ANNUAL REPORT - Franklin Templeton Investments

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Templeton Growth Fund, Ltd. NOTES TO FINANCIAL STATEMENTS For the periods ended April 30, 2013 and 2012 (Continued) 10. Financial Risk Management (Continued) 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. Templeton Growth Fund, Ltd. 17
Templeton Growth Fund, Ltd. NOTES TO FINANCIAL STATEMENTS For the periods ended April 30, 2013 and 2012 (Continued) 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. 18 Templeton Growth Fund, Ltd.
Page 1 and 2: FOR THE YEAR ENDED APRIL 30, 2013 T
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ANNUAL REPORT - Franklin Templeton Investments

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