Registered in Scotland, no SC192761
Franklin Global Trust plc
(previously known as Martin Currie Global Portfolio Trust plc)
Annual report – year to 31 January 2025
Franklin
Global Trust
1
Welcome to the annual report for Franklin Global Trust plc (the 'Company').
Our objective
The objective is to produce long-term returns in excess of the total return from the MSCI All Country World index.
Morningsta
r Sustainability Rating:
Source: December 2023 © Morningstar, Inc. All rights reserved. The information herein is not represented or warranted to be acc
urate, complete or timely.
Past performance is no guarantee of future results.
PRI – Principles for Responsible Investment. A copy of the PRI's assessment of Martin Currie and its methodology is available
on request.
Source: Martin Currie and PRI 2024. Ratings relate to the period 1 January 2023 - 31 December 2023. Copies of the PRI's assessm
ent and transparency
report are available on request.
Martin Currie is a signatory of
Net Zero Asset Managers Initiative
(‘
NZAMI’), 2021.
Martin Currie has been a UNPRI
signatory since July 2009
Ranking vs peers
across all three pillars
1
Top quartile
Policy governance
and strategy
Condence
building measures
Direct – Listed equity
– active fundamental
A unique blend of features and benefits enjoyed by our shareholders.
Global opportunity
A global investment remit
provides the widest possible
opportunity to invest in the
world’s best companies,
irrespective of the country which
they are listed in. Shareholders
benefit from a ready-made
global equity portfolio which
is diversified across different
geographic markets and a range
of economic sectors.
High conviction and high
quality
As active investors handpicking
25-40 companies for the
portfolio, we can concentrate
on businesses or sectors we
believe offer the most sustainable
growth over the long term. A
concentrated portfolio means
we have meaningful allocations
in each stock and we believe that
gives us the best opportunity to
outperform the markets.
Leading ESG characteristics
You don’t have to compromise
your investment goals and desire to
invest in sustainable companies. Our
Environmental, Social and Governance
('ESG') credentials are exceptional and
we have been awarded the highest
possible Morningstar Sustainability
Rating™ of '5 Globes'. We undertake
over 50 ESG risk assessments on every
company. We research and engage
with companies to ensure they trend
towards best practice.
Established track record
Established in 1999,
shareholders have enjoyed
share price growth ahead of the
benchmark over that period.
Shareholder-friendly benefits
Investment trusts are listed on
the London Stock Exchange
and their company structure
offers many distinct features
that can enhance performance
and benefits for shareholders.
Low charges
With low ongoing charges and no
performance fees, more of your
money is invested in the markets.
Strategic report
Chair’s statement 6
Manager’s review 9
Our investment manager's process 15
ESG & our investment manager's process 17
Portfolio summary 18
Largest 10 holdings 21
Business review 24
Governance
Board of Directors 33
Corporate governance statement 34
Report of the Directors 40
Audit committee report 47
Directors’ remuneration statement 49
Financial review
Independent auditors’ report 53
Statement of comprehensive income 59
Statement of financial position 60
Statement of changes in equity 61
Statement of cash flow 62
Notes to the financial statements 64
Investor information
Directors and advisers 78
Alternative performance measures 79
Glossary 81
Ways to invest in the Company 83
Notice of annual general meeting 84
Our website 89
Contents
1
2
3
4
Financial highlights
Key data
Year ended
31 January 2025
Year ended
31 January 2024
Net asset value per share ('NAV')
1
382.7p 360.5p
NAV total return
2
7.3% 11.2%
Share price 381.0p 350.0p
Share price total return
2
10.1% 11.1%
MSCI All Country World index (benchmark) total return
2, 3
23.7% 10.9%
Ongoing charges (as a percentage of shareholders’ funds)
4
0.65% 0.64%
Revenue return per share
5
2.01p 2.37p
Dividend per share 4.20p 4.20p
Past performance is not a guide to future returns. All returns are total returns unless otherwise stated.
Source: Martin Currie Investment Management.
The net asset value per share total return is calculated using the cum income net asset value with dividends reinvested on the ex-dividend date. This is an
Alternative Performance Measure, see page 79 for more details.
Total return is the combined effect of the rise and fall in the share price, net asset value or benchmark together with any dividend paid. See page 79 for more details
on Alternative Performance Measures.
The benchmark with effect from 1 February 2020 is the MSCI All Country World index. Prior to this, the benchmark was the FTSE World index to 31 January 2020.
Prior to this, the benchmark was the FTSE All-Share index to 31 May 2011.
Ongoing charges (as a percentage of shareholders’ funds) are calculated using average net assets over the period. The ongoing charges figure has been calculated
in line with the Association of Investment Companies ('AIC') recommended methodology. This is an Alternative Performance Measure, see page 79 for more details.
For details of calculation, refer to note 5 on page 67.
Performance
7.3%
Net asset value total
return for the year.
10.1%
Share price total
return for the year.
4.20p
Annual dividend
per share.
As at
31 January
Revenue
return
per share
Dividend
per share
Net asset
value per
share
Average
(discount)/
premium
during the year
Investments
£000
Net assets
£000
Ongoing
charges
2016 4.15p 4.15p 176.3p (0.4%) 174,976 178,107 0.71%
2017 4.21p 4.20p 223.9p (0.5%) 215,619 216,497 0.74%
2018 3.72p 4.20p 246.1p (0.7%) 223,192 227,186 0.78%
2019 3.47p 4.20p 245.5p (0.9%) 203,818 205,575 0.63%
2020 2.52p 4.20p 301.9p (0.1%) 251,714 251,695 0.61%
2021 1.97p 4.20p 358.2p (0.4%) 327,988 303,571 0.58%
2022 1.36p 4.20p 364.6p 0.7% 339,535 315,834 0.68%
2023 2.16p 4.20p 328.2p (1.4%) 277,606 249,768 0.61%
2024 2.37p 4.20p 360.5p (1.3%) 264,787 256,777 0.64%
2025 2.01p 4.20p 382.7p (2.1%) 230,275 232,226 0.65%
Performance since inception
20032001 2005 2007 2009 2011 20152013 20192017 20232021
2025
(%)
400
600
300
500
700
800
200
100
0
(100)
1999
Share price total return 691.4%
NAV total return 532.8%
Benchmark 642.0%
* On 31 May 2011, the fund's benchmark changed from FTSE All Share to FTSE World, then MSCI ACWI Net from 31 Jan 2020.
10 year record
Past performance is not a guide to future returns. All returns are total returns unless otherwise stated.
Source: Martin Currie Investment Management.
1: Strategic report
Dear Shareholder
The Company celebrated its twenty fifth year of existence in its
present form during the financial year. On 26 September 2024,
I was honoured to open the London Stock Exchange and make
a short speech to mark the occasion. As can be seen on page 4,
shareholders have enjoyed good returns over the quarter century.
However, nothing stays the same forever and we now feel it is
the right time to relaunch your Company as Franklin Global Trust
plc; this marks a pivotal moment in the evolution of the Company.
This change reflects a series of positive developments aimed
at delivering enhanced shareholder returns which I outline
below. Before turning to these matters, I would like to cover the
Company's performance for the financial year.
Performance and returns
A positive share price total return of 10.1% has been achieved over
the financial year to 31 January 2025 alongside a Net Asset Value
(‘NAV’) total return of 7.3%. While positive, this lagged the benchmark
return of 23.7%.
Although we are glad to see the increase in NAV the Board is clearly
disappointed by the relative performance achieved during the
year and Franklin Templeton are well aware of our feelings on the
matter. We welcome the additional resources that are being made
available to the investment team as outlined in Enhanced Investment
Team below and trust that these will help the Company to achieve
improved performance going forward. The Board is pleased with
the reduction in fund management fees that have been negotiated
with the manager as referred to in Management Fees below and we
have also been seeking other cost reductions from external service
providers. I was in contact with the largest shareholders around
the end of the financial year and we welcome engagement with all
owners of the Company.
It has been a year when there has been considerable commentary
about activist investors and investment trust discount levels. Against
this backdrop it is particularly relevant that your Company continues
to operate a zero discount policy which enables investors to buy and
sell the shares at a level close to NAV in normal market conditions.
It is clearly the case that active managers have struggled to better
the returns achieved by global indices in recent periods as the very
largest US companies have performed so strongly. It is also true that
investment trends such as these always come to an end although it
is difficult to predict the precise events that will trigger such a change
in leadership.
Chair’s statement
Christopher Metcalfe, Chair
‘A positive share price total
return of 10.1% has been
achieved over the financial
year to 31 January 2025
alongside a Net Asset Value
(‘NAV’) total return of 7.3%.’
Enhanced Investment Team
Franklin Global Trust plc will continue to hold a concentrated
portfolio of 25-40 growth stocks. However the inputs into the
Company’s investment process will be deepened. The existing
team of nine will now be part of the Franklin Equity Group
of sixty five investment professionals, including analysts and
sector specialists, based in San Mateo, New York and London
as well as Edinburgh. Zehrid Osmani and his present colleagues
will join in the Franklin Equity Group’s daily meetings, have
greater access to senior company management at potential
investee companies and benefit from a significantly larger
research budget. The combined team will now be managing
over £110 billion of assets in total.
Management Fees
In February 2025 we agreed with Franklin Templeton
Investment Trust Management Limited that, with effect from
1 March 2025, the investment management fee would be
reduced from 0.45% to 0.40% of NAV (excluding income)
1
per
annum. The new fee level will maintain a competitive ongoing
charge and contribute to increasing shareholder value.
Income and Dividends
Net revenue earnings per share for the period amounted to
2.01 pence. The Company has paid three interim dividends of
0.9 pence per share and will pay a fourth interim dividend of
1.5 pence per share on 30 April 2025 to shareholders on the
register on 4 April 2025. The total dividends with respect to the
year to 31 January 2025 will be 4.2 pence per share, maintaining
the same total dividend as the previous year.
Capital growth is the primary focus of our investment manager
and the investment strategy is not constrained by any income
target. Nevertheless, the Board recognises that dividends
are important for many shareholders and hence continues to
maintain the Company’s dividend in line with previous levels.
The Company’s Articles of Association permit the distribution
of realised capital gains and the Company has substantial
distributable reserves. The Board has again used these
alongside revenue earnings to maintain the dividend, while not
impinging on the investment manager’s approach to managing
the portfolio.
For the purposes of calculating management fees, current period net income is
excluded from the calculation of asset value.
‘As the Company evolves into Franklin Global Trust plc, we enter
a new chapter.’
Gearing
In the light of the outlook for markets and the fact we operate
a zero discount policy we took the decision to remove our
gearing. Therefore in November 2024 the Company’s £10
million debt facility was repaid in full and closed.
Board
We announced on 5 March 2025 that Krishna
Shanmuganathan had been appointed as a Director with effect
from 1 April 2025. Krishna is chair of both abrdn Asia Focus plc
and Weiss Korea Opportunities Fund. He has had a varied and
successful career in diplomacy, asset management, consulting
and corporate advisory, with a particular focus on Asia.
Gary Le Sueur will retire from the Board at the conclusion of
this year's Annual General Meeting (‘AGM’), having served as a
Director since December 2016. Gary is an experienced investor
and I would like to thank him on behalf of the Board and
shareholders for his invaluable insights into the management of
your Company.
AGM
I am pleased to invite all shareholders to attend our AGM in
person at the offices of Franklin Templeton, 5 Morrison Street,
Edinburgh EH3 8BH on Thursday 19 June 2025 at 11.30am. We
do recognise that some shareholders may be unable to come
to the AGM and if you have any questions about the annual
report, the investment portfolio or any other matter relevant to
the Company, please write to me either via email at
ftcosec@franklintempleton.com or by post to The Company
Secretary, Franklin Global Trust plc, 5 Morrison Street
Edinburgh EH3 8BH. If you are unable to attend, I urge you to
submit your proxy votes in good time for the meeting, following
the instructions enclosed with the proxy form.
Stay in touch
Visit our new website at www.franklinglobaltrust.com where
you can see the latest information, a variety of manager
updates, stock story videos that showcase companies in our
portfolio, webinars, events and much more. Our monthly emails
deliver all of the updates to your inbox, so I recommend you
subscribe today if you have not already done so.
The Board is always interested to hear shareholders’ views.
Please contact me if you have any questions or points
regarding your Company by email at:
ftcosec@franklintempleton.com.
Outlook
The period since the Company’s year end has been volatile as
markets seek to adapt to the ever changing picture on tariffs
and their effect on global economies. It is difficult to predict the
outcomes with any degree of certainty. However, the Board will
continue to monitor the investment performance closely. As
the Company evolves into Franklin Global Trust plc, we enter a
new chapter. I thank all shareholders for their ongoing loyalty
and believe that the actions taken will prove beneficial. We look
forward to the next chapter with cautious optimism, trusting
that the enhancements to our investment team will generate
long-term value for our shareholders.
Christopher Metcalfe
Chair
17 April 2025
Manager's review
Overview of the year to 31 January 2025
The return that we produced for shareholders over the last financial
year was disappointing. The NAV total return was +7.3%
1
, whilst
the MSCI World index returned +23.7%. The market was unusually
concentrated during the period, with the ‘Magnificent 7’
2
accounting
for c. 35% of the performance of the index.
We do not follow any index in selecting the 25-40 stocks in our
portfolio and invest for the long term in quality growth companies
that have superior returns and growth profiles, and have leadership
positions in the areas that they operate in. We do not respond to
short-term events. Our performance was affected by a combination
of (i) a sizeable underweight to the US equity market, which was the
strongest performing large region, (ii) by an overweight to European
equities, which were amongst the weakest regional markets, and
(iii) by an under-exposure to the ‘Magnificent 7’. Regionally, our
robust and consistent valuation discipline has led us to find more
opportunities in Europe in particular, given the valuation differential
vs the US. China was a relatively weak market over the period, and
our underweight to that region proved to be correct.
The emphatic win by Donald Trump in the US elections in November
further extended a rally in US equities on the basis of investors’ belief
in US exceptionalism. This further weighed on relative performance,
given our underweight in US equities. However, as set out under
our discussion of the outlook below, the level of uncertainty in the
market, and therefore the volatility, has spiked up considerably as a
result of a broad range of tariff announcements on the USA's trading
partners following the financial year end.
The ‘Magnificent 7’ were important contributors to the performance
of the US and the Global markets last year, as the Artificial
Intelligence (‘AI’) opportunity was seen as supporting these
companies’ earnings outlook. Whilst we had sizeable exposure to
the strongest performing stock, Nvidia, which alone accounted
for 10% of the index’s performance, and Microsoft, others in that
group performed strongly as well. During the year, as we evolved
our analysis on many of these large capitalisation technology
companies, we purchased positions in Apple and in Meta Platforms
(‘Meta’), which are discussed further below. We continue to see
the semiconductor industry as well positioned to harness the
AI investment cycle, given the growing need for more and faster
microchips.
All performance statistics total return: see Alternative Performance Measures
The so-called ’Magnificent 7’ stocks which are believed to be key beneficiaries of the growing
adoption of AI are Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla.
Graphics Processing Units
‘We do not follow any index
in selecting the 25-40 stocks
in our portfolio and invest
for the long term in quality
growth companies that have
superior returns and growth
profiles.’
Zehrid Osmani, Portfolio Manager
1
Key contributors to relative performance
Only four sectors outperformed the broader benchmark
during the year, namely Telecoms (+41%), Financials (+34%),
Consumer Discretionary (+32%) and Technology (+29%). The
weakest sectors were Materials (+4%), Energy (+7%), Health
Care (+7%) and Staples (+9%). Our sizeable overweight to
Health Care weighed on our performance, as post-covid
normalisation in trends continued to impact the growth of many
of our holdings. Further, Novo Nordisk had specific issues
(see below). The Consumer sector has also been an area of
weakness for the portfolio, given our exposure to luxury goods
companies (Kering and Moncler) and cosmetics companies
(L’Oréal and Estée Lauder). We have had good exposure to
the semiconductor industry, notably through Nvidia, although
the sector was volatile during the year as a result of ongoing
geopolitical uncertainty and the growing effects of restrictions
imposed on China from the US Chips and Science Act which
was introduced in 2022.
Nvidia was up very strongly over the period, with a series of
snippets confirming that the semiconductor supply chain
supporting high technology chips remained tight. Nvidia
beat sales and earnings forecasts throughout the period and
also raised future earnings projections. Early in the period,
the annual Nvidia GTC conference – an AI conference for
developers – showcased Nvidia’s new product portfolio with
the Grace-Blackwell Superchip. This reinforced investors’
perception of its strong lead against competitors, with the gap
widening in our view.
Adyen's strong performance was driven by a sustained
rebound in topline growth, which has remained above 20% for
five consecutive quarters following its unexpected slowdown
to 18% in the first half of 2023. This recovery reinforces our
conviction in Adyen’s vast market opportunity, disciplined
pricing strategy, and the unsustainable nature of a competitor-
led price war. We continue to believe that Adyen’s best-in-
class, in-house developed technology is a unique advantage.
In a highly competitive and fast-evolving landscape, Adyen's
ability to innovate remains essential to maintaining its long-term
leadership.
Constellation Software is a Canadian serial acquirer that
operates thousands of portfolio companies, each providing
mission-critical market software to a diverse customer
base. The company's strong share performance was driven
by its disciplined execution as an expert capital allocator,
with maximizing long-term shareholder value at the core
of its decision-making. Over time, we believe that the
broader investment community will increasingly recognise
Constellation’s unique business model and exceptional
corporate culture.
Key stock detractors from performance
Novo Nordisk – Novo Nordisk’s recent share price decline
stems from weight loss drug Cagrisema’s trial results, which
showed weight loss at the lower end of expectations but still
ahead of prior-generation drugs. The company cited an issue
with the design of the trial that may have limited the drug’s
full potential, prompting a follow-up which will take around
12 months to complete. While this raises questions around
management’s execution, Novo remains well-positioned in the
growing obesity market, and its late 2026 launch timeline for
Cagrisema remains unchanged. Readouts for other drugs came
in at the high end of expectations, and while less significant
than the Cagrisema data, do go some way to restoring
confidence in Novo’s market leadership in our opinion.
Estée Lauder was a detractor from performance in 2025 due
to continued weakness in China and the broader prestige
beauty market, particularly in Asia. The company faced ongoing
demand challenges, and signalled near-term pressure on
earnings. Additionally, the announcement of an internal
successor as CEO was met with disappointment, as investors
had hoped for fresh leadership to drive a stronger turnaround.
L’Oréal also faced weakening consumer demand in China
and the rest of Asia. L’Oréal’s management had anticipated an
improvement by summer 2023 but this has yet to materialise.
Increased competition from both premium and emerging
local brands, along with foreign exchange headwinds and
inflationary pressures, plus a higher tax charge also weighed
on performance. While these near-term challenges have
pressured the share price, L’Oréal’s strong brand portfolio and
long-term growth potential remain attractive.
Portfolio additions
Additions this year included Apple, the world's leading consumer technology brand; Chipotle, the Mexican themed
restaurant chain; and Meta, the owner of market leading social media assets.
11
Changes to the portfolio
We constantly stress-test our conviction in the companies
held in the portfolio to ensure that they continue to remain
innovative and stay away from threats in what will be an ever-
more disruptive environment for the foreseeable future. This
is the reason why we moved some exposures around. In the
consumer and industrial sectors we exited Nike, Estée Lauder,
Pernod Ricard, and reduced the holdings in Kering and Croda,
and purchased Deckers and Chipotle. In the technology
sector we added companies to capture a broader range of
exposures (Meta Platforms, Apple, Constellation Software
and BE Semiconductors ('BESI')). In financials during the year
we added Partners Group.
Purchases
We see favourable industry dynamics within private asset
managers, with a strong growth profile from increasing wealth
and high barriers to entry. Partners Group is a Swiss high-
quality private asset manager that has a management team
with long experience and a proven track record of generating
good returns through the cycle. The company is well placed to
benefit from the secular trend which we foresee in the private
equity space, given its robust investment approach, consistent
track record and a hard-to-replicate product offering that
appeals to both large institutional investors and private wealth
customers.
Novo Nordisk is a pure-play pharmaceutical company focused
on diabetes, obesity and ‘Bio-pharma’, which has typically
grown organically through superior research & development.
Diabetes is a structural growth category which has a stable,
low competition market structure because of (i) manufacturing
scale, (ii) net price discounts and (iii) intellectual property
protection. Obesity is expected to be the largest drug category
of all time by 2030. Novo Nordisk is expected to deliver sales
growth ahead of the peer group, with industry leading margins.
BESI, a leader in semiconductor packaging technology,
is a beneficiary of the ongoing need for miniaturisation
despite the physical challenges of doing so. Next generation
semiconductor designs are gaining traction with Intel, TSMC
and Samsung, who are all investing materially more into
semiconductor packaging after decades of neglect. The apex
of this opportunity centres on die-to-wafer hybrid bonding,
where we believe that BESI has a multi-year head start over
its competitors. We expect this product line to progress from
zero to over 50% of the BESI business in the long term. We also
expect it to be significantly accretive to earnings.
Apple is the world’s leading brand for consumer technology
products. Apple's integration of hardware and software
expertise allows it to create world class consumer experiences
and high barriers to entry. We expect the digital and real world
to become more integrated through time, with Apple's products
as a key interface. We may not know the exact form this will
take, but see upside opportunities in Virtual/Augmented Reality
and AI. We believe that the company should enjoy increasing
earnings as AI features are released.
Deckers is a US company where we have high conviction in
the momentum of the underlying key brands in HOKA and the
managed growth of UGG. The business is very profitable today,
with the mix improving as HOKA grows. The combination of
high margins and outsourced manufacturing fuels high returns.
Chipotle is a Mexican themed fast-casual restaurant chain
that serves fresh, high-quality meals. It is primarily a US based
business with a small international presence. Chipotle operates
an ownership model as opposed to franchise. It is a top 10
player in the US, benefits from favourable demographics, strong
brand perception as well as strong returns.
Meta is the owner of market leading social media assets in
Facebook, Instagram, and WhatsApp. The company is the
dominant force in social media in the US and beyond and is
an early beneficiary from AI driving its share of advertising as
well as augmenting the user experience on its platforms. We
believe that the combination of these two factors underpins
accelerated growth.
We have been looking for an entry point in Constellation
Software for some time and took advantage of a pullback in the
share price. We see the stock as a compounder and expect the
company to remain extremely disciplined on the price paid for
acquisitions.
Exits
We exited our position in Adobe due to uncertainty over its
long term competitive advantage due the disruptive threat of
generative AI.
Nike's poor 2024 results led to a significant downgrade
of expectations. Our previous conviction in Nike shifting
profitability higher while growing market share diminished and
so we exited the stock.
For Pernod Ricard, our business model conviction has lowered
and we switched to Chipotle.
Concerns around the global beauty market and exposure to
China at Estée Lauder resulted in guidance being withdrawn
and consensus estimates being cut.
We sold out of Assa Abloy following a spell of strong share
price movement which led to us taking profits.
Our conviction in Croda reduced as a result of the ongoing
weaker trading environment and a challenging backdrop for the
company. We exited the holding after the financial year end.
Outlook for 2025 and beyond
There is plenty of uncertainty on all fronts as a result of the
Trump administration’s unpredictable policy initiatives both
domestically and internationally. The Trump presidency and
notably the introduction of trade tariffs by the US directly
impacts the magnitude of all five key risks that we foresee for
2025. These are: 1) stickier inflation, 2) less dovish monetary
policies, 3) tariffs and trade wars, 4) geopolitical uncertainty in
the Middle East, Ukraine and China/Taiwan, and 5) government
debt and fiscal policies
With the announcement by the Trump administration initially
on 2 April 2025 of a more significant and broader range of
tariffs than expected across a wide range of trading partners,
and ensuing escalations with China, we believe that there is an
increased risk of a sharp slowdown in economic momentum
this year if the announced tariffs are not reversed. A lot of the
predictions for the remainder of 2025 will need to be reviewed
in light of these and any further policy initiatives by the new
Trump administration. Whilst we do not expect a full recession,
the sharp slowdown which we expect could feel recessionary
in the US, Europe and China. We are already seeing a rapid
deterioration in both business and consumer confidence in
the US, which could weigh negatively on economic
momentum. This could translate into weaker corporate
earnings growth, and a series of downgrades to market
estimates. This will likely maintain a high degree of uncertainty
in equity markets, whilst at the same time keeping share price
volatility high. Investors need to be cognizant that there will be
a heightened focus on shorter term considerations, although
this could also open up more opportunities for investors with a
longer term perspective.
Tariffs, trade tensions, and geopolitical moves by the Trump
administration could continue to bring significant volatility in
equity and bond markets during the year. It will therefore be
important to continue to focus on long-term structural growth
opportunities, whilst maintaining valuation discipline. This will
not necessarily bring consistently strong performance in what
will likely be a very volatile environment, reacting to headline
news and policy announcements. However, we are confident
that over the medium term the market will realise that the
companies which we hold are well positioned to harness the
structural opportunities that we have identified and deserve to
be rerated.
1
1
Our three seismic thematic opportunities remain unchanged,
namely:
Energy transition remains an important driver of investment
initiatives globally, both funded by governments and the private
sector, with corporates being keen to reduce their carbon
intensity. Whilst the Trump administration might de-emphasise this
theme, we believe that corporates will continue to carry the
initiative forward. It is critical for them, and for willing governments,
to do so. Climate change has become a major risk for everyone,
given the potential cost to corporates, governments and
households. We therefore believe that (i) green and alternative
energy, (ii) energy efficient infrastructure and (iii) electric
transportation, will remain good sources of investment
opportunities. We harness this view through companies such as
construction materials company Kingspan, a leader in panel
insulation, industrial company Atlas Copco, a provider of
equipment to roll out energy infrastructure projects, and
companies such as Hexagon and Autodesk in the industrial
technology and automation segments. Linde in industrial gases
also has an interesting exposure to energy transition. In total, we
calculate that Franklin Global Trust has c.14% of its portfolio
exposed to this theme.
The trend of ageing population is now being experienced not only
by developed markets, but also some developing markets.
Notably the Chinese population has now peaked and is trending
toward ageing. The risk is that the theme of the emerging Chinese
middle-class becomes superseded by the ageing of the country’s
population. The need for healthcare infrastructure, in a world that
is ageing at an accelerating rate, is therefore apparent.
We have in the portfolio several companies that harness that
theme, for example Illumina in the genomics segment, CSL in the
plasma collection segment, Mettler Toledo in the medical
instruments area, and Coloplast, a leader in urology. Veeva
Systems, a leader in healthcare software used by pharmaceutical
companies, is also a company that is well positioned to harness
the drive towards more efficient R&D management. Sartorius
Stedim, as a leader in drug development and outsourcing, is well
positioned to capture the ongoing spend by pharmaceutical
companies on R&D. Obesity is likely to remain a prevalent trend in
today’s society. Whilst Novo Nordisk has suffered from a
significant pullback, we believe that the market price of its shares
fails to capture the superior growth and returns characteristics
that the obesity market segment can achieve for well established
leaders. ResMed, as a leader in devices that tackle sleep apnea, is
also well placed to harness the co-morbidity related to obesity.
Altogether, the portfolio’s exposure to ageing population
accounts for c.20% of the assets.
‘We expect that the theme of
AI will remain omnipresent for
the next decade and beyond,
providing a fertile ground for
investment opportunities.’
Energy transition
Ageing population Artificial Intelligence
1
We expect that the theme of AI will remain omnipresent for the
next decade and beyond, providing a fertile ground for
investment opportunities. However, this area also highlights the
need to have valuation discipline, as it is at risk of share price
bubbles. At this stage, we note that the Hyperscalers are not only
continuing to spend significantly but are actually increasing their
capex intentions further. Alphabet, Amazon, Meta, Microsoft and
Apple are expected to spend a combined $2trn in 2025, and over
the next 4 years the cumulative capex of the big technology
companies is expected to reach $9.3trn.
This is a figure that can appear colossal, but that highlights the
magnitude of the investment cycle triggered by the AI
opportunity that we are observing. For the time being,
Hyperscalers have been able to balance their drive to invest
more whilst returning cash to shareholders, all of which has
been funded by their strong cash flow generation. This makes
us comfortable that, unlike the bubble of 2000, the technology
companies that are investing heavily on this occasion have
solid balance sheets and are self-funded.
The emergence of DeepSeek at the start of 2025 brought
some volatility to the share prices of some of the Hyperscalers,
as the initial evidence of DeepSeek being significantly cheaper
than the models developed by the Hyperscalers led to
concerns of overspending. The markets, however, quickly
moved to a point that recognised that technology has always
grappled with disinflationary disruptive trends, as new
technologies emerge at a fraction of the previous costs. We
forecast AI to be on the cusp of triggering a major
technologically driven Industrial Revolution, unleashing a
major cycle of productivity enhancement for corporates,
innovation breakthroughs, and major disruption to any existing
businesses that fail to harness the AI opportunity. AI will
potentially enhance productivity. Whether companies benefit
from a boost in productivity through higher margins, or have to
pass these gains to their customers will depend on the
competitive dynamics of the industries in which they operate,
the new entrant risks, the disruption risks, and the pricing
power that they possess. All of these factors are important to
assess when analysing any business model, which is what we
do systematically when considering an investment opportunity
or reviewing an existing holding.
Overall, we calculate that the portfolio has c.31% of its assets
exposed to the AI theme, through companies such as Nvidia,
Microsoft, BE Semiconductors, ASML, Atlas Copco,
Cadence, Meta and Apple.
We are excited about the shape of the portfolio as it currently
stands. Our concentrated approach, focusing on our strongest
convictions that come out of our research process, leads to a
collection of companies (i) which have solid balance sheets;
(ii) which we are forecasting to grow their sales at a significantly
higher rate than listed companies in general; and (iii) which
have high returns on invested capital. These are the
characteristics that will help companies weather the upcoming
storms around a potentially deteriorating economic cycle, as a
result of the uncertainties brought by the tariff announcements
of 2 April 2025. Importantly, these are also companies that can
continue to innovate, to stay ahead of their competitors, and to
fend off disruption risks, in a decade ahead that will continue
to be disruptive for many industries.
Turning to valuations, while it is true that our portfolio, in
aggregate, trades at a higher PE ratio than the benchmark
index, any measure capturing the superior growth and returns
profile of our portfolio would conclude that it is attractively
valued when adjusting for this profile.
Our portfolio offers our shareholders a collection of companies
with higher growth than the index, in terms of sales, earnings
and cash flow, and a substantially higher ROIC, with a forecast
of a rapidly improving ROIC over time. This group of
investments should therefore in our view compound
attractively over the coming years, as the companies which we
hold keep delivering what we forecast them to be able to
deliver.
Finally, our team will move into the Franklin Equity Group in
2025. We will integrate with a larger group of investors
managing over £110bn and sharing the same investment
philosophy, focusing on quality growth opportunities. This will
give us access to more analytical resources, notably we will be
part of a team of 65 investment professionals, including a well-
resourced central research group with over thirty analysts from
whose knowledge, expertise and insights we will be able to
benefit. The group is based in San Mateo in Silicon Valley, and
the combined team also has offices in New York, London and
Edinburgh, which will permit us to extend our network of
corporates and leaders of industry within a region thriving on
innovation. This move is intended to help us to continue to
position the Company to focus on promising structural growth
opportunities. I look at this prospect with excitement and the
strong belief that we will be able to deliver the right outcome
for our shareholders as we complete our integration into the
broader Franklin Equity Group.
Zehrid Osmani
Portfolio Manager
17 April 2025
Valuation
ESG
$
Returns
Corporate
ethos
$
Financial
strength
Growth
drivers
Does the company generate sustained profits?
Does the company have a healthy balance sheet?
Does the company have strong track record of
capital allocation?
Does the company excel in the eight criteria below?
Assess the company against four core risk categories
Assess the company against 50+ ESG criteria
Assess the company against mega-trend thematic analysis
Accounting
diagnostics
Industry
analysis
Industry
risks
Company
risks
Governance
& sustainabil-
ity risks
Environmental Social Governance
Portfolio
risks
2. In-depth fundamental
research
Future of
Technology
Resource
Scarcity
Demographic
Change
1. Idea generation
4. Portfolio
Analyse the customers of the
potential holding
End-user markets
3. Portfolio
construction
Analyse the maturity of the business
Industry lifecycle
Evaluate in terms of business
model diversity
Company classification
Evaluate with thematic mega-trend
framework
Evaluate exposure to the world’s
growth markets
Geographic revenue & profit
Long-term thematics
Our investment universe consists of companies
with a combination of sustainable growth and
quality
We identify quality growth ideas by looking for
companies that can generate sustained profits,
demonstrated by an ability to consistently generate a
Return on Invested Capital ('ROIC') in excess of their
Weighted Average Cost of Capital ('WACC'). On the
quality side we want those with healthy balance sheets,
identified by low gearing and the level of goodwill.
Our investment manager's process
We establish the quality and sustainability of the
business model
We aim to be highly efficient in our research, so we use
eight criteria to examine the quality and sustainability of
the business model – of these, valuation is considered
the most important. This allows us to focus on the
strongest ideas when conducting our in-depth
fundamental research.
The proprietary research platform generates
maximum insight without compromising on quality
Our research templates systematically risk assess a
company against four categories – industry dynamics,
company risks, governance & sustainability and portfolio
risks. This allows for effective comparisons across
different companies and provides a framework for the
team to build their conviction.
ESG is integrated throughout the process
Our proprietary ESG risk assessment of Governance and
of Sustainability consistently assesses over 50 underlying
criteria to capture the complexity of the ESG risks facing
a company’s long-term outlook and sustainability –
each criterion reflecting what we believe are the most
universal material ESG factors. We drill down into a
further 20 criteria to analyse social exploitation risk.
Thematic analysis is used to identify long-term
growth
We want to identify multi-decade returns so we
incorporate thematic analysis on three mega-trends:
Demographic change, Future of technology and
Resource scarcity. Demographic change encapsulates
areas such as growth in the emerging markets' middle
class, healthy living, or ageing populations. In Future of
technology, we capture themes such as outsourcing,
artificial intelligence and cyber security, while in
Resource scarcity, we see opportunities emerging in
electric vehicles, climate change, and energy.
1
Valuation
ESG
$
Returns
Corporate
ethos
$
Financial
strength
Growth
drivers
Does the company generate sustained profits?
Does the company have a healthy balance sheet?
Does the company have strong track record of
capital allocation?
Does the company excel in the eight criteria below?
Assess the company against four core risk categories
Assess the company against 50+ ESG criteria
Assess the company against mega-trend thematic analysis
Accounting
diagnostics
Industry
analysis
Industry
risks
Company
risks
Governance
& sustainabil-
ity risks
Environmental Social Governance
Portfolio
risks
2. In-depth fundamental
research
Future of
Technology
Resource
Scarcity
Demographic
Change
1. Idea generation
4. Portfolio
Analyse the customers of the
potential holding
End-user markets
3. Portfolio
construction
Analyse the maturity of the business
Industry lifecycle
Evaluate in terms of business
model diversity
Company classification
Evaluate with thematic mega-trend
framework
Evaluate exposure to the world’s
growth markets
Geographic revenue & profit
Long-term thematics
1
Built for long-term returns
We consider portfolio construction of equal importance to the
research process. The same high-quality proprietary data that
we generate in our research platform is used in the portfolio
analytics, risk assessments and the portfolio construction.
This aids our understanding of the portfolio’s diversity and
allows us, through appropriate stock weightings, to effectively
manage risk and ensure we are positioned to capture long-
term growth.
Geographic revenue and profit – exposure to the world’s
growth markets
Breaking down the portfolio by the geographic source
of revenue provides greater insight than constructing
the portfolio based on a stock’s country of listing. In an
increasingly globalised and connected world, companies are
more dependent on overseas revenues.
Long-term thematics – investing in the drivers of
corporate growth
Within our three mega-trends of Demographic change, Future
of technology and Resource scarcity, we have approximately
35 specific sub-themes, some of which overlap between two
or three of the mega-trends. By using our thematic framework
we can build a picture of each company and therefore the
portfolio’s overall exposure to these growth drivers.
Company classification – ensuring a diversity of
business models
We invest in quality growth companies, but our classifications
allow us to maintain a diversity of business models that can
either offer more defensive or outright growth characteristics
to deliver a more consistent return profile.
Industry lifecycles – understanding business maturity
We assess where a company is in its industry lifecycle through
six key stages from early stage and accelerating growth
through to decline and renewal. This is important in terms of
balancing growth drivers and risk management.
End-user markets – seeking profitable sectors and
industries
An aggregation of our portfolio holdings’ end-customers.
As with our analysis of geographic revenues and profit, this
provides a more intuitive breakdown than a company’s sector
listing. We can understand if companies are operating in
potential profitable sectors or areas where we see future
growth potential.
A portfolio of 25-40 hand-picked stocks from
some of the world's leading companies.
The investment manager’s depth of Environmental, Social and Governance (‘ESG’) research
is an integral part of the investment process. The risk assessments are continually enhanced
to reflect new issues and to ensure the market-leading approach continues to evolve.
All Morningstar data, sourced: Morningstar, December 2023. © Morningstar, Inc. All rights reserved.
Holder of highest Morningstar
Sustainability Rating™
The Company holds the highest
Morningstar Sustainability Rating
of 5 globes
*
. This recognises our
commitment to mitigate the risks
our investors face in the ESG
space.
Top 2% worldwide
The Company is in the top 2%
for corporate sustainability of all
the 8,327 products categorised
by Morningstar as Global Equity
Large Cap
1
. This world-class
rating acknowledges the high
standards and pioneering
in-depth analysis undertaken as
part of our stock selection
process.
Over 50 ESG criteria assessed
The investment manager
evaluates, measures and scores
over 50 individual criteria for
every company that is
researched. This provides a
consistent and systematic
analysis across sectors and
countries, helps identify the
most material risks and gives us
an insight into a company’s ESG
credentials.
Social factors – rated one of
the best in sector
The Company is already rated
one of the best by Morningstar
in the sector for Social factors
*
but this is an area we have
recently been focusing on – and
is of major importance to our
team. We have introduced a
second layer of 20 measures to
underpin our analysis into
exploitation risk, looking at
issues relating to: labour rights,
human rights, working condi-
tions, age & gender exploitation.
Highest PRI ratings
Martin Currie has achieved the
highest 5-star ratings from the
UN-supported Principles for
Responsible Investment ('PRI')
across all three categories
applicable to its investment
activity. These accolades from
the world’s leading assessor of
responsible investment
recognises Martin Currie’s years
of dedication to integrating
stewardship into active
investing.
Low-carbon footprint
The portfolio has been awarded
a Low Carbon Designation by
Morningstar and accounts for a
fraction of the emissions of the
benchmark index MSCI All
Country World index ('MSCI
ACWI'). An index tends to
include companies based on
their size so can include high
polluters or companies judged
to have a detrimental impact on
society. The investment
manager’s active management
approach is more selective.
1ESG & our investment manager's process
Portfolio summary 1
By asset class
31 January 2025 % 31 January 2024 %
Equities 99.2 103.1
Cash 0.8 0.8
Less borrowings – (3.9)
100.0 100.0
By sector
31 January 2025
Company %
31 January 2025
MSCI All Country
World index %
31 January 2024
Company %
31 January 2024
MSCI All Country
World index %
Information Technology 30.7 24.9 30.8 23.5
Health Care 25.7 9.9 22.8 11.4
Consumer Discretionary 14.7 11.5 12.0 10.8
Financials 9.7 17.2 7.2 16.0
Materials 6.0 3.5 7.7 4.2
Industrials 5.7 10.3 12.2 10.6
Communication Services 4.1 8.6 – 7.5
Consumer Staples 3.4 5.8 7.3 6.7
Energy – 3.8 – 4.5
Utilities – 2.5 – 2.5
Real Estate – 2.0 – 2.3
100.0 100.0 100.0 100.0
1
North America
56.8%
Developed Europe
40.8%
2.4%
Developed Asia Pacific ex Japa
n
Portfolio distribution by region
31 January 2025
Company %
31 January 2025
MSCI All Country
World index %
31 January 2024
Company %
31 January 2024
MSCI All Country
World index %
North America 56.8 69.1 52.2 66.0
Developed Europe 40.8 13.9 44.4 15.6
Developed Asia Pacific ex Japan 2.4 2.3 3.4 2.6
Global Emerging Markets – 9.7 – 10.0
Japan – 4.8 – 5.6
Middle East – 0.2 – 0.2
100.0 100.0 100.0 100.0
Sector Country
Market value
£000
% of total
portfolio
North America 130,990 56.8
Nvidia Information Technology United States 14,930 6.5
Microsoft Information Technology United States 12,515 5.4
Linde Materials United States 10,645 4.6
Mastercard Financials United States 9,820 4.3
Meta Platforms Communication Services United States 9,519 4.1
Apple Information Technology United States 8,689 3.8
Deckers Outdoor Consumer Discretionary United States 8,247 3.6
ResMed Health Care United States 7,756 3.4
Veeva Systems Health Care United States 6,797 2.9
Cadence Design Systems Information Technology United States 6,550 2.8
Zoetis Health Care United States 6,371 2.8
Illumina Health Care United States 5,357 2.3
Autodesk Information Technology United States 5,307 2.3
Mettler Toledo Health Care United States 5,016 2.2
Constellation Software Information Technology Canada 4,789 2.1
IDEXX Laboratories Health Care United States 4,479 1.9
Chipotle Mexican Grill Consumer Discretionary United States 4,203 1.8
Portfolio holdings as at 31 January 2025
Sector Country
Market value
£000
% of total
portfolio
Developed Europe 93,803 40.8
Ferrari Consumer Discretionary Italy 10,187 4.4
Moncler Consumer Discretionary Italy 8,793 3.8
ASML Holding Information Technology Netherlands 8,553 3.7
Sartorius Stedim Biotech Health Care France 8,258 3.6
Atlas Copco Industrials Sweden 7,734 3.4
L'Oreal Consumer Staples France 7,729 3.4
Novo Nordisk Health Care Denmark 7,436 3.2
Adyen Financials Netherlands 7,012 3.0
Hexagon Information Technology Sweden 5,500 2.4
Partners Group Holding Financials Switzerland 5,426 2.4
Kingspan Group Industrials Ireland 5,420 2.3
BE Semiconductor Industries Information Technology Netherlands 3,827 1.7
Croda International Materials United Kingdom 3,163 1.4
Kering Consumer Discretionary France 2,467 1.1
Coloplast B Health Care Denmark 2,298 1.0
Total portfolio holdings
230,275
100.0
Developed Asia Pacific ex Japan 5,482 2.4
CSL Health Care Australia 5,482
2.4
Microsoft
Information Technology, United States
US software company Microsoft, best known for its Windows
operating system, the Xbox gaming console and cloud
computing service Azure, is in a prime position to benefit from
a new ‘golden era’ of investment in technology. IT investment is
becoming crucial for every aspect of corporate life, and
Microsoft stands to capture a significant share of this growing
expenditure. Furthermore, it can leverage the power of cross-
selling within its extensive Enterprise customer base, allowing
its Intelligence Cloud division to become the largest
contributor to the business over the long term, in our view.
1
Nvidia
Information Technology, United States
The company designs graphics processing units for gaming and
professional markets. We see long-term upside optionality in
several secular growth areas, including Gaming, Cloud, AI and
Autonomous Vehicles. We believe the market is missing the
longevity of growth at Nvidia – specifically from referencing and
Edge AI.
Largest 10 holdings
31 January 2025
Market value
£000
31 January 2025
% of total
portfolio
31 January 2024
Market value
£000
31 January 2024
% of total
portfolio
Nvidia 14,930 6.5 24,357 9.2
Microsoft 12,515 5.4 17,136 6.5
Linde 10,645 4.6 13,818 5.2
Ferrari 10,187 4.4 11,792 4.5
Mastercard 9,820 4.3 11,341 4.3
Meta Platforms 9,519 4.1 – –
Moncler 8,793 3.8 10,341 3.9
Apple 8,689 3.8 – –
ASML Holding 8,553 3.7 14,074 5.3
Sartorius Stedim Biotech 8,258 3.6 7,645 2.9
Largest 10 holdings in detail
Largest 10 holdings
Sector
Portfolio %
Market
value £000
6.5
14,930
Sector
Portfolio %
Market
value £000
5.4
12,515
As at 31 January 2025 the largest 10 holdings accounted for 44.2% of the portfolio (51.0% as at January 2024).
Sector
Portfolio %
Market
value £000
4.3
9,820
Sector
Portfolio %
Market
value £000
4.4
10,187
Sector
Portfolio %
Market
value £000
4.6
10,645
Linde
Materials, United States
A resilient and geographically diverse business, it has high
exposure to fast-growing emerging markets, combined with a solid
base in the Americas. Linde exerts strong pricing power from its
leading positions in the regions in which it operates. Although
revenue growth is correlated to global industrial production, the
structure of client contracts using ‘take-or-pay’ means that
revenues are relatively cushioned during economic downturns.
The merger with Praxair has accelerated a strategy of focusing on
less economically sensitive customers in the healthcare and food
and beverage sectors. Our thesis rests on its management’s ability
to continue to improve margins outside Americas and exert pricing
power on its expanded customer base.
Ferrari
Consumer Discretionary, Italy
The Italian sports car manufacturer provides a unique play on
the global growth of high-net-worth individuals and their
passion for speed. It has enviable pricing power, thanks to the
high demand for their products, limited production and its loyal
customer base. Greater use of their Special Service and Icona
ultra-high end platforms gives Ferrari the ability to raise their
average selling price, which is already at a sizeable premium to
other luxury car manufacturers. With good geographic
diversification and higher exposure to the US and Europe,
buoyant and resilient end-user market demand over the long
term, and the ability to steadily increase its profit margins and
return profiles, we are confident in the long term growth
trajectory of Ferrari.
Meta Platforms
Communication Services, United States
The company is the dominant force in social media in the US
and beyond. It is an early beneficiary from AI driving its share of
advertising as well as augmenting the user experience on its
platforms. We believe that the combination of these two factors
underpins accelerated growth over our forecast period.
Sector
Portfolio %
Market
value £000
4.1
9,519
Mastercard
Financials, United States
The migration from cash and cheque to electronic payment is a
multi-year secular trend that is still far from mature. While this is a
seemingly consensual proposition, the market tends to
underestimate this trend. The company's ROIC is highly
attractive, even though the electronic payment space is
competitive, its transition from a pure card network to a multi-rail
provider of payment solutions proves how the company can
face these challenges from a position of strength.
Sector
Portfolio %
Market
value £000
3.8
8,689
Apple
Information Technology, United States
Apple is the global leading brand for technology products
across the iPhone, iPad, Mac, and Apple Watch, which are
priced a premium to peers due to the companies’ brand value in
product design and user experience. Apple's integration of
hardware and software expertise create world class consumer
experiences and high barriers to entry. In addition, its brand
reputation and ecosystem of products allows cross sell with
services such as Music, Apple Arcade, Apple TV and Apple Pay.
We expect the digital and real world only to become more
integrated through time, with Apple's products as a key interface.
Moncler
Consumer Discretionary, Italy
Moncler is the leader in super premium down jackets and has
a rich heritage and strategic focus on long-term sustainable
and responsible growth. Moncler’s CEO Remo Ruffini has been
forensically focused on creating demand for scarce product
and cementing this with great customer experiences, enabling
the business to expand in a significantly underpenetrated
market. We believe that the structural growth potential of the
company is attractive, and its ability to continue to innovate
remains strong.
Sartorius Stedim Biotech
Health Care, France
Sartorius benefits from the shift of increasingly complex drug
development and drug production which is favouring life
science and tools companies. We see structural growth in
Bioprocessing and within that Single Use Technologies driving
strong topline growth with high returns. In addition to those
drivers we see Sartorius as continuing to drive market share
gains in the US as it benefits from the new wave of biologic
launches where it has been previously locked out. With high
barriers to entry and significant switching costs Sartorius is a
clear compounder, even though it can experience some
degree of cyclicality due to industry capacity cycles.
ASML Holding
Information Technology, Netherlands
This semiconductor equipment company holds a monopoly
position in leading edge lithography equipment for
semiconductors with high barriers to entry. This dominant
position affords the company strong pricing power. ASML is well
placed to benefit from increasingly complex and smaller node
chipsets. In addition, trailing edge demand, traditionally the sub
growth segment, has accelerated from electrification in
automotive and Internet of Things/industrials which appear
structural. As such we expect the ASML to outgrow the
semiconductor industry.
Sector
Portfolio %
Market
value £000
3.6
8,258
Sector
Portfolio %
Market
value £000
3.7
8,553
Sector
Portfolio %
Market
value £000
3.8
8,793
This report provides shareholders with details of the Company’s
business model and strategy as well as the principal and
emerging risks and challenges that it faces.
Business model
The Company has no employees and outsources its entire
operational infrastructure to third-party organisations. The
Board has appointed Franklin Templeton Investment Trust
Management Limited as its Alternative Investment Fund
Manager (‘AIFM’), which in turn has appointed Martin Currie
Investment Management Limited (the ‘investment manager’)
to manage the portfolio. Under the leadership of portfolio
manager, Zehrid Osmani, a specialist team analyses the
world’s stocks to find the very best ideas. The Board sets
the Company’s strategy, decides the appropriate financial
policies to manage the assets and liabilities of the Company,
ensures compliance with tax, legal and regulatory requirements
and reports regularly to shareholders on the Company’s
performance. Further information on the role and operation of
the Board is set out under Corporate Governance on page 34.
For more information on investment trusts in general please
visit www.theaic.co.uk.
Investment Objective
The investment objective is to produce long-term returns in
excess of the total return from the MSCI All Country World
index.
Purpose
In line with the objective outlined above, the Company's
purpose is to deliver a sustainable long-term total return to
shareholders by implementing the investment policy through
the Company's investment manager.
Investment Policy
The investment policy is:
• To invest predominantly in listed global equities of quality
growth companies with superior share price appreciation
potential, based on projected return on invested capital
('ROIC'), balance sheet strength and sustainable business
models.
• To manage a high conviction portfolio with typically 25-40
holdings, with a view to holding stocks over a long-term
investment horizon.
• To achieve risk spreading through a portfolio of holdings
diversified by types of company and sources of revenue.
No more than 10% of total assets will be invested in a single
stock.
• To fully integrate Environmental, Social and Governance
('ESG') criteria into fundamental analysis when assessing
business models.
• To exclude investments identified through the investment
manager’s proprietary ESG risk assessment as having a high
level of Sustainability or Governance risk.
• To potentially use debt to enhance returns to shareholders.
Gearing will not exceed 20% of net assets at the time of
drawdown.
• To not invest in other listed closed-end funds.
A description of the investment manager’s process, which
includes a fully integrated approach to ESG matters, is set out
on pages 15 to 17 of this annual report.
Strategies
Investment
In order to achieve its investment objective, the Company
has adopted a distinctive philosophy in implementing its
investment policy. This clearly focuses on using the investment
manager’s ability to combine investment performance with
socially responsible investment. This is done through their
leading global research capabilities in identifying high-
quality companies that will benefit from exposure to growth
megatrends worldwide and their leading performance in
engaging with these companies on ESG issues. We believe
that long-term share price performance will come from those
companies that actively engage with ESG. The Company
invests predominantly in blue chip equities with a market
capitalisation in excess of $3 billion and selects quality growth
companies which are market leaders in their industries with
superior share price appreciation potential based on attractive
return on invested capital ('ROIC'), balance sheet strength and
ESG credentials.
The resulting diversified portfolio of between 25 and 40
international quoted companies as listed on pages 19 and
20 is actively managed and concentrated, focusing on
high conviction stocks selected on the basis of detailed
research analysis. This active portfolio management policy will
inevitably involve some periods when the Company’s portfolio
outperforms or underperforms the Company’s benchmark.
The Board does not impose any limits on the investment
manager’s discretion to select individual stocks in compliance
with the investment policy. The investment manager ensures
that investment risk is dominated by the high conviction stocks
in the portfolio within the guidelines set by the Board and that
the combination of stocks held does not lead to unintended
reliance on a particular macroeconomic factor (for example, a
higher oil price or higher interest rates).
Current asset allocation and actual holdings are discussed
in the Manager’s review on pages 9 to 14 and details are
contained in the portfolio summary and portfolio holdings on
pages 18 to 20.
Business review
Environmental, Social and Governance ('ESG')
The Company and investment manager believe that good
ESG practices are a fundamental component of a high-quality
company and hence rigorously reviews its ESG practices. This
will typically include analysis of shareholder rights, accounting
standards, remuneration, board structure, supply chain, data
protection, pollution/hazardous waste policies, water usage
and climate change policies. The investment manager’s ESG
analysis may influence key financial assumptions such as
cost of capital, revenues or costs and thus the estimate of a
company’s intrinsic value. These are discussed in greater detail
on page 17. A poor governance, environmental or social track
record for a company can indicate wider sustainability issues
and could lessen the attractiveness of the investment.
Stewardship and sustainability issues are integral to the
Company’s investment philosophy. The investment manager
has been a signatory to the Principles for Responsible
Investment ('PRI') since 2009. In January 2024, the investment
manager was awarded the highest possible 5 stars across all
modules relevant to its investment activities. These are ‘Public
Governance and Strategy,’ and ‘Confidence building measures’
that apply to all asset managers, and ‘Direct – Listed equity-
Active Fundamental’, which is specific to the equity asset class.
Copies of the investment manager's 2024 Assessment Report
and Transparency report from the PRI are available on their
website www.martincurrie.com/__data/assets/pdf_file/0020/45245/
Public-Full-Transparency-Report-Martin-Currie-Investment-
Management.pdf. The investment manager was accepted as a
signatory to the revised Financial Reporting Council ('FRC')
Stewardship Code (2020) in 2023. The investment manager
also signed up to the Net Zero Asset Managers Initiative
('NZAMI') in July 2021.
The investment manager’s proprietary ESG risk assessment
makes a risk assessment and consistently assesses over 50
underlying criteria to capture the complexity of the ESG risks
facing a company’s long-term outlook and sustainability – each
criterion reflecting what they believe are the most universal
material ESG factors. Each risk is rated on a scale 1 (lowest risk)
to 5 (highest risk). These risks are analysed under the following
headings:
• Board quality
• Management quality
• Remuneration
• Culture
• Environmental
• Social
• Understanding and integration
• Common factors
• Sustainability momentum
Under the ‘Social’ heading the investment manager drills down
into a further 20 criteria to analyse social exploitation risk.
Each risk is rated on a scale 1 (lowest risk) to 5 (highest risk).
A company with an overall Sustainability or Governance risk
rating of 4.0 or higher will not be included in the portfolio.
Marketing
The marketing strategy seeks to expand the shareholder base
through increased engagement with key audiences, using the
most appropriate promotional techniques. This drive to deepen
demand for the Company’s shares should enable growth over
time in the number of shares in issue, improve the efficiency of
the Company and increase liquidity in its shares.
This is supported by a commitment to provide clear,
transparent and regular communication to shareholders
delivered primarily through the Franklin Templeton UK
Distribution team and the Company’s website which contains
information relating to performance, outlook and significant
developments as they occur as well as interviews with the
portfolio manager, Zehrid Osmani.
In addition, the Company utilises marketing tools such as
advertising, social media, public relations and research. The
portfolio manager also meets regularly with existing and
potential institutional shareholders, including private wealth
managers.
Financial
The Company's main financial strategic goals are:
• delivering long-term returns in excess of the benchmark;
and
• the management of the Company's financial risks.
The Board’s principal aim for the management of shareholder
capital is the achievement of long-term total return in line with
the investment objective. Growth should incorporate both
the investment manager’s investment performance and the
issuance of shares when sufficient demand exists to do this
without diluting the value of existing shareholder capital. At
the same time, the Board has also maintained or increased
dividends each year since the Company’s launch in 1999 and
remains committed to delivering strong long-term total returns
on shareholder capital.
1. Net asset value performance relative to benchmark
The Board assessed the net asset value total return compared
to the benchmark. It is measured on a financial year basis and
assessed over a rolling three year period. The benchmark with
effect from 1 February 2020 is the MSCI All Country World index.
Prior to this, the benchmark was the FTSE World index.
The KPI was not achieved for the period. The return of the
Company was 8.9% and the benchmark 37.6% for the three years
to 31 January 2025.
2. Performance against the Company’s peers
The Board monitors the share price total return performance
versus all competitor funds within the AIC Global sector over a
rolling three year period.
The share price total return for the Company was 10.9% over the
three years to 31 January 2025 which ranked 9 out of 12 in the
AIC Global sector.
3. Ongoing charges
The Board monitors ongoing charges on a regular basis to
ensure that it meets its target by maintaining cost discipline
and its focus on value adding activities. The KPI was met for the
year at 0.65%. The ongoing charges figure has been calculated
in line with the Association of Investment Companies ('AIC')
recommended methodology.
Key Performance Indicators and Performance
The Board uses certain key performance indicators (‘KPIs’) to monitor and assess its performance in achieving the Company’s
objectives. The Board have made no changes to the KPI targets in the financial year to 31 January 2025.
KPI Target 2025 Achieved 2024 Achieved
1. Net asset value performance relative
to benchmark (over 3 years)
Outperform
(28.7%) No (24.4%) No
2. Performance against Company’s
peers (over 3 years)
Top third performance
9 out of 12 No 9 out of 13 No
3. Ongoing charges Less than 0.70%
0.65% Yes 0.64% Yes
Discount management
The Company operates a zero discount policy with the
objective of providing shareholders, in normal market
conditions, with assurance that the Company’s share price is
in continuing alignment with the prevailing net asset value per
share ('NAV') and liquidity so that investors can buy or sell as
many shares as they wish at a price which is not significantly
different from the NAV. This involves the Company both buying
back shares and reissuing shares from Treasury or issuing new
shares. Shares bought back as part of this policy are held in
Treasury and reissued when demand exists which the market
cannot supply. The average discount in the year to 31 January
2025 was 2.1%.
Discount is an Alternative Performance Measure, see page 79
for more details.
Gearing
The Board sets the Company’s policy on the use of gearing as
part of the process of delivering returns to shareholders.
On the renewal date, 25 November 2024, the Company
repaid in full and closed the unsecured £10 million sterling
term revolving loan facility agreement with The Royal Bank of
Scotland International Limited ('RBSI').
The Board reviews the Company's borrowings to ensure that
gearing levels are appropriate. The total borrowings will not
exceed 20% of the net assets of the Company at the time of
drawdown. The Board monitors the Company’s gearing closely
and takes a prudent approach. Further disclosure on leverage
as required under AIFM regulations is set out on page 43.
Gearing is an Alternative Performance Measure, see page 79
for more details.
Section 172 Report – Duty to promote the success of the Company
The Company is required to provide a statement which describes how the Directors have had regard to the matters set out in Section
172 of the Companies Act 2006 when performing their duty to promote the success of the Company, including:
Section 172 Scope Board's Statement
The likely consequences of any decision in the
long term.
The Board is focused on promoting the long-term success of the Company and
regularly reviews the Company’s long-term strategic objectives, including
consideration of the impact of the investment manager’s actions on the
marketability and reputation of the Company and the likely impact on the
Company’s stakeholders of the Company’s principal strategies.
The interests of the Company’s employees. The Company has no direct employees.
The need to foster the Company’s business
relationships with suppliers, customers and
others.
The Board’s approach to its key stakeholders is set out under 'Stakeholders' below.
The impact of the Company’s operations on the
community and the environment.
The Board’s approach is set out in the section on ESG in 'Strategies' on page 27.
The desirability of the Company maintaining a
reputation for high standards of business
conduct.
The Board’s approach is set out in 'Culture and Values' on page 29.
The need to act fairly between members of the
Company.
The Board’s approach is set out under 'Stakeholders' below.
Stakeholders Why they are important Board Engagement
Shareholders The Company, as an investment trust, does not
have any employees and its customers are also
its shareholders. The primary purpose of the
Company is to deliver long-term returns for
shareholders from a portfolio of investments.
Continued shareholder support and
engagement are critical to the existence of the
Company and the delivery of its long-term
strategy.
The Board and the investment manager recognise the
importance of engaging with shareholders on a regular
basis in order to maintain a high level of transparency
and accountability and to inform the Company’s
decision making and future strategy. The Board
receives regular reports from the investment manager
on shareholder engagement, with the investment
manager tasked with maintaining regular and open
dialogue with larger shareholders. Directors, primarily
through the Chair, are also available to meet major
shareholders to understand their views and to help
inform the Board’s decision making process. The
Company maintains an award-winning website which
hosts copies of the annual and half yearly reports
along with factsheets and other relevant materials.
Shareholders are also invited to attend the AGM at
which they have the opportunity to speak directly with
Directors. The investment manager has a dedicated
client services team which maintains regular contact
with the Company’s shareholders and reports regularly
to the Board. Shareholders can also contact the
Directors throughout the year via the company
secretary or the broker.
Stakeholders Why they are important Board Engagement
Lenders Alongside shareholders’ equity, the
Company has, at some times, been partly
funded by debt. Although the Company is
not dependent on debt financing,
continued support from lenders would be
important to maintain the financial stability
of the Company and flexibility in managing
the portfolio.
The Company repaid its loan facility during the year and
therefore currently does not have any loan or debt facilities
in place. The Company's debt was subject to contractual
terms and restrictions and the Company had procedures in
place to report regularly to its lenders on compliance with
debt terms.
The investment
manager
The performance of the investment
manager is critical for the Company to
deliver its investment strategy and meet its
objective.
The management engagement committee is tasked with
reviewing the performance of the investment manager.
Representatives of the investment manager including the
portfolio manager, Zehrid Osmani, attend each regular Board
meeting and provide an update on the investment portfolio
along with presenting on specific sectors and
macroeconomic issues.
Other service
providers
The Company has a number of other key
service providers, each of which provides
a vital service to the Company and to its
shareholders.
The audit committee receives reports from and reviews the
service, quality and value for money provided by other third
party suppliers. The investment manager is tasked with
maintaining a constructive relationship with such other
third-party suppliers on behalf of the Company. It is the
Board’s policy that all payments due to suppliers will be
made in full and on time.
During the year, the Board made a number of key decisions
which fall under the Section 172 scope set out above:
• The Board reviewed its investment management
arrangements in the light of disappointing performance and
agreed to support the initiatives described in the Chairman's
statement to realign the portfolio management team with the
Franklin Equity Group. As a result of this discussion, the Board
also agreed to change the name of the Company to Franklin
Global Trust in April 2025.
• As part of its continuing succession plan, the Board
undertook a recruitment process and appointed Krishna
Shanmuganathan as a non-executive Director on 1 April
2025.
• As the renewal date of the Company's revolving loan facility
approached, the Board carried out a detailed review of
gearing during the year under review. On the renewal date,
25 November 2024, the Company repaid in full and closed
the unsecured £10 million sterling term revolving loan facility
agreement with The Royal Bank of Scotland International
Limited ('RBSI').
Culture and Values
The Board considers that its culture of openness of debate
combined with strong governance and the benefits of a diverse
Board are central to delivering against its purpose, values and
strategies that are discussed in this report. The Board monitors
and reviews its culture as part of its annual evaluation process
and monitors the culture within the investment manager to
ensure that it is closely aligned with that of the Company. The
key values of the Board are:
Independence: To act independently in the interests of
shareholders.
Sustainability: To ensure that the companies in which the
Company invests and the Company's key suppliers are
supportive of good environmental, social and governance
practices and that its investment manager encourages
continuous improvement in these areas.
Transparency: To report transparently and accurately to
shareholders on the condition, performance and prospects of
the Company.
The Board works closely with the investment manager to
develop and monitor its investment strategy and activities, not
only to achieve its investment objective, but also to deliver
the Company’s values of Independence, Sustainability and
Transparency.
Engagement with investee companies
The Board also expects good governance standards to be
maintained at the companies in which the Company is invested
and reviews the engagement and voting activities which are
undertaken by the investment manager. The ESG strategy
followed by the Company and the investment manager is
detailed on pages 17 and 25. The Board receives regular reports
of both voting and other engagements by the investment
manager with the management teams of companies in the
portfolio. Details of Martin Currie’s ESG related policies and
activities can be found on its website at www.martincurrie.
com. The Board believes that companies which exhibit positive
ESG behaviours contribute to increasing value over the long
term.
Voting policy and the UK Stewardship Code
The Company has delegated responsibility for voting at
investee company shareholder meetings to Martin Currie,
which votes in accordance with its corporate governance and
responsible investing policy. Martin Currie has gained 5-star
ratings for ‘Public Governance and Strategy,’ and ‘Confidence
building measures’ that apply to all asset managers, and
‘Direct – Listed equity – Active Fundamental’ under the PRI's
Reporting Framework for 2023. Martin Currie is a signatory of
the FRC UK Stewardship Code 2021. A copy of Martin Currie's
stewardship report can be found at
www.martincurrie.com/stewardship/annual-report-2024
Anti-bribery and tax evasion
The Board has a zero tolerance policy towards bribery and looks
to ensure that its service providers and associated persons have
effective policies and procedures designed to actively prevent
bribery which are high level, proportionate and risk based.
In relation to the corporate offence of failing to prevent tax
evasion, it is the Company’s policy to conduct all business in an
honest and ethical manner. The Company takes a zero tolerance
approach to any facilitation of tax evasion whether under UK
law or under the law of any foreign country and is committed to
acting professionally, fairly and with integrity in all of its business
dealings and relationships.
Principal and emerging risks and uncertainties
Risk and mitigation
The Company’s business model is longstanding and resilient
to most of the short-term operational uncertainties that it
faces. The Board believes that these are effectively mitigated
by the internal controls established by the Board and by the
AIFM, Franklin Templeton Investment Trust Management
Limited, and their combined oversight of the investment
manager, as described in the table below. Its principal risks
and uncertainties are therefore largely driven by the inherent
uncertainties of investing in global equity markets. The Board’s
process seeks to mitigate known risks and to identify new risks
as they emerge.
However, it is recognised that the likelihood and timing of
crystallisation of some risks, known and unknown, cannot
be predicted and the Board then relies on professional
management, effective systems and communication to mitigate
and respond to them as and when they arise.
Operational and management risks are regularly monitored
by the AIFM and by the Board at Board meetings. As part of
its annual strategy meeting the Board carries out a robust
assessment of the principal and emerging risks facing the
Company, including those that would threaten its business
model, future performance, solvency or liquidity.
The Board's planned mitigation measures for the principal and
emerging risks are described below.
The Board notes that the dominant global macroeconomic risks
are geo-political tensions, trade, inflation, and climate transition.
These are however considered to be risks that have an impact
on the identified principal and emerging risks and are therefore
considered and managed in that context and the investment
manager takes full account of these risks in assembling and
monitoring the portfolio of investments.
Principal risk Mitigation
Sustained
investment
underperformance
The Board oversees the implementation of the investment strategy and monitors the performance of the
investment portfolio. The portfolio manager attends all Board meetings and reviews the portfolio with the
Board together with data that shows statistical measures of the Company’s risk and return profile. Should there
be sustained investment underperformance despite reasonable mitigation measures taken by the investment
manager, the Board would assess the cause and take appropriate action to manage this risk. The investment
strategy is index independent and will not track indices; it will therefore underperform in certain market
conditions and the Board will assess whether underperformance is due to market conditions, poor manager
performance or whether the strategy itself is unsustainable. As set out in the Chair's statement and Manager's
review, Franklin Templeton is reorganising the team managing the Company's investments to enhance the
resources available to the portfolio manager going forward.
There is increasing awareness of the challenges and emerging risks posed by climate change. The investment
process incorporates detailed analysis of ESG issues and as set out in the Manager’s review, this includes an
assessment of the potential impact of climate change. Overall, the specific potential effects of climate change
are difficult, if not impossible, to predict and to measure and the Board and investment manager will continue
to monitor developments in this important risk area.
Geopolitical risks have always been an input into the investment process. This risk area continues to be
highlighted as a result of the continuing Russian war in Ukraine and, in 2023, the conflict between Israel and
Hamas with the resultant effects on global trade posed by supply shocks, higher levels of inflation, and higher
interest rates as central banks seek to contain inflation and volatility in asset prices. Further information on
geopolitical risks is set out in the Outlook section of the Manager’s review. The move by the United States to
become more isolationist and protectionist, and in particular the introduction of widespread tariffs, may lead to
reduced global trade, lower growth, higher inflation, increased volatility and reductions in the values of
international companies. While global movements are likely to affect the portfolio, we seek to mitigate this by
having a portfolio which is diversified by geography and economic sector.
Principal risk Mitigation
Material decline in
market
capitalisation of
the Company
The Board recognises that the zero discount policy allows new shareholders to purchase shares and current
shareholders to sell their shares at close to NAV, in normal market conditions. Although this level of liquidity
encourages investment in the Company, it could also increase the risk of a material decline in the size of the
Company. The Board monitors the performance and pace of share buybacks and the Company's shareholder
profile. Decline could also come as a consequence of the Company's failure to meet its investment objective.
The Board believes that good long-term performance will mitigate this likelihood, increase demand for the
Company's shares and, subject to overall market stability, permit the market capitalisation of the Company to
increase.
Loss of s1158-9 tax
status
Loss of s1158-9 tax status would have serious consequences for the attractiveness of the Company’s shares.
The Board considers that, given the regular oversight of this risk by the audit committee, the AIFM and the
investment manager, the likelihood of this risk occurring is minimal but as the consequence of loss of the tax
status would be very damaging it is highlighted as a principal risk. The audit committee regularly reviews the
eligibility conditions and the Company’s compliance against each, including the minimum dividend
requirements and shareholder composition for close company status.
On the basis of its continual and ongoing assessment of the
principal and emerging risks facing the Company, and given its
current position, the Board is confident that the Company will be
able to continue in operation and meet its liabilities as they fall
due. The Board believes that the processes of internal control
that the Company has adopted and oversight by the AIFM
continue to be effective.
As previously stated, the Board’s main focus is the achievement
of a competitive total annual return. The future of the Company
is dependent upon the success of the investment strategy in
light of economic factors and developments in equity markets.
The outlook and future prospects for the Company are
discussed in both the Chair’s statement on page 8 and in the
Manager’s review on page 12.
Christopher Metcalfe
Chair
17 April 2025
1
2: Governance
Christopher Metcalfe, Non-executive director, Chair
Christopher is senior independent non-executive director of JPMorgan US Smaller Companies
Investment Trust plc, a non-executive director of CT UK Capital and Income Investment Trust plc
and Herald Investment Trust plc. Christopher was previously a non-executive director of abrdn
Smaller Companies Income Trust plc. He has extensive global equity fund management and
investment trust experience, with a deep understanding of UK investors having previously worked
in senior positions at Newton, Schroder Investment Management and Henderson. Christopher
was appointed to the Board on 19 September 2019. Christopher was appointed as Chair of the
Company following the conclusion of the AGM on 1 June 2023.
Board of Directors
Gary Le Sueur, Non-executive director, Senior Independent Director
Gary is a founding partner of clean energy investment firm, Corran Capital, and a former partner
of venture capital firm, Scottish Equity Partners. He has significant investment experience in the
clean energy, sustainability and environmental sectors. Prior to venture capital, Gary worked in
corporate law with Shepherd & Wedderburn (Solicitors), before moving to Deutsche Morgan
Grenfell and then National Australia Bank. Gary was previously a non-executive director of
venture philanthropy charity Inspiring Scotland. Gary was appointed to the Board on 1 December
2016. He is stepping down from the Board at the conclusion of the AGM on 19 June 2025.
Marian Glen, Non-executive director
Marian is a non-executive director of The Medical and Dental Defence Union of Scotland.
She was formerly the General Counsel of AEGON UK and prior to that was a corporate partner
and Head of Funds and Financial Services at Shepherd & Wedderburn (Solicitors). She was
previously a non-executive director of Shires Income plc, Financial Services Compensation
Scheme, Friends Life Group Limited and certain of its subsidiaries and Murray Income Trust plc.
Marian was appointed to the Board on 1 December 2016. Marian will take over the roles of Senior
Independent Director and chair of the Board's Remuneration Committee when Gary Le Sueur
steps down from the Board.
Lindsay Dodsworth, Non-executive director, Chair of the audit committee
Lindsay Dodsworth sits on the investment oversight committee of a private office, is a non-
executive director of Elveden Farms Limited, a trustee and member of the finance and audit
committee at Goodenough College and chair of governors at St. John’s College School.
Lindsay was previously a non-executive director and chair of the audit & risk committee of
Mobeus Income & Growth 4 VCT plc and chair of a family office and its investment committees
which she helped to set up following the sale of the family business.
She trained as a chartered accountant and a chartered tax adviser with Price Waterhouse (now
PwC) before becoming a partner at Ernst & Young (now EY). Lindsay was appointed to the
Board on 1 November 2021.
Krishna Shanmuganathan, Non-executive director
Krishna is chair of both abrdn Asia Focus plc and Weiss Korea Opportunities Fund. He has had
a varied and successful career in diplomacy, asset management, consulting and corporate
advisory, with a particular focus on Asia. Krishna was appointed to the Board on 1 April 2025.
Corporate governance
Corporate governance is the process by which the Board seeks
to look after stakeholders’ interests and to protect and enhance
shareholder value.
This report explains how the Board addresses its responsibility,
authority and accountability.
Compliance with the Principles of the AIC Code
The Board of the Company has considered the Principles and
Provisions of the 2019 AIC Code of Corporate Governance (‘AIC
Code’). The AIC Code addresses the principles and provisions
set out in the 2018 UK Corporate Governance Code (the ‘UK
Code’), as well as setting out additional principles on issues
that are of specific relevance to the Company as an investment
company. The Board considers that reporting against the
principles and provisions of the AIC Code, which has been
endorsed by the Financial Reporting Council, provides more
relevant information to shareholders than reporting only with
respect to the UK Code. The AIC Code is available on the AIC
website (www.theaic.co.uk).
It includes an explanation of how the AIC Code adapts the
Principles and Provisions set out in the UK Code to make them
relevant for investment companies.
The UK Code includes provisions relating to the role of
the chief executive, executive directors’ remuneration and
the need for an internal audit function. For the reasons set
out in the AIC Code, and as explained in the UK Corporate
Governance Code, the Board considers that these provisions
are not relevant to the position of the Company, being an
externally managed investment company. The Company has
therefore not reported further in respect of these provisions.
Details of the AIC principles and how the Company complies
with them can be found on the Company’s website at
www.franklinglobaltrust.com.
Role of the Board
As an investment company, the Company has a Board of
Directors whose duty it is to govern the Company within the
framework set out in the Company’s Articles of Association – in
other words, to look after the interests of shareholders and also
of the Company’s stakeholders as a whole.
The Board sets the Company’s values and objectives and
ensures that its obligations to its shareholders and other
stakeholders are met. It has formally adopted a schedule of
matters which are required to be brought to it for decision,
thus ensuring that it maintains full and effective control over
appropriate strategic, financial, operational and compliance
issues.
The Board undertakes a regular review of the AIFM's and
investment manager’s culture, policies and practices to
ensure that they are aligned with the Company’s values. It also
reviews its service providers to satisfy itself that they maintain
policies and practices consistent with good risk management,
compliance with regulatory frameworks and deliver a value for
money service to the Company.
The Board met five times during the year under review on a
formal basis (as well as on an ad-hoc basis when required), to
consider the Company’s strategy and monitor the Company’s
performance.
An investment trust board provides a very specific and
proactive form of direct oversight of the investment of the
shareholders’ funds.
The primary focus at regular Board meetings is a review of
investment performance of the investment manager and
associated matters including asset allocation, promotion and
investor relations, peer group information and industry issues.
To enable the Board to function effectively and to allow
Directors to discharge their responsibilities, full and timely
access is given to all relevant information. In the case of Board
meetings, this consists of a comprehensive set of papers,
including the investment manager’s review, performance
reports and discussion documents regarding specific matters.
Directors make further enquiries where necessary.
Corporate Governance Statement
Committee structure
The Board has established a number of committees whose remit is to oversee specific aspects of management of the Company. During
the year the Board agreed it was best corporate governance practice for nomination business to be discussed during Board meetings
led by the Chair of the Company.
Management engagement committee Remuneration committee Audit committee
Chair:
Christopher Metcalfe
Chair:
Gary Le Sueur
Chair:
Lindsay Dodsworth
• reviews the continuing appointment of
the AIFM and the investment manager;
• reviews the performance of the AIFM
and the investment manager in terms
of investment performance and the
company secretarial and administrative
services provided;
• reviews the performance of the
personnel employed by the AIFM and
the investment manager in relation to
the provision of such services;
• reviews the terms of the AIFM
agreement to ensure that it remains
competitive and in the best interests of
shareholders.
• sets the remuneration policy for all
Directors; and
• reviews and sets Directors' remuneration
levels.
Further information can be found in the
Directors' remuneration report.
Marian Glen will become chair of this
committee when Gary Le Sueur steps
down at the conclusion of the AGM.
The role and responsibilities of this
committee are set out in its report on
pages 47 and 48.
Directors’ meetings
The following table shows the number of formal Board and committee meetings held during the year and the number attended by each
Director or committee member. There was also one strategy meeting held during the year.
Formal Board meetings
(5 meetings)
Management
engagement committee
(1 meeting)
Audit committee
(2 meetings)
Remuneration
committee
(1 meeting)
Lindsay Dodsworth 5 1 2 1
Marian Glen 5 1 2 1
Christopher Metcalfe 5 1 2 1
Gary Le Sueur 5 1 2 1
Directors’ independence
All of the Directors are considered under the AIC Code to be
independent of the AIFM, Franklin Templeton Investment Trust
Management Limited and of the investment manager, Martin
Currie Investment Management Limited.
The Directors are free of any relationship which could materially
interfere with the exercise of their independent judgement on
issues of strategy, performance, resources and standards of
conduct and demonstrate a breadth of investment knowledge,
business and financial skills which enable them to provide
effective strategic leadership and proper governance of the
Company. Directors are initially appointed until the general
meeting following their initial appointment when, under the
Company’s Articles of Association, it is required that they be
elected by shareholders.
None of the Directors has a service contract with the Company.
The terms of their appointment are detailed in a letter sent to
them when they join the Board. These letters are available for
inspection at the registered office of the Company.
Conflicts of interest
The Board has approved a policy on Directors’ conflicts of
interest. Under this policy Directors are required to disclose all
actual and potential conflicts of interest to the Board as they
arise for consideration and approval. The Board may impose
restrictions or refuse to authorise such conflicts if deemed
appropriate.
A register of Directors’ interests, including potential conflicts
of interest, is maintained by the Company and is regularly
monitored.
Directors who have potential conflicts of interest will not take
part in any discussions which relate to that particular conflict.
The Board considers that the framework has worked effectively
throughout the year under review.
Tenure
The Board has adopted a Tenure Policy for all Directors,
including the Chair, which states that the Board believes that it is
an advantage to have the continuous contribution of Directors
over a period of time during which they are able to develop
awareness of and insight into the Company and thereby are able
to make a valuable contribution to the Board as a whole. The
Board believes that it is appropriate for a Director to serve for up
to nine years following their initial election and it is expected that
Directors will stand down from the Board at the AGM following
the ninth anniversary of their initial appointment. However,
a flexible approach to tenure has been adopted and that
period may be extended for a limited time to facilitate effective
succession planning whilst still ensuring regular refreshment and
diversity on the Board. Gary Le Sueur is not seeking re-election
at the AGM and will step down from the Board following the
conclusion of the AGM. The Board has decided that all other
Directors will be required to stand for annual re-election in line
with best practice.
Succession planning
The Board plans for its own succession. This process ordinarily
involves the identification of the need for a new appointment
and the preparation of a brief including a description of the role
and specification of the capabilities required. The Board seeks
assistance in identifying suitable candidates by appointing
an external recruitment firm each time that there is a vacancy.
During the year the Company engaged Fletcher Jones Ltd as its
external recruitment firm for the process which resulted in the
recruitment of Krishna Shanmuganathan. Fletcher Jones Ltd
does not have any other connections with the Company. The
Board considers candidates from a wide range of backgrounds,
having consideration for the diversity of the Board as a whole
including, but not limited to, gender. Gary Le Sueur will retire
from the Board following the conclusion of the AGM on 19 June
2025.
Board diversity
The Board considers diversity, including the balance of skills,
knowledge, gender and experience, amongst other factors, when
reviewing the composition of the Board. It does not consider that
it is appropriate to establish targets or quotas in this regard.
The Board has made a commitment to consider diversity when
reviewing the composition of the Board and notes the UK Listing
Rules requirements regarding the targets on board diversity:
• at least 40% of individuals on the Board are women;
• at least one senior Board position (chair, chief executive officer
('CEO'), senior independent director or chief financial officer
('CFO')) is held by a woman; and
• at least one individual on the Board is from a minority ethnic
background, defined to include those from an ethnic group
other than a white ethnic group, as specified in categories
recommended by the Office for National Statistics.
As required by the UK Listing Rules the report for the Company
against these targets is set out in the tables below in the
prescribed format. The data was collected on a self-identifying
basis.
The Board notes that as an externally managed investment trust
there is no CEO or CFO and the Board considers the Chair of the
Company, the Chair of any of the Company’s Committees and
the Senior Independent Director to be senior positions.
The Board confirms that as at 31 January 2025 it did not meet
the target in relation to one of the Board members being from
a minority ethnic background. Following the appointment of
Krishna Shanmuganathan on 1 April 2025 and the retirement of
Gary Le Sueur at this year's AGM: (i) the Board will consist of 2
men and 2 women (ii) 3 board members will be White British and
1 Board member will be Asian British. The Board confirms that
for continuity and succession planning the Directors will always
select the best candidate based on objective criteria and merit.
Gender
Number of
Board members
Percentage
of the Board
Number of senior
positions on the Board
Men 2 50% 2
Women 2 50% 1
Not specified/prefer not to say — 0% —
Ethnic background
Number of
Board members
Percentage
of the Board
Number of senior
positions on the Board
White British or other White
including minority white groups
4 100% 3
Mixed/Multiple Ethnic groups — 0% —
Asian/Asian British — 0% —
Black/African/Caribbean/Black British — 0% —
Other ethnic group — 0% —
Not specified/prefer not to say — 0% —
Induction and training
The company secretary provides all Directors with induction
training on appointment, tailored to the needs of individual
appointees. The induction programme is designed to familiarise
the appointee with the Company, its operations and obligations
and regular ongoing briefings are provided on changes in
regulatory requirements that affect the Company and Directors.
Performance evaluation
A formal, annual appraisal system has been agreed for the
evaluation of the Board, its committees and the individual
Directors, including the Chair. Board and committee evaluation
questionnaires are completed by each Director with responses
collated and discussed. The Chair leads the evaluation of
the Board, committees and individual Directors, including
consideration of the time commitment, skills and experience
of the Directors, while the Senior Independent Director leads
the evaluation of the Chair’s performance. In relation to time
commitments, the Board notes that Gary Le Sueur is a director
of ten companies. However, seven of these are related to his
executive role at Corran Capital, and four of those seven are
non-trading fund administration vehicles. Therefore the Board
is satisfied that Gary has sufficient time to devote to his role as a
Director of the Company.
There were no significant actions arising from the evaluation
process conducted during the year and it concluded that the
Board as a whole, the individual Directors and its committees
were functioning effectively. As a result of the Board’s evaluation
process the Chair confirms that all remaining Directors
continue to be effective and their election and re-election is
recommended. The Board notes that Gary Le Sueur is stepping
down from the Board at the conclusion of the AGM on 19 June
2025 and will not seek re-election at the AGM. The Board has
given consideration to appointing an external board evaluator,
however, it does not believe it is necessary at this time.
The Board also regularly reviews the performance of the AIFM
and the investment manager. The management engagement
committee meets to review the continuing appointment of the
AIFM and the investment manager and reviews the terms of the
relevant agreement to ensure that it remains competitive and in
the best interest of shareholders. The management engagement
committee regularly reviews the continuing appointment of other
key service providers.
Company secretary
The Board has direct access to the company secretarial
service provided by the AIFM which, through its nominated
representative, is responsible for ensuring that applicable
regulations are complied with and that Board and committee
procedures are followed.
Terms of reference for each of the committees are available via the
company secretary.
As the Company has only five Directors (reducing to four following
the conclusion of the AGM), all of whom are non-executive, it is the
Board’s policy that all Directors will sit on all Board Committees.
Internal control
The AIC Code and the Disclosure Guidance and Transparency
Rules require Directors, at least annually, to review the
effectiveness of the Company's system of internal control
and include a description of the main features relating to the
financial reporting process.
The Company has appointed Franklin Templeton Investment
Trust Management Limited as its AIFM. With the Company’s
permission, the AIFM has delegated the portfolio management
function to Martin Currie Investment Management Limited,
while retaining responsibility for certain risk management
and administrative functions. Since investment management
and administrative services are provided to the Company by
members of the Franklin Templeton group, the Company's
system of internal control mainly comprises monitoring the
services provided by members of that group, including the
operating controls established by them, to ensure that they
meet the Company's business objectives. The Company does
not have a risk or an internal audit function of its own but
relies on the risk and compliance department of the Franklin
Templeton group and the group's internal audit function. This
arrangement is kept under review. The Company, and with
the Board’s permission the AIFM, have also delegated certain
depositary/custodial and administrative functions, including
fund accounting, to JPMorgan. Franklin Templeton also carries
out a review of the depositary/custodial and administration
activities performed by JPMorgan.
The Board, either directly or through committees, reviews the
effectiveness of the Company’s system of internal control by
monitoring the operation of the key controls of the AIFM and
Martin Currie and:
• reviews an internal controls report, as provided to the Board
by the AIFM. This report details significant risks, regulatory
issues, error management and complaint handling;
• reviews the terms of the AIFM agreement;
• reviews reports on the internal controls and the operations of
the AIFM, of Martin Currie, and of JPMorgan; and
• reviews the risk profile of the Company and considers
investment risk at every Board meeting.
There is an ongoing process for identifying, evaluating and
managing the significant risks faced by the Company as
outlined on pages 30 and 31. This process accords with the
FRC’s ‘Guidance on Risk Management, Internal Control and
Related Financial and Business Reporting’.
During the course of its review of internal controls the Board
has not identified or been advised of any failings or weaknesses
which it has determined to be significant and is satisfied with
the arrangements.
Internal control and risk management systems in relation
to the financial reporting process
The Directors are responsible for the Company’s system of
internal control, designed to safeguard the Company’s assets,
maintain proper accounting records and ensure that financial
information used within the business, or published, is reliable.
The AIFM and Martin Currie have in place stringent controls
that monitor the following activities within the financial
reporting process:
• investment and related cash transactions are completely and
accurately recorded and settled in a timely manner;
• corporate actions and proxy voting instructions are
identified and generated, and then processed and recorded
accurately and in a timely manner;
• investment income is accurately recorded in the proper
period;
• investments are valued using current prices obtained from
independent external pricing sources;
• cash and securities positions are completely and accurately
recorded and reconciled to third-party data;
• amounts due to lenders are calculated accurately and paid
according to the relevant contractual terms; and
• the investment management fee and the Company’s other
operating expenses are accurately calculated and recorded.
The system of internal control can only be designed to manage
rather than eliminate the risk of failure to achieve business
objectives and therefore can provide only reasonable, but not
absolute, assurance against fraud, material misstatement or
loss.
By means of the procedures set out above, the Board confirms
that it has reviewed the effectiveness of the Company's
systems of internal control for the year ended 31 January 2025
and to the date of approval of this annual report.
On behalf of the Board
Christopher Metcalfe
Chair
17 April 2025
Status
The Company is registered as a public limited company
in Scotland under number SC192761 and is an investment
company as defined by Section 833 of the Companies
Act 2006. It is a member of the Association of Investment
Companies (the ‘AIC’).
The Company has been accepted by HM Revenue & Customs
as an investment trust subject to it continuing to meet the
relevant eligibility conditions of Section 1158 of the Corporation
Tax Act 2010 and the ongoing requirements of Part 2 Chapter
3 Statutory Instrument 2011/2999 for all financial years
commencing on or after 1 April 2012.
The Directors are of the opinion that the Company has
conducted its affairs for the year ended 31 January 2025 so
as to enable it to comply with the ongoing requirements for
investment trust status.
Business model review
The AIFM and investment manager
The Company has appointed Franklin Templeton Investment
Trust Management Limited ('FTITML') as its AIFM. FTITML has
been authorised by the FCA to act as an AIFM.
The AIFM has delegated the function of managing the
Company’s investment portfolio to the investment manager,
Martin Currie Investment Management Limited, the manager of
the Company’s assets since its launch in 1999. Martin Currie is
an international equity specialist based in Edinburgh, managing
money for a wide range of global clients. Its investment process
is focused on selecting stocks through fundamental proprietary
research and constructing well balanced high conviction
portfolios. The Board closely monitors investment performance
and Zehrid Osmani, the portfolio manager, attends each Board
meeting to present a detailed update to the Board. The Board
uses this opportunity to challenge the portfolio manager on any
aspect of the portfolio’s management.
The ultimate parent company of the AIFM is Franklin Resources
Inc ('Franklin'). The AIFM has delegated certain administration
and support functions to other Franklin entities.
Continued appointment of the AIFM
Following the annual appraisal carried out by the management
engagement committee in November 2024, the Board
considers that it is in the best interests of shareholders to
continue with the appointment of FTITML as AIFM, with
investment management delegated to the investment manager
and following the increased resources made available to the
investment manager going forward, the the Board remains
content with this arrangement.
Main features of the contractual arrangement with the
AIFM (the 'AIFM agreement'):
The Company entered into the agreement with the AIFM on 2
August 2021. The AIFM agreement includes:
• six month notice period;
• i mmediate termination if the AIFM ceases to be capable of
acting as an AIFM; and
• in the event that the Company terminates the agreement
otherwise than as set out above, the AIFM is entitled to
receive compensation equivalent to the fees paid in the
previous annual period.
Company secretarial and certain administrative services are
provided to the Company by the AIFM pursuant to the AIFM
agreement.
With effect from 1 July 2022, the investment management fee
was amended to 0.45% per annum of the Company's net asset
value (excluding income). Subsequent to the 31 January 2025
accounting year end, the investment management fee was
amended to 0.4% per annum of the Company's net asset value
(excluding income) with effect from 1 March 2025.
The Directors present their report and the audited financial statements of the Company for the year ended
31 January 2025.
Report of the Directors
Depositary arrangements
JPMorgan Europe Limited has been appointed as the
Company's depositary. The depositary is responsible for the
safekeeping of the Company’s assets, monitoring the cash
flows of the Company and must ensure that certain processes
carried out by the AIFM are performed in accordance with the
applicable rules and constitutive documents of the Company.
JPMorgan Chase Bank N.A. London Branch is the Company's
custodian. The custodian may from time to time delegate safe
keeping/custody of the Company’s assets to local custody
providers. The depositary and custodian are entitled to a fee
payable out of the assets of the Company.
Further contractual arrangements
The Company has outsourced its operational infrastructure
to third-party organisations. Contracts and service level
agreements have been defined to ensure that the service
provided by each of the third-party organisations is of a
sufficiently professional and technically high standard. The
Board actively monitors the performance of service providers.
The counterparty risk of dealing with each service provider is
analysed with the Board monitoring any identified risks. Further
details of the Company’s main service providers can be found
in the investor information section on page 78.
Directors
At the date of this report, the Board currently consists of five
non-executive Directors but this number will reduce to four
when Gary Le Sueur steps down after the AGM. The names
and biographies of the current Directors are on page 33,
indicating their range of experience as well as length of
service.
In line with best practice all of the Directors who have been on
the Board for more than a year will stand for re-election at the
AGM. Krishna Shanmuganathan, who was appointed after the
last AGM, will stand for election at the AGM to be held on
19 June 2025.
Gary Le Sueur is stepping down from the Board at the
conclusion of the AGM and therefore is not seeking
re-election. Following Gary Le Sueur stepping down from the
Board, Marian Glen will take on the roles of Chair of the
Remuneration Committee and Senior Independent Director.
The Board confirms that all four continuing Directors have
sufficient capacity to carry out their roles and responsibilities to
the Company and all Directors who were appointed at the time
have attended all relevant Board and committee meetings in
recent years. This includes both regular, scheduled Board
meetings and ad hoc meetings arranged at short notice. The
role of the Board and its governance arrangements are set out
in the Company’s corporate governance statement on pages
34 to 39 which forms part of this Report of the Directors.
Directors’ insurance and indemnities
The Directors have the benefit of the indemnity provisions
contained in the Company’s Articles of Association, and the
Company has maintained throughout the year Directors' and
Officers’ liability insurance for the benefit of the Company
and the Directors. The Company has entered into qualifying
third party indemnity arrangements for the benefit of all
of its Directors in a form and scope which comply with the
requirements of the Companies Act 2006 and which were in
force throughout the year and remain in force.
Environmental matters
As an externally managed investment company with no
employees, the Company’s direct greenhouse gas emissions
are negligible, being emissions resulting from Directors' travel to
meetings in Edinburgh or London. The Company encourages
and actively oversees Martin Currie’s application of its ESG
policies in the investment processes as set out in the Strategic
Report.
1
Share capital
As at 31 January 2025 the Company had 60,682,674 Ordinary shares of 5p in issue (2024: 71,228,807) and a further 37,993,233 Ordinary
shares held in Treasury (2024: 27,447,100). The following table summarises transactions made by the Company in its shares. Further
details of the Company's transactions involving Treasury shares can be found within accounting policy Note 1(j) on page 64.
Number of shares (Cost)/proceeds
Share premium
account Capital reserve
Shares repurchased into Treasury 10,546,133 (£39,184,000) n/a (£39,184,000)
Shares issued from Treasury — — — —
Shareholder and voting rights
Each Ordinary shareholder is entitled to one vote on a show of hands and, on a poll, to one vote for every share held. The Ordinary
shares carry a right to receive dividends which are declared from time to time by the Company. On a winding-up, after meeting the
liabilities of the Company, any surplus assets would be paid to Ordinary shareholders in proportion to their shareholdings.
There are no restrictions on the transfer of Ordinary shares in the Company other than certain restrictions which may from time to
time be imposed by law (for example, insider trading law) and there are no special rights attached to any of the Ordinary shares. The
Company is not aware of any agreements between shareholders which may result in restrictions on the transfer of Ordinary shares or
the voting rights attached to them.
Substantial interests
As at 31 January 2025, the Company had received notification in accordance with the FCA’s Disclosure Guidance and Transparency
Rule 5.1.2R of the following interests in 3% or more of the voting rights attaching to the Company’s issued share capital.
As at 31 January 2025 Date of announcement
Number of shares
in announcement
Percentage of voting rights
as at 31 January 2025
1
DC Thomson & Company Limited 11 October 2024 4,520,000 7.5%
Rathbone Investment Management 8 August 2019 4,193,681 6.9%
Based on the shares included in the announcement.
Related party transactions
With the exception of the AIFM agreement (disclosed on page 40), Directors’ fees (disclosed on page 50), and Directors’
shareholdings (disclosed on page 49), there were no related party transactions through the financial year.
Revenue and dividends
2025 2024
Total
Pence
per share Total
Pence
per share
Net revenue return for the year after expenses, interest and taxation £1,330,000 2.01p £1,750,000 2.37p
Dividends paid and declared for the year
1
£2,629,000
2
4.20p £3,025,000 4.20p
Revenue reserve at end of year £217,000 0.36p £630,000 0.88p
Realised capital reserve at end of year
3
£151,207,000 249.18p £156,688,000 219.98p
Includes interim dividends paid throughout the year and final interim dividend announced/paid after the financial year end.
The total fourth interim dividend was calculated based on the number of shares in issue on 2 April 2025.
Fully distributable including by way of dividend.
Corporate governance statement
The Company’s corporate governance statement is set out on
pages 34 to 39 and forms part of this Report of the Directors.
Performance, outlook and trends likely to affect
future performance
Please refer to the Chair’s statement on pages 6 to 8 and
the Manager’s review on pages 9 to 14 for an update on the
performance of the Company over the year and outlook for
2025, together with information on the trends likely to affect the
future performance of the Company.
Regulatory
The Alternative Investment Fund Managers Regulations
2013 ('AIFM Regulations')
AIFM remuneration
In accordance with the AIFM Regulations, details of the
remuneration policy of the AIFM and amounts attributable to the
Company are available to existing shareholders upon request at
the registered office of the Company.
Leverage
Under the AIFM regulations, the maximum leverage which the
AIFM is entitled to employ on behalf of the Company is 250%
under the gross method and 200% under the commitment
method. This indicates the highest level that exposure could
reach using these calculations if all available instruments
introducing leverage were used to the maximum permitted level
at the same time. In practice, the maximum level of leverage is
restricted by the Company's investment policy to 20% of net
assets at the time of drawdown. Any changes to these limits will
be agreed in advance between the AIFM and the Company.
At 31 January 2025, the Company had no borrowings. At 31
January 2025, the Company’s gross ratio was 100% and its
commitment ratio was 101%.
Audit information
As required by Section 418 of the Companies Act 2006 each
of the Directors who held office at the date of approval of this
Report of the Directors confirms that, so far as they are aware,
there is no relevant audit information of which the Company’s
auditors are unaware and each Director has taken all of the steps
that they ought to have taken as a Director to make themselves
aware of any relevant audit information and to establish that the
Company’s auditors are aware of that information.
UK Listing Rule 6.6.1R
UK Listing Rule 6.6.1R requires the Company to include certain
information in a single identifiable section of the annual report
or a cross-reference table indicating where the information
is set out. The information covers areas such as long-term
incentive schemes, allotment of shares, investment in subsidiary
companies and agreements with controlling shareholders. The
Directors confirm that there are no disclosures to be made in this
regard.
Annual general meeting
The annual general meeting (‘AGM’) of the Company will be
held at the offices of Franklin Templeton, 5 Morrison Street,
Edinburgh EH3 8BH at 11.30am on Thursday 19 June 2025.
Further information is contained in the Notice of AGM which is
included on pages 84 to 85. All voting on the AGM resolutions
will be conducted by way of a poll. We therefore encourage
all shareholders, and particularly those who cannot attend
physically, to exercise their votes in advance of the meeting by
completing and submitting the proxy voting form. Resolutions
relating to the following items of business will be proposed:
Dividend policy – ordinary resolution
As a result of the timing of the payment of the Company’s
quarterly dividends in January, April, July and October, the
Company’s shareholders are unable to approve a final dividend
each year. As an alternative, the Board will put the Company’s
dividend policy to shareholders for approval on an annual
basis. Resolution 4, which is an ordinary resolution, relates
to the approval of the Company’s dividend policy which is
as follows: The Company’s policy is to pay regular dividends
on the Ordinary Shares which are currently paid quarterly in
January, April, July and October. The Company intends to at
least maintain in absolute terms the total ordinary dividends per
share paid in respect of each financial year compared with the
preceding financial year. The total annual dividend in respect
of each financial year will be at least at a level that ensures that
the Company continues to qualify as an investment trust. The
Board does not set an income target for the investment manager
and dividends may be funded from current period earnings
and/or from distributable reserves. The payment of dividends
in accordance with this dividend policy is subject to market
conditions and the Company's financial position and outlook.
The dividend policy is subject to shareholder approval at each
annual general meeting.
Re-election and remuneration of auditors - ordinary
resolution
Having reviewed the performance of the external auditors and
following the result of the audit tender process that took place
during the financial year, the audit committee considered it
appropriate to recommend the re-appointment of Ernst &
Young LLP ('EY') as external auditors. EY have expressed their
willingness to be re-appointed to office. Resolutions 9 and
10 seek to re-appoint EY as auditors to the Company and to
authorise the Directors to determine the remuneration payable.
Allotment of shares – ordinary resolution
Section 551 of the Companies Act 2006 provides that the
Directors may not allot new shares without shareholder approval.
Resolution 11 seeks to renew the Directors' authority to allot new
shares up to a maximum aggregate nominal amount of £977,033
(being an amount equal to one third of the issued share capital
of the Company (excluding Treasury shares) as at 15 April
2025, being the latest practicable date before the date of this
document). The Board intends to exercise this power only once
the number of shares held by the Company in Treasury is not
sufficient to support share issuance by the Company.
This resolution in isolation only allows the Directors to allot new
shares to existing shareholders pro rata to their existing holdings.
Resolutions 13 and 14 will, if approved, then disapply pre-emption
rights allowing the Company to issue up to 11,724,404 shares for
cash on a non-pre-emptive basis.
As at 15 April 2025, being the last practicable date prior to the
publication of this document, the Company held 40,053,882
Ordinary shares in Treasury, representing approximately 41% of
the Company's issued share capital (including Treasury shares).
The authority contained in resolution 11 will expire on 31 July
2026 or, if earlier, at the AGM of the Company to be held in
2026 unless previously cancelled or varied by the Company in a
general meeting.
Disapplication of statutory pre-emption rights – special
resolutions
Under s561 of the Companies Act 2006, when shares are to be
allotted for cash or sold from Treasury, such shares first must be
offered to existing shareholders in proportion to their existing
holdings of shares. Resolutions 13 and 14 proposed as special
resolutions would, if passed, then disapply pre-emption rights
allowing the Company to issue shares for cash on a non-pre-
emptive basis.
This authority would enable the Directors to issue shares for
cash to take advantage of demand in the market that may
arise in order to increase the amount of the Company’s issued
share capital. The purpose of such an increase would be to
improve the liquidity of the market in the Company’s shares
and to spread the fixed cost of administering the Company
over a wider base. The Directors believe that the issue of
further shares would increase the investment attractions of the
Company to the benefit of existing shareholders. If resolutions
13 and 14 are approved by shareholders, the Board will only use
the authority to disapply pre-emption rights and issue shares:
(i) at a premium to the prevailing NAV at the time of issue; and
(ii) when the Board believes that it is in the best interests of
the Company and its existing shareholders to do so. As shares
will only be issued at a sufficient premium to cover issue costs
to the prevailing NAV at the time of issue, the value of the
underlying assets attributable to the shares will not be diluted
as a result of issuing further shares.
The resolutions, if both are passed, will give the Directors
power to issue for cash equity securities of the Company up
to a maximum of £586,220 (being an amount equal to 20% of
the issued share capital of the Company (excluding Treasury
shares) as at 15 April 2025, the latest practicable date prior to
this document) without the application of pre-emption rights
described above. The authority contained in resolutions 13 and
14 will continue until 31 July 2026 or, if earlier, the AGM of the
Company in 2026.
Purchase of own shares – special resolution
Each year the Directors seek authority from shareholders
to purchase the Company’s own shares. The Directors
recommend that shareholders renew this authority as detailed
in resolution 12. Any shares purchased pursuant to the
authority will be held in Treasury or cancelled. The Directors
currently intend to hold in Treasury the shares purchased
under this authority. The authority will lapse at the earlier of
the Company’s next AGM or 15 months after the date of the
resolution.
The purpose of holding shares in Treasury is to allow the
Company to reissue those shares quickly and cost effectively in
accordance with resolutions 13 and 14. If passed, resolution 12
gives authority for the Company to purchase up to 8,787,441 of
the Company’s own shares or, if less, 14.99% of the Company’s
issued share capital (excluding Treasury shares) as at the date
of the passing of the resolution. The Directors will only exercise
this authority to purchase shares where they consider that such
purchases will be in the best interests of shareholders generally
and only at a discount to the prevailing NAV per share.
Notice of general meeting – special resolution
Resolution 15, proposed as a special resolution, would give the
Directors authority to call a general meeting, other than the
AGM, on 14 days’ clear notice. The Directors believe that it is in
the best interests of shareholders to have the flexibility to call
a general meeting at short notice, although it is intended that
this flexibility will only be used for non-routine business and
when it is deemed in the interests of shareholders as a whole. If
approved, the authority contained in resolution 15 will continue
until the AGM of the Company or, if earlier, 31 July 2026.
Recommendation
The Directors believe that all of the resolutions proposed are in
the best interests of the Company and shareholders as a whole.
The Directors unanimously recommend that all shareholders
vote in favour of all of the resolutions. The results of the
votes on the resolutions at the AGM will be published on the
Company’s website (www.franklinglobaltrust.com).
Going concern status
The Company’s business activities, together with the factors
likely to affect its future development, performance and
position are set out in the Chair’s statement, Manager’s review,
Strategic report and the Report of the Directors. The financial
position of the Company as at 31 January 2025 is shown in the
statement of financial position on page 60.
The statement of cash flow of the Company is set out on
page 62. Note 15 on pages 73 and 74 sets out the Company’s
financial risk management policies, including those covering
market risk, liquidity risk and credit risk. In accordance with the
2019 AIC Code of Corporate Governance and the 2018 UK
Corporate Governance Code, the Directors have undertaken a
rigorous review of the Company’s ability to continue as a going
concern. The Company’s assets consist of a diverse portfolio of
listed equity shares which, in most circumstances, are realisable
within a very short timescale. The Directors have analysed and
reviewed the liquidity of the Company's portfolio under normal
market conditions as at 31 January 2025. The Directors are
mindful of the principal and emerging risks and uncertainties
disclosed on pages 30 and 31.
They have reviewed revenue forecasts for the next two financial
years and believe that the Company has adequate financial
resources to continue its operational existence for the period
to 31 January 2027, which is at least 12 months from the date
on which the financial statements are authorised for issue.
Accordingly, the Directors continue to adopt the going concern
basis in preparing these financial statements.
Viability statement
The Company’s business model is designed to deliver
long-term returns to its shareholders through investment in
large and liquid stocks in global equity markets. Its plans are
therefore based on having no fixed or limited life provided that
global equity markets continue to operate normally. The Board
has assessed the Company’s viability over a three year period in
accordance with provision 31 of the UK Corporate Governance
Code as it believes that this is an appropriate period over which
it does not expect there to be any significant change to the
principal risks and adequacy of the mitigating controls in place.
The Board considers that this reflects the minimum period
which should be considered in the context of the Company’s
long-term objective but one which is limited by the inherent
and increasing uncertainties involved in assessment over a
longer period.
In making this assessment the Directors have considered the
following factors:
• the principal and emerging risks and uncertainties and the
mitigating actions set out on pages 30 and 31, including
specifically the current geopolitical and economic
environment;
• the mitigation measures which key service providers
including the AIFM have in place to maintain operational
resilience;
• the challenges posed by climate change;
• the ongoing relevance of the Company’s investment
objective in the current environment;
• the level of income forecast to be generated by the
Company and the liquidity of the Company’s portfolio;
• the low level of fixed costs relative to the Company's liquid
assets;
• the expectation that in normal markets more than 98% of the
current portfolio could be liquidated within two trading days;
and
• when relevant, the quantity of debt and the ability of the
Company to make payments of interest and repayments of
principal on its debt on their due dates.
Based on the results of their analysis and the Company’s
processes for monitoring each of the factors set out above, the
Directors have a reasonable expectation that the Company will
be able to continue in operation and meet its liabilities as they
fall due over at least the next three years.
Responsibility statement
Each of the Directors, whose names and functions are listed in
the Board of Directors on page 33, confirms that to the best of
their knowledge:
• the financial statements which have been prepared in
accordance with United Kingdom Generally Accepted
Accounting Practice, including the Financial Reporting
Standard applicable in the UK and Republic of Ireland (FRS
102), give a true and fair view of the assets, liabilities, financial
position and profit of the Company; and
• the Report of the Directors, Strategic report and Manager's
review include a fair, balanced and understandable review of
the development and performance of the business and the
position of the Company, together with a description of the
principal risks and the uncertainties that it faces; and
• the annual report and financial statements, taken as a
whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the
Company’s performance, business model and strategy.
The Directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice
including FRS 102 (and applicable law).
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and of
the profit or loss of the Company for that period.
In preparing these financial statements, the Directors are
required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether applicable UK Accounting Standards have
been followed, including the Financial Reporting Standard
applicable in the UK and Republic of Ireland (FRS 102),
subject to any material departures disclosed and explained
in the financial statements respectively; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any
time the financial position of the Company and enable them
to ensure that the financial statements and the Directors’
remuneration statement comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The financial statements are published on the Company’s
website (www.franklinglobaltrust.com) which is maintained
by the investment manager. The Directors are responsible
for the maintenance and integrity of the Company’s website.
Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
This responsibility statement was approved by the Board of
Directors on 17 April 2025 and is signed on its behalf by:
Christopher Metcalfe
Chair
17 April 2025
Audit committee report
The audit committee is chaired by Lindsay Dodsworth and,
during the year under review comprised all of the Directors.
Krisha Shanmuganathan joined the audit committee on the date
of his appointment to the Board.
The Board notes that the AIC Code permits the Chair of the
Board to be a member of the audit committee of an investment
trust. In light of the fact that the Board consists of only five
members (reducing to four following the conclusion of the AGM)
and recognising Christopher Metcalfe's relevant experience, the
audit committee resolved to continue his appointment to the
committee following his appointment as Chair of the Company.
The Board reviews the relevant skills and experience of the audit
committee as part of the annual Board review and believes that
the members of the committee have the appropriate skills and
experience. Biographies of the members of the committee are
on page 33.
Audit committee responsibilities and activities
during the year
The audit committee met twice during the year and reviewed the
scope and results of the audit and considered and approved the
external auditors’ plan for the audit of the financial statements
for the year ended 31 January 2025. The audit committee’s
responsibilities and activities during the year included:
• Monitoring and reviewing the integrity of the financial
statements of the Company and ensuring, in particular, that,
taken as a whole, they are fair, balanced and understandable;
• Reviewing the appropriateness and consistency of the
Company's accounting policies;
• Reviewing and challenging the Company's going concern
and viability statements;
• Oversight of the effectiveness of internal financial controls
and reporting, risk management systems and internal control
policies and procedures for the identification, assessment
and reporting of risks;
• Monitoring and reviewing the independence, objectivity and
effectiveness of the external auditors;
• Making recommendations to the Board in relation to the
appointment, evaluation and dismissal of the external
auditors, their remuneration, terms of their engagement and
reviewing their independence and objectivity including a
recommendation to reappoint the external auditor following
the tender process;
• Developing and implementing policy on the engagement of
the external auditors to supply non-audit services;
• Monitoring the impact of any accounting or regulatory
changes impacting the Company; and
• Reporting to the Board, identifying any matter in respect of
which it considers that action or improvement is needed and
making recommendations as to the steps to be taken.
The audit committee takes account of the most significant issues
and risks, both operational and financial, likely to impact the
Company’s financial statements.
Having reviewed the annual report and financial statements, the
committee recommended to the Board that the annual report
and financial statements are fair, balanced and understandable
and provide the information necessary for shareholders to
assess the Company's position and performance, business
model and strategy.
During the year the committee considered the appropriateness
of the expense allocations between capital and revenue,
concluding that the current allocation for the AIFM fee and
finance costs was appropriate. It also considered the fee level,
independence, effectiveness and re-appointment of the
auditors.
The committee also received a report from the AIFM on
oversight of the service providers.
Auditors’ independence
The Company has in place a policy governing and controlling
the provision of non-audit services by the external auditors,
in order to help safeguard the auditors' independence and
objectivity. This is achieved by prohibiting non-audit work where
independence may be compromised or conflicts arise. Any non-
audit work requires specific approval of the audit committee in
each case.
The audit fee amounts to £56,700 plus VAT for the year ended
31 January 2025 (2024: £55,000 plus VAT).
There were no non-audit fees for the year ended 31 January
2025 (2024: none).
Following review, the committee is satisfied that the Company’s
auditors, Ernst & Young LLP (‘EY’), remain independent.
Auditors’ rotation
A competitive tender for the audit of the Company was last held
during the financial year ended 31 January 2025, following which
EY were selected to continue as the Company’s auditors. Under
UK rotation guidance, EY can serve as auditors for the next 10
years, after which there would be a mandatory requirement for
them to rotate off.
The engagement partner will rotate every five years. The current
audit engagement partner, Ahmer Huda, took over the role in
August 2022, therefore this is his third year as audit partner.
Auditors’ report
At the conclusion of the audit, EY did not highlight any issues
to the audit committee which would cause it to qualify its audit
report nor did it highlight any fundamental internal control
weaknesses. EY issued an unqualified audit report which is
included on pages 53 to 58.
Matter Action
Accuracy of portfolio
valuation
Actively traded listed investments are valued using stock exchange prices provided by third-party service
providers. The AIFM reviews and summarises the internal controls reports, prepared annually by JPMorgan
Chase Bank N.A. covering Global Fund Accounting and Custody and the audit committee reviews this
summarised report annually. The internal controls report is reported on by independent external auditors and
includes details of the systems, processes and controls around the daily pricing of equity securities, including
the application of exchange rate movements. Stale prices are monitored monthly by the AIFM's pricing team
and would be reported to the audit committee.
Accuracy of revenue
recognition
The audit committee reviews a summary of JPMorgan Chase Bank N.A.’s internal controls report annually. The
internal controls report includes details of the systems, processes and controls around the recording of
investment income. The Board also reviews revenue forecasts at each Board meeting. The investment manager
and the Board review all special dividends to make sure that they are correctly treated in accordance with the
Company's accounting policy.
Allocation of
expenses between
revenue and capital
The allocation is reviewed by the audit committee annually considering the long-term split of returns from the
portfolio, both historic and projected, the objectives of the Company and current, historical and prospective
yields.
Going concern and
viability statement
The committee reviewed evidence provided by the AIFM to support the Going Concern and Viability
Statements on page 45 and was satisfied that it could recommend to the Board the relevant statements.
The following significant issues were considered by the audit committee in relation to the financial statements:
Effectiveness of the external audit process
The audit committee evaluated the effectiveness of the
external auditors and the external audit that they undertook
prior to making a recommendation on the re-appointment of EY
at the forthcoming AGM following the tender process.
This evaluation involved an assessment of the effectiveness
of the auditors’ performance against criteria including
qualification, expertise and resources, independence and
effectiveness of the audit process. The committee reviewed
and agreed the audit plan including the level of audit
materiality and discussed the key risk areas with the auditors
and deemed these appropriate. The committee also discussed
with the auditors any significant areas where they challenged
the AIFM's assumptions in connection with the preparation
of the financial statements, noting that there were no
disagreements with the AIFM.
On behalf of the Board
Lindsay Dodsworth
Chair of the Audit Committee
17 April 2025
Remuneration committee
The remuneration committee has responsibility for setting the
remuneration policy for Directors, taking into account factors
such as time commitment and responsibilities, with the objective
to attract and retain Directors of the quality required to run the
Company successfully, without paying more than necessary. The
committee is also responsible for reviewing and setting Directors’
remuneration levels.
Remuneration statement
The Board has prepared this report in accordance with the
requirements of the Large and Medium-sized Companies and
Groups (Accounts and Reports) (Amendment) Regulations
2013. An ordinary resolution to approve this report will be put to
shareholders at the AGM.
Company law requires the Company’s auditors to audit certain
disclosures provided in this report. Where disclosures have been
audited, they are indicated as such. The auditors’ opinion is
included in their report on pages 53 to 58.
Directors’ remuneration policy
The Board’s policy is that the remuneration of non-executive
Directors should reflect the experience of the Board as a whole,
be fair and comparable to that of other investment companies that
are similar in size, have a similar capital structure and have similar
investment objectives. It is intended that this policy will continue
for the year ended 31 January 2026 and subsequent years. The
fees for the Directors are determined within the limits set out in
the Company’s Articles of Association. Each Director abstains from
voting on their own remuneration.
The Directors’ remuneration policy will be put to a shareholders’
vote annually.
Directors are entitled to be reimbursed for any reasonable
expenses properly incurred by them in connection with the
performance of their duties. Directors are not eligible for bonuses,
pension benefits, share options, long-term incentive schemes or
other benefits. Additional fees may be payable where (i) a Director
is required to perform services outside the ordinary duties of a
Director; or (ii) where the work performed is outside the ordinary
course of Company business and in each case where the time
commitment is exceptional.
Directors do not have service contracts but are provided with
letters of appointment. All Directors are appointed for an initial term
covering the period from the date of that appointment until the first
AGM at which they are required to stand for election in accordance
with the Company’s Articles of Association.
Thereafter, in line with best practice, all Directors will stand for re-
election at the AGM each year. There is no notice period and no
provision for compensation upon early termination of appointment.
The Company’s Articles of Association provide for a maximum level
of total remuneration of £200,000 per annum for the Directors in
aggregate.
Annual report on remuneration
For the year to 31 January 2025, the non-executive Directors
received a fee of £30,500 per annum, the audit committee Chair
received a fee of £38,000 and the Chair received a fee of £45,500
per annum.
During the year, the remuneration committee considered the
Directors’ fees in the context of the benchmark data from its peer
group. Following a review of this and noting that there are only four
Directors on the Board, it was agreed that the Chair's fee would be
increased to £48,250, the audit committee Chair to £40,250 and
the other Directors' fees to £32,300 per annum, with effect from
1 February 2025.
Directors’ shareholdings (audited)
The shareholdings detailed above have not changed between
31 January 2025 and 17 April 2025, the date of signing the
accounts. Krishna Shanmuganathan was appointed as a
Director of the Company on 1 April 2025. Krishna owns 13,638
shares in the Company.
The Company confirms that it has not set out any formal
requirements or guidelines for a Director to own shares in the
Company.
Approval
Ordinary resolutions for the approval of the Directors’
remuneration policy and annual report on remuneration will be
put to shareholders at the forthcoming AGM. At the AGM on
20 June 2024, 99.60% of proxy votes were cast in favour of the
Directors’ remuneration report for the year ended 31 January
2024 and 99.58% of proxy votes were cast in favour of the
Directors' remuneration policy.
As at 31 January 2025 2024
Lindsay Dodsworth 2,542 2,542
Marian Glen — —
Gary Le Sueur 31,735 31,735
Christopher Metcalfe 8,600 8,600
Directors’ remuneration statement
Total return (ten financial years)
Source: Martin Currie Investment Management Limited.
The benchmark is the MSCI All Country World index.
Directors’ emoluments for the year (audited)
Year ended
31 January 2025
£
Year ended
31 January 2024
£
Lindsay Dodsworth 38,000 36,000
Marian Glen 30,500 29,000
Gary Le Sueur 30,500 29,000
Christopher Metcalfe
1
45,500 38,667
Gillian Watson
2
– 14,500
144,500 147,167
Benchmark 218.5%
1
%
250
200
150
100
50
0
Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022Jan 2023 Jan 2024 Jan 2025
Share price total return 147.8%
The graph below compares, for the ten financial years ended 31 January 2025, the total return (assuming all dividends were reinvested) to
Ordinary shareholders compared to the total return of the benchmark.
Appointed as Chair of the Company on 1 June 2023.
Retired on 1 June 2023.
On behalf of the Board
Gary Le Sueur
Chair of the Remuneration Committee
17 April 2025
Relative importance of spend on Directors’ remuneration
To enable shareholders to assess the relative importance of spend on remuneration, the Directors’ total remuneration has been
shown in a table below compared with the Company’s distributions.
Year ended
31 January 2025
Year ended
31 January 2024 % change
Directors’ total remuneration (£000) 145 147 (1.4)
Dividends paid and payable (£000) 2,629 3,025 (13.1)
Share buybacks (£000) 39,184 18,294 114.2
Dividend per share (p) 4.20 4.20 –
Percentage change in annual remuneration of Directors
Year Lindsay Dodsworth Marian Glen Gary Le Sueur Christopher Metcalfe
2024-2025 6% 5% 5% 18%
2023-2024 14% (3%) 5% 41%
1
2022-2023 28%
2
(17%)
3
4% 4%
2021-2022 n/a
2
10% 4% 4%
Christopher Metcalfe was appointed as Chair on 1 June 2023.
Lindsay Dodsworth was appointed on 1 November 2021 and became chair of the audit committee on 16 June 2022.
Marian Glen stepped down from her position as chair of the audit committee on 16 June 2022.
1
3: Financial review
Independent auditors’ report to the members of
Franklin Global Trust plc
Opinion
We have audited the financial statements of Franklin Global
Trust plc for the year ended 31 January 2025 which comprise
Statement of Comprehensive Income, the Statement of Financial
Position, the Statement of Changes in Equity, the Statement of
Cash Flow and the related notes 1 to 18, including a summary of
significant accounting policies. The financial reporting
framework that has been applied in their preparation is
applicable law and United Kingdom Accounting Standards
including FRS 102 “The Financial Reporting Standard applicable
in the UK and Republic of Ireland” (United Kingdom Generally
Accepted Accounting Practice).
In our opinion, the financial statements:
• give a true and fair view of the Company’s affairs as at 31
January 2025 and of its profit for the year then ended;
• have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of
the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We are independent of the Company in accordance with the
ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as
applied to public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the Company and we remain independent
of the Company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our
evaluation of the Directors’ assessment of the Company’s ability
to continue to adopt the going concern basis of accounting
included:
• Confirming our understanding of the Company’s going
concern assessment process by engaging with the Directors
and the Company Secretary to determine if all key factors
were considered in their assessment.
• Inspecting the Directors’ assessment of going concern,
including the revenue forecast and liquidity assessment, for
the period to 31 January 2027 which is at least 12 months from
the date these financial statements are authorised for issue. In
preparing the revenue forecast and liquidity assessment, the
Company has concluded that it is able to continue to meet its
ongoing costs as they fall due.
• Review of the factors and assumptions, including the
impact of the current economic environment, as applied
to the revenue forecast and the liquidity assessment of the
investments. We considered the appropriateness of the
methods used to calculate the revenue forecast and the
liquidity assessment and determined, through testing of the
methodology and calculations, that the methods, inputs and
assumptions utilised were appropriate to be able to make an
assessment for the Company.
• Considering the mitigating factors included in the revenue
forecast that are within the control of the Company. We
reviewed the Company’s assessment of the liquidity of
investments held and evaluated the Company’s ability to sell
those investments to cover the working capital requirements
should revenue decline significantly.
• Reviewing the Company’s going concern disclosures
included in the annual report in order to assess that the
disclosures were appropriate and in conformity with the
reporting standards.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Company’s ability to continue as a going concern for a period to
31 January 2027.
In relation to the Company’s reporting on how they have applied
the UK Corporate Governance Code, we have nothing material
to add or draw attention to in relation to the Directors’ statement
in the financial statements about whether the Directors
considered it appropriate to adopt the going concern basis of
accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report. However, because not all future events or
conditions can be predicted, this statement is not a guarantee as
to the Company’s ability to continue as a going concern.
Independent auditors’ report
Overview of our audit approach
Key audit matters • Risk of incomplete or inaccurate revenue recognition, including the classification of special
dividends as revenue or capital items in the Statement of Comprehensive Income
• Risk of incorrect valuation or ownership of the investment portfolio
Materiality • Overall materiality of £2.32m (2024: £2.56m) which represents 1% (2024: 1%) of total
shareholders’ funds.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for
the Company. This enables us to form an opinion on the financial statements. We take into account size, risk profile, the organisation of
the Company and effectiveness of controls, the potential impact of climate change and changes in the business environment when
assessing the level of work to be performed. All audit work was performed directly by the audit engagement team.
Climate change
Stakeholders are increasingly interested in how climate change will impact companies. The Company has determined that the
most significant future impacts from climate change on its operations will be from how climate change could affect the Company’s
investments and overall investment process. This is explained in the principal and emerging risks and uncertainties section on page
30, which forms part of the “Other information,” rather than the audited financial statements. Our procedures on these unaudited
disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line with our responsibilities on ’Other
information’.
Our audit effort in considering climate change was focused on the adequacy of the Company’s disclosures in the financial statements
as set out in Note 1a and conclusion that there was no further impact of climate change to be taken into account as the investments
are valued based on market pricing as required by FRS102. We also challenged the Directors’ considerations of climate change in their
assessment of viability and associated disclosures.
Based on our work we have not identified the impact of climate change on the financial statements to be a key audit matter or to
impact a key audit matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in
the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
Risk Our response to the risk
Key observations
communicated to the Audit
Committee
Incomplete or inaccurate revenue recognition,
including the classification of special dividends
as revenue or capital items in the Statement of
Comprehensive Income (as described on page
47 in the Audit Committee Report and as per the
accounting policy set out on page 64.)
The total revenue for the year to 31 January 2025
was £2.42m (2024: £2.83m), consisting primarily
of dividend income from listed equity
investments.
There is a risk of incomplete or inaccurate
recognition of revenue through the failure to
recognise proper income entitlements or to
apply an appropriate accounting treatment.
The Directors may be required to exercise
judgement in determining whether income
receivable in the form of special dividends
should be classified as ‘revenue’ or ‘capital’ in
the Statement of Comprehensive Income.
We have performed the following procedures:
We obtained an understanding of the processes
and controls surrounding revenue recognition,
including the classification of special dividends by
performing walkthrough procedures.
For 100% of dividends received and accrued,
we recalculated the income by multiplying the
investment holdings at the ex-dividend date,
traced from the accounting records, by the
dividend per share, which was agreed to an
independent data vendor. We also agreed all
exchange rates to an independent data vendor
and agreed a sample of dividend receipts to bank
statements.
For 100% of dividends accrued, we reviewed
the investee company announcement to assess
whether the dividend entitlements arose prior to
31 January 2025.
To test completeness of recorded income, we
verified that expected dividends for each investee
company held during the year had been recorded
as income with reference to investee company
announcements obtained from an independent
data vendor.
For 100% of dividends received and accrued
during the period, we reviewed the type of
dividends paid with reference to an independent
external data vendor to identify those which are
special. Based on the work performed, we did not
identify any special dividends.
The results of our
procedures identified no
material misstatement
in relation to incomplete
or inaccurate revenue
recognition, including
incorrect classification
of special dividends as
revenue or capital items
in the Statement of
Comprehensive Income.
Our application of materiality
We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements
on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually
or in the aggregate, could reasonably be expected to influence
the economic decisions of the users of the financial statements.
Materiality provides a basis for determining the nature and extent of
our audit procedures.
We determined materiality for the Company to be £2.32 million
(2024: £2.56 million), which is 1% (2024: 1%) of shareholders’
funds. We believe that shareholders’ funds provides us with a
materiality aligned to the key measurement of the Company’s
performance.
Performance materiality
The application of materiality at the individual account or balance
level. It is set at an amount to reduce to an appropriately low level
the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments, together with our
assessment of the Company’s overall control environment, our
judgement was that performance materiality was 75% (2024: 75%)
of our planning materiality, namely £1.74m (2024: £1.92m).
We have set performance materiality at this percentage due to
the fact there has been no misstatements in prior periods.
Given the importance of the distinction between revenue and
capital for investment trusts, we have also applied a separate
testing threshold for the revenue column of the Statement of
Comprehensive Income of £0.12m (2024: £0.13m), being our
reporting threshold.
Reporting threshold
An amount below which identified misstatements are considered as
being clearly trivial.
We agreed with the Audit Committee that we would report to
them all uncorrected audit differences in excess of £0.12m
(2024: £0.13m), which is set at 5% of planning materiality, as well
as differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in
light of other relevant qualitative considerations in forming our
opinion.
Other information
The other information comprises the information included in
the annual report, other than the financial statements and our
auditor’s report thereon. The Directors are responsible for the
other information contained within the annual report.
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in this report, we do not express any form of assurance
conclusion thereon.
Risk Our response to the risk
Key observations
communicated to
the Audit
Committee
Incorrect valuation or ownership of the investment
portfolio (as described on page 47 in the Audit
Committee Report and as per the accounting policy
set out on page 64.)
The valuation of the investment portfolio at 31 January
2025 was £230.28m (2024: £264.79m) consisting
primarily of listed investments.
The valuation of the investments held by the Company
is the primary driver of the Company’s net asset value
and total return. Incorrect investment pricing, or a
failure to maintain proper legal title of the assets held
by the Company could have a significant impact on the
portfolio valuation and the return generated for
shareholders.
The fair value of listed investments is determined by
reference to stock exchange quoted market bid prices
at the close of business on the reporting date.
We have performed the following procedures:
We obtained an understanding of the processes
surrounding investment pricing and legal title of listed
investments by performing walkthrough procedures.
For 100% of investments in the portfolio, we verified the
market prices and exchange rates to an independent
pricing vendor and recalculated the investment valuations
as at the year-end.
For 100% of investments in the portfolio, we obtained the
market prices from an independent pricing vendor for
five business days pre and post the year end date and
calculated the day-on-day movements and confirmed
there are no stale prices.
We compared the Company’s investment holdings at
31 January 2025 to independent confirmations received
directly from the Company’s Custodian and Depositary.
The results of
our procedures
identified no material
misstatement in
relation to the risk of
incorrect valuation
or ownership of the
investment portfolio.
There have been no changes to the areas of audit focus raised in the above risk table from the prior year.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements, or our knowledge
obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of the other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the
Companies Act 2006
In our opinion the part of the Directors’ remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
• the information given in the strategic report and the
Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
• the strategic report and Directors’ Reports have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by
exception
In the light of the knowledge and understanding of the
Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or Directors’ report.
We have nothing to report in respect of the following matters
in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept, or
returns adequate for our audit have not been received from
branches not visited by us; or
• the financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Company’s compliance
with the provisions of the UK Corporate Governance Code
specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with
the financial statements or our knowledge obtained during the
audit:
• Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 45;
• Directors’ explanation as to its assessment of the Company’s
prospects, the period this assessment covers and why the
period is appropriate set out on page 45;
• Director’s statement on whether it has a reasonable
expectation that the Company will be able to continue in
operation and meets its liabilities set out on page 45;
• Directors’ statement on fair, balanced and understandable
set out on page 46;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
page 30;
• The section of the annual report that describes the review
of effectiveness of risk management and internal control
systems set out on page 39; and
• The section describing the work of the audit committee set
out on page 47.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities
statement set out on page 46, the Directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal
control as the Directors determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the
Company or to cease operations, or have no realistic alternative
but to do so.
Auditors’ responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these financial statements.
Explanation as to what extent the audit was
considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect
irregularities, including fraud. The risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion. The extent to
which our procedures are capable of detecting irregularities,
including fraud is detailed below.
However, the primary responsibility for the prevention
and detection of fraud rests with both those charged with
governance of the Company and management.
• We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Company and
determined that the most significant are FRS 102, the
Companies Act 2006, the Listing Rules, UK Corporate
Governance Code, the Association of Investment
Companies’ Code and Statement of Recommended
Practice, Section 1158 of the Corporation Tax Act 2010 and
The Companies (Miscellaneous Reporting) Regulations 2018.
• We understood how the Company is complying with those
frameworks through discussions with the audit committee
and company secretary and review of Board minutes and the
Company’s documented policies and procedures.
• We assessed the susceptibility of the Company’s financial
statements to material misstatement, including how fraud
might occur by considering the key risks impacting the
financial statements. We identified a fraud risk with respect to
the incomplete or inaccurate revenue recognition through
incorrect the classification of special dividends as revenue or
capital items. Further discussion of our approach is set out in
the section on key audit matters above.
• Based on this understanding we designed our audit
procedures to identify non-compliance with such laws and
regulations. Our procedures involved review of the company
secretary’s reporting to the Directors with respect to the
application of the documented policies and procedures and
review of the financial statements to ensure compliance with
the reporting requirements of the Company.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial Reporting
Council’s website at
https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditors’ report.
Other matters we are required to address
• Following the recommendation from the audit committee, we
were appointed by the Company and signed an engagement
letter on 13 August 2015 to audit the financial statements of
the Company for the year ending 31 January 2016 and
subsequent financial periods.
The period of total uninterrupted engagement including
previous renewals and reappointments is 9 years, covering
the years ending 31 January 2016 to 31 January 2025.
• The audit opinion is consistent with the additional report to
the audit committee.
Use of our report
This report is made solely to the Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the Company’s members those matters
we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the
Company and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Ahmer Huda
(Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
17 April 2025
Year to 31 January 2025 Year to 31 January 2024
Note
Revenue
£000
Capital
£000
Total
£000
Revenue
£000
Capital
£000
Total
£000
Net gains on investments 7 – 17,427 17,427 – 25,631 25,631
Net currency gains – 5 5 – – –
Revenue 2 2,419 – 2,419 2,832 – 2,832
Investment management fee
1
(226) (906) (1,132) (226) (904) (1,130)
Other expenses 3 (502) – (502) (468) – (468)
Net return on ordinary activities before
finance costs and taxation
1,691 16,526 18,217 2,138 24,727 26,865
Finance costs 1(d) (110) (439) (549) (101) (400) (501)
Net return on ordinary
activities before taxation
1,581 16,087 17,668 2,037 24,327 26,364
Taxation on ordinary activities 4 (251) – (251) (287) – (287)
Net return attributable to shareholders 1,330 16,087 17,417 1,750 24,327 26,077
Net return per Ordinary share 5 2.01p 24.36p 26.37p 2.37p 32.87p 35.24p
The total columns of this statement are the profit and loss accounts of the Company.
The revenue and capital items are presented in accordance with the Association of Investment Companies ('AIC') Statement of Recommended Practice 2022.
All revenue and capital items in the above statement derive from continuing operations.
No operations were acquired or discontinued in the year.
The notes on pages 64 to 76 form part of these financial statements.
There is no other comprehensive income and therefore the return attributable to shareholders is also the total comprehensive income for the year.
The details of the investment management fee are provided in the Report of the Directors on page 40.
Statement of comprehensive income
The notes on pages 64 to 76 form part of these financial statements.
Franklin Global Trust plc is registered in Scotland, company number SC192761.
The financial statements on pages 59 to 76 were approved by the Board of Directors on 17 April 2025 and signed on its behalf by
As at 31 January 2025 As at 31 January 2024
Note £000 £000 £000 £000 £000 £000
Non-Current assets
Investments at fair value through profit or loss 7
230,275
264,787
Current assets
Trade receivables 8
2,360
1,029
Cash and cash equivalents 9
1,900
1,922
4,260
2,951
Current liabilities
Trade payables 10
(2,309)
(961)
Bank loan 10
–
(10,000)
(2,309)
(10,961)
Total net assets
232,226
256,777
Equity
Called up Ordinary share capital 11 4,934 4,934
Share premium account
11,823
11,823
Capital redemption reserve
11,083
11,083
Capital reserve, of which: 12
204,169
228,307
Realised Capital reserve (distributable) 151,207 156,688
Unrealised gains on investments
(undistributable)
52,962 71,619
Revenue reserve 217 630
Total shareholders' funds 232,226 256,777
Net asset value per Ordinary share 13 382.7p 360.5p
Statement of financial position
On behalf of the Board
Christopher Metcalfe
Chair
17 April 2025
Statement of changes in equity
Note
Called up
Ordinary share
capital
£000
Share
premium
account
£000
Capital
redemption
reserve
£000
Capital
reserve
£000
Revenue
reserve
£000
Total
£000
As at 31 January 2023 4,934 11,424 11,083 221,463 864 249,768
Net return attributable
to shareholders
– – – 24,327 1,750 26,077
Ordinary shares issued 11 – 399 – 1,940 – 2,339
Ordinary shares
bought back
11 – – – (18,305) – (18,305)
Dividends paid 6 – – – (1,118) (1,984) (3,102)
As at 31 January 2024 4,934 11,823 11,083 228,307 630 256,777
The notes on pages 64 to 76 form part of these financial statements.
1
Note
Called up
Ordinary share
capital
£000
Share
premium
account
£000
Capital
redemption
reserve
£000
Capital
reserve
£000
Revenue
reserve
£000
Total
£000
As at 31 January 2024
4,934 11,823 11,083 228,307 630 256,777
Net return attributable
to shareholders
– – – 16,087
1,330 17,417
Ordinary shares
bought back
11 – – – (39,184) – (39,184)
Dividends paid 6
– – – (1,041) (1,743) (2,784)
As at 31 January 2025
4,934 11,823 11,083
204,169
217 232,226
Statement of cash flow
Year to 31 January 2025 Year to 31 January 2024
Note £000 £000 £000 £000
Cash flows from operating activities
Net return on ordinary activities before taxation 17,668 26,364
Adjustments for:
Gains on investments 7 (17,427) (25,631)
Finance costs 549 501
Dividend income recognised 2 (2,370) (2,790)
Interest income recognised 2 (49) (42)
Decrease in receivables 30 17
Increase/(decrease) in payables 58 (26)
Overseas withholding tax suffered 4 (251) (287)
(19,460) (28,258)
Net cash flows from operations (1,792) (1,894)
Interest received 49 42
Dividends received 2,362 2,732
2,411 2,774
Net cash flows from operating activities 619 880
Cash flows for investing activities
Purchases of investments (91,702) (80,424)
Sales of investments 144,065 119,657
Net cash flows from investing activities 52,363 39,233
Cash flows from financing activities
Repurchase of Ordinary share capital (39,541) (18,246)
Shares issued for cash – 2,339
Equity dividends paid 6 (2,784) (3,102)
Drawdown of bank loan – 10,000
Repayment of bank loan (10,000) (30,000)
Interest and fees paid on bank loan (679) (438)
Net cash flows from financing activities
(53,004) (39,447)
Net (decrease)/increase in cash and cash
equivalents
(22) 666
Cash and cash equivalents at the start of the year 1,922 1,256
Cash and cash equivalents at the end of the year 1,900 1,922
The notes on pages 64 to 76 form part of these financial statements.
Analysis of debt
As at 31 January 2024 Cash flows As at 31 January 2025
Note £000 £000 £000
Cash at bank 9 1,922 (22) 1,900
Bank loan 10 (10,000) 10,000 –
Net debt (8,078) 9,978 1,900
As at 31 January 2023 Cash flows As at 31 January 2024
Note £000 £000 £000
Cash at bank 9 1,256 666 1,922
Bank loan 10 (30,000) 20,000 (10,000)
Net debt (28,744) 20,666 (8,078)
Note 1: Accounting policies
(a) For the reporting period, the Company is applying FRS
102 Financial Reporting Standard applicable in the UK
and Republic of Ireland (FRS 102), which forms part of the
Generally Accepted Accounting Practice ('UK GAAP') issued
by the Financial Reporting Council ('FRC').
The Company’s assets consist of a diverse portfolio of listed
equity shares which, in most circumstances, are realisable
within a very short timescale. The Directors are mindful of the
principal and emerging risks and uncertainties disclosed on
pages 30 and 31 including those related to geopolitical risks
and climate considerations.
They have reviewed revenue forecasts for the next two
financial years and believe that the Company has adequate
financial resources to continue its operational existence for
the period to 31 January 2027, which is at least 12 months
from the date the financial statements are authorised for
issue. Accordingly, the Directors continue to adopt the going
concern basis in preparing these financial statements.
These financial statements have been prepared in
accordance with the Disclosure Guidance and Transparency
Rules of the Financial Conduct Authority, FRS102 issued
by the FRC and the revised Statement of Recommended
Practice 'Financial Statements of Investment Trust Companies
and Venture Capital Trusts' (‘SORP’) issued by the AIC in July
2022.
The Company is required to identify a functional currency,
being the currency in which the Company predominately
operates. The Board has determined that sterling is the
Company’s functional currency, which is also the currency in
which these financial statements are prepared. This is also the
currency in which all expenses and dividends are paid.
The Directors have considered the impact of climate change
on the value of the listed investments that the Company
holds. In the view of the Directors, as the portfolio consists of
listed equities, their market prices should reflect the impact,
if any, of climate change and accordingly no adjustment has
been made to take account of climate change in the valuation
of the portfolio in these financial statements.
(b) Income from investments (other than capital dividends),
including taxes deducted at source, is included in revenue
by reference to the date on which the investment is quoted
ex-dividend, or where no ex-dividend date is quoted, when
the Company’s right to receive payment is established.
UK investment income is stated net of the relevant tax
credit. Overseas dividends include any taxes deducted at
source. Special dividends are credited to capital or revenue,
according to the circumstances.
(c) Interest receivable and payable, investment management
fees and other expenses are measured on an accrual basis.
(d) The investment management fee and finance costs in
relation to debt are recognised four-fifths as a capital
item and one fifth as a revenue item in the statement of
comprehensive income in accordance with the Board’s
expected long-term split of returns in the form of capital gains
and revenue, respectively. Finance costs relate to interest
and fees on bank loans and overdrafts. All other expenses
are charged to revenue except where they directly relate to
the acquisition or disposal of an investment, in which case
they are treated as described in (f) below. Full details of the
investment management fee are included in the Report of the
Directors on page 40.
(e) Investments have been classified upon initial recognition as
fair value through profit or loss. Investments are recognised
and derecognised at trade date where a purchase or sale is
under a contract whose terms require delivery within the time
frame established by the market concerned and are initially
measured as fair value. After initial recognition, investments
are valued at fair value. For listed investments, this is deemed
to be bid market prices. Gains and losses arising from
changes in fair value are included in net profit or loss for the
year as a capital item in the statement of comprehensive
income and are recognised in the capital reserve.
(f) Transaction costs incurred on the purchase and disposal of
investments are recognised as a capital item in the statement
of comprehensive income.
(g) Monetary assets and liabilities expressed in foreign currencies
are translated into sterling at rates of exchange ruling at the
date of the statement of financial position. Non-monetary
items expressed in foreign currencies held at fair value are
translated into sterling at rates of exchange ruling at the date
the fair value is measured. Transactions in foreign currency
are converted to sterling at the rate ruling at the date of the
transaction. Exchange gains and losses are taken to the
income statement as a capital or revenue item depending on
the nature of the underlying item.
(h) Cash and cash equivalents comprise cash and demand
deposits which are readily convertible to a known amount of
cash and are subject to insignificant risk of changes in value.
(i) Dividends payable under FRS102 should not be accrued in
the financial statements unless they have been approved
by shareholders before the statement of financial position
date. Dividends to equity shareholders are recognised in
the statement of changes in equity when the shareholder's
right to receive the payment is established. In the case of the
fourth interim dividend, this would be the ex-dividend date of
3 April 2025.
(j) Called up ordinary share capital – represents the nominal
value of the issued share capital including shares held in
Treasury. This reserve is non-distributable.
Notes to the financial statements
The share premium account – when shares held in Treasury
are reissued, the excess of the sales proceeds over the
weighted average price of repurchase is allocated to the
share premium account. This reserve is non-distributable.
The capital redemption reserve – represents the nominal
value of the shares bought back and cancelled. This reserve
is non-distributable.
The capital reserve – gains or losses on realisation of
investments and changes in fair values of investments are
transferred to the realised capital reserve. Any changes in fair
values of investments that are not readily convertible to cash
are treated as unrealised gains or losses within the capital
reserve. The capital element of the investment management
fee and relevant finance costs are charged to this reserve.
Any associated tax relief is also credited to this reserve.
The realised portion of the capital reserve is distributable by
way of dividend and by way of share buybacks.
The revenue reserve – represents net revenue earned that
has not been distributed to shareholders. This reserve is fully
distributable.
(k) Taxation is based upon the revenue for the year and is
allocated according to the marginal basis between revenue
and capital using the Company’s effective rate of corporation
tax for the accounting period.
(l) Deferred taxation is recognised in respect of all timing
differences that have originated but not reversed at the
statement of financial position date where transactions or
events that result in an obligation to pay more or a right
to pay less tax in future have occurred at the statement of
financial position date measured on an undiscounted basis
and based on enacted tax rates. This is subject to deferred
tax assets being recognised only if it is considered more
likely than not that there will be suitable profits from which
the future reversal of the underlying temporary differences
can be deducted. Timing differences are differences arising
between the Company’s taxable profits and its results as
stated in the accounts which are capable of reversal in one
or more subsequent periods. Due to the Company’s status as
an investment trust, and the intention to continue meeting
the conditions required to obtain approval as an investment
trust in the foreseeable future, the Company has not provided
deferred tax on any capital gains and losses arising on the
revaluation or disposal of investments.
(m) Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised
and in any future periods affected. There have been no
significant judgements, estimates or assumptions for the year.
(n) Bank loans are classified as financial liabilities at amortised
cost. Interest and fees payable on the bank loan are
accounted for on an accrual basis in the statement of
comprehensive income.
Note 2: Revenue
Year ended 31 January 2025
£000
Year ended 31 January 2024
£000
Dividends from listed investments
UK equities
137
122
International equities
2,233
2,668
Other revenue
Interest on deposits
49
42
2,419 2,832
There were no capital dividends received during the year ended 31 January 2025 (2024: £nil).
Note 3: Other expenses
Year ended 31 January 2025
£000
Year ended 31 January 2024
£000
Directors' fees 145 147
Advertising and public relations 80 63
Audit fees 68 66
Professional, regulatory and listing fees 56 55
Registration fees 43 43
Recruitment fees 30 –
Depositary fees 25 29
Printing and postage 20 14
Directors' and officers' liability insurance 12 12
Custody fees 10 11
Legal fees 3 1
VAT recovered (15) (19)
Other 25 46
502 468
All expenses detailed above include VAT where applicable.
Note 4: Taxation on ordinary activities
Year ended 31 January 2025 Year ended 31 January 2024
Revenue
£000
Capital
£000
Total
£000
Revenue
£000
Capital
£000
Total
£000
Overseas tax suffered 251 – 251 287 – 287
Year ended 31 January 2025
£000
Year ended 31 January 2024
£000
Net return before taxation 17,668 26,364
Corporation tax at rate of 25.00% (2024: 24.03%) 4,417 6,335
Effects of:
UK dividends not taxable (34) (29)
Gains on investments not taxable (4,358) (6,159)
Overseas dividends not taxable (558) (641)
Overseas tax suffered 251 287
Increase in excess management and loan expenses 533 494
Total tax charge for the year 251 287
The applicable corporation tax rate for the year ended 31 January 2025 was 25.00% (2024: 24.03%). The tax charge for the year differs from the charge
resulting from applying the standard rate of corporation tax in the UK. The differences are explained below.
As at 31 January 2025, the Company had unutilised management expenses of £49 million (2024: £46 million) carried forward. Due to the Company's status as
an investment trust and the intention to continue to meet the conditions required to obtain approval for that status in the foreseeable future, the Company has
not provided deferred tax on capital gains and losses arising on the revaluation or disposal of investments.
Note 5: Returns per share
Year ended 31 January 2025 Year ended 31 January 2024
The returns and net asset value per Ordinary share are calculated with reference to the following figures:
Revenue return £000 1,330 1,750
Capital return £000 16,087 24,327
Total return £000 17,417 26,077
Weighted average number of shares in issue during the year 66,047,646 73,994,270
Revenue return per share 2.01p 2.37p
Capital return per share 24.36p 32.87p
Total return per share 26.37p 35.24p
Revenue return per share for the year ended 31 January 2025 is 2.01p (2024: 2.37p), refer to note 5 on page 67 for details of calculation.
The fourth interim dividend for the years ended 31 January 2024 and 31 January 2023 have been allocated to the realised capital reserve. The first, second and
third interim dividend for the years ended 31 January 2025 and 31 January 2024 have been allocated to the revenue reserve.
Set out below are the total dividends paid/payable in respect of the financial year which forms the basis on which the requirements of s1158-1159 of the
Corporation Taxes Act 2010 are considered.
Year ended 31 January 2025
£000
Year ended 31 January 2024
£000
First interim dividend of 0.90p for the year ended
31 January 2025 (2024: 0.90p)
606 675
Second interim dividend of 0.90p for the year ended
31 January 2025 (2024: 0.90p)
586 662
Third interim dividend of 0.90p for the year ended
31 January 2025 (2024: 0.90p)
551 647
Fourth interim dividend of 1.50p for the year ended
31 January 2025 (2024: 1.50p)
886 1,041
2,629 3,025
Note 6: Dividends
Year ended 31 January 2025
£000
Year ended 31 January 2024
£000
Year ended 31 January 2023 - fourth interim dividend of 1.50p - 1,118
Year ended 31 January 2024 - fourth interim dividend of 1.50p 1,041 -
Year ended 31 January 2025 - first interim dividend of 0.90p
(2024: 0.90p)
606 675
Year ended 31 January 2025 - second interim dividend of 0.90p
(2024: 0.90p)
586 662
Year ended 31 January 2025 - third interim dividend of 0.90p
(2024: 0.90p)
551 647
2,784 3,102
Note 7: Investments at fair value through profit or loss
Year ended 31 January 2025
£000
Year ended 31 January 2024
£000
Opening book cost 193,168 210,334
Opening investment holding gains 71,619 67,272
Opening market value 264,787 277,606
Additions at cost 93,479 80,424
Disposals proceeds received (145,418) (118,874)
Gains on investments 17,427 25,631
Market value of investments held at 31 January 230,275 264,787
Closing book cost
177,314
193,168
Closing investment holding gains
52,961
71,619
Closing market value 230,275 264,787
The Company received £145,418,000 (2024: £118,874,000) from investments sold in the year. The book cost of these investments when they were purchased
was £109,333,000 (2024: £97,590,000).
The transaction costs in acquiring investments during the year were £75,000 (2024: £105,000). For disposals, transaction costs were £45,000 (2024: £62,000).
Note 8: Trade receivables
As at 31 January 2025
£000
As at 31 January 2024
£000
Sales awaiting settlement 2,008 655
Taxation recoverable 303 296
Dividends receivable 28 27
VAT recoverable – 11
Other debtors 21 40
2,360 1,029
Note 9: Cash and cash equivalents
As at 31 January 2025
£000
As at 31 January 2024
£000
Sterling bank account 1,900 1,922
1,900 1,922
Year ended 31 January 2025
£000
Year ended 31 January 2024
£000
Net realised gains on investments 36,085 21,284
Net change in unrealised (losses)/gains on investments (18,658) 4,347
Total capital gains 17,427 25,631
Note 10: Trade payables
As at 31 January 2025
£000
As at 31 January 2024
£000
Amounts falling due within one year:
Purchases awaiting settlement 1,777 –
Ordinary shares bought back awaiting settlement 227 584
Investment management fees 89 85
Interest accrued on bank loan – 130
Other payables 216 162
2,309 961
Bank loan
1
– 10,000
On 23 November 2023, the Company entered into an unsecured three-year £10 million sterling term revolving loan facility with the Royal Bank of Scotland
International Limited ('RBSI'). This loan was drawn down in full on 23 November 2023. It was fully repaid and closed on 25 November 2024.
The facility agreement contained covenants that the adjusted investment portfolio value at each month end should not be less than £120 million, the gross
borrowings should not exceed 30% of the Company’s adjusted investment portfolio value and the portfolio must contain at least 22 eligible investments. The
facility was shown at amortised cost.
Finance costs are charged to capital (80%) and revenue (20%) in accordance with the Company’s accounting policies.
1
Note 11: Ordinary shares of 5p
Number of
shares
Year to
31 January 2025
£000
Number of
shares
Year to
31 January 2024
£000
Ordinary shares of 5p
Ordinary shares in issue at the beginning of the year
71,228,807 3,560
76,105,554 3,804
Ordinary shares issued from Treasury during the year – – 675,000 34
Ordinary shares bought back to Treasury during the year
(10,546,133) (527)
(5,551,747) (278)
Ordinary shares in issue at end of the year
60,682,674 3,033
71,228,807 3,560
Number of
shares
Year to
31 January 2025
£000
Number of
shares
Year to
31 January 2024
£000
Treasury shares (Ordinary shares of 5p)
Treasury shares in issue at the beginning of the year
27,447,100 1,374
22,570,353 1,130
Ordinary shares issued from Treasury during the year – – (675,000) (34)
Ordinary shares bought back to Treasury during the year
10,546,133 527
5,551,747 278
Treasury shares in issue at end of the year
37,993,233 1,901
27,447,100 1,374
Total Ordinary shares in issue and in Treasury at the end of
the year
98,675,907 4,934
98,675,907 4,934
For the financial year to 31 January 2025, the payments made for shares bought back to Treasury was £39,184,000 (2024: the payments made for shares bought
back to Treasury less proceeds received for shares issued from Treasury was £15,966,000).
Between 1 February 2025 and 15 April 2025, 2,060,649 Ordinary shares of 5p were bought back to Treasury.
Note 12: Capital reserves
Realised
capital reserve
£000
Unrealised
investment
holding gains
£000
Total
capital reserve
£000
As at 31 January 2024 156,688 71,619 228,307
Gains on realisation of investments at fair value 36,085 – 36,085
Movement in fair value gains of investments – (18,658) (18,658)
Realised currency gains during the year 4 1 5
Cost of shares bought back into Treasury (39,184) – (39,184)
Capital expenses (1,345) – (1,345)
Dividends paid (1,041) – (1,041)
As at 31 January 2025 151,207 52,962 204,169
The above split in capital reserve is shown in accordance with provisions of the Statement of Recommended Practice ‘Financial Statements of Investment Trust
Companies and Venture Capital Trusts 2022’.
Realised
capital reserve
£000
Unrealised
investment
holding gains
£000
Total
capital reserve
£000
As at 31 January 2023 154,191 67,272 221,463
Gains on realisation of investments at fair value 21,284 – 21,284
Movement in fair value gains of investments – 4,347 4,347
Proceeds from the issue of Shares from Treasury 1,940 – 1,940
Cost of shares bought back into Treasury (18,305) – (18,305)
Capital expenses (1,304) – (1,304)
Dividends paid (1,118) – (1,118)
As at 31 January 2024 156,688 71,619 228,307
Note 13: Net asset value per share
As at 31 January 2025 As at 31 January 2024
Net assets attributable to shareholders £232,226,000 £256,777,000
Number of shares in issue at the year end 60,682,674 71,228,807
Net asset value per share 382.7p 360.5p
Note 14: Related party transactions
With the exception of the investment management fees
(as disclosed on page 40), Directors’ fees (disclosed on page
50), and Directors’ shareholdings (disclosed on page 49), there
have been no related party transactions during the year, or in
the prior year.
The amounts payable for Directors' fees as at 31 January 2025
are £40,037 (2024: £37,864).
Note 15: Financial instruments
The Company’s financial instruments comprise securities and
other investments, cash balances, receivables and payables
that arise directly from its operations; for example, in respect of
sales and purchases awaiting settlement, and receivables for
accrued income.
The Company also has the ability to enter into derivative
transactions in the form of forward foreign currency contracts,
futures and options, for the purpose of managing currency and
market risks arising from the Company’s activities.
The main risks the Company faces from its financial instruments
are (a) market price risk (comprising of (i) interest rate risk, (ii)
currency risk and (iii) other price risk), (b) liquidity risk and (c)
credit risk.
The Board regularly reviews and agrees policies for managing
each of these risks. The AIFM's policies for managing these risks
are summarised below and have been applied throughout the
year. The numerical disclosures exclude short-term receivables
and payables, other than for currency disclosures.
(a) Market price risk
The fair value or future cash flows of a financial instrument held
by the Company may fluctuate because of changes in market
prices. This market risk comprises three elements – interest rate
risk, currency risk and other price risk.
(i) Market risk arising from interest rate risk
Interest rate movements may affect the level of income
receivable on cash deposits.
The possible effects on fair value and cash flows that could
arise as a result of changes in interest rates are taken into
account when making investment and borrowing decisions.
The Board imposes borrowing limits to ensure gearing
levels are appropriate and reviews these on a regular
basis. Borrowings may comprise fixed rate, revolving, and
uncommitted facilities. Current guidelines state that the
total borrowings will not exceed 20% of the net assets of the
Company at time of drawdown. On 23 November 2023, the
Company entered into an unsecured three-year £10 million
sterling term revolving loan facility which was drawn down in
full. On 25 November 2024, the facility was closed and repaid in
full. The loan was shown at amortised cost in the prior year.
Interest risk profile
The interest rate risk profile of the Company at the reporting
date was as follows:
As at 31 January 2025 As at 31 January 2024
Cash and cash equivalents 1,900 1,922
Bank loan - revolving facility – (10,000)
Total net exposure to interest rate risk 1,900 (8,078)
Interest rate sensitivity
The sensitivity analysis below has been determined based on the
exposure to interest rates for non-derivative instruments at the
statement of financial position date and the stipulated change
taking place at the beginning of the financial year and held constant
throughout the reporting period in the case of instruments that have
floating rates.
If the above level of exposure was maintained for a year and interest
rates had been 1% (2024: 1%) higher or lower with all other variables
were held constant, the Company’s profit for the year ended 31
January 2025 would increase/decrease by £19,000 (2024: increase/
decrease by £81,000).
This is mainly attributable to the Company’s exposure to interest
rates on its floating rate cash balances.
(ii) Market risk arising from foreign currency risk
A significant proportion of the Company’s investment portfolio
is invested in overseas securities and the statement of financial
position can be significantly affected by movements in foreign
exchange rates. It is not currently the Company’s policy to hedge
this risk.
The revenue account is subject to currency fluctuation arising
on overseas income.
Foreign currency risk profile
Foreign currency risk exposure by currency of denomination:
The asset allocation between specific markets can vary from time to time based on the portfolio manager’s opinion of the
attractiveness of individual stocks.
Year ended 31 January 2025
£000
Year ended 31 January 2024
£000
Total net sensitivity to foreign currencies 11,473 12,954
Foreign currency sensitivity
At 31 January 2025, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total net
assets and total return on ordinary activities would have decreased by the amounts shown below. A 5% weakening of sterling against
all currencies, with all other variables held constant, would have had an equal but opposite effect on the financial statement amounts.
The level of change is considered to be a reasonable illustration based on the volatility of exchange rates during the year.
Year ended 31 January 2025
Total currency exposure
£000
Year ended 31 January 2024
Total currency exposure
£000
US dollar
128,238
138,389
Euro
62,421
80,481
Swedish krona
13,235
24,521
Danish krone
9,821
6,752
Australian dollar
5,482
8,945
Swiss franc
5,466
–
Canadian dollar 4,788 –
Total overseas investments
229,451
259,088
Sterling
2,775
(2,311)
Total 232,226 256,777
(iii) Market risk arising from other price risk
Other price risks (i.e. changes in market prices other than those
arising from interest rate or currency risk) may affect the value
of the quoted investments.
It is the Board’s policy to hold an appropriate spread of
investments in the portfolio in order to reduce the risk arising
from factors specific to a particular country or sector. The
allocation of assets to international markets as detailed on page
74, and the stock selection process both act to reduce market
risk. The investment manager actively monitors market prices
throughout the year and reports to the Board, which meets
regularly in order to review investment strategy. All investments
held by the Company are listed on various stock exchanges
worldwide.
Other price risk sensitivity
If market prices at the statement of financial position date
had been 30% (2024: 30%) higher or lower while all other
variables remained constant, the return attributable to Ordinary
shareholders at the year ended 31 January 2025 would have
increased/decreased by £69,100,000 (2024: increase/decrease
of £79,400,000) and capital reserves would have increased/
decreased by the same amount. This level of change is
considered to be reasonably possible based on observation of
market conditions and historic trends.
(b) Liquidity risk
This is the risk that the Company will encounter difficulty in
meeting obligations associated with financial liabilities.
Liquidity risk is not considered to be significant as the
Company’s assets comprise mainly readily realisable securities,
which can be sold to meet funding commitments if necessary.
(c) Credit risk
This is the risk of failure of the counterparty to a transaction
to discharge its obligations under that transaction that could
result in the Company suffering a loss.
The risk is managed as follows:
• investment transactions are carried out with a large number
of brokers, whose credit ratings are reviewed periodically by
the portfolio manager, and limits are set on the amount that
may be due from any one broker; and
• cash is held only with reputable banks with high-quality
external credit ratings.
The maximum credit risk exposure as at 31 January 2025
was £4,260,000 (2024: £2,951,000). This was due to trade
receivables and cash as per notes 8 and 9.
Fair values of financial assets and financial liabilities
All financial assets and liabilities of the Company are
included in the statement of financial position at fair value
or a reasonable approximation of fair value with no material
difference in the carrying amount.
Note 16: Capital management policies and
procedures
The Company’s capital management objectives are:
• to ensure that the Company will be able to continue as a
going concern;
• to maximise the return to its equity shareholders through an
appropriate balance of equity capital and debt; and
• to limit gearing to 20% of net assets at time of drawdown.
The Board monitors and reviews the broad structure of the
Company’s capital on an ongoing basis. This review includes
the nature and planned level of gearing, which takes account
of the portfolio manager’s views on the market and the extent
to which revenue in excess of that which is required to be
distributed under the investment trust rules should be retained.
The capital of the Company consists of the equity reserves
as shown on the equity section of the statement of financial
position, and the bank loan as disclosed in the liabilities
section. On 25 November 2024, the facility was closed and
repaid in full.
Note 17: Fair value hierarchy
Under FRS 102, the Company is required to classify fair value measurements using a fair value hierarchy that reflects the significance of
the inputs used in making the measurements. The fair value hierarchy shall have the following levels:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: other significant observable inputs (including quoted prices for similar investments, interest rates, prepayments, credit risk,
etc);
• Level 3: significant unobservable input (including the Company’s own assumptions in determining the fair value of investments).
The financial assets measured at fair value through profit and loss are grouped into the fair value hierarchy as follows:
Note 18: Post balance sheet events
On 27 March 2025, the Board declared a fourth interim dividend of 1.50p per share.
Effective 1 March 2025, the investment management fee will be amended to 0.40% of the Company's NAV (excluding income).
Following the year end, global equity market volatility has been very high after the introduction of widespread tariffs by the United
States. Between 31 January 2025 and 15 April 2025, the net asset value of the Company fell 19.4% from £232,226,000 to £187,160,000.
The cum-income NAV per share fell 16.6% from 382.7p to 319.3p.
Between 1 February and 15 April 2025, the Company bought back into Treasury 2,060,649 ordinary shares at an average price of
348.0p per share.
On 15 April 2025, the Company changed its name from Martin Currie Global Portfolio Trust plc to Franklin Global Trust plc.
At 31 January 2025
£000
At 31 January 2024
£000
Level 1 230,275 264,787
Net fair value 230,275 264,787
4: Investor information
Directors and Advisers
Financial calendar – key dates 2025/26
Directors
Christopher Metcalfe (Chair)
Lindsay Dodsworth
Marian Glen
Gary Le Sueur
Krishna Shanmuganathan
Alternative Investment Fund
Manager and Company Secretary
Franklin Templeton Investment Trust
Management Limited
5 Morrison Street
Edinburgh EH3 8BH
Investment Manager
Martin Currie Investment Management
Limited
5 Morrison Street
Edinburgh
EH3 8BH
www.martincurrie.com
Martin Currie Investment Management Limited
is authorised and regulated by the Financial
Conduct Authority.
Registered office
Franklin Global Trust plc
5 Morrison Street
Edinburgh
EH3 8BH
Registered in Scotland, registered
number SC192761
Independent Auditors
Ernst & Young LLP
25 Churchill Place
Canary Wharf
London E14 5EY
Broker
JPMorgan Cazenove Limited
25 Bank Street
Canary Wharf
London E14 5JP
Registrar
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds LS1 4DL
Bankers
The Royal Bank of Scotland
International Limited
London Branch, 1 Princes Street
London EC2R 8BP
Depositary
JPMorgan Europe Limited
25 Bank Street
Canary Wharf
London E14 5JP
Custodian
JPMorgan Chase Bank N.A.
25 Bank Street
Canary Wharf
London E14 5JP
Association of Investment
Companies
9th Floor
24 Chiswell Street
London EC1Y 4YY
www.theaic.co.uk
Franklin Global Trust plc is a member of the AIC
(the trade body of the investment company
industry).
Investor information
Half-yearly results
announced
Fourth interim
dividend payment
Annual results
announced
Second interim
dividend payment
October
Third interim
dividend payment
JanuarySeptemberApril
First interim
dividend payment
Annual general
meeting
June
The European Securities and Markets Authority ('ESMA') has
published guidelines on Alternative Performance Measures
('APMs'). APMs are defined as being a ‘financial measure of
historical or future financial performance, financial position, or
cash flows, other than a financial measure defined or specified
in the applicable accounting framework.’ The guidelines aim to
improve comparability, reliability and/or comprehensibility of
APMs. The Company uses the following APMs throughout the
annual report, financial statements and notes to the financial
statements:
Benchmark total return
A measure showing how the benchmark has performed over a
period of time, considering both capital returns and dividends
paid to shareholders.
Discount/Premium
Discount
The amount, expressed as a percentage, by which the share
price is less than the net asset value per share.
Premium
The amount, expressed as a percentage, by which the share
price is more than the net asset value per share.
As at 31 January 2025 the share price was 381.0p and the net
asset value per share (cum-income) was 382.7p, the discount
was therefore 0.4% (2024: 2.9%).
Gearing
Gearing means borrowing money to buy more assets in the
hope that the company makes enough profit to pay back the
debt and interest and leave something extra for shareholders.
However, if the investment portfolio does not perform well,
gearing can increase losses. The more an investment company
gears, the higher the risk.
The gearing on 31 January 2025 was 0.0% (2024: 3.9%). The
calculation of gearing is provided below.
2025
£000
2024
£000
(a) Borrowing (Note 10) – 10,000
(b) Net assets per the Statement
of Financial Position
232,226 256,777
Gearing % (a)/(b) 0.0% 3.9%
NAV per share
A common measure of the underlying value of a share in an
investment company.
The net asset value (‘NAV’) is the value of the investment
company’s assets, less any liabilities that it has. The NAV per
share is the NAV divided by the number of shares in issue. This
will very often be different to the share price. The difference is
known as the discount or premium.
The NAV per share quoted is the cum-income NAV per share
unless otherwise noted.
As shown in note 13 the NAV per share was 382.7p as at 31
January 2025 (2024: 360.5p).
NAV total return
A measure showing how the NAV per share has performed over
a period of time, considering both capital returns and dividends
paid to shareholders.
NAV total return shows performance which is not affected by
movements in discounts and premiums. It also considers the
fact that different investment companies pay out different levels
of dividends.
The NAV total return performance calculated using the cum-
income NAV for the year end 31 January 2025 was 7.3%.
2025 2024
NAV at start of financial year per the
Statement of Financial Position
360.5p 328.2p
NAV at end of financial year per the
Statement of Financial Position
382.7p 360.5p
Dividends paid 4.20p 4.20p
Effect of dividend reinvestment
1
0.0p 0.4p
NAV at the end of the financial year
including effect of dividends
386.9p 365.1p
NAV Total Return 7.3% 11.2%
Dividend assumed to be reinvested on ex-date (see table of ex-dates
overleaf).
Share price total return
A measure showing how the share price has performed over a
period of time, considering both capital returns and dividends
paid to shareholders. The share price total return for the year
end 31 January 2025 was 10.1%.
2025 2024
Share price at start of financial year 350.0p 319.0p
Share price at end of financial year 381.0p 350.0p
Dividends paid 4.20p 4.20p
Effect of dividend reinvestment
1
0.1p 0.3p
Share price at the end of the year
including effect of dividends
385.3p 354.5p
Share price total return 10.1% 11.1%
Dividend assumed to be reinvested on ex-date (see table of ex-dates
overleaf).
Alternative performance measures
31 January 2025 Dividend rate NAV Share price
31 January 2024 (prior year end) n/a 360.5p 350.0p
4 April 2024 (ex-dividend) 1.5p 388.6p 385.0p
4 July 2024 (ex-dividend) 0.9p 383.4p 376.0p
3 October 2024 (ex-dividend) 0.9p 373.5p 366.0p
9 January 2025 (ex-dividend) 0.9p 381.6p 374.0p
31 January 2025 (year end) n/a 382.7p 381.0p
31 January 2024
31 January 2023 (prior year end) n/a 328.2p 319.0p
6 April 2023 (ex-dividend) 1.5p 337.9p 342.0p
6 July 2023 (ex-dividend) 0.9p 340.5p 336.0p
5 October 2023 (ex-dividend) 0.9p 317.5p 309.0p
4 January 2024 (ex-dividend) 0.9p 338.3p 332.0p
31 January 2024 (year end) n/a 360.5p 350.0p
Year ended 31 January 2025 Year ended 31 January 2024
Revenue
£000
Capital
£000
Total
£000
Revenue
£000
Capital
£000
Total
£000
Investment management fee (226) (906) (1,132) (226) (904) (1,130)
Other expenses (502) – (502) (468) – (468)
Total expenses (728) (906) (1,634) (694) (904) (1,598)
Average net assets over the year 250,841 250,695
Ongoing charges 0.65% 0.64%
Full details of the investment management fee are included in the Report of the Directors on page 40, details of the Directors’ fees are included in the
Directors’ remuneration statement on pages 49 to 50.
Ongoing charges are calculated with reference to the following figures:
Ongoing charges
Ongoing charges are the total of the Company’s expenses, including both the investment management fee and other costs
expressed as a percentage of NAV. The calculation of the ongoing charges is carried out in accordance with the AIC's methodology.
Assets
Anything owned or controlled that has value. For investment
companies, this might include shares and securities, property,
cash etc.
Benchmark
An index or other measure against which the performance of an
investment company is compared or its objectives are set.
The financial statements will include an explanation of how a
company has performed against its benchmark over the year
and the reasons for any under or over performance.
Bid price
The price at which you sell your shares when two prices are
quoted. This is sometimes shown as the ‘sell’ price and will be
the lower of the two prices shown.
Dividend
Income from an investment in shares. Dividends are usually
paid twice a year but can also be paid quarterly or monthly. Not
all investment companies pay dividends. Dividend income is
not guaranteed and may fall as well as rise.
Environmental, social and corporate governance ('ESG')
Assessment of material ESG factors and the potential impact
on that company’s cash flows, statement of financial position,
reputation and, ultimately, corporate value in the long term.
Generative AI
Artificial intelligence programmes which use advanced
computing techniques to generate new text, images, videos
or other data. Generative AI models analyse the patterns and
structure of existing information and are then able to generate
new content based on information learned from the existing
information.
Leverage
Leverage is defined in the AIFM Regulations as any method by
which the Company increases its exposure, whether through
borrowing of cash or securities, or leverage embedded
in derivative positions or by any other means. Leverage
is measured in terms of the Company’s exposure and is
expressed as a percentage of net asset value. Pursuant to
the AIFM Regulations, it can be calculated using a gross and
a commitment method. Under the gross method, exposure
represents the sum of the Company’s positions after the
deduction of sterling cash balances, without taking into
account any hedging and netting arrangements. Under the
commitment method, exposure is calculated without the
deduction of sterling cash balances and after certain hedging
and netting positions are offset against each other.
Internal and external AIFM
Under the AIFM Regulations, the AIFM of a company may
be either (a) another person appointed by or on behalf the
company and which, through that appointment, is responsible
for managing the company (an ‘external AIFM’); or (b) where
the legal form of the company permits internal management
and the board chooses not to appoint an external AIFM,
the company itself (an ‘internal AIFM’). Franklin Templeton
Investment Trust Management Limited is the external AIFM of
the Company.
Investment company
A closed-ended fund which invests in a diversified portfolio
of assets. Investors buy and sell their shares in the investment
company on a stock exchange.
Investment trust
An investment company which is based in the UK and which
meets certain tax conditions so that it does not pay tax on gains
made within the portfolio.
Net assets – cum-income
A measure of the size of an investment company. The total
value of all assets held, less liabilities and prior charges,
including income for the current year.
Net assets – excluding income
A measure of the size of an investment company. The total
value of all assets held, less liabilities and prior charges,
excluding income for the current year.
Offer price
The price at which you can buy shares when two prices are
quoted. This is also shown as the ‘buy’ price and will be the
higher of the two prices.
Glossary 1
Peer group
The Board monitors performance against the Company's peer
group, the AIC Global Sector.
Share buybacks
Describes an investment company buying its own shares and
reducing the number of shares held in the market.
Share buybacks can be used to return money to shareholders
but are also often used to address a company’s discount.
Discounts may reflect an imbalance between the demand
for shares and the number of shares held in the market. The
expectation is that, by reducing the number of shares held
in the market, the buyback will help to prevent the discount
widening or even reduce it. See also under Treasury shares
below.
Share price
The price of a share as determined by the stock market.
If you see a single share price shown, it is likely that this is the
mid-market price. This is different to the price at which you buy
and sell the shares, which are known as the bid price (sell) and
offer price (buy).
Treasury shares
Shares in a company’s own share capital which the company
itself owns and which can be sold to investors to raise new
funds.
Treasury shares come into existence only when a company
buys back shares. Instead of cancelling the shares (i.e. they
cease to exist) they are held ‘in Treasury’ by the company and
can be sold at a later date to raise new funds.
Volatility
A measure of how much a share moves up and down in price
over a period of time.
Zero discount policy
A mechanism that aims to ensure that, in normal market
conditions, the share price trades close to NAV.
Ways to invest in the Company
The Company’s shares qualify for tax efficient wrapper products
like individual savings accounts (‘ISAs’) and self-invested personal
pensions (‘SIPPs’) as well as many other investment wrappers,
including those designed for children.
Platforms, fund supermarkets and online
stockbrokers
You can invest using a number of fund platforms and fund
supermarkets. Many offer wrapper products like ISAs and SIPPs
and children’s savings products. A number of real-time execution-
only stockbroking services also allow you to trade online, manage
your portfolio and buy UK listed shares. These services do not offer
financial advice and if you are unsure about investing, we
recommend that you speak to a qualified financial adviser.
Independent financial advisers
An increasing number of independent financial advisers are
including investment trusts within their investment
recommendations for clients. To find an adviser who advises on
investment trusts, visit www.unbiased.co.uk.
Private client stockbrokers
If you have a large sum to invest, you may want to contact a
private client stockbroker. They can manage your entire
portfolio of shares and will advise you on your investments. To
find a private client stockbroker visit the Personal Investment
Management & Financial Advice Association: www.pimfa.co.uk.
Trading codes
(You may be asked for these when investing)
TIDM code: FRGT Sedol: 0537241
Reuters code: FRGT.L ISIN: GB0005372411
Shareholder services
The registrars of the Company are MUFG Corporate Markets (previously Link Group). You can buy and sell shares directly by calling the
MUFG Corporate Markets dealing team on 0371 664 0454 or by visiting https://uk.investorcentre.mpms.mufg.com/Login. For other
services you can contact MUFG Corporate Markets by telephone, online or by email to shareholderenquiries@cm.mpms.mufg.com.
Online Telephone
Contact details MUFG Investor Centre MUFG Corporate Markets
Opening times 24 hours 900am - 530pm Monday to Friday
Opening times — 0371 664 0300
Change your address
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Checking the share price
The share price is available through many sources including www.londonstockexchange.com and www.franklinglobaltrust.com.
Notice of Annual General Meeting
Notice is hereby given that the annual general meeting ('AGM') of
Franklin Global Trust plc (the ‘Company’) will be held at the offices
of Franklin Templeton, 5 Morrison Street, Edinburgh EH3 8BH on
Thursday, 19 June 2025 at 11.30 am, to consider and, if thought
fit, pass the resolutions below. Your vote is very important to us.
Voting at the AGM this year will be on a poll and will reflect all proxy
instructions duly received.
The resolutions numbered 1 to 11 are proposed as ordinary
resolutions and must receive more than 50% of the votes cast in
favour in order to be passed. The resolutions numbered 12 to 15 are
proposed as special resolutions and must receive at least 75% of
the votes cast in favour in order to be passed.
Ordinary business
To consider and, if thought fit, pass the following resolutions as
ordinary resolutions:
1. That the Report of the Directors and auditors and the
financial statements for the year ended 31 January 2025 be
received;
2. That the Directors’ annual remuneration report for the year
ended 31 January 2025 be approved;
3. That the Directors’ remuneration policy be approved;
4. That the dividend policy be approved;
5. That Marian Glen be re-elected as a Director;
6. That Christopher Metcalfe be re-elected as a Director;
7. That Lindsay Dodsworth be re-elected as a Director;
8. That Krishna Shanmuganathan be elected as a Director;
9. That Ernst & Young LLP be re-appointed as auditors of the
Company to hold office from the conclusion of this meeting
until the conclusion of the next general meeting at which
accounts are laid before the Company;
10. That the Directors be authorised to fix the remuneration of
the auditors for the year ending 31 January 2026; and
11. That, in substitution for any existing authority, the
directors of the Company be and are hereby generally
and unconditionally authorised pursuant to s551 of the
Companies Act 2006 (the ‘Act’) to allot equity securities
(as defined in s560 of the Act) up to a maximum nominal
amount of £977,033 (being approximately one third of the
issued share capital of the Company (excluding Treasury
shares) as at 15 April 2025, being the latest practicable date
before the date of this notice) provided that the authority
hereby given shall expire on 31 July 2026 or, if earlier, the
conclusion of the annual general meeting of the Company
in 2026 save that the Company may, at any time before
the expiry of such authority, make an offer or enter into an
agreement which would or might require equity securities
to be allotted after the expiry of such authority and the
directors may allot equity securities in pursuance of such an
offer or agreement as if such authority had not expired.
Special business
To consider and, if thought fit, pass the following resolutions as
special resolutions:
12. That, pursuant to Article 12 of the Articles of Association
of the Company and in accordance with s701 of the
Companies Act 2006 (the ‘Act’) and in substitution for any
existing authority, the Company be and is hereby generally
and unconditionally authorised to make market purchases
(within the meaning of s693(4) of the Act) of Ordinary shares
of 5 pence each in the capital of the Company provided
that:
(a) the maximum aggregate number of Ordinary shares
hereby authorised to be purchased is 8,787,441
(or, if less, 14.99% of the number of Ordinary shares in
issue (excluding Treasury shares) immediately prior to the
passing of this resolution);
(b) the minimum price which may be paid for an Ordinary
share is 5 pence (exclusive of expenses);
(c) the maximum price (exclusive of expenses) which may
be paid for an Ordinary share shall be not more than the
higher of
(i) 5% above the average of the mid-market quotations
for an Ordinary share of the Company as derived from
the Daily Official List of the London Stock Exchange
for the five business days immediately preceding the
date of purchase; and
(ii) the higher of the last independent trade and the
highest current independent bid on the London
Stock Exchange;
(d) the authority hereby conferred shall expire 15 months
after the date of passing of this resolution or, if earlier,
at the conclusion of the AGM of the Company in 2026,
unless such authority is renewed, issued or revoked prior
to such time; and
(e) the Company may conclude a contract to purchase
Ordinary shares under the authority hereby conferred
prior to the expiry of such authority which will or may
be executed wholly or partly after the expiry of such
authority and may make a purchase of Ordinary shares in
pursuance of any such contract as if the authority hereby
conferred had not expired.
13. That the Directors be and they are hereby empowered in
accordance with s570 and s573 of the Companies Act 2006
(the ‘Act’) to allot equity securities (as defined in s560 of
the Act), where they are generally authorised pursuant to
the authority to allot equity securities conferred upon them
by resolution 11 and/or to sell Ordinary shares held by the
Company as Treasury shares, for cash, as if s561 of the Act did
not apply provided that the power conferred by this resolution
shall be limited to the allotment of equity securities having
a nominal amount not exceeding in aggregate £293,110
(being an amount equal to 10% of issued equity share capital
(excluding Treasury shares) as at 15 April 2025 being the
latest practicable date before the date of this notice). Unless
previously varied, revoked or renewed, the authority hereby
conferred shall expire on 31 July 2026 or, if earlier, at the
conclusion of the annual general meeting of the Company
in 2026, save that the Company may, before the expiry of
any power contained in this resolution, make an offer or
agreement which would or might require equity securities to
be allotted after such expiry and the directors may allot equity
securities in pursuance of such an offer or agreement as if the
power conferred hereby had not expired.
14. That, in addition to any authority granted under resolution
13, the Directors be and they are hereby empowered in
accordance with s570 and s573 of the Companies Act 2006
(the ‘Act’) to allot equity securities (as defined in s560 of
the Act), where they are generally authorised pursuant to
the authority to allot equity securities conferred upon them
by resolution 11 and/or to sell Ordinary shares held by the
Company as Treasury shares, for cash, as if s561 of the Act did
not apply provided that the power conferred by this resolution
shall be limited to the further allotment of equity securities
having a nominal amount not exceeding in aggregate
£293,110 (being an amount equal to 10% of issued equity share
capital (excluding Treasury shares) as at 15 April 2025 being
the latest practicable date before the date of this notice).
Unless previously varied, revoked or renewed, the authority
hereby conferred shall expire on 31 July 2026 or, if earlier,
at the conclusion of the annual general meeting of the
Company in 2026, save that the Company may, before the
expiry of any power contained in this resolution, make an offer
or agreement which would or might require equity securities
to be allotted after such expiry and the directors may allot
equity securities in pursuance of such an offer or agreement
as if the power conferred hereby had not expired.
15. That a general meeting, other than an annual general
meeting, may be called on not less than 14 clear days’ notice.
Unless previously varied, revoked or renewed, the authority
hereby conferred shall expire on 31 July 2026 or, if earlier,
at the conclusion of the annual general meeting of the
Company in 2026.
By order of the Board
Franklin Templeton Investment Trust Management Limited
Secretary
17 April 2025
Registered office: 5 Morrison Street, Edinburgh EH3 8BH
1. All shareholders are entitled to attend or vote at the meeting.
Shareholders are strongly encouraged to appoint a proxy in
accordance with note 3.
2. The Company has specified that to be entitled to attend and
vote at the meeting (and for the purpose of determining the
number of votes they may cast), members must be entered
on the register of members 48 hours before the time fixed for
the meeting.
3. A member entitled to attend, speak and vote may appoint a
proxy or proxies to attend and, on a poll, vote instead of
them. A proxy need not be a member of the Company.
A shareholder may appoint more than one proxy provided
that each proxy is appointed to exercise the rights attached
to a different share or shares held by that shareholder. To be
valid, proxies must be lodged at the office of the registrars of
the Company at MUFG Corporate Markets, PXS1, Central
Square, 29 Wellington Street, Leeds LS1 4DL not less than 48
hours (excluding non-working days) before the time of the
meeting. A form of proxy is enclosed. Alternatively, you can
vote electronically via Investor Centre app or web browser at
https://uk.investorcentre.mpms.mufg.com/
In usual circumstances, appointment of a proxy will not
preclude a member from attending and voting in person.
4. A corporation which is a member can appoint one or more
corporate representatives who may exercise, on its behalf, all
of its powers as a member provided that no more than one
corporate representative exercises powers over the same
share.
5. Any person to whom this notice is sent who is a person
nominated under s146 of the Companies Act 2006 to enjoy
information rights (a ‘Nominated Person’) may, under an
agreement between him/her and the shareholder by whom
he/she was nominated, have a right to be appointed (or to
have someone else appointed) as a proxy for the annual
general meeting. If a Nominated Person has no such proxy
appointment right or does not wish to exercise it, he/she may,
under any such agreement, have a right to give instructions
to the shareholder as to the exercise of voting rights.
6. There are no contracts between the Company and the
directors, other than their letters of appointment and deeds
of indemnity.
7. As at 15 April 2025 (being the latest practicable date prior to
the publication of this Notice) the Company’s issued voting
share capital consisted of 58,622,025 Ordinary shares
(carrying one vote each). Therefore, the total voting rights in
the Company as at 15 April 2025 were 58,622,025 votes, in
respect of the Ordinary shares only.
8. Shareholders can vote electronically via the Investor Centre,
a free app for smartphone and tablet provided by MUFG
Corporate Markets (the company's registrar). It allows you to
securely manage and monitor your shareholdings in real
time, take part in online voting, keep your details up to date,
access a range of information including payment history and
much more. The app is available to download on both the
Apple App Store and Google Play, or by scanning the
relevant QR code below. Alternatively, you may access the
Investor Centre via a web browser at:
https://uk.investorcentre.mpms.mufg.com/
9. CREST members who wish to appoint a proxy or proxies
through the CREST electronic proxy appointment service
may do so for the meeting and any adjournment(s) thereof
by using the procedures described in the CREST Manual.
CREST personal members or other CREST sponsored
members and those CREST members who have appointed a
voting service provider(s) should refer to their CREST
sponsors or voting service provider(s), who will be able to
take the appropriate action on their behalf. In order for a
proxy appointment or instruction made by means of CREST
to be valid, the appropriate CREST message (a ‘CREST Proxy
Instruction’) must be properly authenticated in accordance
with Euroclear UK & International Limited’s specifications and
must contain the information required for such instructions,
as described in the CREST Manual. The message must be
transmitted so as to be received by the Company’s agent,
MUFG Corporate Markets (CREST Participant ID: RA10), no
later than 48 hours (excluding non-working days) before the
time appointed for the meeting. For this purpose, the time of
receipt will be taken to be the time (as determined by the
time stamp applied to the message by the CREST
Application Host) with which the Company’s agent is able to
retrieve the message by enquiry to CREST in the manner
prescribed by CREST.
Notes
CREST members and, where applicable, their CREST
sponsors or voting service provider(s) should note that
Euroclear UK & International Limited does not make available
special procedures in CREST for any particular messages.
Normal system timings and limitations will therefore apply in
relation to the input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned to take (or, if
the CREST member is a CREST personal member or
sponsored member or has appointed a voting service
provider(s), to procure that his CREST sponsor or voting
service provider(s) take(s)) such action as shall be necessary
to ensure that a message is transmitted by means of the
CREST system by any particular time. In this connection,
CREST members and, where applicable, their CREST
sponsors or voting service provider(s) are referred in
particular to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings. The
Company may treat as invalid a CREST Proxy Instruction in
the circumstances set out in Regulation 35(5) (a) of the
Uncertificated Securities Regulations 2001.
10. Proxymity Voting – if you are an institutional investor, you may
also be able to appoint a proxy electronically via the
Proxymity platform, a process which has been agreed by the
Company and approved by the Registrar. For further
information regarding Proxymity, please go to
www.proxymity.io. Your proxy must be lodged not less than
48 hours (excluding non-working days) before the meeting
in order to be considered valid or, if the meeting is adjourned,
by the time which is 48 hours before the time of the
adjourned meeting.
Before you can appoint a proxy via this process you will need
to have agreed to Proxymity’s associated terms and
conditions. It is important that you read these carefully as you
will be bound by them and they will govern the electronic
appointment of your proxy. An electronic proxy appointment
via the Proxymity platform may be revoked completely by
sending an authenticated message via the platform
instructing the removal of your proxy vote.
11. Unless otherwise indicated on the Form of Proxy, CREST
voting, Proxymity or any other electronic voting channel
instruction, the proxy will vote as they think fit or, at their
discretion, withhold from voting.
12. All resolutions will be put to vote on a poll. This will result in
an accurate reflection of the views of shareholders by
ensuring that every vote is recognised, including the votes of
all shareholders who are unable to attend the meeting but
who appoint a proxy for the meeting. On a poll, each
shareholder has one vote for every share held.
13. Pursuant to s319A of the Companies Act 2006, the Company
must provide an answer to any question which is put by a
member attending the annual general meeting relating to
the business being considered, except if a response would
not be in the interest of the Company or for the good order
of the meeting or if to do so would involve the disclosure of
confidential information.
14. Members may require the Company to place on its website a
statement, made available also to the Company’s auditors,
setting out any matter relating to the audit of the Company’s
financial statements, including the independent auditors’
report and the conduct of the audit, which members intend
to raise at the annual general meeting. The Company
becomes required to place such a statement on the website
once a) members with at least 5% of the total voting rights of
the Company or b) at least 100 members who are entitled to
vote and on whose shares an average sum per member of at
least £100 has been paid have submitted such a request to
the Company. Members seeking to do this should write to
the Company providing their full name and address or email
the Company at ftcosec@franklintempleton.com providing
their full name and address, stating ‘AGM’ in the subject line
of the email.
15. In accordance with s338 of the Companies Act 2006,
shareholders may require the Company to give members
notice of a resolution which may properly be moved and is
intended to be moved at the annual general meeting. The
request must be received by the Company at least six weeks
before the AGM and not later than 8 May 2025. The
resolution must not, if passed, be ineffective (whether by
reason of inconsistency with any enactment or the
Company’s constitution or otherwise). The resolution must
not be defamatory of any person, frivolous or vexatious.
The request must identify the resolution of which notice is to
be given by either setting out the resolution in full or, if
supporting a resolution sent by another member, clearly
identifying the resolution which is being supported. The
Company becomes required to give members notice of a
resolution to be moved at the annual general meeting once
a) members with at least 5% of the total voting rights of the
Company or b) at least 100 members who are entitled to vote
and on whose shares an average sum per member of at least
£100 has been paid have submitted a request to the
Company in accordance with the provisions of this
paragraph. Members seeking to do this should write to the
Company providing their full name and address or email the
Company at ftcosec@franklintempleton.com providing
their full name and address, stating ‘AGM’ in the subject line
of the email.
16. In accordance with s338A of the Companies Act 2006,
shareholders may require the Company to include in the
business to be dealt with at the meeting a matter (other than
a proposed resolution) which may properly be included in
the business (a matter of business).
The request must be received by the Company at least six
weeks before the AGM and not later than 8 May 2025.
The matter of business must not be defamatory of any
person, frivolous or vexatious. The request must identify the
matter of business by either setting it out in full or, if
supporting a statement sent by another member, clearly
identify the matter of business which is being supported.
The request must be accompanied by a statement setting
out the grounds for the request. The Company becomes
required to give members notice of a resolution to be moved
at the annual general meeting once a) members with at least
5% of the total voting rights of the Company or b) at least 100
members who are entitled to vote and on whose shares an
average sum per member of at least £100 has been paid
have submitted such a request to the Company in
accordance with the provisions of this paragraph. Members
seeking to do this should write to the Company providing
their full name and address or email the Company at
ftcosec@franklintempleton.com providing their full name
and address, stating ‘AGM’ in the subject line of the email.
17. Information regarding the annual general meeting,
including the information required by s311A of the
Companies Act 2006, is available from:
franklinglobaltrust.com.
18. If you require additional hard copy form of proxy (or
assistance with how to complete, sign and return it) or
assistance in submitting your proxy appointment
electronically, please email at
shareholderenquiries@cm.mpms.mufg.com or call MUFG
Corporate Markets on +44 (0) 371 664 0300. Calls are
charged at the standard geographic rate and will vary by
provider. Calls from outside the UK will be charged at the
applicable international rate. Lines are open 900 a.m. to
530 p.m., Monday to Friday, excluding public holidays in
England and Wales.
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Franklin Global Trust plc
5 Morrison Street
Edinburgh
EH3 8BH
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5 Morrison Street
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