ANNUAL REPORT - Franklin Templeton Investments

FOR THE YEAR ENDED APRIL 30, 2013 

Templeton Growth Fund, Ltd. 

Annual Report


MESSAGE TO INVESTORS 

Dear Investor, 

I am pleased to present the Annual Report for Templeton Growth Fund, Ltd., containing the audited financial statements for the fiscal year 

ended April 30, 2013. 

As we look back at the last 12 months in global equity investing, it is interesting to see how things have changed in just one year. In particular, 

I am reminded of a sage quotation from the founder of this Fund, Sir John Templeton: 

People do not remain pessimistic forever. 

Sir John was not one to try to predict the future. However, I cannot help but think that when he was making his pronouncement, he was 

imagining a scenario like that of the past fiscal year. Almost 12 months ago, we were in the middle of period of less-than-encouraging 

market volatility worldwide, chiefly driven by the emotional reactions to economic turmoil in Europe. 

If we fast forward to 12 months later, economic worries in Europe flared up once again, sparked by events in Cyprus and Italy. Yet, markets 

behaved in a different manner in 2013. While there was some market reaction, it was mainly centred in Europe and was relatively measured. 

European markets and, especially, other global stock indices exhibited resilience to these short-term concerns. Instead, investors 

seemed more focused on improving US economic data, signals of supportive central bank policies worldwide and the fundamental 

strength of individual companies and their stocks. 

If markets are moving away from the more reactionary and impulse-driven markets of one year ago, that could be quite a meaningful shift 

for investors in bottom-up strategies. Accordingly, I encourage you to read the following annual report and message to shareholders, as 

they can give you a good idea of how your investments in this Fund are positioned in this changed environment. 

Thank you for your continued investment, and I wish you and your loved ones all the best this year. 

Sincerely, 

Donald F. Reed 

President and Chief Executive Officer 


Templeton Growth Fund, Ltd. 1


MESSAGE TO SHAREHOLDERS 

Dear Shareholder, 

For the fiscal year in review the Fund delivered solid double-digit absolute returns on the back of strong stock selection 

across numerous regions and sectors. In our opinion, the positive impact of stock selection, as opposed to allocations or 

weightings, on performance highlights the advantages of our bottom-up, value-oriented investment process. While isolated 

stock-level weakness in a handful of sectors offset some of the relative gains found elsewhere, the overall trend during the 

period was one of value recognition as some of our longest-held convictions captured the bulk of relative outperformance. 

This was particularly notable in light of a challenging market environment. While conditions appeared to improve as the 

period progressed, the market still exhibited characteristics adverse to our style of investment. For example, investors preferred 

the perceived safety of bonds to equities during the review period, and stock market correlations—the degree to which 

stocks move in unison—reached record highs as equities were viewed less for their fundamentals and more as proxies for 

overall risk appetite. 

Risk appetite continued to fluctuate broadly as investor focus swung between optimism from aggressive central bank stimulus 

and corporate earnings strength on the one hand, and skepticism stemming from anemic economic growth, political 

dysfunction and fiscal imbalances on the other. Stocks entered the annual period on a weak note as a political backlash 

against austerity shook confidence in European stability. However, European Central Bank President Mario Draghi’s promise 

to do “whatever it takes” to preserve the euro restored order over the summer of 2012. Equities experienced another bout of 

weakness in the fall of 2012 as Hurricane Sandy ravaged the US east coast and countries representing over 50% of global 

gross domestic product (GDP)—including the United States, China and Japan—all underwent political election or transition 

cycles. Ultimately, central bank vigilance and continued corporate earnings strength combined to sustain the global equity 

rally through the winter and spring of 2013. 

The main feature of the stock market rally in these final months was its growing defensiveness. Counter-cyclical sectors like 

Health Care, Utilities and Consumer Staples attracted the lion’s share of investor attention. However, we view the outperformance 

of some our highest conviction holdings, in a market still largely in the thrall of macroeconomic trends, as an 

encouraging sign. In short, if our “bottom-up” investment theses can gain traction in a market still dominated by “top-down” 

macroeconomic forces, we remain optimistic about the portfolio’s long-term potential once the market eventually reverts 

back to its traditional role as value arbiter. 

Our investment theses that have begun to materialize span both cyclical and defensive sectors. Consumer Discretionary and 

Information Technology stocks led Fund returns: while these traditionally cyclical sectors were the Fund’s biggest relative 

overweights during the period, outperformance had little to do with allocation. Stock selection, in fact, was the performance 

driver. Our long-held belief that select US media companies—including cable operators like Comcast Corp. and production 

studios like News Corp.—would benefit from the growing demand for premium content and high-capacity broadband access 

came to fruition as these companies exceeded earnings expectations and rose to record levels. In Information Technology, 

our belief that corporate customers in uncertain times would prioritize productivity—enhancing expenditures over capacityenhancing 

spending also materialized, much to the benefit of firms like Accenture PLC and SAP AG. We also reaped the 

benefits of our contrarian Health Care sector holdings during the fiscal year and continue to diversify into undervalued biotechnology, 

specialty pharmaceutical and medical technology firms with attractive growth prospects. 

In contrast, isolated weakness among overweighted Energy holdings and even-weighted Financials and Industrials stocks 

detracted. Here too, we maintain a high degree of confidence in our convictions. Our integrated oil holdings are in companies 

positioned for above-average production growth, while our oilfield services holdings should benefit from rising demand 

for technical expertise in extracting hydrocarbons from challenging locations. In Financials, we expect our banks and 

insurers to benefit as aggressive restructuring and fundamental repair restore normalized levels of profitability to the industry. 

Finally, our Industrials positions offer cyclical leverage and yield opportunity at significantly more attractive valuations than 

those found in other economically-sensitive sectors, like Materials. 

2 Templeton Growth Fund, Ltd.

Despite recent market strength, considerable risks remain given ongoing fiscal imbalances, economic vulnerability and the 

continued politicization of financial markets. Yet, as Sir John Templeton wrote, “I never ask if the market is going to go up or 

down, because I don’t know, and besides it doesn’t matter. I search nation after nation for stocks, asking: ‘Where is the one 

that is the lowest priced in relation to what I believe it is worth’.” At Templeton, we continue to find stocks around the world 

that fit this criterion, with an objective of acquiring tomorrow’s earnings potential for our investors at low prices today. 

Regards, 

Lisa Myers, J.D., CFA 

Templeton Global Advisors Limited 

Lead Portfolio Manager 



STATEMENT OF INVESTMENTS As at April 30, 2013 


Shares 

Average 

Cost Fair Value 

(000s) (000s) 

LONG-TERM INVESTMENTS: 98.76% 

COMMON STOCKS: 97.27% 

United States: 45.09% 

Abercrombie & Fitch Co., A ............ 144,460 $ 5,527 $ 7,215 

Accenture PLC, A ................... 272,340 9,661 22,331 

ACE Ltd. ......................... 156,000 7,291 14,005 

American Express Co. ............... 178,570 5,697 12,304 

Amgen Inc. ....................... 190,790 10,770 20,022 

Applied Materials Inc. ............... 716,940 8,294 10,472 

Baker Hughes Inc. .................. 451,980 20,505 20,653 

Brocade Communications Systems Inc. . . 1,701,290 8,905 9,957 

Chesapeake Energy Corp. ............ 498,780 8,634 9,812 

Chevron Corp. ..................... 99,770 9,968 12,242 

Cisco Systems Inc. ................. 1,295,250 30,991 27,296 

Citigroup Inc. ..................... 552,500 16,459 25,969 

Comcast Corp., Special A ............. 532,850 15,142 21,090 

CVS Caremark Corp. ................ 413,475 15,010 24,233 

FedEx Corp. ...................... 142,740 11,940 13,516 

Forest Laboratories Inc. .............. 183,540 7,055 6,915 

General Electric Co. ................ 480,470 18,288 10,779 

Gilead Sciences Inc. ................ 363,700 7,429 18,553 

Halliburton Co. .................... 515,715 15,532 22,219 

Hewlett-Packard Co. ................ 715,680 12,697 14,844 

JPMorgan Chase & Co. .............. 288,090 12,864 14,214 

LyondellBasell Industries NV, A ......... 129,030 6,008 7,891 

Macy’s Inc. ....................... 359,100 10,646 16,130 

Medtronic Inc. .................... 322,650 13,457 15,172 

Merck & Co. Inc. ................... 310,920 12,061 14,721 

Microsoft Corp. .................... 717,160 20,928 23,905 

Morgan Stanley .................... 909,090 16,106 20,284 

National Oilwell Varco Inc. ............ 175,402 2,434 11,522 

Navistar International Corp. .......... 312,170 11,474 10,412 

News Corp., A ..................... 446,630 7,954 13,934 

Noble Corp. ...................... 370,261 14,378 13,983 

Oracle Corp. ...................... 696,980 11,883 22,994 

Pfizer Inc. ........................ 666,273 22,270 19,498 

Symantec Corp. ................... 280,770 4,333 6,870 

Target Corp. ...................... 201,960 8,192 14,347 

The Home Depot Inc. ................ 98,969 2,634 7,312 

The Procter & Gamble Co. ............ 175,750 11,588 13,584 

Time Warner Cable Inc. .............. 141,911 5,841 13,419 

Time Warner Inc. ................... 243,016 9,406 14,632 

United Parcel Service Inc., B ........... 165,343 11,895 14,296 

Viacom Inc., B ..................... 163,530 7,300 10,541 

Walgreen Co. ..................... 330,570 11,704 16,480 

481,151 640,568 

United Kingdom: 14.26% 

Aviva PLC ........................ 2,608,084 38,542 12,452 

BG Group PLC ..................... 793,600 15,691 13,443 

Shares 

Average 


(000s) (000s) 

United Kingdom: 14.26% (Continued) 

BPPLC .......................... 1,039,470 $ 10,115 $ 7,587 

GlaxoSmithKline PLC ................ 746,843 20,352 19,377 

HSBC Holdings PLC ................. 2,289,231 38,992 25,096 

International Consolidated Airlines Group 

SA ........................... 1,842,820 5,453 7,841 

Kingfisher PLC ..................... 6,006,071 24,732 29,333 

Lloyds Banking Group PLC ............ 26,750,190 17,397 22,730 

Marks & Spencer Group PLC ........... 2,553,106 15,586 16,301 

Royal Dutch Shell PLC, B ............. 412,321 15,129 14,537 

Tesco PLC ........................ 1,396,206 8,656 7,996 

Vodafone Group PLC ................. 8,451,175 25,516 25,928 

236,161 202,621 

Switzerland: 6.39% 

ABB Ltd. ......................... 710,030 12,968 16,924 

Credit Suisse Group AG .............. 926,952 29,327 25,962 

Novartis AG ....................... 220,400 14,328 16,453 

Roche Holding AG .................. 124,840 20,498 31,380 

77,121 90,719 

France: 5.97% 

Alstom SA ........................ 323,540 13,964 13,355 

BNP Paribas SA .................... 344,380 16,428 19,324 

Compagnie de Saint-Gobain ........... 168,130 6,886 6,789 

Sanofi ........................... 280,080 25,835 30,908 

Total SA, B ....................... 283,310 23,094 14,379 

86,207 84,755 

Germany: 4.43% 

Merck KGaA ....................... 46,540 4,700 7,117 

Muenchener Rueckversicherungs- 

Gesellschaft AG .................. 70,720 10,858 14,244 

SAPAG .......................... 217,830 10,496 17,457 

Siemens AG ....................... 229,400 21,439 24,098 

47,493 62,916 

Japan: 3.60% 

ITOCHU Corp. ..................... 1,334,200 14,311 16,587 

Nissan Motor Co. Ltd. ............... 696,650 7,418 7,300 

Toyota Motor Corp. ................. 466,860 22,444 27,212 

44,173 51,099 

Hong Kong: 3.08% 

AIA Group Ltd. .................... 3,230,050 9,158 14,424 

Cheung Kong (Holdings) Ltd. .......... 613,150 6,728 9,281 

Hutchison Whampoa Ltd. ............. 1,842,620 18,642 20,128 

34,528 43,833 

Singapore: 2.86% 

DBS Group Holdings Ltd. ............. 1,438,611 11,549 19,704 

The accompanying notes are an integral part of these financial statements. 



STATEMENT OF INVESTMENTS 

As at April 30, 2013 (Continued) 

Shares 

Average 


(000s) (000s) 

Singapore: 2.86% (Continued) 

Singapore Telecommunications Ltd. ..... 6,553,370 $ 15,489 $ 21,007 

27,038 40,711 

South Korea: 2.84% 

KB Financial Group Inc. .............. 215,170 13,222 7,073 

POSCO .......................... 21,550 6,836 6,188 

Samsung Electronics Co. Ltd. ......... 19,487 9,312 27,086 

29,370 40,347 

Netherlands: 2.55% 

Akzo Nobel NV ..................... 233,881 13,345 14,186 

ING Groep NV ...................... 2,661,217 58,891 21,998 

72,236 36,184 

Italy: 1.07% 

UniCredit SpA ..................... 2,907,893 78,186 15,266 

Taiwan: 1.04% 

Taiwan Semiconductor Manufacturing Co. 

Ltd. .......................... 3,986,282 7,522 14,842 

Brazil: 0.85% 

Vale SA, American Depositary Receipt .... 702,660 15,101 12,083 

Norway: 0.81% 

Statoil ASA ....................... 466,630 11,282 11,453 

China: 0.78% 

Shanghai Electric Group Co. Ltd. ....... 31,433,600 12,378 11,058 

Ireland: 0.62% 

CRHPLC ......................... 403,303 11,306 8,751 

Canada: 0.57% 

Talisman Energy Inc. ................ 679,940 12,065 8,078 

Spain: 0.46% 

Inditex SA ........................ 48,860 2,024 6,552 

Total Common Stocks: .............. 1,285,342 1,381,836 

Units/Shares 

Average 


(000s) (000s) 

INVESTMENTS IN UNDERLYING FUNDS: 0.76% 

Templeton China Opportunities 

Fund, AS .................. 947,145 9,695 10,743 

Total Investments In Underlying 

Funds: .................... 9,695 10,743 

Total Long-Term Investments: .... 1,310,611 1,403,026 

Principal Amount 

in Currency 

of Issue 

SHORT-TERM SECURITIES: 0.46% 

Bank Of Montreal, Term Deposit, 

0.90%, 5/1/2013 ............ 6,500,000 CAD 6,500 6,500 

Total Short-Term Securities: ..... 6,500 6,500 

Transaction costs (Note 2) ......... (2,683) — 

TOTAL INVESTMENTS: 99.22% . . $1,314,428 1,409,526 

NET UNREALIZED GAIN ON 

DERIVATIVES: ............... 31 

OTHER ASSETS, less 

liabilities: 0.78% ............ 11,002 

TOTAL NET ASSETS: 100.00% . . . $1,420,559 

PREFERRED STOCKS: 0.73% 

Petroleo Brasileiro SA, American Depositary 

Receipt, Preferred ................ 519,574 15,574 10,447 

Total Preferred Stocks: .............. 15,574 10,447 




STATEMENT OF INVESTMENTS 

As at April 30, 2013 (Continued) 

SCHEDULE OF DERIVATIVE INSTRUMENTS (As at April 30, 2013) 

FORWARD FOREIGN EXCHANGE CONTRACTS 

Counterparty 

Credit 

Rating 

Settlement Date 

Currency 

to be Delivered 

Par Value 

In Canadian Dollars 

Currency 

to be Received 

Par Value 

In Canadian Dollars 

Contract 

Price 

Unrealized 

Gain (Loss) 

(000s) (000s) (000s) (000s) (000s) 

CitibankNA ........................ A May28,2013 7 CHF $ 7 7 CAD $ 7 1.0896 $ — 

ROYALBANKOFSCOTLANDPLC ....... A May28,2013 6 GBP 9 9 CAD 9 1.5714 — 

ROYALBANKOFSCOTLANDPLC ....... A May28,2013 40 USD 41 41 CAD 41 1.0224 — 

ROYALBANKOFSCOTLANDPLC ....... A May28,2013 160 CHF 174 174 CAD 174 1.0875 — 

ROYALBANKOFSCOTLANDPLC ....... A May28,2013 226 GBP 354 358 CAD 358 1.5841 4 

ROYALBANKOFSCOTLANDPLC ....... A May28,2013 323 EUR 429 432 CAD 433 1.3375 4 

ROYALBANKOFSCOTLANDPLC ....... A May28,2013 1,288 HKD 168 170 CAD 171 0.1320 3 

ROYALBANKOFSCOTLANDPLC ....... A May28,2013 1,366 USD 1,377 1,397 CAD 1,397 1.0227 20 

ROYALBANKOFSCOTLANDPLC ....... A May29,2013 6 GBP 10 10 CAD 10 1.6167 — 

ROYALBANKOFSCOTLANDPLC ....... A May29,2013 14 EUR 19 19 CAD 19 1.3571 — 

ROYALBANKOFSCOTLANDPLC ....... A May29,2013 45 HKD 6 6 CAD 6 0.1333 — 

Total Number of Contracts .........11 $31 


ROYALBANKOFSCOTLANDPLC ....... A May28,2013 9 EUR 11 11 CAD 11 1.2791 — 


Total Number of Contracts ..........3 $— 

Net Unrealized Gain ................ $31 




STATEMENTS OF NET ASSETS 

As at April 30, 2013 and 2012 

2013 2012 

(000s) 

(000s) 

Assets 

Investment in securities — at fair value $ 1,409,526 $ 1,406,682 

Cash 

Canadian 2,730 33 

Foreign 4,243 3,447 

Receivables 

Investment securities sold 3,973 — 

Capital shares sold 372 117 

Dividends, interest and withholding tax 6,192 6,742 

Refundable income taxes 286 6,518 

Current income taxes 766 — 

Unrealized gain on derivatives 31 — 

Other assets (Note 8) 150 — 

Total assets 1,428,269 1,423,539 

Liabilities 

Payables 

advisory fees 

Accrued expenses 1,411 1,837 

Current income taxes — 1,857 

Future income taxes 1,844 2,525 

Other liabilities (Note 9) — 198 

Capital shares redeemed 

Management and investment 

1,158 

3,297 

2,365 

3,559 

Total liabilities 7,710 12,341 

Net assets $ 1,420,559 $ 1,411,198 

Total net assets per series (000s) 

Series A $1,207,188 $1,223,281 

Series A Hedged 3,076 — 

Series F 32,561 31,050 

Series I 24,860 22,278 

Series O 152,874 134,589 

Number of shares outstanding (Note 3) 

Series A 105,344,343 126,734,454 

Series A Hedged 300,000 — 

Series F 2,544,809 2,913,019 

Series I 1,928,444 2,075,126 

Series O 9,916,904 10,629,680 

Net assets per share — CAD 

Series A $11.46 $9.65 

Series A Hedged 10.26 — 

Series F 12.80 10.66 

Series I 12.89 10.73 

Series O 15.42 12.66 

Net assets per share — USD 

Series A $11.38 $9.77 

Series F 12.71 10.79 

Series I 12.80 10.87 

Series O 15.31 12.82 

Cost of investments held (000s) $1,314,428 $1,537,334 

(Signed) Don Reed 

Director 

Signed on behalf of Templeton Growth Fund., Ltd. 

(Signed) Nevil Thomas 

Director 




STATEMENTS OF OPERATIONS 

For the periods ended April 30, 2013 and 2012 

2013 2012 

(000s) 

(000s) 

Investment income 

Dividends $ 36,884 $ 45,779 

Interest 110 122 

Total investment income 36,994 45,901 

Expenses 

Management fees (Note 4(a)) 14,467 16,447 

Investment advisory fees (Note 4(a)) 6,723 7,627 

Transfer agent fees (Note 4(b)) 7,253 8,857 

Custodian fees 113 199 

Legal fees 2 11 

Audit fees 82 95 

Directors’ fees 162 196 

Shareholder reporting costs 343 390 

Independent review committee fees 1 2 

Registration fees 77 69 

Other expenses (Note 7) 1,103 1,236 

Total expenses 30,326 35,129 

Expenses waived/paid by Manager (Note 6) (329) (911) 

Net expenses 29,997 34,218 

Net investment income (loss) 6,997 11,683 

Realized and unrealized gain (loss) on investments and transaction costs 

Net realized gain (loss) on investments 7,965 3,887 

Net realized and/or unrealized foreign exchange gain (loss) (173) (3) 

Net change in unrealized appreciation (depreciation) in value of investments and 

derivatives 225,781 (75,766) 

Transaction costs (Note 11) (1,048) (398) 

Net gain (loss) on investments 232,525 (72,280) 

Net gain (loss) before taxes 239,522 (60,597) 

Provision for (recoverable) income taxes 

Current 4,374 8,193 

Future (682) 650 

Total provision for income taxes 3,692 8,843 

Increase (decrease) in net assets from operations $ 235,830 $ (69,440) 

Increase (decrease) in net assets from operations per series (000s) 

Series A $198,235 $ (65,153) 

Series A Hedged 76 — 

Series F 5,403 (991) 

Series I 4,241 (625) 

Series O 27,875 (2,671) 

Increase (decrease) in net assets from operations per share 

Series A 1.73 (0.46) 

Series A Hedged 0.25 — 

Series F 2.04 (0.33) 

Series I 2.11 (0.30) 

Series O 2.72 (0.23) 




STATEMENTS OF CHANGES IN NET ASSETS 

For the periods ended April 30, 2013 and 2012 

(in 000s) 

All Series Series A Series A Hedged 

2013 2012 2013 2012 2013 2012 

Increase (decrease) in net assets from operations $ 235,830 $ (69,440) $ 198,235 $ (65,153) $ 76 $ — 

Distributions to shareholders 

From net investment income — (18,889) — (16,612) — — 

From capital gains — — — — — — 

From return of capital — — — — — — 

— (18,889) — (16,612) — — 

Capital share transactions 

Subscriptions 46,244 45,337 29,468 29,906 3,000 — 

Reinvestments — 18,092 — 15,925 — — 

Redemptions (272,713) (360,597) (243,796) (318,366) — — 

(226,469) (297,168) (214,328) (272,535) 3,000 — 

Increase (decrease) in net assets for the period 9,361 (385,497) (16,093) (354,300) 3,076 — 

Net assets — beginning of period 1,411,198 1,796,695 1,223,281 1,577,581 — — 

Net assets — end of period $ 1,420,559 $ 1,411,198 $ 1,207,188 $ 1,223,281 $ 3,076 $ — 

Series F Series I Series O 

2013 2012 2013 2012 2013 2012 

Increase (decrease) in net assets from operations $ 5,403 $ (991) $ 4,241 $ (625) $ 27,875 $ (2,671) 

Distributions to shareholders 

From net investment income — (367) — (254) — (1,656) 

From capital gains — — — — — — 

From return of capital — — — — — — 

— (367) — (254) — (1,656) 

Capital share transactions 

Subscriptions 3,619 9,062 290 518 9,867 5,851 

Reinvestments — 348 — 184 — 1,635 

Redemptions (7,511) (10,675) (1,949) (1,773) (19,457) (29,783) 

(3,892) (1,265) (1,659) (1,071) (9,590) (22,297) 

Increase (decrease) in net assets for the period 1,511 (2,623) 2,582 (1,950) 18,285 (26,624) 

Net assets — beginning of period 31,050 33,673 22,278 24,228 134,589 161,213 

Net assets — end of period $ 32,561 $ 31,050 $ 24,860 $ 22,278 $ 152,874 $ 134,589 




NOTES TO FINANCIAL STATEMENTS For the periods ended April 30, 2013 and 2012 

1. Organization 

(a) 

Inception and Financial Reporting Dates 

Templeton Growth Fund, Ltd. (the “Fund”), is an open-ended mutual fund corporation incorporated under the laws of Canada on 

September 1, 1954, and continued under the Canada Business Corporations Act on July 20, 1979. 

The Fund launched Series A shares on November 29, 1954, Series F, I and O shares on November 24, 2000 and Series A Hedged 

on March 22, 2013. Series A Hedged seeks to provide long-term capital appreciation, while reducing the potential effects of 

exchange rate fluctuations between the Canadian dollar and global currencies within the Fund’s Portfolio by investing in forward 

contracts. 

The financial statements of the Fund include the Statement of Investments as at April 30, 2013, and the Statements of Net Assets as 

at April 30, 2013 and April 30, 2012. The Statements of Operations and Changes in Net Assets for the Fund are for the years ended 

April 30, 2013 and 2012. 

(b) 

Fund Events 

The Fund may invest up to 7.5% of its net assets in separate classes of shares in Templeton China Opportunities Fund (“TCOF”), an 

“Underlying Fund” and a sub-fund of Franklin Templeton Selected Markets Funds (“FTSMF”), an open-end investment company 

organized under the laws of Luxembourg as a Société d’investissement à Capital Variable. TCOF is managed by Templeton Investment 

Counsel, LLC, an affiliate of Franklin Templeton Investment Corp. (the “Manager”). TCOF’s portfolio is managed in accordance 

with the investment restrictions applicable to a UCITS, an undertaking for collective investment in transferable securities, which are 

substantially similar to those that govern the Fund in Canada. As of April 30, 2013, the Fund held 0.76% of its net assets within 

TCOF. The principal distributor and the administrative agent of FTSMF is an affiliate of the Manager. 

On March 22, 2013, the Fund commenced the offering of Series A Hedged shares, which was made available for sale on 

March 28, 2013. 

2. Summary of Significant Accounting Policies 

These financial statements are prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). The significant 

accounting policies are as follows: 

(a) 

(b) 

Designation of financial assets and liabilities — For the purpose of measuring and recognizing financial assets and liabilities, the 

following designations have been made: All investments, including derivatives, if any, are initially recognized at fair value and are 

designated as held for trading. Accrued interest, distributions and dividends receivable, amounts receivable for capital shares 

sold and securities sold, and other assets are designated as loans and receivables and reported at cost or amortized cost. 

Amounts payable for securities purchased and capital shares redeemed, management fees payable, distributions payable, 

accrued expenses and other liabilities, are designated as other financial liabilities and reported at amortized cost. 

Valuation of investments — The CICA Handbook Section 3855, “Financial Instruments — Recognition and Measurement”, 

requires that the fair value of financial instruments traded in active markets be measured at bid price for long positions and 

closing ask price for short positions for financial statement reporting purposes (“net assets”). The Canadian Securities 

Administrators allow investment funds to calculate the daily net asset value for the purpose of processing shareholder 

transactions using the last traded price for the day as fair value of financial instruments traded in an active market, which is 

referred to as a “trading net asset value”. As a result, the net assets per share for financial reporting purposes may differ from 

the trading net asset value. This measurement difference does not affect the Fund’s shareholder transactions. The Fund’s 

trading net asset values are disclosed in Note 13. 

Securities listed on a securities exchange and those traded on the over-the-counter market are valued at the closing bid price for 

long positions and closing ask price for short positions on the valuation day. The Fund has procedures to determine the fair 

value of securities and other financial instruments for which market prices are not readily available or which may not be reliably 

priced. Under these fair valuation procedures, the Fund primarily employs a market-based approach which may use related or 

comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the 



NOTES TO FINANCIAL STATEMENTS 

For the periods ended April 30, 2013 and 2012 (Continued) 

2. Summary of Significant Accounting Policies (Continued) 

investment to determine its fair value. The Fund may also use an income-based valuation approach in which the anticipated 

future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or 

duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, 

the fair values may differ significantly from the values that would have been used had an active market existed. 

Investments in TCOF are made in Series F1, denominated in USD, and valued at the CAD equivalent of the closing net asset 

value on valuation day. 

All security valuation techniques are periodically reviewed by the Valuation Committee of Franklin Templeton Investments Corp., 

the “Manager” and are approved by the Manager. 

(c) 

Derivatives — The Fund may invest in derivatives in order to manage risk or gain exposure to various other investments or 

markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial 

investment that is smaller than would normally be required to have similar response to changes in market factors, and require or 

permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their 

obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market 

movements which expose the Fund to gains and losses in excess of the amounts shown on the Statements of Net Assets. 

Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the 

Statements of Operations. 

(i) 

Foreign/Forward exchange contracts — When a Fund purchases or sells foreign securities, it may enter into foreign exchange 

contracts to minimize foreign exchange risk from the trade date to the settlement date of the transactions. A foreign 

exchange contract is an agreement between two parties to exchange different currencies at an agreed upon exchange rate at 

a future date. 

A Fund may also enter into forward exchange contracts to hedge against fluctuations in foreign exchange rates. These 

contracts are valued as the difference between the contractual forward foreign exchange rates and the forward bid rate for 

currency held and forward ask rate for currency sold short at the reporting date. The unrealized gains or losses on the 

contracts are included in the Statements of Net Assets. Realized gains and losses and changes in unrealized gains and 

losses are included in the Statements of Operations. 

A hedging strategy is employed by the Fund that seeks to reduce, as far as possible, the influence of changes in the 

exchange rate between the Canadian dollar and the currencies of securities held by the Fund’s portfolio on the portion of the 

Fund’s net assets attributable to the Series A Hedged units outstanding. The gains or losses on and the costs of such 

hedging transactions will accrue solely to the Series A Hedged. 

(d) 

(e) 

Valuation of series — A separate net assets per share is calculated for each series of shares of the Fund. The net assets of a 

series is computed by calculating the series’ proportionate share of the assets and liabilities of the Fund common to all series, 

less the liabilities of the Fund attributable only to that series. Expenses directly attributable to a series are charged to that series. 

Other expenses, investment income, realized and unrealized capital and foreign exchange gains and losses are allocated 

proportionately to each series based upon the relative net assets of each series, with the exception of gains and losses arising 

from the hedging strategy, utilizing forward foreign exchange contracts, which is allocated to Series A Hedged only. 

Transaction costs — Transaction costs, such as brokerage commissions and forward fees, incurred on the purchase and sale of 

a security are charged as an expense for the period and shown as transaction costs on the Statements of Operations. 

Investments in Underlying Funds do not incur transaction costs on those transactions. 

(f) 

Security transactions, investment income, expenses and distributions — Security transactions are recorded on the trade date. 

Realized and unrealized gains or losses on security transactions are determined on an average cost basis. Interest income and 

estimated expenses are accrued daily. Dividend income, distributions received from TCOF and distributions to shareholders are 

recorded on the ex-dividend date. 





2. Summary of Significant Accounting Policies (Continued) 

(g) 

Taxes — The Fund presently qualifies as a “mutual fund corporation” as defined in the Income Tax Act (Canada) (the “Act”) 

and the Ontario Corporations Tax Act. 

As a mutual fund corporation, taxable dividends received from taxable Canadian corporations are subject to a tax of 33 1/3%. 

Such taxes are fully refundable upon payment of taxable dividends to its shareholders on a basis of $1 for every $3 of dividends 

paid. Any such tax paid is reported as an amount receivable until recovered through the payment to shareholders of dividends 

out of net investment income. Interest income and foreign dividends, net of applicable expenses, are taxed at full corporate rates 

with credits, subject to certain limitations, for foreign taxes paid. 

Future income tax liabilities are recorded in the financial statements due to temporary differences related to accrued foreign 

dividend income. 

For the years ended April 30, 2013 and 2012, the Fund was subject to tax at full corporate rates on 50% of its net realized capital 

gains. This tax can be eliminated by “capital gains redemptions” [as defined in the Act] by the Fund, or within 60 days of its 

financial year, by making payment to its shareholders of a capital gains dividend out of the Fund’s realized but undistributed 

capital gains, or by a combination of both. Where capital gains redemptions in a given year are not sufficient to eliminate this 

tax, it is the Fund’s policy to apply capital losses against capital gains or pay a capital gains dividend sufficient to do so. Consequently, 

no amount has been included for this tax in the provision for income taxes in the current or prior year. 

(h) 

Foreign currency translation — The functional currency of the Fund is CAD. Portfolio securities and other assets and liabilities 

denominated in foreign currencies are translated into the functional currency based on the exchange rate on the valuation date. 

Purchases and sales of securities and income items denominated in foreign currencies are translated into the functional 

currency at the exchange rate in effect on the transaction date. When an exchange rate is unavailable or unreliable, it will be 

determined using procedures established and accepted by the Manager of the Fund. 

The Fund does not separately report the effects of changes in foreign exchange rates from changes in market prices on securities 

held. Such changes are included in net realized and unrealized gain or loss on investments. 

Realized foreign exchange gains or losses arise from sales of foreign currencies, changes between the trade date and settlement 

date values on security and capital transactions, and the difference between the recorded amounts of foreign currency denominated 

dividends, interest, withholding taxes, and U.S. short-term holdings, and the functional currency equivalent of the 

amounts actually received or paid. These gains or losses are reported on the Statements of Operations as net realized and/or 

unrealized foreign exchange gain (loss). 

(i) 

(j) 

(k) 

Related party transactions — All related party transactions occur in the normal course of operations and are recorded at an 

amount of consideration agreed to by the parties. 

Increase (decrease) in net assets from operations per share — This calculation is based on the increase (decrease) in net assets 

from operations attributable to each series divided by the weighted average number of shares of that series outstanding during 

the period. 

Accounting estimates — The preparation of financial statements in accordance with Canadian GAAP may require the Manager to 

make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements 

and the amounts of income and expense reported during the periods. Actual results may differ from those estimates. 

The key area where estimates and/or assumptions are applied is in the determination of fair values of financial instruments not 

traded on an active market as discussed in note 2(b). 

3. Shareholders’ Capital 

The authorized capital of the Fund consists of an unlimited number of common shares without nominal or par value. The Fund has 

one class of common shares that may be divided into an unlimited number of series. Currently, the Fund offers series of shares, designated 

as Series A, A Hedged, F, I, and O. The holders of common shares have the right under the Fund’s Articles to require the 





3. Shareholders’ Capital (Continued) 

Fund to repurchase their shares at their current net asset value. The Fund’s objective when managing capital is to safeguard its ability 

to continue as going concern in order to maintain a strong capital base to support the development of the investment activities of the 

Fund. In order to maintain or adjust capital structure, the level of shareholder subscriptions and redemptions is monitored relative to 

liquid assets. The Fund may redeem and issue new shares in accordance with the Fund’s Articles. 

Changes in issued capital stock are summarized as follows: 

Series A Series A Hedged Series F 

April 30, 2013 April 30, 2012 April 30, 2013 April 30, 2012 April 30, 2013 April 30, 2012 

Outstanding shares — beginning 126,734,454 155,696,226 — — 2,913,019 3,042,823 

Subscriptions 2,857,794 3,165,397 300,000 — 316,662 879,075 

Reinvestments — 1,658,891 — — — 33,180 

Redemptions (24,247,905) (33,786,060) — — (684,872) (1,042,059) 

Outstanding shares — ending 105,344,343 126,734,454 300,000 — 2,544,809 2,913,019 

Series I 

Series O 

April 30, 2013 April 30, 2012 April 30, 2013 April 30, 2012 

Outstanding shares — beginning 2,075,126 2,174,396 10,629,680 12,440,653 

Subscriptions 24,256 48,441 727,119 476,547 

Reinvestments — 17,395 — 132,680 

Redemptions (170,938) (165,106) (1,439,895) (2,420,200) 

Outstanding shares — ending 1,928,444 2,075,126 9,916,904 10,629,680 

4. Related Party Transactions 

(a) Investment advisory and management fees 

The Fund pays an investment advisory fee to Templeton Global Advisors Limited, Bahamas (the “Advisor”) computed at 1/4 of 0.50% 

quarterly on the average daily net assets of the Fund. The Fund pays the management fee to the Manager calculated monthly at the 

rate set out below on the average daily net assets of the Fund: 

Series A 1/12 of 1.10% 

Series A Hedged 1/12 of 1.40% 

Series F 1/12 of 0.50% 

Series I 1/12 of 0.60% 

The Series O management and administration fee is negotiated with and paid by the individual shareholder directly to the Manager. 

(b) Manager Holdings 

As at April 30, 2013, the Manager held all of the shares in Series A Hedged. No shares of the Fund were held by the Manager as at 

April 30, 2012. 

(c) Other services 

In addition to providing administration and other services in connection with the distribution of Fund shares, the Manager also acts as 

registrar and transfer agent for the Fund and is compensated by the Fund for the provision of such services. 

(d) Expenses absorbed or paid by the Manager 

Operating expenses of the Fund may be absorbed or paid by the Manager as discussed in Note 6. 

5. Sales Charges 

The sales charge incurred by shareholders of Series A shares is dependent on the purchase option selected at the time of purchase. 

Under the front-load sales option, a negotiable fee of up to 6% of the purchase price is payable by the Series A (including A Hedged) 

investors to their dealers. Under the low-load option, the Series A (including A Hedged) investors will pay a redemption fee to the 

Manager if they redeem their shares within three years of purchasing them. This redemption fee is based on a declining percentage 





5. Sales Charges (Continued) 

of the original cost of the investor’s shares and how long the investor has held them, ranging from 3% to 0%. Up to 10% of an investor’s 

investment in Series A (including A Hedged) shares may be redeemed in each calendar year without a redemption charge. 

Under the deferred sales charge option, the Series A (including A Hedged) investors will pay a redemption fee to the Manager if they 

redeem their shares within six years of purchasing them. This redemption fee is based on a declining percentage, ranging from 6% to 

0%, of the original cost of the investor’s shares and how long the investor has held them. Series I shareholders negotiate a fee of up to 

2% with their dealers. 

6. Operating Expenses 

The operating expenses of the Fund, which include, but are not limited to, legal, audit, custodial, registrar, fund administration and 

the cost of financial statements and other reports, are the direct responsibility of the Fund. Brokerage commissions and taxes paid by 

the Fund are not included in operating expenses, but are borne by the Fund and are reflected separately in the Statements of Operations. 

The Manager pays certain of the operating expenses on behalf of the Fund and is then reimbursed by the Fund. The Manager 

may waive or absorb certain expenses of the Fund. The decision to do so is reviewed regularly and determined at the sole discretion 

of the Manager. 

The portion of the operating expenses allocated to Series O investors may be absorbed by the Manager as part of its agreement with 

the investors in those Series. 

7. Other Expenses 

The principal items in other expenses are rent, data communication charges and other overhead costs charged by the Manager. 

8. Other Assets 

The principal items in other assets are recoverable expenses from the Manager. 

9. Other Liabilities 

The principal item in other liabilities is Ontario capital tax liability. 

10. Financial Risk Management 

Risks arising from holding financial instruments are inherent in the Fund’s activities and are managed through a process of ongoing 

measurement and monitoring. These financial risks may include, among others, market risk (including market price risk, currency 

risk, and interest rate risk), liquidity risk and credit risk. These risks are moderated through careful selection of securities and other 

financial instruments within the Fund’s investment guidelines by the Advisor. The risks are measured using a method that reflects the 

expected impact on the results and net assets attributable to shareholders of the Fund from reasonably possible changes in the relevant 

risk variables. Information about these risk exposures at the reporting date and risk management policies employed are disclosed 

in Notes 10 (a) to (e). 

(a) 

Currency risk 

The Fund holds assets and liabilities denominated in currencies other than its functional currency, and is therefore exposed to currency 

risk as the values of such assets and liabilities will fluctuate due to changes in exchange rates. 

The Advisor monitors the Fund’s currency risk position, and may enter into forward exchange contracts to manage foreign exchange 

exposure and disclosed in the Fund’s Statement of Investments, if applicable. 

The table below summarizes the Fund’s exposure to currency risk, where applicable. Amounts shown are based on the carrying value 

of monetary and non-monetary assets, less liabilities. Where individual currencies held are less than 5% of net assets, that currency 

has been included in “other”. The table also illustrates the expected increase or decrease in net assets had the functional currency 





10. Financial Risk Management (Continued) 

strengthened or weakened by 5% in relation to all foreign currencies, with all other variables held constant. Actual results may differ 

from this sensitivity analysis and the difference could be material. 

April 30, 2013 April 30, 2012 

As % of 

net assets Amount 

As % of 

net assets 

Currency 

Amount 

(000s) 

(000s) 

CHF ........................................................ $ 91,830 6.46% — — 

EUR ........................................................ 215,614 15.18% 202,423 14.34% 

GBP ........................................................ 177,854 12.52% 198,850 14.09% 

HKD........................................................ 80,231 5.65% 89,573 6.35% 

USD ........................................................ 680,992 47.94% 670,390 47.51% 

Other ....................................................... 158,844 11.18% 227,696 16.13% 

$1,405,365 98.93% $1,388,932 98.42% 

Impact on net assets from 5% currency movement ................... $ 70,268 $ 69,447 

(b) 

Other price risk 

Other price risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate as a result of changes in market 

prices (other than those arising from currency risk or interest rate risk). Those changes may be caused by factors specific to the 

individual financial instrument or its issuer, or factors affecting a market or market segment. Other assets and liabilities are monetary 

items that are short-term in nature, and as such they are not subject to other price risk. 

The table below illustrates the expected increase or decrease in net assets if the value of the Fund’s investments had increased or 

decreased by 5%, with all other variables held constant. Actual results may differ from this sensitivity analysis and the difference 

could be material. 

Sensitivity on 

Net Assets 

% Impact 

on Net Assets 

(000s) 

April 30, 2013 .............................................................................. $70,151 4.94% 

April 30, 2012 .............................................................................. 69,299 4.91% 

(c) 

Interest rate risk 

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of interest bearing 

financial instruments. 

The Fund is not directly exposed to interest rate risk as no significant interest bearing securities (excluding overnight term deposits) 

were held by the Fund for the periods ended April 30, 2013 and April 30, 2012. 

(d) 

Liquidity risk 

Liquidity risk is the risk that the Fund will not be able to meet liabilities as they fall due. As the Fund is exposed to daily cash 

redemption of shares, the assets of the Fund are invested mainly in securities which are traded in active markets and can be readily 

disposed of. In addition, sufficient cash and cash equivalents are maintained to meet normal operating requirements. The Fund has 

the ability to borrow up to 5% of its net assets for the purposes of funding redemptions. The Fund has a non-committed redemption 

line of credit agreement with a Schedule 1 bank in Canada from which these amounts can be borrowed, if necessary. The loans are 

issued at prime rate and are payable on demand. There were no loans issued or outstanding as of April 30, 2013 and April 30, 2012. 

All liabilities held are payable upon demand or due within three months. 

The Fund also has a policy to purchase an illiquid asset only to the extent that immediately after purchase, the value of the illiquid 

securities held by the Fund does not account for more than 10% of the net assets of the Fund. Units of TCOF are considered illiquid 

assets and as of April 30, 2013 and April 30, 2012, they represented 0.76% and 0.74%, respectively of the net assets of the Fund. 

All liabilities held are payable upon demand or due within three months. 






(e) 

Credit risk 

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered 

into with the Fund. This risk is generally lower if the issuer has a high credit rating from an independent credit rating agency, while 

the risk is generally higher if the issuer has a low credit rating or no credit rating. Where applicable, credit ratings have been disclosed 

at the end of the Statement of Investments. 

As at April 30, 2013 and April 30, 2012, the Fund had no significant investments in debt instruments and/or derivatives. 

All cash and trading transactions are carried out by banks rated A or higher by Standard & Poor’s as at April 30, 2013 and April 30, 

2012. 

(f) 

Fair value estimation 

The Fund classifies fair value measurements of investments held using a fair value hierarchy that reflects the significance of the 

inputs used in making the measurements. The fair value hierarchy has the following levels: 

• Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities 

• Level 2 — inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly 

(prices) or indirectly (derived from prices) 

• Level 3 — inputs for the asset or liability that are not based on observable market data (unobservable inputs) 

The determination of what constitutes “observable” requires significant judgment by the Manager. The Manager considers observable 

data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided 

by independent sources that are actively involved in the relevant market. Financial instruments that trade in markets that are not 

considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by 

observable inputs are classified within Level 2. Investments classified within Level 3 have significant unobservable inputs, as they 

trade infrequently. These may include private equity and corporate debt securities. As observable prices are not available for these 

securities, the Manager has used valuation techniques to derive the fair value. 

The following tables show the classification of the Fund’s financial assets and liabilities measured at fair value as at April 30, 2013 

and 2012. 

April 30, 2013 April 30, 2012 

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total 

($000s) ($000s) ($000s) ($000s) ($000s) ($000s) ($000s) ($000s) 

Equities — long .............................. 1,392,283 — — 1,392,283 1,375,497 — — 1,375,497 

Investments in underlying fund ................. — — 10,743 10,743 — — 10,485 10,485 

Short-term securities ......................... — 6,500 — 6,500 — 20,700 — 20,700 

Total Investments ............................ 1,392,283 6,500 10,743 1,409,526 1,375,497 20,700 10,485 1,406,682 

Derivative assets ............................. — 31 — 31 — — — — 

Derivative liabilities ........................... — — — — — — — — 






There is no significant impact to the net assets of the Fund if changes are made to one or more of the significant assumptions in the 

current valuation model for the level 3 investment to reasonably possible alternative assumptions. A reconciliation of investments 

measured at fair value using unobservable inputs (Level 3) for the applicable fund is presented as follows: 

April 30, 2013 April 30, 2012 

Investments in 

Investments in 

underlying fund Total underlying fund Total 

($000s) ($000s) ($000s) ($000s) 

Opening .................................................................... 10,485 10,485 11,635 11,635 

Sales ...................................................................... — — — — 

Purchases ................................................................. — — 33 33 

Net transfers ................................................................ — — — — 

Net realized gains (losses) ..................................................... — — — — 

Net change in unrealized appreciation (depreciation) ................................ 258 258 (1,183) (1,183) 

Ending ..................................................................... 10,743 10,743 10,485 10,485 

Total change in unrealized appreciation (depreciation) on investments held at April 30 ...... 258 258 (1,183) (1,183) 

In accordance with the Fund’s valuation policy, the Fund may apply fair value adjustment factors when quoted market prices are 

deemed to have been affected by significant market events which exceed pre-determined thresholds. During the year, market level 

fair valuation was applied to the Fund where the pre-determined tolerances were exceeded, at which time the securities were classified 

as Level 2 and subsequently reclassified to Level 1, when the fair value adjustment factors were no longer required. 

As at April 30, 2013 and 2012, there were no significant market events to cause the pre-determined tolerances to be breached; 

hence there were no significant transfers between Level 1 and Level 2 as at that date. 

11. Broker Commissions 

Commissions paid to brokers for portfolio transactions during the years ended April 30, 2013 and 2012 amounted to $1.0 million and 

$0.4 million, respectively. A portion of commissions paid may include payment for goods and services that are used to assist with 

investment or trading decisions such as investment research, analysis and reports (“research services”). Where ascertainable, the 

value of the research services included in the commission paid for the years ended April 30, 2013 and 2012 amounted to 

$0.4 million and $0.3 million, respectively. 

12. Taxes 

(a) 

Capital and non-capital losses 

The Fund has accumulated $539 million of unused capital losses and no unused non-capital losses for income tax purposes as of 

April 30, 2013. Capital losses can be carried forward indefinitely and applied against future years’ capital gains. 

Temporary differences between the carrying value of assets and liabilities for accounting and income tax purposes give rise to future 

tax assets and liabilities. The most significant temporary difference is that between the reported fair market value of the investment 

portfolio of the Fund and its adjusted cost base (“ACB”) for income tax purposes. To the extent that the fair market value of a portfolio 

exceeds its ACB, a future tax liability is fully offset by the future refundable taxes available to the Fund as a mutual fund corporation. 

Conversely, when the ACB exceeds the portfolio’s market value, a future tax asset is generated. In such cases, a full valuation allowance 

is taken to offset this asset given the uncertainty that such future tax assets will ultimately be realized. Unused capital and noncapital 

losses disclosed above represent future tax assets to the Fund for which no benefit has been recorded in these financial 

statements as there is no certainty that the losses are more likely than not to be utilized in future periods. 





12. Taxes (Continued) 

(b) Effective tax rates 

The Fund’s statutory corporate tax rate on net investment income (excluding Canadian dividend income) for the year ended April 30, 

2013 was 39.50%: (2012 : 39.58%). The actual effective tax rate for the year ended April 30, 2013 was 1.54%: (2012 : (14.59%)). 

The effective tax rate includes the tax effect of income related foreign exchange gains/losses included in net realized gains/losses. 

2013 2012 

% % 

Statutory Tax Rate ........................................................................... 39.50 39.58 

Realized and Unrealized Gain (Loss) on Investments ................................................ (38.24) (47.21) 

Canadian Dividends .......................................................................... (0.03) 0.10 

Foreign Taxes (grouped) ...................................................................... 0.46 (2.67) 

Other ...................................................................................... (0.15) (4.39) 

Effective Tax Rate ............................................................................ 1.54 (14.59) 

13. Trading Net Asset Value 

As discussed in Note 2, the trading net asset value per share may differ from the GAAP net assets per share as shown in the Statements 

of Net Assets. The trading net asset value per share for each series is shown below, as at April 30, 2013 and April 30, 2012. 

April 30, 2013 April 30, 2012 

Series A ................................................................................... $11.46 $ 9.66 

Series A Hedged ............................................................................. $10.26 $ — 

Series F .................................................................................... $12.80 $10.67 

Series I .................................................................................... $12.89 $10.74 

Series O ................................................................................... $15.42 $12.67 

14. Financial Statements Presentation 

The amounts shown on the Statements of Net Assets and the Statements of Operations and Changes in Net Assets are rounded to 

the nearest thousand. As a result, balances reported may include amounts rounded to zero. Per share amounts and number of 

shares outstanding shown are actual amounts. 

15. Currency Legend 

Below is a list of currency abbreviations that are used throughout the financial statements. 

CAD Canadian Dollar GBP British pound 

CHF Swiss Franc HKD Hong Kong Dollar 

EUR euro USD United States Dollar 

16. Regulatory Developments 

International Financial Reporting Standards (IFRS) 

The Canadian Accounting Standards Board (“AcSB”) confirmed that effective January 1, 2011, IFRS replaced current Canadian 

standards and interpretations as Canadian GAAP for publicly accountable enterprises, which includes investment funds. The adoption 

of IFRS for investment funds will now not be mandatory until periods beginning on or after January 1, 2014. The deferral of the 

mandatory changeover was intended to allow the International Accounting Standard Board’s (“IASB”) proposed exemption from 

consolidation for investment funds to be in place prior to the adoption of IFRS by investment companies in Canada. 

In October 2012, the IASB approved the proposed amendments to IFRS 10, “Consolidated Financial Statements”, which define criteria 

for an entity to qualify as an investment entity and exempts such entity from consolidation requirements. These amendments 

require an investment entity to measure those subsidiaries at fair value through profit or loss in accordance with IFRS 9, “Financial 

Instruments” and expand disclosures to help users evaluate the nature and financial effect of its investment activities. The amendment 

will be effective January 1, 2014. Based on the Manager’s assessment, each of the Funds currently meet the proposed criteria 

for an investment entity and as such will be exempt from consolidation requirements. 





16. Regulatory Developments (Continued) 

The Manager has developed a plan to meet the timetable published by the CICA for the changeover to IFRS. The key elements of the 

plan include an assessment of differences between Canadian GAAP and IFRS, changes required to financial statement disclosure 

and impact on the current process for financial reporting purposes. 

Based on the Manager’s assessment of the accounting differences between Canadian GAAP and IFRS, the following areas of differences 

were identified: 

(a) 

(b) 

IAS 32, “Financial Instruments: Presentation”, requires puttable instruments to be classified as a liability unless certain 

conditions are met. The Funds’ shareholders’ equity meets the definition of a puttable instrument. The Manager has assessed 

the Fund’s shareholder structure and has determined the liability treatment is the most appropriate classification. 

IFRS 13, “Fair Value Measurements”, was published in May 2011. The standard provides guidance on the measurement of fair 

value and allows for the use of closing market prices to value investments. Under Canadian GAAP the fair value of investments 

for financial statement reporting purposes, was required to be measured at closing bid price for long positions and closing ask 

price for short positions. The Manager has assessed the guidance that will apply under IFRS and has determined that the use of 

closing market prices is appropriate in valuing investments. 

A Statement of Cash Flow will be required for IFRS reporting purposes. The Manager has presently determined that the impact of 

IFRS will also include additional note disclosure and modifications to existing presentation. The Manager does not expect that the 

trading net asset value or trading net asset value per unit will be impacted by the changeover to IFRS. 


MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING 

The accompanying financial statements have been prepared by Franklin Templeton Investment Corp., (the “Manager), as Manager of 

Templeton Growth Fund., Ltd (the “Fund”) and are approved by the Board of Directors of the Fund. 

The Manager is responsible for the information and representations contained in these financial statements and the other sections of the 

Annual Report. The Manager also maintains appropriate processes to ensure that relevant and reliable financial information is produced. 

The financial statements have been prepared in accordance with accounting principles generally accepted in Canada and include certain 

amounts that are based on estimates and judgments. The significant accounting policies which the Manager believes are appropriate for 

the Fund are described in Note 2 to the financial statements. Financial information published with the Annual Report is consistent with 

that in the financial statements. 

The Board of Directors is responsible for reviewing and approving the financial statements and overseeing management’s performance of 

its financial reporting. The Board of Directors appoints an Audit Committee comprised of a majority of non-management Directors. The 

Audit Committee reviews the financial statements, adequacy of internal controls, the audit process and financial reporting with management 

and the external auditors. The Audit Committee reports to the Board of Directors prior to the approval of the audited financial statements 

for publication. 

PricewaterhouseCoopers LLP are the external auditors of the Fund, appointed by the shareholders. They have audited the financial statements 

in accordance with Canadian generally accepted auditing standards to enable them to express to the shareholders their opinion on 

the financial statements. Their report is set out on the following page. 

D.F. REED 

Chief Executive Officer, 


D.A. BUCHANAN 

Treasurer, 



INDEPENDENT AUDITOR’S REPORT 

To the shareholders of 

Templeton Growth Fund, Ltd. (the Fund) 

We have audited the accompanying financial statements of the Fund, which comprise the statement of investment portfolio as at April 30, 

2013, the statements of net assets as at April 30, 2013 and April 30, 2012 and the statements of operations and changes in net assets for 

the years then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory 

information. 

Management’s responsibility for the financial statements 

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Canadian generally 

accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial 

statements that are free from material misstatement, whether due to fraud or error. 

Auditor’s responsibility 

Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with 

Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform 

the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The 

procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial 

statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s 

preparation and fair presentation of the financial statements 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 entity’s internal control. An audit also includes evaluating the 

appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating 

the overall presentation of the financial statements. 

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. 

Opinion 

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as at April 30, 2013 and 

April 30, 2012 and the results of its operations and the changes in its net assets for the years then ended in accordance with Canadian 

generally accepted accounting principles. 

Toronto, Ontario 

May 21, 2013 

Chartered Accountants, Licensed Public Accountants 


Franklin Templeton Investments is one of the world’s largest publicly-traded investment 

management companies, delivering a truly global perspective to investors for over 60 years. 

With values that have withstood the test of time, Franklin Templeton Investments provides 

global and domestic investment advisory services to the Franklin, Templeton, Bissett and 

Mutual Series funds and institutional accounts, including private wealth management 

solutions through Fiduciary Trust Company of Canada. 

www.franklintempleton.ca 

Franklin Templeton Investments Corp. 

5000 Yonge Street, Suite 900 

Toronto, ON, M2N 0A7 

Client Services: 416.364.4672 Fax: 416.364.1163 

Client Services Toll-free: 1.800.387.0830 Toll-free Fax: 1.866.850.8241 

Founding Member of The Canadian Coalition for Good Governance 

Canadian offices: 

VANCOUVER • CALGARY • WINNIPEG • TORONTO 

OTTAWA • MONTREAL • HALIFAX 

NYSE: BEN 

IFIC 

A Member of The Investment Funds 

Institute of Canada 

201304253044 

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund 

investments. Please read the Franklin Templeton Investments Funds’ prospectus before investing. Mutual fund 

securities are not covered by the Canada Deposit Insurance Corporation or by any other government deposit 

insurer. There can be no assurances that the money market funds will be able to maintain their net asset value 

per security at a constant amount or that the full amount of your investment in the fund(s) will be returned to 

you. Unit/share values change frequently and past performance may not be repeated. Fiduciary Trust Company 

of Canada is a wholly owned subsidiary of Franklin Templeton Investments Corp. 

700 ARE 04/13

ANNUAL REPORT - Franklin Templeton Investments

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