N-CSR 1 primary-document.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 
FORM N-CSR
 
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
 
Investment Company Act file number 811-03143
 
Templeton Global Smaller Companies Fund
(Exact name of registrant as specified in charter)
 
300 S.E. 2nd Street, Fort Lauderdale, FL 33301-1923

(Address of principal executive offices)(Zip code)
 
Alison Baur, One Franklin Parkway, San Mateo, CA 94403-1906
(Name and address of agent for service)
 
Registrant's telephone number, including area code: 954 527-7500
 
Date of fiscal year end: 8/31
 
Date of reporting period: 8/31/23
 
Item 1. Reports to Stockholders.
 
a.)
 
The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)


b.)
 
Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.
Not Applicable
.
 
 
ANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Templeton
Global
Smaller
Companies
Fund
August
31,
2023
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
The
Securities
and
Exchange
Commission
has
adopted
new
regulations
that
will
result
in
changes
to
the
design
and
delivery
of
annual
and
semiannual
shareholder
reports
beginning
in
July
2024.
If
you
have
previously
elected
to
receive
shareholder
reports
electronically,
you
will
continue
to
do
so
and
need
not
take
any
action.
Otherwise,
paper
copies
of
the
Fund’s
shareholder
reports
will
be
mailed
to
you
beginning
in
July
2024.
If
you
would
like
to
receive
shareholder
reports
and
other
communications
from
the
Fund
electronically
instead
of
by
mail,
you
may
make
that
request
at
any
time
by
contacting
your
financial
intermediary
(such
as
a
broker-dealer
or
bank)
or,
if
you
are
a
direct
investor,
enrolling
at
franklintempleton.com.
You
may
access
franklintempleton.com
by
scanning
the
code
below.
Templeton
Global
Smaller
Companies
Fund
1
franklintempleton.com
Annual
Report
SHAREHOLDER
LETTER
Dear
Shareholder,
We
are
pleased
to
provide
the
annual
report
of
Templeton
Global
Smaller
Companies
for
the
12-month
reporting
period
ended
August
31,
2023.
Please
read
on
for
a
detailed
look
at
prevailing
economic
and
market
conditions
during
the
Fund’s
reporting
period
and
to
learn
how
those
conditions
have
affected
Fund
performance.
As
always,
we
remain
committed
to
providing
you
with
excellent
service
and
a
full
spectrum
of
investment
choices.
We
also
remain
committed
to
supplementing
the
support
you
receive
from
your
financial
advisor.
One
way
we
accomplish
this
is
through
our
website,
www.franklintempleton.
com
.
Here
you
can
gain
immediate
access
to
market
and
investment
information,
including:
•
Fund
prices
and
performance.
•
Market
insights
and
commentaries
from
our
portfolio
Managers,
and
•
A
host
of
educational
resources.
We
look
forward
to
helping
you
meet
your
financial
goals.
Sincerely,
Manraj
S.
Sekhon,
CFA
Chief
Investment
Officer
Templeton
Global
Equity
Group
CFA
®
is
a
trademark
owned
by
CFA
Institute.
franklintempleton.com
Annual
Report
2
Contents
Fund
Overview
3
Performance
Summary
6
Your
Fund’s
Expenses
9
Financial
Highlights
and
Schedule
of
Investments
10
Financial
Statements
18
Notes
to
Financial
Statements
22
Report
of
Independent
Registered
Public
Accounting
Firm
31
Tax
Information
32
Board
Members
and
Officers
33
Shareholder
Information
38
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Annual
Report
Templeton
Global
Smaller
Companies
Fund
Fund
Overview
Q.
What
is
the
Fund's
investment
strategy?
A.
When
choosing
equity
investments
for
the
Fund,
we
apply
a
bottom-up,
value-oriented,
long-term
approach,
focusing
on
the
market
price
of
a
company’s
securities
relative
to
our
evaluation
of
the
company’s
long-term
earnings,
asset
value
and
cash
flow
potential.
We
also
consider
the
company’s
price/earnings
ratio,
profit
margins
and
liquidation
value.
We
may
consider
selling
a
security
when
we
believe
the
security
has
become
overvalued
due
to
either
its
price
appreciation
or
changes
in
the
company’s
fundamentals,
when
we
believe
that
the
market
capitalization
of
a
security
has
become
too
large,
or
when
we
believe
another
security
is
a
more
attractive
investment
opportunity.
Q.
What
were
the
overall
market
conditions
during
the
Fund's
reporting
period?
A.
Global
small-cap
stocks
overall
rose
during
the
12-month
reporting
period.
After
reaching
a
low
in
mid-October
2022,
stocks
rallied
as
many
investors
hoped
the
U.S.
Federal
Reserve
(Fed)
would
soon
slow
the
pace
of
its
policy
tightening,
but
this
optimism
faded
and
equities
worldwide
collectively
ended
2022
with
a
significant
loss.
A
strong
rally
in
January
2023
was
followed
by
heightened
volatility
in
March
due
to
banking
turmoil
in
the
U.S.
and
Switzerland.
However,
fairly
quick
action
by
authorities
in
both
countries
to
stem
potential
contagion
calmed
investors.
During
the
latter
part
of
the
period,
global
small-cap
equities
benefited
from
easing
concerns
about
the
banking
industry,
passage
of
legislation
that
suspended
the
U.S.
debt
ceiling,
first-
quarter
corporate
earnings
reports
that
generally
exceeded
consensus
estimates,
and
several
central
banks’
slower
pace
or
pausing
of
interest-rate
hikes.
Q.
How
did
we
respond
to
these
changing
market
conditions?
A.
First
and
foremost,
we
are
bottom-up
stock
pickers.
We
do
our
best
to
articulate
our
macro
views
in
our
modeling
and
recommendations.
During
the
year,
we
remained
biased
toward
higher-quality
businesses
and
focused
on
“growth
at
a
reasonable
price”
(GARP)
screens
and
companies
that
have
limited
exposure
to
rising
interest
rates.
The
“growth”
in
“GARP”
revolved
across
numerous
themes
including
automation,
outsourcing,
health
and
wellness,
near-shoring
and
digitalization,
to
name
a
few.
Performance
Overview
For
the
12
months
under
review,
the
Fund’s
Class
A
shares
posted
a
+11.15%
cumulative
total
return.
In
comparison,
the
MSCI
ACWI
Small
Cap
Index-NR,
which
measures
performance
of
small
capitalization
companies
in
global
developed
and
emerging
markets,
posted
a
+8.67%
cumulative
total
return
for
the
same
period.
1
Please
note
index
performance
information
is
provided
for
reference
and
we
do
not
attempt
to
track
the
index
but
rather
undertake
investments
on
the
basis
of
fundamental
research.
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
6
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Q.
What
were
the
leading
contributors
to
performance?
A.
Outperformance
was
due
primarily
to
stock
selection,
primarily
in
the
health
care,
real
estate
and
consumer
discretionary
sectors.
This
is
encouraging,
as
we
expect
our
brand
of
fundamental
value
investing
to
benefit
from
normalizing
market
conditions
following
a
protracted
period
of
ultra-loose
monetary
policy
and
unprecedented
fiscal
stimulus.
Our
focus
on
value
at
the
individual
security
level
helped
the
Fund
deliver
strong
absolute
and
relative
performance.
Asics,
a
Japan-based
global
company
providing
shoes,
sportswear
and
other
sporting
goods
to
athletes
around
the
world,
was
the
top
individual
stock
contributor
for
the
period.
The
company’s
competitive
advantage
is
in
its
focus
on
high-end
and
high-quality
running
shoes,
which
has
helped
Geographic
Composition
8/31/23
%
of
Total
Net
Assets
North
America
44.3%
Europe
29.2%
Asia
18.9%
Latin
America
&
Caribbean
2.9%
Short-Term
Investments
&
Other
Net
Assets
4.7%
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
Net
Returns
(NR)
include
income
net
of
tax
withholding
when
dividends
are
paid.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
14
.
Templeton
Global
Smaller
Companies
Fund
4
franklintempleton.com
Annual
Report
Asics
grow
internationally
by
gaining
recognition
as
a
market
leader
in
quality.
Gerresheimer,
a
Germany-based
leading
pharmaceutical
packaging
company
that
produces
glass
and
plastic
primary
packaging,
syringes,
inhalation
packaging,
and
drug-delivery
devices,
was
the
top
relative
contributor
in
the
health
care
sector.
The
company,
in
our
view,
offers
exposure
to
the
increase
in
global
pharmaceutical
consumption,
including
faster-growing
specialist
pharmaceutical
products.
With
its
growing
portfolio
of
biologic
offerings,
patch
pumps
and
pre-
filled
syringes,
we
believe
Gerresheimer
is
well-equipped
for
a
resilient
growth
path
despite
economic
uncertainty.
After
a
period
of
high
investment,
Gerresheimer
is
now
beginning
to
see
revenue
and
profit
margins
accelerate.
Newly
launched
high-value
solutions
should
support
profit
margin
expansion
over
time,
in
our
view.
Regionally,
stock
selection
in
Europe
and
Asia
ex-Japan
contributed
to
relative
performance
for
the
year.
*
Does
not
include
cash
and
cash
equivalents.
Q.
What
were
the
leading
detractors
from
performance?
A.
Stock
selection
in
the
materials
and
financials
sectors
and
an
underweight
in
the
energy
sector
detracted
from
relative
performance
for
the
period.
The
shares
of
U.S.-based
investment
manager
AllianceBernstein
were
negatively
impacted
by
ongoing
stock
market
volatility
during
the
period.
Since
going
into
a
tailspin
in
the
late
2000s,
AllianceBernstein
has
since
reinvented
itself.
It
has
diversified
its
equities
business
away
from
what
was
primarily
a
deep-value
offering
into
more
specialized
non-traditional
areas
like
global,
concentrated
growth,
small
cap
and
low
volatility.
It
has
also
expanded
its
fixed
income
business
into
global
high
income
and
has
built
up
a
higher-fee,
alternative
strategies
offering.
We
believe
this
strategy
shift
has
made
the
company
better
positioned
to
retain
assets
in
challenging
market
conditions.
Elsewhere,
Tsumura,
a
Japanese
manufacturer
and
distributor
of
traditional
Kampo
medicine
(herbal
drugs
made
from
natural
ingredients)
detracted
from
relative
returns.
We
still
see
compelling
long-term
value
in
Tsumura,
which
is
essentially
a
monopoly
business
with
a
dominant
market
share
in
the
Japanese
Kampo
drug
business.
Its
massive
scale
advantages
in
a
highly
regulated
market
make
entry
barriers
to
potential
competitors
extremely
high.
We
believe
further
profit
margin
expansion
can
come
from
improved
manufacturing
and
the
enhancement
and
streamlining
of
its
procurement
systems.
Regionally,
stock
selection
in
Latin
America
and
the
U.K
detracted
from
relative
returns.
Q.
Were
there
any
significant
changes
to
the
Fund
during
the
reporting
period?
A.
Although
there
were
no
significant
changes
during
the
reporting
period,
we
actively
tried
to
reduce
geopolitical
risk
as
much
as
possible
and
focus
on
bottom-up
thematic
research
that
drives
not
only
growth
at
a
reasonable
price,
but
also
with
less
risk.
As
a
result,
we
took
advantage
of
several
opportunities
that
reduced
the
geopolitical
risk
of
the
Fund.
The
Fund
remains
focused
on
the
“core”
part
of
the
market
with
a
balanced
exposure
to
growth
and
value
factors.
We
will
continue
to
search
for
opportunities
where
we
believe
stocks
are
trading
at
a
significant
discount
to
their
intrinsic
value.
Top
10
Countries*
8/31/23
a
%
of
Total
Net
Assets
a
a
United
States
42.4%
Japan
8.2%
Italy
6.1%
Switzerland
6.1%
Taiwan
6.0%
Germany
4.5%
United
Kingdom
4.1%
Sweden
2.3%
Netherlands
2.0%
Canada
1.9%
Top
10
Holdings
8/31/23
Company
Industry,
Country
%
of
Total
Net
Assets
a
a
Siegfried
Holding
AG
2.1%
Life
Sciences
Tools
&
Services,
Switzerland
Asics
Corp.
2.0%
Textiles,
Apparel
&
Luxury
Goods,
Japan
OneSpaWorld
Holdings
Ltd.
2.0%
Diversified
Consumer
Services,
Bahamas
MGP
Ingredients,
Inc.
1.8%
Beverages,
United
States
NCR
Corp.
1.8%
Software,
United
States
Interpump
Group
SpA
1.8%
Machinery,
Italy
Crown
Holdings,
Inc.
1.8%
Containers
&
Packaging,
United
States
Gerresheimer
AG
1.8%
Life
Sciences
Tools
&
Services,
Germany
Hillenbrand,
Inc.
1.7%
Machinery,
United
States
TriMas
Corp.
1.7%
Containers
&
Packaging,
United
States
Templeton
Global
Smaller
Companies
Fund
5
franklintempleton.com
Annual
Report
Thank
you
for
your
continued
participation
in
Templeton
Global
Smaller
Companies
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Harlan
B.
Hodes
Lead
Portfolio
Manager
David
A.
Tuttle,
CFA
Kyle
Denning,
CFA
Katie
Ylijoki,
CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
August
31,
2023,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
CFA
®
is
a
trademark
owned
by
CFA
Institute.
Performance
Summary
as
of
August
31,
2023
Templeton
Global
Smaller
Companies
Fund
6
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
8/31/23
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
5.50%
and
the
minimum
is
0%.
Class
A
:
5.50%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4
1-Year
+11.15%
+5.03%
5-Year
+12.24%
+1.19%
10-Year
+59.47%
+4.19%
Advisor
1-Year
+11.40%
+11.40%
5-Year
+13.60%
+2.58%
10-Year
+63.41%
+5.03%
See
page
8
for
Performance
Summary
footnotes.
Templeton
Global
Smaller
Companies
Fund
Performance
Summary
7
franklintempleton.com
Annual
Report
See
page
8
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(8/31/13–8/31/23)
Advisor
Class
(8/31/13–8/31/23)
Templeton
Global
Smaller
Companies
Fund
Performance
Summary
8
franklintempleton.com
Annual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
All
investments
involve
risks,
including
possible
loss
of
principal.
Small-
and
mid-cap
stocks
involve
greater
risks
and
volatility
than
large-cap
stocks.
Liquidity
risk
exists
when
securities
or
other
investments
become
more
difficult
to
sell,
or
are
unable
to
be
sold,
at
the
price
at
which
they
have
been
valued.
International
investments
are
subject
to
special
risks,
including
currency
fluctuations
and
social,
economic
and
political
uncertainties,
which
could
increase
volatility.
These
risks
are
magnified
in
emerging
markets.
To
the
extent
the
Fund
invests
in
companies
in
a
specific
country
or
region
,
the
Fund
may
experience
greater
volatility
than
a
fund
that
is
more
broadly
diversified
geographically.
The
manager
may
consider
environmental,
social
and
governance
(ESG)
criteria
in
the
research
or
investment
process;
however,
ESG
consid-
erations
may
not
be
a
determinative
factor
in
security
selection.
In
addition,
the
manager
may
not
assess
every
investment
for
ESG
criteria,
and
not
every
ESG
factor
may
be
identified
or
evaluated.
These
and
other
risks
are
discussed
in
the
Fund’s
prospectus.
1.
The
total
annual
operating
expenses
are
as
of
the
Fund's
prospectus
available
at
the
time
of
publication.
Actual
expenses
may
be
higher
and
may
impact
portfolio
returns.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
9/10/18
these
shares
were
offered
at
a
higher
initial
sales
charge
of
5.75%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
5.50%.
5.
Source:
FactSet.
The
MSCI
ACWI
Small
Cap
Index-NR
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
the
performance
of
small
cap
equity
securities
in
global
developed
and
emerging
markets.
Net
Returns
(NR)
include
income
net
of
tax
withholding
when
dividends
are
paid.
6.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(9/1/22–8/31/23)
Share
Class
Net
Investment
Income
Long-Term
Capital
Gain
Total
A
$0.0585
$0.1970
$0.2555
C
–
$0.1970
$0.1970
R6
$0.0970
$0.1970
$0.2940
Advisor
$0.0840
$0.1970
$0.2810
Total
Annual
Operating
Expenses
6
Share
Class
A
1.31%
Advisor
1.06%
Your
Fund’s
Expenses
Templeton
Global
Smaller
Companies
Fund
9
franklintempleton.com
Annual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
184/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
3/1/23
Ending
Account
Value
8/31/23
Expenses
Paid
During
Period
3/1/23–8/31/23
1,2
Ending
Account
Value
8/31/23
Expenses
Paid
During
Period
3/1/23–8/31/23
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,017.20
$6.56
$1,018.70
$6.56
1.29%
C
$1,000
$1,012.30
$10.35
$1,014.92
$10.36
2.04%
R6
$1,000
$1,019.40
$4.71
$1,020.54
$4.72
0.93%
Advisor
$1,000
$1,018.20
$5.29
$1,019.96
$5.29
1.04%
Templeton
Global
Smaller
Companies
Fund
Financial
Highlights
Templeton
Global
Smaller
Companies
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
Year
Ended
August
31,
2023
2022
2021
2020
2019
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$8.24
$12.67
$9.16
$8.66
$10.39
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.09
0.05
0.06
0.04
0.08
Net
realized
and
unrealized
gains
(losses)
...........
0.81
(3.30)
3.72
0.67
(1.09)
Total
from
investment
operations
....................
0.90
(3.25)
3.78
0.71
(1.01)
Less
distributions
from:
Net
investment
income
..........................
(0.06)
(0.03)
(0.08)
(0.09)
(0.07)
Net
realized
gains
.............................
(0.20)
(1.15)
(0.19)
(0.12)
(0.65)
Total
distributions
...............................
(0.26)
(1.18)
(0.27)
(0.21)
(0.72)
Net
asset
value,
end
of
year
.......................
$8.88
$8.24
$12.67
$9.16
$8.66
Total
return
c
...................................
11.15%
(27.76)%
41.91%
8.08%
(8.86)%
Ratios
to
average
net
assets
Expenses
d
....................................
1.30%
1.31%
1.31%
1.38%
1.33%
Net
investment
income
...........................
1.06%
0.51%
0.55%
0.45%
0.87%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$794,020
$799,689
$1,203,490
$921,018
$998,891
Portfolio
turnover
rate
............................
12.85%
13.80%
20.47%
16.81%
18.87%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Templeton
Global
Smaller
Companies
Fund
Financial
Highlights
Templeton
Global
Smaller
Companies
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
11
a
Year
Ended
August
31,
2023
2022
2021
2020
2019
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$7.64
$11.88
$8.60
$8.15
$9.82
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
0.02
(0.03)
(0.02)
(0.03)
0.01
Net
realized
and
unrealized
gains
(losses)
...........
0.75
(3.06)
3.49
0.63
(1.03)
Total
from
investment
operations
....................
0.77
(3.09)
3.47
0.60
(1.02)
Less
distributions
from:
Net
investment
income
..........................
—
—
(—)
c
(0.03)
—
Net
realized
gains
.............................
(0.20)
(1.15)
(0.19)
(0.12)
(0.65)
Total
distributions
...............................
(0.20)
(1.15)
(0.19)
(0.15)
(0.65)
Net
asset
value,
end
of
year
.......................
$8.21
$7.64
$11.88
$8.60
$8.15
Total
return
d
...................................
10.25%
(28.25)%
40.84%
7.25%
(9.60)%
Ratios
to
average
net
assets
Expenses
e
....................................
2.06%
2.06%
2.06%
2.13%
2.08%
Net
investment
income
(loss)
......................
0.27%
(0.28)%
(0.23)%
(0.32)%
0.12%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$4,875
$6,116
$11,344
$11,509
$17,373
Portfolio
turnover
rate
............................
12.85%
13.80%
20.47%
16.81%
18.87%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Amount
rounds
to
less
than
$0.01
per
share.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Templeton
Global
Smaller
Companies
Fund
Financial
Highlights
Templeton
Global
Smaller
Companies
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Year
Ended
August
31,
2023
2022
2021
2020
2019
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$8.30
$12.74
$9.22
$8.69
$10.44
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.12
0.09
0.10
0.07
0.11
Net
realized
and
unrealized
gains
(losses)
...........
0.82
(3.32)
3.73
0.69
(1.10)
Total
from
investment
operations
....................
0.94
(3.23)
3.83
0.76
(0.99)
Less
distributions
from:
Net
investment
income
..........................
(0.10)
(0.06)
(0.12)
(0.11)
(0.11)
Net
realized
gains
.............................
(0.20)
(1.15)
(0.19)
(0.12)
(0.65)
Total
distributions
...............................
(0.30)
(1.21)
(0.31)
(0.23)
(0.76)
Net
asset
value,
end
of
year
.......................
$8.94
$8.30
$12.74
$9.22
$8.69
Total
return
....................................
11.59%
(27.49)%
42.37%
8.55%
(8.57)%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.94%
0.96%
0.98%
1.00%
0.97%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
0.93%
0.95%
0.97%
0.98%
0.96%
Net
investment
income
...........................
1.43%
0.88%
0.89%
0.84%
1.24%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$75,063
$73,802
$104,097
$78,551
$85,377
Portfolio
turnover
rate
............................
12.85%
13.80%
20.47%
16.81%
18.87%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
Templeton
Global
Smaller
Companies
Fund
Financial
Highlights
Templeton
Global
Smaller
Companies
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
13
a
Year
Ended
August
31,
2023
2022
2021
2020
2019
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$8.31
$12.76
$9.23
$8.71
$10.45
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.11
0.08
0.09
0.06
0.10
Net
realized
and
unrealized
gains
(losses)
...........
0.81
(3.33)
3.74
0.68
(1.09)
Total
from
investment
operations
....................
0.92
(3.25)
3.83
0.74
(0.99)
Less
distributions
from:
Net
investment
income
..........................
(0.08)
(0.05)
(0.11)
(0.10)
(0.10)
Net
realized
gains
.............................
(0.20)
(1.15)
(0.19)
(0.12)
(0.65)
Total
distributions
...............................
(0.28)
(1.20)
(0.30)
(0.22)
(0.75)
Net
asset
value,
end
of
year
.......................
$8.95
$8.31
$12.76
$9.23
$8.71
Total
return
....................................
11.40%
(27.59)%
42.27%
8.32%
(8.60)%
Ratios
to
average
net
assets
Expenses
c
.....................................
1.05%
1.06%
1.06%
1.13%
1.08%
Net
investment
income
...........................
1.31%
0.76%
0.80%
0.68%
1.12%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$39,007
$40,999
$63,954
$47,466
$57,452
Portfolio
turnover
rate
............................
12.85%
13.80%
20.47%
16.81%
18.87%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Templeton
Global
Smaller
Companies
Fund
Schedule
of
Investments,
August
31,
2023
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
a
Industry
Shares
a
Value
a
Common
Stocks
93.8%
Bahamas
1.9%
a
OneSpaWorld
Holdings
Ltd.
........
Diversified
Consumer
Services
1,478,293
$
16,911,672
Belgium
1.4%
Barco
NV
......................
Electronic
Equipment,
Instruments
&
Components
607,543
13,041,346
Brazil
0.9%
Camil
Alimentos
SA
...............
Food
Products
5,051,600
8,672,888
Canada
1.9%
Canaccord
Genuity
Group,
Inc.
......
Capital
Markets
753,200
4,742,680
Canadian
Western
Bank
...........
Banks
459,479
8,937,997
North
West
Co.,
Inc.
(The)
..........
Consumer
Staples
Distribution
&
Retail
171,000
3,859,045
17,539,722
China
1.0%
Xtep
International
Holdings
Ltd.
......
Textiles,
Apparel
&
Luxury
Goods
8,914,042
8,818,050
Finland
1.5%
Huhtamaki
OYJ
..................
Containers
&
Packaging
401,631
13,796,591
France
0.1%
Kaufman
&
Broad
SA
.............
Household
Durables
33,598
968,589
Germany
4.5%
b
Adesso
SE
.....................
IT
Services
36,474
4,563,973
Gerresheimer
AG
................
Life
Sciences
Tools
&
Services
123,682
16,054,598
Jenoptik
AG
....................
Electronic
Equipment,
Instruments
&
Components
276,556
8,097,028
Rational
AG
....................
Machinery
16,473
12,548,870
41,264,469
Hong
Kong
1.8%
Techtronic
Industries
Co.
Ltd.
.......
Machinery
1,143,790
11,280,840
VTech
Holdings
Ltd.
..............
Communications
Equipment
775,800
4,735,880
16,016,720
Hungary
1.0%
Richter
Gedeon
Nyrt.
.............
Pharmaceuticals
365,174
9,164,137
India
1.0%
Exide
Industries
Ltd.
..............
Automobile
Components
2,827,836
9,117,010
Italy
6.1%
Brunello
Cucinelli
SpA
.............
Textiles,
Apparel
&
Luxury
Goods
184,168
15,220,140
c
Carel
Industries
SpA,
144A,
Reg
S
...
Building
Products
186,983
5,253,571
Interpump
Group
SpA
.............
Machinery
323,981
16,379,665
Sanlorenzo
SpA
.................
Leisure
Products
125,413
5,037,019
c
Technogym
SpA,
144A,
Reg
S
......
Leisure
Products
1,634,415
13,968,699
55,859,094
Japan
8.2%
Asics
Corp.
.....................
Textiles,
Apparel
&
Luxury
Goods
511,000
18,602,114
Bunka
Shutter
Co.
Ltd.
............
Building
Products
537,400
4,019,925
CKD
Corp.
.....................
Machinery
303,300
4,186,064
Digital
Garage,
Inc.
...............
IT
Services
390,100
10,035,155
Idec
Corp.
......................
Electrical
Equipment
231,500
4,834,371
IDOM,
Inc.
.....................
Specialty
Retail
1,432,500
7,711,675
Meitec
Corp.
....................
Professional
Services
277,600
4,860,760
TechnoPro
Holdings,
Inc.
..........
Professional
Services
332,700
8,161,327
Templeton
Global
Smaller
Companies
Fund
Schedule
of
Investments
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
15
a
a
Industry
Shares
a
Value
a
Common
Stocks
(continued)
Japan
(continued)
Tsumura
&
Co.
..................
Pharmaceuticals
644,700
$
12,150,966
74,562,357
Netherlands
2.0%
Flow
Traders
Ltd.
................
Capital
Markets
222,759
4,512,338
SBM
Offshore
NV
................
Energy
Equipment
&
Services
971,871
14,080,535
18,592,873
South
Korea
1.0%
BNK
Financial
Group,
Inc.
..........
Banks
910,901
4,684,063
DGB
Financial
Group,
Inc.
..........
Banks
841,511
4,758,498
9,442,561
Sweden
2.3%
b,c
Dometic
Group
AB,
144A
..........
Automobile
Components
1,320,778
8,462,390
c
Thule
Group
AB,
144A,
Reg
S
.......
Leisure
Products
436,184
12,608,230
21,070,620
Switzerland
6.1%
Bucher
Industries
AG
.............
Machinery
37,115
15,214,330
Logitech
International
SA
..........
Technology
Hardware,
Storage
&
Peripherals
126,370
8,696,783
c
Medacta
Group
SA,
144A,
Reg
S
....
Health
Care
Equipment
&
Supplies
86,356
12,148,804
Siegfried
Holding
AG
..............
Life
Sciences
Tools
&
Services
21,358
19,279,564
55,339,481
Taiwan
6.0%
Catcher
Technology
Co.
Ltd.
........
Technology
Hardware,
Storage
&
Peripherals
798,000
4,512,709
Chicony
Electronics
Co.
Ltd.
........
Technology
Hardware,
Storage
&
Peripherals
3,924,432
12,718,467
Giant
Manufacturing
Co.
Ltd.
........
Leisure
Products
585,311
3,591,036
King
Yuan
Electronics
Co.
Ltd.
......
Semiconductors
&
Semiconductor
Equipment
5,207,000
12,512,916
Merida
Industry
Co.
Ltd.
...........
Leisure
Products
1,329,000
8,029,556
Nien
Made
Enterprise
Co.
Ltd.
......
Household
Durables
534,000
5,002,140
Tripod
Technology
Corp.
...........
Electronic
Equipment,
Instruments
&
Components
1,416,000
8,382,186
54,749,010
United
Kingdom
4.1%
Greggs
plc
.....................
Hotels,
Restaurants
&
Leisure
351,438
10,955,936
Man
Group
plc
..................
Capital
Markets
4,470,960
11,981,833
Oxford
Instruments
plc
............
Electronic
Equipment,
Instruments
&
Components
205,183
5,757,357
Persimmon
plc
..................
Household
Durables
311,957
4,205,583
Savills
plc
......................
Real
Estate
Management
&
Development
387,773
4,472,657
37,373,366
United
States
41.0%
Academy
Sports
&
Outdoors,
Inc.
....
Specialty
Retail
69,400
3,787,158
Advanced
Drainage
Systems,
Inc.
....
Building
Products
55,000
7,048,800
Alamo
Group,
Inc.
................
Machinery
81,215
13,940,555
a
Avanos
Medical,
Inc.
..............
Health
Care
Equipment
&
Supplies
365,164
7,683,050
Columbia
Sportswear
Co.
..........
Textiles,
Apparel
&
Luxury
Goods
197,612
14,492,864
b
Crown
Holdings,
Inc.
..............
Containers
&
Packaging
173,800
16,104,308
a
Deckers
Outdoor
Corp.
............
Textiles,
Apparel
&
Luxury
Goods
8,244
4,361,818
a
Freshpet,
Inc.
...................
Food
Products
147,400
11,130,174
Hillenbrand,
Inc.
.................
Machinery
320,834
15,541,199
Huntington
Bancshares,
Inc.
........
Banks
1,132,756
12,562,264
a,b
ICON
plc
.......................
Life
Sciences
Tools
&
Services
46,872
12,183,908
Templeton
Global
Smaller
Companies
Fund
Schedule
of
Investments
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
a
a
Industry
Shares
a
Value
a
Common
Stocks
(continued)
United
States
(continued)
a,b
Integer
Holdings
Corp.
............
Health
Care
Equipment
&
Supplies
176,436
$
15,051,755
Janus
Henderson
Group
plc
........
Capital
Markets
348,953
9,585,739
John
Bean
Technologies
Corp.
......
Machinery
104,783
11,516,699
a,b
Jones
Lang
LaSalle,
Inc.
...........
Real
Estate
Management
&
Development
83,800
14,480,640
a
Knowles
Corp.
..................
Electronic
Equipment,
Instruments
&
Components
627,893
10,065,125
LCI
Industries
...................
Automobile
Components
70,913
8,883,981
Lear
Corp.
.....................
Automobile
Components
63,662
9,173,058
a,b
Leonardo
DRS,
Inc.
..............
Aerospace
&
Defense
630,700
10,797,584
Levi
Strauss
&
Co.,
A
.............
Textiles,
Apparel
&
Luxury
Goods
834,800
11,495,196
a
Lindblad
Expeditions
Holdings,
Inc.
...
Hotels,
Restaurants
&
Leisure
680,433
6,157,919
Lithia
Motors,
Inc.,
A
..............
Specialty
Retail
20,867
6,427,453
ManpowerGroup,
Inc.
.............
Professional
Services
102,322
8,070,136
b
MGP
Ingredients,
Inc.
.............
Beverages
137,900
16,534,210
a
Middleby
Corp.
(The)
.............
Machinery
47,600
6,930,084
Miller
Industries,
Inc.
..............
Machinery
203,700
8,148,000
a,b
NCR
Corp.
.....................
Software
533,000
16,395,080
b
Patrick
Industries,
Inc.
.............
Automobile
Components
88,434
7,396,620
Sealed
Air
Corp.
.................
Containers
&
Packaging
254,500
9,431,770
a
Skechers
USA,
Inc.,
A
.............
Textiles,
Apparel
&
Luxury
Goods
92,076
4,632,343
a
Sonos,
Inc.
.....................
Household
Durables
606,100
8,352,058
Spirit
AeroSystems
Holdings,
Inc.,
A
..
Aerospace
&
Defense
120,600
2,571,192
a
Texas
Capital
Bancshares,
Inc.
......
Banks
184,270
11,505,819
TriMas
Corp.
....................
Containers
&
Packaging
590,803
15,479,039
TrustCo
Bank
Corp.
..............
Banks
461,894
13,150,122
Voya
Financial,
Inc.
...............
Financial
Services
127,085
8,855,283
Winnebago
Industries,
Inc.
.........
Automobiles
69,564
4,511,225
374,434,228
Total
Common
Stocks
(Cost
$631,794,569)
.....................................
856,734,784
Warrants
a
a
a
a
a
Warrants
0.1%
Bahamas
0.1%
a
OneSpaWorld
Holdings
Ltd.
,
3/19/24
..
Diversified
Consumer
Services
314,014
463,171
Total
Warrants
(Cost
$–)
......................................................
463,171
Units
Limited
Partnerships
1.4%
United
States
1.4%
AllianceBernstein
Holding
LP
.......
Capital
Markets
422,465
13,083,741
Total
Limited
Partnerships
(Cost
$5,488,905)
...................................
13,083,741
Total
Long
Term
Investments
(Cost
$637,283,474)
...............................
870,281,696
Templeton
Global
Smaller
Companies
Fund
Schedule
of
Investments
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
17
Short
Term
Investments
4.0%
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
U.S.
Government
and
Agency
Securities
4.0%
United
States
4.0%
d
FHLB,
9/01/23
..................
36,100,000
$
36,100,000
Total
U.S.
Government
and
Agency
Securities
(Cost
$36,100,000)
.................
36,100,000
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$36,100,000
)
................................
36,100,000
a
a
a
Total
Investments
(Cost
$673,383,474)
99.3%
...................................
$906,381,696
Other
Assets,
less
Liabilities
0.7%
.............................................
6,582,614
Net
Assets
100.0%
...........................................................
$912,964,310
a
a
a
See
Abbreviations
on
page
30
.
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
a
Non-income
producing.
b
A
portion
or
all
of
the
security
is
on
loan
at
August
31,
2023.
See
Note
1(c).
c
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
August
31,
2023,
the
aggregate
value
of
these
securities
was
$52,441,694,
representing
5.7%
of
net
assets.
d
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
Templeton
Global
Smaller
Companies
Fund
Financial
Statements
Statement
of
Assets
and
Liabilities
August
31,
2023
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
Templeton
Global
Smaller
Companies
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$673,383,474
Value
-
Unaffiliated
issuers
(Includes
securities
loaned
of
$45,418,082)
.................................
$906,381,696
Cash
....................................................................................
5,083,015
Receivables:
Investment
securities
sold
...................................................................
99
Capital
shares
sold
........................................................................
216,225
Dividends
...............................................................................
2,830,782
European
Union
tax
reclaims
(Note
1
d
)
.........................................................
810,564
Total
assets
..........................................................................
915,322,381
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
113,477
Capital
shares
redeemed
...................................................................
845,279
Management
fees
.........................................................................
685,278
Distribution
fees
..........................................................................
173,559
Transfer
agent
fees
........................................................................
211,090
Trustees'
fees
and
expenses
.................................................................
5,798
Accrued
expenses
and
other
liabilities
...........................................................
323,590
Total
liabilities
.........................................................................
2,358,071
Net
assets,
at
value
.................................................................
$912,964,310
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$707,076,242
Total
distributable
earnings
(losses)
.............................................................
205,888,068
Net
assets,
at
value
.................................................................
$912,964,310
Templeton
Global
Smaller
Companies
Fund
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
August
31,
2023
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
19
Templeton
Global
Smaller
Companies
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$794,019,566
Shares
outstanding
........................................................................
89,449,998
Net
asset
value
per
share
a
..................................................................
$8.88
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
94.50%)
................................
$9.40
Class
C:
Net
assets,
at
value
.......................................................................
$4,874,950
Shares
outstanding
........................................................................
593,954
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$8.21
Class
R6:
Net
assets,
at
value
.......................................................................
$75,063,061
Shares
outstanding
........................................................................
8,398,193
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$8.94
Advisor
Class:
Net
assets,
at
value
.......................................................................
$39,006,733
Shares
outstanding
........................................................................
4,357,281
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$8.95
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Global
Smaller
Companies
Fund
Financial
Statements
Statement
of
Operations
for
the
year
ended
August
31,
2023
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
Templeton
Global
Smaller
Companies
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$1,892,242)
Unaffiliated
issuers
........................................................................
$19,713,432
Interest:
Unaffiliated
issuers
........................................................................
1,567,222
Income
from
securities
loaned:
Unaffiliated
entities
(net
of
fees
and
rebates)
.....................................................
72,796
Non-controlled
affiliates
(Note
3
f
)
.............................................................
33,764
Other
income
(Note
1
d
)
......................................................................
188,019
Total
investment
income
...................................................................
21,575,233
Expenses:
Management
fees
(Note
3
a
)
...................................................................
8,040,444
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
1,985,215
    Class
C
................................................................................
55,055
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
1,193,065
    Class
C
................................................................................
8,272
    Class
R6
...............................................................................
26,332
    Advisor
Class
............................................................................
59,008
Custodian
fees
.............................................................................
44,351
Reports
to
shareholders
fees
..................................................................
(76,979)
Registration
and
filing
fees
....................................................................
103,208
Trustees'
fees
and
expenses
..................................................................
115,647
Other
....................................................................................
33,686
Total
expenses
.........................................................................
11,587,304
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(6,159)
Net
expenses
.........................................................................
11,581,145
Net
investment
income
................................................................
9,994,088
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
(34,095,942)
Foreign
currency
transactions
................................................................
(250,670)
Net
realized
gain
(loss)
..................................................................
(34,346,612)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
120,142,727
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
103,407
Net
change
in
unrealized
appreciation
(depreciation)
............................................
120,246,134
Net
realized
and
unrealized
gain
(loss)
............................................................
85,899,522
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$95,893,610
Templeton
Global
Smaller
Companies
Fund
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
21
Templeton
Global
Smaller
Companies
Fund
Year
Ended
August
31,
2023
Year
Ended
August
31,
2022
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$9,994,088
$6,355,469
Net
realized
gain
(loss)
.................................................
(34,346,612)
37,171,757
Net
change
in
unrealize
d
appreciation
(depreciation)
...........................
120,246,134
(411,881,459)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
95,893,610
(368,354,233)
Distributions
to
shareholders:
Class
A
.............................................................
(24,014,783)
(109,936,819)
Class
C
.............................................................
(146,098)
(1,038,272)
Class
R6
............................................................
(2,578,482)
(9,983,983)
Advisor
Class
........................................................
(1,292,389)
(5,790,108)
Total
distributions
to
shareholders
..........................................
(28,031,752)
(126,749,182)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(64,806,697)
26,965,139
Class
C
.............................................................
(1,630,286)
(1,352,423)
Class
R6
............................................................
(4,350,188)
8,004,634
Advisor
Class
........................................................
(4,716,744)
(792,886)
Total
capital
share
transactions
............................................
(75,503,915)
32,824,464
Net
increase
(decrease)
in
net
assets
...................................
(7,642,057)
(462,278,951)
Net
assets:
Beginning
of
year
.......................................................
920,606,367
1,382,885,318
End
of
year
...........................................................
$912,964,310
$920,606,367
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
22
franklintempleton.com
Annual
Report
1.
Organization
and
Significant
Accounting
Policies
Templeton
Global
Smaller
Companies
Fund (Fund)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company.
The
Fund
follows
the
accounting
and
reporting
guidance
in
Financial
Accounting
Standards
Board
(FASB)
Accounting
Standards
Codification
Topic
946,
Financial
Services
–
Investment
Companies
(ASC
946)
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP),
including,
but
not
limited
to,
ASC
946.
The
Fund
offers
four
classes
of
shares:
Class
A,
Class
C,
Class
R6
and
Advisor
Class.
Class
C
shares
automatically
convert
to
Class
A
shares
on
a
monthly
basis,
after
they
have
been
held
for
8
years.
Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees.
The
following
summarizes
the
Fund’s
significant
accounting
policies.
a.
Financial
Instrument
Valuation 
The
Fund's
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Fund
calculates
the
net
asset
value
(NAV)
per
share
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Fund's
Board
of
Trustees
(the
Board),
the
Board
has
designated
the
Fund's
investment
manager
as
the
valuation
designee
and
has
responsibility
for
oversight
of
valuation.
The
investment
manager
is
assisted
by
the
Fund's
administrator
in
performing
this
responsibility,
including
leading
the
cross-
functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value. 
Equity
securities
listed
on
an
exchange
or
on
the
NASDAQ
National
Market
System
are
valued
at
the
last
quoted
sale
price
or
the
official
closing
price of
the
day,
respectively.
Foreign
equity
securities
are
valued
as
of
the
close
of
trading
on
the
foreign
stock
exchange
on
which
the
security
is
primarily
traded,
or
as
of
4
p.m.
Eastern
time.
The
value
is
then
converted
into
its
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
day
that
the
value
of
the
security
is
determined.
Over-the-counter
(OTC)
securities
are
valued
within
the
range
of
the
most
recent
quoted
bid
and
ask
prices.
Securities
that
trade
in
multiple
markets
or
on
multiple
exchanges
are
valued
according
to
the
broadest
and
most
representative
market.
Certain
equity
securities
are
valued
based
upon
fundamental
characteristics
or
relationships
to
similar
securities. 
Debt
securities
generally
trade
in
the
OTC
market
rather
than
on
a
securities
exchange.
The
Fund's
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
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.
Investments
in
open-end
mutual
funds
are
valued
at
the
closing
NAV.
The
Fund
has
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
Trading
in
securities
on
foreign
securities
stock
exchanges
and
OTC
markets
may
be
completed
before
4
p.m.
Eastern
time.
In
addition,
trading
in
certain
foreign
markets
may
not
take
place
on
every
Fund's
business
day.
Events
can
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
23
franklintempleton.com
Annual
Report
occur
between
the
time
at
which
trading
in
a
foreign
security
is
completed
and
4
p.m.
Eastern
time
that
might
call
into
question
the
reliability
of
the
value
of
a
portfolio
security
held
by
the
Fund.
As
a
result,
differences
may
arise
between
the
value
of
the
Fund's
portfolio
securities
as
determined
at
the
foreign
market
close
and
the
latest
indications
of
value
at
4
p.m.
Eastern
time.
In
order
to
minimize
the
potential
for
these
differences,
an
independent
pricing
service
may
be
used
to
adjust
the
value
of
the
Fund's
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
At
August
31,
2023,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
were
categorized
as
Level
2
within
the
fair
value
hierarchy
(referred
to
as
“market
level
fair
value”).
See
the
Fair
Value
Measurements
note
for
more
information.
When
the
last
day
of
the
reporting
period
is
a
non-business
day,
certain
foreign
markets
may
be
open
on
those
days
that
the
Fund's
NAV
is
not
calculated,
which
could
result
in
differences
between
the
value
of
the
Fund's
portfolio
securities
on
the
last
business
day
and
the
last
calendar
day
of
the
reporting
period.
Any
security
valuation
changes
due
to
an
open
foreign
market
are
adjusted
and
reflected
by
the
Fund
for
financial
reporting
purposes.
b.
Foreign
Currency
Translation 
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Fund
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
The
Fund
does
not
separately
report
the
effect
of
changes
in
foreign
exchange
rates
from
changes
in
market
prices
on
securities
held.
Such
changes
are
included
in
net
realized
and
unrealized
gain
or
loss
from
investments
in
the
Statement of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Securities
Lending
The
Fund
participates
in
an
agency
based
securities
lending
program
to
earn
additional
income.
The
Fund
receives
collateral
in
the
form
of
cash
and/or
U.S.
Government
and
Agency
securities
against
the
loaned
securities
in
an
amount
equal
to
at
least
102%
of
the
fair
value
of
the
loaned
securities.
Collateral
is
maintained
over
the
life
of
the
loan
in
an
amount
not
less
than
100%
of
the
fair
value
of
loaned
securities,
as
determined
at
the
close
of
Fund
business
each
day;
any
additional
collateral
required
due
to
changes
in
security
values
is
delivered
to
the
Fund
on
the
next
business
day.
Any
cash
collateral
received
is
deposited
into
a
joint
cash
account
with
other
funds
and
is
used
to
invest
in
a
money
market
fund
managed
by
Franklin
Advisers,
Inc.,
an
affiliate
of
the
Fund.
Additionally,
at
August
31,
2023,
the
Fund
held
$46,526,648
in
U.S.
Government
and
Agency
securities
as
collateral.
These
securities
are
held
as
collateral
in
segregated
accounts
with
the
Fund’s
custodian.
The
Fund
cannot
repledge
or
resell
these
securities
held
as
collateral.
As
such,
the
non-cash
collateral
is
excluded
from
the
Statement
of
Assets
and
Liabilities.
The
Fund
may
receive
income
from
the
investment
of
cash
collateral,
in
addition
to
lending
fees
and
rebates
paid
by
the
borrower.
Income
from
securities
loaned,
net
of
fees
paid
to
the
securities
lending
agent
and/or
third-party
vendor,
is
reported
separately
in
the
Statement
of
Operations.
The
Fund
bears
the
market
risk
with
respect
to
any
cash
collateral
investment,
securities
loaned,
and
the
risk
that
the
agent
may
default
on
its
obligations
to
the
Fund.
If
the
borrower
defaults
on
its
obligation
to
return
the
securities
loaned,
the
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation 
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
24
franklintempleton.com
Annual
Report
Fund
has
the
right
to
repurchase
the
securities
in
the
open
market
using
the
collateral
received.
The
securities
lending
agent
has
agreed
to
indemnify
the
Fund
in
the
event
of
default
by
a
third
party
borrower.
d.
Income
and
Deferred
Taxes
It
is the
Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. The
Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The
Fund
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which it
invests.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Fund
invests.
When
a
capital
gain
tax
is
determined
to
apply,
the
Fund
records
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
As
a
result
of
several
court
cases,
in
certain
countries
across
the
European
Union, the
Fund
filed
additional
tax
reclaims
for
previously
withheld
taxes
on
dividends
earned
in
those
countries
(EU
reclaims). Income
recognized,
if
any,
for
EU
reclaims
is
reflected
as
other
income
in
the
Statement
of
Operations
and
any
related
receivable,
if
any,
is
reflected
as
European
Union
tax
reclaims
in
the
Statement
of
Assets
and
Liabilities.
Any
fees
associated
with
these
filings
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
When
uncertainty
exists
as
to
the
ultimate
resolution
of
these
proceedings,
the
likelihood
of
receipt
of
these
EU
reclaims,
and
the
potential
timing
of
payment,
no
amounts
are
reflected
in
the
financial
statements.
For
U.S.
income
tax
purposes,
EU
reclaims
received
by
the
Fund,
if
any,
reduce
the
amount
of
foreign
taxes
Fund
shareholders
can
use
as
tax
deductions
or credits
on
their
income
tax
returns.
In
the
event
that
EU
reclaims
received
by
the
Fund
during
a
fiscal
year
exceed
foreign
withholding
taxes
paid
by
the
Fund,
and
the
Fund
previously
passed
through
to
its
shareholders
foreign
taxes
incurred
by
the
Fund
to
be
used
as
a
credit
or
deduction
on
a
shareholder’s
income
tax
return,
the
Fund
will
enter
into
a
closing
agreement
with
the
Internal
Revenue
Service
(IRS)
in
order
to
pay
the
associated
tax
liability
on
behalf
of
the
Fund’s
shareholders.
The
Fund
determined
to
enter
into
a
closing
agreement
with
the
IRS
and
recorded
the
estimated
payments
as
a
reduction
to
income,
as
reflected
in
the
Statement
of
Operations.
The
Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
August
31,
2023,
the
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests. 
e.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
Interest
income
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
Dividend
income
is
recorded
on
the
ex-dividend
date
except
for
certain
dividends
from
securities
where
the
dividend
rate
is
not
available.
In
such
cases,
the
dividend
is
recorded
as
soon
as
the
information
is
received
by
the
Fund.
Distributions
to shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Securities
Lending
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
25
franklintempleton.com
Annual
Report
f.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
g.
Guarantees
and
Indemnifications
Under
the
Fund's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Fund
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
Additionally,
in
the
normal
course
of
business,
the
Fund
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Fund's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund
that
have
not
yet
occurred.
Currently,
the
Fund
expects
the
risk
of
loss
to
be
remote.
2.
Shares
of
Beneficial
Interest
At
August
31,
2023,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
Year
Ended
August
31,
2023
Year
Ended
August
31,
2022
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
4,549,946
$38,550,465
4,785,160
$49,830,182
Shares
issued
in
reinvestment
of
distributions
..........
2,815,556
23,045,020
9,930,700
105,563,343
Shares
redeemed
...............................
(14,952,591)
(126,402,182)
(12,700,284)
(128,428,386)
Net
increase
(decrease)
..........................
(7,587,089)
$(64,806,697)
2,015,576
$26,965,139
Class
C
Shares:
Shares
sold
...................................
134,459
$1,049,583
92,217
$950,507
Shares
issued
in
reinvestment
of
distributions
..........
19,221
145,887
104,131
1,030,896
Shares
redeemed
a
..............................
(360,489)
(2,825,756)
(350,576)
(3,333,826)
Net
increase
(decrease)
..........................
(206,809)
$(1,630,286)
(154,228)
$(1,352,423)
Class
R6
Shares:
Shares
sold
...................................
1,257,472
$10,656,433
1,918,742
$20,034,439
Shares
issued
in
reinvestment
of
distributions
..........
237,526
1,955,313
698,035
7,455,014
Shares
redeemed
...............................
(1,984,060)
(16,961,934)
(1,899,728)
(19,484,819)
Net
increase
(decrease)
..........................
(489,062)
$(4,350,188)
717,049
$8,004,634
Advisor
Class
Shares:
Shares
sold
...................................
452,420
$3,874,201
670,605
$6,954,214
Shares
issued
in
reinvestment
of
distributions
..........
152,200
1,254,838
517,319
5,540,487
Shares
redeemed
...............................
(1,178,653)
(9,845,783)
(1,269,618)
(13,287,587)
Net
increase
(decrease)
..........................
(574,033)
$(4,716,744)
(81,694)
$(792,886)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
1.
Organization
and
Significant
Accounting
Policies
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
26
franklintempleton.com
Annual
Report
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Fund
are
also
officers
and/or
directors
of
the
following
subsidiaries:
a.
Management
Fees
The
Fund
pays
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
TIC
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
year
ended
August
31,
2023,
the
gross
effective
investment
management
fee
rate
was 0.880%
of
the
Fund’s
average daily
net
assets. 
Under
a
subadvisory
agreement,
FTIC,
an
affiliate
of
TIC,
provides
subadvisory
services
to
the
Fund.
The
subadvisory
fee
is
paid
by
TIC
based
on
the
Fund's
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
b.
Administrative
Fees
Under
an
agreement
with
TIC,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
TIC
based
on
the
Fund’s
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
Class
A
and
Class
C
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Fund’s
Class A reimbursement
distribution
plan,
the
Fund
reimburses
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plan,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Fund’s
Class C
compensation
distribution
plan,
the
Fund
pays
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate
for
each
class.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31.
Subsidiary
Affiliation
Templeton
Investment
Counsel,
LLC
(TIC)
Investment
manager
Franklin
Templeton
Investments
Corp.
(FTIC)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Annualized
Fee
Rate
Net
Assets
0.900%
Up
to
and
including
$200
million
0.885%
Over
$200
million,
up
to
and
including
$700
million
0.850%
Over
$700
million,
up
to
and
including
$1
billion
0.830%
Over
$1
billion,
up
to
and
including
$1.2
billion
0.805%
Over
$1.2
billion,
up
to
and
including
$5
billion
0.785%
Over
$5
billion,
up
to
and
including
$10
billion
0.765%
Over
$10
billion,
up
to
and
including
$15
billion
0.745%
Over
$15
billion,
up
to
and
including
$20
billion
0.725%
In
excess
of
$20
billion
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
27
franklintempleton.com
Annual
Report
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Fund.
These
charges
are
deducted
from
the
proceeds
of
sales
of
Fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Fund
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Fund's
shares
for
the
year:
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
Effective
October
1,
2022,
the
fees
are
based
on
an
annualized
asset
based
fee
of
0.016%
plus
a
reduced
transaction
based
fee.
Prior
to
October
1,
2022,
the
fees
were
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6, reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
year
ended
August
31,
2023,
the
Fund
paid
transfer
agent
fees
of
$1,286,677,
of
which
$342,931
was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Fund
does
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
year
ended
August
31,
2023,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
1.00%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$22,305
CDSC
retained
..............................................................................
$1,853
    aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Templeton
Global
Smaller
Companies
Fund
Non-Controlled
Affiliates
Income
from
securities
loaned
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
5.066%
$27,614
$35,475,787
$(35,503,401)
$—
$—
$—
—
$33,764
Total
Affiliated
Securities
...
$27,614
$35,475,787
$(35,503,401)
$—
$—
$—
$33,764
3.
Transactions
with
Affiliates
(continued)
c.
Distribution
Fees
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
28
franklintempleton.com
Annual
Report
g.
Waiver
and
Expense
Reimbursements
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
December
31,
202
3
.
4.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
August
31,
2023,
the
capital
loss
carryforwards
were
as
follows:
The
tax
character
of
distributions
paid
during
the
years
ended
August
31,
2023
and
2022,
was
as
follows:
At
August
31,
2023,
the
cost
of
investments,
net
unrealized
appreciation
(depreciation)
and
undistributed
ordinary
income
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of
EU
reclaims,
passive
foreign
investment
company
shares,
pass-through
entity
income
and
corporate
actions.
5.
Investment
Transactions
Purchases
and
sales
of
investments (excluding
short
term
securities) for
the
year
ended
August
31,
2023,
aggregated
$112,004,009
and
$213,675,547,
respectively. 
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$16,682,852
Long
term
................................................................................
19,416,534
Total
capital
loss
carryforwards
...............................................................
$36,099,386
2023
2022
Distributions
paid
from:
Ordinary
income
..........................................................
$6,840,920
$5,474,148
Long
term
capital
gain
......................................................
21,190,832
121,275,034
$28,031,752
$126,749,182
Cost
of
investments
..........................................................................
$675,413,091
Unrealized
appreciation
........................................................................
$284,190,103
Unrealized
depreciation
........................................................................
(53,221,498)
Net
unrealized
appreciation
(depreciation)
..........................................................
$230,968,605
Distributable
earnings:
Undistributed
ordinary
income
...................................................................
$10,280,493
3.
Transactions
with
Affiliates
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
29
franklintempleton.com
Annual
Report
6.
Concentration
of
Risk
Investing
in
foreign
securities
may
include
certain
risks
and
considerations
not
typically
associated
with
investing
in
U.S.
securities,
such
as
fluctuating
currency
values
and
changing
local,
regional
and
global
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
Political
and
financial
uncertainty
in
many
foreign
regions
may
increase
market
volatility
and
the
economic
risk
of
investing
in
foreign
securities.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
7.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
2,
2024.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the Statement
of
Operations.
During
the
year
ended
August
31,
2023,
the Fund
did
not
use
the
Global
Credit
Facility.
8.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund's financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
–
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
August
31,
2023,
in
valuing
the
Fund's
assets
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
Global
Smaller
Companies
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Bahamas
.............................
$
16,911,672
$
—
$
—
$
16,911,672
Belgium
..............................
—
13,041,346
—
13,041,346
Brazil
................................
8,672,888
—
—
8,672,888
Canada
..............................
17,539,722
—
—
17,539,722
China
...............................
—
8,818,050
—
8,818,050
Finland
..............................
—
13,796,591
—
13,796,591
France
...............................
—
968,589
—
968,589
Germany
.............................
—
41,264,469
—
41,264,469
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
30
franklintempleton.com
Annual
Report
A
reconciliation
in
which
Level
3
inputs
are
used
in
determining
fair
value
is
presented
when
there
are
significant
Level
3
assets
and/or
liabilities
at
the
beginning
and/or
end
of
the 
year
.
9.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Abbreviations
Level
1
Level
2
Level
3
Total
Templeton
Global
Smaller
Companies
Fund
(continued)
Assets:
(continued)
Investments
in
Securities:
Common
Stocks:
Hong
Kong
...........................
$
—
$
16,016,720
$
—
$
16,016,720
Hungary
.............................
9,164,137
—
—
9,164,137
India
................................
—
9,117,010
—
9,117,010
Italy
.................................
—
55,859,094
—
55,859,094
Japan
...............................
—
74,562,357
—
74,562,357
Netherlands
...........................
4,512,338
14,080,535
—
18,592,873
South
Korea
..........................
—
9,442,561
—
9,442,561
Sweden
..............................
—
21,070,620
—
21,070,620
Switzerland
...........................
8,696,783
46,642,698
—
55,339,481
Taiwan
...............................
—
54,749,010
—
54,749,010
United
Kingdom
........................
10,230,014
27,143,352
—
37,373,366
United
States
..........................
374,434,228
—
—
374,434,228
Warrants
..............................
463,171
—
—
463,171
Limited
Partnerships
......................
13,083,741
—
—
13,083,741
Short
Term
Investments
...................
—
36,100,000
—
36,100,000
Total
Investments
in
Securities
...........
$463,708,694
$442,673,002
a
$—
$906,381,696
a
Includes
foreign
securities
valued
at
$406,573,002,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
Selected
Portfolio
FHLB
Federal
Home
Loan
Banks
8.
Fair
Value
Measurements
(continued)
Templeton
Global
Smaller
Companies
Fund
Report
of
Independent
Registered
Public
Accounting
Firm
31
franklintempleton.com
Annual
Report
To
the
Board
of
Trustees
and
Shareholders
of
Templeton
Global
Smaller
Companies
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
investments,
of
Templeton
Global
Smaller
Companies
Fund
(the
"Fund")
as
of
August
31,
2023,
the
related
statement
of
operations
for
the
year
ended
August
31,
2023,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
August
31,
2023,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
August
31,
2023
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
August
31,
2023,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
August
31,
2023
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
August
31,
2023
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
August
31,
2023
by
correspondence
with
the
custodian
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
PricewaterhouseCoopers
LLP
San
Francisco,
California
October
23,
2023
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Franklin
Templeton
Group
of
Funds
since
1948.
Templeton
Global
Smaller
Companies
Fund
Tax
Information
(unaudited)
32
franklintempleton.com
Annual
Report
By
mid-February,
tax
information
related
to
a
shareholder's
proportionate
share
of
distributions
paid
during
the
preceding
calendar
year
will
be
received,
if
applicable.
Please
also
refer
to
www.franklintempleton.com
for
per
share
tax
information
related
to
any
distributions
paid
during
the
preceding
calendar
year.
Shareholders
are
advised
to
consult
with
their
tax
advisors
for
further
information
on
the
treatment
of
these
amounts
on
their
tax
returns.
The
following
tax
information
for
the
Fund
is
required
to
be
furnished
to
shareholders
with
respect
to
income
earned
and
distributions
paid
during
its
fiscal
year.
The
Fund
hereby
reports
the
following
amounts,
or
if
subsequently
determined
to
be
different,
the
maximum
allowable
amounts,
for
the
fiscal
year
ended
August
31,
2023:
Under
Section
853
of
the
Internal
Revenue
Code,
the
Fund
intend
s
t
o
elect
to
pass
through
to
its
shareholders
the
following
amounts,
or
amounts
as
finally
determined,
of
foreign
taxes
paid
and
foreign
s
ource
income
earned
by
the
Fund
during
the
fiscal
year
ended
August
31,
202
3
:
Pursuant
to:
Amount
Reported
Long-Term
Capital
Gain
Dividends
Distributed
§852(b)(3)(C)
$21,190,832
Income
Eligible
for
Dividends
Received
Deduction
(DRD)
§854(b)(1)(A)
$4,934,625
Qualified
Dividend
Income
Earned
(QDI)
§854(b)(1)(B)
$15,635,693
Section
163(j)
Interest
Earned
§163(j)
$808,684
Amount
Reported
Foreign
Taxes
Paid
$1,788,807
Foreign
Source
Income
Earned
$8,261,537
Templeton
Global
Smaller
Companies
Fund
Board
Members
and
Officers
33
franklintempleton.com
Annual
Report
The
name,
year
of
birth
and
address
of
the
officers
and
board
members,
as
well
as
their
affiliations,
positions
held
with
the
Trust,
principal
occupations
during
at
least
the
past
five
years
and
number
of
U.S.
registered
portfolios
overseen
in
the
Franklin
Templeton/Legg
Mason
fund
complex,
are
shown
below.
Generally,
each
board
member
serves
until
that
person’s
successor
is
elected
and
qualified.
Independent
Board
Members
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member
1
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Harris
J.
Ashton
(1932)
Trustee
Since
1992
119
Bar-S
Foods
(meat
packing
company)
(1981-2010).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Director,
RBC
Holdings,
Inc.
(bank
holding
company)
(until
2002);
and
President,
Chief
Executive
Officer
and
Chairman
of
the
Board,
General
Host
Corporation
(nursery
and
craft
centers)
(until
1998).
Ann
Torre
Bates
(1958)
Trustee
Since
2008
29
Ares
Strategic
Income
Fund
(closed-end
investment
management
company)
(September
2022-present);
Ares
Capital
Corporation
(specialty
finance
company)
(2010-present),
United
Natural
Foods,
Inc.
(food
distribution)
(2013-present),
formerly
,
Navient
Corporation
(loan
management,
servicing
and
asset
recovery)
(2014-2016).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Executive
Vice
President
and
Chief
Financial
Officer,
NHP
Incorporated
(manager
of
multifamily
housing)
(1995-1997);
and
Vice
President
and
Treasurer,
US
Airways,
Inc.
(until
1995).
Terrence
J.
Checki
(1945)
Trustee
Since
January
2023
119
Hess
Corporation
(exploration
of
oil
and
gas)
(2014-present).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Member
of
the
Council
on
Foreign
Relations
(1996-present);
Member
of
the
National
Committee
on
U.S.-China
Relations
(1999-present);
member
of
the
board
of
trustees
of
the
Economic
Club
of
New
York
(2013-present);
member
of
the
board
of
trustees
of
the
Foreign
Policy
Association
(2005-present);
member
of
the
board
of
directors
of
Council
of
the
Americas
(2007-present)
and
the
Tallberg
Foundation
(2018-present);
and
formerly
,
Executive
Vice
President
of
the
Federal
Reserve
Bank
of
New
York
and
Head
of
its
Emerging
Markets
and
Internal
Affairs
Group
and
Member
of
Management
Committee
(1995-2014);
and
Visiting
Fellow
at
the
Council
on
Foreign
Relations
(2014).
Mary
C.
Choksi
(1950)
Trustee
Since
2016
119
Omnicom
Group
Inc.
(advertising
and
marketing
communications
services)
(2011-present)
and
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2017-present);
and
formerly
,
Avis
Budget
Group
Inc.
(car
rental)
(2007-2020).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(investment
management
group)
(2015-2017);
Founding
Partner
and
Senior
Managing
Director,
Strategic
Investment
Group
(1987-2015);
Founding
Partner
and
Managing
Director,
Emerging
Markets
Management
LLC
(investment
management
firm)
(1987-2011);
and
Loan
Officer/Senior
Loan
Officer/Senior
Pension
Investment
Officer,
World
Bank
Group
(international
financial
institution)
(1977-1987).
Templeton
Global
Smaller
Companies
Fund
34
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member
1
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Edith
E.
Holiday
(1952)
Lead
Independent
Trustee
Trustee
since
2004
and
Lead
Independent
Trustee
since
2007
119
Hess
Corporation
(exploration
of
oil
and
gas)
(1993-present),
Santander
Consumer
USA
Holdings,
Inc.
(consumer
finance)
(2016-present);
Santander
Holdings
USA
(holding
company)
(2019-present);
and
formerly
,
Canadian
National
Railway
(railroad)
(2001-2021),
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2004-
2021),
RTI
International
Metals,
Inc.
(manufacture
and
distribution
of
titanium)
(1999-2015)
and
H.J.
Heinz
Company
(processed
foods
and
allied
products)
(1994-2013).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
or
Trustee
of
various
companies
and
trusts;
and
formerly
,
Assistant
to
the
President
of
the
United
States
and
Secretary
of
the
Cabinet
(1990-1993);
General
Counsel
to
the
United
States
Treasury
Department
(1989-1990);
and
Counselor
to
the
Secretary
and
Assistant
Secretary
for
Public
Affairs
and
Public
Liaison-United
States
Treasury
Department
(1988-1989).
J.
Michael
Luttig
(1954)
Trustee
Since
2009
119
Boeing
Capital
Corporation
(aircraft
financing)
(2006-2010).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Counselor
and
Special
Advisor
to
the
CEO
and
Board
of
Directors
of
the
Coca-Cola
Company
(beverage
company)
(2021-present);
and
formerly
,
Counselor
and
Senior
Advisor
to
the
Chairman,
CEO,
and
Board
of
Directors,
of
The
Boeing
Company
(aerospace
company),
and
member
of
the
Executive
Council
(2019-2020);
Executive
Vice
President,
General
Counsel
and
member
of
the
Executive
Council,
The
Boeing
Company
(2006-2019);
and
Federal
Appeals
Court
Judge,
United
States
Court
of
Appeals
for
the
Fourth
Circuit
(1991-2006).
David
W.
Niemiec
(1949)
Trustee
Since
2005
29
Hess
Midstream
LP
(oil
and
gas
midstream
infrastructure)
(2017-present).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Advisor,
Saratoga
Partners
(private
equity
fund);
and
formerly
,
Managing
Director,
Saratoga
Partners
(1998-2001)
and
SBC
Warburg
Dillon
Read
(investment
banking)
(1997-1998);
Vice
Chairman,
Dillon,
Read
&
Co.
Inc.
(investment
banking)
(1991-1997);
and
Chief
Financial
Officer,
Dillon,
Read
&
Co.
Inc.
(1982-1997).
Larry
D.
Thompson
(1945)
Trustee
Since
2005
119
Graham
Holdings
Company
(education
and
media
organization)
(2011-2021);
The
Southern
Company
(energy
company)
(2014-2020;
previously
(2010-
2012)
and
Cbeyond,
Inc.
(business
communications
provider)
(2010-
2012).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
Counsel,
Finch
McCranie,
LLP
(law
firm)
(2015-present);
John
A.
Sibley
Professor
of
Corporate
and
Business
Law,
University
of
Georgia
School
of
Law
(2015-present;
previously
2011-2012);
and
formerly
,
Independent
Compliance
Monitor
and
Auditor,
Volkswagen
AG
(manufacturer
of
automobiles
and
commercial
vehicles)
(2017-2020);
Executive
Vice
President
-
Government
Affairs,
General
Counsel
and
Corporate
Secretary,
PepsiCo,
Inc.
(consumer
products)
(2012-2014);
Senior
Vice
President
-
Government
Affairs,
General
Counsel
and
Secretary,
PepsiCo,
Inc.
(2004-2011);
Senior
Fellow
of
The
Brookings
Institution
(2003-2004);
Visiting
Professor,
University
of
Georgia
School
of
Law
(2004);
and
Deputy
Attorney
General,
U.S.
Department
of
Justice
(2001-2003).
Independent
Board
Members
(continued)
Templeton
Global
Smaller
Companies
Fund
35
franklintempleton.com
Annual
Report
Interested
Board
Members
and
Officers
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member
1
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Constantine
D.
Tseretopoulos
(1954)
Trustee
Since
2004
19
None
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Physician,
Chief
of
Staff,
owner
and
operator
of
the
Lyford
Cay
Hospital
(1987-present);
director
of
various
nonprofit
organizations;
and
formerly
,
Cardiology
Fellow,
University
of
Maryland
(1985-1987);
and
Internal
Medicine
Resident,
Greater
Baltimore
Medical
Center
(1982-
1985).
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member
1
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Gregory
E.
Johnson
2
(1961)
Chairman
of
the
Board,
Vice
President
and
Trustee
Chairman
of
the
Board
and
Vice
President
since
January
2023
and
Trustee
since
2007
129
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Chairman,
Chairman
of
the
Board
and
Director,
Franklin
Resources,
Inc.;
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
Vice
Chairman,
Investment
Company
Institute;
and
formerly
,
Chief
Executive
Officer
(2013-2020)
and
President
(1994-2015)
Franklin
Resources,
Inc.
Rupert
H.
Johnson,
Jr.
3
(1940)
Trustee
Since
2013
119
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
(Vice
Chairman),
Franklin
Resources,
Inc.;
Director,
Franklin
Advisers,
Inc.;
and
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Ted
P.
Becker
(1951)
Chief
Compliance
Officer
Since
June
2023
Not
Applicable
Not
Applicable
280
Park
Avenue
New
York,
NY
10017
Principal
Occupation
During
at
Least
the
Past
5
Years:
Vice
President,
Global
Compliance
of
Franklin
Templeton
(since
2020);
Chief
Compliance
Officer
of
Legg
Mason
Partners
Fund
Advisor,
LLC
(since
2006);
Chief
Compliance
Officer
of
certain
funds
associated
with
Legg
Mason
&
Co.
or
its
affiliates
(since
2006);
formerly
,
Director
of
Global
Compliance
at
Legg
Mason
(2006
to
2020);
Managing
Director
of
Compliance
of
Legg
Mason
&
Co.
(2005
to
2020).
Matthew
T.
Hinkle
(1971)
Chief
Executive
Officer
–
Finance
and
Administration
Since
2017
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Vice
President,
Franklin
Templeton
Services,
LLC;
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
and
formerly
,
Vice
President,
Global
Tax
(2012-April
2017)
and
Treasurer/Assistant
Treasurer,
Franklin
Templeton
(2009-2017).
Independent
Board
Members
(continued)
Templeton
Global
Smaller
Companies
Fund
36
franklintempleton.com
Annual
Report
Note
1:
Rupert
H.
Johnson,
Jr.
is
the
uncle
of
Gregory
E.
Johnson.
Note
2:
Officer
information
is
current
as
of
the
date
of
this
report.
It
is
possible
that
after
this
date,
information
about
officers
may
change.
Note
3:
Effective
December
31,
2022,
Robert
E.
Wade
ceased
to
be
a
trustee
of
the
Trust.
1.
We
base
the
number
of
portfolios
on
each
separate
series
of
the
U.S.
registered
investment
companies
within
the
Franklin
Templeton/Legg
Mason
fund
complex.
These
portfolios
have
a
common
investment
manager
or
affiliated
investment
managers.
2.
Gregory
E.
Johnson
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
of
Franklin
Resources,
Inc.
(Resources),
which
is
the
parent
company
of
the
Fund's
investment
manager
and
distributor.
3.
Rupert
H.
Johnson,
Jr.
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
and
a
major
shareholder
of
Resources,
which
is
the
parent
company
of
the
Fund's
investment
manager
and
distributor.
The
Sarbanes-Oxley
Act
of
2002
and
Rules
adopted
by
the
U.S.
Securities
and
Exchange
Commission
require
the
Fund
to
disclose
whether
the
Fund’s
Audit
Committee
includes
at
least
one
member
who
is
an
audit
committee
financial
expert
within
the
meaning
of
such
Act
and
Rules.
The
Fund’s
Board
has
determined
that
there
is
at
least
one
such
financial
expert
on
the
Audit
Committee
and
has
designated
each
of
Ann
Torre
Bates
and
David
W.
Niemiec
as
an
audit
committee
financial
expert.
The
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
qualify
as
such
an
expert
in
view
of
their
extensive
business
background
and
experience.
Ms.
Bates
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2008.
She
currently
serves
as
a
director
of
Ares
Capital
Corporation
(2010-present)
and
United
Natural
Foods,
Inc.
(2013-present)
and
was
formerly
a
director
of
Navient
Corporation
from
2014
to
2016,
SLM
Corporation
from
1997
to
2014
and
Allied
Capital
Corporation
from
2003
to
2010,
Executive
Vice
President
and
Chief
Financial
Officer
of
NHP
Incorporated
from
1995
to
1997
and
Vice
President
and
Treasurer
of
US
Airways,
Inc.
until
1995.
Mr.
Niemiec
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2005,
currently
serves
as
an
Advisor
to
Saratoga
Partners
and
was
formerly
its
Managing
Director
from
1998
to
2001
and
serves
as
a
director
of
Hess
Midstream
LP
(2017-present).
Mr.
Niemiec
was
formerly
a
director
of
Emeritus
Corporation
from
1999
to
2010
and
OSI
Pharmaceuticals,
Inc.
from
2006
to
2010,
Managing
Director
of
SBC
Warburg
Dillon
Read
from
1997
to
1998,
and
was
Vice
Chairman
from
1991
to
1997
and
Chief
Financial
Officer
from
1982
to
1997
of
Dillon,
Read
&
Co.
Inc.
As
a
result
of
such
background
and
experience,
the
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
have
each
acquired
an
understanding
of
generally
accepted
accounting
principles
and
financial
statements,
the
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member
1
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Susan
Kerr
(1949)
Vice
President
–
AML
Compliance
Since
2021
Not
Applicable
Not
Applicable
280
Park
Avenue
New
York,
NY
10017
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Compliance
Analyst,
Franklin
Templeton;
Chief
Anti-Money
Laundering
Compliance
Officer,
Legg
Mason
&
Co.,
or
its
affiliates;
Anti
Money
Laundering
Compliance
Officer;
Senior
Compliance
Officer,
LMIS;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Christopher
Kings
(1974)
Chief
Financial
Officer,
Chief
Accounting
Officer
and
Treasurer
Since
2022
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Treasurer,
U.S.
Fund
Administration
&
Reporting;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Manraj
S.
Sekhon
(1969)
President
and
Chief
Executive
Officer
–
Investment
Management
Since
2018
Not
Applicable
Not
Applicable
7
Temasek
Blvd.
Suntec
Tower
1,
#38-03
Singapore
038987
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chief
Investment
Officer,
Franklin
Templeton
Emerging
Markets
Equity;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Navid
J.
Tofigh
(1972)
Vice
President
and
Secretary
Vice
President
Since
2015
and
Secretary
since
September
2023
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Interested
Board
Members
and
Officers
(continued)
Templeton
Global
Smaller
Companies
Fund
37
franklintempleton.com
Annual
Report
general
application
of
such
principles
in
connection
with
the
accounting
estimates,
accruals
and
reserves,
and
analyzing
and
evaluating
financial
statements
that
present
a
breadth
and
level
of
complexity
of
accounting
issues
generally
comparable
to
those
of
the
Fund,
as
well
as
an
understanding
of
internal
controls
and
procedures
for
financial
reporting
and
an
understanding
of
audit
committee
functions.
Ms.
Bates
and
Mr.
Niemiec
are
independent
Board
members
as
that
term
is
defined
under
the
applicable
U.S.
Securities
and
Exchange
Commission
Rules
and
Releases.
The
Statement
of
Additional
Information
(SAI)
includes
additional
information
about
the
board
members
and
is
available,
without
charge,
upon
request.
Shareholders
may
call
(800)
DIAL
BEN/342-5236
to
request
the
SAI.
Interested
Board
Members
and
Officers
(continued)
Templeton
Global
Smaller
Companies
Fund
Shareholder
Information
38
franklintempleton.com
Annual
Report
Board
Approval
of
Investment
Management
Agreements
TEMPLETON
GLOBAL
SMALLER
COMPANIES
FUND
(Fund)
March
27,
2023
15(c)
Meeting
At
a
meeting
held
on
March
27,
2023
(March
Meeting),
the
Board
of
Trustees
(Board)
of
the
Fund,
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(Independent
Trustees),
reviewed
and
approved
the
continuance
of
the
investment
management
agreement
between
Templeton
Investment
Counsel,
LLC
(TICL)
and
the
Fund
and
the
investment
sub-advisory
agreement
between
TICL
and
Franklin
Templeton
Investments
Corp.
(Sub-Adviser),
an
affiliate
of
TICL,
on
behalf
of
the
Fund
(each
a
Management
Agreement)
for
the
period
May
1,
2023
through
June
30,
2023
(Stub
Period).
The
Independent
Trustees
noted
that
the
Fund’s
annual
contract
review
was
historically
held
at
the
February
Board
meeting
and
that
management
proposed
to
move
the
contract
review
to
the
May
Board
meeting.
The
Independent
Trustees
further
noted
management’s
explanation
that,
to
effect
this
change,
the
Board
needed
to
consider
the
renewal
of
the
Fund’s
Management
Agreements
prior
to
their
current
April
30,
2023
expiration
date.
The
Independent
Trustees
also
noted
that
management
would
ask
them
to
consider
the
continuation
of
the
Management
Agreements
again
at
the
May
Board
meeting
for
the
12-month
period
beginning
July
1,
2023.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
continuation
of
each
Management
Agreement
for
the
Stub
Period.
TICL
and
the
Sub-Adviser
are
each
referred
to
herein
as
a
Manager.
In
considering
the
continuation
of
each
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
each
Manager
at
the
March
Meeting
and
throughout
the
year
at
meetings
of
the
Board
and
its
committees.
The
Board
also
reviewed
and
considered
information
provided
in
response
to
a
detailed
set
of
requests
for
information
submitted
to
each
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
March
Meeting,
the
Independent
Trustees
held
a
virtual
contract
renewal
meeting
at
which
the
Independent
Trustees
first
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters;
then
met
with
management
to
request
additional
information
that
the
Independent
Trustees
reviewed
and
considered
prior
to
and
at
the
March
Meeting.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
each
Management
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent
and
quality
of
the
services
provided
by
each
Manager;
(ii)
the
investment
performance
of
the
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
each
Manager
and
its
affiliates
from
the
relationship
with
the
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
the
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors
(Factors).
In
approving
the
continuance
of
each
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
each
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
the
Management
Agreement
is
in
the
best
interests
of
the
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
each
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
each
Manager,
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
the
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
each
Manager
and
its
affiliates;
and
management
fees
charged
by
each
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements.
The
Board
acknowledged
Templeton
Global
Smaller
Companies
Fund
Shareholder
Information
39
franklintempleton.com
Annual
Report
management’s
continued
development
of
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
including
various
regulatory
initiatives
and
continuing
geopolitical
concerns.
The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Managers’
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
technological
innovation
and
advancement
and
investments
to
promote
alternative
investing.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
by
each
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
the
Fund
over
various
time
periods
ended
December
31,
2022.
The
Board
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
also
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
a
customized
peer
group
(Performance
Customized
Peer
Group)
selected
by
the
Manager.
The
Board
further
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
the
Fund’s
performance
results
is
below.
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
global
small-/mid-cap
funds.
The
Customized
Performance
Group
also
provided
for
the
Board’s
consideration
included
funds
that
are
value
style
and
invest
only
in
stocks
that
have
total
market
capitalizations
not
exceeding
the
lesser
of:
(1)
the
highest
float-adjusted
market
capitalization
in
the
Fund’s
benchmark
(MSCI
All
Country
World
Small
Cap
Index-NR),
or
(2)
$10
billion,
at
the
time
of
purchase.
The
Board
noted
that
the
Fund’s
annualized
total
return
for
the
one-year
period
was
above
the
median
of
its
Performance
Universe,
but
for
the
three-,
five-
and
10-year
periods
was
below
the
median
of
its
Performance
Universe.
The
Board
further
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
five-,
and
10-year
periods
was
equal
to
the
median
of
its
Customized
Performance
Group,
but
for
the
three-year
period
was
below
the
median
of
its
Customized
Performance
Group.
The
Board
further
noted
the
small
size
of
the
Fund’s
Customized
Performance
Group
for
the
five-
and
10-year
periods
and
that
therefore
no
quintile
information
was
provided
for
the
Fund
for
those
periods.
The
Board
discussed
the
performance
of
the
Fund
with
management
and
management
explained
that
the
Performance
Universe
for
the
Fund
was
not
directly
comparable
to
the
Fund
as
the
Performance
Universe
is
not
comprised
solely
of
small-capitalization
funds,
but
also
includes
funds
with
larger
market
capitalizations.
Management
also
explained
that
the
Fund
is
limited
to
purchasing
securities
with
market
capitalizations
that
do
not
exceed
the
lesser
of
(i)
the
highest
float-adjusted
market
capitalization
in
the
Fund’s
benchmark,
or
(2)
$10
billion,
at
the
time
of
purchase,
whereas
other
funds
in
the
Performance
Universe
can
purchase
securities
with
higher
market
capitalizations.
Management
also
explained
that
the
foregoing
are
the
reasons
management
asked
Broadridge
to
include
the
Performance
Customized
Peer
Group
which
is
comprised
of
value
style
funds
that
invest
only
in
stocks
that
have
total
market
capitalizations
that
do
not
exceed
the
lesser
of
(i)
the
highest
float-adjusted
market
capitalization
in
the
Fund’s
benchmark,
or
(2)
$10
billion,
at
the
time
of
purchase,
which
is
consistent
with
the
Fund’s
strategy.
Management
further
explained
that
particular
sectors
(such
as
consumer
discretionary,
industrials
and
information
technology)
and
overall
stock
selection
contributed
to
the
Fund’s
relative
longer-term
underperformance,
as
well
as
the
Fund’s
underweight
position
to
US
stocks
which
led
market
returns
in
recent
years.
Management
then
discussed
with
the
Board
the
actions
that
are
being
taken
in
an
effort
to
improve
the
performance
of
the
Fund,
noting
its
confidence
in
the
current
portfolio
positioning
of
the
Fund
and
enhancements
made
to
portfolio
management
team
resources.
The
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
the
Stub
Period,
while
management’s
efforts
continue
to
be
closely
monitored.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
Templeton
Global
Smaller
Companies
Fund
Shareholder
Information
40
franklintempleton.com
Annual
Report
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
the
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
as
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
or
semi-annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
and
Management
Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
analysis
conducted
by
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges,
and
the
actual
total
expense
ratio,
for
comparative
consistency,
was
shown
for
Class
A
shares
for
the
Fund
and
for
each
other
fund
in
the
Expense
Group.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
The
Expense
Group
for
the
Fund
included
the
Fund,
one
other
global
small-/mid-cap
fund,
four
global
multi-cap
value
funds,
five
global
multi-cap
core
funds,
one
global
multi-cap
growth
fund
and
four
global
large-cap
growth
funds.
The
Board
noted
that
the
Management
Rate
and
actual
total
expense
ratio
for
the
Fund
were
above
the
medians
of
its
Expense
Group.
The
Board
discussed
with
management
the
composition
of
the
Fund’s
Expense
Group
and
management
explained
that
the
Expense
Group
is
not
directly
comparable
to
the
Fund,
as
none
of
the
other
15
funds
in
the
Expense
Group
focused
on
investments
in
smaller
capitalization
companies
similar
to
the
Fund.
Management
also
explained
that
the
Fund’s
quintile
rankings
improved
to
the
first
quintile
for
the
Management
Rate
and
the
actual
total
expense
ratio
when
the
Fund’s
expenses
were
compared
to
those
of
a
customized
expense
group,
which
was
comprised
of
funds
that
are
value
style
funds
that
invest
only
in
stocks
that
have
total
market
capitalizations
that
do
not
exceed
the
lesser
of:
(i)
the
highest
float-adjusted
market
capitalization
in
the
Fund’s
benchmark,
or
(2)
$10
billion,
at
the
time
of
purchase.
The
Board
noted
that
the
Fund’s
Sub-Adviser
is
paid
by
TICL
out
of
the
management
fee
TICL
receives
from
the
Fund
and
that
the
allocation
of
the
fee
between
TICL
and
the
Sub-
Adviser
reflected
the
services
provided
by
each
to
the
Fund.
After
consideration
of
the
above,
the
Board
concluded
that
the
Management
Rate
charged
to
the
Fund
and
the
sub-
advisory
fee
paid
to
the
Sub-Adviser
are
reasonable.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
each
Manager
and
its
affiliates
in
connection
with
the
operation
of
the
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2022,
being
the
most
recent
fiscal
year-end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Fund’s
profitability
report
presentations
from
prior
years.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
by
the
Manager
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Fund’s
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
the
Managers
and
their
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability,
as
well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
each
Manager
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Fund,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
each
Manager
and
its
affiliates
might
derive
ancillary
benefits
from
fund
operations,
including
revenues
generated
from
transfer
agent
services,
potential
benefits
resulting
from
personnel
and
systems
enhancements
necessitated
by
fund
growth,
as
well
as
increased
leverage
with
service
providers
and
counterparties.
Based
upon
its
consideration
of
all
these
Templeton
Global
Smaller
Companies
Fund
Shareholder
Information
41
franklintempleton.com
Annual
Report
factors,
the
Board
concluded
that
the
level
of
profits
realized
by
each
Manager
and
its
affiliates
from
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
the
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
each
Manager
may
realize
economies
of
scale,
if
any,
as
the
Fund
grows
larger
and
whether
the
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints,
which
operate
generally
to
share
any
economies
of
scale
with
the
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
the
Fund
grows
in
size.
The
Board
considered
management’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
each
Manager
incurs
across
the
FT
family
of
funds
as
a
whole.
The
Board
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
each
Manager
and
its
affiliates,
the
Fund’s
management
fee
structure
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
each
Management
Agreement
for
the
Stub
Period.
May
24,
2023
15(c)
Meeting
At
a
meeting
held
on
May
24,
2023
(May
Meeting),
the
Board
reviewed
and
approved
each
Management
Agreement
for
an
additional
twelve-month
period
beginning
July
1,
2023.
The
Board
noted
its
review
and
consideration
of
the
information
it
received
in
connection
with
both
the
March
Meeting
and
the
May
Meeting.
In
particular,
the
Board
reviewed
and
considered
information
provided
in
response
to
a
follow-up
set
of
requests
for
information
submitted
to
the
Managers
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees,
which
included
information
on
Fund
performance
for
the
one-,
three-
and
five-year
periods
ended
March
31,
2023
and
the
other
Factors.
The
Board
noted
the
recent
improving
absolute
and
relative
performance
of
the
Fund.
The
Board
determined
that
the
conclusions
it
made
at
the
March
Meeting
had
not
changed.
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
Factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
the
Management
Agreements
for
an
additional
twelve-month
period
beginning
July
1,
2023.
Liquidity
Risk
Management
Program
Each
of
the
Franklin
Templeton
and
Legg
Mason
Funds
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
Franklin
Templeton
and
Legg
Mason
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Legal,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
Templeton
Global
Smaller
Companies
Fund
Shareholder
Information
42
franklintempleton.com
Annual
Report
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2023,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2022.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
Proxy
Voting
Policies
and
Procedures
The
Fund’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Fund’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Fund’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Schedule
of
Investments
The
Fund
files
a
complete
schedule
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.
gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
the
availability
of,
the
Fund’s
financial
reports
every
six
months.
In
addition,
you
will
receive
as
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
“householding,”
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
103
A
10/23
©
2023
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
Annual
Report
and
Shareholder
Letter
Templeton
Global
Smaller
Companies
Fund
Investment
Manager
Distributor
Shareholder
Services
Templeton
Investment
Counsel,
LLC
Franklin
Distributors,
LLC
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
Item 2. Code of Ethics.
 
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
 
(c) N/A
 
(d) N/A
 
(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
 
Item 3. Audit Committee Financial Expert.
 
(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.
 
(2) The audit committee financial experts are Ann Torre Bates and
David W. Niemiec and they are "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
 
Item 4. Principal Accountant Fees and Services.
 
(a)      Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $43,485 for the fiscal year ended August 31, 2023 and $45,764 for the fiscal year ended August 31, 2022.
 
(b)      Audit-Related Fees
The aggregate fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4 were $3,000 for the fiscal year ended August 31, 2023 and $3,000 for the fiscal year ended August 31, 2022. The services for which these fees were paid included attestation services.
 
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.  
 
(c)      Tax Fees
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.
 
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $70,000 for the fiscal year ended August 31, 2023, and $0 for the fiscal year ended August 31, 2022. The services for which these fees were paid included global access to tax platform International Tax View.
 
(d)      All Other Fees
There were no fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4.
 
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4
 
were $37,215 for the fiscal year ended August 31, 2023 and $181,126 for the fiscal year ended August 31, 2022. The services for which these fees were paid included professional fees in connection with SOC 1 reports, fees in connection with license for accounting and business knowledge platform Viewpoint, and fees in connection with license for employee development tool ProEdge.
 
(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:
 
      (i)   pre-approval of all audit and audit related services;
 
      (ii)  pre-approval of all non-audit related services to be provided to the Fund by the auditors;
 
      (iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and
 
      (iv)  establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
 
(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
 
(f) No disclosures are required by this Item 4(f).
 
(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $110,215 for the fiscal year ended August 31, 2023 and $184,126 for the fiscal year ended August 31, 2022.
 
(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
 
(i) N/A
 
 
(j) N/A
 
 
Item 5. Audit Committee
of Listed Registrants.
                    N/A
 
 
Item 6. Schedule of Investments.
                                 N/A
 
 
Item 7
. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.                                 N/A
 
 
Item 8. Portfolio Managers of Closed-End Management Investment Companies.  N/A
 
 
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.                                N/A
 
 
Item 10. Submission of Matters to a Vote of Security Holders.
 
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.
 
 
Item 11. Controls and Procedures.
 
(a)
Evaluation of Disclosure Controls and Procedures. 
 
The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
 
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
 
(b) Changes in Internal Controls:
There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
 
 
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company.                  N/A
 
 
Item 13. Exhibits.
 
(a)(1) Code of Ethics
 
 
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
 
 
(a)(2)(1) There were no written solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.
 
(a)(2)(2) There was no change in the Registrant’s independent public accountant during the period covered by the report.
 
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
 
 







 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
TEMPLETON GLOBAL SMALLER COMPANIES FUND
 
 
By S\MATTHEW T. HINKLE______________________
Matthew T. Hinkle
      Chief Executive Officer - Finance and Administration
Date  October 30, 2023
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
 
By S\MATTHEW T. HINKLE______________________
Matthew T. Hinkle
      Chief Executive Officer - Finance and Administration
Date  October 30, 2023
 
 
By S\CHRISTOPHER KINGS______________________
      Christopher Kings
      Chief Financial Officer, Chief Accounting Officer and Treasurer
Date  October 30, 2023