TEMPLETON GROWTH FUND, LTD - Investments€¦ · I am pleased to present the annual report for Templeton Growth Fund, Ltd., containing the audited financial statements for the period

Annual Report Apri l 30, 2019

TEMPLETON GROWTH FUND, LTD

Dear Investor,

I am pleased to present the annual report for Templeton Growth Fund, Ltd., containing the audited financial statements for the period endingApril 30, 2019.

This value-focused, global fund celebrates its 65th anniversary this year, which is testament to an investment philosophy that has prosperedfor over six decades now.

Identifying undervalued companies from around the globe with strong fundamentals and growth potential over the long term, TempletonGrowth Fund has proven to be an important building block for investors across different generations.

The current bull market is now into its 11th year, making it the longest bull run on record. In this late stage of the market cycle, market volatilityhas become more pronounced, as was witnessed during the correction at the end of 2018.

The success of Templeton Growth Fund and its longevity comes from an ability to withstand short-term volatility in order to achieve its long-terminvestment goals. In large part, this is achieved through having a truly global perspective that provides more opportunities to find bargain stocksthat have been largely overlooked by the markets.

Portfolio manager Norman Boersma will share his views on the outlook for the Fund in his letter to shareholders on the following page. I alsoencourage you to review the Fund’s annual Management Report of Fund Performance, or alternatively, visit our website atwww.franklintempleton.ca.

On behalf of Franklin Templeton Investments, I wish you all the best and thank you for your continued investment with us.

Sincerely,

Duane W. GreenPresident and Chief Executive OfficerFranklin Templeton Investments Corp.

Templeton Growth Fund, Ltd.

Templeton Growth Fund, Ltd. 1

MESSAGE TO SHAREHOLDERS

Dear Shareholder,

Global equity markets rose in Canadian-dollar terms for the 12-month period. After a late sell-off in 2018, global equities staged a V-shapedrecovery in the first quarter of 2019, spurred on by a dovish pivot from the world’s major central banks. Investors interpreted the policy shiftas a sign that the “central bank put” back-stopping markets since the global financial crisis was alive and well, and promptly resumed buyingthe growth stocks that have dominated this extended cycle. The resurgence of the expensive growth stocks that declined so precipitously inthe fourth quarter of last year created headwinds for value investors in the first few months of 2019.

While growth outperformed in an environment of economic frailty and financial repression, we question the sustainability of current conditions.We see cracks in the foundation of the US economy and vulnerabilities in an increasingly oligopolistic and controversial technology sector thatsuggest these market segments won’t always deliver the “perfection” they appear to be priced for. Conversely, European stocks are priced foreconomic inertia and political dysfunction, and the simple avoidance of a large-scale crisis may be sufficient to jump-start regional equities.Across all sectors and regions, but particularly in Europe, Financials, Health Care and Energy, we have continued to find instances of what weview as significant market mis-pricing, creating opportunities for long-term value investors.

Realizing we cannot time the markets, we have made enhancements to our process to improve performance in the current challenging cycleand position the portfolios to benefit from future opportunities. We have continued to manage portfolios with an increasingly defensive bias asthe cycle matures. This has involved selling what we viewed as fully valued holdings in cyclical industries like retail, automotives, media,technology and commodity producers, and using the proceeds to increase exposure to existing holdings and initiate new potential bargainsacross regions and sectors. These efforts have been driven by valuation and designed to ensure the inclusion of high-conviction ideas with wellunderstood risk/reward characteristics.

Some of these opportunities are outright “quality upgrades”—companies with superior profitability, market positioning, yield characteristicsand balance sheets. Others are deep value opportunities, often in the financials sector, where we believe we understand the risks and seeasymmetric return potential at exceedingly depressed valuations. European banks, in particular, remain attractive to us given the disconnectbetween declining valuations and improving fundamentals.

At Templeton, we continue to focus on what we can control, making incremental enhancements to our process with the aim of constructinglower-risk, higher-conviction portfolios suitable for an environment of rising risks and abnormally strong macroeconomic and geopoliticalinfluences.

Sincerely,

Norman J. BoersmaPresident and Chief Investment OfficerTempleton Global Equity Group


Templeton Growth Fund, Ltd.2

Financial StatementsTempleton Growth Fund, Ltd. ........................................................................................................................ 4

Notes to Financial Statements.............................................................................................................................. 13Management’s Responsibility for Financial Reporting.............................................................................................. 25

Table of Contents


SharesAverage

Cost Fair Value

(000s) (000s)INVESTMENTS: 94.61%COMMON STOCKS: 94.61%United States: 28.93%

Allergan PLC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,936 $ 27,002 $ 24,599Alphabet Inc., A .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,560 6,537 13,746Amgen Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,581 6,916 13,830Apache Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430,030 23,803 18,956Citigroup Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281,330 17,053 26,641Comcast Corp., A .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634,980 12,899 37,022Coty Inc., A .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,069,210 22,698 15,495Exxon Mobil Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315,710 33,493 33,947Gilead Sciences Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225,870 6,579 19,677Kellogg Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355,900 27,698 28,745Mattel Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 820,920 15,938 13,403Oracle Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437,050 20,137 32,389Tapestry Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365,690 18,489 15,806The Kroger Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 776,270 28,098 26,804United Parcel Service Inc., B .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,680 21,395 21,864Walgreens Boots Alliance Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274,650 24,619 19,707Wells Fargo & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428,190 29,846 27,764

343,200 390,395

United Kingdom: 11.73%BAE Systems PLC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,895,560 24,122 24,984BP PLC .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,521,500 29,307 34,383HSBC Holdings PLC .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,601,992 22,251 18,516Kingfisher PLC .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,027,630 15,917 13,966Royal Dutch Shell PLC, A.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,225 — 352Royal Dutch Shell PLC, B .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 650,091 24,830 27,984Standard Chartered PLC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,862,961 26,404 22,778Vodafone Group PLC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,185,449 26,991 15,341

169,822 158,304

Japan: 9.98%Ezaki Glico Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,800 13,787 14,151Mitsui Fudosan Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771,370 24,226 23,813Panasonic Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,667,260 22,195 20,471Seven & i Holdings Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 492,730 26,703 22,867Sumitomo Mitsui Financial Group Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334,280 15,243 16,165Suntory Beverage & Food Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,120 12,931 19,158Takeda Pharmaceutical Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365,247 18,784 18,062

133,869 134,687

France: 6.80%BNP Paribas SA.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376,590 21,163 26,847Compagnie de Saint-Gobain.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290,738 14,181 15,917Sanofi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228,020 22,511 26,546Veolia Environnement SA.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 710,090 20,668 22,468

78,523 91,778

Germany: 5.36%Bayer AG .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247,555 33,478 22,070


SCHEDULE OF INVESTMENTS As at April 30, 2019

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


SharesAverage

Cost Fair Value

(000s) (000s)Germany: 5.36% (Continued)

E.ON SE .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,677,040 $ 23,578 $ 24,108Siemens AG .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162,810 22,177 26,109

79,233 72,287

Switzerland: 4.09%Alcon Inc .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,934 3,147 3,312Novartis AG.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214,670 25,553 23,484Roche Holding AG .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,440 17,625 28,405

46,325 55,201

Italy: 3.43%Eni SpA .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390,220 9,304 8,922Prysmian SpA .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 709,840 18,311 18,332Tenaris SA .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,021,240 18,296 18,995

45,911 46,249

Netherlands: 3.35%ING Groep NV .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,459,197 26,038 24,896NXP Semiconductors NV .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,780 17,182 20,340

43,220 45,236

Denmark: 3.21%A.P. Moeller-Maersk AS, B.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,690 10,516 9,929The Drilling Co. of 1972 AS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,980 17,235 15,936Vestas Wind Systems AS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,130 12,829 17,459

40,580 43,324

China: 2.89%Baidu Inc., American Depositary Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,930 24,217 24,253China Telecom Corp. Ltd., H .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,268,890 13,754 14,743

37,971 38,996

Hong Kong: 2.09%CK Hutchison Holdings Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,003,308 29,060 28,182

South Korea: 2.04%Samsung Electronics Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523,150 6,151 27,590

Israel: 1.52%Teva Pharmaceutical Industries Ltd., American Depositary Receipt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,009,160 29,320 20,572

Taiwan: 1.44%Taiwan Semiconductor Manufacturing Co. Ltd., American Depositary Receipt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330,160 17,529 19,378

Norway: 1.37%Yara International ASA .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306,270 15,794 18,500

Canada: 1.37%Wheaton Precious Metals Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637,900 17,546 18,486

India: 1.22%Hero Motocorp Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342,030 17,601 16,522

Ireland: 1.11%Bank of Ireland Group PLC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,753,490 16,204 14,990

Singapore: 1.09%Singapore Telecommunications Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,727,140 11,173 14,759


SCHEDULE OF INVESTMENTS As at April 30, 2019 (Continued)



SharesAverage

Cost Fair Value

(000s) (000s)Thailand: 0.89%

Bangkok Bank PCL, Foreign Traded Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,362,110 $ 9,108 $ 11,953

Luxembourg: 0.70%SES SA, International Depository Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413,040 12,300 9,414

Total Common Stocks: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200,440 1,276,803

Principal Amountin Currency

of Issue

SHORT-TERM SECURITIES: 5.37%Bank of Montreal, Term Deposit, 1.65%, 5/1/2019 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,500,000 CAD 72,500 72,500

Total Short-Term Securities: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,500 72,500

TOTAL INVESTMENTS: 99.98%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,272,940 1,349,303

NET UNREALIZED GAIN ON DERIVATIVES: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6OTHER ASSETS, less liabilities: 0.02% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307

TOTAL NET ASSETS: 100.00% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,349,616

SCHEDULE OF DERIVATIVE INSTRUMENTS (As at April 30, 2019)FORWARD FOREIGN EXCHANGE CONTRACTS

CounterpartyCreditRating Settlement Date

Currencyto be Delivered

Par Valuein Canadian Dollars

Currencyto be Received


ContractPrice

UnrealizedGain (Loss)

(000s) (000s) (000s) (000s) (000s)Bank of America, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 7, 2019 838 JPY $10 10 CAD $10 $ 0.0122 $—

Bank of America, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 30 USD 40 40 CAD 40 1.3493 —

Bank of America, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 38 HKD 7 7 CAD 7 0.1721 —

Barclays Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A May 7, 2019 1,946 JPY 24 24 CAD 24 0.0122 —

Barclays Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A May 28, 2019 36 EUR 54 54 CAD 54 1.5079 —

Barclays Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A May 28, 2019 36 USD 48 49 CAD 49 1.3492 1

Barclays Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A May 28, 2019 69 HKD 12 12 CAD 12 0.1721 —

Barclays Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A May 28, 2019 71 USD 95 96 CAD 96 1.3492 1

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 7, 2019 1 CAD 1 98 JPY 1 83.7127 —

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 7, 2019 155 JPY 2 2 CAD 2 0.0121 —

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 7, 2019 289 JPY 3 3 CAD 3 0.0121 —

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 7, 2019 1,982 JPY 24 24 CAD 24 0.0122 —

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 7, 2019 2,499 JPY 29 30 CAD 30 0.0122 1

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 2 CAD 2 1 GBP 2 0.5736 —

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 34 EUR 51 51 CAD 51 1.5086 —

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 60 USD 80 81 CAD 81 1.3491 1

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 63 EUR 95 95 CAD 95 1.5085 —

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 74 USD 98 99 CAD 99 1.3491 1

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 87 HKD 15 15 CAD 15 0.1721 —

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 127 HKD 22 22 CAD 22 0.1721 —

HSBC Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AA- May 7, 2019 1,777 JPY 22 22 CAD 22 0.0122 —

JP Morgan Chase Bank, N.A. . . . . . . . . . . . . . . . . . . . . . . . A+ May 7, 2019 2 CAD 2 181 JPY 2 84.0882 —

JP Morgan Chase Bank, N.A. . . . . . . . . . . . . . . . . . . . . . . . A+ May 7, 2019 201 JPY 2 2 CAD 2 0.0122 —

JP Morgan Chase Bank, N.A. . . . . . . . . . . . . . . . . . . . . . . . A+ May 7, 2019 2,549 JPY 30 31 CAD 31 0.0122 1

JP Morgan Chase Bank, N.A. . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 6 EUR 9 9 CAD 9 1.5083 —

JP Morgan Chase Bank, N.A. . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 69 USD 93 94 CAD 94 1.3490 1

UBS AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 29 USD 39 39 CAD 39 1.3493 —

UBS AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 58 EUR 88 88 CAD 88 1.5078 —





SCHEDULE OF DERIVATIVE INSTRUMENTS (As at April 30, 2019) (Continued)FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)

CounterpartyCreditRating Settlement Date

Currencyto be Delivered


Currencyto be Received


ContractPrice

UnrealizedGain (Loss)

(000s) (000s) (000s) (000s) (000s)UBS AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 117 HKD $20 20 CAD $20 $ 0.1721 $—

Total Number of Contracts . . . . . . . . . . . . . . . . . . . . . . . 29 $ 7

Bank of America, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 6 CAD 6 38 HKD 6 5.8272 —

Bank of America, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 16 GBP 29 29 CAD 29 1.7425 —

Barclays Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A May 7, 2019 1 CAD 1 106 JPY 1 82.2679 —

Barclays Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A May 28, 2019 6 CAD 6 4 EUR 6 0.6639 —

Barclays Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A May 28, 2019 12 CAD 12 69 HKD 12 5.8238 —

Barclays Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A May 28, 2019 13 GBP 22 22 CAD 22 1.7428 —

Barclays Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A May 28, 2019 14 GBP 24 24 CAD 24 1.7429 —

Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 1 CAD 1 7 HKD 1 5.8150 —


Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 12 CAD 12 8 EUR 12 0.6641 —


Citibank N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 15 GBP 27 27 CAD 27 1.7426 —


HSBC Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AA- May 28, 2019 21 GBP 38 37 CAD 37 1.7412 (1)

JP Morgan Chase Bank, N.A. . . . . . . . . . . . . . . . . . . . . . . . A+ May 7, 2019 2 CAD 2 198 JPY 2 82.2636 —

JP Morgan Chase Bank, N.A. . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 2 GBP 3 3 CAD 3 1.7423 —

JP Morgan Chase Bank, N.A. . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 5 GBP 8 8 CAD 8 1.7423 —

UBS AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A+ May 28, 2019 20 CAD 20 117 HKD 20 5.8286 —

Total Number of Contracts . . . . . . . . . . . . . . . . . . . . . . . 18 $(1)

Net Unrealized Gain on ForwardExchange Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6

Net Unrealized Gain on Derivatives . . . . . . . . . . . . . . . . . . . . $ 6





STATEMENTS OF FINANCIAL POSITIONAs at April 30, 2019 and 2018

2019 2018(000s) (000s)

AssetsCurrent assetsNon-derivative investments at fair value $ 1,349,303 $ 1,530,746Unrealized gain on derivatives 7 21Cash

Canadian 66 140Foreign 82 —

ReceivablesSubscription of redeemable shares 26 67Dividends and withholding tax 9,512 8,129Refundable income taxes (Note 3(i)) 557 382Current income taxes (Note 3(i)) — 1,381

1,359,553 1,540,866LiabilitiesCurrent liabilitiesUnrealized loss on derivatives 1 2Payables

Redemption of redeemable shares 554 610Management fees 1,703 1,940Fixed administration fees 305 381Current income taxes (Note 3(i)) 4,204 —Future income taxes (Note 3(i)) 3,170 3,006

9,937 5,939Net assets attributable to holders of redeemable shares $ 1,349,616 $ 1,534,927

Net assets attributable to holders of redeemable shares per series (000s)Series A $ 746,237 $ 1,069,253Series A (Hedged) 912 2,766Series F 30,798 28,564Series I 47,944 52,834Series O 261,545 287,883Series PA 167,221 —Series PA (Hedged) 498 —Series PF 94,461 93,627

Number of redeemable shares outstanding (Note 3(i))Series A 38,822,975 53,901,471Series A (Hedged) 63,635 184,152Series F 1,343,774 1,221,117Series I 2,078,783 2,243,847Series O 8,736,961 9,549,800Series PA 16,147,038 —Series PA (Hedged) 48,168 —Series PF 7,824,436 7,618,936

Net assets attributable to holders of redeemable shares per share — CADSeries A $ 19.22 $ 19.84Series A (Hedged) 14.33 15.02Series F 22.92 23.39Series I 23.06 23.55Series O 29.94 30.15Series PA 10.36 —Series PA (Hedged) 10.33 —Series PF 12.07 12.29

Net assets attributable to holders of redeemable shares per share — USDSeries A $ 14.35 $ 15.46Series F 17.11 18.23Series I 17.22 18.35Series O 22.35 23.49Series PA 7.73 —Series PF 9.01 9.58

• Series PA and PA (Hedged) launched January 25, 2019

Signed on behalf of Templeton Growth Fund., Ltd.(Signed) Linda Currie (Signed) Stuart Douglas

Director Director




STATEMENTS OF COMPREHENSIVE INCOMEFor the periods ended April 30, 2019 and 2018

2019 2018

(000s) (000s)Income

Dividends $ 45,509 $ 37,547Interest for distribution purposes (Note 3(h)) 971 448Net realized and/or unrealized foreign exchange gain (loss) (405) (712)Net realized gain (loss) on investments and derivatives 168,652 131,097Net change in unrealized appreciation (depreciation) in value of investments and derivatives (215,467) (65,266)

Total income (loss), net (740) 103,114

ExpensesManagement and investment advisory fees (Note 5(a)) 21,767 24,088Fixed administration fees (Note 5(b)) 4,187 4,719Directors’ fees 113 144Investor meeting costs 262 248Independent review committee fees 1 2

Operating expenses before amounts waived/paid by Manager 26,330 29,201Operating expenses waived/paid by Manager (Note 5(b)) (69) (68)

Net operating expenses after amounts waived/paid by Manager 26,261 29,133Transaction costs (Note 8) 2,072 1,711

Total expenses, net 28,333 30,844

Net income (loss) before income taxes (29,073) 72,270Income taxes

Current 8,062 4,801Future 231 918

Total income taxes 8,293 5,719

Increase (decrease) in net assets attributable to holders of redeemable shares from operations $ (37,366) $ 66,551

Increase (decrease) in net assets attributable to holders of redeemable shares from operations per series (000s)Series A $ (37,645) $ 40,531Series A (Hedged) (54) 158Series F (577) 1,219Series I (1,075) 2,576Series O (2,188) 17,543Series PA 6,003 —Series PA (Hedged) 16 —Series PF (1,846) 4,524

Weighted average number of shares outstandingSeries A 48,662,676 57,231,097Series A (Hedged) 115,368 189,333Series F 1,321,234 1,145,150Series I 2,178,258 2,344,818Series O 9,181,454 9,671,793Series PA 16,111,691 —Series PA (Hedged) 47,203 —Series PF 7,900,393 7,269,553

Increase (decrease) in net assets attributable to holders of redeemable shares from operations per shareSeries A $ (0.77) $ 0.71Series A (Hedged) (0.46) 0.83Series F (0.44) 1.06Series I (0.50) 1.10Series O (0.24) 1.81Series PA 0.37 —Series PA (Hedged) 0.33 —Series PF (0.24) 0.62





STATEMENTS OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE SHARESFor the periods ended April 30, 2019 and 2018 (000s)

All Series Series A Series A (Hedged)

2019 2018 2019 2018 2019 2018

Net assets attributable to holders of redeemable shares at beginningof period $1,534,927 $1,596,322 $1,069,253 $1,164,017 $ 2,766 $ 2,772

Increase (decrease) in net assets attributable to holders ofredeemable shares from operations (37,366) 66,551 (37,645) 40,531 (54) 158

Distributions to holders of redeemable sharesFrom net investment income (997) — (692) — (2) —From net realized gains on investments — — — — — —From return of capital — — — — — —

Total distributions to holders of redeemable shares (997) — (692) — (2) —

Redeemable shares transactionsSubscriptions 253,457 105,260 30,865 33,268 96 119Reinvestments 941 — 658 — 1 —Redemptions (401,346) (233,206) (316,202) (168,563) (1,895) (283)

Net increase (decrease) from redeemable shares transactions (146,948) (127,946) (284,679) (135,295) (1,798) (164)

Increase (decrease) in net assets attributable to holders ofredeemable shares (185,311) (61,395) (323,016) (94,764) (1,854) (6)

Net assets attributable to holders of redeemable shares at end ofperiod $1,349,616 $1,534,927 $ 746,237 $1,069,253 $ 912 $ 2,766

Series F Series I Series O

2019 2018 2019 2018 2019 2018

Net assets attributable to holders of redeemable shares at beginningof period $ 28,564 $ 22,550 $ 52,834 $ 55,067 $287,883 $273,590

Increase (decrease) in net assets attributable to holders ofredeemable shares from operations (577) 1,219 (1,075) 2,576 (2,188) 17,543

Distributions to holders of redeemable sharesFrom net investment income (19) — (35) — (187) —From net realized gains on investments — — — — — —From return of capital — — — — — —

Total distributions to holders of redeemable shares (19) — (35) — (187) —

Redeemable shares transactionsSubscriptions 16,169 18,994 430 851 15,086 29,773Reinvestments 17 — 30 — 183 —Redemptions (13,356) (14,199) (4,240) (5,660) (39,232) (33,023)

Net increase (decrease) from redeemable shares transactions 2,830 4,795 (3,780) (4,809) (23,963) (3,250)

Increase (decrease) in net assets attributable to holders ofredeemable shares 2,234 6,014 (4,890) (2,233) (26,338) 14,293

Net assets attributable to holders of redeemable shares at end ofperiod $ 30,798 $ 28,564 $ 47,944 $ 52,834 $261,545 $287,883




STATEMENTS OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE SHARESFor the periods ended April 30, 2019 and 2018 (000s) (Continued)

Series PASeries PA(Hedged) Series PF

2019 2019 2019 2018

Net assets attributable to holders of redeemable shares at beginningof period $ — $ — $ 93,627 $ 78,326

Increase (decrease) in net assets attributable to holders ofredeemable shares from operations 6,003 16 (1,846) 4,524

Distributions to holders of redeemable sharesFrom net investment income — — (62) —From net realized gains on investments — — — —From return of capital — — — —

Total distributions to holders of redeemable shares — — (62) —

Redeemable shares transactionsSubscriptions 174,992 482 15,337 22,255Reinvestments — — 52 —Redemptions (13,774) — (12,647) (11,478)

Net increase (decrease) from redeemable shares transactions 161,218 482 2,742 10,777

Increase (decrease) in net assets attributable to holders ofredeemable shares 167,221 498 834 15,301

Net assets attributable to holders of redeemable shares at end ofperiod $ 167,221 $ 498 $ 94,461 $ 93,627





STATEMENTS OF CASH FLOWSFor the periods ended April 30, 2019 and 2018

2019 2018(000s) (000s)

Cash flows from operating activitiesInterest received $ 967 $ 440Dividends received, net of withholding taxes 34,903 33,626Proceeds from sale and maturity of investments 957,920 626,055Purchases of investments (819,752) (503,831)Receipts on settlement of derivative activities 222 332Payments on settlement of derivative activities (230) (311)Realized foreign exchange gain/(loss) (732) 251Taxes paid (87) (1,601)Taxes refunded 1,322 2,234Operating expenses paid (26,575) (29,255)

Net cash from/(used in) operating activities 147,958 127,940

Cash flows from financing activitiesProceeds from issuances of redeemable shares 253,518 105,304Amounts paid on redemption of redeemable shares (401,442) (233,539)Distributions paid to holders of redeemable shares, net of reinvested distributions (56) —

Net cash from/(used in) financing activities (147,980) (128,235)

Net increase (decrease) in cash (22) (295)Cash at beginning of period 140 458Effect of exchange rate changes 30 (23)

Cash at end of year $ 148 $ 140




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

Franklin Templeton Investments Corp., a corporation duly incorporated under the laws of the Province of Ontario (hereinafter called the�Manager�), having an office at 200 King Street West, Suite 1500, Toronto, Ontario M5H 3T4 and an indirectly wholly owned subsidiaryof Franklin Resources Inc. (�FRI�), a United States Securities and Exchange Commission (SEC) registered company listed on the NewYork Stock Exchange, is the Manager and Transfer Agent of the Fund.

The Fund launched Series A shares on November 29, 1954, Series F, I and O shares on November 24, 2000, Series A (Hedged) shareson March 22, 2013, Series PF shares on June 15, 2015 and Series PA and PA (Hedged) shares on January 25, 2019.

The Fund seeks to provide long-term capital appreciation by investing primarily in equity securities of companies around the world, andfixed income securities issued by governments or companies of any country. Series A (Hedged) and Series PA (Hedged) seek to providelong-term capital appreciation, while attempting to reduce the potential effects of exchange rate fluctuations between the Canadian dollarand global currencies within the Fund’s portfolio by investing in forward contracts.

The financial statements of the Fund include the Schedule of Investments as at April 30, 2019, and the Statements of Financial Positionas at April 30, 2019 and 2018. The Statements of Comprehensive Income, Changes in Net Assets Attributable to Holders of RedeemableShares and Cash Flows for the Fund are for the periods ended April 30, 2019 and 2018.

These financial statements have been authorized for issue by the Board of Directors of Templeton Growth Fund, Ltd. on May 22, 2019.

2. Basis of Presentation of IFRS

These financial statements have been prepared in compliance with International Financial Reporting Standards (“IFRS”).

The financial statements have been prepared under the historical cost convention as modified by the revaluation of financial assets andfinancial liabilities (including derivatives) at fair value through profit or loss.

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have beenconsistently applied to all periods presented.

3. Summary of Significant Accounting Policies

The significant accounting policies are as follows:

(a) Classification of financial assets and liabilities — Effective May 1, 2018, the Fund retrospectively adopted IFRS 9 FinancialInstruments, which includes a new credit loss impairment model. The Fund’s financial assets and financial liabilities, under IFRS9 are classified and measured at fair value through profit and loss (�FVTPL�), as those financial assets and liabilities are managedtogether and their performance evaluated on a fair value basis in accordance with the Fund’s documented investment strategy. Thisis consistent with the classification category prior to the transition to IFRS 9, with the exception of derivatives which are categorizedas fair value through profit and loss. Derivatives were previously classified as held for trading under IAS 39, however suchsub-categorization is not applicable under IFRS 9. All financial assets and financial liabilities are shown on the Fund’s Statementsof Financial Position and are measured as FVTPL with the associated unrealized gain/loss included in the Statements ofComprehensive Income in net change in unrealized appreciation (depreciation) in value of investments and derivatives.

There were no changes in the measurement attributes in either the current or comparative period for any of the financial assets andliabilities upon transition to IFRS 9.

The Fund’s obligation for net assets attributable to holders of redeemable shares is presented at the redemption amount. All otherfinancial assets and liabilities are carried at amortized cost which approximates fair value due to their short-term nature.


NOTES TO FINANCIAL STATEMENTS For the periods ended April 30, 2019 and 2018


3. Summary of Significant Accounting Policies (Continued)

The net asset value (�NAV�) is the value of the total assets of the Fund less the value of its total liabilities determined, on eachvaluation day, in accordance with Part 14 of National Instrument (NI) 81-106 Investment Fund Continuous Disclosure for thepurpose of processing shareholder transactions (herein called the “Trading NAV”). Net assets are determined in accordance withIFRS (herein called the “IFRS NAV”) and may differ to the Fund’s Trading NAV. Where the Fund’s Trading NAV is not equal to its IFRSNAV, a reconciliation is shown in Note 10 .

(b) Classification of redeemable shares — The Fund’s outstanding redeemable shares’ entitlements include a contractual obligation todistribute any net income and net realized capital gains annually in cash (at the request of the shareholder) and therefore theongoing redemption feature is not the shares’ only contractual obligation. In addition, the Fund has multiple features across thedifferent series of the Fund. Consequently, the Fund’s outstanding redeemable shares are classified as financial liabilities inaccordance with the requirements of International Accounting Standard 32 “Financial Instruments: Presentation”.

(c) Valuation of series — A separate net asset value (�NAV�) per share is calculated for each series of shares of the Fund. TheFund calculates the NAV per share at the close of trading on the Toronto Stock Exchange (�TSX�) each business day (usually 4p.m.EST). The net assets of a series is computed by calculating the series’ proportionate share of the assets and liabilities of the Fundcommon to all series, adjusted for the assets and liabilities of the Fund attributable only to that series. Expenses directly attributableto a series are charged to that series. Other expenses, investment income, realized and unrealized capital and foreign exchangegains and losses are allocated proportionately to each series based upon the relative net assets of each series, with the exceptionof gains and losses arising from the hedging strategy, utilizing forward foreign exchange contracts, which is allocated to Series A(Hedged) and Series PA (Hedged) only.

(d) Valuation of investments — The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price thatwould be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on themeasurement date. The fair value of equity securities and derivative financial instruments (derivatives) traded in active markets ismeasured at quoted market prices at the close of trading on the reporting date. The Fund uses the last traded market price for bothfinancial assets and financial liabilities where the last traded price falls within the bid-ask spread. In circumstances where the lasttraded price is not within the bid-ask spread, the Manager will review and apply a price that is most representative of fair value basedon the specific facts and circumstances. Over the counter (�OTC�) securities are valued within the range of the most recent quotedbid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and mostrepresentative market (that is, the principal market). Certain equity securities are valued based upon fundamental characteristicsor relationships to similar securities.

Debt and certain preferred securities generally trade in the OTC market rather than on a securities exchange. The Fund’s pricingservices use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, amarket-based approach utilizing quotes from market makers is used to determine fair value. In instances where sufficient marketactivity may not exist or is limited, proprietary valuation models are used, which may consider market characteristics such asbenchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipatedtiming or principal repayments, underlying collateral and other unique security features in order to estimate the relevant cash flows,which are then discounted to calculate the fair value.

The Manager has procedures to determine the fair value of securities and other financial instruments for which market prices arenot readily available or which may not be reliably priced. Under these fair valuation procedures, the Fund primarily employs amarket-based approach, which may use related or comparable assets or liabilities, recent transactions, market multiples, bookvalues, and other relevant information for the investment to determine its fair value. The Fund may also use an income-basedvaluation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts mayalso be applied due to the nature or duration of any restrictions on the disposition of the investments, but only if they arise as a featureof the instrument itself. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly fromthe values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may not be completed before 4 p.m. Eastern Standardtime (EST). In addition, trading in certain foreign markets may not take place on every business day. Occasionally, events occurbetween the time at which trading in a foreign security is completed and 4 p.m. EST that might call into question the reliability of thevalue of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securitiesas determined at the foreign market close and the latest indications of value at 4 p.m. EST. In order to minimize the potential for thesedifferences, the price movements are monitored following the close of trading in foreign stock markets through a series of country


NOTES TO FINANCIAL STATEMENTS For the periods ended April 30, 2019 and 2018 (Continued)



specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). Theseprice movements are measured against established trigger thresholds for each specific market proxy to assist in determining if anevent has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an eventoccurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

All security valuation techniques are periodically reviewed by the Valuation Committee of the Manager and are approved by theManager. The Valuation Committee provides administration and oversight of the Funds’ valuation policies and procedures. Theseprocedures allow the Valuation Committee to utilize independent pricing services, quotations from securities and financialinstrument dealers, and other market sources to determine fair value.

(e) Derivatives — The Fund may invest in derivatives in order to manage risk or gain exposure to various other investments or markets.Derivatives may be used for trading purposes where the Portfolio Manager believes this would be more effective than investingdirectly in the underlying financial instruments. 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 tochanges in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability ofthe counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or thepotential for market movements, which expose the Fund to gains and losses in excess of the amounts shown on the Statements ofFinancial Position. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period areincluded in the Statements of Comprehensive Income.

(i) Foreign/Forward exchange contracts — In the case of Series A (Hedged) and PA (Hedged), a hedging strategy is used thatseeks to reduce, as far as possible, the influence of changes in the exchange rate between the Canadian dollar and thecurrencies of securities held by the Fund’s portfolio on the portion of the Fund’s net assets attributable to Series A (Hedged)and PA (Hedged) shares outstanding by investing in forward foreign exchange contracts. A foreign exchange contract is anagreement between two parties to exchange different currencies at an agreed upon exchange rate at a future date. The gainsor losses on the contracts accrue solely to the Series A (Hedged) and PA (Hedged).

For OTC derivatives traded under an International Swaps and Derivatives Association (�ISDA�) master agreement, posting ofcollateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with theapplicable counterparty exceeds a certain minimum transfer amount and can vary depending on the counterparty and the type ofagreement. Generally, collateral is determined at the close of business each day and any additional collateral required due tochanges in derivative values may be delivered by the Fund or the counterparty within a few business days. Collateral pledged maybe in the form of cash and/or securities. Cash pledged as collateral by the Fund for OTC derivatives, if any, is presented in theStatements of Financial Position as margin and collateral receivable / payable and securities pledged as collateral are identified inthe Fund’s Schedule of Investments. Should the Fund fail to meet any of these provisions, the derivative counterparty has the rightto terminate the derivative contract and require immediate payment by the Fund for those OTC derivatives with that particularcounterparty that are in a net liability position.

(f) Offsetting of derivative financial instruments — Derivative counterparty credit risk is managed through formal evaluation of thecreditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty risk on OTC derivatives,whenever possible, by entering into ISDA master agreements with certain counterparties. These agreements contain variousprovisions, including but not limited to enforceable master netting arrangements, collateral requirements, events of default, or earlytermination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty.Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or, limit the decline innet assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives thenon-defaulting party the right to net and close-out all transactions traded to one net amount, payable by one counterparty to theother, however, absent an event of default or early termination, OTC derivatives assets and liabilities are settled on a gross basis,presented gross, and not offset in the Statements of Financial Position. Early termination by the counterparty may result in animmediate payment by the Fund of any net liability owed to that counterparty under ISDA agreement.

See Note 11(a) for details of derivative assets and liabilities presented gross, amounts available for offset and collateral amountspledged or held in trust for the Fund.

(g) Transaction costs — Transaction costs incurred on the purchase and sale of equity securities generally include brokeragecommissions, trade execution costs, stamp duty and exchange fees and are charged as an expense for the period and shown astransaction costs on the Statements of Comprehensive Income.





(h) Security transactions, investment income, expenses and distributions — Security transactions are recorded on the trade date.Estimated expenses are accrued daily. Dividend income, distributions received from or made to Underlying Funds and distributionsto shareholders are recorded on the ex-dividend date.

Interest in distribution purposes shown on the Statements of Comprehensive Income represents the coupon interest received by theFund accounted for on an accrual basis.

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

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

As a mutual fund corporation, taxable dividends received from taxable Canadian corporations are subject to a tax of 38 1/3%. Suchtaxes are fully refundable upon payment of taxable dividends to its share holders on a basis of $1 for every $2.61 of dividends paid.Any such tax paid is reported as an amount receivable until recovered through the payment to shareholders of dividends out of netinvestment 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 dividendincome.

For the years ended April 30, 2019 and 2018, the Fund was subject to tax at full corporate rates on 50% of its net realized capitalgains. This tax can be eliminated by �capital gains redemptions� (as defined in the Act) by the Fund, or within 60 days of its financialyear, 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’spolicy to apply capital losses against capital gains or pay a capital gains dividend sufficient to do so. Consequently, no amount hasbeen included for this tax in the provision for income taxes in the current or prior year.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreigncurrency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulationsand rates that exist in the foreign markets in which the Fund invests. When a foreign capital gain tax is determined to apply, the Fundrecords an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The switching of shares between Series A (Hedged) or PA (Hedged) and another series of the Fund, are considered a dispositionfor tax purposes and shareholders will realize a capital gain or loss at the time of the switch.

(j) Functional and presentation currency — The Fund’s functional currency is the Canadian Dollar (“CAD”) which is the currency of theprimary economic environment in which it operates. The Fund is distributed within Canada with the subscriptions and redemptionsprimarily denominated in CAD. Accordingly, the Manager has determined that the functional currency of the Fund is CAD. TheFund’s presentation currency is also CAD.

(k) Foreign currency translation — Portfolio securities and other assets and liabilities denominated in foreign currencies are translatedinto the functional currency based on the mid exchange rate on the valuation date. Purchases and sales of securities and incomeitems denominated in foreign currencies are translated into the functional currency at the exchange rate in effect on the transactiondate. When an exchange rate is unavailable or unreliable, it will be determined using procedures established and accepted by theBoard of Directors and the Manager.

Realized foreign exchange gains or losses arise from sales of foreign currencies, changes between the trade date and settlementdate values on foreign securities and foreign capital transactions, and the difference between the recorded amounts of foreigncurrency denominated dividends, interest, withholding taxes, and U.S. short-term holdings, and the functional currency equivalentof the amounts actually received or paid. These gains or losses are reported on the Statements of Comprehensive Income as netrealized and/or unrealized foreign exchange gain (loss).

(l) Increase (decrease) in net assets from operations per share — This calculation is based on the increase (decrease) in net assets fromoperations attributable to each series divided by the weighted average number of shares of that series outstanding during the period.





(m) Accounting judgements, estimates and assumptions— The preparation of financial statements in accordance with IFRS may requirethe Manager to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities at the dateof the financial statements and the amounts of income and expense reported during the periods. Actual results may differ from thoseestimates.

The key area where judgement is applied is in the determination of the functional currency of the Fund, as discussed in Note 3(j).Assumptions and estimates are made in the determination of fair values of financial instruments not traded on an active market asdiscussed in Note 3(d).

4. Capital Risk Management

The capital of the Fund is comprised of its net assets attributable to holders of redeemable shares. The Fund’s capital is managed inaccordance with its respective investment objectives and policies, and there are no externally imposed restrictions in relation to the Fund’sshares. Changes in capital during the period are reflected in the Statements of Changes in Net Assets Attributable to Holders ofRedeemable Shares for the Fund. The Fund has no specific restrictions or capital requirements on the subscriptions and redemption ofshares, other than minimum subscription requirements. The Fund endeavors to manage capital by maintaining a strong capital base tosupport the investment activities of the Fund while maintaining sufficient liquidity to meet redemptions.

Changes in issued shares are summarized as follows:

Series A Series A (Hedged) Series F

April 30, 2019 April 30, 2018 April 30, 2019 April 30, 2018 April 30, 2019 April 30, 2018

Outstanding shares — beginning 53,901,471 60,912,162 184,152 195,211 1,221,117 1,011,804Subscriptions 1,595,154 1,715,561 6,604 8,045 700,285 838,038Reinvestments 32,472 — 61 — 711 —Redemptions (16,706,122) (8,726,252) (127,182) (19,104) (578,339) (628,725)

Outstanding shares — ending 38,822,975 53,901,471 63,635 184,152 1,343,774 1,221,117

Series I Series O Series PA Series PA (Hedged)

April 30, 2019 April 30, 2018 April 30, 2019 April 30, 2018 April 30, 2019 April 30, 2019

Outstanding shares — beginning 2,243,847 2,454,051 9,549,800 9,654,836 — —Subscriptions 18,794 36,905 506,595 1,027,403 17,479,601 48,168Reinvestments 1,238 — 5,913 — — —Redemptions (185,096) (247,109) (1,325,347) (1,132,439) (1,332,563) —

Outstanding shares — ending 2,078,783 2,243,847 8,736,961 9,549,800 16,147,038 48,168

Series PF

April 30, 2019 April 30, 2018

Outstanding shares — beginning 7,618,936 6,708,492Subscriptions 1,252,552 1,878,617Reinvestments 4,188 —Redemptions (1,051,240) (968,173)

Outstanding shares — ending 7,824,436 7,618,936

5. Related Party Transactions

The Manager is the principal distributor, registrar and transfer agent of the Fund. The Manager and/or its affiliates provides or arrangesfor the provision of all management and administrative services for day-to-day Fund operations, including marketing, promotion anddistribution of the Fund, portfolio advisory services and the provision of key management personnel to the Fund.




5. Related Party Transactions (Continued)

As a principal distributor of the Fund, the Manager markets the Fund and arranges for the sale of the Fund through dealers acrossCanada. The Manager may retain certain companies to assist in the sale of the Fund under the deferred sales charge option. TheManager’s affiliate, FTC Investor Services (�FTC ISI�) also acts as a principal distributor for Series F, PF and O shares of the Fund. Foracting as principal distributor of the applicable series, FTC ISI receives an inter-company service fee of 0.20% from the Manager withrespect to those shares.

In addition to management services, the Manager acts as registrar and transfer agent of the Fund. These services are in the normal courseof operations and are covered by a fixed administration fee, as discussed in Note 5(b), paid by the Fund to the Manager.

Franklin Templeton Services, LLC (�FTS�) provides fund accounting and portfolio valuation services in connection with the Fund, andprovides certain back office administration services to the Manager. These services are in the normal course of operations and arecovered by a fixed administration fee, as discussed in Note 5(b), paid by the Fund to the Manager.

(a) Management and investment advisory fees (�management fees�)

The Fund pays an aggregate monthly fee for management and investment advisory services to the Manager calculated monthly at the rateset out below on the average daily net assets of the Fund, plus applicable taxes:

Series A 1/12 of 1.85%

Series A (Hedged) 1/12 of 1.85%

Series F 1/12 of 0.85%

Series I 1/12 of 1.10%

Series PA 1/12 of 1.80%

Series PA (Hedged) 1/12 of 1.80%

Series PF 1/12 of 0.80%

The Manager has agreed to waive a portion of the management fees on certain series of shares (the �Management Fee Waiver�). ThisManagement Fee Waiver is applied to the following Series at the specified rate:

Series I: 0.23%

The management fee and administration fee for Series O is paid for by the shareholder directly to the Manager as follows:

First C$200,000 to under $2.5 million 0.95%

Next C$2.5 million to under $5.0 million 0.80%

Over C$5.0 million 0.75%

Certain institutional and ultra-high-net-worth investors may negotiate the management fee by written agreement with Franklin Templeton.

The Manager is the portfolio advisor of the Fund. The Manager has engaged Templeton Global Advisors Limited, Bahamas, an affiliate ofthe Manager, as sub-advisor (the �Sub-Advisor�). The Sub-Advisor provides investment analysis and recommendations to the Managerand executes and arranges for brokers to execute portfolio transactions in respect of the Fund. A portion of the management fee payableby the Fund to the Manager is paid by the Manager to the Sub-Advisor with respect to portfolio advisory services.

(b) Fixed administration fees

The Manager pays the operating expenses of the Fund, other than certain fund costs (�Fund Costs�), such as borrowing and interestcosts, investor meeting costs (as permitted by Canadian securities regulation), the fees and expenses of the Independent ReviewCommittee, directors’ fees and expenses, any costs and expenses associated with litigation for the benefit of the Fund or brought topursue rights on behalf of the Fund and the cost of compliance with any new government and regulatory requirements, in exchange for




5. Related Party Transactions (Continued)

a payment by the Fund of an annual fixed administration rate. The operating expenses payable by the Manager include but are not limitedto, transfer agent fees, custodian fees, legal and audit fees. As such, the Fund did not directly pay these costs; hence line items for theseamounts are not shown on the Statements of Comprehensive Income.

The Manager may, in some years and in certain cases, waive a portion of a series’ Administration Fee or absorb certain Fund Costs. Thedecision to waive the Administration Fee or absorb certain Fund Costs, or a portion thereof, is determined at the discretion of the Manager.In addition, the Manager pays all operating expenses of Series O.

The monthly fixed administration fee is calculated as 1/12 of the annual rate of 0.35% applied against the monthly average daily net assetsof each series, plus applicable taxes. Series PF is charged an annual fixed administration fee rate of 0.15% against the monthly averagedaily net assets of that series, plus applicable taxes. Series O is not charged an administration fee. The fixed administration fee payableat the period ends are shown in the Statements of Financial Position of the Fund.

(c) Manager holdings

The Manager held the following shares in the Fund as at April 30, 2019 and 2018.

April 30, 2019 April 30, 2018Series A (Hedged) — 83,133Series PA 500 —Series PA (Hedged) 30,000 —

(d) Other services

In addition to providing administration and other management services in connection with the distribution of the Fund’s shares, theManager acts as registrar and transfer agent for the Fund. In consideration of these services, the Manager charges a fixed administrationfee as discussed in Note 5(b).

6. Sales Charges

The sales charge incurred by shareholders of Series A (including Series A (Hedged)) shares and Series PA (including Series PA (Hedged))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 and Series PA investorsto their dealers. Under the low-load option, the Series A and Series PA investors will pay a redemption fee to the Manager if they redeemtheir shares within three years of purchasing them. This redemption fee is based on a declining percentage of the original cost of theinvestor’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 Asharesand Series PA shares may be redeemed in each calendar year without a redemption charge. Under the deferred sales chargeoption, the Series A and Series PA investors will pay a redemption fee to the Manager if they redeem their shares within six years ofpurchasing them. This redemption fee is based on a declining percentage, ranging from 6% to 0%, of the original cost of the investor’sshares and how long the investor has held them. Series I shareholders negotiate a fee of up to 2% with their dealers.

7. Financial Risk Management

Risks arising from holding financial instruments are inherent in the Fund’s activities and is managed through a process of ongoingmeasurement and monitoring. These financial risks may include, among others, market risk (including currency risk, interest rate riskand other price risk), liquidity risk, credit risk and concentration risk. All investments result in a risk of loss of capital. These risks aremoderated through careful selection of securities and other financial instruments within the Fund’s investment guidelines by therespective portfolio advisors. The risks are measured using a method that reflects the expected impact on the results and net assetsattributable to shareholders of the Fund from reasonably possible changes in the relevant risk variables.

(a) Currency risk

The Fund holds assets and liabilities denominated in currencies other than its functional currency, and are therefore exposed to currencyrisk 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 exchangeexposure as described in Note 3(e) and disclosed in the Fund’s Schedule of Investments, as applicable.




7. Financial Risk Management (Continued)

The table below summarizes the Fund’s exposure to currency risk, where applicable. Amounts shown are based on the carrying value ofmonetary and non-monetary assets, less liabilities and derivatives. Where individual currencies held are less than 5% of net assets, thatcurrency has been included in “currencies less than 5% of net assets”. The table also illustrates the expected decrease or increase in netassets had the functional currency strengthened or weakened by 5% in relation to all foreign currencies, with all other variables heldconstant. Actual results may differ from this sensitivity analysis and the difference could be material.

April 30, 2019 April 30, 2018

Currency AmountAs % of

net assets AmountAs % of

net assets

(000s) (000s)EUR ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 264,265 19.58% $ 325,869 21.23%GBP ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,885 10.44% 208,804 13.60%HKD ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,441 4.55% 91,713 5.98%JPY .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,876 10.07% 132,616 8.64%USD ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475,149 35.21% 580,734 37.83%Currencies less than 5% of net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190,218 14.08% 162,164 10.58%

$1,267,834 93.93% $1,501,900 97.86%

Impact on net assets from 5% currency movement . . . . . . . . . . . . . . . . . . . . . . . $ 63,392 4.70% $ 75,095 4.89%

(b) 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 bearingfinancial instruments. The portfolio advisors monitor overall interest rate sensitivity on a periodic basis.

The Fund is not directly exposed to interest rate risk as no significant interest bearing securities (excluding overnight term deposits) wereheld by the Fund as at April 30, 2019 and 2018.

(c) 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 marketprices (other than those arising from currency risk or interest rate risk). Those changes may be caused by factors specific to the individualfinancial instrument or its issuer, or factors affecting a market or market segment. Other assets and liabilities are monetary items that areshort-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 ordecreased by 5%, with all other variables held constant. Actual results may differ from this sensitivity analysis and the difference couldbe material.

April 30, 2019 April 30, 2018

Sensitivity on NetAssets

% Impact on NetAssets

Sensitivity on NetAssets

% Impact on NetAssets

(000s) (000s)$63,840 4.73% $75,582 4.92%

(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 redemptionof shares, the assets of the Fund are invested mainly in securities which are traded in active markets and can be readily disposed of. Inaddition, sufficient cash and cash equivalents are maintained to meet normal operating requirements. The Fund has the ability to borrowup to 5% of its net assets for the purposes of funding redemptions. The Fund has a non-committed redemption line of credit agreementwith a Schedule 1 bank in Canada from which these amounts can be borrowed, if necessary. The loans are issued at prime rate and arepayable on demand. There were no loans issued or outstanding as of April 30, 2019 and 2018.

The Fund also has a policy to purchase an illiquid asset only to the extent that immediately after purchase, the value of the illiquidsecurities held by the Fund does not account for more than 10% of the net assets of the Fund.





The Fund’s financial liabilities which include redemptions payable, accrued liabilities and derivative liabilities are due within 3 months.Redeemable shares are redeemable on demand at the holder’s option. However the Manager does not expect that the contractualmaturity disclosed above will be representative of the actual cash outflows, as holders of these instruments typically retain them for alonger period.

In accordance with the Fund’s investment objectives, the Manager monitors the Fund’s liquidity position on an ongoing basis.

(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 intowith the Fund. This risk is generally lower if the issuer has a high credit rating from an independent credit rating agency, while the risk isgenerally higher if the issuer has a low credit rating or no credit rating. Where applicable, credit ratings have been disclosed at the endof the Schedule of Investments.

All transactions in listed securities are settled or paid for upon delivery using approved brokers. The credit risk related to the associatedreceivables is considered limited, as delivery of securities sold is only made once the broker has received payment. Payment is made ona purchase once the securities have been received by the broker. The trade will fail if either party fails to meet its obligation. However, thereare risks involved in dealing with custodians or prime brokers who settle trades and in rare circumstances, the securities and other assetsdeposited with the custodian or broker may be exposed to credit risk with regard to such parties. In addition, there may be practicalproblems or time delays associated with enforcing the Fund’s rights to its assets in the case of an insolvency of any such party.

As at April 30, 2019 and 2018, 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, 2019 and 2018.

(f) Concentration risk

Concentration risk arises as a result of the concentration of exposures within the same category, whether it is geographical location,product type, industry sector or counterparty type. Below is a summary of the Fund’s concentration risk.

Industries

April 30,2019(%)

April 30,2018(%)

Banks 14.12 12.41Pharmaceuticals 12.13 8.53Oil, Gas & Consumable Fuels 9.23 9.16Food & Staples Retailing 5.14 0.68Others 53.99 67.70

Asset Class Weightings

April 30,2019(%)

April 30,2018(%)

Common Stocks 94.61 98.48Short-term securities and all other

assets, net5.39 1.52

(g) Fair value estimation

The Fund classifies fair value measurements of investments held using a fair value hierarchy that reflects the significance of the inputsused 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 judgement by the Manager. The Manager considers observabledata to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided byindependent 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 observableinputs 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 Managerhas used valuation techniques to derive the fair value.

The Fund’s investments are generally classified as follows:

• Equities — The Fund’s equity positions are classified as Level 1 when the security is actively traded and a reliable price is observable.The Fund’s equities may not trade frequently or have a fair value factor included and therefore observable prices may not be available.In such cases, fair value is determined using observable market data (e.g., transactions for similar securities of the same issuer) andthe fair value is classified as Level 2, unless the determination of fair value requires significant unobservable data, in which case themeasurement is classified as Level 3.

• Short-term investments — The Fund’s short-term investments generally trade in the OTC market rather than on a securities exchange.The inputs that are significant to valuation are generally observable such as benchmark yield curves, credit spreads, estimated defaultrates, anticipated market interest rate volatility, coupon rates, anticipated timing of repayments, underlying collateral and other uniquesecurity features in order to estimate the relevant cash flows. Therefore the Fund’s short-term investments have been classified asLevel 2, unless the determination of fair value requires significant unobservable data, in which case the measurement is classified asLevel 3.

• Derivative assets and liabilities — Derivative assets and liabilities consist of foreign currency forward contracts which are valued basedprimarily on the contract notional amount, the difference between the contract rate and the forward market rate for the same currency.Contracts for which counterparty credit spreads are observable and reliable, or for which the credit-related inputs are determined notto be significant to fair value, are classified as Level 2.

The carrying values of cash, capital shares sold receivable, dividend and interest receivable, receivable for investments sold, payable forinvestments purchased, capital shares redeemed payable, distributions payable, accrued liabilities and the Fund’s obligation for netassets attributable to holders of redeemable shares approximate their fair values due to their short-term nature.

The following table shows the classification of the Fund’s financial assets and liabilities measured at fair value as at April 30, 2019 and2018.

April 30, 2019 April 30, 2018

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

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

Equities — Long $ 1,276,803 $ — $ — $ 1,276,803 $ 1,398,472 $ 113,174 $ — $ 1,511,646Short-term securities — 72,500 — 72,500 — 19,100 — 19,100

Total Investments $ 1,276,803 $ 72,500 $ — $ 1,349,303 $ 1,398,472 $ 132,274 $ — $ 1,530,746

Derivative assets $ — $ 7 $ — $ 7 $ — $ 21 $ — $ 21Derivative liabilities — (1) — (1) — (2) — (2)

If an instrument classified as Level 1 subsequently ceases to be actively traded, it is transferred out of Level 1. In such cases, instrumentsare reclassified into Level 2, unless the measurement of the instruments fair value requires the use of significant unobservable inputs, inwhich case it is classified as Level 3. The Fund’s policy is to recognise transfers into and out of the fair value hierarchy levels as of the dateof the event or change in circumstances giving rise to the transfer.

In accordance with the Fund’s valuation policy, the Fund may apply fair value adjustment factors when quoted market prices are deemedto have been affected by significant market events which exceed pre-determined thresholds. As at April 30, 2019 and 2018, securitiestransferred out of Level 1 and reclassified into Level 2, amounted to nil and $113.2 million, respectively, due to the application of fair valuefactors.




8. Broker Commissions

Commissions paid to brokers for portfolio transactions during the periods ended April 30, 2019 and 2018 amounted to $2.1 million and$1.7 million, respectively. A portion of commissions paid may include payment for goods and services that are used to assist withinvestment or trading decisions such as investment research, analysis and reports (“research services”). Where ascertainable, the valueof the research services included in the commission paid for the periods ended April 30, 2019 and 2018 amounted to $0.6 million and$0.5 million, respectively.

9. Taxes

(a) Capital and non-capital losses

The Fund has no unused capital and non-capital losses for income tax purposes as of April 30, 2019. Capital losses can be carriedforward indefinitely and applied against future years’ capital gains.

Temporary differences between the carrying value of certain assets and liabilities for accounting and income tax purposes give rise todeferred tax assets and liabilities. The most significant temporary difference is that between the reported fair value of the investmentportfolio and its adjusted cost base (�ACB�) for income tax purposes. To the extent that the fair value of a portfolio exceeds its ACB, adeferred tax liability arises. Since capital gains taxes payable by the Fund are refundable under the relevant provisions of the Act, thefuture tax liability is fully offset by the future refundable taxes available to a mutual fund corporation. Conversely, when the ACB exceedsthe portfolio’s fair value, a deferred tax asset is generated. In such cases, no benefit is recorded given the uncertainty that such future taxassets will ultimately be realized. Any unused capital and non-capital losses disclosed above represent a future tax asset to the Fund forwhich no benefit has been recorded in these financial statements as there is no certainty that the losses are more likely than not to beutilized in future periods.

(b) Effective tax rates

The Fund’s statutory corporate tax rate on net investment income (excluding Canadian dividend income) for the year ended April 30,2019 was 39.50% (2018: 39.50%). The actual effective tax rate for the year ended April 30, 2019 was -28.53% (2018: 7.79%). Theeffective tax rate includes the tax effect of income related foreign exchange gains/losses included in net realized gains/losses.

April 30, 2019 April 30, 2018% %

Statutory Tax Rate.................................................................................................... 39.50 39.50Realized and Unrealized Gain (Loss) on Investments ........................................................... (67.09) (34.60)Canadian Dividends ................................................................................................. 0.62 (0.28)Foreign Taxes (grouped) ............................................................................................. (2.58) 2.50Other................................................................................................................... 1.02 0.67

Effective Tax Rate ................................................................................................... (28.53) 7.79

10. Trading Net Asset Value

As discussed in Note 3(a), the Trading NAV per share may differ from the IFRS NAV per share as shown in the Statements of FinancialPosition. As at April 30, 2019 and 2018 the Fund’s Trading NAV per share did not differ from the IFRS NAV per share.

11. Other Information

(a) Offsetting of derivative financial information

As discussed in Note 3(f) the Fund held derivatives that were subject to enforceable netting arrangements, in the form of ISDAagreements, with certain counterparties.

Absent an agreement, or an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offsetin the Statements of Financial Position.

The following tables present the gross derivative assets and liabilities, not offset as at April 30, 2019 and 2018 and amounts available foroffset. The �Net Amount� represents the impact to the Fund if all set-off rights were exercised.




11. Other Information (Continued)

April 30, 2019Amounts available for offset Amounts available for offset

CounterpartyGrossAssets

FinancialInstruments

CollateralHeld in Trust

NetAmount

GrossLiabilities


CollateralPledged

NetAmount

(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)Citibank N.A.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3 $— $— $ 3 $— $— $— $—HSBC Bank PLC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — (1) — — (1)JP Morgan Chase Bank, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 — — 2 — — — —Others(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 — — 2 — — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7 $— $— $ 7 $(1) $— $— $(1)

April 30, 2018Amounts available for offset Amounts available for offset

CounterpartyGrossAssets


CollateralHeld in Trust

NetAmount

GrossLiabilities


CollateralPledged

NetAmount

(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)Bank of America, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1 $— $— $ 1 $— $— $— $—Citibank N.A.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 — — 4 — — — —HSBC Bank PLC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1 — 3 (1) (1) — —JP Morgan Chase Bank, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 — — 1 — — — —Others(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 — — 11 (1) — — (1)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21 $ 1 $— $20 $(2) $(1) $— $(1)

(a)Represents contracts for which there are no ISDA agreements with the counterparties and for which are centrally cleared over-the-counter derivatives.

12. Financial Statement Presentation

The amounts shown on the Statements of Financial Position, the Statements of Comprehensive Income, Changes in Net AssetsAttributable to Holders of Redeemable Shares and Cash Flows are rounded to the nearest thousand. As a result, balances reported mayinclude amounts rounded to zero and as a result, certain line items on the respective statements may not be shown. Per share amountsand number of shares outstanding shown are actual amounts.

13. Currency Legend

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

CAD Canadian DollarCHF Switzerland FrancDKK Denmark KroneEUR EuroGBP United Kingdom PoundHKD Hong Kong DollarINR Indian Rupee

JPY Japanese YenKRW South-Korean WonNOK Norwegian KronerSGD Singapore DollarTHB Thai BahtUSD United States Dollar




MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying financial statements have been prepared by Franklin Templeton Investments Corp., (the “Manager”), as Manager ofTempleton 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 theAnnual Report. The Manager also maintains appropriate processes to ensure that relevant and reliable financial information is produced.The financial statements are prepared in compliance with International Financial Reporting Standards and include certain amounts thatare based on estimates and judgments. The significant accounting policies which the Manager believes are appropriate for the Fund aredescribed in Note 4 to the financial statements. Financial information published with the Annual Report is consistent with that in the finan-cial statements.

The Board of Directors is responsible for reviewing and approving the financial statements and overseeing management’s performance ofits financial reporting. The Board of Directors appoints an Audit Committee comprised of a majority of Non-management Directors. TheAudit Committee reviews the financial statements, adequacy of internal controls, the audit process and financial reporting with manage-ment and the external auditors. The Audit Committee reports to the Board of Directors prior to the approval of the audited financial state-ments for publication.

PricewaterhouseCoopers LLP are the external auditors of the Fund, appointed by the Shareholders. They have audited the financial state-ments in accordance with Canadian generally accepted auditing standards to enable them to express to the shareholders their opinion onthe financial statements. Their report is set out on the following page.

D. GREEN D. BUCHANANChief Executive Officer, Fund Treasurer,

Franklin Templeton Investments Corp. Franklin Templeton Investments Corp.


Independent Auditor’s ReportTo the Shareholders of

Templeton Growth Fund, Ltd. (the Fund)

Our opinion

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Fund as atApril 30, 2019 and 2018, and its financial performance and its cash flows for the years then ended in accordance with International Finan-cial Reporting Standards (IFRS).

What we have audited

The Fund’s financial statements comprise:

• the statements of financial position as at April 30, 2019 and 2018;

• the statements of comprehensive income for the years then ended;

• the statements of changes in net assets attributable to holders of redeemable shares for the years then ended;

• the statements of cash flows for the years then ended; and

• the notes to the financial statements, which include a summary of significant accounting policies.

Basis of opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standardsare further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.

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

Independence

We are independent of the Fund in accordance with the ethical requirements that are relevant to our audit of the financial statements inCanada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

Other information

Management is responsible for the other information. The other information comprises the Annual Management Report of Fund Perfor-mance of the Fund.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so,consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, orotherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required toreport that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such in-ternal control as management determines is necessary to enable the preparation of financial statements that are free from material mis-statement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Fund’s ability to continue as a going concern, disclos-ing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends toliquidate the Fund or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Fund’s financial reporting process.


Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the ag-gregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform auditprocedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circum-stances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures madeby management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence ob-tained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund’s ability to continueas a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the relateddisclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the au-dit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Fund to cease to continueas a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financialstatements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and sig-nificant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Chartered Professional Accountants, Licensed Public AccountantsToronto, Ontario

May 24, 2019


Annual Report

Franklin Templeton Investments Canada200 King Street West, Suite 1500

Toronto, ON, M5H 3T4

www.franklintempleton.ca

Client Services Toll-free:(800) 387-0830 Fax: (866) 850-8241

Franklin Templeton Investments Canada is a business name used by Franklin Templeton Investments Corp.

© 2019 Franklin Templeton Investments Corp. All rights reserved. 700 ARE 04/19

http://www.franklintempleton.ca

Documents

TEMPLETON GROWTH FUND, LTD - Investments€¦ · I am pleased to present the annual report for Templeton Growth Fund, Ltd., containing the audited financial statements for the period