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|What is happening? |On January 8, 2013, Franklin Templeton Corporate Class Ltd. (“FTCCL”, a mutual fund corporation) declared |

| |ordinary taxable dividends for all shareholders of record as at the close of business on January 28, 2013 for |

| |payment on January 29, 2013. |

| |The dividend notice published in the January 18, 2013 editions of the National Post and Calgary Herald includes |

| |estimates* of the dividend rate per share for all classes of FTCCL that are paying a dividend on January 29, |

| |2013. |

| |The US dollar equivalent is based on the January 29, 2013 exchange rate for shares held in US dollars. |

| |*The final amounts of the dividends for each class and series are dependent on the number of shares outstanding.|

| |The final amounts will be determined on the date of the payment and will be posted on franklintempleton.ca. |

|Speaking points for sales and client relations* |These types of distributions are not unique to FTCCL, several companies with corporate class structures have |

|*Revised as of 01.25.13 |frequently paid dividends to distribute Canadian dividend income earned by the funds (ex: Invesco, Dynamic, |

| |Fidelity and CI funds). |

| |The ordinary taxable dividends are taxable in the hands of the FTCCL shareholders in the taxation year of |

| |receipt but consist entirely of tax-efficient eligible dividends. |

| |Tax laws for mutual fund corporations like FTCCL are designed to facilitate the flow through of Canadian |

| |dividends (eligible and ineligible). |

| |When Canadian dividends earned by FTCCL funds are not distributed, FTCCL forfeits a refundable tax of 33.33% of |

| |the portfolio dividend income earned. The unclaimed refundable tax is effectively a non-interest bearing asset |

| |and brings no returns to the fund. Recovering the refundable tax increases Corporate Class investable assets and|

| |contributes to fund performance. |

| |Generally, our practice going forward will be to pay ordinary eligible (and ineligible if required) dividends on|

| |an annual basis for funds that have received sufficient Canadian dividends from the underlying trust funds. |

|Which corporate classes are expected to pay a |Eligible dividend – 16 corporate class mutual funds* and 2 corporate class Tapestry Portfolios** are paying an |

|dividend and in what amount? |eligible dividend*** in 2013. |

| |Ineligible dividend – No corporate class mutual funds or Tapestry Portfolios are expected to pay an ineligible |

| |dividend in 2013. By contrast, Quotential Balanced Growth Corporate Class Portfolio, Quotential Balanced Income |

| |Corporate Class and Quotential Diversified Income Corporate Class Portfolio paid an ineligible dividend in 2012.|

| |The dividend dollar amount per share varies between the corporate class mutual funds and between the series of |

| |each corporate class mutual fund. |

| |IMPORTANT: Corporate Class Series R, S, T and T-US$ dividends will be reinvested in accordance with the |

| |prospectus distribution policy. |

| |* Corporate Class mutual funds are sold by simplified prospectus. |

| |**Tapestry Corporate Classes are sold by offering memorandum. |

| |*** Note: Templeton Growth Fund, Ltd did not pay any dividends in 2012. |

|Lists of expected dividend amounts (in Canadian dollars): |

|Paid an eligible dividend |

|Did not pay any dividend |

| |

|Bissett All Canadian Focus Corporate Class |

|Bissett Canadian Balanced Corporate Class |

|Bissett Canadian Dividend Corporate Class |

|Bissett Canadian Equity Corporate Class |

|Bissett Energy Corporate Class |

|Bissett Focus Balanced Corporate Class |

|Bissett Small Cap Corporate Class |

|Bissett Strategic Income Corporate Class |

|Franklin Templeton Global Blend Corporate Class |

|Quotential Balanced Growth Corporate Class Portfolio |

|Quotential Canadian Growth Corporate Class Portfolio |

|Quotential Diversified Income Corporate Class Portfolio |

|Quotential Growth Corporate Class Portfolio |

|Quotential Maximum Growth Corporate Class Portfolio |

|Tapestry Diversified Income Private Portfolio Corp. Class |

|Tapestry Growth Private Portfolio Corporate Class |

|Templeton Global Smaller Companies Corporate Class |

|Templeton Growth Corporate Class |

|Bissett Bond Corporate Class |

|Bissett Bond Yield Class |

|Bissett Canadian Short Term Bond Yield Class |

|Bissett Corporate Bond Yield Class |

|Bissett U.S. Focus Corporate Class |

|Franklin Flex Cap Growth Corporate Class |

|Franklin Templeton Global Blend Corporate Class |

|Franklin Templeton Money Market Corporate Class |

|Franklin Templeton Money Market Yield Class |

|Franklin Templeton Treasury Bill Yield Class |

|Franklin Templeton U.S. Money Market Corporate Class |

|Franklin Templeton U.S. Money Market Yield Class |

|Franklin U.S. Rising Dividends Corporate Class |

|Franklin U.S. Rising Dividends Hedged Corporate Class |

|Franklin World Growth Corporate Class |

|Mutual Beacon Corporate Class |

|Mutual Discovery Corporate Class |

|Quotential Balanced Income Corporate Class Portfolio |

|Quotential Global Balanced Corporate Class Portfolio |

|Quotential Global Growth Corporate Class Portfolio |

|Tapestry Balanced Growth Private Portfolio Corporate Class |

|Tapestry Global Balanced Private Portfolio Corporate Class |

|Tapestry Balanced Income Private Portfolio Corporate Class |

|Tapestry Global Growth Private Portfolio Corporate Class |

|Templeton Asian Growth Corporate Class |

|Templeton BRIC Corporate Class |

|Templeton Canadian Stock Corporate Class |

|Templeton Emerging Markets Corporate Class |

|Templeton Frontier Markets Corporate Class |

|Templeton Global Bond Hedged Yield Class |

|Templeton International Stock Corporate Class |

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|Corporate Class Fund |

|Dividend Amount per Share for each Fund Series |

|All amounts are in Canadian dollars, except for Series T-US$ |

| |

| |

|A |

|F |

|I |

|O |

|R |

|S |

|T |

|T-US$ |

| |

|Bissett All Canadian Focus Corporate Class |

|0.4761 |

|0.5230 |

|0.4966 |

|0.5917 |

|- |

|- |

|- |

|- |

| |

|Bissett Canadian Balanced Corporate Class |

|0.0963 |

|0.1041 |

|- |

|0.1106 |

|- |

|- |

|0.0953 |

|- |

| |

|Bissett Canadian Dividend Corporate Class |

|0.2854 |

|0.2929 |

|0.2888 |

|0.3020 |

|0.4578 |

|0.3836 |

|0.3736 |

|- |

| |

|Bissett Canadian Equity Corporate Class |

|0.3905 |

|0.4527 |

|- |

|0.5251 |

|- |

|- |

|- |

|- |

| |

|Bissett Energy Corporate Class |

|0.2347 |

|0.2489 |

|- |

|0.2703 |

|- |

|- |

|- |

|- |

| |

|Bissett Focus Balanced Corporate Class |

|0.0849 |

|0.0887 |

|0.0872 |

|0.0933 |

|- |

|- |

|0.1009 |

|- |

| |

|Bissett Small Cap Corporate Class |

|0.7958 |

|0.8918 |

|- |

|1.0767 |

|- |

|- |

|- |

|- |

| |

|Bissett Strategic Income Corporate Class |

|0.1711 |

|0.1730 |

|0.1719 |

|0.1750 |

|0.2477 |

|0.2449 |

|0.2422 |

|- |

| |

|Franklin Templeton Global Blend Corporate Class |

|0.0054 |

|0.0056 |

|0.0055 |

|0.0059 |

|- |

|- |

|0.0064 |

|0.0079 |

| |

|Quotential Balanced Growth Corporate Class Portfolio |

|0.1467 |

|0.1608 |

|0.1690 |

|0.1775 |

|0.1248 |

|0.1171 |

|0.1104 |

|- |

| |

|Quotential Canadian Growth Corporate Class Portfolio |

|0.2675 |

|0.2930 |

|0.3441 |

|0.3337 |

|0.2027 |

|0.1878 |

|0.1773 |

|- |

| |

|Quotential Diversified Income Corporate Class Portfolio |

|0.0794 |

|0.0857 |

|0.0819 |

|0.0937 |

|0.0847 |

|0.0801 |

|0.0763 |

|0.0895 |

| |

|Quotential Growth Corporate Class Portfolio |

|0.1396 |

|0.1530 |

|0.1821 |

|0.1709 |

|0.1194 |

|0.1108 |

|0.1046 |

|- |

| |

|Quotential Maximum Growth Corporate Class Portfolio |

|0.0942 |

|0.1029 |

|0.1385 |

|0.1190 |

|0.0757 |

|0.0762 |

|0.0719 |

|- |

| |

|Tapestry Diversified Income Private Portfolio Corp. Class |

|0.0602 |

|0.0620 |

|- |

|0.0638 |

|0.0824 |

|- |

|0.0770 |

|- |

| |

|Tapestry Growth Private Portfolio Corporate Class |

|0.0885 |

|0.0916 |

|- |

|0.0957 |

|0.1119 |

|- |

|0.1026 |

|- |

| |

|Templeton Global Smaller Companies Corporate Class |

|0.0436 |

|0.0497 |

|0.0477 |

|0.0597 |

|- |

|- |

|- |

|- |

| |

|Templeton Growth Corporate Class |

|0.0847 |

|0.0925 |

|0.0926 |

|0.1092 |

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|What are eligible and ineligible dividends? Why are |Corporate class funds invest in underlying mutual fund trusts and unit trusts and in direct securities that pay |

|we paying eligible dividends in 2013? |ordinary taxable dividends. These dividends are characterized for tax purposes as either ineligible (typically |

|Revised as of 02.12.2013 |paid by Canadian-controlled private corporations out of earnings taxed at a lower/preferred corporate tax rate) |

| |or eligible (paid by public Canadian corporations out of earnings taxed at the general corporate tax rate). |

| |Canadian Controlled Private Corporations (“CCPCs”) are small businesses that may pay taxable dividends |

| |(ineligible) to shareholders from after-tax earnings that have benefitted from the small business deduction, |

| |whereas larger public Canadian corporations pay taxable dividends (eligible) from after-tax earnings that have |

| |been taxed at the general corporate tax rate. Consequently the top marginal ineligible dividend tax rate is |

| |higher than the top marginal eligible dividend rate. |

| |For the 2013 calendar year, eligible dividends are entitled to a 38% gross-up and dividend tax credit, whereas |

| |ineligible dividends are entitled to a 25% gross-up and dividend tax credit. |

| |FTCCL is organized as a mutual fund corporation, which is a tax efficient vehicle with respect to Canadian |

| |ordinary taxable dividends. FTCCL pays a tax called Refundable Part IV tax on the Canadian ordinary taxable |

| |dividend income it earns. |

| | |

| |When FTCCL pays an ordinary taxable dividend to its shareholders, CRA reimburses FTCCL for the refundable tax |

| |previously paid at a rate of $1 of refund for every $3 of taxable dividends paid to shareholders. |

| |To avoid a penalty tax, FTCCL must pay out to shareholders on a one-to-one basis any ineligible dividends it has|

| |received since the last time it paid an ineligible dividend before or at the time it pays an eligible dividend. |

| | |

| |Shareholders who receive an eligible and/or an ineligible dividend in 2013 must pay tax in the taxation year in |

| |which the dividend is received (i.e. the 2013 taxation year for individuals) and at the appropriate rate as |

| |determined by the tax character of the ordinary taxable dividend (eligible vs. ineligible). |

| |The table below summarizes the top marginal personal tax rates in Ontario for 2013 based on the tax character of|

| |earnings: |

| |Other income |

| |Capital Gain |

| |Eligible Dividend[1] |

| |Ineligible Dividend1 |

| | |

| |49.53% |

| |24.76% |

| |33.85% |

| |36.47% |

| | |

|Why did we wait until 2012 to declare a dividend on |Since it was formed in 2001, FTCCL had not paid an ordinary dividend to recover the cash taxes paid in prior |

|refundable dividend tax that had been building up |years until 2012. Consequently, the Part IV recoverable tax balance had built up to a point in those Classes |

|since the start of FTCCL in 2001? |which paid a dividend, where it now made sense to pay an ordinary dividend to recover the taxes previously paid.|

| | |

| |This recoverable tax balance is a function of the fund’s investment activities and is likely to grow year over |

| |year. The Refundable Part IV tax balance for those Classes that paid a dividend was significant enough to |

| |substantiate the dividend payout per share. |

| |As noted above, FTCCL must pay out to shareholders on a one-to-one basis any ineligible dividends it has |

| |received since the last time it paid an ineligible dividend before it can pay an eligible dividend. In previous|

| |years the ineligible dividend pool had not been large enough relative to the outstanding share balance to |

| |justify the payment of a dividend. Until such time that ineligible dividend could be paid, it had not been |

| |possible to pay out an eligible dividend to recover the Part IV tax. |

|What is the difference between the 2013, 2012 and |The dividend paid in 2013 consists entirely of eligible dividends. In 2012, all funds that declared a dividend |

|2008 FTCCL dividends? |paid eligible dividends but Quotential Balanced Growth Corporate Class Portfolio, Quotential Balanced Income |

| |Corporate Class and Quotential Diversified Income Corporate Class Portfolio also paid ineligible dividends. |

| |The difference between the dividend paid in 2008 and in 2012-2013 is the source and tax character of the income |

| |that has given rise to the dividend. FTCCL, as a mutual fund corporation, is a tax-efficient vehicle with |

| |respect to both Canadian taxable dividends and capital gains. |

| |FTCCL is required to pay out sufficient capital gain dividends to ensure taxes on capital gains realized by |

| |FTCCL are reduced to zero. On January 11, 2008 FTCCL paid such a dividend. As the tax character of the |

| |dividend was a capital gain dividend, the amount paid was added to the recipient investor’s taxable income based|

| |on a 50% inclusion rate (capital gain rate). |

| |On January 27, 2012 FTCCL paid ordinary taxable dividends taxable at the eligible or ineligible dividend tax |

| |rate, based on the tax character of the original dividends received by FTCCL. |

| |FTCCL has paid a significant amount of refundable tax across the various Classes that will pay an ordinary |

| |taxable dividend in 2013. This refundable tax is effectively a non-interest bearing asset and the dividend |

| |payment will return cash tax to FTCCL that can then be reinvested. |

|Why is the Corporate Class Series RST dividend being|The January 29, 2013 dividends are considered “annual” distributions, and as such, the distribution for Series |

|reinvested? What about the January 31 ROC |R, S and T will be force-reinvested (DVR) as per the RST distribution policy disclosure in the Prospectus. |

|distribution? |On January 31, 2013 when the regular monthly ROC distributions are made, investors who set up to receive the |

| |distribution (DVC, DVB) will receive it; and those set up to have the distribution reinvested (DVR) will have it|

| |reinvested. |

|Did FTCCL pay a capital gain dividend in 2013? |No; FTCCL has not paid a capital gain dividend in 2013. |

| |As a mutual fund corporation, FTCCL is eligible for a refund of tax paid or payable on the capital gains that |

| |have been distributed as capital gain dividends in the period ending 60 days after the end of the taxation year.|

| |As of December 31, 2012, FTCCL had an aggregate capital loss carryforward balance and therefore a capital gain |

| |dividend is not necessary with respect to the 2012 taxation year. |

|What is the strategy regarding FTCCL’s dividend |FTCCL paid a capital gain dividend in 2008 and its first ordinary taxable dividends in 2012. |

|payments? |Since then, FTCCL expects to pay capital gain dividends where necessary to ensure the taxes on realized capital |

| |gains are reduced to zero for the corresponding taxation year. |

| |Since then, FTCCL also expects to pay ordinary taxable dividends again when the Part IV refundable tax balance |

| |becomes significant enough to substantiate another ordinary taxable dividend payment. This will be driven |

| |entirely by the investment activities of the various funds and the ordinary taxable dividends received from |

| |Canadian corporations. |

| |FTCCL is taking steps to minimize the likelihood of Corporate Class funds paying ineligible dividends in the |

| |future because they are more heavily taxed than eligible dividends and also limit FTCCL’s ability to pay |

| |eligible dividends given the tax law requirement that ineligible dividends be paid before eligible dividends. |

|How has this been communicated to advisors and |On January 18, 2013, FTCCL announced an ordinary taxable dividend for all shareholders of record as at the close|

|shareholders? |of business on January 28, 2013 for payment on January 29, 2013. |

| |On January 18, 2013: |

| |A notice was published in the National Post and Calgary Herald to satisfy the legal requirement in the corporate|

| |legislation governing FTCCL. The notice included the dividend estimates. |

| |The English and French press notices and list of estimates were posted on the external website. |

| |Dealer back offices were notified of the upcoming dividend payment. |

| |Documents posted online include, beside the Q&A: |

| |[pic][pic][pic][pic][pic][pic] |

| |On January 29, 2013: |

| |The actual eligible dividends will be paid |

| |The actual dividend amounts will be posted in English and French on the FTIC external website before 7:00 pm ET.|

| |Dealer back offices will be notified of the final dividend payment amount per share. |

|Other mutual fund corporations pay a dividend in |FTCCL may distribute ordinary taxable dividends in any month of the year and capital gains dividends in January |

|December, why do we pay one in January? |or February. It may also pay dividends at other times during the year. |

| |The tax on a dividend received in December 2012 by an individual investor is due 4 months later in April 2013; |

| |for a dividend received in January 2013, the tax is due 15 months later in April 2014. |

| |We chose to pay this dividend in January to provide investors with the most significant deferral of tax on the |

| |ordinary taxable dividend being paid. This will also provide investors with more time to plan and evaluate |

| |their tax position with respect to this payment. |

|How have the dividends being paid by FTCCL been |The ordinary taxable dividends have been allocated in a fair and equitable manner based on the actual ordinary |

|allocated between the different Corporate Class |taxable dividend income earned by the respective Corporate Class funds. |

|funds? |The dividends will not necessarily reflect the recent performance of the corporate classes as performance |

| |depends on realized and unrealized gains as well as distributions received by the funds. |

|When will clients receive a tax slip for this |Shareholders who received the January 29, 2013 dividend in their non-registered account will receive a T5 in |

|dividend? |early 2014 (Quebec residents will also receive a Relevé 3). |

| |They will also see the dividend on any statement of account which covers this period including their 2013 annual|

| |statement. |

| |NR4 slips will be issued to non-residents in early 2014 with respect to the eligible and ineligible taxable |

| |dividend payment. |

|Does a client have to pay tax on Corporate Class |Yes, all dividends are taxable whether they are received in cash or reinvested for more shares of the fund. The |

|dividends that they reinvest? |reinvested dividends are deemed to have been received by the shareholder in cash, and are immediately given back|

| |to the fund as a purchase of new shares. This purchase of new shares increases the adjusted cost base (ACB) of |

| |the total investment. The result is a reduced taxable capital gain (or increased capital loss) when you redeem |

| |your total investment holdings at a later date. This ensures you are not taxed again on the amount of the |

| |dividend. |

|Background: Corporate Class Funds |Franklin Templeton Investments introduced Corporate Class Funds (originally called Tax Class) in June 2001 as a |

| |tax-efficient structure of funds designed for those investing outside their registered accounts. This structure |

| |allows investors to switch between different Corporate Class funds without triggering an immediate disposition |

| |for tax purposes. |

| |A switch from one Corporate Class fund to another Corporate Class fund is not a taxable event to a shareholder. |

| |This is because they still own shares of FTCCL. Any capital gains (or losses) from switching from one Corporate |

| |Class fund to another will be deferred until the investment is redeemed or switched out of the Corporate Class |

| |structure. This allows for rebalancing or re-allocation of assets without an immediate tax consequence to the |

| |investor. |

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For Internal Use Only

Franklin Templeton Corporate Class Ltd.

REGULAR DIVIDEND TO BE PAID JANUARY 29, 2013

As of January 18, 2013

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