To the Board Directors of Trustee Franklin Templeton Trustee Services Private Limited

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Independent Auditor’s Report
To the Board Directors of Trustee
Franklin Templeton Trustee Services Private Limited
Franklin Templeton Mutual Fund – Franklin India Low Duration Fund (No. of
segregated portfolios in the scheme -2)
Report on the Audit of the Financial Statements

Qualified Opinion
We have audited the financial statements of Franklin India Low Duration Fund (No. of segregated
portfolios in the scheme -2) – Total Portfolio (the ‘Scheme’) of Franklin Templeton Mutual Fund,
consisting of the Main portfolio and Segregated portfolio (refer note 1), which comprise the
balance sheet as at 31 March 2021 and the revenue account and cash flow statement for the year
then ended, and notes to the financial statements, including a summary of the significant
accounting policies.
In our opinion and to the best of our information and according to the explanations given to us,
except for the effects of the matter described in the Basis for Qualified Opinion section of our
report, the aforesaid financial statements give a true and fair view in conformity with the
accounting principles generally accepted in India relating to the liquidation basis of accounting
of the state of affairs of the Scheme as at 31 March 2021, its net surplus and cash flows for the
year ended on that date.

Basis for Qualified Opinion
We draw attention to Note 17 of the financial statements, regarding the ongoing judicial process
including the matters pending with the Hon’ble Supreme Court and the appeal made by Franklin
Templeton Asset Management (India) Private Limited (the ‘AMC’) and being made by Franklin
Templeton Trustee Services Private Limited (the ‘Trustee’) to the Securities Appellate Tribunal
(‘SAT’) on the Orders of the Securities and Exchange Board of India (the ‘SEBI’) in relation to the
governance and affairs of the Scheme.
Pursuant to the direction (without prejudice to the rights and contentions of the parties) of the
Hon’ble Supreme Court, the Trustee obtained the approval / consent of the unitholders for winding
up of the Scheme. However, the other aspects and issues in the petition of the AMC and some of the
unit holders including the governance and affairs of the Scheme and interpretation of regulation
18(15) (c) and regulation 39 of the Securities and Exchange Board of India (Mutual Funds)
Regulation, 1996 , as amended (the ‘Regulations’) are still pending before the Hon’ble Supreme
Court.
In the meanwhile, upon consideration of observations of the forensic auditor and response submitted
by the AMC and the Trustee, the SEBI issued show cause notices to the AMC, the Trustee and 8
employees of the AMC (including an ex-employee). All the parties submitted responses to the show
cause notice and post that the SEBI issued Orders to the AMC on 7 June 2021 and the Trustee and 8
employees of the AMC (including an ex-employee) on 14 June 2021 inter-alia directing the AMC to
refund to the Scheme, the investment management and advisory fees collected from 4 June 2018 (i.e.
date from which categorization circular was effective) till 23 April 2020 amounting to Rs. 41.19
crores (including interest), imposing restrictions on the AMC on launching new debt schemes and
imposing monetary penalty on the AMC and the Trustee and 8 employees of the AMC (including an
ex-employee).
Independent Auditor’s Report (Continued)
Franklin Templeton Trustee Services Private Limited
Franklin Templeton Mutual Fund – Franklin India Low Duration Fund (No. of
segregated portfolios in the scheme -2)
Basis for Qualified Opinion (Continued)
The AMC has filed an appeal against the SEBI’s Order on 21 June 2021. On 28 June 2021, SAT
issued an interim stay on the SEBI’s Order and directed AMC to deposit Rs. 250 Crore (consolidated
amount across the board for all the schemes under winding up) in an escrow account within three
weeks from the date of the order. The Trustee and 8 employees of the AMC (including an ex-
employee) are in the process of filing an appeal against the SEBI’s Order with SAT. The final
outcome of this appeal is pending as on the reporting date. Given the uncertainty relating to the
outcome of the appeal, the Scheme has not recognized an asset for the recovery of fee from the AMC.
Whilst the matter is pending to be further admitted/ heard by SAT, management, the Trustee and the
AMC, based on their review of the findings of the SEBI’s Order, believe this should not have a
material impact on the financial statements of the Scheme for the year ended 31 March 2021.
However, given the fact that certain matters related to the governance and affairs of the six schemes
are pending before the Hon’ble Supreme Court and the aforesaid Order of SEBI is being challenged
in appeal before SAT (as above) and given the uncertainty, we are unable to comment on the
consequential impact, if any, these matters may have on these financial statements for the year ended
31 March 2021.
We further draw attention to Note 9d of the financial statements, regarding accrual of trail
commission in the Scheme post issuance of the notice of its winding up i.e. from 24 April 2020 to
17 March 2021. The AMC vide letter dated 19 April 2021 sought guidance of the SEBI on the
payment of trail commission post issuance of the notice of its winding up. The SEBI vide letter dated
12 May 2021 clarified that trail commission due and payable till the date of issuance of the notice of
winding up i.e. 23 April 2020 can be charged to the schemes under winding up. The AMC vide letter
dated 26 May 2021, has sought further clarification from SEBI on payment of such commission for
the period 24 April 2020 to 17 March 2021.The SEBI vide letter dated 2 July 2021 re-iterated that
trail commission due and payable till the date of issuance of the notice of winding up i.e. 23 April
2020 can be charged to the schemes under winding up. Management believes that under Regulation
54, distribution commission is a recurring expense payable within the ‘total expense ratio’ as
disclosed in the scheme information document. Management is in the process of evaluating the letter
and next steps to be taken in this regard. Since, management is yet to complete its assessment and
decide on the future course of action, trail commission amounting to Rs. 5.51 Crore has not been
reversed for the period 24 April 2020 to 17 March 2021. Had the Scheme not accrued the trail
commission for the period from 24 April 2020 to 17 March 2021, ‘Commission to Agent’ expenses
and ‘Other Current Liabilities’ would have been lower by Rs. 5.51 crores and ‘net surplus for the
year’ and ‘retained surplus’ of the Scheme would have been higher by Rs. 5.51 crores.
We conducted our audit in accordance with the Standards on Auditing (‘SAs’) issued by the Institute
of Chartered Accountants of India (the ‘ICAI’). Our responsibilities under those SAs are further
described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. We are independent of the Scheme in accordance with the Code of Ethics issued by the ICAI
and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our qualified opinion.
Independent Auditor’s Report (Continued)
Franklin Templeton Trustee Services Private Limited
Franklin Templeton Mutual Fund – Franklin India Low Duration Fund (No. of
segregated portfolios in the scheme -2)
Emphasis of Matters
We draw attention to Note 2 to the financial statements, which explain that in view of the decision
of the Trustee to wind-up the Scheme and to cease any business activity in respect of the Scheme,
the going concern assumption is not valid for the preparation of the financial statements of the
Scheme. Accordingly, the financial statements of the Scheme have been prepared on a liquidation
basis i.e. assets are measured at lower of carrying amount and estimated net realizable values and
liabilities are stated at their estimated settlement amounts.
Further to the decision taken by the Trustee to wind-up the scheme, some unitholders sent legal
notices and filed writ petitions before Hon’ble High Courts of Madras, Delhi and Gujarat challenging
the decision of the Trustee to wind up the scheme without the consent of the unitholders and raising
concerns over non-compliance with the investment objectives of the Scheme. The single bench of
Hon’ble Gujarat High Court issued a stay order against the notice dated 28 May 2020 issued by the
Trustee to conduct E-voting and Unitholder’s meet for winding up of the Scheme. The Trustee and
the AMC filed a special leave petition before Hon’ble Supreme Court along with a petition to transfer
the writ petitions pending before various High courts to a single High court. On 19 June 2020,
Hon’ble Supreme Court transferred all the aforesaid matters to Hon’ble High Court of Karnataka
with a direction to hear and finally decide the matter within three months. On 24 October 2020,
Hon’ble Karnataka High Court upheld that the decision taken by the Trustee to wind up the schemes
can be implemented only after obtaining the consent of the unitholders by simple majority. The
Trustee and the AMC filed an appeal on 23 November 2020 with Hon’ble Supreme Court on certain
aspects of the Judgement of Hon’ble High Court of Karnataka. The petitioners before the various
High courts also filed separate SLPs before the Supreme Court and all these matters were listed
together. With a view to proceed with orderly realization of value from Scheme’s assets and
distribution to unitholders at the earliest, the Trustee had sought permission of Hon’ble Supreme
Court to seek the approval of unitholders for winding up the Schemes, to which permission was
granted by Hon’ble Supreme Court on 3 December 2020. As per the interim order passed on 3
December 2020 and 9 December 2020 by Hon’ble Supreme Court, E-voting was held from 26
December 2020 to 28 December 2020 followed by a unitholders meeting on 29 December 2020 and
the results of this voting exercise was delivered to Hon’ble Supreme Court by the SEBI appointed
independent observer. On 18 January 2021, Hon’ble Supreme Court disclosed the result and advised
the Trustee to compute the results based on units as well. For the Scheme, out of the votes cast, 97.23
% of unitholders representing 98.08 % of units, voted in favour of winding up. However, few
unitholders raised some objections on the E-voting process and after concluding the hearing Hon’ble
Supreme Court has reserved the matter for pronouncing order. On 2 February 2021, Hon’ble
Supreme Court permitted the Scheme to distribute cash generated by the Scheme as of 15 January
2021 to the unitholders and directed SBI MF to distribute this amount to unitholders. On 12 February
2021, Hon’ble Supreme Court upheld the results of the e-voting under Regulation 18 (15) (c) held
in December 2020 and confirmed the winding up of the six schemes and appointed SBI Mutual
Funds Management Private Limited (‘SBI MF’) to undertake the exercise of winding up, which
would include liquidation of assets and distribution to unitholders. SBI MF had filed the standard
operating procedure (‘SOP’) for liquidation of assets and distribution of cash to unit holders with the
Hon’ble Supreme Court on 8 March 2021 which was taken on record and accepted by the Hon'ble
Supreme Court on 18 March 2021. However the other aspects and issues in the petition of the
Appellant and some of the unit holders including the governance and affairs of the Scheme and
interpretation of regulation 18(15) (c) and regulation 39 of the Regulations are still pending before
the Hon’ble Supreme Court.
Independent Auditor’s Report (Continued)
Franklin Templeton Trustee Services Private Limited
Franklin Templeton Mutual Fund – Franklin India Low Duration Fund (No. of
segregated portfolios in the scheme -2)
Emphasis of Matters (Continued)
Management believes that the aforementioned litigations would not have a material impact on the
financial statements of the Scheme.
We draw attention to Note 18 to the financial statements which states that whilst the COVID-19
impact has been factored in the fair valuation of fixed income securities in the financial statements
as at 31 March 2021, however the ongoing COVID – 19 situation could increase the uncertainty and
adversely affect the ultimate realizable value of the Scheme’s fixed income securities, from that
estimated as at 31 March 2021.
Our opinion is not modified in respect of these matters.

Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters. In addition to the matter described in the Basis
for Qualified Opinion section we have determined the matters described below to be the key audit
matters to be communicated in our report

 Key audit matter                                           How the matter was addressed in our audit

 Fair valuation of fixed income securities

 Refer Note 2 (c) to the financial statements

 ▪ Fair valuation of debt securities is a subjective Our audit procedures included the following:
   area with judgment applied in determining fair ▪ We understood, evaluated and tested the design
     value.                                                      and operating effectiveness of key controls around
 ▪   Determination of fair valuation of securities is            the fair valuation of debt securities.
     dependent on various factors including issuer          ▪    We tested valuation policy approved by the
     specific factors, general factors, availability and         Trustees for its compliance with the Regulations.
     quality of data.                                       ▪   We checked the fair value used by the Scheme for
 ▪   Fair valuation of fixed income securities requires         the debt securities were in accordance with the
     application of valuation principles prescribed by          valuation policy.
     the Regulations.                                       ▪    We evaluated judgements and estimates used
 ▪   We have identified fair valuation of fixed income           while determining the fair valuation of debt
     securities as a key audit matter because of inherent        securities comprising of assumptions and
     subjectivity of estimates and judgement and its             relevance of data sources.
     significance to the financial statements.
Independent Auditor’s Report (Continued)
Franklin Templeton Trustee Services Private Limited
Franklin Templeton Mutual Fund – Franklin India Low Duration Fund (No. of
segregated portfolios in the scheme -2)
Other Information
Management of the AMC is responsible for the other information. The other information comprises
the information included in the Annual Report but does not include the financial statements and
our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to
report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial
Statements
The Scheme’s management, the Board of Directors of the Trustee and the Board of Directors of the
AMC (collectively referred to as ‘Management’) are responsible for the preparation of these financial
statements that give a true and fair view of the state of affairs, results of operations and cash flows
of the Scheme in accordance with the accounting policies and standards specified in the Ninth
Schedule of the Regulations and the accounting principles generally accepted in India relating to the
liquidation basis of accounting. This responsibility includes design, implementation and
maintenance of internal control relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, Management is responsible for assessing the Scheme’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless Management either intends to liquidate the Scheme or
to cease operations, or has no realistic alternative but to do so. In the present case Management
intends to liquidate the Scheme.
Management are responsible for overseeing the Scheme’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with SAs will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Independent Auditor’s Report (Continued)
Franklin Templeton Trustee Services Private Limited
Franklin Templeton Mutual Fund – Franklin India Low Duration Fund (No. of
segregated portfolios in the scheme -2)
Auditor’s Responsibilities for the Audit of the Financial Statements (Continued)
As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
•   Identify and assess the risks of material misstatement of the financial statements, whether due
    to fraud or error, design and perform audit procedures responsive to those risks, and obtain
    audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
    not detecting a material misstatement resulting from fraud is higher than for one resulting from
    error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
    override of internal control;
•   Obtain an understanding of internal control relevant to the audit in order to design audit
    procedures that are appropriate in the circumstances, but not for the purpose of expressing an
    opinion on the effectiveness of the Scheme’s internal controls;
•   Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
    estimates and related disclosures made by Management;
•   Conclude on the appropriateness of Management’s use of the going concern basis of
    accounting and, based on the audit evidence obtained, whether a material uncertainty exists
    related to events or conditions that may cast significant doubt on the Scheme’s ability to
    continue as a going concern. If we conclude that a material uncertainty exists, we are required
    to draw attention in our auditor’s report to the related disclosures in the financial statements or,
    if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
    audit evidence obtained up to the date of our auditor’s report. However, future events or
    conditions may cause the Scheme to cease to continue as a going concern. In the present case,
    liquidation basis of accounting has been used since the Trustee have concluded that the use of
    going concern basis is not appropriate in the facts and circumstances as stated in Note 2.
•   Evaluate the overall presentation, structure and content of the financial statements, including
    the disclosures and whether the financial statements represent the underlying transactions and
    events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.

Report on Other Legal and Regulatory Requirements
1   As required by Regulation 55 (4) of the Regulations, we report that:
    (a) We have obtained all information and explanations which, to the best of our knowledge
        and belief, were necessary for the purposes of the audit; and
    (b) Except for the effects of the matters described in the Basis for Qualified Opinion paragraph
        above, the balance sheet and the revenue account have been prepared in accordance with
        the accounting policies and standards as specified in the Ninth Schedule of the Regulations
        as applicable in the context of liquidation basis of accounting.
Independent Auditor’s Report (Continued)
Franklin Templeton Trustee Services Private Limited
Franklin Templeton Mutual Fund – Franklin India Low Duration Fund (No. of
segregated portfolios in the scheme -2)
Report on Other Legal and Regulatory Requirements (Continued)
2   As required by Clause 5 (ii) (2) of the Eleventh Schedule of the Regulations, we report that the
    balance sheet and the revenue account are in agreement with the books of account of the
    Scheme.
3   As required by the Eight Schedule of the Regulations, we report that, except for the effects of
    the matters described in the Basis for Qualified Opinion paragraph above, in our opinion and
    on the basis of information and explanations given to us, the methods used to value non - traded
    securities as at 31 March 2021, as determined by the Board of Directors of the AMC, are in
    accordance with the Regulations and other guidelines issued by the SEBI as applicable and
    approved by the Board of Directors of the Trustee, are fair and reasonable. This is in the context
    of liquidation basis of accounting whereby non-traded securities are measured at lower of
    carrying amount and estimated net realisable value.

                                                                               For B S R & Co. LLP
                                                                              Chartered Accountants
                                                         Firm's Registration No: 101248W/W-100022

                                                                                     Sameer Mota
Mumbai                                                                                     Partner
5 July 2021                                                                 Membership No. 109928
                                                                      UDIN: 21109928AAAATA3082
FRANKLIN TEMPLETON MUTUAL FUND
        BALANCE SHEET AS AT MARCH 31, 2021
        (All amounts in thousands of Rupees)

                                                                                                                                                                                                                               Franklin India Low Duration Fund-Segregated Portfolio 2 -         Franklin India Low Duration Fund (No. of segregated Portfolios
                                                                                           Franklin India Low Duration Fund (No. of segregated Portfolios       Franklin India Low Duration Fund-Segregated Portfolio 1 -
                                                                               Schedules                                                                                                                                       10.90% Vodafone Idea Ltd (02-Sep-2023) P/C 03 Sep 2021 –             in the scheme -2) – Total portfolio i.e. Main portfolio &
                                                                                                          in the scheme -2) – Main portfolio                  8.25% Vodafone Idea Ltd (10-Jul-2020) – Segregated portfolio
                                                                                                                                                                                                                                                 Segregated portfolio                                                 Segregated portfolio

                                                                                                                   As at                             As at                            As at                           As at                          As at                              As at                              As at                         As at
                                                                                                          March 31, 2021                    March 31, 2020                    July 10, 2020                  March 31, 2020                 March 31, 2021                     March 31, 2020                 March 31, 2021 $$                 March 31, 2020
        LIABILITIES
 1      Unit Capital                                                            2(b) & 3                       45,35,092                       1,40,16,644                       19,43,743                       21,03,093                       19,36,318                         21,03,093                            84,15,153                  1,82,22,830
 2      Reserves and Surplus                                                       4
2.1     Unit Premium Reserve                                                                                  (29,33,830)                       (29,40,196)                      (1,62,708)                       (1,59,539)                     (6,02,705)                         (5,93,093)                         (36,99,243)                  (36,92,828)
2.2     Unrealised Appreciation Reserve                                                                         1,26,496                                94                               -                                -                              -                                  -                            1,26,496                           94
2.3     Retained Surplus                                                                                       81,85,818                       1,62,10,641                        2,00,657                       (19,43,554)                    (13,33,613)                        (15,10,000)                          70,52,862                  1,27,57,087
 3      Borrowings
3.1     Borrowings from CCIL                                                                                            -                       51,58,000                                 -                               -                              -                                  -                                    -                   51,58,000
 4      Current Liabilities and Provisions                                         5
4.1     Current Liabilities                                                                                     1,23,674                          1,38,467                             776                                -                              -                                  -                             1,24,450                    1,38,467
        TOTAL                                                                                                1,00,37,250                       3,25,83,650                       19,82,468                                -                              -                                  -                          1,20,19,718                 3,25,83,650

        ASSETS

  1     Investments                                                            2(c) & 6
 1.1    Listed Securities
1.1.1   Other Debentures and Bonds                                                                             83,68,224                       2,00,90,811                                -                               -                              -                                  -                           83,68,224                  2,00,90,811
 1.2    Unlisted Securities
1.2.1   Privately Placed Debentures and Bonds                                                                   2,88,739                        97,15,232                                 -                               -                              -                                  -                            2,88,739                    97,15,232
1.2.2   Privately Placed Debentures and Bonds                                                                                                                                             -                               -                              -                                  -
          -Below Investment Grade and Default                                                                           -                        5,09,524                                                                                                                                                                        -                    5,09,524
 1.3    Money Market Instruments
1.3.1   Commercial Papers                                                                                              -                         5,28,411                                 -                               -                              -                                  -                                   -                     5,28,411
 1.4    Units of Mutual Fund                                                                                    9,56,621                                -                                 -                               -                              -                                  -                            9,56,621                            -
  2     Other Current Assets                                                       7
 2.1    Cash and Bank Balances                                                                                  2,51,881                            42,372                       19,82,468                                -                              -                                  -                            22,34,349                      42,372
 2.2    Reverse Repo Lending                                                                                           -                          9,14,358                               -                                -                              -                                  -                                    -                    9,14,358
 2.3    Others                                                                                                  1,71,785                          7,82,942                               -                                -                              -                                  -                             1,71,785                    7,82,942
        TOTAL                                                                                                1,00,37,250                       3,25,83,650                       19,82,468                                -                              -                                  -                          1,20,19,718                 3,25,83,650
        $$ Includes balances as at July 10, 2020 for Segregated portfolio -1

        Reference to significant accounting policies                            1 to 19

        The accompanying schedules are integral part of this Balance Sheet.

        As per our attached report of even date

        For B S R & Co. LLP                                                                                                 For Franklin Templeton Trustee                                    For Franklin Templeton Asset Management
        Chartered Accountants                                                                                               Services Private Limited                                          (India) Private Limited
        Firm's Registration No.: 101248W/W-100022

        Sd/-                                                                                                                Sd/-                                                              Sd/-                                                            Sd/-                               Sd/-
        Sameer Mota                                                                                                         Sandra Martyres                                                   Tabassum Inamdar                                                S. Jayaram                         Santosh Kamath
        Partner                                                                                                             Director                                                          Director                                                        Director                           Managing Director &
        Membership No: 109928                                                                                                                                                                                                                                                                    Chief Investment Officer –
                                                                                                                                                                                                                                                                                                 Fixed Income

                                                                                                                            Sd/-                                                              Sd/-                                                            Sd/-                               Sd/-
        Place : Mumbai                                                                                                      Shilpa Shetty                                                     Sanjay Sapre                                                    Sandeep Nair                       Kunal Agarwal
        Date : July 5, 2021                                                                                                 Director                                                          President                                                       Vice President                     Vice President &
                                                                                                                                                                                                                                                                                                 Portfolio Manager –
                                                                                                                                                                                                                                                                                                 Fixed Income
FRANKLIN TEMPLETON MUTUAL FUND
       REVENUE ACCOUNT FOR THE YEAR ENDED MARCH 31, 2021
       (All amounts in thousands of Rupees)

                                                                                                                                                                                                                                                         Franklin India Low Duration Fund-Segregated Portfolio 2 -       Franklin India Low Duration Fund (No. of segregated Portfolios
                                                                                                                  Franklin India Low Duration Fund (No. of segregated Portfolios        Franklin India Low Duration Fund-Segregated Portfolio 1 -
                                                                                                   Schedules                                                                                                                                             10.90% Vodafone Idea Ltd (02-Sep-2023) P/C 03 Sep 2021 –            in the scheme -2) – Total portfolio i.e. Main portfolio &
                                                                                                                                 in the scheme -2) – Main portfolio                   8.25% Vodafone Idea Ltd (10-Jul-2020) – Segregated portfolio
                                                                                                                                                                                                                                                                           Segregated portfolio                                                Segregated portfolio

                                                                                                                                     Year ended                        Year ended              For the period ended For the period January 24,2020                       Year ended For the period January 24,2020                              Year ended                  Year ended
                                                                                                                                                                                                                                                to                                                              to
                                                                                                                                 March 31, 2021                     March 31, 2020                     July 10, 2020               March 31, 2020                     March 31, 2021               March 31, 2020                    March 31, 2021 $$$                 March 31, 2020
 1     INCOME & GAINS
1.1    Interest ( Refer Note No.16)                                                                  2(d) & 8                         24,39,005                         57,73,186                         1,74,988                                   -                      1,76,387                                 -                           27,90,380                   57,73,186
1.2    Profit on inter-scheme transfer of investments                                                  2(d)                                 712                          2,82,112                                -                                   -                             -                                 -                                 712                    2,82,112
1.3    Profit on sale/redemption of investments in securities (other than inter-scheme transfer)       2(d)                            1,50,829                                 -                           26,446                                   -                             -                                 -                            1,77,275                           -
1.4    Change in Unrealised Appreciation in the value of Investments                               2(c) & 6(ii)                        1,26,402                           (20,876)                               -                                   -                             -                                 -                            1,26,402                     (20,876)
1.5    Other Income                                                                                2(e ) & 2(g)                             534                            12,067                                -                                   -                             -                                 -                                 534                      12,067
                                                                                                                                      27,17,482                         60,46,489                         2,01,434                                -                         1,76,387                                 -                           30,95,303                   60,46,489
  2    EXPENSES & LOSSES
 2.1   Loss on sale/redemption of investments in securities (other than inter-scheme transfer)        2(d)                                    -                          2,96,186                                -                               -                                 -                              -                                      -                    2,96,186
 2.2   Management Fees                                                                                 9                                  5,978                          2,04,656                                -                               -                                 -                              -                                  5,978                    2,04,656
 2.3   GST on Management Fees                                                                          9                                  1,076                            36,837                                -                               -                                 -                              -                                  1,076                      36,837
 2.4   Transfer Agents Fees and Expenses                                                                                                    605                            19,587                                -                               -                                 -                              -                                    605                      19,587
 2.5   Custodian Fees                                                                                                                         2                             3,745                                -                               -                                 -                              -                                      2                       3,745
 2.6   Trusteeship Fees                                                                                 9                                    24                               844                                -                               -                                 -                              -                                     24                         844
 2.7   Commission to Agents                                                                                                              59,334                          1,52,750                                -                               -                                 -                              -                                 59,334                    1,52,750
 2.8   Investor Education Expenses                                                                     2(f)                                 323                            11,248                                -                               -                                 -                              -                                    323                      11,248
 2.9   Marketing and Distribution Expenses                                                                                                2,714                             5,701                                -                               -                                 -                              -                                  2,714                       5,701
2.10   Audit Fees                                                                                                                           509                               338                                -                               -                                 -                              -                                    509                         338
2.11   Change in Unrealised Depreciation in value of Investments                                   2(c) & 6(ii)                      (36,08,860)                        34,27,523                       (19,43,554)                      19,43,554                                 -                      15,10,000                             (55,52,414)                  68,81,077
2.13   Provision for default securities                                                                                               35,26,810                                 -                                -                               -                                 -                              -                              35,26,810                           -
2.13   Other Operating Expenses                                                                                                           5,169                             6,833                              777                               -                                 -                              -                                  5,946                       6,833
                                                                                                                                         (6,316)                        41,66,248                       (19,42,777)                      19,43,554                                 -                      15,10,000                             (19,49,093)                  76,19,802

 3     NET SURPLUS/(DEFICIT) FOR THE YEAR/ PERIOD                                                                                     27,23,798                         18,80,241                        21,44,211                       (19,43,554)                        1,76,387                      (15,10,000)                            50,44,396                  (15,73,313)
 4     Transfer from Retained Surplus                                                                  4                             1,62,10,641                       3,42,44,937                      (19,43,554)                               -                       (15,10,000)                              -                            1,27,57,087                 3,42,44,937
 5     Add: Balance Transfer from Unrealised Appreciation Reserve                                       4                                     94                            20,970                               -                                -                                -                               -                                     94                      20,970
 6     Less: Balance Transfer to Unrealised Appreciation Reserve                                        4                               1,26,496                                94                               -                                -                                -                               -                               1,26,496                          94
 7     Add / (Less): Equalisation Credit/(Debit)                                                      2(b)                          (1,06,22,219)                     (1,96,85,960)                              -                                -                                -                               -                           (1,06,22,219)               (1,96,85,960)
 8     Income Available for Appropriation                                                                                              81,85,818                       1,64,60,094                        2,00,657                       (19,43,554)                      (13,33,613)                     (15,10,000)                             70,52,862                 1,30,06,540
 9     Dividend Appropriation
9.1    Income Distributed during the Year / Period                                                     14                                    0*                          (1,76,356)                              -                                -                                -                               -                                    0*                    (1,76,356)
9.2    Tax on Income Distributed during the Year / Period ##                                           14                                     -                            (73,097)                              -                                -                                -                               -                                     -                      (73,097)
10     RETAINED SURPLUS / (DEFICIT) CARRIED                                                            4                              81,85,818                        1,62,10,641                        2,00,657                       (19,43,554)                      (13,33,613)                     (15,10,000)                            70,52,862                  1,27,57,087
                                                                                        (8+9)
       FORWARD TO THE BALANCE SHEET

       $$$ Includes balances during the period April 1, 2020 to July
       10, 2020 for Segregated portfolio -1

       ## Income distribution is subject to deduction of TDS at the
       applicable rates effective April 1, 2020

       * Amount is less than rupees one thousand
       Reference to significant accounting policies                                                  1 to 19
       The accompanying schedules are integral part of this Revenue Account.

       As per our attached report of even date

       For B S R & Co. LLP                                                                                                                          For Franklin Templeton Trustee                                    For Franklin Templeton Asset Management
       Chartered Accountants                                                                                                                        Services Private Limited                                          (India) Private Limited
       Firm's Registration No.: 101248W/W-100022

       Sd/-                                                                                                                                         Sd/-                                                              Sd/-                                                              Sd/-                             Sd/-
       Sameer Mota                                                                                                                                  Sandra Martyres                                                   Tabassum Inamdar                                                  S. Jayaram                       Santosh Kamath
       Partner                                                                                                                                      Director                                                          Director                                                          Director                         Managing Director &
       Membership No: 109928                                                                                                                                                                                                                                                                                             Chief Investment Officer –
                                                                                                                                                                                                                                                                                                                         Fixed Income

                                                                                                                                                    Sd/-                                                              Sd/-                                                              Sd/-                             Sd/-
       Place : Mumbai                                                                                                                               Shilpa Shetty                                                     Sanjay Sapre                                                      Sandeep Nair                     Kunal Agarwal
       Date : July 5, 2021                                                                                                                          Director                                                          President                                                         Vice President                   Vice President &
                                                                                                                                                                                                                                                                                                                         Portfolio Manager –
                                                                                                                                                                                                                                                                                                                         Fixed Income
FRANKLIN TEMPLETON MUTUAL FUND
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2021
(All amounts in thousands of Rupees)
                                                                                                                                                                                                      Franklin India Low Duration Fund-             Franklin India Low Duration Fund-
                                                                                                       Franklin India Low Duration Fund (No. of segregated Portfolios in the scheme -2) – Main      Segregated Portfolio 1 - 8.25% Vodafone      Segregated Portfolio 2 - 10.90% Vodafone
                                                                                                                                             portfolio                                                Idea Ltd (10-Jul-2020) – Segregated        Idea Ltd (02-Sep-2023) P/C 03 Sep 2021 –
                                                                                                                                                                                                                   portfolio                                Segregated portfolio
                                                                                                                                     Year ended                                   Year ended                            For the period ended                                    Year ended
                                                                                                                                  March 31, 2021                               March 31, 2020                                   July 10, 2020                                March 31, 2021
Cashflow from operating activities
Surplus/(Deficit) for the year before equalisation and income distribution.                                                             27,23,798                                    18,80,241                                     21,44,211                                       1,76,387
Add / (Less) :Change in Unrealised Appreciation in value of Investments                                                                 (1,26,402)                                      20,876                                             -                                              -
Add / (Less) :Change in Unrealised Depreciation in value of Investments                                                                (36,08,860)                                   34,27,523                                    (19,43,554)                                             -
Add / (Less) :Amortization of premium / discount on investment cost                                                                     (1,19,220)                                  (16,81,168)                                            -                                              -
Add / (Less) :Interest income                                                                                                          (24,95,834)                                  (58,18,929)                                    (1,74,988)                                     (1,76,387)
Add / (Less) :Interest expense on borrowing                                                                                                56,829                                       45,743                                             -                                              -
Adjustments for:-
(Increase)/Decrease in Investments at cost                                                                                            2,50,84,876                                  3,51,39,421                                     19,43,554                                              -
(Increase)/Decrease in Other current assets                                                                                                (2,330)                                      32,700                                             -                                              -
Increase/(Decrease) in Current liabilities                                                                                                 29,861                                      (12,925)                                          776                                              -
Cash Generated from / (used in) operating activities before                                                                           2,15,42,718                                  3,30,33,482                                     19,69,999                                              -
adjustement for interest received and paid
Interest income received                                                                                                                30,90,894                                    61,57,384                                      1,74,988                                      1,76,387
Interest expense paid on borrowing                                                                                                        (57,949)                                     (45,743)                                            -                                             -
Net Cash Generated from / (used in) operating activities                                 (A)                                          2,45,75,663                                  3,91,45,123                                     21,44,987                                      1,76,387

Cashflow from financing activities
Increase/(Decrease) in Unit capital                                                                                                    (94,81,552)                                (2,06,08,569)                                    (1,59,350)                                     (1,66,775)
Increase/(Decrease) in Unit premium @@@                                                                                              (1,06,15,853)                                (2,31,20,488)                                       (3,169)                                        (9,612)
Adjustments for:-
Increase/(Decrease) in Redemption Payable                                                                                                 (43,483)                                      (2,401)                                            -                                              -
(Increase)/Decrease in Subscription Receivable                                                                                             18,427                                       39,290                                             -                                              -
Dividend paid during the year                                                                                                                   -                                    (1,36,752)                                            -                                              -
Increase/(Decrease) in Loans and Borrowings                                                                                            (51,58,000)                                   51,58,000                                             -                                              -
Increase/(Decrease) in Unclaimed Redemption                                                                                                   (10)                                          10                                             -                                              -
Increase/(Decrease) in Unclaimed distributed income                                                                                           (14)                                          14                                             -                                              -
Increase/(Decrease) in units pending allotment                                                                                                (27)                                     (73,434)                                            -                                              -
Net Cash Generated from / (used in) financing activities                                 (B)                                         (2,52,80,512)                                (3,87,44,330)                                    (1,62,519)                                     (1,76,387)

Net Increase/(Decrease) in cash and cash equivalents                                    (A+B)                                           (7,04,849)                                   4,00,793                                      19,82,468                                              -

Cash and Cash Equivalents as at the beginning of the year                                                                                9,56,730                                    5,55,937                                              -                                              -
Cash and Cash Equivalents as at the close of the year                                                                                    2,51,881                                    9,56,730                                      19,82,468                                              -

Components of cash and cash equivalents
Balances with banks in current accounts                                                                                                  2,51,881                                    9,56,730                                      19,82,468                                              -
                                                                                                                                         2,51,881                                    9,56,730                                      19,82,468                                              -
@@@ includes amount of (3,458,452) adjusted on account of segregation
of portfolio during the financial year 2019-2020.

Note 1 :Cash and Cash Equivalents includes Reverse Repo balances
(Current Year - Nil & Previous Year - INR 914,358) and bank balances in
current account pertaining to Investor education accruals, unclaimed
redemptions/ dividends etc.

Note 2 :The Above Cashflow Statement has been prepared under the
indirect method for identifying operating cash flows as set out in Accounting
Standard 3 - Cash Flow Statement (Revised 1997), issued by the Institute of
Chartered Accountants of India.

As per our attached report of even date

For B S R & Co. LLP                                                             For Franklin Templeton Trustee                                       For Franklin Templeton Asset Management
Chartered Accountants                                                           Services Private Limited                                             (India) Private Limited
Firm's Registration No.: 101248W/W-100022

Sd/-                                                                            Sd/-                                                                 Sd/-                                         Sd/-                                          Sd/-
Sameer Mota                                                                     Sandra Martyres                                                      Tabassum Inamdar                             S. Jayaram                                    Santosh Kamath
Partner                                                                         Director                                                             Director                                     Director                                      Managing Director &
Membership No: 109928                                                                                                                                                                                                                           Chief Investment Officer –
                                                                                                                                                                                                                                                Fixed Income

                                                                                Sd/-                                                                 Sd/-                                         Sd/-                                          Sd/-
Place : Mumbai                                                                  Shilpa Shetty                                                        Sanjay Sapre                                 Sandeep Nair                                  Kunal Agarwal
Date : July 5, 2021                                                             Director                                                             President                                    Vice President                                Vice President &
                                                                                                                                                                                                                                                Portfolio Manager –
                                                                                                                                                                                                                                                Fixed Income
FRANKLIN TEMPLETON MUTUAL FUND
SCHEDULES TO THE BALANCE SHEET AS AT MARCH 31, 2021 AND REVENUE ACCOUNT FOR THE YEAR ENDED MARCH 31, 2021
(All amounts in thousands of Rupees)

1.    BACKGROUND

      Franklin Templeton Mutual Fund (‘the Fund’) was established as a trust under the Indian Trusts Act, 1882, by way of a trust deed dated January 4, 1996, a supplementary trust deed dated March 30, 1996 and August 26, 2005 executed
      by Templeton International Inc. USA, the sponsor of the Fund. Templeton International Inc. is a part of the Franklin Templeton Investments group.
      In accordance with the Securities and Exchange Board of India (‘SEBI’) (Mutual Funds) Regulations, 1996 (‘the SEBI Regulations’), the Board of Directors of Franklin Templeton Trustee Services Private Limited (‘the Trustee’) has
      appointed Franklin Templeton Asset Management (India) Private Limited ('the AMC') to manage the Fund’s affairs and operate its Schemes.
      The objective and other feature of the schemes covered in the condensed financial statement are as under:

                     Scheme Name                    Nature of the Scheme                   Date of Allotment                     Scheme Objective                                                    Plans Offered ##

      Franklin India Low Duration Fund              Open Ended Mutual Fund Scheme           February 7, 2000     The primary objective of the Scheme is to earn The Scheme offers its investors three plans: the Monthly IDCW Plan, the
                                                                                                                 regular income for investors through investment Quarterly IDCW Plan, and the Growth Plan (‘the Plans’). Effective January 1,
                                                                                                                 primarily in debt securities                    2013, in accordance with SEBI Circular no. CIR/IMD/DF/21/2012 dated
                                                                                                                                                                 September 13, 2012, the      Scheme introduced a new Plan under each of the
                                                                                                                                                                 Existing plan / option, termed as ‘Direct’.”

      IDCW - Income Distribution cum capital withdrawal

      ## On April 23, 2020, the Trustee issued a winding up notice thereby deciding to wind up the scheme in accordance with Regulation 39(2)(a) of the SEBI Regulations. Effective April 24, 2020, fresh subscriptions / redemptions are not
      permitted in the scheme on account of the winding up notice.
      This scheme is under winding-up and SBI Funds Management Private Limited has been appointed as the liquidator as per the order of Hon'ble Supreme Court dated February 12, 2021.

      SEBI vide its Circular no. SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 6, 2017 read along with Circular no. SEBI/HO/IMD/DF3/CIR/P/2017/126 dated December 4, 2017 (the “Circulars”) had issued directions for categorization
      and rationalization of all the Mutual Fund Schemes in order to standardize the scheme categories and characteristics of each category. Pursuant to the circulars, the Board of Directors of Franklin Templeton Trustee Services Private
      Limited and Franklin Templeton Asset Management (India) Private Limited have approved the proposed categorization and changes in name/ features of the schemes. Subsequently, changes in name/ features of this scheme (as
      applicable) on account of the proposed categorization was notified to SEBI and the changes were made effective June 4, 2018.

      During FY 2019-20, the Scheme has included provisions related to creation of segregated portfolios in the Scheme Information Document (SID) with effect from December 26, 2019. This change in fundamental attribute of the Scheme
      was done in accordance with regulation 18(15A) of the SEBI (Mutual Funds) Regulations, 1996.

      During FY 2019-20, the Scheme has modified its asset allocation and has included Investment in debt instruments having structured obligations/ credit enhancements with effect from January 29, 2020. This change in fundamental
      attribute of the Scheme was done in accordance with regulation 18(15A) of the SEBI (Mutual Funds) Regulations, 1996.

      Pursuant to the rating downgrade of the security to ‘below investment grade’, the following segregated portfolios were created on January 24, 2020 with the approval of the Board of Directors of the Trustee and AMC, in accordance with
      the SEBI Regulations and as per the provisions of the Scheme Information Document (SID):
                                                                                            Effective date of
                                    Name of the segregated portfolio                            creation

                Franklin India Low Duration Fund-Segregated Portfolio 1 - 8.25%
                                                                                                     24-Jan-20
                Vodafone Idea Ltd (10-Jul-2020) ###

                Franklin India Low Duration Fund-Segregated Portfolio 2 - 10.90%
                                                                                                     24-Jan-20
                Vodafone Idea Ltd (02-Sep-2023) P/C 03 Sep 2021

      These securities of Vodafone Idea Ltd. were fair valued on January 16, 2020 in accordance with fair valuation principles of SEBI Regulations.

      In accordance with the SEBI circular no. SEBI/HO/IMD/DF2/CIR/P/2018/160 dated December 28, 2018, all existing investors in the scheme as on the date of the segregation have been allotted same number of units in the segregated
      portfolio as held in the main portfolio at a face value of Rs. 1 each as per the resolution of the Board of Trustees dated January 25, 2020 for Vodafone Idea. Resultantly, the segregated portfolio has the same number of corresponding
      plans as in the main portfolio. As required by the aforesaid SEBI circular, the units of the segregated portfolio were listed on National Stock Exchange (NSE) on February 7, 2020 for Vodafone Idea to facilitate exit to unitholders in the
      segregated portfolio.

      ### Post the creation of the segregated portfolio (8.25% Vodafone Idea Ltd 10JUL20) on January 24, 2020, the annual coupon was due and received by the segregated portfolio on June 12, 2020. Subsequently, the full principal due,
      along with the interest from June 12, 2020 to July 9, 2020 was received by the segregated portfolio on the maturity date i.e. July 10, 2020. These amounts were distributed to the unitholders proportionately in ratio of their holdings in the
      segregated portfolio.
      All the figures pertain to the main portfolio, unless stated otherwise.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Basis of preparation of financial statements

      The financial statements are prepared in accordance and conformity with the accounting policies and standards specified in the Ninth Schedule to the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 (‘SEBI
      Regulations’). The significant accounting policies are in the context of the fact that on 23 April 2020, the Trustee passed a resolution for winding up of the Scheme and issued a notice to wind up the Scheme in accordance with
      Regulation 39(2)(a) of the SEBI Regulations. This was consequent to steep fall in liquidity in certain segments of the corporate bond market primarily due to the Covid-19 crisis and the resultant lock-down of the Indian economy.
      Considering the significant and unprecedented economic and financial challenges posed, coupled with heightened redemption pressure, the Trustee was of the considered opinion that an event has occurred wherein winding up of the
      Scheme was the only viable option to preserve value for unitholders and to enable an orderly and equitable exit for all investors in these unprecedented circumstances. As per the legal advice received by the Fund/ Trustee/ AMC,
      Regulation 39(2)(a) of the SEBI Mutual Fund Regulations 1996 and the decision to wind-up a scheme takes effect on the date of publication of notice under regulation 39(3)(b) and further authorization from unitholders is needed for the
      Trustee or any other person to take steps consequent upon the winding up of the Scheme, viz., liquidation of assets and distribution of proceeds to unitholders after meeting liabilities of the Scheme. In view of the notice to wind up as
      mentioned above, on and from 24 April 2020, the Trustee and the AMC have:
      (a) ceased to carry on any business activity in respect of the Scheme;
      (b) ceased to create or cancel units in the Scheme; and
      (c) ceased to issue or redeem units in the Scheme.
      On 28 May 2020, the Trustee issued notice to unitholders for E-voting and Unitholders’ meet to seek approval by simple majority of votes to authorize the Trustee or Deloitte Touche Tohmastu India LLP (Deloitte) to take further steps
      for winding up of the Scheme as per Regulation 41(1) of the SEBI Regulations.
      Further to the decision taken by the Trustee to wind-up the scheme, some unitholders had sent legal notices and filed writ petitions before the Hon’ble High Courts of Madras, Delhi and Gujarat challenging the decision of the Trustee to
      wind up the Scheme without the consent of the Unitholders and raising concerns over non-compliance with the investment objectives of the Scheme. The single bench of Hon’ble Gujarat High Court issued a stay order against the notice
      dated 28 May 2020 issued by the Trustee to conduct E-voting and Unitholders meet for winding up of the Scheme. The Trustee and AMC filed a special leave petition before the Hon’ble Supreme Court along with a petition to transfer
      the writ petitions pending before various High courts to a single High court. On 19 June 2020, the Hon’ble Supreme Court transferred all the aforesaid matters to the Hon’ble High Court of Karnataka with a direction to hear and finally
      decide the matter within three months. The Hon’ble High Court of Karnataka upheld the authority of the Trustee to wind up the six fixed income schemes in its judgment dated 24 October 2020. The Hon’ble High Court Karnataka also
      held that there was nothing wrong in the decision-making process and that no interference is called for in the decision taken by the Trustee on 23 April 2020 to wind up the schemes. It further directed that the decision of winding up can
      be implemented only after obtaining the consent of unitholders under sub-clause (c) of clause 15 of Regulation 18 of the SEBI (Mutual Funds) Regulations, 1996.

      The Trustees and the AMC filed an appeal on 23 November 2020 with the Hon’ble Supreme Court on certain aspects of the judgement of the Hon’ble High Court of Karnataka. The petitioners before the various High courts also filed
      separate Special Leave Petitions (‘SLPs’) before the Hon’ble Supreme Court and all these were listed together. With a view to proceed with orderly realization of value from Scheme assets and distribution to Unitholder at the earliest, the
      Trustee had sought permission of the Hon’ble Supreme Court to seek the approval of Unitholder for winding up the Schemes, for which the permission was granted by the Hon’ble Supreme Court on 3 December 2020. As per the interim
      order passed on 3 December 2020 and 9 December 2020 by the Hon’ble Supreme Court, E-voting was held from 26 December 2020 to 28 December 2020 followed by a unitholders meeting on 29 December 2020 to seek unitholder’s
      consent and the results of this voting exercise was delivered to the Hon’ble Supreme Court by the SEBI appointed independent observer. On 18 January 2021, the Hon’ble Supreme Court disclosed the results and advised the Trustee to
      compute the results based on units as well. In Franklin India Low Duration Fund, out of the votes cast, 97.23 % of unitholders representing 98.08 % of units, voted in favour of winding up. However, few unitholders raised some
      objections on the E-voting process and after concluding the hearing the Hon’ble Supreme Court had reserved the matter for pronouncing order. On 2 February 2021, the Hon’ble Supreme Court permitted the schemes to distribute cash
      generated by the schemes (as of 15 January 2021) to the unitholders and directed SBI Funds Management Private Limited (‘SBI MF’) to distribute this amount to unitholders. Accordingly, Rs.1625.36 crore available in the scheme was
      processed for distribution on 12 February 2021 to the unitholders in proportion to their entitlement. On 12 February 2021, Hon’ble Supreme Court upheld the results of the e-voting under regulation 18 (15) (c) held in December 2020
      and confirmed the winding up of the six fixed income schemes and appointed SBI MF to undertake the exercise of winding up, which would include liquidation of assets and distribution to unitholders. SBI MF had filed the standard
      operating procedure (SOP) for liquidation of assets and distribution of cash to unit holders with the Hon’ble Supreme Court on 8 March 2021 which was taken on record and accepted by the Hon'ble Supreme Court on 18 March 2021.
      Further, as a part of liquidation exercise, amounts tabulated as below were processed for distribution to the unitholders in proportion to their entitlement. Various other aspects related to winding-up are still sub judice.
FRANKLIN TEMPLETON MUTUAL FUND
SCHEDULES TO THE BALANCE SHEET AS AT MARCH 31, 2021 AND REVENUE ACCOUNT FOR THE YEAR ENDED MARCH 31, 2021
(All amounts in thousands of Rupees)
                    Distribution to unitholders

                Tranche                                                                       Amounts in 000’s
                Tranche 1                           based on NAV as on 12 February                 16,253,603
                                                    2021
                Tranche 2                           based on NAV as on 9 April 2021                   1,410,000
                Tranche 3                           based on NAV as on 30 April 2021                  2,897,500
                Tranche 4                           based on NAV as on 4 June 2021                    1,060,000
                Total                                                                                21,621,103

      Based on the understanding of the matters as explained above and as per legal advice received, the management, Trustee and AMC believe that the aforementioned litigations would not have a material impact on the financial statements
      of the Scheme.
      In view of the decision taken by the Trustee to wind up the Scheme (further substantiated by the consent of majority of the unitholders who voted for the resolution of winding up), the going concern assumption is not valid for the
      preparation of financial statements of the Scheme. Accordingly, the financial statements of the Scheme have been prepared on a liquidation basis. Under the liquidation basis of accounting, assets are measured at lower of carrying
      amount or estimated net realizable values and liabilities are stated at their estimated settlement amounts. Investments are fair valued as per SEBI Regulations hence the fair value is the carrying value for investments. Since the financial
      statements already reflect the fair value of investments as at 31 March 2021, no other adjustments to the valuation of investments are required for the change from a going concern basis to a liquidation basis of accounting. Refer Note
      2(g) with regard to liquidation expenses.

      Use of estimates

      The preparation of the financial statements in conformity with Generally Accepted Accounting Principles ('GAAP') requires management to make judgments, estimates and assumptions that affect the application of accounting policies
      and reported amounts of assets, liabilities and the disclosure of contingent liabilities on the date of the financial statements and reported amounts of income and expenses during the reporting period. Actual results could differ from those
      estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current and future periods.

      (a)    Determination of net asset value (NAV):

              - The NAV of a Scheme is computed separately for units issued under the various plans / options of the relevant schemes. The corresponding scheme’s investments and other net assets are managed as a single portfolio. For
                computing the NAV’s for various plans / options, daily income earned, including realized and unrealized gains or losses in the value of investments and derivatives and expenses incurred by the corresponding scheme are
                allocated to the plans / options in proportion to the net assets of immediately preceding day plus subscriptions less redemptions for the day of the respective plan / options.

              - Commission expenses are not allocated to the NAV of Direct Plans.

      (b)    Unit capital:

              - Unit capital represents the net outstanding units at the balance sheet date, thereby reflecting all transactions relating to the period ended on that date.

             Unit Premium Reserve

              - When units are issued or redeemed, the net premium or discount to the face value of unit is transferred / charged to the unit premium reserve, after an appropriate portion of the issue proceeds and redemption payout is credited
                or debited respectively to the equalization reserve.

             Equalization Reserve

              - In case of open-ended schemes, when units are issued or redeemed, distributable surplus per unit (net of unit premium reserve) as on date of the transaction (including distributable surplus at the beginning of the year) is
                determined. The per units so determined is credited or debited to the equalization account on issue/redemption of each unit respectively.

             Effective April 24, 2020, fresh subscriptions / redemptions are not permitted in the scheme on account of the winding up notice. SEBI circular no. SEBI/HO/IMD/DF3/CIR/P/2020/086 dated May 20, 2020 prescribes that the
             units of Mutual Fund schemes which are in the process of winding-up in terms of Regulation 39(2)(a) of the SEBI Regulations, shall be listed on a recognized stock exchange. Accordingly, the process of listing is currently in
             progress and the AMC is awaiting guidance from stock exchanges and SEBI regarding the manner of listing and subsequent trading of these schemes.

      (c)    Investments:

             Accounting for investment transactions

             - Purchase and sale of investments are recorded on the date of the transaction, at cost and sale price respectively, after considering brokerage charges, commission, securities transaction tax, fees payable and any other charges
               customarily included in the trade note. The front-end fee receivable, if any, is reduced from the cost of investment.

             - In terms of SEBI circular no. CIR/IMD/DF/21/2012 dated September 13, 2012, brokerage and transaction costs (including all taxes) incurred for the purpose of execution of trade in excess of 0.12% in case of cash market
               transaction and 0.05% in case of derivatives transactions is charged to the Total Expense Ratio of the Scheme. Effective December 9, 2019, Brokerage and transactions costs for derivative transactions is charged to the realized
               gain/loss on sale of investments.

             - Interest paid / received from the last interest payment date till the date of purchase / sale of investments by the schemes is not included in the cost of purchase / sale of investments. For purchase, the interest is debited to
               interest accrued but not due account. Similarly, for sale, interest from the last interest payment date up to the date of sale is not treated as an addition to sale value but credited to interest accrued but not due account.

             - The net unrealized gain or loss in the value of investments is determined separately for each category of investments. The change in the net unrealized gain or loss, if any, between two balance sheet dates is recognised in the
               revenue account. However, change in net unrealized gain, if any, is transferred to unrealized appreciation reserve before arriving at Income Available for Appropriation.

             - Right entitlements are recognised as investments on the ex-rights date.

             - Bonus entitlements are recognised as investments on the ex-bonus date.

             - Other Corporate Action entitlements are recognised on the ex-date.

      Valuation of investments

      Asset Class                                   Traded                                                         Non- Traded                                             Thinly Traded* / Unlisted
      Equity Shares / Equity Related/ REIT’s /      Valued at the last quoted closing price on the National        Valued at the last quoted closing price on NSE or Valued "in good faith" as determined, in accordance with the SEBI
      Preference Shares                             Stock Exchange of India Limited (NSE). If a security is        BSE or other recognised stock exchange (in that Regulation.
                                                    not traded on NSE, it will be valued at the last quoted        order) on the earliest previous day would be used,
                                                    closing price on Bombay Stock Exchange Limited (BSE)           provided such day is not more than thirty days
                                                    or any other stock exchange (in that order).                   prior to the valuation day.

      Foreign Securities                            Valued at the last available traded or quoted price on the     Valued at the last available traded or quoted price
                                                    valuation day on the relevant stock exchange around the        on the relevant stock exchange, provided such day
                                                    time of closure of Indian stock markets (which is currently    is not more than thirty days prior to the valuation
                                                    3:30 p.m. IST). In case of schemes eligible to invest in       day. If no prices are available for the 30 days, then
                                                    foreign securities wherein the NAV is computed and             valued at fair value as determined “in good faith”
                                                    declared on the next business day, the foreign securities      by the AMC.
                                                    would be valued at the last available traded or quoted price
                                                    on the relevant stock exchange at the time of computation
                                                    of NAV (which is currently around 3:30 a.m. IST).

      *Security where monthly traded amount is less than INR 5 lacs and volume is less than 50,000 is considered as thinly traded.
FRANKLIN TEMPLETON MUTUAL FUND
SCHEDULES TO THE BALANCE SHEET AS AT MARCH 31, 2021 AND REVENUE ACCOUNT FOR THE YEAR ENDED MARCH 31, 2021
(All amounts in thousands of Rupees)

      Asset Class                                 Traded / Non-Traded                     Valuation Policy
      Debt and Money Market Instruments with      Traded / Non – Traded                   Valued basis average of security level prices received from AMFI appointed/designated agencies viz: CRISIL and ICRA.
      residual maturity > 60 days (30 days, wef
      from June 20, 2019**)                                                               Prior to September 24, 2019
                                                                                          If security level price for new security purchased (primary allotment or secondary market) is not available, the security will be
                                                                                          valued at weighted average traded price available on public platform i.e. FIMMDA, NSE and BSE if it meets qualification criteria
                                                                                          of 5 Crores or more for Bonds and at least one trade of Rs.25 Crores or more for Money Market Instruments. Else, AMC own trade
                                                                                          is considered for valuation.

                                                                                          Post September 24, 2019***
                                                                                          If security level price for new security purchased (primary allotment or secondary market) is not available, the security will be
                                                                                          valued at weighted average purchase yield of security on the date of purchase.

      Debt and Money Market Instruments with Traded                                       Valued at weighted average traded price available on public platform i.e. FIMMDA, NSE and BSE with qualification criteria of
      residual maturity < =60 days (30 days, wef                                          considering trades at least 3 trades aggregating to 100 Crs. If market trades satisfying the above criteria are not available on the
      from June 20, 2019**)                                                               public platforms, AMC’s own trade to be considered for valuation.

                                                                                          If the AMC’s own trade(s) also do not satisfy the criteria, then the security will be treated as ‘Non-Traded’.

                                                                                          Post September 24, 2019***
                                                                                          If market trades satisfying the above criteria are not available on the public platforms, then the security will be treated as ‘Non-
                                                                                          Traded’.

                                                                                          Effective February 14, 2020
                                                                                          Valued at weighted average traded price available on public platform i.e. FIMMDA, NSE and BSE with a qualification criteria for
                                                                                          primary market trade as at least 1 trade of Rs. 25 crores or more and a qualification criteria for secondary market trades as at least
                                                                                          1 trade of Rs. 5 crore or more for Bonds and Rs. 25 crores or more for Money Market Instrument. Prior to this, these securities
                                                                                          were valued at weighted average traded price available on public platform i.e. FIMMDA, NSE and BSE with a qualification
                                                                                          criteria of considering trades at least 3 trades aggregating to 100 crores.

                                                                                          Effective June 30, 2020 $$$
                                                                                          All money market and debt securities including floating rate securities are valued at average of security level prices obtained from
                                                                                          valuation agencies. Prior to this, these securities were valued at weighted average traded price available on public platform i.e.
                                                                                          FIMMDA, NSE and BSE as per the qualification criteria.

                                                  Non-Traded                              The security will be amortized by constant yield (last traded yield) and Straight-line method for non-coupon bearing instrument
                                                                                          and coupon bearing instrument respectively.

                                                                                          The amortized price may be used for valuation as long as it is within ±0.10% of the reference price derived from benchmark yield
                                                                                          provided by agencies appointed by AMFI. In case the variance exceeds ±0.10%, the valuation will be adjusted to bring it within the
                                                                                          band of +/-0.10%.

                                                                                          Post June 20, 2019**
                                                                                          The amortized price variance may be used for valuation as long as it is within ±0.025% of the reference price. In case the variance
                                                                                          exceeds ±0.025%, the valuation will be adjusted to bring it within the band of +/-0.025%.

                                                                                          Reference price shall be the average of the security level price of such security as provided by the agencies appointed by AMFI.

                                                                                          Effective June 30, 2020 $$$
                                                                                          All money market and debt securities including floating rate securities are valued at average of security level prices obtained from
                                                                                          valuation agencies. Prior to this, these securities were amortized by constant yield (last traded yield) and Straight-line method for
                                                                                          non-coupon bearing securities and coupon bearing securities respectively.

      Government Securities including State      Traded / Non-Traded                      Valued basis average of security level prices received from AMFI appointed/designated agencies viz: CRISIL and ICRA.
      Development Loan irrespective of residual
      maturity
      Treasury Bills maturity > 60 days (30 days Traded / Non-Traded                      Valued basis average of security level prices received from AMFI appointed/designated agencies viz: CRISIL and ICRA.
      wef from June 20, 2019**)
                                                                                          Prior to September 24, 2019
                                                                                          If security level price for new security purchased (primary allotment or secondary market) is not available, the security will be
                                                                                          valued at weighted average traded price available on CCIL website if it meets qualification criteria of 5 Crores or more for Bonds
                                                                                          and at least one trade of Rs.25 Crores or more for Money Market Instruments. Else, AMC own trade is considered.

                                                                                          Post September 24, 2019***
                                                                                          All securities irrespective of maturities will be valued basis average of security level prices received from AMFI
                                                                                          appointed/designated agencies viz: CRISIL and ICRA.

      Treasury Bills maturity
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