Franklin Templeton Mutual Fund Level 4, Wockhardt Towers, - Complex, Bandra (East), 400051

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

Introduction: The Scheme would introduce a new Option under TFIF – Long Term Plan (LT) w.e.f. May 09, 2007, which will be termed as the ‘TFIF-LT-Super Institutional Option’ with following options: ƒ Growth option ƒ Dividend option (with Reinvestment and Payout facility)

Issue opening and closing date: May 09, 2007 (Wednesday) Ongoing Sales and redemption: May 11, 2007 (Friday)

The following will be allowed as a mode of subscription: • High value cheques drawn on high value zones, • Direct credit/transfer cheques into the bank account of the Scheme/Option, • Switches/transfers from other Franklin Templeton schemes/plans/options, received before the prescribed cut off time of the Fund will be accepted. • No outstation cheques will be accepted.

Asset Allocation: Under normal circumstances, the asset allocation of the new Option in TFIF-LT would be as follows: Instruments Profile Risk Profile % of corpus (Min%-Max%) Fixed Rate debt instruments: Low to 0 - 35% • Money market instruments (including CPs, CDs, treasury Medium bills, bill rediscounting, gilts less than 1 year, Repos/Reverse Repos or any other instrument permitted by RBI/SEBI) • Non-Money market instruments (including bonds & debentures of over 182 days to maturity issued by corporates or PSUs, gilts, securitised debt*, fixed deposits or any other instrument permitted by RBI/SEBI) Floating Rate debt instruments**: Low to 65 - 100% • Money market instruments with residual maturity of up to Medium 182 days (Money at call, CPs, CDs, bill rediscounting, or any other instrument permitted by RBI/SEBI) • Non-Money market instruments (including floating rate bonds & debentures issued by corporates or PSUs, floating rate gilts, inverse floaters, floating rate bank deposits, floating rate securitised debt*, fixed rate debentures/bonds with swap, mibor linked debentures or any other instrument permitted by RBI/SEBI, fixed rate bonds & debentures with residual maturity of upto 182 days issued by corporates or PSUs, gilts, securitised debt*) *Investment in securitised debts (including floating securitisation) will not, normally, exceed 35% of the net assets of the scheme. **Floating Rate debt instruments include fixed rate instruments swapped for floating rate returns.

Notwithstanding what is stated in the foregoing table, the Investment Manager shall have the right to alter the above asset allocation for a short-term period on defensive consideration. Please note that the new Option has the same investment objectives and investment pattern as that of the existing scheme.

Load: Entry : Nil Exit : Nil

Minimum subscription/redemption: The minimum investment/redemption amounts under this Option will be as under: Minimum Investment Rs. 15 crores Additional Investment Rs. 1 crore Minimum Redemption Rs. 10 lac

The Option will have the same portfolio as that of the existing TFIF-LT and hence the same investment objectives and investment pattern as that of the existing TFIF-LT, but will have different expense ratio within the limits prescribed by SEBI (Mutual Funds) Regulations, 1996. Since this Option is within an existing portfolio, the Fund does not have any target for minimum subscription amount.

The Units of the Option will be available at Rs.10 per Unit on May 09, 2007 and at NAV based prices thereafter.

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

Currently, the Mutual Fund proposes to declare weekly dividend in the Dividend Option under the Super Institutional Option of TFIF-LT. However, the Trustee, at its discretion, may declare dividend(s) at any time and at such frequency as it deems appropriate though there is no assurance or guarantee to the Unitholders as to the rate of dividend distribution nor that the dividend will be regularly paid. In terms of SEBI circular SEBI/IMD/CIR No.1/64057/06 dated April 4, 2006, the public notice for dividend and record date will not be necessary where the frequency of the dividend is from daily up to monthly.

All the other terms and conditions of the Offer Document, read with the addenda issued from time to time will remain unchanged.

This addendum form an integral part of the Offer Document issued for the scheme, read with the Addenda.

This addendum is dated May 7, 2007.

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

Sd/- Vivek Kudva President