ANNUAL REPORT - Franklin Templeton Investments
ANNUAL REPORT - Franklin Templeton Investments
ANNUAL REPORT - Franklin Templeton Investments
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<strong>Templeton</strong> Growth Fund, Ltd.<br />
NOTES TO FINANCIAL STATEMENTS For the periods ended April 30, 2013 and 2012<br />
1. Organization<br />
(a)<br />
Inception and Financial Reporting Dates<br />
<strong>Templeton</strong> Growth Fund, Ltd. (the “Fund”), is an open-ended mutual fund corporation incorporated under the laws of Canada on<br />
September 1, 1954, and continued under the Canada Business Corporations Act on July 20, 1979.<br />
The Fund launched Series A shares on November 29, 1954, Series F, I and O shares on November 24, 2000 and Series A Hedged<br />
on March 22, 2013. Series A Hedged seeks to provide long-term capital appreciation, while reducing the potential effects of<br />
exchange rate fluctuations between the Canadian dollar and global currencies within the Fund’s Portfolio by investing in forward<br />
contracts.<br />
The financial statements of the Fund include the Statement of <strong>Investments</strong> as at April 30, 2013, and the Statements of Net Assets as<br />
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<br />
April 30, 2013 and 2012.<br />
(b)<br />
Fund Events<br />
The Fund may invest up to 7.5% of its net assets in separate classes of shares in <strong>Templeton</strong> China Opportunities Fund (“TCOF”), an<br />
“Underlying Fund” and a sub-fund of <strong>Franklin</strong> <strong>Templeton</strong> Selected Markets Funds (“FTSMF”), an open-end investment company<br />
organized under the laws of Luxembourg as a Société d’investissement à Capital Variable. TCOF is managed by <strong>Templeton</strong> Investment<br />
Counsel, LLC, an affiliate of <strong>Franklin</strong> <strong>Templeton</strong> Investment Corp. (the “Manager”). TCOF’s portfolio is managed in accordance<br />
with the investment restrictions applicable to a UCITS, an undertaking for collective investment in transferable securities, which are<br />
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<br />
TCOF. The principal distributor and the administrative agent of FTSMF is an affiliate of the Manager.<br />
On March 22, 2013, the Fund commenced the offering of Series A Hedged shares, which was made available for sale on<br />
March 28, 2013.<br />
2. Summary of Significant Accounting Policies<br />
These financial statements are prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). The significant<br />
accounting policies are as follows:<br />
(a)<br />
(b)<br />
Designation of financial assets and liabilities — For the purpose of measuring and recognizing financial assets and liabilities, the<br />
following designations have been made: All investments, including derivatives, if any, are initially recognized at fair value and are<br />
designated as held for trading. Accrued interest, distributions and dividends receivable, amounts receivable for capital shares<br />
sold and securities sold, and other assets are designated as loans and receivables and reported at cost or amortized cost.<br />
Amounts payable for securities purchased and capital shares redeemed, management fees payable, distributions payable,<br />
accrued expenses and other liabilities, are designated as other financial liabilities and reported at amortized cost.<br />
Valuation of investments — The CICA Handbook Section 3855, “Financial Instruments — Recognition and Measurement”,<br />
requires that the fair value of financial instruments traded in active markets be measured at bid price for long positions and<br />
closing ask price for short positions for financial statement reporting purposes (“net assets”). The Canadian Securities<br />
Administrators allow investment funds to calculate the daily net asset value for the purpose of processing shareholder<br />
transactions using the last traded price for the day as fair value of financial instruments traded in an active market, which is<br />
referred to as a “trading net asset value”. As a result, the net assets per share for financial reporting purposes may differ from<br />
the trading net asset value. This measurement difference does not affect the Fund’s shareholder transactions. The Fund’s<br />
trading net asset values are disclosed in Note 13.<br />
Securities listed on a securities exchange and those traded on the over-the-counter market are valued at the closing bid price for<br />
long positions and closing ask price for short positions on the valuation day. The Fund has procedures to determine the fair<br />
value of securities and other financial instruments for which market prices are not readily available or which may not be reliably<br />
priced. Under these fair valuation procedures, the Fund primarily employs a market-based approach which may use related or<br />
comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the<br />
10 <strong>Templeton</strong> Growth Fund, Ltd.