auditors' reporttothe members offranklintempleton
TRANSCRIPT
Auditors' Report to the Members of Franklin Templeton Asset Management (India)Private Limited
Page 1
1. We have audited the attached Balance Sheet of Franklin Templeton Asset Management (India)Private Limited (the "Company") as at September 30, 2010, and the related Profit and LossAccount and Cash Flow Statement for the year ended on that date annexed thereto, which wehave signed under reference to this report. These financial statements are the responsibility ofthe Company's Management. Our responsibility is to express an opinion on these financialstatements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in .India.Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by Management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies(Auditor's Report) (Amendment) Order, 2004 (together the "Order"), issued by the centralGovernment of India in terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956' ofIndia (the 'Act) and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to us, we give inthe Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:
(a) We have obtained all the information and explanations which, to the best of our knowledgeand belief, were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Companyso far as appears from our examination of those books;
(c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with bythis report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, the Profit and LossAccount and the Cash Flow Statementdealt with by this report comply with the accounting standards referred to in sub-section (3C)of Section 211 of the Act;
(e) On the basis of written representations received from the Directors of the Company, as onSeptember 30, 2010 and taken on record by the Board of Directors of the Company, none ofthe directors of the Company is disqualified as on September 30, 2010 from being appointedas a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;
Auditors' Report to the Members of Franklin Templeton Asset Management (India)Private Limited
Page 2
(f) In our opinion and to the best of our information and according to the explanations given tous, the said financial statements together with the notes thereon and attached thereto give,in the prescribed manner, the information required by the Act, and give a true and fair viewin conformity with the accounting principles generally accepted in India:
(i) in the case of the BalanceSheet, of the state of affairs of the Company as at September30,2010;
(ii) in the case of the Profit and LossAccount, of the profit for the year ended on that date;and
(iii) in the case of the cash Flow Statement, of the cash flows for the year ended on thatdate.
For Price WaterhouseFirm Registration Number: 301112EChartered Accountants
Uday ShahPartnerMembership Number. F/46061Place: MumbaiDate: January 19, 2011
Annexure to Auditors' Report
Referred to in paragraph 3 of the Auditors' Report of even date to the members of FranklinTempleton Asset Management (India) Private Limited on the financial statements for theyear ended September 30, 2010.
Page 1 of 3
1. (a) The Company is maintaining proper records showing full particulars, including quantitative detailsand situation, of its fixed assets.
(b) The fixed assets of the Company have been physically verified by the Management during theyear and no material discrepancies between the book records and the physical inventory havebeen noticed. In our opinion, the frequency of verification is reasonable.
(c) In our opinion and according to the information and explanations given to us, a substantial part offixed assets has not been disposed of by the Company during the year.
2. The Company does not hold any securities as stock in trade.
3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or otherparties covered in the register maintained under Section 301 of the Act.
(b) The Company has not taken any loans, secured or unsecured, from companies, firms or otherparties covered in the register maintained under Section 301 of the Act.
4. In our opinion and according to the information and explanations given to us, there is anadequate internal control system commensurate with the size of the Company and the nature ofits business for the purchase of fixed assets and for the sale of services. Further, on the basis ofour examination of the books and records of the Company, and according to the information andexplanations given to us, no major weakness have been noticed or reported.
5. (a) In our opinion and according to the information and explanations given to us, the particulars ofcontracts or arrangements referred to in Section 301 of the Act have been entered in the registerrequired to be maintained under that section.
(b) In our opinion and according to the information and explanations given to us the transactionsmade in pursuance of such contracts or arrangements and exceeding the value of Rs. 500,000 inrespect of any party during the year have been made at prices which are reasonable, havingregard to the prevailing market prices at the relevant time or are considered to be of specialnature for which no comparison of prices could be made as explained by the Management of theCompany.
6. The Company has not accepted any deposits from the public within the meaning of Sections 58Aand 58AA of the Act and the rules framed there under.
7. In our opinion, the Company has an internal audit system commensurate with its size and natureof its business.
8. The Central Government of India has not prescribed the maintenance of cost records under:clat:Jse(d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.
9. (a) According to the information and explanations given to us and the records of the Companyexamined by us, in our opinion, the Company is regular in depositing the undisputed statutorydues including provident fund, investor education and protection fund, employees' state
Annexure to Auditors' Report
Referred to in paragraph 3 of the Auditors' Report of even date to the members of FranklinTempleton Asset Management (India) Private Limited on the financial statements for theyear ended September 30, 2010.
Page 2 of 3
insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess andother material statutory dues as applicable with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Companyexamined by us, there are no dues of income tax, sales tax, customs duty, wealth-tax, servicetax, excise duty and cess as at September 30, 2010 except as given below which have not beendeposited on account of a dispute are as follows:
Name of thestatuteThe Income TaxAct, 1961
NatureduesIncome Tax
of AmountRs.
17,73,178
Period to whichthe amount relatesAssessment year2005-06
10. The Company has no accumulated losses as at September 30, 2010 and it has not incurred anycash losses in the financial year ended on that date or in the immediately preceding financialyear.
11. According to the records of the Company examined by us and the information and explanationsgiven to us, the Company has not defaulted in repayment of dues to any financial institution orbank or debenture holders as at the balance sheet date.
12. The Company has not granted any loans and advances on the basis of security by way of pledgeof shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund I nidhi I mutual benefit fundisocieties are not applicable to the Company.
14. In our opinion, the Company is not a dealer in shares, securities, debentures and otherinvestments.
15. In our opinion and according to the information and explanations given to us, the Company hasnot given any guarantee for loans taken by others from banks or financial institutions during theyear.
16. The Company had not obtained any term loans.
17. On the basis of an overall examination of the balance sheet of the Company, in our opinion andaccording to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.
18. The Company has not made any preferential allotment of shares to parties and companiescovered in the register maintained under section 301 of the Act during the year.
: -.-1.
19 The COmpany has not issued any debentures during the year.
20. The Company has not raised any money by public issues during the year.
Annexure to Auditors' ReportReferred to in paragraph 3 of the Auditors' Report of even date to the members of FranklinTempleton Asset Management (India) Private Limited on the financial statements for theyear ended September 30, 2010.
Page 3 of 3
21. During the course of our examination of the books and records of the Company carried out inaccordance with the generally accepted auditing practices in India, and according to theinformation and explanations given to us, we have not come across any instance of fraud on orby the Company noticed or reported during the year except that we have been informed by theManagement of fraudulent redemptions of units in certain inactive folios of certain Schemes ofFranklin Templeton Mutual Fund during the period August 2010 to September 2010 aggregatingto Rs. 29.11 lakhs by certain employees in the registrar and transfer agency activity of theCompany. The Company's internal investigation has since been substantially completed and theamount has been reimbursed by the Company to the Schemes subsequent to the year end.
For Price WaterhouseFirm Registration Number: 301112E.Chartered Accountants
Place: MumbaiDate: January 19, 2011
Uday ShahPartnerMembership Number. F/46061.
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
_ BALANCE SHEET AS AT SEPTEMBER 30,2010
SCHEDULE
SOURCES OF FUNDSShareholders FundsCapital
September 30, 2010Rs. Rs.
2,393,333,000
September 30, 2009Rs. Rs.
2,393,333,000
Reserves and Surplus
Loan FundsSecured Loans
TOTAL
APPLICA nON OF FUNDS
II
II1
1,254,537,665
6, 113,939
3,653,984,604
8 I 7,008,079
9,356,344
3,219,697,423
Fixed AssetsGross BlockLess: DepreciationNet BlockCapital Work-in-Progress
Investments
Deferred Tax (Refer Note 5 of Schedule XIII)Deferred Tax AssetDeferred Tax Liability
Current Assets, Loans and AdvancesSundry DebtorsCash and Bank BalancesInterest Accrued on DepositsLoans and Advances
Current Liabilities and ProvisionsLiabilitiesProvisions
Net Current Liabilities
TOTAL
Notes to the Financial Statements
IV
V
VIVII
VIII
IX
XIII
470,416,081 393,897,5793 I 9,380,688 291,108,79215 I ,035,393 102,788,787
1,158,151 1,918,643152,193,544 104,707,430
3,375,5 I 7, I 08 3,334,476,848
157,197,455 169,814,212( 114,430) 157,083,025 (3,954,017) 165,860,195
338, I06,399 234,656,82869,797,027 38,551,953
13,049 4,027481,849,188 248,845,614889,765,663 522,058,422
837, I 39,705 817,473,20783,435,031 89,932,265
920,574,736 907,405,472(30,809,073) (385,347,050)
3,653,984,604 3,219,697,423
The Schedules referred to above form an integral part of the Balance Sheet.
This is the Balance Sheet referred to in our report of even date.
For PRICE WATERHOUSEFirm Registration Number: 30 I I 12EChartered Accountants
l).~.~kk..Uday ShahPartnerMembership No.: F-4606 I
Harshendu BindalPresident . ;>h~rQ~amCompany Secretary
Vivek KudvaDirector
M. B. N. RaoDirector
Place: Mumbai
Date: :r<:>vww>Jt0 10, I 2.0 II
Place: MumbaiDate: :rcx..vu..v~ \q , ~O,I
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
PROFIT AND LOSS ACCOUNT FOR THE VEAR ENDED SEPTEMBER 30, 2010
SCHEDULE October 01,2009 to
September 30, 2010
Rs
October 01, 2009 to
September 30, 2010
Rs.
October 01, 2008 to
September 30, 2009
Rs
Octoberl 01, 2008 to
September 30. 2009
Rs
Profit after Taxalion
Profit available for Appropriation
Profit and Loss Account Balance Brought FOT\vard
Profit and Loss Account Balance Carried to Balance Sheet
2.452.45
863,496,244
817,008,079
J 17,OOO,O(;c
587,233,081
202,029,217
(6,107,0(, ..)
(34,629,769)
229,774,998
817,008,079
1,979.734.61 J
148,339,871
2,330,103,701
t ,423,966,396
1.845,OtO
40,796,0511,466,607,457
22,275,681
199,604,751
224,304,898
2,179,339,3643,550, J 78,825
300,751,763 3,249,427,062
289,164,213
27,002,642 262,161,571
58,977,623
3,570,566,256
2,069.443,532
1,614,897
39,185,8812,110,244,310
1,460,321,946
482,000,000
8,777,170
969,544,776
817,008,079
t ,786,552,855
454,733,270
77,281,920
73,000,000 605,015,190
1,181,537,665
4.05
4.05
XIXII
X
Profit before Taxation
EXPENDITURE
Operating Expenses
Interesl
Depreciation
Transfer Agency Fees. Gross (Refer Note 1D of Schedule Xlii)
(including lax deducled at source Rs. 28.916,474; Previous Year - Rs. 25,413,744)
Less Service Tax
Other Income
Appropriations
Interim DividendTax on Distributed Profit
General Reserve
Provision for Taxation
Current Tax
(Refer Note 5(a) of Schedule XIII)Fringe Benefit Tax (NeLof reversal of recovery from employees Rs. Nil; Previous Year Rs. 9,483,932)
Deferred Tax (Refer Noles IG and 5(b) of Schedule XIlI)
Earnings Per Share (on Equity Share ofRs. 10 each)
(Refer Note 16 of Schedule XIII)
Basic
Diluted
INCOMEInvestment Management Fees - Gross (Refer Notes ID and 13 of Schedule XIII)
(including tax deducted at source Rs. 307,706,400; Previous Year - Rs, 207,633.895)
Less: Service Tax
Noles to the Financial Statements XIII
The Schedules referred (a above fonn an integral part of the Profit and Loss Account
This is the Profit and Loss Account referred to in our report of even date
For and on behalfofthe Board of Directors
~ d-~,\),~ UG-----:'Q----'-.-Harshendu Bindal Vivek Kud~'" M. B. N. Rao
For PRICE WATERHOUSE
Finn Registration Number: 301112E
Chartered Accountants
u.~.~Uday Shah
PartnerMembership No.: F.46061
Director Director
Company Secrelary
Place: Mumbai
Dale: '3"0W\.1A.A1l(J 1'),2.011
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRlVATE LIMITED
Cash Flow Statement for the year ended September 2010October 01, 2009 to October OJ. 2008 to
September 30, 2010 September 3D, 2009
CASH FLOW FROM OPERATING ACTIVITIES: Rupees Rupees
Profit before taxation 1,460,321,946 863,496,244
Adjustments for:Depreciation 39,185,881 40,796,051
(Profit)1 Loss on Salel Scrapping afFixed Assets (net) 397,329 338,582
(Profit)/ Loss on Sale! Redemption of Investments- Cun"ent Investments (11,073,136) (26,062,032)
Provision for Diminution in Value ofInvestments Written Back as No Longer Required (5,007,022) 7,022
Interest Expense 1,614,897 1,845,010
Provision forI (write back of) Leave Encashment 8,147,158 (689,250)
Provision forI (write back of) Gratuity 7,879,233 3,862,044
DefclTed Launch Expense Amortised 157,387,813 104,366,740
Restricted Stock! Unit Award! Employee Stock Incentive Plan Amortised 67,202,648 95,883,482
Provision! Liabilities Written Back as No Longer Required (6,267,628) (5,366,167)
Deposits Written off 368,328
Dividend Received on Stock-in-trade (230,400)
Provision for General Reserve 73,000,000
Dividend Received on CUlTent Investments (9,757,486) (38,195,938)
Interest on Income Tax Refund Received (8,016,922 124,209,843
Operating profit before working capital changes 1,775,014,711 1,016,209,873
Adjustments for changes in working capital:Decrease! (Increase) in Stock-in-trade 12,697,396
Decrease/ (Increase) in Loans and Adva',:ces (394,384,387) 83,864,952
Decreasel (Increase) in Debtors (103,449,571 ) (55,588,532)
Decrease! (Increase) in Interest Accrued on Deposits (9,022) 155,324
Increase! (Decrease) in Current Liabilities (37,444,545) (32,494,379)
(535,287,525) 8,634,761
Cash generated from operations 1,239,727,186 1,024,844,634
Taxes Paid (net of refunds) 1500,530,628 1139,561,951
Net cash from operating activities (A) 739,196,558 885,282,683
CASH FLOW FROM INVESTING ACTIVITIES:Purchase! Transfer of Fixed Assets including Capital Work in Progress (88,536,232) (19,834,463)
Proceeds from Sale/ Disposal of Fixed Assets 1,466,910 1,147,466
Purchase/ Transfer of Investments/ Reinvestment of Dividend ( 1,579,757,486) (2,418,195,938)
Proceeds from Sale! Redemption of Investments 1.554,797,385 1,489,950,697
Dividend Received on Stock-in-trade 230,400
Dividend Received on Cun'ent Investments 9,757,486 38,195,938
Net cash from/ (used in) investing activities (B) (102,271,937) (908,505,900)
CASH FLOW FROM FINANCING ACTIVITIES:Secured Loan (Repaid)/ Taken (3,242,405) (599,952)
Interest Expense ( 1,614,897) (1,845,010)
Interim Dividend (including Dividend Distribution Tax) Paid (605,015,190)
Interest on Income Tax Refund Received 8,016,922 24,209,843
Net cash from/ (used in) financing activities (C) (601,855,570) 21,764,881
Net (decrease) !Increase in cash and cash equivalents (A+B-t<:) 35,069,051 (1,458,336
Cash and cash equivalents at the beginning of the year ( 1,809,890) (351,554)
Cash and cash equivalents at the end of the year 33,259,161 ( 1,809,890)
35,069,051 (1,458,336)
Notes:
I) Cash and cash equivalents comprises of
Cash on handBalance with scheduled bank - in CUITent AccountBook Overdraft with Scheduled BankIn Deposit Accounts
297,027100,000
(36,537,866)69,400,00033,259,161
346,4571,505,496
(40,361,843 )36,700,000( 1,809,890)
2) The above cash flow statement has been prepared under the "Indirect Method" set out in Accounting Standard-3 onCash Flow Statements issued by the Institute ofChaitered Accountants of India.
This is the Cash Flow Statement refen'ed to in our repOlt on even date.
For PRICE WATERHOUSE
Finn Registration Number: 301112E
Chmtered Accountants
Uday ShahPmtnerMembership No F-46061
~;~,:~\-<.L,~ 'N ~o
President ). Director Directorerri1SCompallY Secretary
Place: Mumbai
Date :TClWU<.Cl'\J I\ 1-0 I \Place: Mllillbai
Date .J"~ a..c1 lG\ I W \\
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
Schedules forming part of Balance Sheet as at September 30, 2010
Schedule ISHARE CAPITALAuthorised245,000,000 equity shares ofRs. 10 each.
Issued, Subscribed and Paid-Up239,333,300 equity shares ofRs. 10 each, fully paid up{All the above equity shares are held by Franklin Templeton HoldingLimited Mauritius, the holding company and its nominee;Franklin Resources Inc., USA being the ultimate holding company}
Schedule IIRESERVES AND SURPLUS
General ReserveBalance as per last balance sheetAdd: Transfer from Profit and Loss Account
Profit and Loss Account
Schedule '"SECURED LOANSLease liability for vehicles on finance lease(Secured by hypothecation of vehicles)(Amount due within one year Rs. 3,611,928 , Previous Year - Rs. 4,457,586 )(Refer Note 6 (ii) of Schedule XIII)
September 30, 2010Rs. Rs
2,450,000,0002,450,000,000
2,393,333,000
2,393,333,000
73,000,00073,000,000
1,181,537,665
1,254,537,665
6,113,939
6,113,939
Septem ber 30, 2009Rs. Rs
2,450,000,0002,450,000,000
2,393,333,000
2,393,333,000
817,008,079
817 ,008,079
9,356,344
9,356,344
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
Schedule forming part of Balance Sheet as at September 30,2010
Schedule IV
FIXED ASSETS(Amount in Rupees)
ASSET DESCRIPTION COST DEPRECIATION NET BOOK VALUE
ASAT ADDITIONS DEDUCTIONS ASAT ASAT FOR THE YEAR DEDUCTIONS ASAT AS AT AS AT
OCTOBER 01, 2009 SEPTEMBER 30, 2010 OCTOBER 01, 2009 SEPTEMBER 30,2010 SEPTEMBER 30,2010 SEPTEMBER 30, 2009OWN ASSETSLand 9,745,500 9,745,500 9,745,500 9,745,500Leasehold Improvements 38,999,486 38,999,486 655,405 655,405 38,344,081
Buildings@ 65,378,434 - 65,378,434 24,866,090 1,867,955 26,734,045 38,644,389 40,512,344Furniture and Fixtures 28,721,105 12,632,376 1,707,918 39,645,563 24,686,875 6,175,534 1,494,090 29,368,319 10,277,244 4,034,230Computers and Other Hardware 216,980,480 14,563,617 231,544,097 187,808,724 20,687,266 208,495,990 23,048,107 29,171,756Office Equipment 55,760,758 22,204,016 6,336,918 71,627,856 45,407,900 6,701,606 5,612,309 46,497,197 25,130,659 10,352,858Vehicles 1,327,030 1,327,030 686,795 374,665 1,061,460 265,570 640,235
A 377,913,307 88,399,495 8,044,836 458,267,966 283,456,384 36,462,431 7,106,399 312,812,4 I 6 145,455,550 94,456,923
ASSETS ON LEASEVehicles $ B 15,984,272 897,229 4,733,386 12,148,115 7,652,408 2,723,450 3,807,586 6,568,272 5,579,843 8,331,864
(A+B) 393,897,579 89,296,724 12,778,222 470,416,081 291,108,792 39,185,881 10,913,985 319,380,688 151,035,393 102,788,787
Previous Year 380,5 I0,239 17,915,820 4,528,480 393,897,579 253,355,173 40,796,051 3,042,432 291,108,792
Capital Work-In-Progress 1,158,151 1,918,643152,193,544 104,707,430
@ Refer Note 4 (c) of Schedule XIIl$ Vehicles Rs. 12,148,115 (Previous Year. Rs. 15,984,272) were hypothecated and charged in favour of financial institution by way of first and exclusive charge
~~
- FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
Schedules forming part or Balance Sheet RS at September 30, 2010
Schedule V
INVESTMENTS(Refer Notes 1C and 7 of Schedule XIII)Long Term (Other than Trade)Unquoted (at cost), fully paid-up
[n Subsidiary Company
September 30,2010Rs. Rs.
September 30, 2009Rs. Rs
1,100,110 equity shares ofRs 10 each inITI Capital Markets Limited (Refer Note 2 of Schedule XIII)Less. Provision for diminution
Current (Other than Trade)Unquoted (at cost or net asset value (NA V) whichever is lower)fully paid-up
479,577.489 units (Previous Year - 90,068.100) ofRs. 1,000 each ofTempleton India TreasuryManagement Account Super Institutional Plan ~Growth(Repurchase price Rs. 673,043,220; Previous Year - Rs. 120,699,234)
Nil units (Previous Vear. 1,222,024.017) ofRs. 1,000 each ofTempleton India TreasuryManagement Account Super Institutional Plan - Weekly Dividend Reinvestment(Repurchase price Rs Nil, Previous Year. Rs 1,248,109,708)Less: Provision for diminution
89,179,045.890 units (PrevIous Year - 45,672,722.669 units) ofRs 10 each ofTempletonFloating Rate Income Fund - Long Term Plan Super Institutional Option - Growth(Repurchase price Rs. 1,157,249,725; Previous Year - Rs. 560,938,678)
Nil units (Previous Vear - 80,978.624 units) ofRs 1,000 each of TempletonIndia Short Term Income Plan. Institutional - Monthly DIvidend Reinvestment(Repurchase price Rs. Nil , Previous Year - Rs. 92,094,608)
98,566.578 units (previous Year - 98,566.578) ofRs. 1,000 each of TempletonIndia Short Term Income Retail Plan - Growth(Repurchase price Rs. 187,337,245; Previous Year - Rs. 175,037,230)
1,052,720.177 units (Previous Vear - 948,087.021) ofRs. 1,000 each ofTempletonIndia Short Term Income Plan - Institutional. Growth(Repurchase price Rs. 1,606,390,353; Previous Year - Rs. 1,349,218,847)
12,776,742.113 units (Previous Year - Nil) ofRs. 10 each of TempletonIndia Income Opportunities Fund - Growth(Repurchase price Rs. 136,656,201; Previous Year - Rs. Nil)
Aggregate Value of Current Investments- At Book Value- At Market Value! Net Asset Value
I J ,658,67511,658,675
11,658,675
661,233,431
1,034,316,333
150,679,339
1,387,629,330
130,000,000
3,363,858,433
3,375,517,108
3,363,858,4333,760,676,744
11,658,6755,000,000
1,248,116,729
7,022
6,658,675
6,658,675
120,000,000
1,248,109,707
484,316,333
87,083,462
150,679,338
1,237,629,333
3,327,818,173
3,334,476,848
3,327,818,1733,546,098,306
- FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
Schedules forming part of Balance Sheet as at September 30, 2010
Schedule VI
SUNDRY DEBTORS(Unsecured considered good)
Less than six months
Schedule VII
CASH AND BANK BALANCES
Cash on hand
Balances with scheduled banks:• In current account
- In deposit accounts
Schedule VIII
September 30, 2010Rs. Rs.
338,106,399338,106,399
297,027
100,000
69,400,00069,797,027
September 30, 2009Rs. Rs.
234,656,828234,656,828
346,457
1,505,49636,700,00038,551,953
LOANS AND ADVANCES(Unsecured. considered good unless stated otherwise)Advances recoverable in cash or in kind or for value to be received
Prepaid expensesDeferred receivableLess Contingent deferred sales charge recovered
Amortisation (Refer Notes I I and I L of Schedule XIII)
Receivable for face value of matured debentures (including
accrued interest) - considered doubtful(Refer Note 9 of Schedule XIII)
Less: Provision thereon
Deposits . considered good- considered doubtful
Less: Provision thereon
Advance Fringe benefit tax (net of provision for tax Rs. Nil; Previous Year Rs. 63,349,000)
Schedule IX
CURRENT LIABILITIES AND PROVISIONS
CURRENT LIABILITIESSundry creditors' (Refer Note 20 of Schedule XIII)(a) Total outstanding dues of micro enterprises and small enterprises(b) Total outstanding dues of creditors other than micro enterprises and small enterprises
• There are no amounts due and outstanding to be credited to Investor Education and Protection Fund,
Other liabilitiesIncome received in advanceBook overdraft
PROVISIONSLeave encashment and compensated absencesGratuity (Refer Note 15 of Schedule XIIl)Income tax (net of Advance Tax Rs.2,424,305,995; Previous Year Rs.1 ,918,775,368)Fringe benefit tax (net of advance tax Rs. 62,342,000; Previous Year Rs.Nil)
981,452,887161,322,554542,319,750
75,676,054
75,676,054
132,293,612420,555
132,714,167
420,555
10,678594,567,253
61,684,20210,060,791
277,810,583
132,293,612
481,849,188
594,577,931
88,618,822117,405,08636,537,866
837,139,705
31,220,16512,282,58938,925,277
1,007,00083,435,031
920,574,736
650,101,737161,322,557
384,931,933
75,676,054
75,676,054
128,735,670420,555
129,156,225
420,555
17,447570,734,463
3,952,5068,317,191
103,847,247
128,735,670
3,993,000
248,845,614
570,751,910
82,378,280123,981,17440,361,843
817,473,207
23,073,0074,403,356
62,455,902
89,932,265
907,405,472
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
Schedules fonning part of Profit and Loss Account for the year ended September 30, 2010
Schedule XOTHER INCOMEInterest on Deposits. Gross(including tax deducted at source Rs. 242.646; Previous Year Rs. 4,5H7,3(7)Interest on Inter Corporate Deposits(including ta", deducted at source Rs. Nil: Previous Year Rs. 469,(80)Interest - Others(including ta.x deducted at source Rs. Nil, Previous Year Rs. 16,751)Interest on Income Tax RefundDividend on. Stock-in-Trade- Current InvestmentsProfit on Sale! Redemption of- Stock-in-Trade- Current InvestmentsProvision! Liabilities Wrinen Back as No Longer RequiredProfit on Sale of Fixed Assets (Net)Exchange Gain (net)Provision for Diminution in Value of Investments Written Back as No Longer RequiredMiscellaneous Income (including ta" deducted at source Rs. 2,835: Previous Year Rs. 3.726)
Schedule XIOPERATING EXPENSES
Employee Cost (Refer Notes IE and 15 of Schedule XIII)Salaries, Bonus, Allowances etc. (Net) (including Rs. 18,168,884 for earlier years)Contribution to Provident and Other FundsGratuityOther Employee Costs (including staff welfare)Temporary Staff WagesAdministrative and Other ExpensesRentRates and TaxesInsuranceElectricityTravelling, Conveyance and Car HireBank ChargesRepairs and Maintenance - OthersPrinting and StationeryCommunicationCommission on FundsLegaJ and ProfessionalAuditors' Remuneration:
Audit FeesOther ServicesOut of Pocket Expenses
Directors' Sining FeesAdvertisementBusiness PromotionMembership Fees and SubscriptionsOffice Security ChargesVehicle MaintenanceExchange Loss (Net)Loss on Sale! Scrapping of Fixed Assets (Net)Information Systems and Technology, General and Administrative, Marketingand Investment OperationsDeposits Written offCurrent Diminution in VaJue of InvestmentsLaunch Expenses (Refer Note 14 of Schedule XIlI)Fund Expenses (Refer Note 14 of Schedule XIlI)Deferred Launch Expenses Amortised (Refer Notes II and 13 of Schedule XIII)ClaimsMiscellaneous
Less Recovery of Expenses from Fellow Subsidiaries(including ta" deducted at source Rs. 145,350: Previous Year Rs. 122,470)
Schedule XIIINTERESTOn Finance Leases
October 01,2009 toSeptember JO, 2010
Rs,
840,895.46626,534,78 112,379,23316,294,7H715,322,091
1,650,0009liO.OOOIH,501
October 01. 2009 toSeptember 30, 2010
Rs,
1,417,826
19,084
8,016,922
9,757.486
11.073.1366,267,628
15.809.1775.007,0221,609,342
58,971,623
911,426,358
93,882,4361,271,070
14,645,51817,838,03336,180,873
604,32530,252,18711.715,00254,498,2253H5.491.407195,785,816
2,62H.501360.000
19,011,17251,164,9473,202,7504.305,991H,375,52H
397.329
27,714,372
38,193,6002,900,065
157,387,813747,354
1,067,5852,071,048,257
1,604,725
2,069,443,5J2
1,614,8971,614,897
October 0 I, 2008 toSeptember JO, 2009
Rs,
687,106,15625,128,1493,862,04414,404,83622,834,665
1,440,000870,00023,7HH
October 01, 2008 toSeptember 30, 2009
Rs,
36,905,206
2,072,603
116.457
24,209,843
230,40038,195,938
5.737,21926.062,0325.366.167
9,444,006148,339,871
753,335,H50
84,569,0742,388,12013,040,86719,940,37832,864,4452,175,02127,911,219]0,722,6725H,203,55023,952,755123,622,230
2.333,788400,000
1,770,28322,626,0042,268,4573,712,2408,747,7764,490,271338,582
20,577,195368,3287,022
51,923,35245,496,549104,366,7402,265,051177,608
1,424,595,427629.031
1,423,966,396
1,845,0101,845,010
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII - NOTES TO THE FINANCIAL STATEMENTS
SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Accounting
The financial statements are prepared under the historical cost convention on an accrual basis of accounting and comply in aJl material aspects with theapplicable accounting principles in India and accounting standards notified under subsection (3C) of Section 21 I of the Companies Act. 1956 and therelevant provisions of the Companies Act, 1956.
B. Fixed Assets and Depreciation
(a) Fixed assets are stated at cost inclusive of incidental expenses less accumulated depreciation.
(b) Depreciation is provided on straight line method over the useful life of the assets as under:Buildings 35 yearsLeasehold Improvements Lower of expected useful life of the asset or primary lease termFurniture and Fixtures 5 yearsComputers - Hardware/ Software 3 yearsOffice Equipment 5 yearsVehicles 5 years
(c) Depreciation on additions/ deletions to fixed assets during the year is being provided on a prorata basis.
(d) Fixed assets acquired pursuant to the scheme of amalgamation of Franklin Templeton AMC Limited with the Company are depreciated over the
remaining life of the assets.
(e) Fixed assets purchased from Franklin Templeton International Services India Private Limited under a Memorandum of Understanding aredepreciated over the remaining life of the assets.
(t) Assets individuaJly costing less than or equal to Rs. 5,000 are fuJly depreciated in the year of acquisition.
C. Investments
Investments are classified into long teon and current investments. Investments which have maturities of more than one year from the balance sheet dateor which are intended to be held for more than one year are classified as long tenn investments; other investments are classified as current investments.Long-tenn investments are accounted for at cost and any diminution other than temporary in the value is provided for. Current investments are valued atcost or net asset value whichever is lower. Profit or loss on sale of investments is computed on the basis of weighted average cost method.
D. Revenue Recognition
Investment management fees shown in Profit and Loss Account include investment management fees charged to Franklin Templeton Mutual Fund.advisory/ sub-advisory fees, portfolio management fees and management fees on Franklin Templeton Private Equity Strategy.
Investment management fees. which are accounted for on an accrual basis. are recognised on rendering of services and are dependent on the net assetvalue as recorded by the schemes of Franklin Templeton Mutual Fund.
Portfolio management fees are accounted for on an accrual basis as follows'
(a) In the case of fees based on a fixed percentage of the daily average net assets. income is accrued over the period of the agreement.
(b) In the case of fees based on the returns of the portfolio, income is accounted for on the termination of the portfolio agreement! on each anniversaryas per the agreement, whichever is earlier.
Management fees on Franklin Templeton Private Equity Strategy are accounted for as follows;
(a) Upfront non refundable fee is accounted for as income in the first year of service rendered.
(b) Annual fee received in advance is accounted for as income received in advance and reCOh'llised over a period of twelve months in the incomestatement. In case of clients which are under termination, the balance of recognised fees are transferred to liability and accounted for as income asper final settlement with the clients.
Transfer agency fees and advisory/ sub~advisory fees are recognised at the time the services are rendered and a binding obligation to receive fees hasarisen.
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII- NOTES TO THE FINANCIAL STATEMENTS
E. Employee Benefits
Long-term Employee Benefits
(a) Defined Contribution PlanThe Company has defined contribution plans for post-employment benefits in the form of Provident Fund and Employee's State Insurance Corporation(ESIC). Under the Provident Fund Plan, the Company contributes to a Government administered provident fund on behalf of employees. The Companyhas no further obligation beyond making the contributions.The Company makes contribution to a state plan namely Employee's State Insurance Corporation (ESIC) and has no further obligation beyond makingthe contributions.The Company's contributions to the above Plans are charged to the Profit and Loss Account.
(b) Defined Benefit PlanThe Company has a defined benefit plan for post-employment benefits in the form of Gratuity. The Company has taken a group gratuity policy withTATA AIG Life Insurance Company Limited (TATA AIG) which is partially funded. Gratuity Fund is administered through Trustees and! or TATAAIG and is a recognised fund under the Income Tax Act, 1956. The Company accounts for gratuity based on an actuarial valuation which is carried outby an independent actuary as at the year end. The actuanal valuation method used by the independent actuary for measuring the liability is the ProjectedUnit Credit Method. The adequacy of the accumulated fund balance available with TAT A AIG is compared with the gratuity liability as per theindependent actuarial valuation at the year end and any shortfall. if any, is recognised in the financial statements.
(c) Other Long-term Employee BenefitsThe employees of the Company are entitled to leave encashment and compensated absences as per the policy of the Company, the liability in respect ofwhich is provided, based on an actuanal valuation carried out by an independent actuary as at the year end. The actuanal valuation method used by theindependent actuary for measuring the liability is the Projected Unit Credit Method.
Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in theProfit and Loss Account as income or expense.
F. Leased Assets
Operating Leases
Leases of assets under which all the risks and the benefits of ownership are effectively retained by the lessor are classified as operating leases. Paymentsmade under operating leases are charged to the Profit and Loss Account on a straight-line basis over the lease term.
Finance Leases
Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Such assets arecapitalized at the inception of the lease at the lower of the fair value or the present value of minimum lease payment and a liability is created for anequivalent amount net of security deposit. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodicrate of interest on the outstanding liability for each period. The assets acquired under finance lease are depreciated as per the Company's depreciationpolicy over the useful life of the assets.
G. Deferred Tax
Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets on timing differences. being the differencesbetween taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred taxasset including asset arising from unabsorbed depreciation and losses earned forward, is not recognized unless there is virtual certainty that sufficientfurther taxable income will be available against which deferred tax can be realised.
H. Stock Bonus
Employee cost includes cost of restricted stock! unit awards in accordance with the terms of the Amended and Restated Annual Incentive Plan and the2002 Universal Stock Incentive Plan as amended and restated, collectively referred to as the 'Plan' of Franklin Resources Inc., USA, the ultimateholding company. Restricted stock! unit awards granted in accordance with the Plan are being amortized over the period of vesting.
J. Deferred Receivable
Up front sales brokerage! commission paid to distributors and related expenses incurred for the launch of the fixed tenure and other closed end schemesof Franklin Templeton Mutual Fund launched on a no load basis are accounted for as deferred receivable. Such brokerage! commission and relatedexpenses are amortised over the tenure of these schemes in proportion to the additional management fee receivable in respect of unit balances from thenew fund offering.
J. Foreign Currency Transactions
Expenses and income are recorded at the exchange rate prevailing on the date of the transaction. Assets and liabilities at the Balance Sheet date arerestated at the exchange rate prevailing on the Balance Sheet date. Exchange difference arising on settlement of the transaction and on account ofrestatement of assets and liabilities are dealt with in the Profit and Loss Account.
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII- NOTES TO THE FINANCIAL STATEMENTS
K. Provisions and Contingent Liabilities
Provisions are recognized when the Company has a legal and a constructive obligation as a result of a past event, for which it is probable that a cashoutflow will be required and a reliable estimate can be made of the amount of the obligation.
Contingent liabilities are disclosed when the Company has a possible obligation or a present obligation and it is probable that a cash outflow will not berequired to settle the obligation.
L. Brokerage on Franklin Templeton Private Equity Strategy
UpITont brokerage paid on Franklin Templeton Private Equity Strategy is accounted for as expense to the extent of upITont non-refundable feeaccounted for as income. UpITont brokerage paid over and above such upITont non refundable fee is accounted for as deferred receivable and isamortised over a period of three years. In case of clients under termination. the balance of unamortised brokerage is immediately amortised andrecognised as expense in the books.
Amalgamation
Consequent to the amalgamation of Franklin Templeton AMC Limited (FTAMC) with the Company, the entire share eapital of ITI Capital MarketsLimited held earlier by FTAMC and its nominees is now held by the Company and its nominees.
3 Capital Commitments
Capital commitments on account of fixed assets, net of advances paid, if any, amount to RS.II,713,224 (Previous Year Rs. 2,180,412).
4 Contingent Liability
(a) The Company is contingently liable in respect of claims, if any, ITom the unit holders of the sehemes of Franklin Templeton Mutual Fund inter-alia forinterest on delays in dispatch of redemption or repurchase proceeds by the registrar and transfer agent in accordance with the Securities and ExchangeBoard of India (Mutual Funds) Regulations and amendments thereto.
(b) (i) The Company has reeeived intimation for appeals filed by Income Tax Department before the High Court of Bombay for assessment year (AY)1997-98, 2000-0 I and for the block period ITom I April 1995 to 31 August 200 I, against the orders passed by the Income Tax Appellate Tribunal infavour of the Company.
(ii) Income tax authorities had initiated re-assessment proceedings in the earlier years against the Company in respect of assessment years 1999-2000,2000-0 I and 2001-02 resulting in a lower refund by Rs. 138,437,894 granted in respect of subsequent assessment years 2003-04 and 2004-05. TheCompany had preferred appeals against the re-assessment proceedings. An order !,'ranting relief dated May 12, 2008 by Commissioner of IncomeTax (Appeals) has been passed in favour of the Company in respect of assessment years 1999-2000,2000-01 and 2001-02. An order giving effect tothe order granting relief has been received by the Company.
(iii) The tax authorities had filed appeals before the Income Tax Appellate Tribunal against the favourable orders, in respect of regular assessmentsl re-assessments, of the Commissioner of Income Tax (Appeals) for assessment years 1999-2000, 2000-0 I, 2001-02, 2002-03, 2003-04, 2004-05 and2005-06. The Company has received order in its favour ITom the Ineome Tax Appellate Tribunal in respect of assessment years 2002-03, 2003-04and 2004-05. During the year the Company has received order ITom Income Tax Appellate Tribunal in it's favor for assessment year 1999-2000,2000-01, 2001-02 and 2005-06. The Company has received intimation for appeals filed by Income Tax Department before the High Court ofBombay for assessment year (AY) 1999-2000, 2000-0 I, 2001-02, 2002-03, 2003-04, 2004-05 and 2005-06, against the orders passed by the IncomeTax Appellate Tribunal in favour of the Company.
(iv) The Company has received an assessment order for the assessment year 2006-07 revising the taxable income of the Company resulting in a taxdemand of Rs. 225,760,133. The Company has filed an appeal against this assessment order and has received favourable order ITom Commissionerof Income Tax (Appeals). The tax authorities have filed appeal before the Income Tax Appellate Tribunal against the favourable order.
(v) The Company has received an assessment order for the assessment year 2007-08 revising the taxable income of the Company resulting in a taxdemand ofRs. 195,877,916. The Company has filed an appeal against this assessment order and has received favourable order ITom Commissionerof Income Tax (Appeals).
(vi) Subsequent to the year end, the Company has received an assessment order for the assessment year 2008-09 revising the taxable income of theCompany resulting in a tax demand of Rs. 438,647,252. The Company has filed an appeal against this assessment order with Commissioner ofIncome Tax (Appeals).
(vi( Subsequent to the year end. the Company has received an assessment order for the assessment year 2005-06 revising the taxable income of theCompany, giving effect to the order passed by Commissioner of Income Tax ('CIT') under section 263 of the Act resulting in a tax demand ofRs.77,515,433. The Company is in the process of filing an appeal against this assessment order.
(viii Subsequent to the year end, the Company has received a mnge benefit assessment order for the assessment year 2008-09 calculating interestpayable u/s 115WJ(3) resulting in a tax demand of Rs.126,319. The Company is in the process of filing a letter for rectification of calculation ofinterest & revise the tax payable thereon.
(ix) Based on the favourable orders received ITom the Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal, the Company hasbeen professionally advised that the Income Tax Department's chances of succeeding in appeal are not very good and accordingly the potentialdemands have not been provided for.
(c) Consequent to merger of Franklin Templeton AMC Limited with the Company, the assets of Franklin Templeton AMC Limited have been transferred tothe Company including the building "Century Centre" at Chennai. Receipt of title deeds with respect to the building "Century Centre" at Chennai isawaited ITom the registration authorities. No provision is considered necessary for the stamp duty of Rs. 7,087,000 demanded by the authorities, as theCompany has been advised that the demand is not valid in law. Necessary legal remedies as advised are being pursued in this regard.
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XII1 - NOTES TO THE FINANCIAL STATEMENTS
Taxation
(a) Current TaxThe tax year for the Company being the year ending March 31, the provision for taxation for the year is the aggregate of the provision made for the sixmonth ended March 31, 20 I0 and provision based on the figures for the remaining six months up to September 30, 20 I0, the ultimate tax liability ofwhich will be deterrnined on the basis of the figures for the period April I, 2010 to March 3 I, 20 I I.
(b) Deferred Tax
Deferred tax asset and liability comprises of tax effect of the timing differences on account of:Particulars September 30, 2010
RupeesSeptem ber 30, 2009
RupeesDeferred Tax AssetLiability towards lease rentalsProvision for doubtful depositsProvision for leave encashmentProvision for bonusEmployee stock incentive plan! restrictedstock / units awardsProvision for gratuityProvision for expenses disallowed under section 40 (a) (ia)Provision for sales commissionTotal
Deferred Tax LiabilityDepreciationTotal
Net Deferred Tax Asset
6 Leases
Operating Leases
2,030,899139,698
10,370,55851,980,45072,814,239
4,079,969202,070
15,579,572157,197,455
(114,430)(114,430)
157,083,025
3,180,221142,947
7,842,51527,733,153118,976,565
1,496,700206,767
10,235,344169,814,212
(3,954,017)(3,954,017)
165,860,195
The Company has entered into non-cancellable leasing arrangements for premises. There are no tenns of purchase options and restrictions in the leasingarrangements. These leases are renewable at the option of the lessor.
Not later than I yearLater than I year and not later than 5 yearsLater than 5 yearsTotal
September 30, 2010Rupees
27,471,89055,910,140
83,382,030
Septem ber 30, 2009Rupees
5,288,70 I4,058,475
9,347,176
Lease payments recognized in the Profit and Loss Account for the year are Rs 34,910,808 (Previous Year Rs. 5.414,087)The Company has paid interest free security deposits ofRs. 48,809,546 (Previous Year Rs. 32,797,390)
ii. Finance Leases
Minimum lease payments:Not later than I yearLater than I year and not later than 5 yearsLater than 5 yearsTotal
Less: Future finance chargesPresent value of minimum lease payment
Present value of finance lease payments:Not later than I yearLater than I year and not later than 5 yearsLater than 5 yearsTotal
September 30, 2010Rupees
3,611,9283,697,091
7,309,019
1,195,0806,113,939
2,957,9853,155,954
6,113,939
September 30, 2009Rupees
4,457,5866,963,851
11,421,437
2,065,0939,356,344
3,388,0715,968,273
9,356,344
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIYATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XJJI- NOTES TO THE FINANCIAL STATEMENTS
7 Investments
The following investments have been purchased and soldl redeemed during the year:
Scheme Name DividendPurchases R~invp..~tm".nt Sales! RedemptionUnits Units Units
Current Investments
Templeton India Income Opportunities Fund - Growth 12,776,742.113 - -
Templeton India Treasury Management Account Super 439,524.843 50,015.454Institutional Plan - Growth
Templeton India Treasury Management Account Super - 7,721.103 J ,229,745.120Institutional Plan - Weekly Dividend Reinvestment
Templeton Floating Rate Income Fund - Long Term Plan Super 43,506,323.221 . -Institutional Option. Growth
Templeton India Short Term Income Plan - Institutional-Growth 104,633.156 . -
Templeton India Ultra Short Bond Fund Super Institutional Plan 11,092,528.755 - 11,092,528.755
- Growth
Templeton India Short Term Income Plan - Institutional - . 1,637.431 82,616.055Monthlv Dividend Reinvestment
Total 67919752,088 9358.534 12 454 905,384
8 Stock-in-tradeQuantitative infonnation in respect of trading in securities are as follows:
ParticularsSeptember 30, 2010
Quantity YalueNos, Rupees
Septem ber 30, 2009Quantity YalueNos, Rupees
Opening StockEquity shares of face value Rs. 10 eachUnits of mutual fundTOTAL (A)
PurchasesEquity shares of face value Rs. 10 eachUnits of mutual fundTOTAL (B)
Salesl RedemptionEquity shares of face value Rs. 10 eachUnits of mutual fundTOTAL(C)
Closing StockEquity shares of face value Rs. 10 eachUnits of mutual fundTOTAL (D)
115,2007,402
122,602
115,2007,402
122,602
739,58411,957,81212,697,396
2,908,48915,526,12618,434,615
(Profit)! Loss (A+B-C-D) (5,737,219)
9 Matured Debentures
Receivables for face value of matured debentures represents amount due from:
Name of the CompanyPrecision Fasteners LimitedViral Filaments Limited
Rupees18,840,45156,835,603
Matured onMay 9, 2000May 20, 2000
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII- NOTES TO THE FINANCIAL STATEMENTS
10 Restricted Stock / Unit Awards
The employees of the Company have been granted stock based compensation in accordance with the terms of the Amended and Restated AnnualIncentive Plan and the 2002 Universal Stock Incentive Plan as amended and restated, collectively referred to as the 'Plan' of Franklin ResourcesInc., USA, (FRI) the ultimate holding company, which is being amortised over the period of vesting from the date of grant. The gross liabilitytowards unvested stock grants as at the date of this Balance Sheet aggregated to Rs. 87,123,910 (Previous Year Rs. 94,817,371) of which Rs.38,43,56 I (Previous Year Rs. 9,774,455) has been amortised till the date of the Balance Sheet. The charge in the Profit and Loss Account for theyear towards amortization of stock grants vested and unvested is Rs. 61,961,385 (Previous Year Rs. 89,194,092).
I I Employee Stock Investment Plan (ESIP)
The Company participates in the amended and restated 1998 Employee Stock Investment Plan which allows participating employees who meetcertain eligibility criteria to purchase equity share at 85% of their market value on defined dates. In addition, in respect of ESIP purchases madetill July 31, 2008, FRI has provided matching grants equivalent to one-half share of each share held by a participating employee for a minimumperiod of 18 months ('employer match'). The total amount of discount and the employer match charged to Profit and Loss Account during theyear is Rs. 5,241,263 (Previous year Rs. 6,689,390).
12 Remuneration to the Whole time Director
Salaries and allowancesContribution to provident fund and other fundsPerquisites *Total
October 01, 2009 to
September 30, 2010
Rupees23,773,008
896,10013,015,61037,684,718
October 01, 2008 to
Septem ber 30, 2009
Rupees26,562,277
882,17814,057,31641,501,771
• Estimated money value of benefits, computed where necessary under Income Tax Rules, 1962.The above excludes contribution to gratuity fund and provision for leave encashment, which are based on an actuarial valuation and groupinsurance premium towards medical and life cover and value of stocks allotted up to March 31, 2009 as it was not covered in the definition ofperquisites as Fringe Benefit Tax was payable thereon.
13 Additional Management Fees
Investment management fees include additional management fees of Rs. I 12, I93,396 (Previous Year Rs. 56,00,6942) in accordance withRegulation 52(3) of the Securities and Exchange Board oflndia (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable.
14 Launch and Fund Expenses
The Company has absorbed a sum of Rs. 38, I93,600 (Previous Year Rs. 51,923,352) being the expenses relating to the launch of new schemes ofFranklin Templeton Mutual Fund during the year and Rs. 2,900,065 (Previous Year Rs. 45,496,549) being the Fund expenses relating to theschemes of Franklin Templeton Mutual Fund.
Details of launch expenses are as follows:
AdvertisementRegistration FeesPrinting, Stationery and Data ProcessingBrokeragePromotion, Marketing and ConferenceCourier and PostageOthersTotal
Details of fund expenses are as follows:
Brokerage and Commission on FundsCourier and PostageInterestBank charges and othersTotal
October 01, 2009 toSeptember 30, 2010
Rupees30,517103,000191,079
37,165,092254,4 I 8253,823195,670
38,193,600
October 01, 2009 toSeptember 30, 2010
Rupees200,000
2,200,732499,333
2,900,065
October 01, 2008 toSeptember 30, 2009
Rupees13,174,005
503,0007,051,10525,143,2843,630,9002,054,057367,001
51,923,352
October 01, 2008 toSeptember 30, 2009
Rupees21,681,674
7,17321,849,2961,958,406
45,496,549
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIM (TED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30,2010 AND THE PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII - NOTES TO THE FINANCIAL STATEMENTS
15 Employee Benefits
The Company has classified the various benefits provided to the employees as follows:
October 1,2009September 30, 2010
Rupees
(I) Defined Contribution Plan(a) Provident Fund
During the year the Company has recognised the following amounts in the Profit and Loss Account:
October I, 2008September 30, 2009
Rupees
(i) Contribution to Provident Fund'• Included in Contribution to Provident and Other Funds (refer Schedule XI).
(b) Employee State Insurance Corporation (ESIC)
During the year the Company has recognised the following amounts in the Profit and Loss Account:
(i) Contribution to Employee State Insurance Corporation (ESIC) •• Included in Contribution to Provident and Other Funds (refer Schedule XI).
(II) Defined Benefit Plan
Contribution to Gratuity Fund
Actuarial valuation has been carried out by an independent actuary as at the Balance Sheetdate in respect of the aforesaid defined benefit plans of;,'fatuity based on the followingassumptions.
26,335,699
199,082
25,085,334
42,815
(a) Discount Rate (per annum)(b) Expected Rate of Return on Plan Assets (per annum)(c) Salary Escalation Rate (per annum)
8.25%7.50%
10% for first 4 years and7% thereafter
8.25%7.50%
10% for first 4 yearsand 7% thereafter
GratuitySeptember 30, 2010 September 30, 2009
Rupees Rupees(i) Changes in the Present Yalue of Obligation
(a) Opening Present Yalue of Defined Benefit Obligation Assets(b) Current Service Cost(c) Interest Cost(d) Actuarial Losses! (Gain)(e) Past Service Cost(I) Liabilities Extinguished on Curtailment(g) Liabilities Extinguished on Settlements(h) Liabilities Assumed on Acquisition(i) Exchange Difference on Foreign Plans(j) Benefits Paid(k) Closing Present Yalue of Defined Benefit Obligation
(ii) Change in the Fair Yalue of Plan Assets(a) Opening Present Yalue of Plan Assets(b) Expected Return on Plan Assets(c) Actuarial Gains! (Losses)(d) Assets Distributed on Settlements(e) Contributions by Employer(f) Assets Acquired due to Acquisition(g) Exchange Difference on Foreign Plans(I) Benefits Paid(g) Closing Fair Yalue of Plan Assets(h) Expected Employer's Contribution Next Year
18,547,6832,482,2661,710,744611,799
12,337,541
(239,593)35,450,440
14,144,3261,320,050316,832
4,500,000
(239,593)20,041,6155,500,000
15,060,2632,557,8501,588,5661,267,105
(1,926,101)18,547,683
14,518,9511,074,339477,137
(1,926,101)14,144,3267,500,000
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII- NOTES TO THE FINANCIAL STATEMENTS
GratuitySeptember 30, 2010 September 30, 2009
(%) (%)(iii) Percentage of each Category of Plan Assets to total Fair Value of Plan Assets
for Gratuity(a) Government of India Securities(b) Corporate(c) Special Deposit Scheme(d) Equity Shares of Listed Companies(e) Property(f) Insurer Managed Funds(g) Others
0%0%0%0%0%
100%0%
0%0%0%0%0%
100%0%
GratuitySeptember 30, 2010 September 30, 2009
Rupees Rupees(iv) Reconciliation of the Present Value of Defined Benefit Obligation and the Fair Value of Assets
(a) Present Value of Funded Obligation(b) Fair Value of Plan Assets(c) (Asset)! Liability recognised in the Balance Sheet (Net)(d) Present Value of Unfunded Obligation(e) Unrecognised Past Service Cost(f) Unrecognised Actuarial (Gains)! Losses(g) Unfunded Net Liability recognised in the Balance Sheet (Net)
(v) Amount recognised in the Balance Sheet(a) Present Value of Obligation in the Balance Sheet(b) Fair Value of Plan Assets(c) Unrecognized Past Service Cost(d) (Asset)! Liability recognised in the Balance Sheet (Net)
(vi) Expenses recognised in the Profit and Loss Account(a) Current Service Cost(b) Interest on Defined Benefit Obligation(c) Expected Return on Plan Assets(d) Net Actuarial Losses! (Gains) Recognised in Year(e) Past Service Cost(f) Losses! (Gains) on "Curtailment and Settlement"(g) Total Expenses Recognised in the Profit and Loss Account
(vii: Experience Adjustments(a) Defined Benefit Obligation(b) Plan Assets(c) Surplus! (Deficit)(d) Experience Adjustment on Plan Liabilities(e) Experience Adjustment on Plan Assets
35,450,440 18,547,683(20,041,615) (14,144,326)15,408,825 4,403,357
4,403,3573,126,235
12,282,590 4,403,357
35,450,440 18,547,683(20,041,615) (14,144,326)3,126,23512,282,590 4,403,357
2,482,266 2,557,8501,710,744 1,588,566(1,320,050) (1,074,339)
294,967 789,9679,211,306
12,379,233 3,862,044
35,450,440 18,547,68320,041,615 14,144,326( 15,408,825) (4,403,357)
(429,441) (1,137,956)316,832 477,137
The liability for leave encashment and compensated absences as at September 30, 20 lOis Rs. 31,220,165 (Previous Year Rs. 23,073,007).
16 Earnings Per Share
Particulars
EarningsNet profit for the year (A) (Rupees)
Numher of Equity SharesNumber of shares at the beginning of the yearWeighted Average Number of EquityShares - Basic (B)
Weighted Average Number of EquityShares - Diluted (e)Earnings! (Loss) Per Share - Basic [(A)!(B)] (Rs.)Earnings! (Loss) Per Share. Diluted [(A)!(C)] (Rs.)
Octoher 1,2009Septemher 30, 2010
969,544,776
239,333,300
239,333,300
239,333,3004.054.05
October 1,2008September 30, 2009
587,233,081
239,333,300
239,333,300
239,333,3002.452.45
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED SEPTEMBER 30,2010
SCHEDULE XIII - NOTES TO THE FINANCIAL STATEMENTS
17 (a) Income in Foreign Currency(on Accrual Basis)
Particulars
Sub-advisory Fee
(b) Expenditure in Foreign Currency(On Payment Basis)
TravelSubscriptionTrainingSales PromotionInformation Systems and Technology Generaland Administrative, Marketing andInvestment Operations
and Investment OperationsProfessional Service FeesConference ExpensesFund Advisor Fees
(c) Amount Remitted During the Year in Foreign Currency on Account of Dividend
Interim DividendNumber of non resident shareholdersNumber of shares of Rs. 10 each held by them on which dividend was due
18 Segmental Reporting
October 1, 2009September 30, 2010
Rupees
454,733,270I
239,333,300
October I, 2008Septem ber 30, 2009
Rupees
The Company is mainly engaged in investment management operations. There are no other significant operations. Therefore these financialstatements pertain to one business segment. The Company renders services within one geographical segment and has no offices or assets outsideIndia.
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THEPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII - NOTES TO THE FINANCIAL STATEMENTS19 Related Party Disclosures
(i) Related parties (during the year)
Nature of Relationship Name of Related Party
Ultimate holding company Franklin Resources Inc., USA
Holding company Franklin Templeton Holding Limited, Mauritius
Subsidiary company ITI Capital Markets Limited
Fellow subsidiary companies Franklin Templeton International Services (India) Private LimitedFranklin Templeton Trustee Services Private LimitedDarby Asia Investors (India) Private LimitedFranklin Templeton Companies, LLC (USA)Franklin Templeton Services, LLC (USA)Templeton Asset Management Limited (Singapore)Franklin Templeton Investment Services GmbH, GermanyTempleton Asset Management (Asia) Ltd. Hong KongFranklin Advisers, Inc., (USA)Franklin Templeton Asset Management (Malaysia) Sdn Bhd
Key management personnel Vivek KudvaHarshendu BindalS. Jayaram
Mutual Fund managed by the Company Franklin Templeton Mutual Fund
Related Party Disclosures - Page I of 8
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII - NOTES TO THE FINANCIAL STATEMENTS19 Related Party Disclosures(ii) The following transactions were carried out with the related parties in the ordinary course of business:
Nature of Transactions
Payment of Interim DividendPrevious year
Franklin Templeton Holding Limited, MauritiusPrevious year
Inter Corporate Deposit given tot (repaid) by Fellow SubsidiaryCompanyPrevious year
Franklin Templeton International Services (India) Private LimitedPrevious year
Interest received on Inter Corporate Deposit given to FellowSubsidiary CompanyPrevious year
Franklin Templeton International Services (India) Private LimitedPrevious year
Amount Received for Payment of Tax on behalf of Fellow SubsidiaryCompanyPrevious year
Franklin Templeton Trustee Services Private LimitedPrevious year
Franklin Templeton International Services (India) Private LimitedPrevious year
(Amount in Rupees)
Ultimate holding Holding company Subsidiary Fellow Key management Mutual Fund Totalcompany companies subsidiary personnel managed by the
companies Company
Nil 454,733,270 Nil Nil Nil Nil 454,733,270
Nil 454,733,270 Nil Nil Nil Nil 454,733,270
Nil I Nil I Nil I Nil Nil Nil Nil(50,000,000) (50,000,000)
Nil I Nil I Nil I Nil Nil Nil Nil(50,000,000) (50,000,000)
Nil I Nil I Nil I Nil Nil Nil Nil2,072,603 2,072,603
Nil I Nil I Nil I Nil Nil Nil Nil2,072,603 2,072,603
Nil I Nil I Nil I Nil Nil Nil Nil167,373 167,373
Nil I Nil I Nil I Nil Nil Nil Nil100,765 100,765
Nil I Nil I Nil I Nil Nil Nil Nil66,608 66,608
/d:
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30,2010 AND THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED SEPTEMBER 30,2010
SCHEDULE XIII - NOTES TO THE FINANCIAL STATEMENTS19 Related Party Disclosures(ii) The following transactions were carried out with the related parties in the ordinary course of business:
(Amount in Rupees)
Nature of Transactions Ultimate holding Holding company Subsidiary Fellow Key management Mutual Fund Totalcompany companies subsidiary personnel managed by the
companies Company
Fixed asset purchased! (transferred) Nil Nil Nil Nil Nil Nil NilPrevious year - - - (18,930) - - (18,930)
Templeton Asset Management Limited (Singapore) Nil Nil Nil Nil Nil Nil -Previous year - - - (18,930) - - (18,930)
Contingent Deferred Sales Charge Received Nil Nil Nil Nil Nil Nil NilPrevious year - - - - - 59,9/5,465 59,9/5,465
Franklin Templeton Mutual Fund Nil Nil Nil Nil Nil Nil NilPrevious year - - - - - 59,9/5,465 59,9/5,465
Transfer Agency Fees Received Nil Nil Nil Nil Nil 289,164,213 289,164,213Previous year - - - - - 224,304,898 224,304,898
Franklin Templeton Mutual Fund Nil Nil Nil Nil Nil 289,164,213 289,164,213Previous year - - - - - 224,304,898 224,304,898
Sub Advisory Fees Received Nil Nil Nil 329,506,678 Nil Nil 329,506,678Previous year - - - /88,603,244 - - /88,603,244
Franklin Advisers, Inc. USA Nil Nil Nil 329,506,678 Nil Nil 329,506,678Previous year - - - /88,603,244 - - /88,603,244
d----
Related Party Disclosures - Page 3 of 8
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30,2010 AND THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII - NOTES TO THE FINANCIAL STATEMENTS19 Related Party Disclosures(ii) The following transactions were carried out with the related parties in the ordinary course of business:
Nature of Transactions
Management Fees ReceivedPrevious year
Franklin Templeton Mutual FundPrevious year
Investments in Mutual Fund
Purchase of Units of SchemesPrevious year
Franklin Templeton Mutual FundPrevious year
Sale/ Redemption of Units of SchemesPrevious year
Franklin Templeton Mutual FundPrevious year
Dividend ReceivedPrevious year
Franklin Templeton Mutual FundPrevious year
Purchase of Units of Schemes for allotment to employeesPrevious year
(Amount in Rupees)
Ultimate holding IHolding company Subsidiary Fellow Key management Mutual Fund Totalcompany companies subsidiary personnel managed by the
companies Company
Nil Nil Nil Nil Nil 3,074,012,049 3,074,012,0491,799,451,825 1,799,451,825
Nil I Nil I Nil I Nil I Nil I 3,074,012,049 3,074,012,0491,799,451,825 /,799,451,825
Nil I Nil I Nil I Nil I Nil I 1,579,757,486 1,579,757,4862,418,/95,938 2,418,/95,938
Nil I Nil I Nil I Nil I Nil I 1,579,757,486 1,579,757,4862,418,195,938 2,418,/95,938
Nil I Nil I Nil I Nil I Nil I 1,554,797,385 1,554,797,3851,489,950,697 1,489,950,697
Nil I Nil I Nil I Nil I Nil I 1,554,797,385 1,554,797,3851,489,950,697 1,489,950,697
Nil I Nil I Nil I Nil I Nil I 9,757,486 9,757,48667,826,284 67,826,284
Nil I Nil I Nil I Nil I Nil I 9,757,486 9,757,48667,826,284 67,826,284
Nil I Nil I Nil I Nil I Nil I 29,629,825 29,629,82524,319,755 24,319,755
Nil I Nil I Nil I Nil I Nil I 29,629,825 29,629,82524,319,755 24,319,755
~-
Related Party Disclosures - Page 4 of 8
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED SEPTEMBER 30,2010
SCHEDULE XIII- NOTES TO THE FINANCIAL STATEMENTS19 Related Party Disclosures(ii) The following transactions were carried out with the related parties in the ordinary course of business:
(Amount in Rupees)
Nature of Transactions Ultimate holding IHolding companycompany
Subsidiarycompanies
Fellowsubsidiarycompanies
Key managementlpersonnel
Mutual Fundmanaged by the
Company
Total
Nil I Nil I Nil I 774,791 I Nil234,909
Nil I Nil I Nil I 224,294 I Nil2/7,569
Nil Nil Nil 213,370 I Nil
Nil Nil Nil 33,411 I Nil
Nil Nil Nil 932 Nil17,340
Nil I Nil I Nil I 303,716 Nil
Sale/ Redemption of Stock-in-trade of Units of Schemes of MutualFundPrevious year
Franklin Templeton Mutual FundPrevious year
Reimbursement of Expenses Paid/ (Reversed)Previous year
Franklin Templeton Companies LLC, USAPrevious year
Franklin Templeton Services, LLCPrevious year
Templeton Asset Management Ltd. Hong KongPrevious year
Templeton Asset Management Limited (Singapore)Previous year
Franklin Templeton Investment Services GmbH, GermanyPrevious year
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil Nil18,434,615 /8,434,6/5
Nil Nil/8,434,6/5 /8,434,6/5
Nil 774,791234,909
Nil I 224,294217,569
Nil 213,370
Nil 33,411
Nil Nil17,340
Nil 303,716
Reimbursement of Expenses ReceivedPrevious year
Franklin Templeton International Services (India) Private LimitedPrevious year
Franklin Templeton Trustee Services Private LimitedPrevious year
Nil I Nil I Nil I 1,604,725 Nil 53,641,668 55,246,394629,03/ 629,03/
Nil I Nil I Nil I 883,046 Nil Nil 883,046/43,563 143,563
Nil I Nil I Nil I 486,710 Nil Nil485,468
---
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII - NOTES TO THE FINANCIAL STATEMENTS19 Related Party Disclosures(ii) The following transactions were carried out with the related parties in the ordinary course of business:
(Amount in Rupees)
Nature of Transactions Ultimate holding Holding company Subsidiary Fellow Key management Mutual Fund Totalcompany companies subsidiary personnel managed by the
companies Company
Franklin Templeton Asset Management (Malaysia) Sdn Bhd Nil Nil Nil 142,555 Nil Nil 142,555Previous year - - - - - - -Franklin Templeton Mutual Fund Nil Nil Nil Nil Nil 53,641,668 53,641,668Previous year - - - - - - -
Darby Asia Investors (India) Private Limited Nil Nil Nil 234,969 Nil Nil 234,969Previous year - - - - - - -
Employee Advances Transferred Nil Nil Nil Nil Nil Nil NilPrevious year - - - 83,200 - - 83.200
Franklin Templeton International Services (India) Private LimIted Nil Nil Nil Nil Nil Nil NilPrevious year - - - 83,200 - - 83,200
cd:-------
Related Party Disclosures - Page 6 of 8
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30,2010 AND THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED SEPTEMBER 30,2010
SCHEDULE XIII - NOTES TO THE FINANCIAL STATEMENTS19 Related Party Disclosures(ii) The following transactions were carried out with the related parties in the ordinary course of business:
(Amount in Rupees)
Nature of Transactions Ultimate holding Holding company Subsidiary Fellow Key management Mutual Fund Totalcompany companies subsidiary personnel managed by the
companies Company
Transfer Agency Services Fees Paid Nil Nil Nil 114,883,041 Nil Nil 114,883,04 IPrevious year - - - 109,121,241 - - 109,/21,241
Franklin Templeton International Services (India) Pvt. Ltd. Nil Nil Nil 114,883,041 Nil Nil 114,883,041Previous year - - - 109,/21,241 - - 109,/21,241
Sub Advisory Services Fees Paid Nil Nil Nil 56,933,275 Nil Nil 56,933,275Previous year - - - 1,846,792 - - 1,846,792
Darby Asia Investors (India) Private Limited Nil Nil Nil 56,933,275 Nil Nil 56,933,275Previous year - - - 1,846,792 - - 1,846,792
Information Systems and Technology, General and Administrative,Marketing and Investment Operations Expenses Paid Nil Nil Nil 27,714,372 Nil Nil 27,714,372Previous year - - - 20,577,195 - - 20,577,/95
Franklin Templeton Companies LLC, USA Nil Nil Nil 27,714,372 Nil Nil 27,714,372Previous year - - - 20,577,195 - - 20,577,/95
Restricted Stock Unit! Awards Vested 67,647,887 Nil Nil Nil Nil Nil 67,647,887Previous year 109,824,899 - - - - - 109,824,899
Franklin Resources Inc., USA 67,647,887 Nil Nil Nil Nil Nil 67,647,887Previous year 109,824,899 - - - - - 109,824,899
£---:
Related Party Disclosures - Page 7 of 8
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30,2010 AND THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII - NOTES TO THE FINANCIAL STATEMENTS19 Related Party Disclosures
(ii) The following transactions were carried out with the related parties in the ordinary course of business:(Amount in Rupees)
Nature of Transactions Ultimate holding Holding company Subsidiary Fellow Key management Mutual Fund Totalcompany companies subsidiary personnel managed by the
companies Company
Employee Stock Investment Plan (ESIP) Discount and EmployerMatch 8,827,186 Nil Nil Nil Nil Nil 8,827,186Previous year 8,042,/69 - - - - - 8,042,/69
Franklin Resources [nc., USA 8,827,186 Nil Nil Nil Nil Nil 8,827,186Previous year 8,042,/69 - - - - - 8,042,/69
Remuneration. Nil Nil Nil Nil 71,442,074 Nil 71,442,074Previous year - - - - 59,8/2,638 - 59,812,638
Vivek Kudva Nil Nil Nil Nil 37,684,718 Nil 37,684,718Previous Year - - - - 41,501,771 - 41,501,771
Harshendu Bindal Nil Nil Nil Nil 25,941,359 Nil 25,941,359Previous Year - - - - 9,887,772 - 9,887,772
S. Jayaram Nil Nil Nil Nil 7,815,997 Nil 7,815,997Previous Year - - - - 8,423,095 - 8,423,095
• Excludes contribution to gratuity fund and provision for leave encashment, which is based on actuarial valuation and value of stocks allotted up to March 31, 2009 as it was not covered in the definition of perquisites asFringe Benefit tax was payable there on and includes value of perquisites under the provisions of Income Tax Rules, 1962. ~
."..
Related Party Disclosures - Page 8 of 8
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30,2010 AND THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED SEPTEMBER 30, 2010
SCHEDULE XIII - NOTES TO THE FINANCIAL STATEMENTS19 Related Party Disclosures(iii) Balance outstanding at year end:
(Amount in Rupees)
Nature of Transactions Ultimate holding Holding company Subsidiary Fellow Key management Mutual Fund Totalcompany companies subsidiary personnel managed by the
companies Company
Balance Payable/ (Receivable) 193,337,595 (500) Nil (339,625) Nil (353,788,152) (160,790,681 )Previous year 331,821,568 (500) - (4,599,324) - (209,353,841) 1/7.867,904
Franklin Resources Inc., USA 193,337,595 Nil Nil Nil Nil Nil 193,337,595Previous Year 331.821,568 - - - - - 331,821,568
Franklin Templeton Companies LLC, USA Nil Nil Nil 7,980,615 Nil Nil 7,980,615Previous year - - - 10,651,779 - - 10,65/.779
Franklin Templeton International Services (India) Pvt. Ltd. Nil Nil Nil 9,477,486 Nil Nil 9,477,486Previous year - - - 6,250,999 - - 6,250,999
Darby Asia Investors (India) Private Limited Nil Nil Nil 13,201,291 Nil Nil 13,201,291Previous year - - - 1,637,542 - - 1,637,542
Franklin Templeton Holding Limited, Mauritius Nil (500) Nil Nil Nil Nil (500)Previous year - (500) - - - - (500)
Franklin Advisers, Inc., USA Nil Nil Nil (30,999,017) Nil Nil (30,999,017)Previous year - - - (23,139,644) - - (23,139,644)
Franklin Templeton Mutual Fund Nil Nil Nil Nil Nil (353,788, I52) (353,788,152)Previous year - - - - - (209,353.841) (209,353,841)
Investments in Units of Schemes Nil Nil Nil Nil Nil 3,363,858,433 3,363,858,433Previous year - - - - - 3,327,818,173 3.327,818,/73
Franklin Templeton Mutual Fund Nil Nil Nil Nil Nil 3,363,858,433 3,363,858,433Previous year - - - - - 3,327,818,173 3,327,818,/73
~ A i"
'!!<'1&_ .....••.... ~----..•.
Related Party Disclosures - Page 1 of 1
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT SEPTEMBER 30, 2010 AND THE PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED SEPTEMBER 30,2010
SCHEDULE XIII- NOTES TO THE FINANCIAL STATEMENTS
20 Details of Dues to Micro Enterprises and Small Enterprises
Sr No ParticularsI the principal amount and the interest due thereon remain in
unpaid to any snpplier as at the end ofllle acconnting year10,678
Se tember 30, 2009Ru ees
17,447
4
the amount of interest paid by the buyer in tenus of section16 of the Micro Small and Medium Enterprise DevelopmentAct, 2006, along with the amounts of the payment made tothe supplier beyond the appointed day during theaccounting yearthe amount of interest dne and payable for the period 0delay in making payment (which have been paid bnt beyonthe appointed day during the year) but without adding theinterest specified under Micro Small and MediumEnterprise Development Act, 2006,
the amount of interest accmed and remaining unpaid at theend of the accounting year;the amount of further interest remaining due and payableeven in the succeeding years, until such date when theinterest dues as above are actually paid to the smallenterprise for the pnrpose of disallowance as a deductiblexpenditure under section 23 of the Micro Small andMedium Enterprise Development Act, 2006,
1,220,272
10,678
10,678
988,950
17,447
17,447
21 SCHEDULE VI OF THE COMPANIES ACT, 1956
Infonnation with regard to other matters specified in paragraphs 4A, 4C and 4D of part II of Schedule VI to the companis Act, 1956 is either Nilor not applicable to the Company for the year ended September 30, 2010.
22 Previous Year's Figures
Prior year amounts have been reclassified wherever necessary to confaml with current year's classifications.
Signatures to Schedule I to XIII fomling part of the financial statements and to the above notes.
For PRICE WATERHOUSEFinn Registration Nnmber: 301112EChartered Accountants
Uday ShahPartnerMembership No,: F-46061
Place: Mumbai
Date: :r0W\.wIVL~ ' ", LO II
'of Directors
\\.9.~~~Harshendu Bindal Vivek Kudva ~ M. B. N. RaoPresident Director Director
6(?S, JayaramCompany Secretary
~ FI{:\f~KLlN TEi\II'LE'rON ASSET :VIANAGEMENT (INDIA) PRIVATE 1.Ii\I\TED
STATEi\lFNT OF TIlE ('OMI'ANY'S I:\TEREST 1:\ StBSII>lAr{y COi\-lI'A:\V ,\S
REQURED BY SECTION 212 OF TI-IE e<rV1PAN1ES ACt'. 19%,All :\ll1onnls in Ind.ian I{npc'es
(ill Subsldiarv Company
ill) Interest of holding ('ompany ,IS atSepll'mblT ~\(),:.,,()')
(e) .'c1 ::~ggrcgatc anloullt (Jt'lhc SubsidiaryCompany's (\OSS),'profil Iwl dealt \'.ltl, In
the Cnrnp~lt1y'saccuunlS
1'01'Ihe Subsn]lary ('ot11p,m)''s YUII
ended September 30, 20 I I)
For the prevIous financial years since il
hce-arne a S'lhSldiary
Ill) '\el ag~.~rcg"le ;1I110llnl of thc SubSldial'\( (lmp,my's nOSS) prol1t deall wllh 11, Ihe
Conlp:Il'IY'S l:lCCt)unts
r:or the S11bsldl;Jry Company's year
cnded SepIl'Inher .'\0, :'.0 I 0
h'1[' the' prl'\'HlUS rin~H)Cl~d years SlIH.'t.: It
bCC<Hlh: a SUhSldl:.I'l"V
~'" .D.~Ilarshendu Bindal
President/' ,
/ ,.Y
~)lu(!;s .IayanlmCompany SCCI'l't:lI'~'
PI"cl' : \l\l",h;II
Date
1'1'1 Capital ,\Iarkeh Limited
I.IOn,! 10 eqully shares ofl~s IO':,ll'h
(rcprescntmg !()()'~;, of the shar,:s ,,,,ued).
,\11 the "b\ne sbare, ;n'C held hII:r,lllk!in lCinplel<ln :\",ct \1,ln:.'gcn'll'lll i l'lll",)I'ril';J1l' I ,irn'lcd :ll1d lh l1i)ll'lIllC'CS
1~1~ (10,U.14)
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED
Annexure
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
I. Registration Details
Registration No. ~ State Code o:IIl (Refer Code List)
Balance SheetDate
[ill] [QTI][ill]Date Month Year
II. Capital raised during the year ( Amount in Rs. Thousands)
Public Issue
Bonus Issue
Rights Issue
Private Placement
III. Position of Mobilisation and deployment of Funds (Amount in Rs. Thousands)
Total Liabilities
Sources of Funds
Paid up Capital
Secured Loans
Total Assets
Reserves and Surplus
Unsecured Loans
I"""
FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LIMITED lAnnexure
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
Application of Funds -
Net Fixed Assets Investments
Net Current Assets ** Miscellaneous Expenditure
CD ~J ITIIIIIJIJ** Excludes Deferred Tax Asset (Net) Rs. 157,083 ('000)
Accumulated Losses
IV. Performance of Company (Amount in Rs. Thousands)
Turnover/Income Total Expenditure
Profit / Loss Before Tax Profit / Loss After Tax
Earning per Share in Rs. Dividend Rate %
V. Generic Names of Three Principal Products / Services of Company (as per monetary terms)
Item Code No.(ITC Code)
ProductDescription
M. B. N. RaoDirector
For and on behalf of the Board of Directors
L--~.Q.~~U~~ =---------::
VivekKud~Director
Harshendu BindalPresident "
/Gr~~Company Secretary
Place: MumbaiDate: :r0Ut\M.~ ~'\ \ '1-0 \ \