Templeton Mutual Fund - Franklin Templeton...

Templeton Mutual Fund

Key Information Memorandum and Application Form

The particulars of the scheme have been prepared in accordance with Securities and Exchange Board of India (Mutual Funds) Regulations 1996, as amended till dateand filed with SEBI and the units being offered for public subscription have neither been approved or disapproved by Securities and Exchange Board of India nor hasSecurities and Exchange Board of India certified the accuracy or adequacy of the Offer Document.

The memorandum is dated December 31, 2003. The Abridged Offer Document sets forth concisely the information about the scheme that a prospective investorought to know before investing. Please retain this document for future reference. For further details please refer to the Offer Document. Investors are advised to ascertainany further changes in the Offer Document from the mutual fund/investor service centres/distributors/website before investing.

Sponsor: Templeton International Inc., Florida, USA.

Asset Management Company: Templeton Asset Management (India) Pvt. Ltd.

FT INDIALIFE STAGE FUND OF FUNDS

THE 50’s PLUS FLOATING RATE PLAN

A n o p e n e n d f u n d o f f u n d s , o f f e r i n g ac h o i c e o f a s s e t a l l o c a t i o n p l a n s

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ContentsIntroduction 3Franklin Templeton Group 4Investment Objective 4Risk Factors and Special Considerations 6Investment Restrictions and Other Considerations 6The Fund 8The Sponsors 8The Trustee 8Substantial Provision of the Trust Deed 8Summary of the Duties of the Trustee as per the Trust Deed and SEBI (MF) Regulations 8Management of the Fund 8Initial Issue Expenses 11Expenses 11Condensed Financial Information 12Who Can Buy 12Redemption Procedure 13

Exchanges 14Nomination Facility 14Transfer 14Unclaimed Dividend/Redemption 14Winding Up 14Determination of Net Asset Value 14Email Services 14Valuation of Assets 14Accounting Policy 15Investor Information 15Associate Transaction 15Tax Benefi ts 15Investor Rights and Services 16Pending Litigation or Proceedings 17Other Information 18Instructions 18Application Form 20

Mumbai 72/73 Free Press House, 7th Floor, Free Press Journal Marg Nariman Point,Mumbai - 400 021. Tel : 56325820-29,56325830-36. Fax : (022) 22810923 Ahmedabad 1001 Abhijit-II, Mithakhali Six Roads,Navrangpura Ahmedabad 380009. Tel : 6470057 Fax : (079) 6401945Bangalore Niton Compound 11, Palace Road,Bangalore 560052 Tel : 2385612/13/14 Fax : (080) 2385886Baroda306, Dwarkesh Complex, R.C. Dutt Road,Alkapuri, Baroda 390007. Tel : 2353036/37 Telefax : (0265) 2353038Bhubaneswar 77, Kharavel Nagar, Unit III, Janpath Bhubaneswar 751001. Tel : 2535141,2531745 Fax : (0674) 2531026 Chandigarh S.C.O. 371-372, I Floor Sector 35 - B (above HDFC Bank) Chandigarh 160 022. Tel : 2662136, 2622341, 2613371 Fax : (0172) 2622341/2613371Chennai Century Centre, 75 TTK Road, Chennai 600 018 Tel : 24679200 - 02Fax : (044) 24987790 Cochin 36/1696-A, II Floor, N.H.Road, Kaloor,Ernakulam Cochin 682017. Tel : 2334824,2335096 Fax : (0484) 2334865Coimbatore 424-C Red Rose Towers, II floor, D. B. Road R.S.Puram, Coimbatore 641002. Tel : 2474616 Telefax : (0422) 2470277

DehradunShop no. 44, Meedo Arcade, 28 Rajpur Road Dehradun 248001 Tel : 2743268/2748306Fax : (0135) 2748306 Hyderabad 501 Regency House, Somajiguda, Hyderabad 500 082. Tel : 55665915 /55665916 Fax : (040) 55665770Indore303, Silver Sanchore Castle, 7, RNT Marg Indore 452 001. Tel : 2526710 Telefax : (0731) 2526711Jaipur 250 Ganpati Plaza, M I Road, Jaipur 302 001. Tel : (0141) 2377904,2377905 Fax : (0141) 2388737JalandharRachnaa Chambers, Next to Hotel CentrePoint BMC Chowk, G.T. Road, Jalandhar-144001 Tel : 5080784, 2456033Telefax : (0181) 5080783Kanpur Room No 307, Third Floor, 15/63 Krishna Tower, Kanpur 208001. Tel : (0512) 2303131, 2330767 Kolkatta2D & 2E Landmark Building, 228-A A.J.C. Bose Road, Calcutta 700020.Tel : 22826517, 22824171 Fax: (033) 22826459Lucknow 2 Uttam Palace, I Floor, 3 Sapru Marg, Lucknow 226 001 Tel : 2285301 Telefax : (0522) 2285172Ludhiana SCO-37, II Floor, Feroze Gandhi MarketLudhiana 141 001 Tel : 2406198 Telefax : (0161) 2406191

Madurai 24 A Pechiamman Padithurai Road, Madurai 625001 Tel : (0452) 2343008, 2350144. Mangalore IV Floor, Sanu Palace, Kodialbail,Mangalore 575 003 Tel : 2492796 Telefax : (0824) 2493749Nagpur126, FarmLand, Ramdas Peth, Opp SBI Bank, Nagpur 440 010. Tel : 2555074 Telefax : (0712) 2553794NasikS-6, Suyojit Trade Centre, Opp Rajiv Gandhi BhavanSharanpur Road, Nasik 422 002Tel: 2574329 Telefax : (0253) 2574327New Delhi 123 Himalaya House12th Floor, Kasturba Gandhi Marg, New Delhi 110001. Tel : 23722786, 23752017 Telefax : (011) 23353213. Patna 505 Ashiana Hariniwas Apartments, Dak Bungalow Road, Patna 800 001. Tel : 2212277 Fax: (0612) 2213170Pune 1306, ‘Kamalja’, Shivajinagar, Rokdoba Mandir Path, Near MSEB office, Off Jangli Maharaj Road, Pune 411005 Tel : 5533140/5533141/5513660 Telefax : (020) 5513661

Rajkot5th Floor, Star Plaza, Phulchhab Chowk,Rajkot - 360 001 Tel: 2471395 Telefax : (0281) 2294204 RaipurOffice No.244, Second Floor, Rishabh Complex, M.G. Road, Raipur 492 001. Tel : 5033244 Telefax: (0771) 5033614. Salem 1/31-A Anna Salai, I Floor, Swarnapuri, Salem 636004 Tel : 2446854, 2430506 Fax : (0427) 2446854 Surat404-405, Lalbhai Contractor Complex, Opp. Library, Nanpura, Surat - 395 001. Tel : 2473766 Telefax : (0261) 2473744. Trichy Jenne Plaza Ground Floor 5/C, 28 Bharathiar Salai Cantonment, Trichy 620001. Tel : 2464022 Fax : (0431) 2414691. Varanasi IV Floor, Kuber Complex, Rathyatra crossing, Varanasi 221010. Tel : 2226684 Telefax : (0542) 2226684Vijayawada White House I Floor, Room # 2 M.G.Road, Vijayawada 520010.Tel : 2472594, 5561301 Fax : (0866) 2472594. Visakhapatnam C-9 Pavan Palace, Dwaraka Nagar.Visakhapatnam 530016 Tel : 5565351,2704705. Fax : (0891) 5566806

Franklin Templeton Branch Offices

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BARODA GOKULESH, R C DUTT ROAD,VADODARA - 390 009

CHANDIGARH SCO, 137-138 SECTOR - 9C, MADHYA MARG, CHANDIGARH.

CHENNAI 19, RAJAJI SALAI, CHENNAI 600001

COCHIN XXIV/ 1633, KPK MENON ROAD, WILLINGDON ISLAND, COCHIN- 682003

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JAIPUR H8, SHOWROOM NO.1, BHAGWAT BHAWAN, MI ROAD, JAIPURJALANDHAR PLOT NO. 34, G. T. ROADJALANDHAR. 144 001.KANPUR 16/105, M.G. ROAD, KANPUR - 208 001KOLKATA 19 NETAJI SUBHAS ROAD KOLKATA 700001MUMBAI 270 D.N.ROAD, FORT MUMBAI 400001NEW DELHI H2 CONNAUGHT CIRCLE NEW DELHI 110001PUNE SHRIRANG HOUSE, 364-365, JUNGLEE MAHARAJ ROAD

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Investor Service Centre for IPO: Collection Bank - Standard Chartered Bank

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Introduction

Mutual Funds are for everyone. Around the world, millions ofinvestors are investing in mutual funds because of their safety, ease ofinvesting and the many advantages they offer. As you read on, you will geta flavour of what mutual funds are and how they can help you achieveyour financial goals. But before that, here are some basics of investing.

Investments and You

Investing is never an easy process. However, a sound understandingof some basic concepts makes the process of investment decision-makingmuch easier and the experience much more enjoyable. The followingsteps can help you get started on your path to becoming a successfulinvestor:

1. Identify your financial needs and goals

The first step is to get a clear understanding of your own financialneeds and goals. Ask yourself the question - When do I need money andfor what purpose? List down your financial goals and when they willmaterialise (daughter’s higher education after 6 years, purchase of a houseafter 10 years), and how much money you will need for the same. Theanswer will help you arrive at the time frame for your investment - shortterm, medium term or long term.

Financial Amount Years’ to InvestmentGoals Required achieve horizon

(At today’s your goal prices)

Retirement Rs.25 lakhs 20 years Long Term

Daughter’s higher education Rs.2 lakhs 6 years Long Term

Buying a car Rs. 4 lakhs 2 years Medium Term

Son’s

computer course Rs. 0.50 lakhs 6 months Short Term

2. Understand your tolerance to risk

Before making an investment decision, it is important to ascertainyour feelings about risk. Will you be comfortable with fluctuations in thevalue of your investment? Or would you prefer to settle for lower returns,without ups and downs?

3. Estimate your required rate of return

Your required rate of return depends on your financial goals and thetime you have to achieve them, as can be seen from the illustration below:

If your retirement goal at 58 years is Rs.20 lakhs and your monthlysavings is Rs.5000, your required rate of return depending on yourcurrent age would be:

Present Age Returns

43 years 9.5%

48 years 21.2%

As you can see, the later you start, the higher will be your requiredrate of return... in other words, as your investment horizon reduces, forthe same level of savings, you may need to take on a higher risk.Alternatively, if you were not willing to take a higher risk, you would haveto save a higher amount every month - Rs. 9800, almost twice the originalsavings required to achieve your target accumulation.

Once you are comfortable with these basics, the next step is tounderstand your investment choices, and draw up an investment planrelevant to your requirements. While the following section provides you

more details on these choices, we would urge you to consult yourinvestment advisor to understand these better before investing.

Mutual Funds and You

What is a mutual fund?

A mutual fund pools the money of people with similar investmentgoals. The money in turn is invested in various securities depending onthe objectives of the mutual fund scheme, and the profits (or loss) areshared among investors in proportion to their investments.

Mutual fund schemes are usually open end (perpetually open forinvestments and redemptions) or closed end (with a fixed term). Amutual fund scheme issues units that are normally priced at Rs.10 duringthe initial offer. Thus, the number of units you own as against the totalnumber of units issued by the mutual fund scheme determines your sharein the profits or loss of a scheme.

In the case of open end schemes, units can be purchased from or soldback to the fund at a Net Asset Value (NAV) based price on all workingdays.

The NAV is the actual value of a unit of the fund on a given day. Thus,when you invest in a mutual fund scheme, you normally get an accountstatement mentioning the number of units that have been allotted to youand the NAV based price at which the units have been allotted. Theaccount statement is similar to your bank passbook... when you buy moreunits or redeem your units in part or full, you get an updated accountstatement, reflecting your transaction.

Where do mutual funds invest?

Broadly, mutual funds invest basically in three types of asset classes:

Stocks: Stocks represent ownership or equity in a company,popularly known as shares

Bonds: These represent debt from companies, financial institutionsor government agencies.

Money market instruments: These include short-term debtinstruments such as treasury bills, certificate of deposits and inter-bankcall money.

What are the types of mutual funds?

Mutual funds can be classified based on their objectives as:

Sector Equity Schemes: These schemes invest in shares of companiesin a specific sector.

Diversified Equity Schemes: These schemes invest in shares ofcompanies across different sectors of the economy.

Hybrid Schemes: These schemes invest in a mix of shares and fixedincome instruments.

Income Schemes: These schemes invest in fixed income instrumentssuch as bonds issued by corporates and financial institutions, andgovernment securities.

Money Market Schemes: These schemes invest in short terminstruments such as certificate of deposits, treasury bills and short termbonds.

Growth Schemes: Capital GrowthRisk: Medium to HighRecommended Investment Horizon:5 years and above

Hybrid Schemes: Growth and IncomeRisk: Medium to HighRecommended Investment Horizon:3 years to 5 years

Income Schemes: IncomeRisk: Low to MediumRecommended Investment Horizon:1 year to 3 years

Liquid / Money Market Schemes:Capital PreservationRisk: LowRecommended Investment Horizon:Upto 1 year

■ Equities ■ Debtfor illustrative purposes only

What are the benefits of investing in mutual funds?

As opposed to investing directly in the three asset classes, accessingthem through a mutual fund has several advantages:

Professional Management:

Your money is managed by professionals who have the experienceand resources to thoroughly analyse the economy and financial markets,and spot good opportunities.

Diversification:

With smaller amounts, you can achieve a higher degree ofdiversification and reduce your risk.

Liquidity and Convenience:

Investing and getting back your money is easy. Also, there is very littlepaper work, and it is very easy to track and monitor your investments.

Tax Benefits:

Some mutual fund schemes offer you tax rebates under Section 88. Inaddition, your returns from mutual funds (dividends and capitalappreciation) are also eligible for favourable tax treatment.

To sum up, the key to investment success is determining your needsand selecting and allocating your savings across appropriate asset classesthat can help you achieve them. Mutual funds offer you a low cost,convenient and professional investment vehicle to access different assetclasses.

Franklin Templeton is one of the largest mutual funds in India and offersa range of mutual fund schemes to cater to the diverse needs of investors.

The Franklin Templeton Group

The Franklin Templeton Group is one of the world’s largestInvestment Management Companies, with over US$ 336.7 billionequivalent to Rs.15,35,685 crores approximately in assets undermanagement as on December 31, 2003 including more than 250 OpenEnd Mutual Funds, Separately Managed Accounts and other investmentvehicles. The Franklin Templeton Group has over 50 years of experiencein Investment Management. The Group has over 28 offices world-wide.

In India, Franklin Templeton started its operations in 1996, with theconstitution of Templeton Mutual Fund as a Trust and Templeton AssetManagement (India) Pvt. Ltd. as a Asset Management Company. In 2002,it acquired Pioneer ITI Mutual Fund Pvt. Ltd. and Pioneer ITI AMC Ltd.,to emerge as one of the largest private sector mutual fund in terms ofassets and investor base, and also the range of mutual fund schemes thatit had to offer to investors.

Investment Objectives

FT India Life Stage Fund of Fund (FTLF)

FT India Life Stage Fund of Funds scheme is a open-end Fund ofFunds Scheme. The primary objective of the scheme is to generatesuperior risk adjusted retur

unitholders. Templeton portfolio managers use the widely knownphilosophy of ‘value investing’ and aim to seek out securities with themost promising potential for long-term growth rather than looking at hotmarkets or day-to-day trends. Investors have the choice of investing inthe Growth Plan and Dividend Plan.

Asset Allocation

Instruments Risk Profile %

Equity & Equity Linked Medium to High 85%

Debt/Money Market instruments Low to Medium 15%

Franklin India Prima Fund (FIPF)

To provide medium to long term capital appreciation as a primaryobjective and income as a secondary objective.

Asset Allocation


Equities Medium to High Above 60%

Debt Low to Medium Upto 40%

Money Market Instruments Low Upto 15%

FIPF invests in relatively smaller, fast growing companies to providea high degree of capital appreciation. Investors have the choice ofinvesting in the Growth Plan and Dividend Plan.

Templeton India Income Fund (TIIF)

TIIF is an open-end income scheme, whose primary objective is togenerate a steady stream of income through investments in fixed incomesecurities. TIIF fund managers strive to earn steady returns in the fixedincome market by actively managing the fund’s portfolio on interest ratemovements and credit risk.

They search through the entire gamut of available fixed incomeinstruments like Government securities, PSU bonds, corporatedebentures and structured products to optimize returns on investments.

Asset Allocation

Instruments Risk Profile % of corpus

Debt instruments includingCorporate debt, PSU Bonds,Gilts and Securitised Debt Low to Medium Upto 100%

Money Market instruments & Cash & Deposits (including - Money at Call, Mibor Linked Instruments and Fixed Deposits) Low to Medium Upto 25%

Investors have the choice of investing in the Growth Plan andDividend Plan.

Templeton India Income Builder Account (TIIBA)

To provide investors regular income under the Dividend Plan andcapital appreciation under the Growth Plan

Asset Allocation


Debentures * (investment Medium to Low Upto 100%grade, privately placed etc.),

Bonds issued by public sector Low Upto 20%units & other fixed income instruments Money market instruments

Shares High to Medium Upto 20%

* Includes securitised debt upto 40%

An open end income scheme, TIIBA seeks to deliver consistent andsustainable returns while avoiding undue risk on the credit and maturityside.

The scheme offers a choice of Growth Plan, Bonus Plan, DividendPlan and Institutional Plan. Under the dividend plan, investors can chooseto receive monthly, quarterly, half-yearly or annual dividends. Investorsalso have the option to reinvest their dividend for additional units.

Investors can choose from the following plans -

Plan A - The no load plan, with a minimum investment of Rs.20,000 in

Half-yearly/Annual Dividend, Bonus and Growth Plan, and Rs.40,000 inMonthly and Quarterly Dividend Plan.

Plan B - The no entry load plan, with a 0.5% exit load for redemptionswithin 6 months of allotment for Rs.10 lakhs & below and 0.25% forredemptions within 3 months of allotment for above Rs.10 lakhs.

Templeton Floating Rate Income Fund (TFIF)

TFIF is an open end income scheme whose primary objective is toprovide income consistent with the prudent risk from a portfoliocomprising substantially of floating rate debt instruments, fixed rate debtinstruments swapped for floating rate return, and also fixed rateinstruments and money market instruments.

Asset Allocation

Allocation as Risk% of Corpus Profile

Type of Security Min. Max.

Fixed Rate debt instruments: Money market 0% 35% Low instruments (including money at call, CPs, to MediumCDs, treasury bills, gilts less than 1 year, Repos/Reverse Repos or any other instrument permitted by RBI/SEBI) Non-Money market instruments (including bonds & debentures issued by corporates or PSUs, gilts, securitised debt*, fixed deposits or any other instrument permitted by RBI/SEBI)

Floating Rate debt instruments **: 65% 100% Low Money market instruments (Money at to Mediumcall, mibor linked debentures, floatingrate CPs, CDs, floating rate bonds < 182 days or any other instrument permitted by RBI/SEBI)

Non-Money market instruments (including floating rate bonds & debentures issued by corporates or PSUs, floating rate gilts, fixed rate debentures/bonds with swap or any other instrument permitted by RBI/SEBI)

* Includes securitised debt upto 35% ** Floating rate debt instruments includefixed rate instruments swapped for floating rate returns.

The scheme offers a choice of Short Term and Long Term plans. TheShort Term Plan has a portfolio skewed towards short-term maturityinstruments and offers a choice of growth and dividend reinvestmentoption. The long term plan offers a choice of growth, dividend payout andreinvestment options, and will have a portfolio skewed towards longermaturity instruments.

The scheme retains the option to alter the asset allocation in the interestof unitholders on a short-term basis on defensive considerations. However, ifthe investment pattern is changed for any other reasons, the procedureoutlined in the paragraph ‘Fundamental Attributes’ under the section‘Investment Restrictions’ shall be followed.

Portfolio Turnover

Portfolio turnover will be a function of market opportunities. Theeconomic environment changes on a continuous basis and exposes debtand equity portfolios to systematic as well as non-systematic risk. TheAMC will endeavour to optimize portfolio turnover to maximize gainsand minimize risks keeping in mind the cost associated with it.

The portfolio turnover will be on account of rebalancing of portfolioon account of new subscriptions, redemptions, dividend payouts andchange in the market conditions. The debt and equity allocation will beautomatically rebalanced every 6 months to revert to the steady statelevels.

A higher portfolio turnover will result in higher transaction andbrokerage costs including custodian fees and consequently may impactthe Net Asset Value adversely.

Debt and Money Markets

The Indian debt markets are one of the largest such markets in Asia.Government and Public Sector enterprises are predominant borrowers inthe market. While interest rates were regulated till a few years back, therehas been a rapid deregulation and currently both the lending and depositrates are market determined.

The money markets in India essentially consist of call money market,repo transactions, commercial papers, certificate of deposits and Treasury

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Bills. A predominantly institutional market, the key money marketplayers are banks, financial institutions, insurance companies, mutualfunds, primary dealers and corporates. Please refer to the Offer Documentfor more details on debt/money market instruments.

Risk Factors and Special Considerations

Standard Risk Factors

- Mutual funds and securities investments are subject to market risksand there is no assurance or guarantee that the objective of the schemeswill be achieved.

- As with any investment in securities, the Net Asset Value (NAV) of theunits issued under the schemes can go up or down depending on thefactors and forces affecting the capital/debt markets.

- Past performance of the sponsors/the asset managementcompany/mutual fund does not necessarily indicate the futureperformance of the schemes of the mutual fund.

- FT India Lifestage Fund of Funds (FTLF) is only the name of thescheme and does not in any manner indicate either the quality of thescheme or its future prospects and returns.

- The sponsor is not responsible or liable for any loss resulting from theoperations of the Schemes beyond the initial contribution of Rs. 1 lakhmade by it towards setting up the Fund.

- Investors in the scheme are not being offered any guaranteed/assuredreturns

Special Consideration :

- The performance of the scheme may be affected by changes inGovernment policies, general levels of interest rates and risksassociated with trading volumes, liquidity and settlement systems inequity and debt markets.

- Investments in underlying debt schemes are subject to default risk andinterest rate risk. Interest rate risk results from changes in demand andsupply for money and other macroeconomic factors and creates pricechanges in the value of the debt instruments. Consequently, the NetAsset Value of the scheme may be subject to fluctuation.

- Investments in underlying debt schemes are subject to reinvestmentrisks as interest rates prevailing on interest or maturity due dates maydiffer from the original coupon of the bond, which might result in theproceeds being invested at a lower rate.

- To the extent the equity/debt schemes invest in overseas financialassets, there may be risks associated with currency movements,restrictions on repatriation and transaction procedures in overseasmarkets.

- The underlying schemes may invest in non-publicly offered debtsecurities and unlisted equities. This may expose the scheme toliquidity risks.

- Investors should study the Offer Document carefully in its entiretyand should not construe the contents hereof as advise relating tolegal, taxation, investment or any other matters. Investors may, ifthey wish, consult their legal, tax, investment and other professionaladvisors to determine possible legal, tax, financial or otherconsiderations of subscribing to or redeeming units, before making adecision to invest / redeem Units.

- No person has been authorized to give any information or to make anyrepresentations not confirmed in this Document in connection withthe offers or the issue of Units, and any information or representationsnot contained herein must not be relied upon as having beenauthorized by the Mutual Fund, the Investment Manager. Neither thedelivery of this Abridged Offer Document nor any sale made hereundershall, under any circumstances, create any implication that theinformation contained herein is correct.

- From time to time and subject to Securities and Exchange Board ofIndia (Mutual Funds) Regulations, 1996, the Sponsor, investmentcompanies of the Sponsor, funds managed by the Sponsor, theiraffiliates, associate companies, subsidiaries, the AMC and the TrusteeCompany may invest either directly or indirectly in the Scheme. Theseentities may acquire a substantial portion of the Scheme Units andcollectively constitute a major investor in the Scheme. Accordingly,Redemption of Units by these entities may have an adverse impact on

the Units of the Scheme because the timing of such Redemption mayimpact the ability of other Unit holders to redeem their Units.

- Neither the Offer Document/Abridged Offer Document nor the Unitshave been registered in any jurisdiction. The distribution of the OfferDocument/Abridged Offer Document in certain jurisdictions may berestricted or totally prohibited to registration requirements andaccordingly, persons who come into possession of the Offer Document/Abridged Offer Document are required to inform themselves aboutand to observe any such restrictions and / or legal compliancerequirements.

• As FTLF will invest primarily in a combination of FT India’s equityand income schemes, movement in Net Asset Value, investmentpolicies or fundamental attribute may impact the performance of thescheme.

- To the extent the underlying Debt/Equity schemes engage insecurity lending, FT India Life Stage Fund of Funds will besubject to risks related to fluctuations in collateralvalue/settlement/liquidity/ counter party.

- To the extent the underlying Debt/Equity schemes are permittedto invest in derivative instruments, FT India Life Stage Fund ofFunds is exposed to the high risk, high return derivativeinstruments.

- Half-yearly rebalancing could result in higher transaction costs.

- The expenses of FTLF are over and above the expenses chargedby the underlying schemes.

For more special considerations, please refer the respectiveunderlying schemes Unabridged Offer Document.

Due diligence

Templeton Asset Management (India) Pvt. Ltd. has exercised duediligence while preparing the Offer Documents and has submitted a duediligence certificate to SEBI in the prescribed format. Investors may referto the appropriate Offer Document for the contents of the due diligencecertificate.

Investment Restrictions and Other Considerations

All the investments by the Fund and the Scheme will be within theinvestment restrictions and other limitations as prescribed under theRegulations and as amended from time to time. Pursuant to theRegulations, some of the investment and other limitations as presentlyapplicable to the scheme are mentioned hereunder.

1. No term loans for any purpose will be advanced by the Scheme.

2. The Mutual Fund under all its Schemes taken together will not ownmore than 10% of any Company’s paid up capital carrying voting rights.

3. The scheme may invest in another scheme under the same assetmanagement company or any other Mutual Fund without chargingany fees, provided that aggregate interscheme investment made by allthe schemes under the same management or in schemes under themanagement of any other asset management company shall notexceed 5% of the net asset value of the Mutual Fund . SEBI vide it’scircular dated November 7, 2002, has clarified that Clause 4 ofSeventh Schedule of the SEBI (Mutual Funds) Regulations 1996which restricts investments in mutual fund units upto 5% of netassets and prohibits charging of fees, shall not be applicable toinvestments in mutual funds in foreign countries made in accordancewith guidelines. However, the management fees and other expensescharged by the mutual fund(s) in foreign countries along with themanagement fee and recurring expenses charged to the domesticmutual fund scheme shall not exceed the total limits on expenses asprescribed under Regulation 52(6)

4. Transfers of investments from one Scheme to another scheme in theMutual Fund shall be allowed only if:

a. Such transfers are done at the prevailing market price for quotedinstruments on spot basis

b. The securities so transferred shall be in conformity with theinvestment objective of the scheme to which such transfer hasbeen made

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c. The registration and accounting of the transactions is completedand is ratified in the next meeting of the Board of Trustee, if theregulations so require

5. The investment manager may invest in the scheme from time to time.The percentage of such investments to the total net assets may varyfrom time to time and can be upto 100% of the net assets of thescheme. However the investment manager shall not charge any feeson its investments in the scheme in accordance with sub-clause (3)of Regulation 24 of the Regulations.

6. The Mutual Fund may borrow to meet liquidity needs, for thepurpose of repurchase, redemption of units or payment of interest ordividend to the unitholders and such borrowings shall not exceed20% of the net assets of the scheme and duration of the borrowingshall not exceed 6 months. The fund may borrow from permissibleentities at prevailing market rates and may offer the assets of theFund as collateral for such borrowing.

7. A Scheme shall not invest more than 15% of its NAV in debtinstruments issued by a single issuer which are rated not belowinvestment grade by a credit rating agency authorised to carry outsuch activity under the Act. Such investment limit may be extendedto 20% of the NAV of the scheme with the prior approval of the Boardof Trustees and the Board of Asset Management Company. Providedthat such limit shall not be applicable for investments in governmentsecurities and money market instruments. Provided further thatinvestment within such limit can be made in mortgaged backedsecuritised debt which are rated not below investment grade by acredit rating agency registered with SEBI.

8. A Mutual Fund scheme shall not invest more than 10% of its NAV inunrated debt instruments issued by a single issuer and the totalinvestment in such instruments shall not exceed 25% of the NAV ofthe scheme. All such investments shall be made with the priorapproval of the Boards of Trustee and the Investment Manager, or thecommittee constituted by the Boards of the Trustee Company andInvestment Manager for approval of such instruments.

9. The Mutual Fund will buy and sell securities on the basis ofdeliveries and will in all cases of purchase, take delivery of relativesecurities and in all cases of sale, deliver the securities and will in nocase put itself in a position whereby it has to make short sales or carryforward transactions or engage in badla finance (carry forward).Provided that the Mutual Fund shall enter into derivativestransactions in a recognized stock exchange for the purpose ofhedging and portfolio balancing, in accordance with the guidelinesissued by SEBI.

10. The Mutual Fund shall get the securities purchased transferred in thename of the Fund on account of the Schemes, wherever investmentsare intended to be of a long-term nature.

11. Pending investment of the funds of the Scheme in the requiredmanner, the AMC may invest the funds of the Scheme in short-termmoney market instruments of Scheduled Commercial Banks or otherliquid instruments or both.

12. The Scheme shall not make any investment in:

a) any unlisted security of an associate or group company of thesponsor; b) any security issued by way of private placement by anassociate or group company of the Sponsor; c) the listed securitiesof group companies of the Sponsor which is in excess of 25% of thenet assets.

13. The underlying schemes shall not invest more than 5 percent of itsNAV in the unlisted equity shares or equity related securities.

14. The underlying schemes may invest in ADRs/GDRs of Indiancompanies listed on overseas stock exchanges to the extent and in themanner approved by RBI. The fund will employ necessary measures tomanage foreign exchange movements arising out of such investments.

The underlying schemes may invest in other investment avenues /instruments as allowed to/permitted under SEBI regulations, fromtime to time.

15. The scheme will comply with any other Regulations applicable to theinvestments of Mutual Funds from time to time.

The Trustee of the Mutual Fund may alter these limitations /objectives from time to time to the extent the SEBI Regulations. Allinvestments of the Scheme will be made in accordance with the SEBIRegulations.

Procedure for investment

FT India Life Stage Fund of Funds

FT India Life Stage Fund of Funds is an open-end fund investingpredominantly in Franklin Templeton’s Equity and Income Funds. TheCIOs of Franklin Equity and Franklin Debt schemes, will decide on theallocation within equity and debt schemes respectively.

The Investment Managers for the underlying Schemes are:

FIBCF and FIPF: K.N. Siva Subramanian

TIGF : Dr. Mark Mobius

TIIF : Nilesh Shah

TIIBA : Rahul Goswami

The debt and equity allocation will be automatically rebalanced oncein every 6 months to revert to the steady state levels. The CIOs ofFranklin Equity and Franklin Debt funds will decide on the allocationwithin equity and debt funds respectively in consultation with theInternational CIO.

Trading in Derivatives

The scheme may use derivatives with respect to equities/debt inaccordance with SEBI Regulations.

Policy for Borrowing

A scheme may borrow upto a maximum of 20% of the net assets ofthe scheme for a maximum duration of 6 months in order to meetredemption of units/dividends or interest payouts as a temporary liquiditymeasure as per Regulation 44[2] of Chapter VI of SEBI [Mutual Funds]Regulations, 1996, on such terms (as to creation of charge on theproperties, rate of interest, margins etc.) as the Trustee/AMC considers tobe in the interest of investors.

As of November 29, 2003 the borrowing is Rs.4.19 crores.

Securities Lending

A scheme may also engage in scrip lending as provided under SecuritiesLending scheme 1997, and other applicable guidelines/regulations. Scriplending means lending a security to another person or entity for a fixedperiod of time, at a negotiated compensation. The security lent will bereturned by the borrower on expiry of the stipulated period.

The AMC will comply with the required reporting obligations and theTrustee will carry out the reviews required under SEBI/RBI guidelines.Further, a maximum of 40% of net assets under each plan will bedeployed in securities lending and the maximum single party exposurewill be restricted to 10% of net assets under each plan outstanding at anypoint of time.

Engaging in scrip lending is subject to risks related to fluctuations inthe collateral value and settlement/liquidity/ counterparty.

The investment restrictions specified as a percentage of net assets willbe computed at the time of making the investment and it is clarified thatchanges need not be effected, merely by reason of appreciation ordepreciation in value or by reason of factors beyond the control of thescheme (such as receipt of any corporate or capital benefits oramalgamations). In case the limits are exceeded due to reasons beyond itscontrol, the AMC shall adopt necessary measures of prudence to reset thesituation having regard to the interest of the investors.

Underwriting

A scheme may accept underwriting obligations consistent with itsinvestment objective and asset allocation subject to the fund obtainingthe necessary approval/registration under SEBI (underwriters)Regulations, 1993 and the capital adequacy norms as prescribed by SEBI.The total underwriting obligations will not exceed the scheme’s total netasset value.

Fundamental Attributes

Fundamental attributes cannot be changed without the consent ofless than 75% of the unitholders. Please note that the following are thefundamental attributes of the scheme :

- Type of scheme

- Investment objective

- Investment pattern, minimum and maximum asset allocation. Thefund retains the option to alter the asset allocation on a short termbasis in the interest of unitholders on defensive considerations

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- Liquidity provisions such as repurchase or redemption

- Aggregate fees and expenses charged to the scheme

The Trustee can change the fundamental attributes of the schemeprovided that

a. the unitholders are informed about the proposed change infundamental attributes by sending an individual communicationand an advertisement is given in one English newspaper havingnation wide circulation and one newspaper published in thelanguage of the region where the head office is situated, and

b. the unitholders are given an option to exit at the prevailing NetAsset Value without any exit load.

The Fund

Templeton Mutual Fund (the “Mutual Fund”) has been constitutedas a trust under the Indian Trusts Act, 1882 and registered with SEBIbearing registration No. MF/026/96/8 dated February 19, 1996.

The Sponsor

The sponsor of Templeton Mutual Fund is Templeton International,Inc., a wholly owned subsidiary of Templeton Worldwide Inc., which inturn is a wholly owned subsidiary of Franklin Resources Inc.

The Sponsor was responsible for setting up and establishing theTempleton Mutual Fund. The Sponsor is the Settler of the Mutual FundTrust. The Sponsor has entrusted a sum of Rs. 1 lakh to the Trustee as theinitial contribution towards the corpus of the Mutual Fund. The sponsorhas delegated the trustee functions to the Trustee. The Sponsor isrepresented by Directors on the Board of the Trustee and the InvestmentManager in accordance with the Regulations. The Sponsor shall beresponsible for discharging its functions and responsibilities towards theFund in accordance with Regulations and the various constitutivedocuments of the Fund.

The Trustee Company (The Trustee)

Templeton Trust Services Private Limited is a company incorporatedwith limited liability under the Companies Act, 1956. The RegisteredOffice of the Trustee is situated at 1st Floor, Sakhar Bhavan, NarimanPoint, Mumbai 400 021. Following are the details of the Directors of theTrustee Company:

Gregory E. McGowan*, Templeton Worldwide, Inc., 500 EastBroward Boulevard, Suite 2100, Fort Lauderdale, FL - 33394, U.S.A.,Executive Vice-President for International Development of TempletonWorldwide Inc. Other Directorships - Franklin Templeton AssetManagement S.A,

Franklin Templeton Asset Strategies, LLC, Franklin TempletonFrance S.A., Franklin Templeton Holding Limited, Franklin TempletonInternational Services S.A., Franklin Templeton Italia SIM SpA, FranklinTempleton Investments (Australia) Ltd., Franklin Templeton InvestmentServices GmbH, Franklin Templeton Management (Lux) SA, FranklinTempleton Services Limited, Happy Dragon Holdings Ltd., TRFIInvestments Limited, Templeton Asian Direct Investments Ltd.,Templeton Asset Management Limited, Templeton Franklin GlobalDistributors Ltd, Templeton Global Advisors Limited, Templeton GlobalHoldings Ltd., Templeton International Inc., Templeton InvestmentCounsel, LLC., Templeton Research & Management Venezuela, C.A.,Templeton Research Poland SP.z.o.o., Templeton Worldwide Inc.

Anand Vashi Kalpataru Heritage, 5th Floor, 127 M G Road, Mumbai400023. Practising Chartered Accountant and Senior Partner of a firm ofChartered Accountants. Other Directorships - A.J. Patel Investment &Trading Co. Pvt. Ltd., Lucid Technologies Pvt Ltd., Millars India Ltd.Millars Mach Co. Pvt. Ltd., Pedershaab Millars India Pvt Ltd.

Percy Jal Pardiwalla, 16, Vishnu Mahal, ‘D’ Road, Churchgate,Mumbai 400 020, Advocate.

Bharat Doshi, 8, St. Helen’s Court, Dr. Gopalrao Deshmukh Marg,Mumbai 400 026, Executive Director-Finance & Corporate Affairs andPresident- Trade & Financial Services Sector of Mahindra & Mahindra Ltd.Other Directorships - Ford India Ltd., Godrej Consumer Product Limited,Mahindra British Telecom Limited, Mahindra Consulting Inc., MahindraConsulting Limited, Mahindra & Mahindra Financial services Limited,Mahindra Holdings & Finance Limited, Mahindra Information TechnologyServices Limited, Mahindra Intertrade Limited, Mahindra & MahindraLimited, Mahindra Steel Service Centre Limited, NSE.IT Limited.

Stephen Dover*, Franklin Resources Inc. San Mateo, One FranklinParkway, San Mateo, CA 94403, U.S.A., International Chief InvestmentOfficer Franklin Templeton Advisors.

* These directors represent sponsors of the Trustee Company and areassociates of the sponsor. Pursuant to the Deed of Trust constituting theMutual Fund, the Mutual Fund is authorised to pay to the Trustee, whichin turn pays to its individual directors, a fee for their services in suchcapacity. The Trustee shall charge the Fund a Trusteeship Fee at suchpercentage as may be agreed upon of the weekly/daily average asset valueof the Fund. The Trustee has appointed Templeton Asset Management(India) Private Ltd. as the Investment Manager.

Substantial Provisions of the Trust Deed

- To invest the funds collected through the scheme effectively so as toprovide a fair return to the unitholders

- The Trustee shall, in discharging their duties, act in the interest of theunitholders

- The monitoring of the fund will be carried out by the Trustee on acontinuous basis. When the AMC is engaged by the Trustee formanaging the fund, the Trustee shall obtain such periodical reports asit may require from the AMC. Such periodical reports shall be analysedwith an object to recognise the need for corrective actions early enoughin order to avoid or minimize losses to the unitholders

- To do all such other acts, deeds, things as may be incidental ornecessary for the advancement or fulfillment of the above objects

- No amendment in the trust deed shall be carried out without the priorapproval of SEBI and unitholders approval would be obtained where itaffects the interests of unitholder.

Summary of the Duties of the Trustee as per the Trust Deed and SEBI (MF) Regulations

The Trustee shall obtain consent of the unitholders of the Scheme:

a. When the Trustee is required to do so by SEBI in the interests of theunitholders; or

b. Upon the request of three-fourths of the unitholders of any Schemeunder the Mutual Fund; or

c. If a majority of the directors of the Trustee company decide to wind upthe Scheme or prematurely redeem the units; or

d. When a change in the fundamental attributes (viz. the investmentobjective and the terms of the scheme) of the Scheme or the Trust or thefees and expenses payable or any other change which would modify theScheme or affect the interest of the unitholders is proposed to be carriedout the trustee will ensure that, (i.) a written communication about theproposed change is sent to each unitholder and an advertisement is givenin one English daily newspaper having nationwide circulation as well asin a newspaper published in the language of the region where the HeadOffice of the mutual fund is situated; and (ii) the unitholders are givenan option to exit at the prevailing Net Asset Value without any exit load.”

The Trustee shall ensure that the AMC has not given any undue orunfair advantage to any associates or dealt with any of the associates ofthe AMC in any manner detrimental to the interest of unitholders.

The Trustee shall be accountable for and be the custodian of theproperty of the respective Scheme and shall hold the same in trust for thebenefit of the unitholders in accordance with Regulations and theprovisions of the Trust Deed.

The Board of Directors of Templeton Trust Services Private Limitedheld seven meetings during the year 2002-2003.

Procedure for Unitholder ApprovalsThe Trustee will call for a meeting of the Unitholders of the Scheme

or adopt postal ballot or any other appropriate method whenever it isrequired to do so in the interest of the Unitholders, or as required by theSEBI Regulations for the time being in force or if the Trustee determinesto modify the Scheme or prematurely redeem the Units or wind up theScheme.

Management of The Fund

Templeton Asset Management (India) Pvt. Ltd. (The InvestmentManager)

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Templeton Asset Management (India) Private Ltd. is a private limitedcompany incorporated under the Companies Act, 1956 on October 6,1995, having its Registered Office at 1st Floor, Sakhar Bhavan, 230Backbay Reclamation, Nariman Point, Mumbai 400 021. Templeton AssetManagement (India) Private Ltd., has been appointed the AssetManagement Company of the Mutual Fund by the Trustee videInvestment Management Agreement (IMA) dated January 5, 1996,executed between Templeton Trust Services Pvt. Ltd and Templeton AssetManagement (India) Pvt. Ltd.

Board of DirectorsGregory E. Johnson*, Chairman of the Board of Director of TempletonAsset Management (India)Pvt. Ltd. Vijay C. Advani * (Alternate Director to G. E. Johnson) - ExecutiveManaging Director, International Retail Development Dr. J. Mark Mobius*, President - Templeton Emerging Markets Fund Inc. Rajan Raheja*, Industrialist.Deepak M. Satwalekar, Managing Director and CEO - HDFC StandardLife Insurance Company Ltd.P. Vaidyanathan, Managing Director - Integrated Enterprises (India) Ltd.Narvoz Seervai, Advocate* These Directors are associated with the sponsor or its associates.

Compliance OfficerPranita Gramopadhye, 1st Floor, Sakhar Bhavan, 230 Backbay

Reclamation, Nariman Point, Mumbai 400 021, India.

Share holding PatternOut of the Investment Manager’s total equity paid-up capital of

Rs.59.33 cr., 75% is held by Franklin Templeton Holding Ltd., Mauritiuswith the balance of about 25% being held by Hathway Investments Pvt.Ltd. Hathway Investments is an Indian investment company, a member ofthe Rajan Raheja group of companies.

Porfolio Management ServicesThe AMC had obtained a certificate from SEBI dated November 8,

2000 to act as a Portfolio Manager under Securities and Exchange Boardof India (Portfolio Managers) Rules and Regulations, 1993, videregistration No.INP000000464 and commenced the activity. Further, arenewal of the registration certificate was granted upto November 15,2006 vide SEBI letter no. IMD/SD/22901/2003 dated December 4,2003.The AMC has also obtained a No-Objection letter from SEBI underRegulation 24(2) of Securities and Exchange Board of India (MutualFunds) Regulations, 1996 for commencing the Portfolio Managersactivity. The asset management company certifies that the key personnelof the asset management company, the systems, back office, bank andsecurities accounts are segregated activity wise and there exists a systemto prohibit access to inside information of various activities.

REGISTRARS AND TRANSFER AGENTS

Sale/Repurchase/transfer/transmission of the scheme units will beprocessed in-house and at competitive rates. The fees will be charged tothe scheme as a part of annual ongoing expenses and shall confirm to sub-clause 15 of Regulation 25 of SEBI (Mutual Funds) Regulations, 1996.

AUDITORS

S.R Batliboi & Co. 18th Floor, Express Towers, Nariman Point, Mumbai400 021, is the Auditor for this Scheme of the Mutual Fund. The Trusteeshall appoint auditors for each Scheme of the Mutual Fund. Further, theTrustee has the right to change the Auditors. S.R Batliboi & Co. havehowever, not provided any services in connection with this Offer Document.

INVESTOR RELATION OFFICER

S Rajagopalan, Transfer Agency and Customer Service - Century Centre, 75, T.T.K Road, Alwarpet, Chennai 600 018. Ph No- 044 - 2467 9200

The Trustee is satisfied that the investor services division hasadequate capacity and systems to discharge the various obligationsrelating to investor servicing as provided in the regulations and to handleinvestor complaints.

Investor Service Centres (ISCs)

Please refer to the list of Investor Service Centres (ISCs) on page 2.

Information on Key Personnel

Rajiv Vij - Managing Director Asia -(since 2003)

Total experience : 14 years, Age: 36 years

Qualifications: B. Tech. (IIT-Delhi), PGDM (IIM-Calcutta)

Current Responsibilities: Responsible for expanding FranklinTempleton’s business interests in Asia.

Assignments held upto 10 years or less: Sales and Marketing functionsTAMIL, Hindustan Lever Ltd.

Ravi Mehrotra - President -Templeton Asset Management (India) Pvt.Ltd.

Total experience: 18 years, Age: 41 years

Qualifications: B.Com, PGDBM (XLRI, Jamshedpur)

Current Responsibilities: Overall responsibility of Sales and marketing,Fixed-income portfolio management, Franklin equity team, Riskmanagement, Human Resources and Corporate Accounts.

Assignments held upto 10 years or less: Senior Vice President and ChiefInvestment officer - Pioneer ITI AMC Ltd.

Vivek Pai

Total Experience: 9 years, Age: 33 years

Qualifications: B. Com, ACA

Current Responsibilities: Vice President - FA Operations andCompliance

His role largely involves general management of several functions withinthe operations department such as Fund Accounting, Custody and CashManagement along with overseeing the Legal Affairs.

Assignments held upto 10 years or less: Joined Templeton in October2000, and with the responsibility to the Trustees for Compliance andInternal Audit of the Mutual Fund. Prior to this he was acting as aConsultant for setting up back office operations for a new company, BirlaSun Life Mutual Fund- Head of Fund Accounting.

Sanjay Sapre - Head TA Operations & Customer Service- India (based atMumbai)


Qualifications: M.B.A (USA)

Current Responsibilities: Head TA Operations & Customer Service-India, Responsible for the company’s Transfer Agency Operations andCustomer Service functions in India

Assignments held upto 10 years or less: Franklin TempletonInternational Services (India) Pvt. Ltd.-Manager, Global EnterpriseConsulting (Asia), Templeton Asset Management (India) Pvt Ltd-eBusiness Manager (Asia).Various Management positions at ThomasCook (India) Limited including responsibilities in the areas ofTechnology, Marketing support, Special projects and Vendor ManagementOperations Manager with Pinnacle Data Systems, Inc. in the USAhandling the purchase and operations functions of the company.Purchasing Manager / Director with Henkel Chemicals (India) Limited.

S Rajgopalan - Senior Manager- Transfer Agency and Customer Services

Total experience: 16 years, Age: 38 years (based at Chennai)

Qualifications: BSc (Maths)

Current Responsibilities: Senior Manager- Transfer Agency andCustomer Services. Oversees the operations and customer services of thecompany.

Assignments held upto 10 years or less: From 1999- May 2003-KarvyConsultants- Heading the Templeton MF unit and supervising all processrelated activities. Client co-ordination, regular review meetings with theinternal auditors, internal teams and visiting distributor houses. From1993-1999-MCS Ltd. Mumbai Handling close ended Mutual Fundschemes and investor services. Maintaining relationship with client andco-ordinating with internal auditors/distributors etc.

Pranita Gramopadhye


Qualifications: B. Com, ACA

Current Responsibilities: Compliance Officer (based at Mumbai)

Templeton Trust Services Private Ltd.

Having joined Templeton in July 2000, she is responsible to The Trusteesfor Compliance and Internal Audit of the Mutual Fund. She is alsoresponsible for compliance of Portfolio Management Services.

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Assignments held upto 10 years or less: Joined Templeton in July 2000,and was managing back office cash operations and custody services,subsequently she was moved to Compliance and was handlingcompliance of mutual fund regulations and other applicable laws.Reliance Industries Ltd. -Manager, Management Information, BusinessAnalysis and Cost Control, P.C Hansotia & Associates (affiliated toDeloitte Haskins & Sells) -Manager, Auditing of corporate clients.

Details of the Fund Management Personnel:

Franklin Equity Team

R. Sukumar - Chief Investment Officer - Franklin Equity Funds (based atChennai)


Qualifications: B.E (Univ. of Roorkee); PGDM (IIM Bangalore)

Current Responsibilities: Chief Investment Officer - Franklin EquityFunds (based at Chennai) Responsible for investment strategy and assetallocation for all equity funds.

Assignments held upto 10 years or less: Senior Vice President andPortfolio Manager - Equity; Vice President and Fund Manager - PioneerITI AMC Ltd.

K.N. Siva Subramanian - Senior Vice President and Portfolio Manager -Equity (based at Chennai)


Qualifications: BE (REC Jaipur); PGDM (IIM Calcutta)

Current Responsibilities: Senior Vice President and Portfolio Manager -Equity (based at Chennai)

Assignments held upto 10 years or less: Vice President and FundManager - Pioneer ITI AMC Ltd.

Deepesh Pandey - Asst. Vice President & Portfolio Manager (Equity)


Qualifications: B. Tech. (IIT-Delhi), PGDM (IIM-Calcutta)

Current Responsibilities: Asst. Vice President & Portfolio Manager(Equity). Responsible for Balanced Funds, Nifty, Sensex & PE RatioFunds, equity portion of Monthly Income Plan.

Assignments held upto 10 years or less: Fund Manager - TAMIL, Ltd.Investment Analyst - SBI Funds Mgmt.

S. Chellappa - Assistant Vice President and Senior Research Analyst(based at Chennai)


Qualifications: MBA, (Madras Univ.), Diploma in Computer Applications(NITIE) - Provides Research support on Software, Cement, Metals,Banking Sectors

Current Responsibilities: Assistant Vice President and Senior ResearchAnalyst (based at Chennai)

Assignments held upto 10 years or less: Asst. Vice President- Pioneer ITIAMC Ltd.

B. Sashikanth - Asst. Vice President & Senior Research Analyst

Total Experience - 12 years, Age: 36 years (based at Chennai)

Qualifications - B.Com, CA

Current Responsibilities: AVP & Senior Research Analyst, Responsiblefor Research coverage of Pharma, Auto, Media and Power sectors

Assignments held upto 10 years or less: Assistant Director, ABN AmroAsia Equities, Research of Basic Industries including, Oil & Gas, CapitalGoods, Power Utilities, Metals; Vice President, Socgen Crosby Securities,Research of Basic Industries including Cement, Metals, Capital goods;General Manager, ITC Peregrine / Peregrine Capital India - ResearchAnalyst for Basic Industries; Investment Analyst- SBI Mutual Fund

Anil Prabhudas - Assistant Vice President and Senior Research Analyst(based at Chennai)


Qualifications: CA

Current Responsibilities: Assistant Vice President and Senior ResearchAnalyst (based at Chennai)

Assignments held upto 10 years or less: Asst. Vice President -Investments - Pioneer ITI AMC Ltd.

Templeton Equity Team

Chetan Sehgal - Director - Research India and is part of the teammanaging TIGF.


Qualifications: B.E. (Mech), PGDBA (IIM-Bangalore), CFA

Current Responsibilities: Director - Research India and is part of theteam managing TIGF.

Assignments held upto 10 years or less: He joined Templeton in 1995 asInvestment Analyst with the emerging markets group and is currently aPortfolio Manager.

Rakesh Parekh - Investment Analyst with the Emerging Markets Group,under Dr. Mark Mobius


Qualifications: MBA-Finance from University of Stirling (UK), Associateof Chartered Insurance Institute (UK), Business Administration withHonours from University of Dundee (UK).

Current Responsibilities: Investment Analyst with the Emerging MarketsGroup, under Dr. Mark Mobius

Assignments held upto 10 years or less: He identifies and evaluatesinvestment opportunities for the global funds as well as TIGF, and looksafter Israel and India markets.

Fixed Income / Debt Team

Nilesh Shah - Director and Chief Investment Officer -(Fixed Income)


Qualifications: B.Com., ACA, Grad. CWA

Current Responsibilities: Director and Chief Investment Officer -(FixedIncome). Responsible for investment strategy and asset allocation for allfixed income funds.

Assignments held upto 10 years or less: CIO-TAMIL, Head StructuredProducts, Advisor - ICICI Ltd.

Sameer Kulkarni - Asst. Vice President & Portfolio Manager - FixedIncome


Qualifications: BE (Mech), M.Sc. (Eco), MMS, CFA, FRM

Current Responsibilities: Asst. Vice President & Portfolio Manager -Fixed Income. Responsible for Government Securities Portfolio across allthe funds, manages the Swap and other derivative products exposureacross all the funds, support s the group in managing the Liquidity Riskand Interest Rate Risk of all the portfolios.

Assignments held upto 10 years or less: Head of Money Markets andInvestments in IndusInd Bank. Index Fund Models- Chescor Ltd., SeniorDealer - Mukesh Babu Securities- NSE, Executive Assistant - L&T

Shobhit Mehrotra - Asst. Vice President & Portfolio Manager - FixedIncome


Qualifications: MBA (Clemson Univ., USA)

Current Responsibilities: Asst. Vice President & Portfolio Manager -Fixed Income. Responsible for the Liquid Funds, all the Money Marketand short term instruments portfolio across all funds and directlyresponsible for all Short tenure Income/Bond funds. Also responsible forthe Credit Risk across all the portfolios.

Assignments held upto 10 years or less: Senior Rating Analyst andmember of Executive Rating Committee with ICRA

Rahul Goswami - Asst. Vice President - Fixed Income Total experience: 8 years, Age: 30 years

Qualifications: B.Sc. (Mathematics), M.B.A. (Finance)

Current Responsibilities: Asst. Vice President - Fixed Income.Responsible for some Fixed Income schemes.

Assignments held upto 10 years or less: Fund Management- UTI BankLimited, Mumbai, Senior dealer - SMIFS Securities Ltd., KhandwalaFinance Ltd., Manager - RR Financial Consultants Ltd.

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Initial Issue Expenses

Initial Issue Expenses of scheme launched during the last 1 year: (Rs.in lakhs)

Nature of expenses FINTF FISIP- FISIP FT India Series 1 Series 1 Dynamic

Plan A- LT Plan A- MT PE Ratio Fund of Funds

Brokerage fees & Commission 2.63 17.85 Nil 236.52Marketing & Advertising 103.80 Nil Nil 6.09Printing & Distribution 14.98 0.03 Nil 2.27Banker’s fees 0.38 Nil Nil NilOther expenses 7.95 Nil Nil 0.25

Total expenses 129.74 17.88 Nil 245.13

All initial issue expenses were borne by the AMC.Expenses

Loada FTLF

Maximum sales load imposed on purchase of units (as a % of NAV)# 2.0%/1.5%/1%/0.5%j

Sales Load on issue if units in lieu of dividend (as a % of NAV) 0%Contingent Deferred Sales NACharge (CDSC) (as a % of NAV)Redemption/Repurchase Load (as a % of NAV)# 0%

aLoad on Exchange/SwitchWhen there is an exchange/switch from one scheme where the investor

has paid an entry load (Scheme I) to another scheme with an entry load(Scheme II), the entry load levied by Scheme II will be as follows:

If Entry Load paid for Scheme I is No entry load will be charged greater than the entry load by Scheme IIfor Scheme IIIf Entry Load paid for Scheme I is The differential load will belower than the entry load for Scheme II charged by Scheme IIIf Entry Load paid for Scheme I is An exchange fee of 0.25% will same as the entry load for Scheme II be charged by Scheme II

The Trustee reserves the right to increase / decrease / introduce a Load /Fee at any time in future on a prospective basis. However, such increase /decrease/ introduction would be subject to the limits prescribed under theRegulations.

The investors may please note the exchanges/switches in the tax savingsschemes and investments made under Section 54EA/EB will be subject to theapplicable lock-in-periods.

Load in case of Fund-of-Funds scheme: As a FOF scheme can charge aload, if the underlying schemes too charge a load, there would be a doubleincidence of load for investors at the FOF level and at the underlying schemelevel. Hence, no load (entry/exit) will be charged by the underlying schemeson the investments made by Franklin Templeton Fund of Funds schemes inan underlying scheme.

Trail Fees: In the FOF scheme, the underlying schemes get thesubscription through the vehicle of FOF. Hence, the distributor whomobilizes the investment in Franklin Templeton Fund of Fund schemes isentitled to trail fees, which the underlying scheme would have normally paidto a distributor. Accordingly, the trail fees will be paid out of the underlyingscheme.As the FTLF scheme is a FOF scheme, the distributor who mobilizes theinvestment is entitled to trail commission, which would be paid by theunderlying scheme. Given below is an example explaining the working oftrail commission: If there is an investment of Rs. 1 lac in FTLF-The 20sPlan, the trail will be paid by the respective underlying schemes based onthe value of the respective investments made by FTLF.

FIBCF FIPF TIGF TIIF TIIBA

Rate of Trail Commission (a) 0.50% 0.50% 0.50% 0.75% 0.75%

The 20s Plan allocation ratio 50% 15% 15% 10% 10%

Day 0 50,000 15,000 15,000 10,000 10,000

Value of the Assets

Day 1 50,500 15,150 15,150 10,100 10,100

Day 2 49,490 14,847 14,847 9,898 9,898

Day 3 50,480 15,144 15,144 10,096 10,096

Day 4 53,004 15,901 15,901 10,601 10,601

Day 5 52,474 15,742 15,742 10,495 10,495

Day 6 55,097 16,529 16,529 11,019 11,019

Day 7 54,546 16,364 16,364 10,909 10,909

Average assets for 7 days (b) 52,227 15,668 15,668 10,445 10,445

Trail Commission for 7 days (Rs.) (a*b*7/365) 5.01 1.50 1.50 1.50 1.50

The total trail commission that the distributor will get is Rs. 11.02 for 7days from the respective underlying schemes. However, the trailcommission will not have an impact on the expenses of FTLF scheme.

#Please refer to the details of individual schemes for slab-wise load structure.jThe 20s Plan; The 30s Plan; The 40s Plan; The 50s Plus Plan. All priorinvestments continue to subject to the load structure at the time of originalinvestment as may be applicable.

The Trustee reserves the right to introduce/increase/decrease aLoad/Fee for the items above at any time in future on a prospective basis.However, such increase/decrease/introduction would be subject to thelimits prescribed under the Regulations. The addendum detailing thechanges may be attached to offer documents and abridged offer documents.The addendum may be circulated to all the distributors/brokers so that thesame can be attached to all offer documents and abridged offer documentsalready in stock. The addendum may be sent along with the newsletter sentto the unitholders immediately after the changes. Arrangements may bemade to display the changes/modification in the offer documents in theform of notice in all the investors service centres and distributor/brokeroffices. The introduction of exit load along with details may be stampedwith acknowledgement slip issued to the investors on submission ofapplication form and may also be disclosed in the Account Statementissued after introduction of load.

The AMC/Trustee reserve the right to introduce a load and changethe load structure of a scheme on a prospective basis if it so deems fit inthe interest of and for the smooth and efficient functioning of a scheme.A load structure, introduced by the Trustee/AMC may comprise of anentry load, exit load, spread or level load or any other load as may bepermissible under the regulations. Level load represents a low flat chargeto buy the scheme units with an equal charge upon redemption,whenever it occurs.

Any load that may be levied will be applicable on a prospective basisand will be applied for transactions after the introduction of the load.Load will be charged at rates applicable at the time of the transaction(purchase, redemption) details of which are provided at our office. (Also,see paragraph ‘At What Price’ under the section ‘How to Invest’)

All loads shall be maintained in a separate account and may beutilised towards meeting the selling and distribution expenses. Anysurplus in this account may be credited to the scheme, whenever feltappropriate by the AMC.

Annual Recurring ExpensesThe maximum annual recurring expenses that can be charged shall

be within the limits stated in Regulation 52(6) and subject to a percentagelimit of Weekly/Daily Average Net Assets

In FTLF, the total expenses of the scheme including the managementfees shall not exceed 0.75% of the daily /weekly average net assets. Thetotal expenses of the scheme including the Management and advisory fees(including service tax) shall not exceed the limits prescribed underRegulation 52(6) of SEBI (Mutual Funds) Regulations, 1996, as amendedfrom time to time. These estimates have been made in good faith as per theinformation available to the Investment Manager based on past experienceand are subject to change inter-se and types of the expenses charged shallbe as per the Regulations. These expenses are over and above the expensescharged by the underlying schemes.

Total Scheme Recurring Expenses (as a percentage of average weekly/daily net assets for the period ended September 30, 2003) :

FTLF: NA

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Condensed Financial Information

HISTORICAL PER UNIT STATISTICS (for the financial year 2002-2003 half-year ended September 30, 2003 and as ofNovember 28, 2003) for the schemes launched by the mutual fund during last 3 years (excluding redeemed schemes)

FY - 2002-2003 FTIMIP@ FTIIF TISTIP FTIGF

Date of Inception Sept 28, 2000 Aug 27, 2001 Jan 31, 2002 Dec 7, 2001NAV at the beginning 12.21 (GP) 10.65 (B) 1012.54 (GP), 10.80 (I - GP)of the year 10.66 (MP) 10.83 (N) 1006.24 (WP), 10.47 (I - QP)

10.77 (QP) 1006.24 (MP), 10.43 (L - GP)1006.24 (QP) 10.18 (L - MP)

Dividends (Rs.) / 0.88 (MP), NIL 72 (MP), 79 (QP), 1.30 (I - QP), Bonus Ratio 0.975 (QP), 54.95 : 1000 (Bonus) 65 : 1000 (I - Bonus),

75.5:1000(Bonus) 0.60 (L - MP)NAV at the end 13.2489 (GP) 9.1896 (B) 1096.5752 (GP) 12.6169 (I - GP)of the year (Rs.) 10.6228 (MP) 9.6408 (N) 1089.7646 (WP) 10.8840 (I - QP)

10.6679 (QP) 1015.7615 (MP) 11.8193 (I - Bonus)12.2804 (Bonus) 1008.9605 (QP) 11.1444 (L - GP)

1039.0168 (Bonus) 10.2611 (L - MP)Annualised compounded 11.89% -5.17% (B) 8.26% 19.38% (I)return (%) -2.27% (N) 8.61% (L)Benchmark Index Crisil MIP BSE Sensex, Crisil Liquid I-Sec Li-Bex

Blended Index S&P CNX Nifty Fund IndexBenchmark Returns (%) N.A -5.18% (BSE Sensex) N.A N.A

-5.62% (S&P CNX Nifty)

Assets (Rs. in crores) 67.55 5.91 (B) 467.63 38.18 (I)8.68 (N) 2.36 (L)

NAV at the beginning 13.3422 (GP) ** 9.2839 (B) (GP/DP) 1096.7188 (GP) 12.9145 (I- GP) **of the year (April 1, 2003) 10.6976 (MP) ** 9.6954 (N) (GP/DP) 1089.9073 (WP) 11.1407 (I-QP) **

10.7431 (QP) ** 1015.8945 (MP) 12.0982 (Bonus) **12.3669 (Bonus)** 1009.0926 (QP) 11.1478 (L-GP) **

1038.1148 (Bonus) 10.2642 (L-MP) **NAV as on Sep 30, 2003 14.7530 (GP) 12.9742 (B) 1140.3636 (GP) 14.2347 (I - GP)

11.3343 (MP) 14.2789 (N) 1092.2722 (WP) 11.6739 (I - QP)11.3604 (QP) 1025.1689 (MP) 12.8139 (L - GP)

13.1925(Bonus) 1017.3715 (QP) 11.5168 (L - MP)1051.7376 (Bonus) 10.3028 (I - Bonus)

Annualised 13.81% 13.25% (B) 8.22% 21.49% (I)compounded return (%) 18.55% (N) 8.10% (L)Benchmark Returns (%) N.A 15.09% (BSE Sensex) N.A N.A

14.24% (S&P CNX Nifty)Assets (Rs. in Crores) 252.06 5.04 (B) 1338.54 73.35 (I)

6.20 (N) 2.32 (L)NAV as on Nov 28, 2003 15.1541 (GP) 14.5442 (B) 1146.5541 (GP) 14.3366 (I-GP)

11.5527 (MP) 16.1171 (N) 1090.9035 (WP) 11.7575 (I-QP)11.6693 (QP) 1025.6491 (MP) 11.5918 (L-GP)

13.4703 (Bonus) 1022.8944 (QP) 10.3190 (L-MP)1049.0254 (Bonus) 12.8286 (I-Bonus)

Annualised 14.03% 18.07% (B) 7.78% 20.01% (I)Compounded returns (%) 23.58% (N) 7.76% (L)Benchmark returns (%) N.A 20.42% (BSE Sensex) N.A N.A

19.91% (S&P CNX Nifty)Assets (Rs. in Crores) 674.78 3.19 (B); 5.55 (N) 1198.17 91.38 (I); 3.24 (L)

FY 2002-2003 FIIF FITF FIBF FTIPERF FISIP FTDPEF

Date of Inception Aug 4, 2000 Feb 26, 2001 Aug 4, 2000 Feb 25, 2002 Mar 28, 2003* Oct 31, 2003NAV at the beginning 8.61 8.76 9.88 (GP) 9.72 10.00* N.A.of the year (Rs.) 9.50 (DP)Dividends (Rs.) Nil Nil Nil NIL NIL N.A.NAV at the end 7.4636 7.6362 10.23 (GP) 8.76 10.0293* N.A.of the year (Rs.) 9.82 (DP)Annualised compounded -10.25% -12.10% 0.84% (GP) -11.41% 0.29%* N.A.return (%) -0.67% (DP)Benchmark Index S&P CNX S&P CNX Crisil Balanced - - -

Nifty Nifty Fund Index Benchmark Returns (%) -14.19% -13.12% N.A - - -Assets (Rs. in crores) 46.26 2.55 17.30 31.76 35.68* N.A.NAV at the beginning 7.5088 7.6812 10.47 (GP) ** 8.80 (GP/DP) 10.0023 * N.A.of the year (April 1, 2003) 10.05 (DP) **NAV as on Sep 30, 2003 10.8731 11.1490 14.53 (GP) 12.40 10.3119* N.A.

13.96(DP)Annualised 2.65% 4.29% 12.36% (GP) 14.44% 3.12% * b N.A.compounded return (%) 10.97% (DP)Benchmark Returns (%) -1.34% 3.01% N.A - - -Assets (Rs. in Crores) 34.46 3.87 25.00 19.73 36.57 * N.A.NAV as on Nov 28, 2003 12.3372 12.6630 15.69 (GP) 13.81 10.3996 * 10.1899

13.55 (DP) 10.0316 #bAnnualised 6.44% 8.95% 14.31% (GP) 20.18% 4.00% * b 1.90% bCompounded returns (%) 12.91% (DP) 0.32 #bBenchmark returns (%) 2.64% 7.83% N.A - - -Assets (Rs. in Crores) 33.19 4.43 39.57 19.35 36.62* 158.77

6.02#

FY 2002-2003 TGSF-TP TILP TFIF FTIAAF FINTFDate of Inception Feb 11, 2002 Apr 23, 2001 Feb 11, 2002 Feb 25, 2002 Dec 20, 2002NAV at the beginning 10.0970 (GP) 10.6903(GP) 10.11 (LT-GP) 9.68 (PG) 10.00a

of the year (Rs.) 10.0970 (DP) 10.0000(DP) 10.11 (LT-DP) 9.70 (SG)10.1233 (ST-GP) 9.76 (BG)10.0052 (ST-DP) 9.75 (CG)

9.81 (IH)

Dividends (Rs.) 0.85 (DP) 5.60(DP) 0.725 (LT-DP) Nil Nil0.678 (ST-DP)

NAV at the end 11.3499 (GP) 11.2888 (GP) 10.8419 (LT-GP) 9.5126 (PG) 9.9790of the year (Rs.) 10.4679 (DP) 10.0000 (DP) 10.1042 (LT-DP) 9.7671 (SG)

10.8332 (ST-GP) 9.9756 (BG)10.0028 (ST-DP) 10.1918 (CG)

10.4758 (IH)Annualised 11.84% (GP) 6.46% (GP) 7..24% (LT) -4.47% (PG) -0.21%b

compounded 11.97% (DP) 5.40% (DP) 7..17% (ST) -2.13% (SG) return (%) -0.22% (BG)

1.75% (CG) 4.34% (IH)

Benchmark Index I-Sec Si-bex - Crisil Liquid - -Fund Index

Benchmark Returns (%) N.A - N.A - -Net Assets (Rs. in crores) 11.85 219.85 188.12 (LT) 10.80 5.84

422.82 (ST)NAV at the beginning of 11.3555 (GP) ** 11.2900 (GP) ** 10.8350 ( ST-GP) 9.6757 (PG) ** 9.9402 **the year (April 1, 2003) 10.4732 (DP) ** 10.0000 (DP) ** 10.0044 (ST-DP) 9.8992 (SG) **

10.8495 (LT-GP) ** 10.0836 (BG) **10.4732 (LT-DP) ** 10.2510 (CG) **

10.5228 (IH) **NAV as on Sep 30, 2003 11.9175 (GP) 11.5434 (GP) 11.1576 (LT-GP) 13.6097 (PG) 9.6518

10.6938 (DP) 10.0000 (DP) 10.1446 (LT-DP) 13.0775 (SG)11.1436 (ST-GP) 12.4946 (BG)10.0061 (ST-DP) 12.1733 (CG)

11.4904 (IH)Annualised 13.34% (GP) 6.06% 6.83% (LT) 21.32% (PG) -3.48% bcompounded return (%) 11.42% (DP) 5.28% 6.75% (ST) 18.33% (SG)

14.99% (BG)13.13% (CG)9.10% (IH)

Benchmark Returns (%) N.A - N.A - -Assets (Rs. in Crores) 14.19 369.19 470.71 (ST) 22.26 2.71

138.24 (LT)NAV as on Nov 28, 2003 11.9860 (GP) 11.6175 (GP) 11.2440 (LT-GP) 15.2291 (PG) 9.6275

10.7531 (DP) 10.0000 (DP) 10.2231 (LT-DP) 14.4657 (SG)11.2322 (ST-GP) 13.4410 (BG)10.0086 (ST-DP) 12.8676 (CG)

11.8879 (IH)Annualised 10.62% (GP) 5.94% (GP) 6.66% (LT) 27.06% (PG) -3.73% bCompounded returns (%) 10.68% (DP) 5.12% (DP) 6.60% (ST) 23.40% (SG)

18.34% (BG)15.44% (CG)10.35% (IH)

Benchmark returns (%) N.A - N.A - -Assets (Rs. in Crores) 16.89 451.33 122.51 (LT) 23.99 2.39

566.39 (ST)

aInception/Allotment date NAV. GP-Growth Plan, DP-Dividend Plan, WP - Weekly Dividend Plan, MP-MonthlyDividend Plan, QP-Quarterly Dividend Plan, HP-Half-Yearly Dividend Plan. bAbsolute Returns; SG- Steady Growth, IP-Investment Plan, BG-Balanced Growth, LP-Liquid Plan, CG-Conservative Growth, IH-Inflation Hedge. I - InvestmentPlan, L - Liquid Plan; B - BSE Sensex Plan, N - NSE Nifty Plan. Dividends declared from June 1999 to March 2002 aretax exempt for investors. ST-Short Term, LT - Long Term, TP - Treasury Plan. TFIF was launched on January 21, 2002.TGSF (TP) was launched on February 11, 2002. FINTF was launched on December 20, 2002. * FISIP (1A LT-GR-25.4.2005); # Plan A medium term growth (19.11.2004); ** NAV as of April 3, 2003. Returns for schemes/plans with dividenddistribution are computer assuming re-investment of all payouts at ex-dividend NAV. The NAV as of September 30,2003 for FTIMIP@, FTIGF, TGSF-TP, TILP, TFIF (LT), FINTF and FISIP are Non-business day NAVs. FTDPEF Fund ofFunds was launched on October 31, 2003, hence data for the previous year and half year is not available. TempletonIndia Growth Fund (TIGF) - BSE Sensex/MSCI India Index, Franklin India Growth Fund (FIGF) - BSE 100, FranklinIndia Index Fund (FIIF) - S&P CNX Nifty, Franklin India Index Tax Fund (FITF) - S&P CNX Nifty, Franklin IndiaBluechip Fund - BSE Sensex, Franklin FMCG Fund - ET-Brandex, Franklin Infotech Fund - BSE-IT Index, FranklinPharma Fund - ET-Lifex, FT India Index Fund - BSE Sensex/ NSE Nifty, Franklin Internet Opportunities Fund - ET-Mindex, Franklin India Prima Fund - S&P CNX 500, Franklin India Prima Plus - S&P CNX 500, FT India PE RatioFund - Nil, FT India Asset Allocation Fund - No, Templeton India Money Market Account - Crisil Liquid Fund Index,Templeton India Income Builder Account - Crisil Composite Bond Fund Index, Templeton India Treasury ManagementAccount - Crisil Liquid Fund Index, Templeton India Children’s Asset Plan - Nil, Templeton India Short-Term IncomePlan - Crisil Short-Term Bond Fund Index, FT India Monthly Income Plan - Crisil MIP Blended Index, Templeton IndiaIncome Fund (TIIF) - Crisil Composite Bond Fund Index, Templeton Monthly Income Plan (TMIP)@ - Crisil MIPBlended Index, Templeton India Government Securities Fund (TGSF) - I-Sec Composite Index/I-Sec-Si-BEX (TP Plan),Templeton India Liquid Fund (TILF) - Crisil Liquid Fund Index, Templeton Floating Rate Income Fund (TFIF) - CrisilLiquid Fund Index, FT India Gilt Fund - I-Sec Li Bex, Franklin India Balanced Fund (FIBF) - Crisil Balanced FundIndex, FT India Balanced Fund - Crisil Balanced Fund Index, Templeton India Pension Plan - Franklin India Taxshield- S&P CNX 500, FT India Life Stage Fund of Funds - Nil.

Who Can Buy

Units of the schemes can be purchased by :

1. Adult individuals, either singly or jointly (not exceeding three),resident in India

2. Parents/Guardian on behalf of minors 3. Sole proprietorship, HUFs, Partnership Firms4. Companies, Domestic and Public Sector Undertakings registered in

India, Societies, Association of Persons, Body of Individuals, Clubs etc.5. Charitable or Religious Trusts* authorized to invest in units of

Mutual Funds6. Non-Resident Indians, Persons of Indian Origin, Foreign

Institutional Investors, Banks, Financial Institutions and InvestmentInstitutions

8. Trustee, AMC or Sponsor or their associates may subscribe to theUnits of the mutual fund schemes;

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9. Wakf Boards or endowments and Registered Societies (includingregistered co-operative societies) and private trusts authorized toinvest in units of mutual funds

10. Army/Air Force/Navy/Para-military funds and other eligibleinstitutions

11. Scientific and/or industrial research organizations 12. Other Associations, Institutions, Bodies etc. authorized to invest in

the units of mutual funds.13. Such other individuals/institutions/body corporate etc., as may be

decided by the AMC from time to time, so long as whereverapplicable they are in conformity with SEBI Regulations.* Templeton Mutual Fund is notified under Sec 10 [23 D] of the Income Tax Act

and units of the schemes are an approved security under Sec 11[5] of the Income TaxAct read with Rule 17C of the Income Tax Rules, 1962. (Please refer the OfferDocuments for the approved schemes by the charity commissioner of Maharashtra).

From WhomThe units are being offered for subscription either through

agents/brokers or directly through Branches/ District RepresentativeCentres of Franklin Templeton.

At What PriceThe units are available continuously for sale on all working days at

NAV related prices excepting during the period when there is a bookclosure. While determining the price of units, the fund shall ensure thatthe repurchase price is not lower than 93% of the Net Asset Value (NAV)and the sale price is not higher than 107% of the NAV. Provided further,that the difference between the repurchase price and the sale price of theunits shall not exceed 7% calculated on the sale price. The units would beoffered for sale at Public Offering Price (POP) applicable on the date whenthe application form or additional purchase request is received at anyFranklin Templeton branch, provided these are received before 3.00 p.m.Applications/ additional purchase request received after 3.00 p.m. will beprocessed at the next working day’s POP.

The Public Offering Price is calculated as given below :POP = NAV x (1 + Sales charge)To illustrate :Amount of investment = Rs.10,000NAV = Rs.15.00Sales charge = Say 2%POP = 15.00 x (1+0.02)

= Rs.15.30The number of units allotted = Rs.10,000/15.30 = 653.595

The above are only illustrations to explain the procedure for allotment.It may be noted that since all allotments are subject to realization of

the payment instruments, redemptions/ transfers will be processed at theNAV of the date of receipt of the request for redemption/transfer aftersuch realization.

Subscriptions can be accepted on non-business days (especiallySaturdays). These subscriptions may be permitted provided the investorhas an account in the specified banks where the schemes are able toutilize/transfer the funds on the same day.

How to Buy Completed Applications or Additional Purchase Requests along with

payment can be sent to any Franklin Templeton Branch or DistrictRepresentative Centre. Please note that the payment instrument shouldbe drawn in favour of the FULL scheme name for applications tenderedat Franklin Templeton Investor Service Centres.

Minimum AmountMinimum Investment Additional Purchases Minimum Redemption

FTLF Rs.5000 Rs.1000 Rs.1000Please note that the minimum redemption amount shall be as per the

details given above except when an account is being closed and underSystematic Withdrawal Plan.

GP - Growth Plan, D - Dividend Plan,

In case of investments of Rs.50,000/- and above, please furnishincome tax P.A.N./G.I.R. number and I.T. circle office address.

Bank Account Numbers

It is mandatory for the applicants to give their bank account detailssuch as type of account, account number, name of bank and branch.This is required for redemption payments. In case this information is notprovided, the fund will not be responsible for loss due to fraudulentencashment of any cheque or delay/loss in transit of cheques.

Direct CreditThe fund intends to make redemptions/dividend payments through

Direct Credit under which the proceeds will be directly credited to theinvestor’s bank account. Investors are requested to provide the necessarydetails and authorisation in the application form to avail this facility.Please note that the fund reserves the right to issue a DD/Paymentinstrument instead of making a direct credit.

Redemption ProcedureExcepting during the period when there is a book closure, units of

eligible unitholders will be redeemed on all working days at theapplicable redemption price after receipt of redemption request at anyFranklin Templeton branch from the investor or the investor’sagent/broker/financial advisor. The redemption request may be for aspecified amount or number of units. The number of units redeemed shallbe the amount redeemed divided by that day’s redemption price. Allredemption requests reaching any Franklin Templeton branch before 3.00p.m. on a working day will be processed at that day’s price and thosereaching after 3.00 p.m. will be processed at the next working day’s priceexcepting in the following cases. The Applicable NAV for redemptionaccepted on a day which is followed by a non-business day(s)/holiday(s),will be the NAV (ex-dividend NAV as may be applicable) of the day priorto the immediately following business day. The scheme may also allowredemptions on non-business days if the unitholder is in urgent need offunds. These subscriptions/redemptions be permitted provided theinvestor has an account in the specified banks where the schemes are ableto utilize/transfer the funds on the same day. The NAV applicable for suchredemptions will be that of the day immediately preceding the paymentof redemption proceeds. The number of units so redeemed shall besubtracted from the unitholder’s account and a statement to this effectissued to the unitholder.

To calculate the redemption price, the following formula will be used:Redemption Price = Applicable NAV x (1 - Exit Load)To illustrate : NAV = Say Rs.14Exit Load = Say 1%Redemption Price = 14 x (1 - 0.01) = Rs.13.86

Redemption/dividend payments will be made to the first applicant forindividuals and Karta in the case of a HUF.

Please note :- The minimum amount of redemption shall be Rs.1000 except when an

account is being closed and under Systematic Withdrawal Plan.- A Business day has been defined as: A day other than:

(i)Saturday and Sunday, (ii) a day on which the banks in Mumbaiand/or RBI are closed for business / clearing, (iii) a day which is apublic and/or bank holiday at a collection centre where theapplication is received, (iv) a day on which sale and repurchase ofunits is suspended by the AMC, (v) a day on which normal businesscould not be transacted due to storms, floods, bandhs, strikes orsuch other events as the AMC may specify from time to time.

- For applications submitted at District Representatives/CollectionCentre, the applicable NAV will be based on the date and time ofreceipt at Chennai.

- The Schemes may also allow redemption payments on non-businessdays if the Unitholder is in urgent need of funds. Thesesubscriptions/redemptions may be permitted provided the investor hasan account in the specified banks where the schemes are able toutilize/transfer the funds on the same day. The NAV applicable for suchredemptions will be that of the day immediately preceding the paymentof redemption proceeds.The AMC reserves the right to declare any day as a Business Day or

otherwise at any or all collection centres.The time limits for redemptions will be reckoned from the time the

correct and complete redemption requests are received at customer servicecentre - Chennai office or the branch offices of the AMC specified and the timelimits do not consider delays that maybe caused by communication/systembreakdown, strikes/riots, breakdown in banking system etc.

In the event of failure to despatch the redemption proceeds, withinthe period specified in SEBI (Mutual Funds) Regulations (which atpresent is 10 working days), the AMC will be liable to pay interest to theunitholders at rates prescribed by SEBI for the period of delay (currently,the rate is 15% per annum).

The Trustee/AMC may subject to such conditions as may be prescribedin this behalf, from time to time introduce new features/facilities and plansin the interest of investors in conformity with applicable regulations/rules.

DividendsDividends will be paid out of distributable profits within 30 days of

the declaration of the dividend (record date) in favour of the bankaccount number of the first/sole unitholder as provided in the applicationform for Dividend Plan - payout option or through direct credit facility(which is available with selected banks) except in the case of dividendreinvestment plan under which the dividend will be compulsorilyreinvested at the first ex-dividend NAV.

The record date for the dividends will normally be last workingFriday of the month/quarter/half year/annual as may be applicable;further if the same is a non-business day then the previous working daywill be considered as a record date. All unitholders in the respective plans,whose names appear in the Register of Unitholders on the record date,will be eligible to receive the dividend. However, the AMC reserves theright to vary this day or the period.

The Trustee may declare dividends in the schemes from time to timethough there is no assurance or guarantee to the unit holders as to therate or frequency of dividend distribution. The Trustees may declaredividends out of distributable surplus at any periodicity as it deems fit.

Dividend Reinvestment Plan/OptionAn unitholder opting for the Dividend Plan/Option may choose to

reinvest the dividend at the first ex-dividend NAV prevailing after thedividend is declared.

On reinvestment of dividends, the number of units to the credit ofunitholder will increase to the extent of the dividend reinvested dividedby the NAV applicable on the day of reinvestment, as explained above.

Revocation of the option for Dividend Reinvestment must be signedby the investor(s) and reach the fund’s office at Chennai at least sevenworking days prior to the record date fixed for dividend.

Default Option Scheme Default OptionFTLF The 20s Plan, Dividend Reinvestment Option

The Trustee/AMC reserves the right to alter/vary the defaultplan/option, after giving notice. The Trustee/AMC reserves the right toalter/vary the terms and conditions of these facilities and privileges.

Systematic Investment PlanSystematic Investment Plan (SIP) facility is available in FT India Life

Stage Fund of Funds• Templeton Mutual Fund will accept at least 12 cheques of Rs. 2000

or more each OR at least 6 cheques of Rs. 4,000 or more each for anySIP investor.

• All the SIP cheques (except the first one) must be uniformly datedeither the 1st, 7th, 10th or 20th of a month. Investors can invest at aMonthly or Quarterly interval by providing post-dated cheques. Allcheques should be for the same amount.

• In schemes that have an entry load, the same will currently be waivedfor SIP investors. Such investments will however be charged an exitload equivalent to the waived entry load, if redeemed with in one yearof the allotment date. The AMC reserves to right to reintroduce theentry load through issue of a notice at its investor service centers /distributor offices.

• The AMC reserves the right to discontinue the SIP in case of chequereturn, and debit the cheque return charges to the investors’ account.

ExchangesInvestors may exchange their investments from one scheme to

another at the applicable public offering price provided that:

- there is no book closure in either of the schemes/plans/ options.

- the investment sought to be exchanged is not under any lock-in.

In the event of a book closure in any of the schemes, the exchangewill be effected on the working day immediately following the end of thebook closure period.

For shifts in/switches in and shift out /switches out, the applicableNAV will be the ex-dividend NAV at the close of business day on whichthe application for such shift/switch is accepted

Nomination FacilityThe AMC will provide an option to the Unitholder to nominate a person

in or to whom all the Units held by the Unitholder shall vest in the event ofhis death. Where the Units are held by more than one person jointly, thejoint Unitholders may together nominate a person in whom all the rights inthe Units shall vest in the event of death of all the joint Unitholders.

The Nomination facility extended under the Scheme is in accordancewith SEBI Circular MFD/CIR/07/213/2002 dated 2 July 2002 and subjectto other applicable laws. The single / joint / surviving unitholders cansubsequently write to the ISC requesting for a Nomination Form in orderto nominate any person to receive the Units upon his / her / their death,subject to completion of necessary formalities. Further, if either theMutual Fund or the AMC incur any loss whatsoever arising out of anylitigation or harm that it may suffer in relation to the nomination, theywill be entitled to be indemnified absolutely from the deceasedUnitholders’ estate.

TransferAs the fund stands ready to redeem the units on any working day, the

transfer facility is found redundant. However, if a transferee becomes aholder of scheme’s units in an official capacity by operation of law or is ascheduled bank/financial institution upon enforcement of a pledge, thenthe trustee shall subject to production of necessary evidence, proceed toeffect the transfer, if the intended transferee is otherwise eligible to holdthe scheme’s units and the pledge/charge is otherwise in line with termsof the scheme. In case any pledge/charge over the scheme’s units isregistered with the Trustee, transfer will be effected in accordance withthe procedure outlined in the detailed Offer Document. The transfer willbe effected in accordance with SEBI (Mutual Funds) Regulations, 1996.

Unclaimed Dividend/Redemption The unclaimed redemption and dividend amount may be deployed

by the mutual fund in call money market or money market instrumentsonly and the investors who claim these amounts during a period of threeyears from the due date shall be paid at the prevailing Net Asset Value.After a period of three years, this amount may be transferred to a poolaccount and the investor can claim the amount at NAV prevailing at theend of the third year. The income earned on such funds may be used forthe purpose of investor education. The AMC would make a continuouseffort to remind the investors through letters to take their unclaimedamounts. The investment management fees charged by the AMC formanaging unclaimed amounts will not exceed 50 basis points.

Winding upAt present, as per SEBI (Mutual Funds) Regulations, 1996, the

scheme shall be wound up under the following circumstances:- a) On the happening of any event which, in the opinion of the Trustee

requires the scheme to be wound upb) If 75% of the unitholders under a scheme pass a resolution that the

scheme be wound up; orc) If SEBI so directs in the interest of the unitholders

In the event that the scheme is to be wound up as given above, theTrustee shall give notice disclosing the circumstances leading to thewinding up of the scheme :-

- To SEBI; and- In two daily newspapers having circulation all over India, a vernacular

newspaper circulating at the place where the mutual fund is registered.

Determination of Net Asset ValueNet Asset Value is the actual value of the scheme’s unit on any

business day and is computed as shown below :Value of Investments + Receivables + Accrued Income + Other Current Assets - Liabilities - Accrued Expenses

NAV = __________________________________________________

Number of the scheme units outstandingSeparate NAVs will be declared daily for all schemes, for all

plans/options. The Net Asset Values shall be published in two newspapers(along with sales & repurchase price).

Email ServicesSubject to the consent of the Unitholder, the mutual fund will

endeavour to send the account statement, annual report, half yearlyportfolio statement to the unitholder by e-mail. Alternately, the AMC mayalso send an e-mail to the investor giving the link to the website of theMutual Fund for the aforesaid statements.

Valuation of AssetsValuation of assets will be in accordance with the provisions of the

SEBI regulations / guidelines / directives as amended from time to time.The valuation of the Scheme(s)’ assets and calculations of the Scheme(s)’NAV shall be subject to audit on an annual basis and such regulations asmay be prescribed by SEBI from time to time.

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Accounting PolicyThe fund shall follow the accounting policy in accordance with

Regulation 50 read with Ninth Schedule to SEBI Regulations and aresubject to change as per any changes in the SEBI Regulations.

Investor InformationThe Mutual Fund shall presume that the identity of the investor and

the information disclosed by him is true and correct. It will also bepresumed that the Funds invested by the investor in the schemes of theMutual Fund come from legitimate sources/ manner and the investor isduly entitled to invest the said funds.

The Mutual Fund is not, in any way, responsible for correctness of theinformation provided by the investor to the Mutual Fund, as to hisidentity or any other information, and also his sources of income. TheMutual Fund is not under any obligation to carry out anyinvestigation/inquiry as to the identity of the investor and the sources ofthe moneys invested by the investor into the schemes of the Mutual Fund.The Fund shall not undertake any such investigation/ inquiry since itdoes not possess adequate resources to undertake such activity.

Where the funds invested are for the benefit of a person (beneficiary)other than the person in whose name the units are issued and registered,the Mutual Fund shall assume that the investor holding the Units in hisname is legally authorised/ entitled to invest the said funds in the Unitsof the Mutual Fund, on behalf of the beneficiaries.

Associate TransactionsTempleton Mutual Fund has utilised the services of the associates as

given below: (Rs. in millions)

Associate Company For the year ended For theperiod

31-03-2001 31-03-2002 31-3-2003 1-04-200330-11-2003

Spur Cable and Datacom TIGF 1.80 0.91 0.82 0.48The Investment Trust Of India Ltd. (ITI)* 029 0.04 - -ITI Capital Markets* 23.05 7.18 2.36 2.43ITI Financial Services - 0.16 0.20 -

*An associate of Pioneer ITI AMC Ltd. prior to August 30, 2002, ITI have beenreplaced by ITI Financial Services since August 30, 2002.

Details of Investment made in Companies which have invested more than 5%of the NAV of the schemes managed by the AMC as on November 28, 2003Investor Company, Scheme/s invested in, Franklin Templeton’sscheme/s which have invested in the Investor Company, Total -Aggregate investment made during the period 01-April- 2003 to 28-Nov-2003 @ at cost (Rs. in Crores), Outstanding# as at 28-Nov-2003 atMarket /Fair Value (Rs. in Crores): Asian Paints (India) Ltd., TILF, FIPP, FFF, FIT open, FTIMIP@, FTIAAF -Equity, 5.54, 15.07; Bharti Televentures Ltd., STIP, TITMA, TIIBA -InstitutionalPlan, FIBCF, FIPP, TIPP, FTIIF - BSE Sensex, FIOF, TISTIP, TIIBA - InstitutionalPlan, TILP,TFIF - S &TFIF - L, 141.77, 137.96; Britannia Industries Ltd., STIP,TITMA, TIIBA -Institutional Plan, FIT 95, FIT 96,FFF, FTIBF, FTIMIP@, FTIIF-Nse Nifty, FTIPERF, FIBF, FIIF, FITF & TMIP@- E, 17.52, 17.28; GrasimIndustries Ltd., TFIF - S, TFIF - L & TGSF, FTIAAF - Equity, FTIBF, FIBCFFTMIP@, FTIPERF, FIOF, FTMIP@, FTIIF- Nse Nifty, FIPP, FTIIF- Bse Sensex,TISTIP,TIPP, FIT95,FIT96,FIT98,FIT99, FIT Open, FIBF, FIIF, FITF, TMIP-E,52.46, 197.29; HCL Technologies Ltd., TFIF - S, TISTIP, TITMA, FIBCF, FIPP,FIT 95, FIT 96, TIPP, FIT98, FIF, FIT99, FIT open, FTIBF, FIOF, FTMIP@,FTIIF- Nse Nifty, FTIIF- Bse Sensex, FTIPERF, FTIAAF - Equity, TIGF,FIGFFIIF,FITF, 85.17, 143.55; HDFC Ltd., TILF, FTIBF, TIIBA, TIIBA - InstitutionalPlan,FTMIP@, FTIPERF, FIPP, FTIIF- Nse Nifty, FTIIF- Bse Sensex, TISTIP,TITMA, FIT Open, FIVF, FIGF, FIIF, FITF, TIIF, TILF, TILP, 351.26, 185.78;HDFC Bank Ltd., TILF, TITMA, TISTIP, FIPP, TIPP, FIT open, FIOF, FTIAAF-Equity, FTIIF- Nse Nifty, FTIIF- Bse Sensex, FTMIP@, FTIPERF, FTIAAF -Equity, FIGF, FIIF, FITF & TMIP@-E, 29.85, 53.80; Hero Honda Motors Ltd.,TMIP@, TGSF, TILF, TFIF - S TITMA,TIIBA -Institutional Plan, FTIIF- NseNifty, FTIIF- Bse Sensex, FTIPERF, TIGF FIIF, FITF, 26.68, 41.99; HindalcoIndustries Ltd., TFIF- S, TIIBA-Institutional Plan, FIBCF,FIPP, FIT 95, FIT 96,FIT 97, FIT98, FIT99, FIT open, ,TIPP, FTIBF, FTMIP@, FTIIF- Nse Nifty,FTIAAF - Equity, FTIIF- Bse Sensex, FTIPERF, TISTIP, TIIBA, TIIBA -Institutional Plan ,FIBF,FIIF,FITF,TMIP@-Equity, 134.47, 323.19; HindustanLever Ltd., TILF, TFIF-S , TITMA, TIIBA -Institutional Plan, TISTIP, FIBCF,FIPP, TIPP, FIVF, FFF, FIT open, FTIBF, FTIIF- Nse Nifty, FTIAAF - Equity,FTIIF- Bse Sensex, FTIPERF , TISTIP, FIGF, FIIF, FITF, 55.25, 29.83; ICI IndiaLtd., TITMA, TIGF, 3.36, 3.87; ICICI Bank Ltd., TILF, TITMA, TISTIP, FIBCF,FIPP, TIPP, FIT Open, FIOF, FTIIF - Nse Nifty, FTIIF - Bse Sensex, FIT 97,FIT99, FIVF, FTIAAF -Equity, FTIPERF, TIIBA - Institutional Plan, TIMMA,

FISIP, TIGF, FIGF, FIIF, FITF, TFIF-S, TFIF-L, TILF, 423.74, 572.68; IDBI,TGSF, TILF, TFIF- S, TISTIP, TITMA, TIIBA -Institutional Plan, TITMA,TISTIP, TIPP, FTIAAF -Debt, FTIBF, TIIBA , TIIBA - Institutional Plan,FTMIP@, TIGF, FIGF, FIIF, FITF,TFIF-S, TFIF-L, TILF, TITMA, TIIF, TFIF-S,TFIF-L, TILF, TMIP@ - E, 585.08, 474.50; IDFC, TGSF, TFIF- S, TIIBA -Institutional Plan, TITMA, STIP , FISIP, TIIF, TIIBA, 14.87, 68.00; IL&FS Ltd.,FIIF, TILF, TFIF - S, TISTIP, TITMA, 228.34, 70.40; Indian Rayon & IndustriesLtd., TITMA, TFIF - S, TIGIP, TISTIP, TIPP, TIIBA, FIGF, FIPF, FIPP, FIT Open,FTIBF, 31.45, 56.19; Indo Gulf Fertilizers Ltd., TILF, TFIF- S, TIIBA -Institutional Plan, FIPF, FIPP, FIT 95, FIT 96, FIT 97, FIT open, TIPP, FIT 98FTMIP@,FIBF, FIGF, 10.79, 0.00; ITC Ltd., TILF,TFIF - S , TFIF-L,TITMA,TISTIP,TIIF, TIIBA -Institutional Plan, FIBCF, FIPP, FIVF, FIT 95, FIT96, FIT 97, TIPP, FIT 98, FFF, FIT 99, FIT Open, FTIIF-NSE Nifty, FTIIF-BSESensex, FTIPERF, FTIBF , FTMIP@, FTIAAF - Equity, FIBF, FIGF FIIF, FITF,TMIP@-E, 70.21, 133.32; Larsen & Toubro Ltd., TILF, TGSF, FIBCF, FIPP, FIT95, FIT Open, FTMIP@, TIPP, FTIBF, FTIIF-NSE Nifty, FTIIF-BSE Sensex,FTIPERF, FTIAAF - Equity , FIGF,FIIF,FITF,TILF & TMIP@- E, 119.51, 102.59;Mahindra & Mahindra Ltd., TFIF - S, FIIF,FITF, FIPF, FIOF, FTIIF-NSE Nifty,FTIPERF, TISTIP, 46.17, 7.48; Maruti Udyog Ltd., TITMA, TISTIP, TIIBA -Institutional Plan, & TILF, FIBCF, FIPP, FIPF, TISTIP, FIT 95, FIT 96, FIT 97,FIT98, FIT99, FIT open, TIPP, FIVF, FTIBF, FTMIP@, FTIAAF - Equity, FIBF,FIGF,TMIP@ - E, 60.86, 67.00; Motor Industries Co. Ltd., TILF, FIPP, FIPF, FIT95, FIT Open , FTIBF, FTMIP@, TIPP, TIGF, FIGF, FIBF, 44.36, 95.83; NestleIndia Ltd., TITMA, FIPP, FIT Open, TIPP, FTIIF-Nse Nifty, FTIIF - Bse Sensex,FTIPERF, FIIF, FITF, 6.22, 6.02; Tata Chemicals Ltd., TGSF,TILF, TFIF-S,TIIBA-Institutional Plan, FTIIF - NSE Nifty, FTIPERF ,FIIF, FITF, 0.02, 10.34;Tata Industries Ltd., TILF, TISTIP, TITMA, 50.00, 25.00; Tata Power Co. Ltd.,TILF, FIBCF, FIPP, FTIIF-NSE Nifty, FTIPERF, FIGF, FIIF, FITF, 24.34, 70.66;Tata Sons, TILF, TITMA, 28.50, 28.50, Tata Tea Ltd., TILF, FIPF, FIT 95, FIT 97,FIT98, FIVF, FFF, FTIBF , FTIAAF - Equity, FIBF, FTIIF-NSE Nifty, FTIPERF,FIIF, FITF, 13.92, 2.56; Tata Motors Ltd., TILF, FIBCF, FIT 96, FIT open, FTIIF-Nse Nifty, FTIIF - Bse Sensex, FTIPERF, FTIAAF - Equity, FIIF, FITF, 0.73,19.47; TELCO Const Equipment Co Ltd, TILF, TFIF - S, 20.00, 20.00; TISCOLtd., TILF, TITMA, FIIF, FITF, 24.79, 28.95; Tata Telecom, TILF, FIPF, 0.61,0.00; UTI BANK LTD., TILF, TILP, 24.84, 52.20; Videsh Sanchar Nigam Ltd.,TISTIP, TITMA, TIIBA, TFIF - S, FTIIF - NSE Nifty, FTIPERF, FIIF, FITF, 0.17,0.40; WIPRO LTD., TILF, TITMA, TISTIP, TFIF - S, FIF, FIT99, FIOF, FTIIF-NSE Nifty, FTIIF - Bse Sensex, FTIPERF, FIIF, FITF, 26.89, 41.75.@This is the aggregate of all investments made during the eight months28-Nov-2003 in accordance with Regulation 25(11) withoutconsidering sale/redemptions and interscheme transactions, whichmight have occurred. # Outstanding value of investments indicate thecurrent value of all the investments in the company. These investmentshave been made because of their value at these prices incase of equityshares and for high credit quality for com[arable yeild for theinvestment in fixed income instruments, the investments made are inaccordance with the investment objectives of the scheme.

Tax Benefits(As per laws currently in force)

THE FOLLOWING INFORMATION IS PROVIDED FOR GENERAL INFORMATION ONLY.HOWEVER, IN VIEW OF THE INDIVIDUAL NATURE OF THE IMPLICATIONS, EACHINVESTOR IS ADVISED TO CONSULT WITH HIS OR HER OWN TAX ADVISORS/AUTHORISED DEALERS WITH RESPECT TO THE SPECIFIC TAX AND OTHERIMPLICATIONS ARISING OUT OF HIS OR HER PARTICIPATION IN THE SCHEMES.

TAX IMPLICATIONS TO RESIDENT UNITHOLDERS

The following summary outlines the tax implications to residentunitholders of the Schemes and is based on relevant provisions under theIncome-tax Act, 1961 (‘the Act’) and Wealth-tax Act, 1957 (collectivelycalled ‘the relevant provisions’), subsequent to the amendments enactedby the Finance Act 2003.

Tax on income in respect of units and Tax on capital gainsAs per the provisions of Section 10(35) of the Act, income received inrespect of units of a mutual fund specified under Section 10(23D) of theAct is exempt from income tax in the hands of the recipient unitholders.

As per Section 2(42A) of the Act, units of the Scheme held as a capitalasset, for a period of more than 12 months immediately preceding thedate of transfer, will be treated as a long-term capital asset for thecomputation of capital gains; in all other cases, it would be treated as ashort-term capital asset.

Also, sub-section 7 of section 94 of the Act provides that losses arisingfrom the sale/transfer of units (including redemption) purchased up to 3months prior to the record date and sold within 3 months after such date,will be disallowed to the extent of income distribution (excludingredemptions) on such units claimed as tax exempt by the unitholder.

Long-term and short-term capital gains arising to residentunitholders from the transfer of the units of the Scheme will be taxable atthe following rates:

15

Nature of income Tax rate*Short-term capital gains Rate applicable as per the prescribed slabs in

the case of resident individuals and at 35percent in the case of resident corporates

Long-term capital gains 20 percent with the cost inflation indexbenefit or 10 percent without the costinflation index benefit, whichever is beneficial

* plus surcharge as may be applicable

Tax deducted at sourceAs per the provisions of Section 194K of the Act, no tax should be

withheld or deducted at source, where any income is credited or paid bya mutual fund.

Further, no tax is required to be deducted at source from capital gainsarising at the time of repurchase or redemption of the units.Wealth Tax Benefits

Units held under the Schemes are not treated as assets under Section2(ea) of the Wealth Tax Act, 1957 and are therefore not liable to wealth tax. Religious and charitable trusts

Investments in the units of the Fund by Religious and CharitableTrusts is an eligible investment under Section 11(5) of the Act, read withRule 17C of the Income-tax Rules, 1962.

Tax implications on mutual fundTempleton Mutual Fund is registered with SEBI and as such, the

entire income of the Fund is exempt from income-tax under Section10(23D) of the Act. In view of the provisions of Section 196(iv) of theAct, no income tax is deductible at source on the income earned by themutual fund. Distribution Tax

As per Section 115R of the Act, any amount of income distributed bya Mutual Fund to its unit holders shall be chargeable to tax and suchMutual Fund shall be liable to pay income-tax at the rate of 12.8125percent (including a surcharge of 2.5 percent).

However, these provisions will not be applicable to any incomedistributed by an open-ended equity oriented fund (where more than 50percent of total proceeds of the mutual fund are invested in equity sharesof domestic companies as defined in Section 115T of the Act) for a periodof one year commencing from April 1, 2003.TAX IMPLICATIONS TO NON-RESIDENT UNITHOLDERS

The following summary outlines the key tax implications applicableto Non-resident Indian (‘NRI’)/ Persons of Indian Origin (‘PIO’) / ForeignInstitutional Investor (‘FII’) based on the relevant provisions under theIncome-tax Act, 1961 (‘Act’) and Wealth-tax Act, 1957 (collectively called‘the relevant provisions’), subsequent to the amendments enacted by theFinance Act 2003.Tax on income in respect of units and Tax on capital gains(same as mentioned in the section of Resident unitholders) NRIs/PIOs

Long-term and short-term capital gains arising to NRIs/PIOs from thetransfer of units of the Scheme, will be taxable at the following rates:

Nature of income Tax rate*Short-term capital gains Rate applicable as per the prescribed slabs in the

case of NRIs/PIOs Long-term capital gains 20 percent with the cost inflation index benefit or

10 percent without the cost inflation indexbenefit, whichever is beneficial

* plus surcharge as may be applicable FIIs

As per the provisions of Section 115AD of the Act, long-term capitalgains on sale of units would be taxed at 10(plus surcharge as applicable)percent and short-term capital gains would be taxed at 30(plus surchargeas applicable) percent. The said rates would be subject to applicable taxtreaty relief. The gains, in either case, would be calculated withoutindexation of cost of acquisition.Tax deducted at sourceIncome in respect of units

As per the provison to Section 196A(1) of the Act, no tax shall bededucted at source from any income credited or paid to non-residentunitholders in respect of units of a mutual fund specified under Section10(23D) of the Act.Capital gains

As per the provisions of Section 195 of the Act, in respect of short-term capital gains, tax is required to be deducted at source at the rate of30(plus surcharge as applicable) percent if the payee is a NRI/PIO. In

respect of long-term capital gains, tax is required to be deducted underSection 195 of the Act at the rate of 20(plus surcharge as applicable)percent in case of NRIs/PIOs.

No tax would be deductible at source from the capital gains (whetherlong-term or short-term) arising to an FII on repurchase/redemption ofunits in view of the provisions of Section 196D(2) of the Act.

The above rates would be subject to applicable tax treaty relief.Wealth tax benefits

Units are not to be treated as assets as defined under Section 2(ea) ofthe Wealth-Tax Act, 1957 and hence will not be liable to wealth-tax.

Investor Rights and Services

- The unitholders of the schemes have a proportionate right in thebeneficial ownership of the assets of and the dividend declared by theMutual Fund for the schemes

- The unitholders are entitled to receive the dividend warrant within 30days of the date of declaration of the dividend, if any

- The unitholders are entitled to receive interest at rates prescribed by SEBI(currently @15% per annum) from the AMC for delay in dispatch ofredemption proceeds beyond the limit specified under SEBI regulations.

- The half yearly portfolio in the prescribed format will be disclosedeither by publishing it in the newspapers &/or by sending to theunitholders within one month from the end of each half-year and itshall also be displayed on the web site.

- Suspension or restriction of repurchase / redemption facility under anyschemes of the mutual fund shall be made applicable only after theapproval from the Board of Directors of the Asset ManagementCompany and the Trustees. The approval from the AMC Board and theTrustees giving details of circumstances and justification for theproposed action shall also be informed to SEBI in advance.

- A change in fundamental attribute/controlling interest of the AMC canbe made after following the procedure as outlined in the paragraph‘Fundamental Attributes’.

- The appointment of the Investment Manager for this schemes can beterminated by a resolution passed by 75% of the unitholders of thisschemes in the manner prescribed by SEBI. Any change in thecontrolling interest of the AMC shall be only with the prior approval ofSEBI and the Trustee. Approval of unitholders will not be necessary asexplained in clause 6a below: (i) the unitholders are informed aboutthe proposed change by sending individual communication and anadvertisement is given in one national English newspaper and oneMarathi daily newspaper and (ii) the unitholders are given an option toexit at the prevailing Net Asset Value without any exit load

- Inspection of important documents at the office of the InvestmentManager such as Copy of Registration Certificate from SEBI, Copy ofthe Trust Deed Copy of Investment Management Agreement, Copy ofMemorandum & Articles of Association of Trustee, Copy ofMemorandum & Articles of Association of the Investment Manager,Copy of the Custodian Agreement, Consent of Registrar and TransferAgents to act in the said capacity, Consent of Auditors, Legal Advisorsto act in the said capacity, A copy of complete Offer Document, SEBI(Mutual Funds) Regulations, 1996, Equity Linked Savings Schemes,1992 and Equity Linked Savings (Amendment) Schemes, 1998notifications Copy of Indian Trust Act, 1882 and Annual Report of theAsset Management Company.

- The scheme’s units can be transmitted after completion of necessaryformalities to the entitled person[s] in the event of death of unitholder.All the restrictions and limitations specified herein including thoserelating to lock-in period and creation of charge, will be binding alsoon the successors, legal heirs, pledgee or assigns of the investor.

- An abridged scheme-wise annual report shall be mailed to allunitholders not later than six months from the closure of the financialyear. Full annual report scheme-wise will be available for inspection byunitholders at the head office of the Fund and a copy wide circulationand one newspaper published in the language of the region where thehead office is situated. These shall also be displayed on the website ofthe mutual fund and that of AMFI.

- The Account Statement is a record of the transaction in the scheme ofTempleton Mutual Fund. Investors are requested to review the AccountStatement carefully and contact their nearest Investor Service Centre incase of any discrepancy. The contents of the statement will beconsidered to be correct if no error is reported within 30 days from thedate of the statement.

- Units of the schemes are not offered, nor is the Fund managed orintended to serve as, a vehicle for frequent trading that seeks to take

16

17

advantage of short-term fluctuations in the securities market. This typeof trading activity is often referred to as “market timing” and couldresult in actual or potential harm to the unit holders. Accordingly, theMutual Fund (MF)at it’s sole discretion may reject any purchase orexchange of units that the MF reasonably believes may represent apattern of market timing activity involving the Funds of the MF.

- Before the expiry of one month from the close of each half year, i.e onMarch 31st and September 30th, the scheme will publish its unauditedfinancial results in one English newspaper having nation widecirculation and one newspaper published in the language of the regionwhere the head office is situated. These shall also be displayed on thewebsite of the mutual fund and that of AMFI.

Investor services

The history regarding redressal of investor grievances is given below:

Scheme 01.04.2001 to 31.03.2002 01.04.2002 to 31.03.2003 01.04.2003 to 30.11.2003

Received Redressed Pending Received Redressed Pending Received Redressed Pending

TIGF 130 130 Nil 53 52 1 36 36 NILFIGF 6 6 Nil 6 6 Nil 29 29 NILFIIF 12 13 Nil 6 6 Nil 30 30 NILFIBF 8 8 Nil 9 9 Nil 28 28 NILTIIF 845 849 Nil 568 566 2 26 26 NILTMIP@ 266 267 Nil 195 194 1 11 11 NILTGSF 164 164 Nil 191 190 1 44 44 NILTILF 11 11 Nil 2 2 Nil 117 117 NILFITF 3 3 Nil 3 3 Nil 2 2 NILTILP 0 0 Nil 0 0 Nil 0 0 NILTFIF Nil Nil Nil 13 13 Nil 6 6 NILFINTF NA NA NA 0 0 Nil 0 0 NILFIPF Nil Nil Nil 26 26 Nil 151 151 NILFIPP Nil Nil Nil 65 65 Nil 350 350 NILFIT95 Nil Nil Nil 55 55 Nil 167 167 NILFIT96 Nil Nil Nil 20 20 Nil 81 81 NILFIT97 Nil Nil Nil 5 5 Nil 22 22 NILFIT98 Nil Nil Nil 0 0 Nil 6 6 NILFIT99 Nil Nil Nil 6 6 Nil 79 79 NILFIT 183 183 Nil 84 84 Nil 322 322 NILFIBCF 95 95 Nil 56 56 Nil 394 394 NILTIGIP 1 1 Nil 1 1 Nil 1 1 NILTIMMA 3 3 Nil 1 1 Nil 8 8 NILTIPP 42 42 Nil 5 5 Nil 56 56 NILTIIBA 71 71 Nil 59 59 Nil 250 250 NILTICAP 14 14 Nil 10 10 Nil 14 14 NILTITMA 6 6 Nil 0 0 Nil 4 4 NILFIVF Nil Nil Nil 2 2 Nil 1 1 NILFIF 64 64 Nil 68 68 Nil 267 267 NILFPF 16 16 Nil 9 9 Nil 79 79 NILFFF 5 5 Nil 3 3 Nil 42 42 NILFIMF Nil Nil Nil 0 0 Nil 1 1 NILFTIBF 25 25 Nil 17 17 Nil 92 92 NILFIOF 93 93 Nil 55 55 Nil 346 346 NILFTIMIP@ 10 10 Nil 11 11 Nil 36 36 NILFISIP Nil Nil Nil 0 0 Nil 0 0 NILFTIIF 5 5 Nil 1 1 Nil 7 7 NILFTIGF 1 1 Nil 4 4 Nil 24 24 NILTISTIP 1 1 Nil 0 0 Nil 0 0 NILFTIPERF Nil Nil Nil 7 7 Nil 13 13 NILFTIAAF Nil Nil Nil 4 4 Nil 5 5 NILOthers Nil Nil Nil Nil Nil Nil 81 81 NIL

As on November 30, 2003 there are no SEBI complaints pending.

FIT 95 - Franklin India Taxshield 95, FIT 96 - Franklin India Taxshield 96, FIT 97 - Franklin IndiaTaxshield 97, FIT 98 - Franklin India Taxshield 98, FIT 99 - Franklin India Taxshield 99, TIGIP- Templeton India Guaranteed Income Plan, FIVF - Franklin India Vista Fund, FISIP - FranklinIndia Strategic Investment Plan, TILP - Templeton India Liquid Plus.

Investor Relations Officer :

Mr. S RajgopalanInvestor Services Century Centre, 75, TTK Road, Alwarpet, Chennai 600 018 Ph : 044 - 2467 9200, Fax : 044 - 2498 7790, Email : [email protected]

The fund will endeavor to adhere to the following response timeswith regard to various investor services from the time of receipt of correctand complete request at Chennai.

Activity From date of receipt Regulatory limitsAccount Statement Mailing 4 working days 6 weeksRedemption cheque mailing 4 working days 10 working daysAddress change 4 working days - Ownership transmission 4 weeks 30 days

These response times do not include postal delivery time, acts of Godor disruptions beyond the control of the AMC.

Pending Litigation or Proceedings

• All cases of penalties awarded by SEBI under the SEBI Act or any of itsregulations against the Sponsor of the Mutual Fund or any companyassociated with the Sponsor in any capacity including the AssetManagement Company, Trustee Company/Board of Trustees, or any ofthe directors or key personnel specifically the fund managers) of theAsset Management Company and Trustee Company. The nature of thepenalty must be disclosed. For Sponsor and its associates, other thanthe penalties as mentioned above, the penalties awarded by anyfinancial regulatory body, including stock exchanges, for defaults inrespect of shareholders, debenture holders and depositors shall also bedisclosed. Additionally, penalties awarded for any economic offenceand violation of any securities laws shall be disclosed :

SEBI had in January 2000 referred to adjudication certain allegationsrelating to non-disclosure of three items in the abridged offer documentsof Balanced Fund, Pharma Fund, FMCG Fund and Taxshield and non-filing of the abridged offer document of Balanced Fund.

The adjudicating officer by his order dated 14th June 2001 levied apenalty of Rs.2 lakhs against the Asset Management Company (erstwhilePioneer ITI AMC Ltd.) and the same was paid

• Any pending material litigation proceedings incidental to the businessof the Mutual Fund to which the Sponsor of the Mutual Fund or anycompany associated with the Sponsor in any capacity including theAMC, Board of Trustees /Trustee Company or any of the directors orkey personnel is a party. Any pending criminal cases against theSponsor or any company associated with the Sponsor in any capacityincluding the AMC, Board of Trustees/Trustee Company or any of thedirectors or key personnel should also be disclosed separately:

International Operations:

• Three individual plaintiffs filed a consolidated class action andderivative complaint captioned, In re: Templeton Securities Litigation(Civil Action No. 98-6059), in the U.S. District Court for the SouthernDistrict of Florida, against Templeton Vietnam Opportunities Fund,Inc. (now known as Templeton Vietnam and Southeast Asia Fund,Inc.) (hereafter, the “Fund”); Templeton Asset Management, Ltd., anindirect wholly-owned subsidiary of Franklin Resources, Inc. (“FRI”)and the investment manager of the closed-end investment company;certain of the fund’s officers and directors; FRI; and TempletonWorldwide, Inc., an FRI subsidiary. On April 3, 2002, the Courtprovided final approval of a settlement agreement entered into amongthe parties, which had been preliminarily approved by the Court onNovember 15, 2001. Under the terms of the settlement agreement, theplaintiffs and defendants agreed to resolve all claims for $6.5 million,including plaintiffs’ attorneys fees and the costs of administering thesettlement; it is expected that the Fund will receive a minimum of $2million, which has been reflected in the Fund’s net asset value as ofApril 3, 2002. The defendants have agreed to the settlement to avoidthe expense and inconvenience of further proceedings. The settlementdoes not contain, and specifically denies, any admission of wrongdoingor violation of law by any of the defendants.

• Templeton International Inc. is involved from time to time in litigationrelating to claims arising in the normal course of business.Management is of the opinion that the ultimate resolution of suchclaims will not materially affect Franklin Templeton Investments’business or financial position.

Indian Operations:• One of the investors under Templeton India Growth Fund had made

investment to the tune of Rs.1,00,00,001/- under Section 54EB of theIncome Tax Act, 1961. In accordance with the legal opinion of thecounsel of the Fund, the Fund is of the view that investments underSection 54EB of the Income Tax Act, 1961 read with CBDT notificationno. 10247 dated December 19, 1996, the units had to be locked-in fora period of seven years from the date of investment. However, theinvestor had disputed this stand and had filed a writ petition in theHigh Court of Delhi seeking the direction of the court for prematureredemption of units, with Templeton Mutual Fund as one of therespondents. The Honourable Delhi High Court vide its order dated3rd August, 2000 directed SEBI to dispose off the representation filedby the investor. The investor then filed a representation with SEBI.After hearing the petitioner and the respondents, SEBI rejected the

representation vide order dated September 4, 2000 upholding the standof the Mutual Fund. Subsequently, the investor had filed a Memorandum of Appeal with theSecurities Appellate Tribunal, Mumbai against the SEBI order datedSeptember 4, 2000. The Tribunal dismissed the appeal vide its orderdated February 15, 2001 and upheld the stand of the Mutual Fund. Theinvestor has now filed a petition in the Delhi High Court challengingthe order of the Securities Appellate Tribunal and challenging theCentral Board of Direct Taxes (CBDT) order.

• Cases of penalties awarded by SEBI under the SEBI Act or any of itsregulations against the Sponsor of the Mutual Fund or any companyassociated with the Sponsor in any capacity including the AssetManagement Company, Trustee, or any of the directors or keypersonnel (specifically the fund managers) of the Asset ManagementCompany and the Trustee company. Penalties awarded against theSponsors and its associates by any financial regulatory body, includingstock exchanges, for defaults in respect of shareholders, debentureholders and depositors, penalties awarded for any economic offenceand violation of any securities laws.SEBI had in January 2000 referred to adjudication certain allegationsrelating to non-disclosure of three items in the abridged Offer Documentsof Balanced Fund, Pharma Fund, FMCG Fund and Taxshield and non-filing of the abridged Offer Document of Balanced Fund.The adjudicating officer by his order dated 14th June 2001 has levieda penalty of Rs.2 lakhs against the Asset Management Company(erstwhile Pioneer ITI AMC Limited).One of the investor under Templeton India Income Builder Account(TIIBA) has filed a compliant against Templeton Asset Management(India) Private Limited (AMC) regarding wrongful withdrawal of fundsfrom its investment accounts. The AMC has filed a compliant in thisregard against an ex-employee of the company and others before theSub Divisional Judicial Magistrate at Bhubaneshwar. The HonourableCourt has given direction to the Police to register and investigate thecase. The investigation is in progress.The investor had also filed a Writ Petition against AMC / SEBI andother Government agencies at the High Court of Orissa at Cuttack.The above litigation, including the complaint by the investor withSEBI, and the Writ Petition arise out of the wrongful redemption madeto third parties aggregating the sum of Rs. 46 lacs. Since thesewrongful redemptions pertain to the ex-Pioneer ITI mutual fundschemes, and most of these transactions were done before theacquisition of the said fund by Franklin Templeton, the AMC hasretained sufficient amount (from the ex-shareholders of Pioneer ITIAMC Ltd.) in an escrow account to meet such contingencies. Under nocircumstances, will the loss be passed on to the fund.

• Any deficiency in the systems and operations of the Sponsor of theMutual Fund or any company associated with the sponsor in anycapacity including the AMC or the Trustee Company which SEBI hasspecifically advised to be disclosed in the offer document, or which hasbeen notified by any other regulatory agency, shall be disclosed: Nil

• Any enquiry/adjudication proceedings under the SEBI Act and theRegulations made thereunder, that are in progress against the Sponsorof the Mutual Fund or any company associated with the Sponsor in anycapacity including the AMC, Board of Trustees/Trustee Company orany of the Directors or key personnel of the Asset ManagementCompany shall be disclosed: Nil

• Details of all cases of suspension & cancellation of certificate ofregistration (for irregularities/violation in financial services or fordefaults in respect of shareholders, debentureholders and depositors)of the AMC, Trustee Company and sponsor or any associate of thesponsor shall be disclosed for the last 10 years: Nil

The above information has been disclosed in good faith as per theinformation available to the AMC.

Other Information

The Unabridged Offer Document of the scheme is available at the offices ofTempleton Asset Management (India) Pvt. Ltd. and will be provided onrequest. The terms and conditions of the Offer Documents shall bind theapplicant/the successors/heirs. In case of incomplete or invalid applications,the AMC reserves the right to refund the monies to the applicants.The Trustee is authorized to prescribe rules, regulations and procedures(including cut-off time, limits on minimum investment/redemption, rightto suspend transactions under certain circumstances etc.) from time totime not inconsistent with the terms of the issue of the scheme or SEBI

regulations, to implement such terms or to remove difficulties or to settleany disputes and to make any changes as may be required by reason ofchanges in law or regulations, in the manner required/permitted undersuch law or regulations.

‘Notwithstanding anything contained in the Offer Document/AbridgedOffer Document the provisions of the SEBI (Mutual Funds) Regulations,1996 and the Guidelines thereunder shall be applicable’

For Templeton Asset Management (India) Pvt. Ltd. (Investment Manager of Templeton Mutual Fund)

Place : Mumbai Ravi MehrotraDate : December 31, 2003 President

Instructions

Please read the Unabridged Offer Document containing the terms ofoffer. All applicants are deemed to have accepted the terms subject towhich the offer is being made and bind themselves to the terms uponsigning the Application Form and tendering the payment.1. The application form must be completed in BLOCK LETTERS in

ENGLISH.2. Resident investors already having an account in any Templeton

Mutual Fund schemes can provide their account number, fund nameand first applicant name in the space provided.

3. Signatures should be in English or in any of the Indian languages.Thumb impressions must be attested by a Magistrate/Notary Publicunder his/her official seal. In case of HUF, the Karta will sign on behalfof the HUF

4. Mode of payment:-During IPO- Applications can be deposited at Franklin Templeton branch

offices in those cities which have a collection bank.- No switches will be allowed during IPO.- No outstation cheques will be accepted. Demand Drafts will be

accepted only if they are payable at corresponding city of thecollection bank where the application is being given.

- DD charge can be deducted to the corresponding SBI charges.On an ongoing basisa. For Resident Investors - by local cheque deposited with any

Franklin Templeton branch- Applicants from places where there is no Franklin Templeton

branch/DR Centre/Collection Banks can deduct DD chargesfrom the application amount provided these drafts are payableat Chennai only. Applicants may send their applicationalongwith separate bank drafts for each scheme, to the investorservice centre at Chennai

- Investors are instructed NOT to make cash payments to theiragents and to district representative centres.

- Cheques should be drawn in favour of the scheme name. - “FTIndia Life Stage Fund of Funds - The 50s Plus Floating RatePlan”. If the application is tendered at District RepresentativeCentre, cheques should be drawn in favour of “TempletonMutual Fund”. The fund is not obliged to represent dishonouredcheques or inform the investor/ investor’s agent about it.

b. For Non-Resident Investors:- by NRE/FCNR/NRO account cheque from a bank located at

places having a Franklin Templeton branch or a DR centre- by Rupee draft purchased abroad payable at Chennai - by Dollar/Pound Sterling/Euro draft purchased abroad

c. Foreign Institutional Investors and International MultilateralAgencies shall pay their subscription by direct remittance fromabroad or out of their special Non Resident Account, maintainedwith a designated bank in India. FIIs, Trusts must also provide theOverseas Auditor’s Certificate

5. In case of an application form under a Power of Attorney or by alimited company or a body corporate or a registered society, or aTrust, the relevant Power of Attorney or the relevant resolution orauthority to make the application, as the case may be, or a dulycertified copy thereof, alongwith a certified copy of the Memorandumand Articles of Association [where applicable] and/or bye law may belodged alongwith the application form. The signature must be dulyattested by a notary public.

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Signatures :

First Applicant __________________________________

Second Applicant ________________________________

Third Applicant _________________________________

Declaration

Having read and understood the contents of the Offer Document(s) of Scheme(s) and KeyInformation Memorandum, Addenda issued till date, I/We hereby apply to the Trustee ofTempleton Mutual Fund for units of Templeton Mutual Fund as indicated above and agreeto abide by the terms, conditions, rules and regulations of the Scheme(s) as on the date ofthis investment and confirm that the funds invested in the scheme(s) legally belong tome/us. I/We have not received nor been induced by any rebate or gifts, directly or indirectlyin making this investments.

*I/We confirm that I am/we are Non-Residents of Indian National /Origin and that I/Wehere by confirm that the funds are remitted from abroad through approved banking channelsor from my/our funds in my/our NRE/NRO/FCNR Account

Date:______________Place ___________________ * Applicable to NRI

Other Services (Optional)

1. Email Services

We wish to receive the following via e-mail instead of physical document (please tick)

■■ Account Statement ■■ Quarterly Review & Annual Report ■■ Communication on Change of Address, Bank etc.

2. Systematic Investment Plan (SIP) (please tick)

Please ■■ Mail ■■ Email the form to us.

3. Nomination Details:

19

Signature ( if available)Nominee Name & Address

Guardian details if nominee is a minor Signature (if available)

Name & Address

Direct Credit of Dividends/Redemptions (available if you are banking with select banks)

I/We authorize Templeton Mutual Fund to credit dividend payout and redemptions pertaining to my/our account with:

■■ ABN Amro ■■ Citibank ■■ HDFC Bank ■■ HSBC Bank ■■ ICICI Bank

■■ IDBI Bank ■■ Kotak Mahindra Bank ■■ UTI Bank ■■ Standard Chartered Bank

Acknowledgement

Received from Mr./Mrs. _____________________________________________________________________________________________________________________________________________________________________________________________________________Pin________________

Scheme Name/Plan Option Payment Details

Amount ____________________ Cheque/DD No. ________________ Date ________________

Bank and Branch details ____________________________________________________________

■■ Growth ■■ Dividend

■■ Payout ■■ Reinvestment

FT India Life Stage Fund of Funds - The 50’s PlusFloating Rate Plan

Statutory Details

Bank Name

Account No. Branch

Branch & Address

Account type For Residents ■■ Savings ■■ Current For Non-Residents ■■ NRO ■■ NRE ■■ Others ____________________________

PAN/GIR No. - Required for investments over Rs.50,000 (Mandatory - to be provided for all holders, irrespective of the mode of holding)

Sole/First Applicant/Guardian Second Applicant Third Applicant

PAN/GIR No.

Circle/Ward/District ______________________________________ ______________________________________ ______________________________________

Applications will be accepted by the mutual fund only if these details are furnished

Please provide the full account number

Distributor information For Office Use Only

Agent /Broker Code* Sub-Broker Code* : Application received

Branch : On: Date Time

Representative : By:(Employee Name) (Branch)

Initial Offer Opens on: 16th June, 2004

Initial Offer Closes on: 28th June, 2004

Scheme Re-opens on: 7th July, 2004

* AMFI Registered Distributors

Investment Details

Scheme Name/Plan Option Amount Net Amount Payment DetailsInvested Paid Cheque/DD No. Bank and Branch

Less DD Charges:

FT India Life Stage Fund of Funds - The 50’s PlusFloating Rate Plan

■■ Growth ■■ Dividend

■■ Payout ■■ Reinvestment

20

Serial No.

Serial No.

Minimum Investment - Rs. 5,000 and in multiples of Rs. 1000 during the initial offer and ongoing basis. Additional purchases Rs. 1000 and in multiples of Rs. 1000;

F T I N D I A

LIFE STAGE FUND OF FUNDS THE 50’s PLUS FLOATING RATE PLAN

An open end fund of funds, offering a choice of asset allocation plans

Your Personal Details

(To be filled in Block Letters. Use one box for one alphabet leaving one box blank between name and surname)

Name of First/Sole Applicant

Name of Second Applicant

Name of Third Applicant

Address (P.O. Box Address is not sufficient; Overseas address in case of NRIs/FIIs) Address is ■■ Home ■■ Office

City State Pin

TelSTD Code Work Residence Mobile

Fax Email

Date of Birth Name of Father/Husband of applicant/Guardian of Minor (Strike off whichever is not applicable)

First Holder/Minor

Existing Shareholders

First Applicant Name

Account No. Fund

(Tick whichever is applicable)

Mode of Holding Status

■■ Single ■■ Individual ■■ HUF ■■ Company/Body Corporate ■■ NRI*/PIO*

■■ Joint ■■ Sole Proprietorship ■■ Club/Society ■■ Minor through Guardian ■■ FII*

■■ Either or Survivor(s) ■■ Partnership ■■ Trust ■■ Others ______________ * ■■ Repatriable ■■ Non-Repatriable

Country of citizenship______________

For investment related enquiries, please contact:Franklin Templeton Investments Service Centres Email: [email protected]. franklintempletonindia.com

Check List: Please ensure the following : • Application Form is complete in all respects and signed by all Applicants • Bank Account details are filled

• Permanent Account Number (PAN) is mentioned for both single/joint holders • Appropriate Options are filled up

Addendum to the Offer Document of FT India Life Stage Fund of Funds (FTLF)

Introduction:

The Scheme would introduce a new Plan under FTLF w.e.f June 16,2004, which will be termed as the “FT India Life Stage Fund of Funds-The 50s Plus Floating Rate Plan”. The Plan will have two optionsnamely Growth and Dividend.

Issue opening: June 16, 2004 (Wednesday)

Issue closing date: June 28, 2004 (Monday)

Ongoing Sales and redemption: July 7, 2004 (Wednesday)

Asset Allocation:

The new 50s Plus Floating Rate Plan will have the following assetallocation:

Option Type of Security Allocation as a Risk Profile% of corpus

The 50s Plus Floating Rate Plan

Equity: 20% Franklin India Upto 20%Bluechip Fund (FIBCF) High

Templeton India Upto 20%Growth Fund (TIGF)

Debt: 80% Templeton India Upto 80% Low to Floating Rate Income Fund Medium(TFIF)-Long Term

The steady state asset allocation will be as shown below:

Plan Allocation

FIBCF TIGF TFIF -Long Term

The 50s Plus Floating Rate Plan 10% 10% 80%

The portfolio will be rebalanced to this level every six months.Depending on the assessment of the market based on parameters suchas the prevailing market valuations etc., the portfolio manager maymake a tactical change in asset allocation within the following range.

Plans Equity Debt

The 50s Plus Floating Rate Plan 10% to 30% 70% to 90%

The asset allocation pattern described above may alter from time to timeon a short term basis on defensive considerations, keeping in viewmarket conditions, market opportunities, applicable regulations andpolitical and economic factors.

The Fund Managers for the underlying schemes are:

FIBCF: K.N. SivaSubramanian

TIGF: Dr. Mark Mobius

TFIF: Rahul Goswami

Minimum subscription/redemption:

Subscription: Rs.5,000/-

Redemption: Rs.1,000/-

The minimum amount the AMC intends to raise is Rs. 1 lac. duringinitial public offer.

The new plan will have a separate portfolio. The units in the 50s PlusFloating Rate Plan will be available at Rs. 10/- plus applicable EntryLoad during the IPO.

Load Structure:

The applicable NAVs will be subject to the applicable load structure asgiven below:

Entry load: 0.50%

Exit load: Nil

The AMC/Trustee reserve the right to introduce a load and change theload structure of the scheme if it so deems fit in the interest of and forthe smooth and efficient functioning of the scheme.

Switching:

No switch transactions will be accepted during IPO.

Benchmark:

There is no appropriate benchmark currently available in the country toreflect the investment universe in line with the investment objectives ofthe scheme.

The introduction of the new plan has been approved by the Boards ofthe AMC and the Trustee Company.

In terms of SEBI Circular SEBI/IMD/CIR No. 10/22701/03 datedDecember 12, 2003, each scheme and individual plan(s) under theschemes should have a minimum of 20 investors and no single investorshould account for more than 25% of the corpus of suchscheme/plan(s). In the case of non-fulfilment with either of the abovetwo conditions, a three months time period or the end of succeedingcalendar quarter, whichever is earlier, from the close of the Initial PublicOffering (IPO) of open ended schemes will be available to balance andto ensure compliance with these two conditions, failing which theprovisions of Regulation 39 (2) (c) of SEBI (Mutual Funds)Regulations, 1996 would become applicable automatically without anyreference from SEBI. Accordingly, schemes /plans shall be wound up byfollowing the guidelines laid down by SEBI.

All other terms and conditions of the Offer Document will remainunchanged. This addendum form an integral part of the OfferDocument issued for the scheme read with the Addenda.

This addendum is dated June 10, 2004.

For Franklin Templeton Asset Management (I) Pvt. Ltd.(Investment Manager of Templeton Mutual Fund)

Sd/-

Ravi MehrotraPresident

Scheme Classification and Objectives: FTLF is an open end Fund of Funds scheme with a primary objective to generate superior risk adjusted returns to investors in line with their chosen asset allocation. TIGFis an open ended growth scheme with the objective to provide long-term capital growth. FIBCF is an open ended growth scheme with an objective to primarily provide medium to long term capitalappreciation.Templeton Floating Rate Income Fund (TFIF) is an open ended income scheme with the objective to provide income consistent with the prudent risk from a portfolio comprising substantially offloating rate debt instruments, fixed rate debt instruments swapped for floating rate returns, and also fixed rate instrument and money market instruments. Risk Factors: All investments in mutual funds andsecurities are subject to market risks and the NAV of the scheme may go up or down depending upon the factors and forces affecting the securities market. There can be no assurance that a scheme’s investmentobjectives will be achieved. The past performance of the mutual funds managed by the Franklin Templeton Group and its affiliates is not necessarily indicative of future performance of the schemes. The aboveare only the names of the schemes and do not in any manner indicate the quality of the schemes, their future prospects or returns. The Mutual Fund is not guaranteeing or assuring any dividend or returns underthe schemes. The investments made by the schemes are subject to external risks. Please read the Offer Document of the scheme carefully before investing. The expenses of the Fund of Funds Scheme is over andabove the expenses charged by the underlying schemes. Statutory Details: Templeton Mutual Fund in India has been set up as a trust by Templeton International Inc. (liability restricted to the seed corpus of Rs.1lac) with Franklin Templeton Trustee Services Pvt. Ltd. as the Trustee (Trustee under the Indian Trust Act, 1882) and with Franklin Templeton Asset Management (India) Pvt. Ltd. as the Investment Manager.

Templeton Mutual FundSakhar Bhavan, 1st floor, 230 Backbay Reclamation, Nariman Point, Mumbai - 400 021.

Addendum to the Offer Document ofFranklin Internet Opportunities Fund (FIOF)

The Fund proposes to change the investment objective and the investmentpattern of FIOF, an open end scheme, in light of the changing economic scenario,that will give it a sustainable growth potential and reposition it well for future.

The Boards of Templeton Trust Services Pvt. Ltd. and Templeton AssetManagement (India) Pvt. Ltd have approved this change in the FundamentalAttribute.

Investment Objectives:

Currently, in terms of the Offer Document of FIOF, the investment objective is asfollows:

“This fund seeks to provide long-term capital appreciation by capitalizing oninvestment opportunities created by the dramatic growth of the internet and itsprofound impact on individuals and businesses.”

The fund proposes to reposition itself to Franklin India Opportunities Fund andchange the objective w.e.f March 10, 2004, which would be as under:

“To generate capital appreciation by capitalizing on the long-term growthopportunities in the Indian economy.”

Investment Pattern:

Old Franklin Internet Opportunities Fund

Risk Profile % Allocation

Equities Medium to High Upto 100%

Money Market Instruments Low Upto 60%

Under normal circumstances at least 65% of the scheme’s assets will be investedin the information technology industry

Benchmark ET Mindex

New Franklin India Opportunities Fund

Risk Profile % Allocation

Equities Medium to High Upto 100%

Money Market Instruments Low to Medium Upto 35%

Under normal circumstances at least 65% of the scheme’s assets will be investedin equities

Benchmark BSE 200

Investors in Franklin Internet Opportunities Fund are given an option to exit atthe prevailing Net Asset Value without any exit load, in case they do not wish tocontinue in this scheme in view of this change in the Fundamental Attributes,before March 10, 2004. Currently, the scheme does not have any exit load. Thenormal redemption form may be used for this purpose and submitted at any ofthe ISCs. Unitholders who do not exercise the exit option on or before the abovedate would be deemed to have consented to the proposed change.

This addendum is dated January 28, 2004.


Sd/-


Addendum to the Offer Documents of all the schemes ofTempleton Mutual Fund

Mr. Shobhit Mehrotra - Asst. Vice President & Portfolio Manager- Fixed Incomeceases to be a part of Templeton Asset Management India Pvt. Ltd. (TAMIL), theAMC w.e.f. February 13, 2004.

The following schemes/plans that were managed by Mr. Shobhit Mehrotra arenow being managed by Mr. Nilesh Shah- Chief Investment Officer, FixedIncome.

• Templeton Floating Rate Income Fund- Short Term Plan (TFIF-ST)

• Templeton India Liquid Fund (TILF)

• Templeton India Treasury Management Account (TITMA)

• Templeton India Money Market Account (TIMMA)

• Templeton India Short-Term Income Plan (TISTIP)

• Franklin India Strategic Investment Plan (FISIP)

• Templeton India Liquid Plus (TILP)

Addendum to the Offer Document of the TempletonFloating Rate Income Fund (TFIF)

Revised Load Structure with effect from March 1, 2004:

Fund TFIF- Long Term Plan(For investments over Rs. 10 lacs)

Revised Exit Load 0.25% (if redeemed within 30 days of allotment)

Existing Exit Load 0.25% (if redeemed within 3 months of allotment)

All prior investments continue to be subject to the load structure at the time oftheir original investments, as may be applicable.

The Trustee reserves the right to increase / decrease / introduce a Load / Fee atany time in future on a prospective basis. However such increase / decrease/introduction would be subject to the limits prescribed under the Regulations.

These addenda form an integral part of the respective Offer Documents issued forthe schemes read with the Addenda.

These addenda are dated February 17, 2004.


Sd/-


Addendum to the Offer Document of Franklin India Index Fund (FIIF)

An Open End Index Scheme

Scheme Objective: It is an open-end growth scheme with an objective to providegrowth of capital plus regular dividend through a diversified portfolio of equities,fixed income securities and money market instruments.

Introduction of BSE Sensex Plan

The Scheme will introduce a BSE Sensex Plan under FIIF w.e.f March 26, 2004.The new plan would be termed as Franklin India Index Fund - BSE Sensex Plan.The BSE Sensex Plan will have two options; Growth Option and DividendOption with a common portfolio. The existing plan in FIIF will be termed as NSENifty Plan- Dividend Option.

Investment objective of the BSE Sensex Plan is to provide returns that, beforeexpenses, closely correspond to the total return of common stocks as representedby the BSE Sensex.

Investment Strategy: Under the ‘BSE Sensex’ Plan, the scheme seeks to match, asclosely as possible before expenses and tracking errors, the performance of theBSE Sensex, which represents a sample of 30 large, well established companies.

Templeton Mutual FundSakhar Bhavan, 1st floor, 230 Backbay Reclamation, Nariman Point, Mumbai - 400 021. Website : www.franklintempletonindia.com

1

Under the scheme of Merger, the FTIIF - BSE Sensex Plan is being merged intoFIIF -BSE Sensex Plan on March 26, 2004. The units in the new BSE Sensex Planof FIIF will be available at NAV of the BSE Sensex Plan of FT India Index Fundon that date.

No load is being charged on the transaction to the investors of BSE SensexPlan of FTIIF.

The new BSE Plan will track the BSE Sensex.

Under normal market circumstances, the investment range would be as follows:

Asset Allocation:


Securities covered by the BSE Sensex Medium to High Upto 100%

Money Market instruments, convertible bonds and other securities including cash at call but excluding subscription and redemption Cash Flow. Low Upto 20%

Subscription cash flow is the subscription money in transit before deploymentand redemption cash flow is the money kept aside for meeting redemptions.

The asset allocation pattern described above may alter from time to time on ashort term basis on defensive considerations. The plan will have a separateportfolio. The minimum amount AMC intends to raise will not be applicable asthis is under the merger of schemes.

The Boards of Templeton Trust Services Private Limited and the Templeton AssetManagement (India) Private Limited have approved the introduction of the newplan.

Introduction of Growth Option in NSE Nifty Plan

The Scheme would introduce a Growth Option under the existing FIIF w.e.fMarch 26, 2004. The new option would be termed as FIIF-NSE Nifty Plan-Growth Option and the existing plan would now be termed as FIIF-NSE NiftyPlan-Dividend Option, which is with payout and reinvestment options.

The new Growth Option will have the same portfolio as that of the existingDividend Option and hence the same investment objectives, investment patternand investment restrictions as that of the existing option. The units in theGrowth option of FIIF-NSE Nifty Plan will be available at NAV of the DividendOption of FIIF-NSE Nifty Plan on the date of merger.

Merger of FT India Index Fund-Nifty Plan- Dividend Option/Growth Optioninto FIIF-NSE Nifty Plan- Dividend Option/Growth Option

Pursuant to Franklin Templeton (FT) group’s acquisition of Pioneer ITI MutualFund (PMF), Templeton Mutual Fund (TMF) now has a variety offunds/schemes, some of which may be similar in nature, type, investmentobjective, category etc.- To reduce the overlap and make the offerings moremeaningful and easy to understand for investors, we intend to merge some of theschemes. Accordingly, we plan to merge Nifty Plan of FTIIF with NSE Nifty Planof FIIF.

Investors of FIIF are hereby informed that investors of FTIIF-Nifty Plan-Dividend Option would become investors of FIIF- NSE Nifty Plan- DividendOption at the NAV of FIIF as on the date of merger i.e. March 26, 2004. Investorsof FTIIF-Nifty Plan- Growth Option would become investors of FIIF- NSE NiftyPlan- Growth Option on the date of merger i.e. March 26, 2004.

Further, portfolio of FTIIF-Nifty Plan as on the date of merger, which is valuedas per SEBI Guidelines, will be merged with the portfolio of FIIF-NSE Nifty Plan.No load is being charged to the investors of FTIIF-Nifty Plan.

This addendum is dated February 19, 2004.


Sd/-

Ravi Mehrotra

President

Addendum to the Offer Document of Franklin India Prima Plus (FIPP)

An Open End Equity Scheme

Scheme Objective: FIPP-To provide growth of capital plus regular dividendthrough diversified portfolio of equities, fixed income securities and moneymarket instruments.

Merger of Franklin India Vista (FIVF) Fund into FIPP

Pursuant to Franklin Templeton (FT) group’s acquisition of Pioneer ITI MutualFund (PMF), Templeton Mutual Fund (TMF) now has a variety offunds/schemes, some of which may be similar in nature, type, investmentobjective, category etc. To reduce the overlap and make the offerings moremeaningful and easy to understand for investors, we intend to merge some of theschemes. Accordingly, we plan to merge FIVF with FIPP.

Investors of FIPP are hereby informed that investors of FIVF would becomeinvestors of FIPP at the NAV of FIPP as on March 26, 2004.

Further, portfolio of FIVF as on the date of merger, which is valued as per SEBIGuidelines, will be merged with the portfolio of FIPP. No load is being chargedto the investors of FIVF.

The proposal and modalities of the merger of the schemes has been approved bythe Boards of AMC and Trustee.

This addendum is dated February 19, 2004.


Sd/-


Addendum to the Offer Documents of

Templeton India Income Fund (TIIF)An Open End Income Scheme

Templeton Floating Rate Income Fund (TFIF)An Open End Income Scheme

Templeton Monthly Income Plan (TMIP)An Open End Income Scheme, monthly income is not assured and is subject to

the availability of distributable surplus

FT India Monthly Income Plan (FTIMIP)An Open End Income Scheme, monthly income is not assured and is subject to

the availability of distributable surplus

Templeton India Short-Term Income Plan (TISTIP)An Open End Income Scheme

Templeton India Liquid Fund (TILF)An Open End Income Scheme

Templeton India Government Securities Fund (TGSF)An Open End Dedicated Gilts Scheme

FT India Gilt Fund (FTIGF) An Open End Dedicated Gilt Scheme

Templeton India Treasury Management Account (TITMA)An Open End Liquid Scheme

Templeton India Income Builder Account (TIIBA)An Open End Income Scheme

Dividend Transfer Plan (DTP)

With a view to offer innovative facilities to our investors, Templeton MutualFund introduces a Dividend Transfer Plan in the above schemes w.e.f. March 17,2004. This facility is available to the investors of various dividend plans of theabove-mentioned schemes. An investor can select this facility whereby thedividend declared will be automatically invested into selected FT Open-endedEquity or Hybrid schemes.

Highlights:

• In order to avail the DTP facility, the minimum account balance should be Rs.25,000/-, except in TISTIP, TILF, TITMA and Short Term Plan of TFIF wherethe same should be Rs. 100,000/-

• The frequency of transfer will be dependent on the dividends declared by the

2

plan in which the investment has been made.

• The amount, to the extent of the distribution, will be automatically investedon the ex-dividend date into Franklin Templeton open end equity or hybridscheme selected by the investor at the NAV of that scheme and equivalentunits will be allotted, subject to the terms of the scheme:

- Equity schemes: FIBCF, TIGF, FIPF, FIPP, FIGF, FIIF, FTIIF, FIF, FFF, FPF,FIOF, FIT, FITF.

- Hybrid schemes: FTIBF, FIBF, FTIAAF, FTIPERF, TIPP, TICAP

For example: If the dividend record day is a Friday and the ex-dividend day isTuesday, the investor will be allotted units at NAV of same day i.e. Tuesday inEquity/Hybrid scheme. In case of non-business day in Equity/Hybrid scheme, the NAVof immediate next business day will be allotted.

• For such transfers, no entry load will be levied. However, for units allotted onaccount of such transfers, an exit load equivalent to the waived entry load willbe applicable if the same are redeemed within one year of allotment.

• This facility is not available under Daily Dividend Plans of the above schemes.

The Trustee/AMC reserves the right to modify the facilities at any time in futureon a prospective basis.

A dividend transfer plan may be terminated on appropriate written notice by theunitholder of the fund. The Investment Manager may change rules relating to theplan from time to time.

Systematic Investment Plan (SIP) in FT India Life Stage Fund of Funds (FTLF)and FT Dynamic PE Ratio Fund of Funds (FTDPEF): (w.e.f March 17, 2004)

• Templeton Mutual Fund will accept minimum of 12 cheques of Rs. 2000 ormore each or a minimum of 6 cheques of Rs. 4,000 or more each for any SIPinvestor.

• All the SIP cheques (except the first one) must be uniformly dated either the1st, 7th, 10th or 20th of a month. Investors can invest at a Monthly orQuarterly interval by providing post-dated cheques. All cheques should be forthe same amount.

• There will not be any entry load for SIP investments, such investments willhowever be charged an exit load equivalent to the waived entry load, ifredeemed with in one year of the allotment date. The AMC reserves to rightto reintroduce the entry load through issue of a notice at its investor servicecentres / distributor offices.

The AMC reserves the right to discontinue the SIP in case of cheque return, anddebit the cheque return charges to the investors’ account.

The above addenda form an integral part of the Offer Documents issued for therespective schemes read with the Addenda.

These addenda are dated March 10, 2004.


Sd/-


Addendum to the Offer Document of Templeton IndiaShort Term Income Plan

Applicable NAV (w.e.f. March 26, 2004)

Subsequent to SEBI Circulars SEBI/ IMD/CIR No. 8/5611/ 2004 dated March 19,2004 and SEBI/ IMD/CIR No. 9/6016/2004 dated March 25, 2004 the scheme isconsidered as non-liquid scheme and hence the applicable NAV will be asmentioned below:

Purchases including switch ins:

In respect of valid applications received upto 3 p.m. by the Mutual Fundalongwith a local cheque or a demand draft payable at par at the place where theapplication is received, the closing NAV of the day on which application isreceived shall be applicable.

In respect of valid applications received after 3 p.m. by the Mutual Fundalongwith a local cheque or a demand draft payable at par at the place where theapplication is received, the closing NAV of the next business day shall beapplicable.

Redemptions including switch outs:

In respect of valid applications received upto 3 p.m. by the Mutual Fund, sameday’s closing NAV shall be applicable.

In respect of valid applications received after 3 p.m. by the Mutual Fund, theclosing NAV of the next business day shall be applicable.

Further, the AMC may alter the limits and other conditions in line with theRegulations. All the other terms and conditions of the offer document willremain unchanged.

These addenda forms an integral part of the Offer Document issued for the respective scheme read with the Addenda. For further details please referto the detailed addendum on website: www.franklintempletonindia.com.


Sd/-


Addendum to the Offer Document of all the schemes ofTempleton Mutual Fund except Franklin India

International Fund (FINTF)Pursuant to SEBI Circulars SEBI/ IMD/CIR No. 8/5611/ 2004 dated March 19,2004 and SEBI/ IMD/CIR No. 9/6016/2004 dated March 25, 2004, with effectfrom March 30, 2004 the cut off timings and the applicability of Net AssetValue of Templeton Mutual Fund schemes/Plans will be as under:

All schemes of Templeton Mutual Fund except schemes mentioned in pointno. 2 and FINTF:

a. Purchases including switch ins:

In respect of valid applications received upto 3 p.m. by the Mutual Fund alongwith a local cheque or a demand draft payable at par at the place where theapplication is received, the closing NAV of the day on which application isreceived shall be applicable.

In respect of valid applications received after 3 p.m. by the Mutual Fund alongwith a local cheque or a demand draft payable at par at the place where theapplication is received, the closing NAV of the next business day shall beapplicable.

However, in respect of valid applications with outstation cheques/ demand draftsnot payable at par at the place where the application is received, closing NAV ofthe day on which cheque/ demand draft is credited to the account of TempletonMutual Fund shall be applicable.

b. Redemptions including switch outs:

In respect of valid applications received upto 3 p.m. by the Mutual Fund, sameday’s closing NAV shall be applicable.

In respect of valid applications received after 3 p.m. by the Mutual Fund, theclosing NAV of the next business day shall be applicable.

Liquid Schemes: Templeton India Liquid Fund (TILF), Templeton IndiaLiquid Plus (TILP), Templeton India Money Market Account (TIMMA),Templeton India Treasury Management Account (TITMA), Templeton FloatingRate Income Fund-Short Term Plan (TFIF-ST), Franklin India StrategicInvestment Plan (FISIP):

a. Purchases:

In respect of valid applications, closing NAV of the day immediately previous tothe day on which funds are available for utilization by the fund shall beapplicable. However, in respect of any application received after 1 p.m. by theMutual Fund and the funds are available for utlisation by the fund on the sameday, closing NAV of the day immediately previous to the next business day shallbe applied.

b. Redemptions:

In respect of valid applications received upto 10:00 a.m., by the Mutual Fund,previous day’s closing NAV shall be applicable. This facility will be available atspecified branches only.

In respect of valid applications received after 10:00 a.m. by the Mutual Fund,closing NAV of the day immediately previous to the next business day shall beapplicable.

For liquid schemes/plans Mutual Fund shall calculate NAVs for every calendarday. Further, the day(s) on which the money markets are closed / not accessible,

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shall not be treated as business day(s). No outstation cheques will be acceptedfor the above mentioned schemes.

Investment Restrictions, investment pattern of the Liquid Schemes willinclude following applicable requirements:

i. Mark-to-Market component of the fund on a weekly average basis will beless than 10%.

ii. For a fixed rate asset, the remaining tenor will be1 year or less.

iii. For a floating rate asset, the interest reset frequency will be 1 year or less.

iv. For a fixed rate/floating rate asset where the principal is paid in a staggeredand/or on amortizing basis (e.g. securitized papers), the average maturity ofsuch an asset will be 1 year or less.

v. For a portfolio using Interest Rate Swaps,

a) The composite floating rate asset will have interest reset frequency upto1 year. b) If Interest Rate Swaps, have been used to convert a floating rateasset into a fixed rate asset, the fixed leg of the Interest Rate Swap willhave remaining tenor upto 1 year.

vi. For a portfolio using Forward Rate Agreements, the summation of thebeginning and end dates of the period covered will be 1 year or less.

vii. For Interest Rate Futures and Bond Futures, the repricing risk will be 1 yearor less.

For Liquid Schemes as the investment focus would be achievable under theexisting disclosures on the investment objectives the above modification shallnot be treated as change in fundamental attribute of the Liquid Schemes.

Further, the AMC may alter the limits and other conditions in line with theRegulations. All the other terms and conditions of the offer document willremain unchanged.

This addendum is dated March 29, 2004 and forms an integral part of the OfferDocument issued for the respective schemes read with the Addenda.


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Mr. Deepesh Pandey- Asst. Vice President & Portfolio Manager (Equity) ceasesto be a part of Templeton Asset Management India Pvt. Ltd. (TAMIL), the AMCw.e.f. March 18, 2004.

The following schemes/plans that were managed by Mr. Deepesh Pandey are nowbeing managed by the following Fund Managers:

Schemes Managed By

Franklin India Index Fund (FIIF) Anil Prabhudas

FT India Index Fund (FTIIF) Anil Prabhudas

Franklin India Index Tax Fund (FITF) Anil Prabhudas

Franklin India Balanced Fund (FIBF): Equity R. Sukumar / S. Chellappa

FT India PE Ratio Fund (FTIPERF) Anil Prabhudas

FT India Balanced Fund (FTIBF): Equity R. Sukumar / S. Chellappa

Templeton Monthly Income Plan* (TMIP): Equity R. Sukumar / S. Chellappa

FT India Monthly Income Plan* (FTIMIP): Equity R. Sukumar / S. Chellappa

Templeton India Children’s Asset Plan (TICAP): Equity R. Sukumar / S. Chellappa

Franklin India Taxshield 95 (FIT95) R. Sukumar / B. Sashikanth





* An open-ended fund. Monthly income is not assured and is subject to theavailability of distributable surplus.

R. Sukumar- Chief Investment Officer- Franklin Equity Funds

S. Chellappa- Asst. Vice President & Senior Research Analyst

B. Sashikanth- Asst. Vice President & Senior Research Analyst

Anil Prabhudas- Asst. Vice President & Senior Research Analyst

All above key personnel are based in Chennai.

This addendum forms an integral part of the respective Offer Documents issuedfor the schemes read with the Addenda.

This addendum is dated March 31, 2004.


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Addendum to the Offer Document of Templeton India Government Securities Fund

An Open End Scheme

Scheme Objective: An open end dedicated Gilts Scheme with the objective togenerate return from a credit-risk free portfolio comprising securities issued bythe Central / State Government and/or securities unconditionally guaranteed bythe Central and State Government for repayment of Principal and Interest.

PF Plan

The Scheme would introduce a PF Plan under Templeton India GovernmentSecurities Fund (TGSF) w.e.f April 19, 2004 with a view to invite ProvidentFunds, Super Annuation and Gratuity Trusts.

Issue opening: April 19, 2004 (Monday)Issue closing date: May 7, 2004 (Friday)Ongoing Sales and redemption: May 12, 2004 (Wednesday)

The new plan would be termed as Templeton India Government SecuritiesFund - PF Plan. This plan will have two options namely Growth and Dividend.The units of this Plan can be purchased by the following entities (subject to theapplicable legislation/regulations governing such entities):

1. Provident Funds

2. Superannuation, Pension, Welfare and Gratuity Funds

3. Charitable or Religious Trusts authorized to invest in units of mutualfunds

4. Trustees of Private Trusts authorized to invest in Mutual Fund Schemesunder their trusts deeds

5. Any other retirement benefit funds, introduced from time to time.

Minimum Amount for subscription in PF Plan:Account Opening: Rs.25,000/-Additional Purchase: Rs.5,000/-

Highlights:

1. Investors can prescribe a maturity date at the time of investment, or at alater date under the feature called Prescribed Maturity Date. Moreover,investors have the flexibility to change the same twice a financial year,provided the same is communicated to the fund’s office atleast 3 businessdays before the maturity date.

2. Investors can also opt for the appreciation withdrawal option either at thetime of investing or at a later date. Under the appreciation withdrawaloption, investors can choose to withdraw the capital appreciation at threefrequencies: Quarterly, Half yearly and Annual. Investors can choose towithdraw or reinvest such appreciation back into their account.

3. For all additional purchases, the investor may choose to provide a maturitydate either at the time of investment or at a later date.

4. Systematic Investment Plan facility will be available in this plan.

The units in the PF Plan will be available at Rs. 10/- during the IPO.

The applicable NAVs will be subject to the applicable load structure as givenbelow:

Entry Load: NilExit Load: 0.35% for redemptions within 6 months of allotment (this will applyfor fresh and additional purchases, and not on appreciation reinvested)

The AMC/Trustee reserve the right to change the load structure of the scheme ifit so deems fit in the interest of and for the smooth and efficient functioning ofthe scheme.

Fund Manager: Sameer Kulkarni

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Investment Objectives:

The new PF Plan will have the same portfolio as that of the existing TGSF andhence the same investment objectives and investment pattern as that of theexisting TGSF.

Minimum Subscription Amount:

Since the PF Plan is a plan within an existing Portfolio, the Fund does not haveany target for minimum subscription amount.

The AMC and the Trustee Board have approved the introduction of the new planon January 16, 2004.

In terms of SEBI Circular SEBI/IMD/CIR No. 10/22701/03 dated December 12,2003, each scheme and individual plan(s) under the schemes should have aminimum of 20 investors and no single investor should account for more than25% of the corpus of such scheme/plan(s). In the case of non-fulfilment witheither of the above two conditions, a three months time period or the end ofsucceeding calendar quarter, whichever is earlier, from the close of the InitialPublic Offering (IPO) of open ended schemes will be available to balance and toensure compliance with these two conditions, failing which the provisions ofRegulation 39 (2) (c) of SEBI (Mutual Funds) Regulations, 1996 would becomeapplicable automatically without any reference from SEBI. Accordingly, schemes/plans shall be wound up by following the guidelines laid down by SEBI.

This addendum is dated April 12, 2004.


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Addendum to the Offer Documents of Templeton IndiaIncome Fund (TIIF) and Franklin India Bluechip Fund (FIBCF)Since there are no significant distribution/marketing costs such as brokerage,sales promotion associated with direct investments made by Foreign InstitutionalInvestors (“FIIs”) through their sub-Accounts, hence, w.e.f. April 10, 2004, noload (entry/exit) will be charged by the above schemes on the direct investmentsmade by such FIIs.



This addendum forms an integral part of the respective Offer Documents issuedfor the above schemes read with the Addenda.



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Addendum to the Offer Document of Templeton FloatingRate Income Fund (TFIF)

Revised Load Structure with effect from April 28, 2004:

Fund TFIF- Long Term Plan(For investments upto Rs. 10 lacs)

Revised Exit Load 0.30% *

Existing Exit Load 0.50% *

*if redeemed within 6 months of allotment



This addendum forms an integral part of the Offer Document issued for thescheme read with the Addenda.


For Franklin Templeton Asset Management (I) Pvt. Ltd.

(Investment Manager of Templeton Mutual Fund)

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Ravi Mehrotra

President

Addendum to the Offer Documents of all Schemes ofTempleton Mutual Fund

The unitholders are hereby informed that the name of the Asset ManagementCompany has changed from Templeton Asset Management (India) PrivateLimited to Franklin Templeton Asset Management (India) Private Limited.

Addendum to the Offer Documents of:

Franklin India Bluechip Fund (FIBCF)

Franklin India Prima Fund (FIPF)

Franklin India Prima Plus (FIPP)

Franklin Infotech Fund (FIF)

Franklin FMCG Fund (FFF)

Franklin Pharma Fund (FPF)

Franklin India Growth Fund (FIGF)

Templeton India Growth Fund (TIGF)

Franklin India Opportunities Fund (FIOF)

Revised Load Structure: With effect from May 1, 2004, the Entry Load for all theabove schemes will stand changed from 2% to 2.25%. All prior investmentscontinue to be subject to the load structure at the time of their originalinvestments, as may be applicable.


These addenda forms an integral part of the Offer Documents issued for theschemes read with the Addenda. These addenda are dated April 22, 2004.


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Addendum to the Offer Documents of all the schemes of Templeton Mutual Fund

1. The unitholders are hereby informed that the name of the Trustee Companyhas changed from Templeton Trust Services Private Limited to FranklinTempleton Trustee Services Private Limited.

2. Change in Key Personnel:

Mr. Nilesh Shah-Director and Chief Investment Officer (Fixed Income) ceasesto be a part of Franklin Templeton Asset Management India Pvt. Ltd.(FTAMIL), the AMC.

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Scheme Objectives and Risk Factors: Franklin India Bluechip Fund (FIBCF) is an open ended growth scheme with an objective to primarily provide medium to long term capital appreciation. Franklin India Prima Fund (FIPF) isan open ended 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 schemewith 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 ended growth schemewith an objective to provide long term capital appreciation from a portfolio that is invested primarily in the information technology industry. Franklin Internet Opportunities Fund (FIOF) is an open end growth scheme, to generatecapital appreciation by capitalizing on the long-term growth opportunities in the Indian economy. and businesses. Franklin India Taxshield (FIT) is an open ended Equity Linked Savings scheme with an objective to provide mediumto long term growth of capital along with income tax rebate. Templeton India Income Builder Account (TIIBA) is an open ended scheme with an objective to provide investors regular income under the Dividend Plan and Capitalappreciation under the Growth Plan. FT India Balanced Fund (FTIBF) is an open ended balanced scheme with an objective to provide long term growth of capital and current income. By investing in equity, equity related securitiesand fixed income instruments. Templeton India Growth Fund (TIGF) is an open ended growth scheme with the objective to provide long-term capital growth. Templeton India Income Fund(TIIF) is an open end income schemewith the objective to generate a steady stream of income through investment in fixed income securities. Franklin India Growth Fund (FIGF) is an open ended growth scheme targeted at long term capital appreciation throughresearch based investments from a diversified portfolio invested predominantly in growth oriented equity and equity related securities. Franklin India Index Tax Fund (FITF) is an open ended index linked growth schemes with theobjective to invest in companies whose securities are included in the Nifty and subject to tracking errors, endeavouring to attain results commensurate with the S&P CNX Nifty Index. FT India Index Fund (FTIIF) is an open endedgrowth index scheme with an objective to provide returns that, before expenses, closely correspond to the total return of common stocks as represented by the S&P CNX Nifty Index under the “Nifty” Plan and BSE Sensex underthe ‘BSE Sensex Plan. Franklin India Index Fund (FIIF) is an open end index linked growth scheme aiming to provide returns that before expenses, closely correspond to the total return of common stocks as represented by theS&P CNX Nifty Index under the ‘Nifty’ Plan and BSE Sensex under the ‘BSE Sensex’ Plan and subject to tracking errors and endeavouring to attain results commensurate with the indices.Franklin India Balanced Fund (FIBF) is anopen ended balanced scheme with an objective to generate a combination of long tern capital appreciation and current income from a portfolio that is invested both in equity and related securities and in fixed income and moneymarket securities. Templeton Monthly Income Plan@ (TMIP) is an open-ended income scheme with no assured returns and having an objective to earn regular income for investors through investment primarily in high rated domesticfixed income securities. Templeton India Liquid Fund(TILF) and Templeton India Liquid Plus (TILP)are an open ended income schemes with the objective of providing income and liquidity consistent with prudent risk from aportfolio comprising of money market and debt instruments. Templeton Government Securities Fund (TGSF) is an open ended income scheme with the objective to generate credit risk-free return through investments in sovereignsecurities 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. Templeton FloatingRate Income Fund (TFIF) is an open ended 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 instrumentsswapped for floating rate returns, and also fixed rate instrument and money market instruments. Franklin FMCG Fund (FFF) is an open ended growth scheme with an objective to provide long term capital appreciation from aportfolio that is invested primarily in the shares of companies operating in the Fast Moving Consumer Goods (FMCG) industry. Franklin Pharma Fund (FPF) is an open ended growth scheme with an objective to provide longterm capital appreciation from a portfolio that is invested in shares of companies operating in pharmaceutical/life sciences industry sector. FT India Monthly Income Plan@ (FTIMIP) is an open ended income scheme with anobjective 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. Templeton India Pension Plan (TIPP) is an open ended taxsaving scheme whose objective is to provide investors regular income under the Dividend Plan and capital appreciation under the Growth Plan. Templeton India Money Market Account (TIMMA) objective to provide investors witha high degree of liquidity combined with current income. Templeton India Treasury Management Account (TITMA) is an open end Liquid scheme with an objective to provide current income with high liquidity. FT India PE RatioFund (FTIPERF) is an open ended scheme with an objective to provide superior risk-adjusted returns through a dynamically balanced portfolio of equities and debt/money market instruments FT India Asset Allocation Fund(FTIAAF) is an open ended scheme with the objective to provide investors a portfolio of equities and debt/ money market instruments, in line with their chosen asset allocation plan. FT India Gilt Fund (FTIGF) is an open endeddedicated gilt scheme with an objective to provide steady returns by investing in securities issued by the Central/State Government securities and/or securities unconditionally guaranteed by the Central/State Government forrepayment of principal and interest. Templeton India Children’s Asset Plan (TICAP) is an open ended income scheme, whose objective is to provide regular income under the Education Plan and Dividend option of Gift Plan andcapital appreciation under the Growth option of Gift Plan. Templeton India Short-Term Income Plan (TISTIP) is an open ended income scheme with an objective to provide stable returns by investing in fixed income securitieshaving a shorter maturity periods. FT India Life Stage Fund of Funds (FTLF) is an open end fund of fund scheme seeking to generate superior risk adjusted returns to investors in line with their chosen asset allocation. FT IndiaDynamic PE Ratio Fund of Funds (FTDPEF) 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 incomefunds. Franklin India Strategic Investment Plan (FISIP) is an open end scheme whose objective is to provide investors stability of capital along with high income. Franklin India Taxshield 95 (FIT 95) is an closed ended EquityLinked Savings scheme with an objective to provide medium to long term growth of capital along with income tax rebate. Franklin India Taxshield 96 (FIT 96) is an closed ended Equity Linked Savings scheme with an objectiveto provide medium to long term growth of capital along with income tax rebate.Franklin India Taxshield 97 (FIT 97) is an closed ended Equity Linked Savings scheme with an objective to provide medium to long term growth ofcapital along with income tax rebate.Franklin India Taxshield 98 (FIT 98) is an closed ended Equity Linked Savings scheme with an objective to provide medium to long term growth of capital along with income tax rebate.FranklinIndia Taxshield 99 (FIT 99) is an closed ended Equity Linked Savings scheme with an objective to provide medium to long term growth of capital along with income tax rebate. Risk Factors : All investments in mutual funds andsecurities are subject to market risks and the NAV of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. There can be no assurancethat a schemes investment objectives will be achieved. The past performance of the mutual funds managed by the Franklin Templeton Group and its affiliates is not necessarily indicative of future performance of the schemes. Theabove are only the names of the scheme and do not in any manner indicate the quality of the schemes, their future prospects or returns. The Mutual Fund is not guaranteeing or assuring any dividend under any of the schemes.The Mutual Fund is also not assuring that it will make any dividend distributions under the dividend plans of the schemes though it has every intention of doing so. All dividend distributions are subject to the investment performanceof the schemes. The investments made by the schemes are subject to external risks. Please go through the offer documents before investing. Statutory Details : Templeton Mutual Fund in India has been set up as a trust by TempletonInternational Inc. (liability restricted to the seed corpus of Rs.1 lac) with Franklin Templeton Trustee Services Pvt. Ltd. as the Trustee (Trustee under the Indian Trust Act 1882) and with Franklin Templeton Asset Management(India) Pvt. Ltd. as the Investment Manager. The fund offers NAV’s, purchases and redemptions on all business days except during the period when there is a book closure.

Following schemes are now being managed by Mr. Sameer Kulkarni-Head ofFixed Income:

Templeton Floating Rate Income Fund- Short Term Plan (TFIF-ST), TempletonIndia Liquid Fund (TILF), Templeton India Treasury Management Account(TITMA), Templeton India Money Market Account (TIMMA), Templeton IndiaShort-Term Income Plan (TISTIP), Franklin India Strategic Investment Plan(FISIP), Templeton India Liquid Plus (TILP), FT India Life Stage Fund of Funds(FTLF), Franklin India International Fund (FINTF)

Further, Templeton India Income Fund (TIIF) is now being managed by Mr.Sameer Kulkarni-Head of Fixed Income and Mr. Rahul Goswami- Asst. VicePresident (Fixed Income).

Mr. Satish Ramanathan has been appointed as Asst. Vice President/PortfolioManager/Research Analyst with effect from April 29, 2004.

Please find his details below:

Age: 38 years; Qualification: B. Tech MBA - USA; Functions & Experience (past10 years): Responsible for analyzing some of the key sectors including auto andwill also be co-portfolio manager of Franklin India Prima Fund (FIPF). (2000-2004) - Vice President, ICICI Securities. Research Analyst for the auto sector andStrategy. (1997-2000) - Senior Analyst - Sundaram Mutual Fund. Was assistingfund managers in the investment process and covered the auto and core economysectors. (1995-1996) - Worked in Birla Marlin and Daewoo Securities coveringvarious sectors including auto, FMCG and Pharma. (1993-1995)- AssistantManager - ICRA Limited. Was responsible in the credit rating process of variouscompanies and financial institutions.

Addendum to the Offer Documents of Templeton IndiaLiquid Fund (TILF), Templeton India Treasury Management

Account (TITMA), Templeton Floating Rate Income Fund-Short Term Plan (TFIF-ST), Templeton India Short-Term

Income Plan (TISTIP)W.e.f. May 14, 2004, Dividend Transfer Plan (DTP) facility will not be availablein Weekly Dividend Plans of the above-mentioned schemes.


This addendum is dated May 5, 2004.


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As per SEBI Circular SEBI/ IMD/CIR No. 8/5611/ 2004 dated March 19, 2004,TMF hereby declare all it’s 33 branches as described on page 36 of the KeyInformation Memorandum under the head “Franklin Templeton BranchOffices”as the Official points of acceptance of transactions. The “cut off time” asmentioned in the Offer Documents shall be reckoned at these official points. Allpurchase and redemption applications must be demonstrably received by theMutual Fund at these “official” points of acceptance of transactions.


This addendum is dated May 5, 2004.


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