AB: Nifty 50 *compounded and annualized returns. Inception date: FIBCF - Growth: December 1, 1993, FIBCF - DirectGrowth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

Our endeavor to focus on quality stocks helped the fund outperform both its benchmark and the additional benchmark in the last fiscal. On an absolute basis, consumer staples and IT were the top contributors. While support from urban consumption demand kept the stocks in consumer staples sector buoyant, depreciating rupee benefitted some key players in technology sector. Meanwhile, financials was the top detractor owing to high NPAs in the banking system. Industrials was another key detractor on account of weakness in global commodity prices and concerns regarding falling demand. Looking ahead, our strategy would be to continue focusing on identifying medium to long term opportunities. While this may impact relative performance over the near term, however this approach should benefit us over the medium to long term.

Franklin India Taxshield Launched in April 1999, Franklin India Taxshield (FIT) is an equity linked savings scheme that seeks to provide medium to long term capital appreciation along with income tax rebate under

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Section 80C of the Income Tax Act, 1961. The fund has the flexibility to invest across sectors and market capitalization. The fund managers aim to create a diversified equity portfolio and the approach taken is to build a core large-cap exposure and selectively add quality companies from the mid & small cap segment. In terms of style, the team utilizes a combination of Growth and Value approach to stock picking and has a long term outlook. Given below is the summary of returns delivered by the fund since inception and last 1 year along with the benchmarks: Last 1 Year Since Inception* -2.91% 24.48% FIT - Growth -7.54% 14.02% B: NIFTY 500 -8.86% 12.85% AB: Nifty 50 -2.00% 18.64% FIT - Direct - Growth -7.54% 9.64% B: NIFTY 500 -8.86% 8.43% AB: Nifty 50 *compounded and annualized returns. Inception date: FIT - Growth: April 10, 1999, FIT - Direct- Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

Over the last year, at a sector level, on an absolute basis, materials and consumer discretionary were the top contributors to the fund performance. While on a sector level, materials sector exhibited a weak performance due to overall slowdown and sliding crude oil prices, it was contributor to the portfolio on an absolute basis primarily due to efficient stock picking. Support from urban consumption demand augured well for consumer discretionary sector. Meanwhile, financials was the top detractor owing to high NPAs in the banking system. Industrials was another key detractor on account of weakness in global commodity prices and concerns regarding falling demand. Going forward, the fund will continue to focus on delivering long term growth through investments in businesses that we believe are high quality and trading at attractive valuations.

Franklin Infotech Fund Launched in August 1998, Franklin Infotech Fund (FIF) is an open-end equity fund focused on companies operating in the information technology (IT) space. While most sectoral indices ended the year lower on account of the sell-off seen as a result of global risk aversion, technology was sector was an outperformer on account of depreciating rupee. The fund’s performance since inception and for the last year is captured below Last 1 Year Since Inception* -0.48% 19.51% FIF - Growth -0.14% N.A B: S&P BSE IT -8.86% 13.31% AB: Nifty 50 0.21% 22.27% FIF - Direct - Growth -0.14% 23.86% B: S&P BSE IT -8.86% 8.43% AB: Nifty 50 *compounded annualized returns. Inception Date: FIF - Growth: August 22, 1998, FIF- Direct - Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

The fund continued to hold bias towards large, well-managed IT companies, and accordingly the fund’s top allocations as of March 2016 were to - Infosys Technologies (31.02%), Tata Consultancy Services (19.64%) and Wipro (9.24%). We see the industry moving away from secular set of 8

services with limited scope for differentiation towards a varied array of offerings with significant room to stand out. Such a scenario could lead to relatively stronger growth expectations for companies with strong leadership in new areas, investing ahead of the curve. The above allocation reflects our views that with limited opportunities to further increase market share in the global arena, larger players in the Indian IT services space could see relatively higher growth. Looking ahead, while prevailing macro remains a potential overhang for industry at large, we believe that any recovery in global economy especially in the US and UK could augur well for discretionary IT spending.

Franklin India Smaller Companies Fund Franklin India Smaller Companies Fund (FISCF) is a fund focused on investment opportunities in the mid and small cap segment. The fund was launched as a 5-year closed-end equity product in January 2006 and was converted into an open-end fund with effect from January 14, 2011. The fund’s performance since inception and for the last year is captured below: Last 1 Year Since Inception* -0.70% 14.01% FISCF - Growth -1.91% 11.45% B: Nifty Midcap 100 -8.86% 10.27% AB: Nifty 50 0.79% 29.16% FISCF - Direct - Growth -1.91% 12.89% B: Nifty Midcap 100 -8.86% 8.43% AB: Nifty 50 *compounded and annualized returns. Inception Date: FISCF -- Growth: January 13, 2006, FISCF- DirectGrowth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

Mid and small cap stocks outperformed the broader indices. The fund also outperformed its benchmark. On an absolute basis, consumer discretionary and materials sector were the top contributors. Support from urban consumption demand augured well for consumer discretionary sector. While on a sector level, materials sector exhibited a weak performance due to overall slowdown and sliding crude oil prices, it was contributor to the portfolio on an absolute basis led by efficient stock picking. Meanwhile, financials was the top detractor owing to high NPAs in the banking system. Industrials was another key detractor on account of weakness in global commodity prices and concerns regarding falling demand. In terms of economic/market outlook for the year ahead, prolonged fall in commodity prices, especially crude, has dampened investment appetite thereby impacting both consumption and investment growth. We see the Indian economy currently following tighter fiscal and accommodative monetary policy which augurs well for containing fiscal deficit and augmenting investment led growth. Further, high economic growth in contrast to the faltering global growth, reliance on domestic consumption as opposed to high dependence on exports, strong fundamentals and decent valuations offered by the Indian equity market pose opportunities from the long term perspective. The fund managers will stick to the fundamental research oriented approach to identifying opportunities in the mid/small capitalization space.

Franklin India Prima Fund Launched in December 1993, Franklin India Prima Fund (FIPF) is an open-end equity fund focused on mid and small-capitalization stocks. The fund follows a blend of value and growth style with a bottom-up approach to stock selection across sectors. Stocks are selected based on fundamental research with a medium to long term perspective. As a strategy, the fund predominantly invests in mid-cap stocks with a smaller exposure to small-cap stocks.

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The fund’s performance since inception and for the last year is captured below: Last 1 Year Since Inception* -1.78% 20.55% FIPF - Growth -7.54% 9.53% B: NIFTY 500 -1.91% N.A B: Nifty Midcap 100 -8.86% 9.55% AB: Nifty 50 -0.55% 24.21% FIPF - Direct - Growth -7.54% 9.64% B: NIFTY 500 -1.91% 12.89% B: Nifty Midcap 100# -8.86% 8.43% AB: Nifty 50 #Nifty Midcap 100 index has been included as additional benchmark for FIPF effective May 20, 2013. *compounded and annualized returns. Inception Date: FIPF - Growth: December 1, 1993, FIPF- DirectGrowth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

Indian equity markets as represented by S&P BSE Sensex and Nifty 50 ended the year down by 9.4% and -8.9%, marginally underperforming the broader indices like BSE 500 (-7.8%) and BSE 200 (-7.9%). Most sectoral indices ended the year lower on account of the sell-off seen as a result of global risk aversion. However, on the domestic front, macroeconomic data was supportive in the form of lowering inflation and deficits in control even as industrial production remained weak. CPI inflation moderated from a 17-month high in March. WPI inflation continued to be deflationary even as it firmed up slightly from the earlier months. Mid and small cap stocks outperformed the broader indices. The fund also outperformed its benchmark. On an absolute basis, consumer discretionary and healthcare sector were the top contributors. Support from urban consumption demand augured well for consumer discretionary sector. While on a sector level, healthcare sector exhibited a weak performance, it was contributor to the portfolio on an absolute basis led by efficient stock picking. Meanwhile, Industrials was the key detractor on account of weakness in global commodity prices and concerns regarding falling demand. Financials was also another detractor owing to high NPAs in the banking system. In terms of economic/market outlook for the year ahead, prolonged fall in commodity prices, especially crude, has dampened investment appetite thereby impacting both consumption and investment growth. We see the Indian economy currently following tighter fiscal and accommodative monetary policy which augurs well for containing fiscal deficit and augmenting investment led growth. Further, high economic growth in contrast to the faltering global growth, reliance on domestic consumption as opposed to high dependence on exports, strong fundamentals and decent valuations offered by the Indian equity market pose opportunities from the long term perspective. The fund managers will stick to the fundamental research oriented approach to identifying opportunities in the mid/small capitalization space. Franklin India Opportunities Fund Launched in February 2000, Franklin India Opportunities Fund (FIOF) is an open-end equity fund that adopts a bottom-up approach to stock-picking and focuses on four themes - (a) Companies that operate in the space where India has a strong advantage (b) Globally competitive Indian companies that have the potential to participate in global opportunities as well (c) Companies that are undervalued (d) Companies that are best positioned to take advantage of the opportunities thrown up by the growing economy. As per our bottom-up and fundamental analysis, well-managed companies in financial services (banks, diversified financials), industrials (electrical equipment and construction and engineering) and information technology are likely to do well in the future. Accordingly a significant portion of our current portfolio is allocated in these segments. The fund’s performance since inception and in the last one year ended March 2015 is summarized below:

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FIOF - Growth B: S&P BSE 200 # AB: Nifty 50 FIOF - Direct - Growth B: S&P BSE 200 AB: Nifty 50

Last 1 Year -8.05% -7.86% -8.86% -7.38% -7.86% -8.86%

Since Inception* 10.93% -0.22% 9.65% 15.92% 9.24% 8.43%

*Compounded annualized returns. # Index adjusted for the period February 21, 2000 to March 10, 2004 with the performance of ET Mindex. Inception Date: FIOF- Growth: February 21, 2000, FIOF - Direct - Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

Indian equity markets as represented by S&P BSE Sensex and Nifty 50 ended the year down by 9.4% and -8.9%, marginally underperforming the broader indices like BSE 500 (-7.8%) and BSE 200 (-7.9%). Most sectoral indices ended the year lower on account of the sell-off seen as a result of global risk aversion. However, on the domestic front, macroeconomic data was supportive in the form of lowering inflation and deficits in control even as industrial production remained weak. CPI inflation moderated from a 17-month high in March. WPI inflation continued to be deflationary even as it firmed up slightly from the earlier months. Domestically, urban consumption demand remains robust despite a deceleration in the rural demand. Expectation of normal monsoons and implementation of 7th pay commission are likely to enhance the consumption demand in the economy. Despite no change in the trajectory of private capex growth, the government-led capex is showing an uptrend. Government spending through infrastructure and allied sectors should also lend support to consumption growth. Additionally, a gradual pick up seen in the manufacturing sector could contribute to reducing supply side bottlenecks. The positive effects of lower interest rates and adequate liquidity in the system is expected to benefit the corporate earnings. In terms of portfolio strategy, we will continue to stick to fundamental research-driven approach to identify companies across sectors that are likely to benefit from the structural changes in India’s economy over the medium to long term. This, in our view, should help us navigate through this phase well.

Franklin India High Growth Companies Fund Launched in July 2007, Franklin India High Growth Companies Fund (FIHGCF) is an open-end equity fund investing in companies that appear well-placed to deliver high growth rates by capturing the growth potential across various macro themes over the medium to long-term. The fund adopts a ‘growth style’ of investing and combines bottom-up stock selection with top-down industry themes to identify such companies. As high growth rates are often characteristic of emerging companies/ sectors - mid to small cap market capitalization - the portfolio tends to have a bias towards lower capitalization. The fund’s performance since inception and in the last one year ended March 2016 is summarized below: Last 1 Year Since Inception* -7.58% 12.37% FIHGCF - Growth -7.54% 6.13% B: NIFTY 500 -8.86% 6.12% AB: Nifty 50 -6.23% 22.78% FIHGCF - Direct - Growth -7.54% 9.64% B: NIFTY 500 -8.86% 8.43% AB: Nifty 50 *compounded and annualized returns. Inception Date: FIHGCF - growth: July 26, 2007, FIHGCF- DirectGrowth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

Indian equity markets as represented by S&P BSE Sensex and Nifty 50 ended the year down by 9.4% and -8.9%, marginally underperforming the broader indices like BSE 500 (-7.8%) and BSE

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200 (-7.9%). Most sectoral indices ended the year lower on account of the sell-off seen as a result of global risk aversion. However, on the domestic front, macroeconomic data was supportive in the form of lowering inflation and deficits in control even as industrial production remained weak. CPI inflation moderated from a 17-month high in March. WPI inflation continued to be deflationary even as it firmed up slightly from the earlier months. FIHGCF slightly underperformed the benchmark index during this period. On an absolute basis, financials and telecom were key detractors. While financials corrected owing to high NPAs in the banking system, telecom sectoral losses were due to some of the key players exhibiting weaker performance. Meanwhile, consumer discretionary and materials were the key contributors. Support from urban consumption demand augured well for consumer discretionary sector. On a sector level, materials sector exhibited a weak performance, it was contributor to the portfolio on an absolute basis due to efficient stock picking. In terms of economic/market outlook for the year ahead, prolonged fall in commodity prices, especially crude, has dampened investment appetite thereby impacting both consumption and investment growth. We see the Indian economy currently following tighter fiscal and accommodative monetary policy which augurs well for containing fiscal deficit and augmenting investment led growth. Further, high economic growth in contrast to the faltering global growth, reliance on domestic consumption as opposed to high dependence on exports, strong fundamentals and decent valuations offered by the Indian equity market pose opportunities from the long term perspective. Franklin Asian Equity Fund Launched in January 2008, Franklin Asian Equity Fund (FAEF) focuses on investing in companies domiciled in the Asia ex Japan region. The fund seeks to provide investors’ exposure to companies that are benefitting and/or expected to benefit from rapid growth in the Asia ex Japan region. Last year, Asia ex-Japan markets corrected on account of global volatility, faltering crude oil prices and persistent concerns on slowdown in China. The fund’s performance since inception and in the last one year ended March 2016 is summarized below: Last 1 Year Since Inception* -3.79% 5.68% FAEF - Growth -8.79% 5.11% B: MSCI Asia (ex Japan) Standard Index -8.86% 3.28% AB: Nifty 50 -3.05% 6.32% FAEF - Direct - Growth -8.79% 3.61% B: MSCI Asia (ex Japan) Standard Index -8.86% 8.43% AB: Nifty 50 *compounded and annualized returns. Inception Date: FAEF - Growth: January 16, 2008, FAEF - Direct Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

In our view, the long-term investment case for Asia remains positive as the region’s economic growth rates in general continue to be faster than those of developed markets. In addition, Asian markets overall have much greater foreign reserves than developed markets, and the debt-toGDP (gross domestic product) ratios of Asian countries generally remain lower than those of developed markets. Though investors have been concerned that China’s growth rate is slowing down, China remains one of the fastest-growing economies in the world. We are aware, however, that market participants remain highly sensitive to macroeconomic indicators and global monetary policy, and accordingly we are likely to see continued bouts of volatility before full confidence returns to investors. Fund flows into emerging markets turned positive in March after a number of negative months, but investors remain considerably underweighted in these markets, which we believe is supportive of further re-rating over the longer term.

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Franklin India Flexi Cap Fund Franklin India Flexi Cap Fund (FIFCF) is an open-end equity fund that invests in stocks across the market capitalization range. The fund follows a bottom-up, fundamental driven approach to investing. Stock selection process focuses on companies with identifiable drivers of growth, strong management capabilities, healthy balance sheet and attractive valuations. The fund’s performance since inception and in the last one year ended March 2015 is summarized below: Last 1 Year Since Inception* -4.41% 17.47% FIFCF - Growth -7.54% 12.06% B: NIFTY 500 -8.86% 12.52% AB: Nifty 50 -3.69% 17.93% FIFCF - Direct - Growth -7.54% 9.64% B: NIFTY 500 -8.86% 8.43% AB: Nifty 50 *compounded and annualized returns. Inception Date: FIFCF - Growth: March 2, 2005, FIFCF - Direct Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

Indian equity markets as represented by S&P BSE Sensex and Nifty 50 ended the year down by 9.4% and -8.9%, marginally underperforming the broader indices like BSE 500 (-7.8%) and BSE 200 (-7.9%). Most sectoral indices ended the year lower on account of the sell-off seen as a result of global risk aversion. However, on the domestic front, macroeconomic data was supportive in the form of lowering inflation and deficits in control even as industrial production remained weak. CPI inflation moderated from a 17-month high in March. WPI inflation continued to be deflationary even as it firmed up slightly from the earlier months. FIFCF managed to outperform the benchmark indices during this period by a significant margin. On an absolute basis, portfolio performance was helped by gains in energy and healthcare sector. While both energy and healthcare sectors corrected during the last fiscal owing to slowdown in global crude oil prices and concerns of regulatory action from the US Food and Drug Administration (FDA) respectively, they were contributors to the portfolio on an absolute basis on account of efficient stock picking. Meanwhile, financials was the top detractor owing to high NPAs in the banking system. Industrials was another key detractor on account of weakness in global commodity prices and concerns regarding falling demand. In terms of economic/market outlook for the year ahead, prolonged fall in commodity prices, especially crude, has dampened investment appetite thereby impacting both consumption and investment growth. We see the Indian economy currently following tighter fiscal and accommodative monetary policy which augurs well for containing fiscal deficit and augmenting investment led growth. Further, high economic growth in contrast to the faltering global growth, reliance on domestic consumption as opposed to high dependence on exports, strong fundamentals and decent valuations offered by the Indian equity market pose opportunities from the long term perspective. Franklin India Dynamic PE Ratio Fund of Funds Franklin India Dynamic PE Ratio Fund of Funds (FIDPEF) is an open-end hybrid fund of fund that allocates funds between equity and debt asset class based on the movement in the weighted average PE ratio of the Nifty 50 index. The fund comes with a pre-defined re-balancing mechanism that ensures that the scheme holds less equity when the markets are overvalued and vice-versa, using the PE levels of the market as a barometer. This approach ensures that the scheme pares its equity exposure when the markets are ruling high. At lower PE levels (i.e. when markets are down), the fund increases its equity exposure to take advantage of the attractive valuations. Thus, when the markets rise, a fully

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invested portfolio is well positioned to turn in a good performance. The table below provides an insight into how the asset allocation works …the equity component will be…%

…and the debt component will be …%

Upto 12

90 – 100

0 – 10

12-16

70 – 90

10 – 30

16-20

50 – 70

30 – 50

20-24

30 – 50

50 – 70

24-28

10 – 30

70 – 90

Above 28

0 – 10

90 – 100

If weighted average PE ratio of NSE Nifty falls in this band…

The fund managers may, at their discretion, change the allocation pattern depending upon their assessment of the markets.

Given below is the summary of returns delivered by the fund since inception and last 1 year along with the benchmarks: Last 1 Year Since Inception* 1.53% 15.90% FIDPEF - Growth -9.36% 14.13% B: S&P BSE Sensex -2.90% 11.61% B: Crisil Balanced Fund Index 2.55% 10.87% FIDPEF - Direct - Growth -9.36% 8.27% B: S&P BSE Sensex -2.90% 8.87% B: Crisil Balanced Fund Index Not Applicable Not Applicable AB *compounded and annualized returns. Inception date: FIDPEF - Growth: October 31, 2003, FIDPEF - DirectGrowth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

At end of March 2016, 60% of the fund’s assets were invested in equity fund and the remainder in debt fund.

Franklin India Pension Plan Franklin India Pension Plan (FIPEP) is an open-end hybrid product designed to cater to pension needs of investors. Investments in the fund are eligible for tax benefits under the Section 80C of the Income Tax Act. The fund invests predominantly in high quality fixed income securities and takes some exposure to equities (capped at 40%) that helps enhance returns over the longer timeframe. The equity portion of the scheme is invested in a diversified portfolio of stocks with pre-dominant exposure to large caps. The below table captures the returns of the fund since inception and for last one year: Last 1 Year Since Inception* FIPEP - Growth 2.37% 12.90% Benchmark** 1.95% N.A Additional Benchmark: Crisil 10 Year Gilt Index 7.97% N.A FIPEP - Direct - Growth 3.17% 13.31% Benchmark** 1.95% 9.44% Additional Benchmark: Crisil 10 Year Gilt Index 7.97% 7.17% **40% NIFTY 500 + 60% CRISIL Composite Bond Fund Index; *compounded and annualized returns. Inception date: FIPEP - Growth: March 31, 1997, FIPEP - Direct - Growth: January 1, 2013.

At end of March 2016, about 40% of fund assets were invested in equities. Top sectoral allocations were to banks, software and pharmaceuticals. On the fixed income side, about 44% of the exposure was to Government of India securities and the remaining to AA- or higher rated

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corporate papers. At the end of the year, the portfolio’s average maturity was 15.98 years and Yield-to-Maturity (pre-expenses) stood at 8.25%. Franklin India Life Stage Fund of Funds Franklin India Life Stage Fund of Funds (FILSF) is an open end fund of funds that offers five plans with different equity and fixed income allocations. This gives investors the flexibility to choose a plan suitable for them, in line with their risk profile, investment horizon and returns expectations. The scheme invests in a combination of Franklin Templeton India’s equity and fixed income schemes, with a pre-determined steady state allocation and has an inbuilt rebalancing feature that makes each plan revert back to the above steady state asset allocation once every six months. Also, based on market conditions, the fund manager has the flexibility to make a tactical allocation of 10% on either side of the steady state asset allocation. The performance of the Growth Option in each of the scheme’s Plans is captured below: Last 1 Year Since Inception* The 20s Plan - Growth -1.43% 15.83% Benchmark** -5.61% 12.78% The 30s Plan - Growth 1.01% 13.00% Benchmark** -1.33% 11.17% The 40s Plan - Growth 2.89% 11.16% Benchmark** 2.21% 9.64% The 50s Plus Plan - Growth 4.33% 8.68% Benchmark** 4.67% 8.31% The 50s Plus Floating Rate Plan - Growth 5.92% 9.78% Benchmark** 4.55% 9.12% The 20s Plan - Direct - Growth -1.13% 12.87% Benchmark** -5.61% 8.75% The 30s Plan - Direct - Growth 1.66% 11.53% Benchmark** -1.33% 8.92% The 40s Plan - Direct - Growth 3.78% 10.83% Benchmark** 2.21% 9.02% The 50s Plus Plan - Direct - Growth 5.27% 9.06% Benchmark** 4.67% 8.90% The 50s Plus Floating Rate Plan - Direct - Growth 6.48% 9.92% Benchmark** 4.55% 8.85% Additional Benchmark Not Applicable Not Applicable *Compounded annualized returns. Inception Date: FILSF 20s Plan - Growth/30s Plan - Growth/40s Plan Growth/50s Plus Plan - Growth: December 1, 2003, FILSF 50s Plus Floating Rate Plan - Growth: July 9, 2004. FILSF 20s Plan - Direct Growth/30s Plan - Direct Growth/40s Plan - Direct Growth/50s Plus Plan - Direct Growth/50s Plus Floating Rate Plan - Direct Growth: January 1, 2013. **Benchmark: The 20s Plan - 65% S&P BSE Sensex + 15% NIFTY 500 + 20% Crisil Composite Bond Fund Index; The 30s Plan - 45% S&P BSE Sensex + 10% NIFTY 500 + 45% Crisil Composite Bond Fund Index; The 40s Plan - 25% S&P BSE Sensex + 10% NIFTY 500 + 65% Crisil Composite Bond Fund Index; The 50s Plus Plan - 20% S&P BSE Sensex + 80% Crisil Composite Bond Fund Index; The 50s Plus Floating Rate Plan - 20% S&P BSE Sensex + 80% Crisil Liquid Fund Index.

Franklin India Multi-Asset Solution Fund Franklin India Multi-Asset Solution Fund (FIMAS) is an open end fund of funds which seeks to achieve capital appreciation and diversification through a mix of strategic and tactical allocation to various asset classes such as equity, debt, gold and cash by investing in funds investing in these asset classes.

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The asset allocation is dynamically managed across each of the asset classes based on proprietary model. The fund proposes to primarily invest in Franklin Templeton's existing local equity, fixed income, liquid products and in domestic Gold ETFs. The proprietary model uses a mix of strategic and tactical allocation. The strategic allocation stems from a combination of quantitative and qualitative analysis and it determines long term allocation to different asset classes. In order to determine the tactical allocation, the model uses a combination of economic, valuation and momentum / sentiment indicators to determine the allocation towards a particular asset class/security. The fund dynamically changes its allocation to different asset classes on monthly basis. At the end of March 2016, fund’s asset allocation was: Asset Instrument Equity Franklin India Bluechip Fund Fixed Income Franklin India Short Term Income Plan Gold Goldman Sachs Gold ETF

Total Portfolio Allocation 31.25% 47.50% 21.25%

The fund’s performance since inception is summarized below: Last 1 Year 1.35% FIMAS - Growth -2.90% B: Crisil Balanced Fund Index 3.16% FIMAS - Direct -Growth -2.90% B: Crisil Balanced Fund Index Not Applicable AB:

Since Inception# 2.45% -1.64% 4.24% -1.64% Not Applicable

# Inception Date: November 28, 2014. B: Benchmark, AB: Additional Benchmark

Franklin India Feeder - Franklin US Opportunities Fund Franklin India Feeder - Franklin US Opportunities Fund (FIF-FUSOF) is an open end fund of fund scheme that seeks to provide capital appreciation by investing predominantly in units of Luxembourg domiciled Franklin US Opportunities Fund (FUSOF). FUSOF was launched in 2000 and has assets of about $4.1 bln at end of March 31, 2016. FUSOF’s investment philosophy is to identify and invest in US based high-quality growth companies with sustainable long-term growth prospects, superior profitability and meaningful competitive advantages. The aim of FIFFUSOF is to leverage on the firm’s global expertise and provide investors with an opportunity to diversify portfolios and gain exposure to US stock markets. The fund’s performance since inception and in the last one year ended March 2016 is summarized below: Last 1 Year Since Inception* -3.43% 17.25% FIF-FUSOF - Growth 7.42% 21.87% B: Russell 3000 Growth -2.40% 18.64% FIF-FUSOF - Direct - Growth 7.42% 21.68% B: Russell 3000 Growth Not Applicable Not Applicable Additional Benchmark *compounded and annualized returns. Inception Date: FIF-FUSOF-Growth: February 6, 2012, FIF-FUSOF Direct - Growth: January 2, 2013. B: Benchmark, AB: Additional Benchmark

The underlying fund continues to focus on identifying and investing in high-quality growth companies with sustainable long-term growth prospects, superior profitability and meaningful competitive advantages. We believe that U.S. consumers appear to be generally healthy, the economy is operating near full employment, wages are starting to rise and consumer debt levels are low. We are constructive on the U.S. equity market in 2016 and believe that periods of market volatility create opportunities for investors. We expect intermittent volatility as the markets

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grapple with global growth concerns, but we believe that the underlying fund will continue to find opportunities tied to our long-term investment themes.

Franklin India Feeder - Franklin European Growth Fund Franklin India Feeder - Franklin European Growth Fund (FIF-FEGF) is an open ended fund of funds scheme investing overseas that seeks to provide capital appreciation by investing predominantly in units of Franklin European Growth Fund (FEGF), an overseas equity fund which primarily invests in securities of issuers incorporated or having their principal business in European countries. FEGF was launched in 2000, and has Euro 747.20 mn assets as on March 31, 2016. The fund utilizes a bottom-up, long-term strategy and endeavors to take advantage of market volatility to gain exposure to companies that exhibit may have strong and sustainable competitive advantages, solid balance sheets and substantial cash generation. With a contrarian style, the fund’s philosophy and process often lead to segments of the market that are out of favor with other investors. The fund’s performance since inception is summarized below: Last 1 Year Since Inception# -1.45% -7.79% FIF-FEGF - Growth -5.52% -4.48% B: MSCI Europe -0.17% -6.60% FIF-FEGF - Direct - Growth -5.52% -4.48% B: MSCI Europe Not Applicable Not Applicable Additional Benchmark #absolute returns. Inception Date: May 19, 2014 for both Growth and Direct-Growth plans. B: Benchmark, AB: Additional Benchmark

The markets weakened in a volatile first quarter CY16, as growth concerns, falling commodity prices, worries about the health of the financial system and renewed political uncertainty made investors more risk averse and pressured stocks. Moreover, we expect a high degree of uncertainty, paired with an elevated level of volatility, to continue in the second quarter. However, valuations look reasonable to us, though, and we believe equity markets offer plenty of opportunity for the mid- to long-term investor. Valuation spreads between sectors are still high, which we believe opens up opportunities for selective stock-picking. Franklin India Index Fund Franklin India Index Fund (FIIF) is a passively-managed open-end fund tracking the Nifty 50 index. The objective is to invest in companies whose securities are included in the chosen underlying index and subject to tracking errors, endeavoring to attain results commensurate with that of the underlying index. As indicated in the table below, the fund has performed in line with the chosen underlying index since inception and over the last one year. Last 1 Year Since Inception* -8.39% 12.26% FIIF - NSE Nifty Plan - Growth -8.86% 11.96% B/AB: Nifty 50 -8.02% 8.94% FIIF - NSE Nifty Plan - Direct Growth -8.86% 8.43% B/AB: Nifty 50 *compounded and annualized basis. Inception Date of NSE Nifty Plan - Growth: August 4, 2000, NSE Nifty Plan -Direct Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

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Franklin India Balanced Fund An open-end hybrid scheme, Franklin India Balanced Fund (FIBF), was launched in December 1999 with the objective to provide long term capital growth along with current income by investing in a mix of equity and fixed income securities. Under normal circumstances, the investment range would be as follows: Instruments

Asset allocation As % of Net Assets 50-75% 25-50%

Equity and Equity related securities Fixed Income and Money market instruments

As indicated above, the fund has the flexibility to invest majority of its assets in equity and related instruments, and remaining in government securities, money market instruments as well as debt issued by private and public sector companies. Based on market conditions, the fund maintains an optimum balance between growth and stability. On the equity side, the fund primarily invests in well-established, large-capitalization companies. The fixed income portfolio is actively managed to capitalize on various opportunities in corporate and government debt. Given below is the summary of returns delivered by the fund since inception and last 1 year along with the benchmarks: Last 1 Year Since Inception* 0.01% 14.44% FIBF - Growth -2.90% N.A B: Crisil Balanced Fund Index -8.86% 10.86% AB: Nifty 50 1.31% 17.37% FIBF - Direct - Growth -2.90% 8.87% B: Crisil Balanced Fund Index -8.86% 8.43% AB: Nifty 50 *compounded and annualized returns. Inception date: FIBF - Growth: December 10, 1999, FIBF - DirectGrowth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

At the close of year, equity allocation stood at 65.46% and debt exposure stood at 32.94%. The average maturity of the debt portfolio at end of year stood at 14.26 years, compared to 12.05 years years at end of March 2015. The Yield to Maturity (pre-expenses) of the debt portfolio stood at 8.08%. In terms of economic/market outlook for the year ahead, prolonged fall in commodity prices, especially crude, has dampened investment appetite thereby impacting both consumption and investment growth. We see the Indian economy currently following tighter fiscal and accommodative monetary policy which augurs well for containing fiscal deficit and augmenting investment led growth. Further, high economic growth in contrast to the faltering global growth, reliance on domestic consumption as opposed to high dependence on exports, strong fundamentals and decent valuations offered by the Indian equity market pose opportunities from the long term perspective. Meanwhile, the RBI has taken precise efforts to identify and address the pressing need for easier liquidity to be made available in the system. The change in stance from maintaining deficit liquidity to neutral liquidity is a huge shift from the earlier regime. The central bank proposes to use a combination of short term and durable liquidity to effectively achieve the dual objective of dealing with frictional liquidity requirements and providing for sustainable liquidity to transmit rate cuts. The fund managers will continue to actively monitor market developments and actively manage the maturity profile of the fund in line with views on interest rate changes, within the stated investment mandate.

Franklin India Monthly Income Plan Franklin India Monthly Income Plan (FIMIP) is an open-ended scheme that aims to provide regular income through a portfolio of predominantly fixed income securities with a maximum

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exposure of 20% to equities. The fund’s exposure to equity helps enhance returns over a longer timeframe while the debt portion helps provide stability to portfolio. The fund managers follow an active investment strategy taking aggressive/defensive positions depending on opportunities available at various points of time. The fund’s performance is summarized below: Last 1 Year 4.05% 5.67% 7.97% 5.12% 5.67% 7.97%

FIMIP - Growth B: Crisil MIP Blended Index AB: Crisil 10 Year Gilt Index FIMIP - Direct - Growth B: Crisil MIP Blended Index AB: Crisil 10 Year Gilt Index

Since Inception* 10.21% N.A N.A 11.54% 8.97% 7.17%

*compounded and annualized returns. Inception date: FIMIP - Growth: September 28, 2000, FIMIP - Direct Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

Most of the bond yields (barring the 30 year gilt) softened during the fiscal year (FY16), although RBI constantly emphasized on the lack of transmission of rate cut despite 125 bps rate cut since January 2015. Yields softened relatively more at the shorter end of the curve, than the longer end, during the fiscal year. The fall in yields was supported by moderation in inflation, twin deficits remaining range bound, weakness in international crude oil prices, some transmission of rate cuts by the RBI, receding supply concerns post budget and increase in the Open Market Operations by the RBI. On the other hand, Indian equity markets ended the year lower on account of the sell-off seen as a result of global risk aversion. However, on the domestic front, macroeconomic data was supportive in the form of lowering inflation and deficits in control even as industrial production remained weak. During the fiscal, the fund’s maturity was actively managed. It started the year with portfolio average maturity of 5.7 years (April-2015), was increased to 12.44 years (August-2015), then decreased to 5.15 years (September 2015) and was again increased in second half of the year, finally closing the year with 12.66 years (March-2016). As of March 2016, 25.83% of the portfolio was invested in corporate debt and PSU/PFI bonds, 50.06% in gilts while 20.94% was in equity assets. From a credit quality perspective, 63.77% of the fund’s investments were in sovereigns or instruments with AAA and/or equivalent) while 15.29% were in AA and/or equivalent rated securities. The RBI in its first bi- monetary policy review (for FY17) on April 5, reduced the Repo rate by 25 bps to stand at 6.5%. The Policy rate corridor was narrowed from 100 bps to 50 bps. The move towards maintaining neutral level of liquidity (away from deficit) is aimed at increasing durable liquidity in the system which augurs well for speedier rate cut transmission. The central bank proposes to use a combination of short term and durable liquidity to effectively achieve the dual objective of dealing with frictional liquidity requirements and providing for sustainable liquidity to transmit rate cuts. The fund managers will continue to actively monitor market developments and actively manage the maturity profile of the fund in line with views on interest rate changes, within the stated investment mandate and will stick to the fundamental research oriented approach to identifying opportunities in the diversified equities space. Templeton India Growth Fund Launched in September 1996, Templeton India Growth Fund (TIGF) follows the ‘value investing’ philosophy, which is based on the tenets of intrinsic value, bargain hunting and long-term orientation. The fund is focused on undervalued securities with the most promising potential for the long-term, unearthed through in-depth research and fundamental analysis, and without overreacting to news and noise. The fund follows a buy-hold strategy, as a result of which it typically has a low portfolio churn rate.

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The fund’s performance since inception and in the last one year ended March 2016 is summarized below: Last 1 Year Since Inception* -3.73% 16.48% TIGF – Dividend -9.36% 10.75% B: S&P BSE Sensex -5.48% N.A B: MSCI India Value -8.86% 11.02% AB: Nifty 50 -3.05% 11.84% TIGF - Direct – Growth -9.36% 8.27% B: S&P BSE Sensex -5.48% 4.09% B: MSCI India Value -8.86% 8.43% AB: Nifty 50 *Compounded & annualized returns. Inception dates: TIGF -Dividend: September 10, 1996, TIGF- Direct Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

Indian equity markets as represented by S&P BSE Sensex and Nifty 50 ended the year down by 9.4% and -8.9%, marginally underperforming the broader indices like BSE 500 (-7.8%) and BSE 200 (-7.9%). Most sectoral indices ended the year lower on account of the sell-off seen as a result of global risk aversion. However, on the domestic front, macroeconomic data was supportive in the form of lower inflation and deficits in control even as industrial production remained weak. CPI inflation moderated from a 17-month high in March. WPI inflation continued to be benign even as it firmed up slightly from the earlier months. During the year, on an absolute basis, the fund benefitted from gains in technology and consumer discretionary sector. While depreciating rupee benefitted the some of the companies in technology sector, support from urban consumption demand augured well for consumer discretionary sector. Meanwhile, financials was the top detractor owing to high NPAs in the banking system. Materials were another key detractor owing to weak demand and soft global commodity prices. As of March 2016, the fund’s top individual stock exposures were - Bajaj Holdings & Investment Limited (14.70%), Tata Chemicals (13.04%), and Infosys (11.72%). Looking ahead, we will continue to employ a ground-up research approach to identify undervalued companies with long term growth potential. Templeton India Equity Income Fund Launched in May 2006, Templeton India Equity Income Fund (TIEIF) is an open-end diversified equity fund that follows the ‘value investing’ philosophy, which is based on the tenets of intrinsic value, bargain hunting and long-term orientation. The fund focuses on Indian and foreign equities that have a current or potentially attractive dividend yield (dividend as a percentage of market price). Indian equity markets as represented by S&P BSE Sensex and Nifty 50 ended the year down by 9.4% and -8.9%, marginally underperforming the broader indices like BSE 500 (-7.8%) and BSE 200 (-7.9%). Most sectoral indices ended the year lower on account of the sell-off seen as a result of global risk aversion. However, on the domestic front, macroeconomic data was supportive in the form of lower inflation and deficits in control even as industrial production remained weak. CPI inflation moderated from a 17-month high in March. WPI inflation continued to be benign even as it firmed up slightly from the earlier months.

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The fund’s performance since inception and in the last one year ended March 2016 is summarized below: Last 1 Year Since Inception* -2.11% 12.62% TIEIF – Growth -7.86% 8.87% B: S&P BSE 200 -8.86% 8.72% AB: Nifty 50 -1.51% 11.12% TIEIF - Direct - Growth -7.86% 9.24% B: S&P BSE 200 -8.86% 8.43% AB: Nifty 50 *Compounded & annualized returns. Inception dates: TIEIF - Growth: May 18, 2006, TIEIF- Direct - Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark

During the year, on an absolute basis, the fund benefitted from gains in technology and consumer discretionary sector. While depreciating rupee benefitted some key companies in technology sector, support from urban consumption demand augured well for consumer discretionary sector. Meanwhile, financials was the top detractor owing to high NPAs in the banking system. Materials was another key detractor owing to weak demand and soft global commodity prices. At end of March 2016, close to 22% of total assets were invested in foreign securities. At a country level, apart from India, the fund had exposure to Hong Kong, South Korea, Chile, Brazil and Taiwan. The fund’s top individual stock exposures were Bajaj Holdings & Investment Limited (12.40%), Tata Chemicals (9.83%), and HDFC Bank (6.71%). India and other energy importing countries have benefitted a lot from the decline in oil and gas prices in the past two years. However, the gains have not been seen as linkages to capital spending and capital flows have impacted the overall salutary effect. Buying overseas equity in oil companies does not result in any significant energy security and thus that policy needs to be well thought out. Some nations are trying to reduce dependence of fossil fuels by encouraging electric vehicles, and trying to convert their coal resources to liquids. India could well be a big beneficiary if these trends take hold. We believe that the long-term investment case for emerging markets continues to remain attractive - we expect positive demographics and rising income levels to boost consumption growth. Further, investment spending continues to be a key theme as governments focus on addressing the infrastructure deficits. In terms of strategy, we will continue to closely scan the investment universe in both domestic and overseas markets for attractive bargains that in our view are poised to do well. Franklin India Fixed Tenure Fund - Series XII - Plan C Franklin India Fixed Tenure Fund - Series XII Plan C (FIFTF XII C) is a five-year closed end fund investing in high quality fixed income securities in line with portfolio duration alongside taking marginal exposure to equities. Both the debt and equity portfolios are conservatively managed. On the equities front, the closed end nature of the fund helps the fund managers take a long term view on investments. Typically, the fund holds the debt investments till maturity, in order to reduce/minimize interest rate risks. The fund matured on April 22, 2015, and its performance since inception to maturity is summarized below: From Mar 31, Since inception* 2015 to maturity (upto the date maturity date) FIFTF XII C - Growth 0.88% 9.38% Benchmark ** 0.17% 8.79% 6.51% AB: Crisil 10 Year Gilt Index 0.37% *compounded and annualized returns. Inception date: 23 April, 2010. ** 25% NIFTY 500 + 65% Crisil Composite Bond Fund Index + 10% Crisil Liquid Fund Index. AB: Additional Benchmark

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Franklin India Fixed Tenure Funds - Series XVII Franklin India Fixed Tenure Fund - Series XVII (FIFTF XVII) is a closed end fund investing in high quality fixed income securities in line with portfolio duration alongside taking marginal exposure to equities. Both the debt and equity portfolios are conservatively managed. On the equities front, the closed end nature of the fund helps the fund managers take a long term view on investments. Typically, the fund holds the debt investments till maturity, in order to reduce/minimize interest rate risks. On the equity side, the scheme utilizes a blend of value and growth style of investing to identify investment opportunities. The fund matured on November 4, 2015, and its performance since inception to maturity is summarized below: From Mar 31, Since inception* 2015 to maturity (upto the date maturity date) 9.60% FIFTF XVII - Growth 3.10% 10.38% Benchmark ** 3.41% 7.40% AB: Crisil 10 Year Gilt Index 4.08% *compounded and annualized returns. ** 20% NIFTY 500 + 80% Crisil Short Term Bond Fund Index. Inception date: 02 November 2012. B: Benchmark, AB: Additional Benchmark

Franklin India Short-term Income Plan Franklin India Short-term Income Plan (FISTIP) is a fund focused on delivering steady returns by investing in shorter-dated fixed income securities. By investing in shorter-dated debt instruments the fund minimizes impact of interest rate changes and bears lower market risk compared to a fund with higher maturity. The fund’s performance is summarized below: Last 1 Year Since Inception* FISTIP - Retail - Growth 6.04% 8.18% B: Crisil Short-Term Bond Fund Index 8.47% N.A AB: Crisil 1 year T-Bill Index 7.69% 5.92% FISTIP - Institutional # - Growth 6.43% 9.00% B: Crisil Short-Term Bond Fund Index 8.47% 7.72% AB: Crisil 1 year T-Bill Index 7.69% 6.13% FISTIP - Retail - Direct - Growth 6.99% 9.93% B: Crisil Short-Term Bond Fund Index 8.47% 9.12% AB: Crisil 1 year T-Bill Index 7.69% 7.50% *compounded and annualized returns. Inception date: FISTIP - Retail -Growth: January 31, 2002, FISTIP Institutional - Growth: September 6, 2009, FISTIP - Retail -Direct (Growth): January 1, 2013. B: Benchmark, AB: Additional Benchmark. #These Plan(s) and all the Option(s) offered under the Plan(s) are suspended for further subscription.

Most of the bond yields (barring the 30 year gilt) softened during the fiscal year (FY16), although RBI constantly emphasized on the lack of transmission of rate cut despite 125 bps rate cut since January 2015. Yields softened relatively more at the shorter end of the curve, than the longer end, during the fiscal year. The fall in yields was supported by moderation in inflation, twin deficits remaining range bound, weakness in international crude oil prices, some transmission of rate cuts by the RBI, receding supply concerns post budget and increase in the Open Market Operations by the RBI. Liquidity conditions which broadly remained comfortable at the beginning of the fiscal year, tightened a bit in second half. It tightened in October-November on the back of festival season draining currency and some slowdown in government expenditure. Systemic liquidity deficit increased during the Jan-March quarter on account of seasonality and advance tax flows. The RBI has taken precise efforts to identify and address the pressing need for easier liquidity to be made available in the system. 22

The credit environment deteriorated through the year driven by soft commodity prices and continued low capacity utilization in several sectors. The stressed assets in Indian banking system continued to rise as corporate balance sheets continued to remain leveraged. Since the fund has significant exposure to corporates, the fund performance was impacted to some extent. Key portfolio characteristics at end of March 2016 for were as given below. Average Maturity As of March 31, 2016 (in years) Yield-to-Maturity^ FISTIP 2.00 11.02%

Exposure to A rated instruments 55.81%

^pre-fund expenses

The RBI in its first bi- monetary policy review (for FY17) on April 5, reduced the Repo rate by 25 bps to stand at 6.5%. The Policy rate corridor was narrowed from 100 bps to 50 bps. The move towards maintaining neutral level of liquidity (away from deficit) is aimed at increasing durable liquidity in the system which augurs well for speedier rate cut transmission. The central bank proposes to use a combination of short term and durable liquidity to effectively achieve the dual objective of dealing with frictional liquidity requirements and providing for sustainable liquidity to transmit rate cuts. We believe that any further transmission of policy rates would help to bring down cost of capital for Indian companies, which in turn may augur well for the improvement of the credit environment. Looking ahead, the fund managers will continue to actively monitor market developments and fine-tune the maturity profile of the fund in line with views on interest rate changes, within the stated investment mandate.

Franklin India Corporate Bond Opportunities Fund Franklin India Corporate Bond Opportunities Fund (FICBOF), as the name suggests, is a fund that primarily focuses on corporate bonds, while keeping the average maturity of the portfolio below 36 months. The fund’s performance is summarized below: Last 1 Year Since Inception* 7.00% 9.99% FICBOF - Growth 8.47% 9.12% B: Crisil Short-Term Bond Fund Index 7.97% 8.13% AB: Crisil 10 Year Gilt Index 7.94% 10.17% FICBOF - Direct - Growth 8.47% 9.12% B: Crisil Short-Term Bond Fund Index 7.97% 7.17% AB: Crisil 10 Year Gilt Index *compounded and annualized returns. Inception date: FICBOF - Growth: December 7, 2011, FICBOF - Direct - Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark.

Most of the bond yields (barring the 30 year gilt) softened during the fiscal year (FY16), although RBI constantly emphasized on the lack of transmission of rate cut despite 125 bps rate cut since January 2015. Yields softened relatively more at the shorter end of the curve, than the longer end, during the fiscal year. The fall in yields was supported by moderation in inflation, twin deficits remaining range bound, weakness in international crude oil prices, some transmission of rate cuts by the RBI, receding supply concerns post budget and increase in the Open Market Operations by the RBI. Liquidity conditions which broadly remained comfortable at the beginning of the fiscal year, tightened a bit in second half. It tightened in October-November on the back of festival season draining currency and some slowdown in government expenditure. Systemic liquidity deficit increased during the Jan-March quarter on account of seasonality and advance tax flows. The RBI has taken precise efforts to identify and address the pressing need for easier liquidity to be made available in the system.

23

The credit environment deteriorated through the year driven by soft commodity prices and continued low capacity utilization in several sectors. The stressed assets in Indian banking system continued to rise as corporate balance sheets continued to remain leveraged. Since the fund has significant exposure to corporates, the fund performance was impacted to some extent. Key portfolio characteristics at end of March 2016 for were as given below. Average Maturity Yield-toAs of March 31, 2016 (in years) Maturity^ FICBOF 2.13 11.16%

Exposure to A rated instruments 64.14%

^pre-fund expenses

The RBI in its first bi- monetary policy review (for FY17) on April 5, reduced the Repo rate by 25 bps to stand at 6.5%. The Policy rate corridor was narrowed from 100 bps to 50 bps. The move towards maintaining neutral level of liquidity (away from deficit) is aimed at increasing durable liquidity in the system which augurs well for speedier rate cut transmission. The central bank proposes to use a combination of short term and durable liquidity to effectively achieve the dual objective of dealing with frictional liquidity requirements and providing for sustainable liquidity to transmit rate cuts. We believe that any further transmission of policy rates would help to bring down cost of capital for Indian companies, which in turn may augur well for the improvement of the credit environment. Looking ahead, the fund managers will continue to actively monitor market developments and fine-tune the maturity profile of the fund in line with views on interest rate changes, within the stated investment mandate.

Franklin India Income Builder Account Franklin India Income Builder Account (FIIBA) has an active management style wherein it can invest across segments while tapping opportunities from interest rate changes. The product typically has longer average maturity period compared to short-term debt funds. The fund’s performance is summarized below: Last 1 Year Since Inception* 5.83% 9.09% FIIBA - Growth 8.24% N.A B: Crisil Composite Bond Fund Index 7.97% N.A AB: Crisil 10 Year Gilt Index 6.65% 9.79% FIIBA - Direct - Growth 8.24% 8.88% B: Crisil Composite Bond Fund Index 7.97% 7.17% AB: Crisil 10 Year Gilt Index *compounded and annualized returns. Inception date: FIIBA -Growth: June 23, 1997, FIIBA - Direct -Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark.

Most of the bond yields (barring the 30 year gilt) softened during the fiscal year (FY16), although RBI constantly emphasized on the lack of transmission of rate cut despite 125 bps rate cut since January 2015. Yields softened relatively more at the shorter end of the curve, than the longer end, during the fiscal year. The fall in yields was supported by moderation in inflation, twin deficits remaining range bound, weakness in international crude oil prices, some transmission of rate cuts by the RBI, receding supply concerns post budget and increase in the Open Market Operations by the RBI. Liquidity conditions which broadly remained comfortable at the beginning of the fiscal year, tightened a bit in second half. It tightened in October-November on the back of festival season draining currency and some slowdown in government expenditure. Systemic liquidity deficit increased during the Jan-March quarter on account of seasonality and advance tax flows. The RBI has taken precise efforts to identify and address the pressing need for easier liquidity to be made available in the system.

24

The credit environment deteriorated through the year driven by soft commodity prices and continued low capacity utilization in several sectors. The stressed assets in Indian banking system continued to rise as corporate balance sheets continued to remain leveraged. Since the fund has significant exposure to corporates, the fund performance was impacted to some extent. Key portfolio characteristics at end of March 2016 for were as given below. Average Exposure to Maturity (in Yield-toA rated As of March 31, 2016 years) Maturity^ instruments 47.76% FIIBA 3.21 10.80%

Exposure to Corporate Debt 80.12%

^pre-fund expenses

The RBI in its first bi- monetary policy review (for FY17) on April 5, reduced the Repo rate by 25 bps to stand at 6.5%. The Policy rate corridor was narrowed from 100 bps to 50 bps. The move towards maintaining neutral level of liquidity (away from deficit) is aimed at increasing durable liquidity in the system which augurs well for speedier rate cut transmission. The central bank proposes to use a combination of short term and durable liquidity to effectively achieve the dual objective of dealing with frictional liquidity requirements and providing for sustainable liquidity to transmit rate cuts. We believe that any further transmission of policy rates would help to bring down cost of capital for Indian companies, which in turn may augur well for the improvement of the credit environment. We believe that FIIBA is well-positioned to provide attractive total returns (higher yields along with capital appreciation) in the current environment, given its exposure to both corporate bonds and gilts. The fund’s returns may however witness relatively higher volatility in the event of near-term uncertainty about policy direction.

Franklin India Income Opportunities Fund Franklin India Income Opportunities Fund (FIIOF) is an open-end income fund provide regular income and medium term capital appreciation by investing in securities across the yield curve, while focusing on high accrual securities. The flexibility to take concentrated exposure to a particular security class based on analysis. The fund’s performance is summarized below: Last 1 Year Since Inception* 6.15% 8.90% FIIOF - Growth 8.47% 8.16% B: Crisil Short-Term Bond Fund Index 7.97% 6.26% AB: Crisil 10 Year Gilt Index 7.17% 9.85% FIIOF - Direct - Growth 8.47% 9.12% B: Crisil Short-Term Bond Fund Index 7.97% 7.17% AB: Crisil 10 Year Gilt Index

that looks to fixed income fund has the macro/micro

*compounded and annualized returns. Inception date: FIIOF - Growth: December 11, 2009, FIIOF - Direct Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark.

Most of the bond yields (barring the 30 year gilt) softened during the fiscal year (FY16), although RBI constantly emphasized on the lack of transmission of rate cut despite 125 bps rate cut since January 2015. Yields softened relatively more at the shorter end of the curve, than the longer end, during the fiscal year. The fall in yields was supported by moderation in inflation, twin deficits remaining range bound, weakness in international crude oil prices, some transmission of rate cuts by the RBI, receding supply concerns post budget and increase in the Open Market Operations by the RBI. Liquidity conditions which broadly remained comfortable at the beginning of the fiscal year, tightened a bit in second half. It tightened in October-November on the back of festival season draining currency and some slowdown in government expenditure. Systemic liquidity deficit increased during the Jan-March quarter on account of seasonality and advance tax flows. The RBI

25

has taken precise efforts to identify and address the pressing need for easier liquidity to be made available in the system. The credit environment deteriorated through the year driven by soft commodity prices and continued low capacity utilization in several sectors. The stressed assets in Indian banking system continued to rise as corporate balance sheets continued to remain leveraged. Since the fund has significant exposure to corporates, the fund performance was impacted to some extent. Key portfolio characteristics at end of March 2016 for were as given below. Average Maturity Yield-toAs of March 31, 2016 (in years) Maturity^ FIIOF 2.14 11.36%

Exposure to A rated instruments 49.37%

^pre-fund expenses

The RBI in its first bi- monetary policy review (for FY17) on April 5, reduced the Repo rate by 25 bps to stand at 6.5%. The Policy rate corridor was narrowed from 100 bps to 50 bps. The move towards maintaining neutral level of liquidity (away from deficit) is aimed at increasing durable liquidity in the system which augurs well for speedier rate cut transmission. The central bank proposes to use a combination of short term and durable liquidity to effectively achieve the dual objective of dealing with frictional liquidity requirements and providing for sustainable liquidity to transmit rate cuts. We believe that any further transmission of policy rates would help to bring down cost of capital for Indian companies, which in turn may augur well for the improvement of the credit environment. Our corporate bond funds continue to offer higher yields, thereby providing higher accrual income opportunities for short-to-medium term. Looking ahead, the fund managers will continue to actively monitor market developments and fine-tune the maturity profile of the fund in line with views on interest rate changes, within the stated investment mandate. Franklin India Government Securities Fund Franklin India Government Securities Fund (FIGSF) is focused on investment opportunities in government debt. While not exposed to credit risks, the fund is subject to market risks based on changes in interest rate environment, monetary policy expectations and liquidity risks. The fund managers strive to enhance portfolio returns by actively managing the portfolio duration and market volatility. The fund has various plans for investors to choose from. The performance of the various Plans is summarized below: Last 1 Year Since Inception* 5.60% 10.00% FIGSF - CP - Growth 8.22% N.A B: I-Sec Composite Index 7.97% N.A AB: Crisil 10 Year Gilt Index 6.76% 9.06% FIGSF - CP - Direct - Growth 8.22% 9.20% B: I-Sec Composite Index 7.97% 7.17% AB: Crisil 10 Year Gilt Index 5.60% 6.75% FIGSF - PF Plan - Growth 8.22% 7.32% B: I-Sec Composite Index 7.97% 5.27% AB: Crisil 10 Year Gilt Index 5.76% 9.08% FIGSF - LT Plan - Growth 7.26% N.A B: I-Sec Li-BEX 7.97% 6.92% AB: Crisil 10 Year Gilt Index 7.04% 9.36% FIGSF - LT Plan - Direct - Growth 7.26% 9.36% B: I-Sec Li-BEX 7.97% 7.17% AB: Crisil 10 Year Gilt Index

26

*compounded and annualized returns. Inception date: FIGSF - CP - Growth: June 21, 1999, FIGSF - PF Plan Growth: May 7, 2004, FIGSF - LT Plan - Growth: December 7, 2001, All direct plan options: January 1, 2013. B: Benchmark, AB: Additional Benchmark, CP: Composite Plan.

Key portfolio characteristics at end of March 2016 for the various plans were as given below. Average Maturity Yield-toAs of March 31, 2016 (in years) Maturity^ FIGSF - CP/ PF 21.40 7.90% FIGSF - LT 21.53 7.91% ^pre-fund expenses

The RBI in its first bi- monetary policy review (for FY17) on April 5, reduced the Repo rate by 25 bps to stand at 6.5%. The Policy rate corridor was narrowed from 100 bps to 50 bps. The move towards maintaining neutral level of liquidity (away from deficit) is aimed at increasing durable liquidity in the system which augurs well for speedier rate cut transmission. The central bank proposes to use a combination of short term and durable liquidity to effectively achieve the dual objective of dealing with frictional liquidity requirements and providing for sustainable liquidity to transmit rate cuts. Looking ahead, at a broad level, we will continue to actively manage portfolio maturities, in line with our views on the macro-environment and policy developments. The attempt will be to take advantage of any opportunities that arise as a result of market volatility over the near term, while positioning well for any capital gains over the medium term.

Franklin India Dynamic Accrual Fund Franklin India Dynamic Accrual Fund (FIDA) is an open-end income fund that focuses on fixed income securities with high accrual and potential for capital gains in line with its maturity profile. The fund manager aims to generate steady return in fixed income market by managing credit risk through investments in managed credit space and interest rate risk through opportunistic duration management in medium to long term space. The fund’s performance is summarized below: Since Last 1 Year Inception* 8.29% 8.90% FIDA - Growth 8.24% N.A B: Crisil Composite Bond Fund Index 7.97% N.A AB: Crisil 10 Year Gilt Index 9.35% 9.35% FIDA - Direct - Growth 8.24% 8.88% B: Crisil Composite Bond Fund Index 7.97% 7.17% AB: Crisil 10 Year Gilt Index *compounded and annualized returns. Inception date: FIDA -Growth: March 5, 1997, FIDA - Direct -Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark.

Most of the bond yields (barring the 30 year gilt) softened during the fiscal year (FY16), although RBI constantly emphasized on the lack of transmission of rate cut despite 125 bps rate cut since January 2015. Yields softened relatively more at the shorter end of the curve, than the longer end, during the fiscal year. The fall in yields was supported by moderation in inflation, twin deficits remaining range bound, weakness in international crude oil prices, some transmission of rate cuts by the RBI, receding supply concerns post budget and increase in the Open Market Operations by the RBI. Liquidity conditions which broadly remained comfortable at the beginning of the fiscal year, tightened a bit in second half. It tightened in October-November on the back of festival season draining currency and some slowdown in government expenditure. Systemic liquidity deficit increased during the Jan-March quarter on account of seasonality and advance tax flows. The RBI has taken precise efforts to identify and address the pressing need for easier liquidity to be made available in the system.

27

The credit environment deteriorated through the year driven by soft commodity prices and continued low capacity utilization in several sectors. The stressed assets in Indian banking system continued to rise as corporate balance sheets continued to remain leveraged. Since the fund has significant exposure to corporates, the fund performance was impacted to some extent. Based on the above and our views on the macro/market environment, we decreased the average maturity of the fund from 3.69 years in March 2015 to 2.69 years in March 2016, by increasing exposure to money market instruments and decreasing exposure to corporate debt. Due to the fund’s focus on fixed income securities with high accrual and investments in the managed credit space, it has predominant exposure to securities in AA and A rated segment. Key portfolio characteristics at end of March 2016 were as given below. Average Maturity Yield-toExposure to AA As of March 31, 2016 (in years) Maturity^ rated papers FIDA 2.69 11.37% 17.34%

Exposure to A rated papers 56.37%

The RBI in its first bi- monetary policy review (for FY17) on April 5, reduced the Repo rate by 25 bps to stand at 6.5%. The Policy rate corridor was narrowed from 100 bps to 50 bps. The move towards maintaining neutral level of liquidity (away from deficit) is aimed at increasing durable liquidity in the system which augurs well for speedier rate cut transmission. The central bank proposes to use a combination of short term and durable liquidity to effectively achieve the dual objective of dealing with frictional liquidity requirements and providing for sustainable liquidity to transmit rate cuts. Looking ahead, the fund managers will continue to actively monitor market developments and fine-tune the maturity profile of the fund in line with views on interest rate changes, within the stated investment mandate.

Franklin India Ultra-Short Bond Fund Launched in December 2007, Franklin India Ultra-Short Bond Fund (FIUBF) invests in a mix of short-term debt and money market instruments. The fund seeks to provide a combination of regular income and high liquidity, and is positioned between a liquid and a short bond fund. The fund’s performance is summarized below: Last 1 Year 9.01% 9.23% 9.63% 8.06% 7.69% 9.72% 8.06% 7.69%

FIUBF - Retail# - Growth FIUBF - Institutional# - Growth FIUBF - Super Institutional - Growth B: Crisil Liquid Fund Index AB: Crisil 1 year T-Bill Index FIUBF - Super Institutional - Direct - Growth B: Crisil Liquid Fund Index AB: Crisil 1 year T-Bill Index

Since Inception* 8.43% 8.64% 8.93% 7.70% 6.45% 9.98% 8.78% 7.50%

*compounded and annualized returns. Inception date for Retail, Institutional and Super Institutional plans is December 18, 2007. Inception date for all direct plan options is January 1, 2013. B: Benchmark, AB: Additional Benchmark. #These Plan(s) and all the Option(s) offered under the Plan(s) are suspended for further subscription.

The fund’s average maturity was 0.55 years in March 2016 marginally down from 0.56 years in March 2015. Yield to Maturity (pre-expenses) stood at 9.23% at the end of March 2016. The RBI has taken precise efforts to identify and address the pressing need for easier liquidity to be made available in the system. The central bank proposes to use a combination of short term and durable liquidity to effectively achieve the dual objective of dealing with frictional liquidity requirements and providing for sustainable liquidity to transmit rate cuts. We believe that any further transmission of policy rates would help to bring down cost of capital for Indian

28

companies, which in turn may augur well for the improvement of the credit environment. We will continue to manage the scheme in line with its investment objectives, and thereby seek to offer potentially higher returns than liquid funds without compromising on capital preservation. Franklin India Savings Plus Fund Franklin India Savings Plus Fund (FISPF) is an open-end income scheme with the objective of providing income consistent with the prudent risk, and it looks to minimize the risk arising from interest rate fluctuations. The fund’s performance is summarized below: Last 1 Year 8.10% FISPF - Retail - Growth 8.06% B: Crisil Liquid Fund Index 7.69% AB: Crisil 1 year T-Bill Index 8.82% FISPF - Retail - Direct - Growth 8.06% B: Crisil Liquid Fund Index 7.69% AB: Crisil 1 year T-Bill Index

Since Inception* 7.42% N.A 5.90% 9.30% 8.78% 7.50%

*compounded and annualized returns. Inception date: FISPF - Retail - Growth: February 11, 2002. Inception date for all direct plan options is January 1, 2013. B: Benchmark, AB: Additional Benchmark.

The fund’s average maturity has been decreased from 1.19 years in March 2015 to 0.58 years in March 2016, by decreasing exposure to PSU/PFI bonds. At the end of March 2016, 51.08% of the portfolio was invested in money market instruments. 80.57% of the portfolio was allocated to A1+/AAA rated securities at the end the end of March 2016, and the fund’s Yield to Maturity (pre-expenses) stood at 8.09% at the end of the period. Going forward, the fund will continue to be managed in line with its stated objective of managing volatility arising due to interest rate changes. Franklin India Low Duration Fund Franklin India Low Duration Fund (FILDF) is an open-end income fund that seeks to earn regular income for investors in the short term by focusing on low duration securities. The fund’s performance is summarized below: Last 1 Year Since Inception* 9.08% 9.50% FILDF - Growth 8.47% 8.68% B: Crisil Short-Term Bond Fund Index # 7.69% 7.06% AB: Crisil 1 year T-Bill Index 9.07% 7.82% FILDF - Monthly Dividend 9.07% 7.83% FILDF - Quarterly Dividend 8.47% N.A B: Crisil Short-Term Bond Fund Index # 7.69% 6.38% AB: Crisil 1 year T-Bill Index 9.43% 9.93% FILDF - Direct - Growth 8.47% 9.12% B: Crisil Short-Term Bond Fund Index # 7.69% 7.50% AB: Crisil 1 year T-Bill Index *compounded and annualized returns. Inception date: July 26, 2010, FILDF - Monthly Dividend & FILDF Quarterly Dividend: February 7, 2000, FILDF - Direct - Growth: January 1, 2013. B: Benchmark, AB: Additional Benchmark. #Index adjusted for the period April 1, 2002 to November 29, 2010 with the performance of Crisil MIP Blended Index.

The fund’s average maturity has been decreased from 1.19 years in March 2015 to 0.93 years in March 2016. At the end of March 2016, 12.94% of the portfolio was allocated to A1+/AAA securities, 30.49% of the portfolio to AA rated securities and 56.56% of the portfolio to A rated securities. Yield to Maturity (pre-expenses) stood at 10.44% at the end of March 2016.

29

Going forward, the fund will continue to be managed in line with its stated objective, with a focus on low duration securities. Franklin India Banking and PSU Debt Fund Franklin India Banking and PSU Debt Fund (FIBPDF) was launched on April 25, 2014, and is an open end income fund that seeks to provide regular income through a portfolio of debt and money market instruments consisting predominantly of securities issued by entities such as Banks and Public Sector Undertakings (PSUs). The fund’s performance is summarized below:

FIBPDF-Growth B: Crisil Composite Bond Fund Index AB: Crisil 10 Year Gilt Index FIBPDF - Direct - Growth B: Crisil Composite Bond Fund Index AB: Crisil 10 Year Gilt Index

Last 1 Year 7.11% 8.24% 7.97% 7.73% 8.24% 7.97%

Since Inception# 8.97% 11.37% 11.56% 9.60% 11.37% 11.56%

# Absolute return. Inception date for all plans is April 25, 2014. B: Benchmark, AB: Additional Benchmark.

Most of the bond yields (barring the 30 year gilt) softened during the fiscal year (FY16), although RBI constantly emphasized on the lack of transmission of rate cut despite 125 bps rate cut since January 2015. Yields softened relatively more at the shorter end of the curve, than the longer end, during the fiscal year. The fall in yields was supported by moderation in inflation, twin deficits remaining range bound, weakness in international crude oil prices, some transmission of rate cuts by the RBI, receding supply concerns post budget and increase in the Open Market Operations by the RBI. Liquidity conditions which broadly remained comfortable at the beginning of the fiscal year, tightened a bit in second half. It tightened in October-November on the back of festival season draining currency and some slowdown in government expenditure. Systemic liquidity deficit increased during the Jan-March quarter on account of seasonality and advance tax flows. The RBI has taken precise efforts to identify and address the pressing need for easier liquidity to be made available in the system. Based on the above and our views on the macro/market environment, we decreased the average maturity of the fund from 5.60 years in March 2015 to 3.74 years in March 2016. Due to the nature of the fund, and its investment objective 100% of the portfolio was allocated to A1+/AAA rated securities at the end the end of March 2016. The fund’s Yield to Maturity (pre-expenses) stood at 8.05% at the end of the period. The RBI in its first bi- monetary policy review (for FY17) on April 5, reduced the Repo rate by 25 bps to stand at 6.5%. The Policy rate corridor was narrowed from 100 bps to 50 bps. The move towards maintaining neutral level of liquidity (away from deficit) is aimed at increasing durable liquidity in the system which augurs well for speedier rate cut transmission. The central bank proposes to use a combination of short term and durable liquidity to effectively achieve the dual objective of dealing with frictional liquidity requirements and providing for sustainable liquidity to transmit rate cuts. Looking ahead, the fund managers will continue to actively monitor market developments and fine-tune the maturity profile of the fund in line with views on interest rate changes, within the stated investment mandate. Franklin India Treasury Management Account Franklin India Treasury Management Account (FITMA) is an open end liquid scheme that strives to strike an optimum balance between stable income and high liquidity by investing in a mix of short term debt and money market instruments. The scheme continues to be rated A1+mfs by

30

ICRA. This represents the highest credit quality rating and lowest credit risk in the short term. The fund’s performance is summarized below: Last 1 Year Since Inception* 7.63% 7.44% FITMA - Regular# - Growth 8.04% N.A B: Crisil Liquid Fund Index 7.67% 6.59% AB: Crisil 1 year T-Bill Index 7.90% 7.44% FITMA - Institutional# - Growth 8.04% 7.11% B: Crisil Liquid Fund Index 7.67% 5.96% AB: Crisil 1 year T-Bill Index 8.37% 8.02% FITMA - Super Institutional - Growth 8.04% 7.42% B: Crisil Liquid Fund Index 7.67% 6.14% AB: Crisil 1 year T-Bill Index 8.42% 9.07% FITMA - Super Institutional - Direct - Growth 8.04% 8.78% B: Crisil Liquid Fund Index 7.67% 7.51% AB: Crisil 1 year T-Bill Index *compounded and annualized returns. Inception date: FITMA - Regular - Growth: April 29, 1998, FITMA Institutional - Growth: June 22, 2004, FITMA - Super Institutional - Growth: September 2, 2005. Inception date for all direct plan options is December 31, 2012. B: Benchmark, AB: Additional Benchmark. #These Plan(s) and all the Option(s) offered under the Plan(s) are suspended for further subscription.

The scheme closed the fiscal year with an average maturity of 0.15 years and Yield to Maturity (pre-expenses) of 7.97% as of March 2016. Going forward, we will continue to manage the scheme in line with its investment objective of providing consistent income along while investing in papers with high credit quality. Franklin India Cash Management Account Franklin India Cash Management Account (FICMA) invests in a portfolio comprising of money market and debt instruments. The fund maintains a shorter duration strategy to be able to provide stable income and high liquidity. The fund’s performance since inception and during the last year is summarized below: Last 1 Year Since Inception* 6.10% 5.78% FICMA -Growth 8.04% N.A B: Crisil Liquid Fund Index 7.67% 6.15% AB: Crisil 1 year T-Bill Index 7.14% 7.58% FICMA - Direct - Growth 8.04% 8.78% B: Crisil Liquid Fund Index 7.67% 7.51% AB: Crisil 1 year T-Bill Index *compounded and annualized returns. Inception date: FICMA - Growth: April 23, 2001, FICMA - Direct Growth: December 31, 2012. B: Benchmark, AB: Additional Benchmark.

The scheme closed the fiscal year with an average maturity of 0.13 years and Yield to Maturity (pre-expenses) of 7.68% as of March 2016.

31

Annexure II Investor Complaints Report for the Financial Year 2015-16 Total Number of Folios: 25,33,348

Complaint Code

IA IB IC ID

II A

II B II C II D III A III B

Type of Complaint#

Non receipt of Dividend on Units Interest on delayed payment of Dividend Non receipt of Redemption Proceeds Interest on delayed payment of Redemption Non receipt of Statement of Account/Unit Certificate Discrepancy in Statement of Account Data Corrections in Investor details Non receipt of Annual Report/Abridged Summary Wrong switch between Schemes Unauthorized switch between Schemes

Action on (a) and (b) (a) No. of complaints (b) No. of Resolved pending at the Complaints Non 0-3 beginning of received during Within 30-60 60-180 Beyond Actionable * 30 days days days 180 days months the year the year

Pending 3-6 6-9 9-12 months months months

0

66

47

6

1

0

0

12

0

0

0

0

2

2

0

0

0

0

0

0

0

0

0

84

76

5

2

0

0

1

0

0

0

1

6

3

3

1

0

0

0

0

0

0

0

2

2

0

0

0

0

0

0

0

0

0

25

23

2

0

0

0

0

0

0

0

13

1490

1481

8

2

0

0

12

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

31

31

0

0

0

0

0

0

0

0

0

7

6

1

0

0

0

0

0

0

0

32

Complaint Code

III C III D

III E IV Total

Type of Complaint#

Deviation from Scheme attributes Wrong or excess charges/load Non updation of changes viz. address, PAN, bank details, nomination, etc Others

Action on (a) and (b) (a) No. of complaints (b) No. of Resolved pending at the Complaints Non 0-3 beginning of received during Within 30-60 60-180 Beyond Actionable * 30 days days days 180 days months the year the year

Pending 3-6 6-9 9-12 months months months

0

0

0

0

0

0

0

0

0

0

0

0

4

2

1

0

0

0

1

0

0

0

1

211

196

8

0

0

0

8

0

0

0

34 49

3601 5529

3064 4933

344 378

98 104

2 2

0 0

124 158

2 2

0 0

1 1

# including against its authorized persons/ distributors/ employees, etc. *Non actionable means the complaints that are incomplete / outside the scope of the mutual fund Note: 89% of the complaints have been resolved within 30 days. The time shown above is the average time for resolution of complaint s from receipt of initial complaint till eventual closure. Delays could be caused by a variety of factors including the need to receive information from clients, due process followed by banks in cases where payment instruments have been lost and delays due to verification of certain facts received from clients. This Report has been approved by the Board of Franklin Templeton Trustee Services Private Limited on May 24, 2016.

33

Annexure III Scheme Investment Objectives & Risk Factors

Franklin India Bluechip Fund (FIBCF) is an open end growth scheme with an objective to primarily provide medium to long term capital appreciation. Franklin India Prima Fund (FIPF) is an open end growth scheme with an objective to provide medium to long term capital appreciation as a primary objective and income as a secondary objective. Franklin India Prima Plus (FIPP) is an open end growth scheme with an objective to provide growth of capital plus regular dividend through a diversified portfolio of equities, fixed income securities and money market instruments. Franklin Infotech Fund (FIF) is an open end growth scheme with an objective to provide long term capital appreciation from a portfolio that is invested primarily in the information technology industry. Franklin India Opportunities Fund (FIOF) is an open end diversified growth scheme with an objective to generate appreciation by capitalising on long - term growth opportunities in the Indian economy. Franklin India Taxshield (FIT) is an open end equity linked savings scheme with an objective to provide medium to long term growth of capital along with income tax rebate. Franklin India Income Builder Account (FIIBA) is an open end income scheme with an objective to provide investors regular income under the Dividend Plan and Capital appreciation under the Growth Plan. Franklin India Balanced Fund (FIBF) is an open end balanced scheme with an objective to provide long-term growth of capital and current income by investing in equity and equity related securities and fixed income instruments. Templeton India Growth Fund (TIGF) is an open end growth scheme with the objective to provide long-term capital growth to its unitholders. Franklin India Dynamic Accrual Fund (FIDA) is an open end income scheme with the objective to generate a steady stream of income through investment in fixed income securities. Franklin India Index Fund (FIIF) is an open end index linked growth scheme with the objective to invest in companies whose securities are included in the Nifty and subject to tracking errors, endeavouring to attain results commensurate with the CNX Nifty Index under NSE Nifty Plan, and to provide returns that, before expenses, closely correspond to the total return of common stocks as represented by the S&P BSE Sensex under BSE Sensex Plan. Franklin India Low Duration Fund (FILDF) is an open-end income scheme having an objective to earn regular income for investors through investment primarily in highly rated debt securities. Franklin India Cash Management Account (FICMA) is an open end liquid scheme with the objective of providing income and liquidity consistent with prudent risk from a portfolio comprising of money market and debt instruments. Franklin India Government Securities Fund (FIGSF) is an open end dedicated Gilts scheme

34

with the objective to generate credit risk-free return through investments in sovereign securities issued by the Central Government and/or State Government and/or any security unconditionally guaranteed by the Central Government and/or State Government for repayment of Principal and Interest. Franklin India Savings Plus Fund (FISPF) is an open end income scheme with the objective to provide income consistent with the prudent risk from a portfolio comprising substantially of floating rate debt instruments, fixed rate debt instruments swapped for floating rate returns, and also fixed rate instrument and money market instruments. Franklin India Monthly Income Plan (FIMIP) is an open end income scheme (with no assured returns) with an objective to provide regular income from a portfolio that is invested in predominantly high quality fixed income securities with a maximum exposure of 20% to equities. Franklin India Pension Plan (FIPEP) is an open end tax saving scheme whose objective is to provide investors regular income under the Dividend Plan and capital appreciation under the Growth Plan. Franklin India Treasury Management Account (FITMA) is an open end liquid scheme with an objective to provide current income with high liquidity. Franklin India Short Term Income Plan (FISTIP) is an open end income scheme with an objective to provide stable returns by investing in fixed income securities. Franklin India Flexi Cap Fund (FIFCF) is an open end diversified equity fund that seeks to provide medium to long-term capital appreciation by investing in stocks across the entire market capitalisation range. Templeton India Equity Income Fund (TIEIF) is an open end diversified equity fund to provide a combination of regular income and long-term capital appreciation by investing primarily in stocks that have current or potentially attractive dividend yield. Franklin Asian Equity Fund (FAEF) is an open end diversified equity fund that seeks to provide medium to long term appreciation through investments primarily in Asian Companies / sectors (excluding Japan) with long term potential across market capitalisation. Franklin India High Growth Companies Fund (FIHGCF) is an open-end diversified equity fund that seeks to achieve capital appreciation through investments in Indian companies/sectors with high growth rates or potential. Franklin India Ultra Short Bond Fund (FIUBF) is an open-end income fund that seeks to provide a combination of regular income and high liquidity by investing primarily in a mix of short term debt and money market instruments. Franklin Build India Fund (FBIF) is an open-end equity fund which seeks to achieve capital appreciation through investments in companies engaged either directly or indirectly in infrastructure-related activities. Franklin India Income Opportunities Fund (FIIOF) is an open end income fund that seeks to provide regular income and capital appreciation by investing in fixed income securities across the yield curve. Franklin India Smaller Companies Fund (FISCF) is an open end diversified equity fund that seeks to provide long-term capital appreciation by investing in mid and small cap companies. Franklin India Feeder - Franklin U.S. Opportunities Fund (FIF-FUSOF) is an open-end fund of

35

funds scheme investing overseas that seeks to provide capital appreciation by investing predominantly in units of Franklin U. S. Opportunities Fund, an overseas Franklin Templeton mutual fund, which primarily invests in securities in the United States of America. Franklin India Corporate Bond Opportunities Fund (FICBOF) is an open-end income fund which seeks to provide regular income and capital appreciation through a focus on corporate securities. Franklin India Life Stage Fund of Funds (FILSF) is an open end fund of funds scheme seeking to generate superior risk adjusted returns to investors in line with their chosen asset allocation. Franklin India Dynamic PE Ratio Fund of Funds (FIDPEF) is an open end fund of funds scheme seeking to provide long-term capital appreciation with relatively lower volatility through a dynamically balanced portfolio of equity and income funds. The equity funds allocation will be determined based on the month-end weighted average PE ratio of the Nifty 50 Index (NSE Nifty). Franklin India Fixed Tenure Fund - Series XII (FIFTF-XII) is a closed end income scheme that seeks to generate returns and reduce interest rate volatility, through a portfolio of fixed income securities that are maturing on or before the maturity of the Scheme along with capital appreciation through equity exposure. Franklin India Fixed Tenure Fund - Series XVII (FIFTF-XVII) is a closed end income scheme that seeks to provide investors returns along with capital appreciation through equity exposure. Franklin India Banking & PSU Debt Fund (FIBPDF) is an open-end income fund that seeks to provide regular income through a portfolio of debt and money market instruments consisting predominantly of securities issued by entities such as Banks and Public Sector Undertakings (PSUs). Franklin India Feeder - Franklin European Growth Fund (FIF-FEGF) is an open ended fund of funds scheme investing overseas that seeks to provide capital appreciation by investing predominantly in units of Franklin European Growth Fund, an overseas equity fund which primarily invests in securities of issuers incorporated or having their principal business in European countries. Franklin India Multi-Asset Solution Fund (FIMAS) is an open end fund of funds scheme that seeks to achieve capital appreciation and diversification through a mix of strategic and tactical allocation to various asset classes such as equity, debt, gold and cash by investing in funds investing in these asset classes.

RISK FACTORS AND DISCLAIMERS i) General Risk Factors (common for all schemes/ plans): Mutual Fund investments are subject to market risks, read all scheme related documents carefully. The NAV of the scheme may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds managed by the Franklin Templeton Group and its affiliates is not necessarily indicative of future performance of the scheme. The Mutual Fund is not guaranteeing or assuring any dividend under the scheme and the same is subject to the availability and adequacy of distributable surplus. The Mutual Fund is also not assuring that it will make any dividend distributions under the dividend plan of the scheme though it has every intention of doing so and payment of dividend is at the sole discretion of Trustees. The investments made by the scheme are subject to external risks.

36

ii) Additional scheme / plan specific Risk Factors: FILSF & FIDPEF The expenses of the Fund of Funds scheme will be over and above the expenses charged by the underlying schemes. Disclaimer for FIMIP Income is not assured, and is subject to the availability of distributable surplus. FIT All investments in FIT are subject to a lock-in-period of 3 years from the date of respective allotment and the unitholders cannot redeem, transfer, assign or pledge the units during this period. The Trustee, AMC, their directors or their employees shall not be liable for any of the tax consequences that may arise, in the event that the Scheme is wound up before the completion of the lock-in period. FIPEP All investments in FIPEP are subject to a lock-in for a period of 3 financial years. The Trustee, AMC, their directors or their employees shall not be liable for any of the tax consequences that may arise, in the event that the Scheme is wound up before the completion of the lock-in period. Investors are requested to review the prospectus carefully and obtain expert professional advice with regard to specific legal, tax and financial implications of the investment/participation in the scheme. FIIF The existence, accuracy and performance of the CNX Nifty Index will directly affect the performance of Index schemes and tracking errors are inherent in any Index Fund. FIBF In the event that the investible funds of more than 65% of the total proceeds of the scheme (annual average) are not invested by way of equity shares of domestic companies, then the scheme may not qualify as equity oriented fund. TIEIF In the event that the investible funds of more than 65% of the total proceeds of the scheme (annual average) are not invested by way of equity shares of domestic companies, then the scheme may not qualify as equity oriented fund. Investments in overseas financial assets are subject to risks associated with currency movements, restrictions on repatriation, transaction procedures in overseas markets and country related risks.

FAEF Investments in overseas financial assets are subject to risks associated with currency movements, restrictions on repatriation, transaction procedures in overseas markets and country related risks. FIF - FUSOF & FIF - FEGF The expenses of the Fund of Funds scheme will be over and above the expenses charged by the underlying schemes. Investments in overseas financial assets are subject to risks associated with currency movements, restrictions on repatriation, transaction procedures in overseas markets and country related risks.

37

Annexure IV Unclaimed Dividends and Redemptions of more than 90 Days as on March 31, 2016 Scheme Name Templeton India GROWTH FUND Franklin India Dynamic Accrual Fund Franklin India Government Securities Fund - Composite Plan Franklin India INDEX FUND NIFTY PLAN Franklin India Savings Plus Fund Retail Option Franklin India FLEXI CAP FUND Franklin India Life Stage Fund of Funds 20's Plan Franklin India Life Stage Fund of Funds 30's Plan Franklin India Life Stage Fund of Funds 40's Plan Franklin India Life Stage Fund of Funds 50's Plus Plan Franklin India Life Stage Fund Of Funds - 50's Plus Floating Rate Plan Franklin India Smaller Companies Fund Templeton India EQUITY INCOME FUND Franklin India Low Duration Fund Franklin India BLUECHIP FUND Franklin India PRIMA FUND Franklin India PRIMA PLUS Franklin INFOTECH FUND Franklin INDIA OPPORTUNITIES FUND Franklin India TAXSHIELD Franklin India Dynamic P E Ratio Fund Of Funds Franklin India Balanced Fund Franklin India Pension Plan Franklin India Income Builder Account Franklin India Monthly Income Plan Franklin India Treasury Management Account Franklin India Government Securities Fund - Long Term Plan Franklin India Short Term Income Plan Franklin India High Growth Companies Fund Franklin Asian Equity Fund Franklin India Ultra Short Bond Fund Franklin Build India Fund Franklin India Income Opportunities Fund

Unclaimed Redemption* Amount(Rs.) Count 2,916,225.24 128 1,756,419.98 172

Unclaimed Dividend* Amount(Rs.) Count 6,577,522.28 2687 2,788,226.11 7709

940,131.86

25

761,754.14

1314

777,568.65

53

-

0

1,544,753.62

100

361,899.53

502

26,686,053.01

1041

30,412,664.34

10144

20,565.97

2

386,118.54

69

9,965.88

1

28,256.32

21

369,728.74

4

35,307.58

21

0.02

1

54,660.56

68

48,707.69

8

575,719.17

365

9,334,963.63

270

7,150,916.45

1829

17,129,387.81

598

25,223,187.44

21646

333,516.43 24,391,223.61 8,696,803.84 16,624,051.79 1,493,659.16

8 3601 399 623 136

1,083,955.70 43,383,913.82 16,185,460.60 58,999,900.86 10,592,992.38

2860 13049 5676 47771 10133

9,329,681.79

351

23,923,001.16

11141

11,758,526.26

612

50,045,308.93

30270

2,441,716.78

45

1,898,800.66

888

2,384,529.45 923,405.69 1,236,426.14 2,378,192.65

71 42 76 143

7,920,978.47 1,208,429.90 1,823,199.70 2,899,430.16

2043 496 2328 4966

483,498.84

61

1,627.92

2

69,052.25

5

179,158.94

155

1,105,254.49

23

1,145,228.50

388

17,508,115.88

802

8,139,651.99

4315

6,462,691.03 307,157.53 712,494.95

858 19 43

936,443.73 2,721.24 1,445,479.92

604 10 260

7,000.44

4

536,025.85

68

38

Scheme Name Franklin India Corporate Bond Opportunities Fund Franklin India Feeder - Franklin U S Opportunities Fund Franklin India Banking and PSU Debt Fund FRANKLIN INDIA FEEDER FRANKLIN EUROPEAN GROWTH FUND Franklin India Multi-Asset Solution Fund Details Not available# Closed / matured schemes Franklin Templeton FIXED TENURE FUND SERIES I 60 MONTH PLAN Franklin Templeton FIXED TENURE FUND SERIES I I 60 MONTH PLAN Franklin Templeton FIXED TENURE FUND SERIES I I I 36 MONTH PLAN Franklin Templeton FIXED TENURE FUND SERIES I V 60 MONTH PLAN Franklin Templeton CAPITAL SAFETY FUND - 5 YEARS PLAN Franklin Templeton CAPITAL SAFETY FUND - 3 YEARS PLAN TEMPLETON FIXED HORIZON FUND SERIES I 15 MONTHS PLAN TEMPLETON FIXED HORIZON FUND 3 MONTHS PLAN - RETAIL Franklin Templeton FIXED TENURE FUND SERIES V I 60 MONTHS PLAN Franklin Templeton FIXED TENURE FUND SERIES V 13 MONTHS PLAN Franklin India TAXSHIELD'96 Franklin India TAXSHIELD'97 Franklin India TAXSHIELD'98 Franklin India TAXSHIELD'99 Franklin Templeton Capital Protection Oriented Fund - 3 Years Plan Franklin Templeton Capital Protection Oriented Fund - 5 Years Plan Templeton Quarterly Interval Plan - Plan C - Retail Franklin India INTERNATIONAL FUND TEMPLETON FIXED HORIZON FUND SERIES I 13 MONTHS PLAN - RETAIL Franklin Templeton FIXED TENURE FUND SERIES V I I I 60 MONTHS PLAN A Templeton Quarterly Interval Plan - Plan B - Retail

Unclaimed Redemption* Amount(Rs.) Count

Unclaimed Dividend* Amount(Rs.) Count

254,185.23

8

1,456,080.08

119

656,399.88

12

-

0

24,253.95

2

67.14

1

44,071.68

6

-

0

3,999.12 1,480,063.71

2 15

939,047.11

0 240

273,529.58

238

94,601.54

26

1,485,353.95

131

142,568.74

30

215,153.63

10

21,549.48

17

496,833.61

63

60,310.44

41

9,113,234.91

342

1,037,586.63

372

7,671,120.93

303

403,987.79

427

392.39

1

-

0

-

0

1,315.50

1

1,136,554.03

36

179,694.33

56

-

0

1,227.80

1

67,333,531.38 88.31 797,901.33 1,773,191.88

1198 1 14 63

-

0 0 0 0

-

0

2,365.05

3

801,497.73

26

333,745.01

111

-

0

814.11

1

272.61

3

-

0

11,914.45

3

-

0

185,319.46

5

12,072.89

6

986.23

1

251.75

3

39

Scheme Name Templeton Fixed Horizon Fund Series I V - Plan A - Retail Templeton Fixed Horizon Fund Series I I - Plan C - Retail Templeton Fixed Horizon Fund Series V I I - Plan B - Retail Franklin Templeton Fixed Tenure Fund Series I X Plan B Franklin Templeton Fixed Tenure Fund Series I X Plan A Franklin Templeton Fixed Tenure Fund Series X - Plan A Franklin Templeton Fixed Tenure Fund Series X - Plan C Templeton Fixed Horizon Fund Series V I I I - Plan F Templeton Fixed Horizon Fund Series I X - Plan B Templeton Fixed Horizon Fund Series I X - Plan C Franklin Templeton Fixed Tenure Fund Series X - Plan D Franklin Templeton Fixed Tenure Fund Series X - Plan B Templeton Fixed Horizon Fund Series I X - Plan D Templeton Fixed Horizon Fund Series I X - Plan E Templeton Fixed Horizon Fund Series X - Plan B Templeton Fixed Horizon Fund Series X I - Plan G Templeton Fixed Horizon Fund Series X - Plan C Templeton Fixed Horizon Fund Series X I - Plan H Templeton Fixed Horizon Fund Series X I - Plan A Templeton Fixed Horizon Fund Series X - Plan D Franklin India Fixed Tenure Fund Series X I I - Plan A Franklin India Fixed Tenure Fund Series X I I - Plan B Franklin Templeton Fixed Tenure Fund Series X I I I - Plan A Franklin India Fixed Tenure Fund Series XII - Plan C Franklin Templeton Fixed Tenure Fund Series X I V - Plan A Franklin Templeton Fixed Tenure Fund SeriesXIV - Plan B

Unclaimed Redemption* Amount(Rs.) Count

Unclaimed Dividend* Amount(Rs.) Count

56.64

1

-

0

31.10

7

-

0

10,704.50

3

-

0

23,337.60

1

11,885.85

6

43,956.07

34

-

0

87,953.27

45

1,094.93

2

71,038.25

3

469,570.46

3

504.87

3

-

0

11,109.30

2

-

0

16,662.00

1

-

0

-

0

1,982.05

1

45,714.66

7

24,371.98

1

-

0

976.85

1

156,775.87

70

-

0

-

0

6,155.70

2

33,617.40

3

1,571.62

1

-

0

2,593.67

2

21,146.04

1

-

0

7,938.45

1

-

0

-

0

132.79

1

3,432,273.44

89

138,563.17

29

177,646.15

6

188,846.97

18

1,509,233.94

11

939,010.09

98

12,491,134.66

32

965,510.24

103

72,338.60

6

16,737.46

7

318,094.80

11

21,872.82

5

40

Scheme Name Franklin Templeton Fixed Tenure Fund Series XV Franklin India Fixed Tenure Fund Series XVI Franklin India Fixed Tenure Fund Series XVII FRANKLIN INDIA STRATEGIC INVESTMENT PLAN Templeton India GUARANTEED INCOME PLAN Total

Unclaimed Redemption* Amount(Rs.) Count

Unclaimed Dividend* Amount(Rs.) Count

339,878.01

3

584,016.44

15

942,274.79

5

94,616.78

3

2,335,952.03

7

41,076.19

16

370,741.00

3

-

0

15,797.19

5

-

0

286,477,231.71

13,168

314,905,814.34

185,567

# This being historical data, details are unavailable. *Includes demand drafts lying unclaimed with the banks which were cancelled and brought back in the respective scheme books.

41

Annexure V Summary of proxy votes cast by FTMF / AMC during FY16 Financial Year

Quarter

June 2015 September 2015 2015-2016 December 2015 March 2016 Total

Total no. of resolutions 1,935 5,206 282 242 7,665

For 1,623 4,691 255 215 6,784

42

Break-up of Vote decision Against Abstained 239 1 515 0 24 0 25 0 803 1

None 72 0 3 2 77