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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTINGThe management of Franklin Resources, Inc. and its consolidated subsidiaries (the “Company”) isresponsible for establishing and maintaining adequate internal control over financial reporting for theCompany. The Company’s internal control over financial reporting is a process designed under thesupervision of the Company’s principal executive and principal financial officers to provide reasonableassurance regarding the reliability of financial reporting and the preparation of the Company’s financialstatements for external purposes in accordance with accounting principles generally accepted in the UnitedStates of America.The Company’s internal control over financial reporting includes those policies and procedures that:(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (ii) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements in accordance withaccounting principles generally accepted in the United States of America, and that receipts and expendituresof the Company are being made only in accordance with authorizations of management and directors of theCompany; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the Company’s assets that could have a material effect on the financialstatements.Because of its inherent limitations, internal control over financial reporting may not prevent or detectmisstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the riskthat controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.Management assessed the effectiveness of the Company’s internal control over financial reporting asof September 30, 2009, based on the framework set forth by the Committee of Sponsoring Organizations ofthe Treadway Commission in Internal Control – Integrated Framework. Based on that assessment,management concluded that, as of September 30, 2009, the Company’s internal control over financialreporting was effective.The effectiveness of the Company’s internal control over financial reporting as of September 30, 2009has been audited by PricewaterhouseCoopers LLP, the independent registered public accounting firm thataudits the Company’s consolidated financial statements, as stated in their report immediately following thisreport, which expresses an unqualified opinion on the effectiveness of the Company’s internal control overfinancial reporting as of September 30, 2009.65