Annual Report and Accounts to 31 March 2025
Templeton Emerging Markets Investment Trust plc
5 Morrison Street, Edinburgh, EH3 8BH, UK
temitcosec@franklintempleton.com
www.temit.co.uk
© 2025 Franklin Templeton. All rights reserved.
EMEA_EUK_2466005_2366005
TEMIT ANNUAL REPORT 03/25
Introducing TEMIT
Launched in June 1989, Templeton Emerging Markets Investment
Trust plc (‘TEMIT’ or the ‘Company’) is an investment trust that
invests principally in emerging markets companies with the aim of
delivering capital growth to shareholders over the long term. While
the majority of the Company’s shareholders are based in the UK,
shares are traded on both the London and New Zealand stock
exchanges. From its launch to 31 March 2025, TEMIT’s net asset
value (‘NAV’) total return was +4,528.5% compared to the
benchmark total return of +1,781.1%.
The Company is governed by a Board of Directors who are
committed to ensuring that shareholders’ best interests,
considering the wider community of stakeholders, are at the
forefront of all decisions. Under the guidance of the Chairman,
the Board of Directors is responsible for the overall strategy of
the Company and monitoring its performance.
Winner 2023 and 2024
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 3
Your future is emerging
TEMIT offers you easy access to the dynamic growth
potential of emerging markets.
TEMIT offers investors a simple way
to invest in the growth potential of
dynamic economies in Asia, Latin
America, the Middle East, Africa and
Europe. Emerging markets currently
generate 65% of global growth and
that is forecast to increase
(a)
.
Access to
growth markets
TEMIT is the first emerging markets
investment trust and has delivered a
NAV total return of +4,528.5% over
its 35-year life. It is also the largest
with just under £2.0 billion of net
assets.
35-year track
record
TEMIT’s portfolio is diversified across
approximately 80 high quality
companies that include the very best
investment opportunities.
Best
ideas portfolio
With over 70 investment
professionals spread across
13countries our Investment
Managers can identify investment
opportunities beyond the
mainstream, often before they are
recognised by the broader market.
Investment
expertise
Structured analysis of Environmental,
Social and Governance (‘ESG’)
factors is part of the research
process.
ESG
analysis
As a stock market listed investment
trust, this offers additional features
and benefits for shareholders
including dividends, gearing, and
independent board governance.
Shareholder-
friendly features
(a) Source: IMF WEO, October 2024, the latest available.
All other data sourced: Franklin Templeton as at 31 March 2025.
Receive all the latest information direct to your email inbox every month. Our newsletter
provides you with all the updates, announcements and information on emerging
markets like our stock story and manager update videos, factsheets and insights.
Subscribe to our monthly newsletter
4
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
(a) A glossary of alternative performance measures is included on pages 114 and 115.
(b) Source: MSCI. The Company’s benchmark is the MSCI Emerging Markets (Net Dividends) Index.
(c) An annual ordinary dividend of 5.25 pence per share for the year ended 31 March 2025 has been proposed. This comprises the interim dividend of 2.00 pence per share paid by the Company
on 31 January 2025 and the proposed final dividend of 3.25 pence per share.
Financial highlights
2025 2024 3 Years Cumulative 5 Years Cumulative 10 Years Cumulative
Share Price Total
Return
(a)
MSCI Emerging
Markets Index
(a)(b)
Proposed Total
Ordinary Dividend
(c)
8.8% 18.3% 51.1% 88.0%7.9%
13.3% 19.5% 50.1% 95.7%4.9%
5.8% 6.5% 40.8% 65.5%5.9%
5.25p 5.00p
Net Assets Value
Total Return
(cum-income)
(a)
China
14.80p 24.40p 37.07p
Taiwan
Contents
01. Strategic Report
Strategic report 7
10 year record 8
Chairman’s statement 9
The investment managers 12
The investment managers’ report 13
The investment managers’ process 29
Business review 36
02. Governance
Supporting charitable causes 48
Directors’ report 49
Directors’ remuneration report 60
Report of the audit and risk committee 65
Statement of directors’ responsibilities 71
04. Investor Information
Notice of meeting 108
Shareholder communications 111
General information 112
Shareholder information 113
Glossary of alternative performance measures 114
03. Financial Review
Independent auditor’s report 73
Statement of comprehensive income 81
Statement of financial position 82
Statement of changes in equity 83
Statement of cash flows 84
Notes to the financial statements 86
Securities financing transactions - unaudited 104
AIFMD report in remuneration - unaudited 106
Brazil
6
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Strategic
Report
01.
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 7
Strategic report
The Directors present the Strategic Report for the year ended 31 March 2025, which incorporates
the Chairman’s Statement, and has been prepared in accordance with the Companies Act 2006.
The aim of the Strategic Report is to provide shareholders with the ability to assess how the
Directors have performed in their duty to promote the success of the Company for shareholders’
collective benefit, and having regard for the interests of all stakeholders, by bringing together in
one place key information about the Company’s strategy, the risks it faces, how it is performing
and the outlook.
Financial Summary
2024–2025
Year Ended
31 March 2025
Year Ended
31 March 2024
Net Asset Value Total Return (Cum-Income)
(a)
8.8% 7.9%
Share Price Total Return
(a)
13.3% 4.9%
MSCI Emerging Markets (Net Dividends) Index Total Return
(a)
5.8% 5.9%
Total Net Assets (£ millions) 1,985.4 2,034.9
Net Asset Value (Pence per Share) 193.7 182.5
Share Price (Pence per Share) 169.6 154.4
Share Price Discount to Net Asset Value at Year End
(a)
12.4% 15.4%
Average Share Price Discount to Net Asset Value Over the Year
(a)
13.8% 13.9%
Ordinary Dividend
(b)
(Pence per Share) 5.25 5.00
Revenue Earnings
(c)
(Pence per Share) 5.41 5.18
Net Gearing
(a)
0.2% 0.0%
Ongoing Charges Ratio
(a)
0.95% 0.97%
Source: Franklin Templeton and FactSet.
(a) A glossary of alternative performance measures is included on pages 114 and 115.
(b) An annual ordinary dividend of 5.25 pence per share for the year ended 31 March 2025 has been proposed. This comprises the interim dividend of 2.00 pence per share (2024: 2.00 pence
per share) paid by the Company on 31 January 2025 and a proposed final dividend of 3.25 pence per share (2024: 3.00 pence per share).
(c) The revenue earnings per share figures are shown in the Statement of Comprehensive Income on page 81 and Note 7 of the Notes to the Financial Statements.
01. Strategic Report
8
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
10 year record
2015-2025
Year Ended
Total Net
Assets (£m)
Annual
Dividend
(£m)
Buy backs
(£m)
NAV
(a)
(Pence
per Share)
Share Price
(a)
(Pence
per Share)
Year-End
Discount
(b)
(%)
Annual
Dividend
(a)
(Pence
per Share)
Ongoing
Charges
Ratio
(b)
(%)
31 March 2015 2,045.0 26.1 24.7 128.2 111.2 13.3 1.65 1.20
31 March 2016 1,562.3 24.1 93.6 104.8 90.8 13.4 1.65 1.22
31 March 2017 2,148.1 23.1 89.4 152.6 132.3 13.3 1.65 1.20
31 March 2018 2,300.8 40.0 72.5 169.2 148.6 12.2 3.00 1.12
31 March 2019 2,118.2 40.2 147.5 168.5 153.2 9.1 3.20 1.02
31 March 2020 1,775.7 45.9
(c)
69.9 146.5 131.4 10.3 3.80
(c)
1.02
31 March 2021 2,591.3 44.9
(c)
49.6 219.4 202.4 7.7 3.80
(c)
0.97
31 March 2022 2,100.4 44.8 3.6 178.2 156.4 12.2 3.80 0.97
31 March 2023 2,017.5 57.8 29.2 174.1 152.2 12.6 5.00 0.98
31 March 2024 2,034.9 55.4 65.9 182.5 154.4 15.4 5.00 0.97
31 March 2025 1,985.4 54.0
(d)
149.2 193.7 169.6 12.4 5.25
(d)
0.95
Source: Franklin Templeton and FactSet.
(a) Comparative figures for financial years 2015 to 2021 have been retrospectively adjusted following the sub-division of each existing ordinary share of 25 pence into five ordinary shares of 5 pence
each on 26 July 2021.
(b) A glossary of alternative performance measures is included on pages 114 and 115.
(c) Excludes the special dividend of 0.52 pence per share for the year ended 31 March 2020 and the special dividend of 2.00 pence per share for the year ended 31 March 2021.
(d) Based on a proposed annual ordinary dividend of 5.25 pence per share for the year ended 31 March 2025. This comprises a proposed final dividend of 3.25 pence per share calculated using
shares in issue as at 16 May 2025 and the interim dividend of 2.00 pence per share paid 31 January 2025.
(e) Rebased to 100 at 31 March 2015.
’25’24’23
50
100
150
250
20
0
March
2015
’16’17 ’18’19 ’20’21 ’22
TEMIT NAV Total Return TEMIT Share Price Total Return
MSCI Emerging Markets (Net Dividends) Index Total Return
10 Year Performance
2015–2025
NAV, Share Price and Benchmark Total Return
(e)
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 9
South Korea
Chairman’s statement
Performance
(a)
In the financial year under review, the performance of the
TEMIT portfolio was excellent. The net asset value (‘NAV’) total
return over the 12 months to 31 March 2025 was +8.8%, while
the share price total return was +13.3%. By contrast, the
benchmark’s total return was +5.8%. The investment managers
deserve congratulation for this performance.
It would be remiss not to comment on the impact of President
Trump’s “Liberation Day”, declared two days after the financial
year end. The announcement of the intention to impose
widespread tariffs on imports into the United States from most
countries was an unwelcome event creating considerable
investor anxiety as a wider range of countries were affected by
the proposed tariffs than had been expected, particularly
inAsia.
Subsequently it became clear that China, the largest weighting
in the Emerging Markets benchmark, was being singled out in
particular. In last year’s letter I wrote “the Board and
Investment Managers believe that China is probably too
integrated into the global economy for economic sanctions to
profit any party”. The temporary truce in place at the time of
writing supports this premise.
Both the NAV of the Company and its share price initially fell
sharply but have now recovered to similar levels to the
yearend.
The truce is temporary and tariffs appear to be part of a
broader reset of the relationship between the United States
and the rest of the world. This outlook for the portfolio against
this backdrop is discussed in greater detail at the end of this
letter and in the manager’s report.
Communication with investors
Over the last twelve months, I have spoken with holders of
more than half of the Company’s shares and our brokers have
also conducted interviews to solicit views on TEMIT, while the
managers have worked to share their actions and insights
through written articles, videos and seminars to ensure
existing and prospective investors are fully informed.
The Board continues to explore ways in which demand for
TEMIT’s shares could be improved and, to this end, we
commissioned research from independent third parties to
obtain the views of both private and professional investors in
May 2025. The shareholders who were interviewed were
broadly supportive of the Company in its current form and
recognised the very good investment performance relative to
the benchmark. We received a lot of positive feedback on the
investment managers’ strategy. Some shareholders expressed
a preference for higher – but still moderate – levels of gearing.
Finally, the general lack of demand for investment trust shares
remains an issue and there was widespread support for our
efforts to manage the balance of demand through share
buybacks, which is discussed further below.
(a) See Glossary of Alternative Performance Measures on pages 114 and 115.
‘The net asset value (‘NAV’) total return over the
12 months to 31 March 2025 was +8.8%. The
investment managers deserve congratulation for
this performance.
’
Angus Macpherson
Chairman
01. Strategic Report
10
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
South Africa
shareholders and in line with the commitment set out above.
These buybacks represented 8.1% of shares in issue on
31March 2024 and, as all buybacks were at a discount to the
prevailing NAV, resulted in an uplift of 1.16% of NAV per share
for remaining shareholders.
As I commented last year, the board does not believe share
buybacks narrow discounts other than in the short term; their
more measurable impact is to improve liquidity and to
enhance earnings per share. Indeed, the discount remained
largely driven by market forces and there were times when it
widened due to very limited demand. I am pleased to report
that the share price discount narrowed from 15.4% at the start
to 12.4% at the end of the year under review.
The board is seeking approval from shareholders for the
authority to repurchase up to 14.99% of the issued shares over
the year following the AGM and intends to purchase a further
£100m-£200m of shares over the next 12 to 24 months, subject
of course to market conditions.
Revenue and dividends
The net revenue profit for the year was 5.41 pence per share.
The Company paid an interim dividend of 2.00 pence per
share at the half year stage and the Board is recommending an
increased final dividend of 3.25 pence per share, making a
total dividend for the year of 5.25 pence; an increase of
5%compared with the prior year.
Gearing
TEMIT’s previous £100 million fixed rate loan matured and was
repaid on 31 January 2025. On that date, the Company
entered into a £122 million multi-currency revolving loan
facility with The Bank of Nova Scotia, London branch. The loan
facility is available for 364 days, to 30 January 2026.
Share price rating
The Board was very clear in last year’s report that it found the
persistence and scale of the discount that the Company’s
shares trade to their underlying NAV unsatisfactory.
We believe that there are three important factors which can
narrow the discount: renewed investor enthusiasm for
emerging market equities; a company structure with
investment performance that makes it attractive relative to
other investment vehicles; and an enhanced profile through
marketing that increases awareness amongst new investors.
In June 2024 we announced a series of measures with the
intention of improving liquidity and returns for holders of
TEMIT’s shares. In summary, these were commitments to:
•
At least maintain the current level of annual dividend;
•
Repurchase up to £200m of shares over the next 12 to
24months;
•
A conditional tender offer, under which TEMIT will tender for
up to 25% of its shares if it underperforms its benchmark
index over five years to March 2029; and
•
A phased reduction in AIFM fees.
These measures were intended to make the value proposition
of the shares more evident to shareholders and to improve
liquidity for shareholders wishing to buy or sell. The Board’s
premise is that whilst there are significant benefits to a closed
ended vehicle, the fact that we are not required to return
capital to shareholders does not mean that we may not do so,
provided that it does not compromise the ability of the
company to meet its objectives.
Following this announcement, we stepped up the rate of share
buybacks and over the year under review around 90 million
shares were bought back, returning £149.2 million to
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 11
Annual General Meeting
I am pleased to extend an invitation to all shareholders to join
us for our AGM on 10 July 2025 at Franklin Templeton’s offices
at 78 Cannon Street in London. The meeting will include a
presentation by the Investment Managers. We look forward to
welcoming those shareholders who are able to come to
themeeting.
Whether or not you intend to attend the meeting in person,
you are strongly encouraged to submit your votes on the AGM
resolutions in advance of the meeting. Submitting votes by
proxy does not preclude you attending the meeting or
changing your vote if you do subsequently decide to attend
the AGM. If you have any questions, please send these by
email to temitcosec@franklintempleton.com or via
www.temit.co.uk/investor/contact-us in advance of the
meeting. You are also welcome to use these contact details
should you have a question at any other time. Any questions
that we receive will be considered and, if appropriate,
responses will be provided on our website www.temit.co.uk.
Outlook
The announcements on “Liberation Day” were shaped long
before this year. Some retreat from globalisation and
decoupling of the United States from China was likely
whichever party formed the administration after the last
election. Those disadvantaged by the deflationary forces of
trade and immigration represent a significant political bloc
which cannot be ignored in a democratic state.
The imposition on the American people of a significant import
tax burden, higher consumer goods prices and their
consequent inflationary impact is unlikely to be electorally
compelling in the US mid-term elections without some
evidence of compensatory economic benefit. Even if the
current propositions prove sustainable, their impact on the US
is likely to be much greater than on their targets’ economies.
China’s exports to the United States, for example, are
estimated to be less than 3% of its GDP.
We maintain a positive outlook on emerging markets,
supported by a combination of improving macro conditions,
structural growth trends, and a shifting geopolitical
landscape. The backdrop of lower U.S. interest rates and a
weaker dollar creates a more favourable environment for
capital flows and local currency strength across many
emerging economies.
It should be borne in mind that the imposition of punitive
tariffs on China and other emerging markets is a sign of the
economic strength, not the weakness, of these high growth
countries. Having continued investment exposure to them
may well turn out to be even more important than before.
Angus Macpherson
Chairman
6 June 2025
The facility provides flexible debt. Drawings may be in sterling,
US dollars and offshore renminbi (Chinese Yuan, CNH). The
Company initially drew down £80 million on 31 January 2025.
Subsequently, when a £40 million tranche of debt matured at
the end of April this was partly replaced by borrowing
CNH300million, equivalent to £30.8 million at the time.
Stewardship and Governance
Since TEMIT was launched over 35 years ago, our Investment
Managers have always focused on the corporate governance
of investee companies, which we believe has helped many
companies to understand and attract international investors.
Over the years, the level of investor attention on sustainability
has grown and investment managers’ broader approach to the
stewardship of investors’ capital and the companies in which
they invest has come under increasing scrutiny. The report on
this subject starts on page 31. For those interested in exploring
the subject in more depth, our Investment Managers have in
recent years produced a comprehensive, dedicated
Stewardship Report for TEMIT. This year’s report is published
simultaneously with this Annual Report and is available to
download at www.temit.co.uk.
As part of an exercise of good corporate governance the
Board has undertaken an extensive programme of shareholder
tracing which has reunited a number of shareholders with their
holdings. The process has also saved the Company the
registration and serving costs of shareholders who remain
unidentified and enabled legal forfeiture and disposal of these
shares with the proceeds donated to a number of charitable
institutions.
The Board
Sarika Patel was appointed as a non-executive Director of the
Company with effect from 1 January 2025. Simon Jeffreys, the
current Chair of the Audit and Risk Committee, will retire from
the Board following the conclusion of the Annual General
meeting in July. Following Simon’s retirement, Sarika will take
over the role of Chair of the Committee having worked closely
with Simon since her appointment.
Sarika is a Chartered Accountant and has widespread
experience in both investment trusts and trading companies.
She is Chair of abrdn Equity Income Trust and chairs the
Audit& Risk Committee of SDCL Energy Efficiency Income
Trust and she is also Chair of Action for Children.
I would like to record thanks on behalf of myself, the Board and
the managers for Simon’s exemplary contribution to TEMIT
and his leadership of the audit and risk management function
over the last nine years. We wish him well in his current and
future endeavours.
01. Strategic Report
12
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
The investment managers
TEMIT’s investment management is delegated
to Franklin Templeton Investment
Management Limited (‘FTIML’) and Templeton
Asset Management Ltd (‘TAML’) (together, the
‘Investment Managers’). Portfolio Managers
from FTIML and TAML form part of the wider
Franklin Templeton Emerging Markets Equity
group (‘FTEME’). FTEME have managed the
portfolio since TEMIT’s inception and are
pioneers in emerging markets equity
investing. They bring more than 35 years of
experience along with local knowledge from
over 70investment professionals, based in
13countries around the world.
The team has a collaborative investment
process where all analysts and portfolio
managers work together to contribute to
investment returns. They meet regularly,
both formally and informally, to debate and
exchange ideas, investment themes and
enrich their understanding of the markets
by drawing on local insights to build a global
perspective and context to their thinking.
They also benefit from the broader resources
available throughout Franklin Templeton.
The Portfolio Managers for TEMIT, Chetan
Sehgal (lead) and Andrew Ness, are senior
executives in FTEME.
Portfolio Managers
Chetan is the lead Portfolio Manager of TEMIT and is based
in Singapore.
As part of his broader responsibilities within FTEME, Chetan
is also the director of portfolio management. In this capacity,
he is responsible for the overall Global Emerging Markets
strategies, providing guidance and thought leadership,
co-ordinating appropriate resources and coverage, and
leveraging the group’s expertise to add value across
products within the strategies.
Chetan joined Franklin Templeton in 1995 from Credit Rating
Information Services of India Ltd, where he was a senior analyst.
Chetan holds a B.E. Mechanical (Hons) from the University of
Bombay and a postgraduate diploma in Management from the
Indian Institute of Management in Bangalore, where he
specialised in finance and business policy and graduated
as an institute scholar. Chetan speaks English and Hindi and is
a Chartered Financial Analyst (‘CFA’) Charterholder.
Andrew Ness is a Portfolio Manager of TEMIT and is based
in Edinburgh.
Prior to joining Franklin Templeton in September 2018, Andrew
was a Portfolio Manager at Martin Currie. He began his career
at Murray Johnstone in 1994 and worked with Deutsche Asset
Management in both London and New York before joining
Scottish Widows Investment Partnership in 2007.
Andrew holds a B.A. (Hons) in Economics and an MSc in
Business Economics from the University of Strathclyde in
the UK. He is an Associate Member of the UK Society of
Investment Professionals and a member of the CFA Institute.
Chetan Sehgal
CFA
Andrew Ness
ASIP
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 13
Outlook for emerging markets
In our Half-Yearly Report to 30 September 2024, we wrote that
we have emerged from a volatile period in which worries about
economic recession dominated investor sentiment. With the
benefit of hindsight, what we experienced were ebbs and flows
in what was perceived as volatility, and there will be more
uncertainty for the foreseeable future.
Following US President Trump’s ‘Liberation Day’
announcement of tariffs in April 2025, global equity markets
have faced considerable turbulence.
We believe that the United States has three key objectives: to
raise money to fund its deficit and restore the credibility of its
financial systems, to add critical manufacturing capacity in the
United States and to contain China. Whilst most countries are
likely to negotiate and help the United States to achieve some
of these objectives, there remains significant uncertainty on
how this incipient trade war will panout.
Tariffs, if implemented for an extended period would lead to
slower economic growth and inefficiencies globally. Tariffs
have also put into question the United States’ exceptionalism.
Investors may look to diversify away from the US which would
also put pressure on the dollar. Valuations in EMs are also
generally supportive. In tandem, valuations, currency and fund
inflows should act as tailwinds for EMs.
In our view as long-term investors, we balance uncertainty with
optimism in pockets of our investable universe. We continue to
remain overweight on equities in Latin America; and in
particular, Mexico and Brazil, as the region has been spared
from the harshest tariffs. Mexico will also benefit due to its
geographical proximity to the United States. The outlook for
Brazilian equities looks to be on the mend as we expect Brazil
to eventually reduce interest rates.
Slower global growth from tariffs and increased oil output from
OPEC+ would likely result in an easing of energy prices. We
remain underweight on the Middle East, due to its reliance on
oil prices for economic growth.
Emerging Asia has its own strengths, which could help to
buffer the negative impacts of tariffs. AI remains a strong
growth area despite concerns on the monetisation of AI. This
should be beneficial for South Korea and Taiwan, which are
home to several large semiconductor companies which are
key to driving the development of AI. This has flowed through
to Chinese internet companies, which have benefitted as they
progress with AI.
China is attempting to minimise the risks inherent in
geopolitical tensions by keeping up with its policy support for
its economy. While tariffs could further impact growth,
valuations are supportive. Our approach towards Chinese
equities is selective and our key holdings in internet
companies give us a degree of comfort through their cash
flows and shareholder returns, notwithstanding their growth
potential resulting from AI developments.
India is probably better relatively positioned because of its
large domestic market and limited dependence on trade
exports. In addition, there no tariffs on services including the
information technology sector. However, the recent escalation
in tension between India and Pakistan has further added to
global geopolitical uncertainty. Balancing what seems like a
positive view on India is our selective approach as we maintain
a watchful eye onvaluations.
Reciprocal tariffs have been deferred and this provides a
window of opportunity for trade negotiations. Most countries
should be able to negotiate a trade deal, balancing between
their national objectives and the demands of the
UnitedStates.
Conclusion
While we do not know the exact impact of tariffs thus far, the
portfolio is well positioned geographically, with an overweight
positioning in Latin America and underweight positioning in
the Middle East. The impact of tariffs on individual portfolio
holdings will be clear only after the final tariff rates are
announced.
The macroeconomic environment has been, and remains,
decidedly tricky and intertwined with a multitude of headwinds
and risks.
We have built considerable expertise in the emerging market
equity asset class, which has guided us to outperform in a
complex environment; and we hope that we have shown this
throughout the course of this report. We continue to abide by
our investment approach and seek opportunities across equity
markets, focusing on companies that, in our assessment, have
long-term earnings power. We find that this is especially
crucial in the current circumstances.
01. Strategic Report
The investment managers’ report
14
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Review of performance
(a)
Emerging markets (‘EMs’) advanced over the 12 months ended 31 March 2025. While this may be interpreted positively, the
year was marked by volatility and was a challenging period for equity investing. We credit our investment approach to steering
the performance of TEMIT to deliver returns that were superior to the benchmark. Our investment philosophy is anchored in a
bottom-up process to finding companies that our analysis indicates have sustainable earnings power and whose shares trade
at a discount relative to their intrinsic worth. The MSCI Emerging Markets (Net Dividends) Index returned 5.8% in the 12-month
period under review, while TEMIT delivered a net asset value total return of 8.8% (all performance figures are net total return in
sterling terms)
(b)
. Full details of TEMIT’s performance can be found on page 4.
Three macro themes have triggered price movements:
Elections: Several EM countries such as India, Indonesia, Mexico, South Africa and Thailand held elections. Equities in India and
Mexico fluctuated around the times of their elections. While Indian equities benefited as the incumbent prime minister won the
elections and gave rise to expectations of policy continuity, elections in Mexico posed a drag on the prices of Mexican equities as
the strong victory of its ruling party caught investors by surprise. This led to concerns over the potential for anti-market reforms. As
the new United States President came into power concerns were raised over the potential imposition of import tariffs and the
move by the United States government to become more isolationist and protectionist, which caused broad-based declines across
markets. Volatility increased sharply immediately after our financial year-end and is discussed under Outlook below.
Artificial intelligence (‘AI’); this investment theme was disrupted by concerns over the ability of companies to convert potential into
profitable business over the long term and then by the emergence of lower cost alternative approaches in China. These factors
led to increased volatility in the share prices of companies which had been seen to be beneficiaries of AI.
Geopolitics; these concerns remained a mainstay, where the conflict between Israel and Hamas militants and that between Russia
and Ukraine continued unabated. EM equities could not escape pressures from concerns over a recession in the United States.
However, the US Federal Reserve’s eventual interest rate cut infused a bout of optimism globally, including in EMs.
By region as measured by the MSCI Emerging Markets Index, all regions advanced save for Latin America. The reasons behind
each country’s equity market performance are detailed below for TEMIT’s largest-weighted country exposures.
(a) All benchmark performance as per the MSCI Emerging Markets (Net Dividends) Index.
(b) See Glossary of Alternative Performance Measures on pages 114 and 115.
TEMIT’s largest market exposure, although the portfolio remained underweight relative to the
benchmark. Chinese equities rose by over 37% in sterling terms over the 12-month period. This
outperformance was supported by the government’s policies to boost the country’s economic
growth and equity market. The government announced measures that encompassed a
programme for share buybacks and a swap facility to shore up the equity market. The release of
Chinese startup DeepSeek’s AI models, which have been reported to be on a par with or better
and cheaper than other AI models, sparked a wave of interest in Chinese equities. Investors were
impressed by China’s ability to innovate despite efforts by the US to limit the development of
sophisticated technology in the country. The Chinese government’s renewed focus on
technology as tabled in its government work plan announced in March 2025 and the President’s
high-profile meeting with some of the biggest names in China’s technology sector were viewed
as signs of support for the sector and sent technology stock prices even higher. Our approach
towards Chinese equities continues to be selective. Whilst policy support has resulted in a return
of investor interest, we are sceptical of the benefits of these policies in the longer term.
Reviewing the macroeconomic background, we have not yet observed any meaningful change
in demand; and the declining and ageing population remains a key structural challenge. Our
Chinese exposure is largely to internet companies. Notwithstanding their growth potential from
AI developments, Chinese internet companies give us an additional degree of comfort through
their cash flows and shareholder returns.
China/Hong Kong
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 15
Taiwan
TEMIT’s second-largest market exposure, where the portfolio was weighted on par versus the
benchmark. The Taiwanese equity market performed satisfactorily and ended the 12-month period
with a gain of over 2% in sterling terms. Expectations of higher earnings growth bolstered by AI lifted
performance earlier in the period. This optimism was offset to an extent by uncertainties around
monetisation of AI investments. Investment sentiment soured thereafter as investors braced for US
tariffs. The portfolio’s exposure to the country is concentrated in the island’s semiconductor industry
and TEMIT’s largest portfolio holding, which is in Taiwan Semiconductor Manufacturing Company
(‘TSMC’). TSMC, despite its dominance in the semiconductor industry, is not immune to trade
uncertainties. The company announced plans to increase its investment in the US amid tariff
concerns. Using a longer-term lens, we remain positive on the semiconductor industry and believe
that AI will continue to experience strong growth, which should benefit semiconductor companies as
they make up a key component of the AI supply chain. Beyond AI, semiconductors are essential
components used in a myriad of industries. We maintain a positive long-term view on both Taiwan’s
semiconductor industry and TSMC.
India
TEMIT’s fourth-largest market exposure. This was an equity market which saw tides change repeatedly
in a relatively short period. First half gains were offset by second half losses to end the period flat. Indian
equities started the first half of the period with an advance of more than 11% (in sterling terms),
benefitting from positive economic data and expectations of policy continuity from the incumbent
prime minister Narendra Modi’s coalition party. The positive backdrop did not last for long and
investment sentiment soured in the second half of the period with returns flat over the full 12-month
period. Corporate earnings for the second and third quarters of the 2025 fiscal year were below investor
expectations and gave rise to concerns on a probable growth slowdown. A slowdown in consumption
was also experienced. While valuations are still a concern for us, recalling that our investment approach
hinges on finding companies whose shares according to our analysis trade at a discount relative to their
intrinsic worth, we continue to see attractive opportunities in India. While the country is one of TEMIT’s
largest absolute weighting allocations, it is still underweight relative to the benchmark.
Brazil
TEMIT’s fifth-largest market exposure with equities in Brazil finishing the reporting period
with losses of more than 15%. Defying the trajectory of most other central banks, Brazil
started to raise interest rates to control the country’s level of inflation as well as to protect its
currency. We believe that the interest rate hikes should be a short-term phenomenon and
rates should converge with the global interest rate cycle in due course.
South Korea
TEMIT’s third-largest market exposure, where the portfolio was overweight versus the benchmark. South
Korean equities lost just under 23% in sterling terms during the reporting period, as the technology-
heavy market struggled with near-term oversupply in the electronic memory market. Investor
confidence in South Korean equites eroded over domestic political uncertainties, following declaration
and subsequent lifting of Martial Law by the President in December 2024. The Korean won devalued.
The market struggled as optimism on AI, which should benefit memory chips, was dampened by slowing
demand growth for legacy memory products. The market decline was driven by the country’s most
valuable company, Samsung Electronics, as its share price was pressured over concerns of the
company’s perceived loss of technological leadership. We expect the supply-demand imbalance for
memory chips to improve driven by supply tightness and demand for chips for the development of AI
applications. Our overweight position in South Korea includes companies that are positioned to capture
longer-term structural growth drivers in the form of semiconductors and artificial intelligence (Samsung
Electronics and SK Hynix), the green transition (Samsung SDI and LG Corp) and dominant internet
search platform integrating e-commerce, payments and digital content (NAVER).
01. Strategic Report
16
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Other Emerging Markets
There were initial signs of abatement in geopolitical conflicts
which proved positive for emerging EMEA equities, but as of
end of March 2025, these negotiations had stalled. South
Africa’s equity market experienced a rally following the
country’s elections. President Cyril Ramaphosa won a second
successive term and formed a coalition government.
The Mexican equity market declined following the country’s
elections. Concerns regarding anti-market reforms and the
signing of a controversial judicial reform into law pressured
Mexican equities. Uncertainties on US tariffs also led to some
market volatility towards the end of the period.
Investment strategy, portfolio changes
and performance attribution
The following sections show how different investment factors
(stocks, sectors and countries) accounted for TEMIT’s
performance over the 12-month period. We continue to
emphasise our investment process that selects companies
based on their individual attributes and ability to generate
risk- adjusted returns for investors, rather than taking a
high-level view of sectors, countries or geographic regions to
determine our investment allocations.
Full details of our investment process, philosophy and
approach are detailed on page 29.
Our well-resourced, locally based, teams remain a key competitive
advantage and it has been particularly helpful having teams on
the ground, in the benchmark-heavyweight countries of China,
India and Brazil, to help us better understand these markets. This
local presence allows us to understand business models,
competitive dynamics and supply-chain issues. We have also
managed to get insights into regulatory conversations and
management capabilities, which are factored into our analysis. We
view our locally based teams, which are armed with vast
knowledge of the respective countries’ macroeconomic issues
and views on the ground, as vital sources of input into the
investment process. This complements our global presence,
which allows us to analyse short-term uncertainties and
determine if these are reflective of cyclical or structural trends.
In the portfolio, we remain positioned in long-term themes
including consumption premiumisation, digitalisation, health
care and technology. We focus on companies reflecting our
philosophy of owning good quality businesses, with long-term
sustainable earnings power and share prices at a discount to
intrinsic worth. We see high levels of leverage as a risk and
continue to avoid companies with weak balance sheets.
Performance Attribution Analysis %
Year to 31 March
2025 2024 2023 2022 2021
Net Asset Value Total Return
(a)
8.8 7.9 0.8 (17.3) 54.5
Expenses Incurred 0.9 1.0 1.0 1.0 1.0
Gross Total Return
(a)
9.7 8.9 1.8 (16.3) 55.5
Benchmark Total Return
(a)
5.8 5.9 (4.9) ( 7.1) 42.3
Excess return
(a)
3.9 3.0 6.7 (9.2) 13.2
Stock Selection 2.7 0.3 7. 3 (10.2) 6.0
Sector Allocation 1.6 2.1 (0.4) 0.8 6.5
Currency (0.7) 0.3 (0.2) 0.2 0.6
Share Buyback Impact 1.2 0.5 0.2 0.0 0.3
Residual Return
(a)
(0.9) (0.2) (0.2) – (0.2)
Total Contribution 3.9 3.0 6.7 (9.2) 13.2
Source: FactSet and Franklin Templeton.
(a) A glossary of alternative performance measures is included on pages 114 and 115.
This table sets out the results of a detailed analysis of the returns produced by the TEMIT portfolio, how this compares with the
theoretical returns available from the benchmark index and factors affecting the comparison with the returns of the benchmark index.
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 17
This table sets out the results of a detailed analysis of the
returns produced by individual securities in the TEMIT portfolio,
and how this has affected the overall returns produced by the
portfolio compared with theoretical returns available from the
benchmark index.
An off benchmark holding in Prosus served the portfolio well.
Prosus is a leading global investment company and the largest
shareholder of Tencent (also held directly by TEMIT), a Chinese
technology company. The company also has investments in
several food delivery platforms in different parts of the world. Its
share price tracked that of Tencent’s stock, which rose on the
company’s release of its earnings results for several quarters, a
slew of stimulus measures in China and investor enthusiasm for
China’s technology companies after breakthroughs in China’s
AI capabilities. Regular buybacks also aided the performance of
Prosus in the period.
Also finishing higher over the 12-month period were shares of
Chinese e-commerce company Alibaba. Its share price
received support from investor expectations that the company
could be included in the Hong Kong Stock Connect in late 2024
(which eventually happened), and that the company’s new
strategy to charge merchant service fees could potentially boost
its revenue. China’s stimulus measures to boost the country’s
economy and equity market, Alibaba’s strong December quarter
results announcement and the company’s optimism and
commitment to invest in AI boosted share price returns as well.
Alibaba remains a key holding in the portfolio’s China exposure.
The company continues to generate strong cash flows, in our
assessment, and we expect share-price appreciation to be
supported by corporate actions, including share buybacks.
Another stock that the portfolio held outside of the index is
Genpact, a US-listed technology services company that derives
much of its earnings from services provided from India. Its share
price rose on consistently strong earnings results for the last
three quarters of 2024. The fourth-quarter results showed
improved execution and progress on its strategic initiatives.
South Korea-based Samsung SDI is a leading manufacturer of
lithium-ion batteries for electric vehicles (‘EVs’), energy storage,
power tools and information technology products. Its share
price declined due to its weak quarterly results. Utilisation of its
key plants has been impacted by weak demand as well as loss of
market share with its key clients. Concerns of a reduction in US
tax credits under the new US Government also pressured its
share price. The company also announced a rights issue to fund
its capital expenditure plan. Fundamentals deteriorated
significantly and the share price reacted accordingly. While the
near term looks challenging, the company also owns a
meaningful stake in Samsung Display, a manufacturer of OLED
(organic light emitting diode) panels, and any monetisation
there should help to crystallise value.
LG Corp is a South Korean holding company and owns stakes
in several companies across various industries including
electronics, chemicals, electric vehicle (‘EV’) batteries and
household products. LG Corp’s share performance has been
impacted by weak earnings for its key holdings. By way of
example, LG Chem, an associate of LG Corp, reported weak
results due to a sluggish petrochemical sector, as well as
slower-than-expected growth for the EV sector. Its share price
continues to trade at significant discount to its net asset value
(NAV). The company has been buying back shares, which
should help narrow the discount to its NAV.
Samsung Electronics is one of the largest semiconductor
memory manufacturers in the world. It also manufactures a wide
range of consumer and industrial electronics and equipment.
The company reported tepid results, which were impacted by a
weaker memory cycle as well as a low share in high-margin high
bandwidth memory (‘HBM’). The company seems to have lost its
technological leadership in the memory segment and is lagging
in the advanced chips being used for AI servers. Nonetheless, it
remains one of the key companies in the highly consolidated
memory market and should benefit from the rise in demand for
memory products which has been further accentuated by
growth in AI models.
Top 10 Contributors and Detractors to Relative Performance by Security (%)
(a)
Top Contributors
Contribution to
portfolio relative
to MSCI Emerging
Markets Index Top Detractors
Contribution to
portfolio relative
to MSCI Emerging
Markets Index
Overweight
(TEMIT holds more than the index weight)
Prosus 1.3 Samsung SDI (1.2)
Alibaba 1.3 LG Corp (0.8)
Genpact 0.9 Samsung Electronics (0.7)
China Merchants Bank 0.7 Grupo Financiero Banorte (0.7)
Discovery 0.7 Samsung Life Insurance (0.4)
Kasikornbank 0.5 Soulbrain (0.4)
Uni-President China 0.4 Banco Bradesco (0.4)
ICICI Bank 0.4
WuXi Biologics 0.4
Underweight
(TEMIT has no holding or
a holding smaller than the index weight)
Reliance Industries 0.5 Xiaomi (0.9)
China Construction Bank (0.4)
BYD (0.4)
(a) For the period 31 March 2024 to 31 March 2025.
01. Strategic Report
18
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
The table above shows the contribution of the overall portfolio
returns of the different sectors within the TEMIT portfolio
relative to the MSCI Emerging Markets Index.
Stock selection in the consumer discretionary, consumer
staples and energy sectors were key drivers of these sectors’
relative contribution, but allocations played a supporting role
in boosting TEMIT’s performance relative to the benchmark
index during the 12-month period under review. Our
bottom-up stock-picking process led to a slight overweight in
consumer discretionary, and underweight exposures to
consumer staples and energy. Within the consumer
discretionary sector, Alibaba and Prosus (both described
above) are examples of companies that aided relative returns.
The contribution from the consumer staples sector was
partially driven by our holding in Uni-President China, a
manufacturer and retailer of beverages and instant noodles. Its
share price received several boosts in the year, including from
its full-year 2024 results where earnings growth proved steady.
In contrast, stock selection and allocations in the information
technology (overweight) and communication services
(underweight) sectors proved slightly detrimental for TEMIT’s
relative performance. The information technology sector was
driven lower by holdings in Samsung SDI and Samsung
Electronics (both described above). A lack of exposure to
China-based consumer electronics, software and hardware
designer Xiaomi weighed on TEMIT’s performance relative to
the sector. The weakness in the communication services
sector was partially due to TEMIT’s holding in NAVER, a South
Korean internet search and advertising company with
additional business interests in e-commerce, financial services
and entertainment content. The share price weakened as a
result of a combination of factors including weaker growth in
the market, competition for both its advertisement and
e-commerce business, an underwhelming response to its
generative AI technology and uncertainty around benefits
from AI investments. The company suffered a data leak in its
messaging application Line in Japan and the potential
implications of this also pressured the share price. While the
company’s share price recovered on the back of its third- and
fourth-quarter 2024 earnings results, which marked better
growth in advertising revenue and an improvement in cost
controls, the stock still ended with a decline for the period.
Contributors and Detractors to Relative Performance by Sector (%)
(a)
Top Contributors
Contribution to
portfolio relative
to MSCI Emerging
Markets Index Top Detractors
Contribution to
portfolio relative
to MSCI Emerging
Markets Index
Overweight
(TEMIT holds more than the index weight)
Consumer Discretionary 1.7 Information Technology (1.7)
Financials 0.6
Industrials 0.3
Underweight
(TEMIT has no holding or
a holding smaller than the index weight)
Consumer Staples 1.1 Communication Services (0.4)
Energy 0.8
Health Care 0.4
Materials 0.4
Utilities 0.2
Real Estate 0.1
(a) For the period 31 March 2024 to 31 March 2025.
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 19
The table above shows the contribution of the overall portfolio
returns by country relative to the MSCI Emerging Markets
Index.
By markets, stock selection and allocations in India
(underweight) and Taiwan (overweight) added to a positive
contribution from stock selection in China. Our selective
approach in India resulted in TEMIT owning several holdings in
the financials sector that proved accretive, namely private
sector banks ICICI Bank and HDFC Bank, and investment
holding company Bajaj Holdings & Investment. Once again,
TSMC aided relative returns in Taiwan. In China, Prosus and
Alibaba were leading contributors.
Conversely, overweight allocations in both South Korea and
Brazil led these markets to be among the top detractors from
relative returns. Stock selection in South Korea also pressured
the portfolio’s relative performance. Samsung Electronics,
LGCorp and Samsung SDI were key drivers of the portfolio’s
lacklustre performance in South Korea. In Brazil, the share
prices of TEMIT’s holdings in banks Banco Bradesco and Itaú
Unibancoled detractions as they moved in tandem with the
performance of the general Brazilian equity market. The
United Arab Emirates was also a relative detractor, largely
due to stock selection.
Contributors and Detractors to Relative Performance by Country (%)
(a)
Top Contributors
Contribution to
portfolio relative
to MSCI Emerging
Markets Index Top Detractors
Contribution to
portfolio relative
to MSCI Emerging
Markets Index
Overweight
(TEMIT holds more than the index weight)
Taiwan 1.5 South Korea (3.1)
United States 0.8 Brazil (0.2)
Hungary (0.1)
Underweight
(TEMIT has no holding or
a holding smaller than the index weight)
India 2.6 United Arab Emirates (0.2)
China/Hong Kong 0.7 Poland (0.1)
Indonesia 0.5
(a) For the period 31 March 2024 to 31 March 2025.
01. Strategic Report
20
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Top 10 Holdings
As at 31 March 2025
Portfolio
Benchmark
%
Over/(Under)
weight %Holding £’000 %
TSMC
The world’s largest semiconductor foundry company, which is based in Taiwan. Optimism
regarding the growth potential from AI and a recovery in the demand for technology products
have been moderated by uncertainty about US policies, reports that TSMC might have to take
a stake in Intel’s factories, and its increased investment in the United States. TSMC still
remains a key portfolio holding. Encouraged by the structural growth in demand for
computing and the company’s technology leadership, we remain confident in the resilience
of the TSMC business model.
229,057 11.4 8.6 2.8
ICICI Bank
A leading India-based private sector bank and the portfolio’s second-largest holding. Its
share price has seen sustained appreciation over the past years and the bank has been a key
contributor to overall fund performance. This highlights the value of our longer-term,
fundamentally driven investment process, which we continue to employ. We believe that the
bank, with its strong franchise, remains well positioned to benefit from the India growth story.
105,274 5.3 1.1 4.2
Prosus
A leading global investment company and the largest shareholder of Tencent, a Chinese
technology company. We see Prosus as a good proxy for Tencent exposure and is available at
a discount to its NAV. Besides Tencent, Prosus has a diversified portfolio of internet assets in
areas such as food delivery, payment, education technology, e-commerce. Management’s
efforts to narrow the share price discount to NAV via share buybacks should also
supportreturns.
98,029 4.9 – 4.9
Alibaba
The leading e-commerce company in China. While intensified competition and a weak
economy have impacted the growth outlook for its e-commerce business, its other
businesses such as cloud, fintech, local commerce and international e-commerce have
significant potential, in our view. We believe that these could offer either growth opportunities
or the possibility for improvements in profitability. The share price had experienced a
significant derating over the past couple of years, but its initial success in AI and plans for
large investments in AI has sparked investor optimism. While this should drive growth, cash
flows could be weaker in the near term. The company has a strong share buyback policy. We
expect returns from here to be supported by such corporate actions.
93,128 4.7 3.4 1.3
Samsung Electronics
One of the largest memory semiconductor manufacturers in the world, based in South Korea.
It also manufactures a wide range of consumer and industrial electronics and equipment. The
relatively weak share price reflects concerns around the company’s loss of technology
leadership. Nonetheless, it remains one of the key companies in the highly consolidated
memory market, and should benefit from the rise in demand for memory products which has
been further accentuated by growth in AI models.
75,492 3.8 2.4 1.4
SK Hynix
A South Korean semiconductor company and a maker of memory chips used globally across
a wide range of solutions. The company is the industry leader in HBM chips, which are
expected to see strong demand growth for AI applications. We continue to maintain our
conviction, largely due to its leadership position in the latest generation of the HBM market.
66,433 3.3 0.9 2.4
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 21
Portfolio
Benchmark
%
Over/(Under)
weight %Holding £’000 %
Tencent
The largest gaming, communication and social entertainment platform in China. It has a major
presence in online games, digital advertising, video, music and live-streaming, fintech, and
other businesses such as cloud computing. We believe that the company should be a key
beneficiary of AI across its business segments. Tencent also has significant public and private
investments in China and globally. Trading at an attractive valuation, the company has been
proactively undertaking share buybacks, which further enhances its earnings per share.
64,692 3.2 5.3 (2.1)
HDFC Bank
India’s leading private sector bank. It offers a wide range of banking services across retail
banking, home loans and mortgages, and wholesale/corporate banking. HDFC Bank is a clear
leader among Indian private sector banks with a strong liability franchise, market leadership
across multiple retail asset categories and a comprehensive approach to digitalisation. It is
well-positioned to benefit from the anticipated acceleration in credit growth and the
increasing share of financial assets in household savings in India.
58,225 2.9 1.5 1.4
MediaTek
MediaTek is a Taiwan-based chip designer for smartphones and other technology devices.
These devices include televisions, wireless communications and optical storage. MediaTek has
a solid position in mobile computing chips and we believe that it should benefit from growth in
demand for chips from IoT (‘Internet of Things’), automotive, industrial, and wi-fi applications.
Its partnership with Nvidia (not a portfolio holding) to provide advanced automotive chips
integrating Nvidia’s graphic processors as well as opportunities in enterprise application
specific chips should drive additional growth.
56,951 2.9 0.8 2.1
Petrobras
Petrobras is a Brazilian energy company engaged in the exploration, production, and
distribution of oil and gas. The company is recognised worldwide for its oil exploration
technology in ultra-deep waters. With the unpredictability in oil prices, our investment in
Petrobras hinges on its proactive policy of returning cash to shareholders. It remains our top
pick in the oil and gas industry, given its large cash generation and high dividend yield.
50,502 2.5 0.4 2.1
01. Strategic Report
22
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Portfolio Changes by Country
Total Return in Sterling
Country
31 March 2024
Market Value £m Purchase £m Sales £m
Market
Movement £m
31 March 2025
Market Value £m TEMIT %
MSCI Emerging
Markets Index %
China/Hong Kong 490 129 (243) 173 549 42.3 37.2
Taiwan 358 8 (63) 32 335 9.5 2.3
South Korea 426 110 (88) (116) 332 (25.0) (22.6)
India 247 76 (70) 40 293 14.8 (0.4)
Brazil 186 23 (1) (36) 172 (10.8) (15.4)
United States 62 4 (12) 18 72 28.3 –
Thailand 49 11 (1) 5 64 14.2 (6.8)
South Africa 20 13 (3) 16 46 49.8 25.8
Mexico 48 13 – (18) 43 (30.7) (22.4)
Hungary 30 1 (5) – 26 1.4 31.0
Others 79 11 (21) 2 71 – –
Total Investments 1,995 399 (507) 116 2,003
Cambodia
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 23
Geographic Asset Allocation
As at 31 March 2025
Country Weightings vs Benchmark (%)
(a)
27.7
25.8
17.0
8.1
8.0
4 .0
3.3
3.2
2.7
1 .9
1 .1
0.5
5.9
2.6
1 .7
4 .7
4 .5
10.3
6.3
14.6
21.7
24.4
0
5
10
15
20
25
30
Financials Communication
Services
Health Care Consumer
Staples
Energy Materials Utilities Real
Estate
Consumer
Discretionary
IndustrialsInformation
Technology
TEMIT
MSCI Emerging Markets Index
Sector Asset Allocation
As at 31 March 2025
Sector Weightings vs Benchmark (%)
(a) Other countries included in the benchmark are Colombia, Czech Republic, Egypt, Greece, Kuwait, Malaysia, Poland, Qatar, Saudi Arabia and Turkey.
(b) Countries not included in the MSCI Emerging Markets Index.
(c) All companies held by TEMIT in this country are valued at zero.
18.5
-
1.2
0.5
3.6
3.1
4.4
8.6
14.6
0
5
10
15
20
25
35
3
0
China/
Hong Kong
United
States
(b)
United Arab
Emirates
Taiwan
South Korea
India
Brazil
Thailand
South Africa
Mexico
Hungary
Chile
Russia
(b)(c)
Indonesia
Peru
Cambodia
(b)
Philippines
27.4
16.7
16.6
16.8
9.0
31.4
3.1
2.3
2.0
2.2
1.3
0.3
1.0
0.8
0.5
1.4
0. 6
0.5
0.2
0.5
0.2
-
0.0
-
1.2
TEMIT
MSCI Emerging Markets Index
01. Strategic Report
24
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Portfolio by Fair Value
Holding
Sector Fair Value £’000 % of Portfolio
Brazil
Petrobras
(a)
Energy 50,502 2.5
Itaú Unibanco
(a)(b)
Financials 38,030 1.9
Banco Bradesco
(a)(b)
Financials 26,910 1.4
Vale Materials 20,720 1.0
TOTVS Information Technology 10,414 0.5
XP Financials 9,657 0.5
Hypera Health Care 8,577 0.4
Oncoclinicas do Brasil Servicos Medicos Health Care 7,141 0.4
171,951 8.6
Cambodia
NagaCorp Consumer Discretionary 3,684 0.2
3,684 0.2
Chile
Banco Santander Chile
(b)
Financials 20,319 1.0
20,319 1.0
China/Hong Kong
Prosus Consumer Discretionary 98,029 4.9
Alibaba
(c)
Consumer Discretionary 93,128 4.7
Tencent Communication Services 64,692 3.2
China Merchants Bank Financials 38,371 1.9
Techtronic Industries Industrials 35,988 1.8
Budweiser Brewing Company APAC Consumer Staples 31,587 1.6
Baidu Communication Services 24,136 1.2
Ping An Insurance Financials 22,603 1.1
Kuaishou Technology Communication Services 20,228 1.0
WuXi Biologics Health Care 19,525 1.0
NetEase Communication Services 18,274 0.9
Weichai Power Industrials 17,728 0.9
Uni-President China Consumer Staples 15,472 0.8
Haier Smart Home Consumer Discretionary 12,858 0.6
JD.com Consumer Discretionary 8,240 0.4
Daqo New Energy
(b)
Information Technology 7,501 0.4
COSCO SHIPPING Ports Industrials 6,193 0.3
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 25
Holding
Sector Fair Value £’000 % of Portfolio
China/Hong Kong
H&H Group Consumer Staples 5,042 0.2
Beijing Oriental Yuhong Waterproof Technology Materials 3,780 0.2
Greentown Service Group Real Estate 3,360 0.2
Weifu High-Technology Consumer Discretionary 2,229 0.1
China Resources Building Materials Technology Materials 331 0.0
549,295 27.4
Hungary
Gedeon Richter Health Care 23,706 1.2
Wizz Air Holdings Industrials 2,043 0.1
25,749 1.3
India
ICICI Bank Financials 105,274 5.3
HDFC Bank Financials 58,225 2.9
Swiggy Consumer Discretionary 37,873 1.9
Infosys Information Technology 18,179 0.9
Federal Bank Financials 15,595 0.8
Zomato Consumer Discretionary 13,862 0.7
ReNew Energy Global Utilities 12,307 0.6
Bajaj Holdings & Investment Financials 11,343 0.5
ACC Materials 9,155 0.4
Brigade Enterprises Real Estate 5,758 0.3
Niva Bupa Health Insurance Financials 3,851 0.2
NATCO Pharma Health Care 1,425 0.1
Hexaware Technologies Information Technology 297 0.0
293,144 14.6
Indonesia
Astra International Industrials 11,460 0.6
11,460 0.6
Mexico
Grupo Financiero Banorte Financials 41,228 2.1
Nemak Consumer Discretionary 2,034 0.1
43,262 2.2
01. Strategic Report
26
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Holding
Sector Fair Value £’000 % of Portfolio
Peru
Intercorp Financial Services Financials 9,855 0.5
9,855 0.5
Philippines
BDO Unibank Financials 9,750 0.5
9,750 0.5
Russia
LUKOIL
(d)
Energy 0.0 0.0
Sberbank of Russia
(d)
Financials 0.0 0.0
0.0 0.0
South Africa
Discovery Financials 31,049 1.6
Netcare Health Care 14,901 0.7
45,950 2.3
South Korea
Samsung Electronics Information Technology 75,492 3.8
SK Hynix Information Technology 66,433 3.3
NAVER Communication Services 35,036 1.7
Samsung Life Insurance Financials 31,215 1.6
LG Corp Industrials 27,221 1.4
Delivery Hero Consumer Discretionary 21,993 1.1
Doosan Bobcat Industrials 20,961 1.0
Hyundai Motor Consumer Discretionary 20,053 1.0
Samsung SDI Information Technology 10,662 0.5
Fila Consumer Discretionary 9,858 0.5
Soulbrain Materials 5,654 0.3
LigaChem Biosciences
(e)
Health Care 3,373 0.2
Hankook Tire Consumer Discretionary 3,154 0.2
KT Skylife Communication Services 1,031 0.0
332,136 16.6
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 27
Holding
Sector Fair Value £’000 % of Portfolio
Taiwan
TSMC Information Technology 229,057 11.4
MediaTek Information Technology 56,951 2.9
Hon Hai Precision Industry Information Technology 36,522 1.8
Yageo Information Technology 6,738 0.3
Lite-On Technology Information Technology 5,865 0.3
335,133 16.7
Thailand
Kasikornbank Financials 33,692 1.7
Minor International Consumer Discretionary 12,418 0.6
Kiatnakin Phatra Bank Financials 6,836 0.3
Thai Beverage Consumer Staples 6,624 0.3
Star Petroleum Refining Energy 4,009 0.2
63,579 3.1
United Arab Emirates
Emirates Central Cooling Systems Utilities 10,007 0.5
Spinneys Consumer Staples 5,319 0.3
15,326 0.8
United States
Genpact
(f)
Industrials 40,378 2.0
Cognizant Technology Solutions
(f)
Information Technology 31,646 1.6
72,024 3.6
Total Investments 2,002,617 100.0
(a) Preferred shareholders are entitled to dividends before ordinary shareholders.
(b) US listed American Depository Receipt.
(c) TEMIT holds in this company shares listed on the Hong Kong stock exchange and American Depository Receipts listed on the New York stock exchange.
(d) This company is fair valued at zero as a result of its trading being suspended on international stock exchanges.
(e) This company changed its name from LegoChem Biosciences.
(f) This company, listed on a stock exchange in a developed market, has significant exposure to operations from emerging markets.
01. Strategic Report
28
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Market Capitalisation Breakdown %
Less than
£1.5bn
£1.5bn to
£5bn
£5bn to
£25bn
Greater than
£25bn
31 March 2025 3.6 9.2 27.7 59.5
31 March 2024 4.6 12.6 23.3 59.5
Split Between Markets %
(a)
31 March 2025 31 March 2024
Emerging Markets 96.2 95.8
Developed Markets
(b)
3.6 4.0
Frontier Markets 0.2 0.2
Source: FactSet Research System, Inc.
(a) Geographic split between ‘Emerging markets’, ‘Frontier markets’, ‘Developed markets’ are as per MSCI index classifications.
(b) Developed market exposure represented by companies listed in United States which have significant exposure to operations in emerging markets.
Mexico
In investment terminology, a developed market is a country
that is most developed in terms of its economy and capital
markets. To be classified as a developed market, the country
must have a high average level of personal income, but this
also includes openness to foreign ownership, ease of capital
movement, and efficiency of market institutions. An emerging
market is a market that has some characteristics of a
developed market but does not fully meet its standards. This
includes markets that may become developed markets in the
future or were in the past. The term ‘frontier market’ is used for
developing countries with smaller, riskier, or more illiquid
capital markets than ‘emerging’.
Chetan Sehgal
Lead Portfolio Manager
6 June 2025
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 29
The investment managers’ process
Investment philosophy and approach
FTEME’s long-term approach is driven by the 3 S’s, seeking
Structural
growth opportunities in emerging markets,
investing in businesses with
Sustainable
earnings power at
a discount to intrinsic worth, and believing in responsible
Stewardship
of client capital. FTEME seeks to capture the
growth potential of emerging market companies and believes
that this is best achieved by employing a bottom-up and
fundamental security selection process. FTEME conducts
in-depth proprietary company research with a long-term and
independent perspective. FTEME believes in the responsible
stewardship of clients’ capital and that governance and
sustainability issues create risks and opportunities for
companies. ESG analysis is therefore integrated as a key
element of fundamental bottom-up analysis.
TEMIT’s performance in different
market environments
FTEME’s approach aims for outperformance over the long
term. The investment strategy tends to produce stronger
performance when company fundamentals are the primary
driver for stock returns, where a focus on stock selection
should produce superior results. Performance may be less
strong in highly sentiment-driven market environments, when
investors focus more on the overall economic picture rather
than company fundamentals.
Idea generation
The key source of idea generation is FTEME’s team of
over 70 analysts and portfolio managers located around
the globe. Their experience and expertise allow them to
identify trends which they may want to explore further
through company research. In addition, FTEME’s local
presence, network and understanding of local dynamics
may help to identify trends and opportunities that other
market participants may filter out through standard
quantitative screens. FTEME analysts speak the local
language and are part of the local culture and fabric of
the countries where they conduct research.
1
This can also be the case when the market is overly short-term
oriented, and rewards companies driven by what FTEME views
as unsustainable factors such as short-term demand/supply
imbalances or inorganic growth.
Investment process
The three broad stages of FTEME’s investment process
comprise: idea generation, stock research, and portfolio
construction and management; with governance and
sustainability considerations and risk management fully
integrated at all stages.
South Korea
01. Strategic Report
30
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Portfolio construction
FTEME seeks to build a high-conviction stock-centric
portfolio that is primarily driven by company-specific
factors and focused on the long term. A bottom-up
approach to stock selection is used, with country and
sector allocations a residual of this process.
Portfolio style and characteristics
The strategy typically displays the following
characteristics:
Core style
The strategy aims to deliver outperformance
irrespective of market direction. The portfolio
construction process leads to the majority of
active risk being focused on stock selection,
not style or currency factors.
Quality and growth but not at excessive valuation levels
The philosophy typically leads to a portfolio
with higher quality and growth than the
aggregate of the benchmark index.
High conviction portfolio
The top 10 holdings typically account
for over 40% of the portfolio which
overall is well-diversified across the market
cap spectrum.
Low turnover
FTEME’s high conviction and long-term
approach means that the typical annual
portfolio turnover is less than 20%.
Buy and sell discipline
FTEME’s buy discipline is primarily designed to ensure
that the portfolio managers buy when they have both
conviction in a business and it is trading below its intrinsic
value; FTEME’s sell discipline is designed to capture the
opposite. All holdings are regularly reviewed to ensure
that analyst recommendations are up to date and
accurately reflect any changes in company fundamentals.
In this way, ongoing fundamental research drives all buy
and sell decisions.
3
Stock research
FTEME analysts conduct rigorous analysis to assess
whether a company has sustainable earnings power, and
to establish a proprietary estimate of its intrinsic worth.
By integrating ESG analysis with traditional business and
financial analysis, FTEME seeks to gain insights into the
quality and risks of companies. FTEME’s research
platform currently has coverage of over 700 companies
across emerging markets using a proprietary and
rigorous bottom-up research approach, along with
extensive knowledge of the wider investment universe.
FTEME’s research analysts form detailed views of
companies by collecting and analysing a variety of
information. The team conducts detailed quantitative
financial analysis by building in-depth company models
to evaluate financial strength and profitability, and to
project future earnings and cash flow. Industry demand
and supply models are incorporated in the analysis, as
well as country and currency macro considerations.
FTEME has a strong emphasis on qualitative assessment.
The assessment of ability to sustain stable or growing
economic profits over time is typically driven by
a combination of factors, including (i) sound business
models; (ii) sustainable competitive advantages; (iii)
management foresight; and (iv) low debt levels. Earnings
power is the demonstrable ability to generate
sustainable economic profit into the future in areas
which could be beyond the current scope of operations.
The analysts look for real earnings growth by focusing on
economic earnings and cash flows rather than reported
earnings and differentiating between operational
earnings and financial earnings. They evaluate internal
versus external drivers to earnings and prefer companies
with earnings which can be affected through
management action.
A key element of earnings power is therefore quality, as
signified by (i) products and services with low regulatory
and macro risk; (ii) financial strength; and (iii)
management strength.
Each research recommendation may incorporate several
valuation methods extending typically over a three to
five-year horizon. FTEME aims to clarify the risk/reward
balance of a company by conducting sensitivity analysis,
stress-testing, and scenario analysis. It seeks to identify
what the market consensus expectations are for a stock
and how the team’s fundamental views may differ.
2
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 31
Investment risk management
Investment in emerging markets equities inevitably involves risk
in a volatile asset class. Franklin Templeton uses a
comprehensive approach to managing risks within its portfolios
and this approach is inherent in all aspects of the investment
process. Investment risks are to be identified and intentional,
not minimised. Risk management is embedded through all
stages of the investment process, in collaboration with
dedicated resources from Franklin Templeton’s Investment Risk
Management Group, which is independent from the portfolio
management team. Various risk management tools are used to
predict and decompose the portfolio’s active risk in order to
understand and manage the portfolio’s active risk profile.
For additional information with respect to the
AIFM risk management framework, please read the
Investor Disclosure Document on our website
(www.temit.co.uk).
Stewardship
Templeton Emerging Markets Investment Trust (‘TEMIT’) seeks
to capture the growth potential of emerging markets
companies by employing a bottom-up security selection
process with a long-term perspective. We aim to be a
responsible steward of our clients’ capital—that is why we
integrate Environmental, Social and Governance (‘ESG’) factors
into our investment research process to understand the
financial risks and opportunities that stem from governance
and sustainability issues.
Whilst governance and sustainability issues are analysed in our
research, the findings are not binding on the stock selection
process. TEMIT does not pursue any particular sustainable
targets (e.g., carbon reduction) or objectives.
Being responsible stewards of our clients’ capital is reflected in:
How we act as investors
•
ESG integration
•
Company engagement
•
Policy advocacy
How we treat our clients
•
Putting clients first
•
Being responsible fiduciaries of our clients’ capital
How we behave as a business
•
Building relationships
•
Achieving quality results
•
Working with integrity
Integrating ESG factors
As part of TEMIT’s stock research process, ESG factors are
researched alongside other important factors, such as
company earnings power, competitive positioning and
management quality. These factors are likely to impact
materially on the operating performance or financial
conditions of a company. This deepens our understanding of
the companies we research; it also guides us in our
engagement activities over a range of issues, better informing
our research insights, as we strive to protect shareholder value.
01. Strategic Report
32
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Our proprietary three-pillar ESG research
framework is an assessment tool that has
further enhanced our ability to identify
financial risk and opportunities.
3
Pillars
Intentionality
Assessing companies’ intentionality toward managing material
ESG risks and their long term growth prospects and
considering ESG factors in our valuation models.
Alignment
Assessing the alignment of companies’ products and services
to positive social and environmental outcomes.
Transition
Identifying companies’ transition potential and monitoring their
incremental progress, using our on-the-ground capabilities and
experience as active owners to foster positive change.
Please find below a case study of a company’s intentionality to
manage the ESG footprint of its operating model from the full
TEMIT Stewardship Report 2025 to give shareholders a
snapshot of the typical intentionality analysis undertaken. Case
studies of alignment and transition can also be found in the full
TEMIT Stewardship Report 2025 at www.temit.co.uk.
Thai Beverage (ThaiBev)
One of Southeast Asia’s largest beverage companies and the
largest in Thailand.
ESG Topic: Water management
Materiality and Risk:
Companies in the Alcoholic Beverages industry require a large
amount of clean water for production. They are potentially exposed
to water supply disruptions that could significantly impact
operations and increase costs. These risks can be managed by
improving water management through increased efficiency and
recycling, particularly in regions with baseline water stress
ESG Thesis:
ThaiBev places strong emphasis on sustainable water
management. Recognising water as a critical resource, ThaiBev
has implemented several initiatives to ensure efficient and
responsible water use.
•
ThaiBev aims to replenish 100% of water used in its Thai
beverage products by 2040 and reduce water intensity by
7% by 2030, with a 5.33% reduction achieved as of 2024.
(a)
•
In 2024, ThaiBev reduced water usage by 8.8%, reused 2.7%,
and recycled 4.7% of the total water withdrawn.
(b)
•
All ThaiBev production facilities are certified with the ISO
14001 environmental management standard.
•
ThaiBev collaborates with suppliers in water-stressed areas
to minimise water consumption, identifying 46% of key
suppliers in high-stress regions.
Business Thesis:
ThaiBev holds a 90% share in Thailand’s low-end spirits market
and 40% in the beer market, benefiting from strong brand
awareness and robust distribution. Despite limited pricing power,
it maintains higher margins due to lower advertising and
promotional (A&P) spending. ThaiBev controls 40% of Thailand’s
beer market but faces intense competition here, while significant
A&P spending keeps margins relatively low. Overall, ThaiBev’s
strategic positioning and efficient operations underscore its
market dominance and growth prospects.
(a)
Source: Sustainability Report 2024, ThaiBev
(b)
Ibid
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 33
TEMIT’s research process includes a structured analysis of governance and sustainability
issues. Whilst governance and sustainability issues are analysed in our research, the
findings are not binding on the stock selection process. TEMIT does not pursue any
sustainable targets (e.g., carbon reduction) or objectives.
Climate Change
Emerging market (EM) governments will need to adopt
growth-enhancing fiscal and structural reforms that promote
low-emission resilient investments, backed by productive and
cost-effective climate policies, to achieve climate-compatible
development. Against this backdrop, our objective to
understand the climate commitments of our investee
companies for company research incorporates both local
and global perspectives, recognizing that the pace of
decarbonization and the associated strategies will
differ globally.
Our investment process incorporates top-down policy and
industry studies, bottom-up company research and
comprehensive ESG analysis including climate considerations,
all of which help to deepen our research insights. Factoring
material environmental issues into our company forecasts can
lead to adjustments in growth projections, margin expectations
or discount rates. In addition, as active stewards of our clients’
capital, engagement is a key tool that enables us to
understand and facilitate a company’s sustainability journey,
where financially material, which is supported by a local
footprint and access to management.
We do not rule out investing in companies in carbon intensive
sectors, such as cement, steel, industrials and extractive
industries. As a material sustainability issue, carbon emissions
management can impact a company’s business model in
various ways, including carbon taxes, technology upgrades
and compliance costs.
Climate Risk
Weichai Power
Specialising in the production and sales of diesel engines,
automobiles, and automobile components.
ESG Observations and Analysis:
•
Weichai Power has launched several initiatives to enhance its
environmental profile:
•
Weichai Power invests in R&D to enhance engine technology,
develop new energy industries, and optimize its industrial
structure.
•
In partnership with Bosch, Weichai launched the “Giving
Everything to Protect the Blue Sky” campaign to reduce
emissions and promote green development.
•
Weichai is building a “National-Level Green Factory” to advance
green and low-carbon transformation and implement sustainable
practices.
•
KION, Weichai’s European subsidiary, targets a 4.2% annual
reduction in Scope 1 and 2 GHG emissions and a 2.5% reduction
in Scope 3 emissions by 2030, aiming for zero carbon emissions
by 2050.
ESG Thesis:
Weichai Power is committed to achieving carbon peaking by
2030 and carbon neutrality by 2060. As its ESG initiatives
continue, we believe that Weichai Power is progressing well in
achieving its emissions goals. The same commitment extends
across the group. Subsidiaries of Weichai, such as Shaanxi
Heavy Duty Automobile and KION Group, also have specific
targets for reducing energy consumption and emissions.
Business Thesis:
Weichai Power, a leader in diesel and LNG engines, is
diversifying into construction machinery, agricultural
equipment, generator, and vessel engines, while pioneering
hydrogen technology with fuel cell products and trucks. It
plans to build an electric powertrain supply chain and launch
electric and hybrid trucks. Synergies with its European
subsidiary KION, a key player in forklifts and supply chain
solutions, will enhance growth and efficiency in both markets.
Active ownership
As investors with a significant presence in emerging markets,
FTEME’s active ownership efforts are a key part of the overall
approach to stewardship and sustainability. FTEME analysts
conduct almost 2,000 company meetings a year across the
investment platform using its industry-leading research
footprint across emerging markets, where FTEME seek to
gain a number of fundamental and sustainability insights. We
believe that our engagement efforts are key to developing a
detailed understanding of companies and improving
outcomes for shareholders as well as stakeholders
more broadly.
01. Strategic Report
34
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
ESG Discussion ESG Engagement
Clarifying View Seeking Change or Improved Disclosure
This is a targeted interaction to gather
material ESG information through a
company call, meeting or a one-time
short-term discussion.
This is a targeted interaction to influence change related to material ESG topics and
risks, including improved ESG disclosures. Each ESG engagement must have a
specific and clearly defined objective to measure progress against. This interaction
entails a sustained, medium-to long-term dialogue.
To coordinate and oversee the engagement efforts of our platform of 70+ investment professionals across 13 countries, we also
created the FTEME Engagement Group comprising seven regional coordinators from the research analyst team. This group includes
a representative from each key region that will bring cross-border perspectives and provide guidance on best practices.
Engagement statistics
We focus our time and efforts on material issues that affect the
sustainability of earnings, and a company’s operating model,
including strategy. Our analysts are in continual dialogue with
companies on a range of topics, including operational
performance, competition landscape, business outlook and
company financials, to name a few. There are also companies
which we identify where we believe that dedicated discussions
and engagements on ESG topics can impact long-term
performance. A full report on the nature and outcome of these
meetings, where relevant is available in the Stewardship Report
available at www.temit.co.uk. Given our long-term outlook, we
build strong relationships with our investee companies as
co-owners on our clients’ behalf.
For the 12 months ended 31 March 2025, of the 340 company
engagements, there were 60 tagged ESG interactions, 22 ESG
discussions and 38 ESG engagements, where detailed
interactions were conducted with an investee company.
Effective engagement
In 2024, we redefined what we mean by engagement,
distinguishing between seeking change at a company and a
discussion with a company when it related to sustainability
and governance issues. Our proprietary Emerging Markets
Research Database (EMDB), where we document our
research and record our company interactions, was adjusted
accordingly. This enabled us to enhance our practice and
outcomes; build more consistency and transparency; and
improve reporting to our clients.
With this updated framework, we had 340 company meetings
this past year, comprising discussions and engagement with
management across a range of topics. This allowed us to
better understand the businesses’ intentions and initiatives.
We also shared our views on the risks and opportunities that
may affect the companies’ long-term success. The following
section details our discussions and engagement activities
involving ESG topics over the year.
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 35
Percentage figures rounded to the nearest whole number.
Source: ISS
FTEME view votes against proposals as a formal way to
communicate our views to management, and we undertake
them based on our investment team’s assessment of each
motion, in line with our clients’ best interests.
The number of resolutions proposed by shareholders (as
distinct from a company’s governing board) is increasing
around the world, particularly on environmental and social
issues, although they remain relatively uncommon in emerging
markets. We encountered several governance-related
shareholder proposals over the year. For TEMIT’s portfolio, we
voted “For” on 15 governance related shareholder proposals.
These were across several categories, such as director elections
and audit related. We will continue to closely examine the merits
of views raised by fellow shareholders and vote accordingly.
We encourage you to download the full TEMIT Stewardship
Report 2025 from www.temit.co.uk for further, detailed information.
This table records the independent milestones to measure our
process to an objective set in our ESG engagements.
Below is an ESG engagement example with an investee
company in China.
Company: Objectives:
WuXi Biologics
A global leader
in open-access
biologics
technology
We wrote to the board of WuXi Biologics
to express our concern about the
potential implications of the Biosecure
Act in the US, which aims to prohibit
contracting with certain biotechnology
firms deemed national security risks,
including WuXi AppTec and its
subsidiaries such as WuXi Biologics. We
urged the board to take proactive steps
to alleviate the impact and put in place
a suitable plan to safeguard stakeholder
interests.
ESG engagement
topic:
Outcome: Plan formulated
Corporate
Governance –
Strategic risk and
communication
Our letter was followed by a call with
WuXi Biologics’ management, which
shared plans to ensure normal business
operation and protect shareholders’
rights. This may entail changing its
corporate governance structure to clear
its association with WuXi AppTec and
become a more global entity. Our
engagement continued throughout
2024 as we monitored the steps taken
to mitigate the potential impact.
Proxy voting
In the year ended 31 March 2025, FTEME voted on over 1,000
management proposals at annual and special general
meetings for TEMIT.
For
Against
Other
91%
9%
0%
Of the voteable management proposals, we voted “For”
proposals 91% of the time and “Against” in another 9%. By
proposal category, as a percentage of votes within each
category and where we had a total of 10 votes or more, our
votes against were largely concentrated on capital structure,
management compensation, company articles and strategic
transactions.
Voted on Over 1,000
Management Proposals
01. Strategic Report
36
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Business review
Strategy and business model
Company purpose and objective
TEMIT’s purpose is to provide both private and institutional
investors with the opportunity for capital appreciation via
a professionally managed vehicle focused on listed equity
investments in emerging markets.
The objective of TEMIT is to provide long-term capital
appreciation via exposure to global emerging markets,
supported by a culture of both strong customer service and
corporate governance.
Investment policy
The Company seeks long-term capital appreciation through
investment in companies listed in emerging markets or
companies which earn a significant amount of their revenues
in emerging markets but are domiciled in, or listed on, stock
exchanges in developed countries (‘Emerging Markets
Companies’).
It is expected that the majority of investments will be in listed
equities. However, up to 10% of the Company’s assets may be
invested in unlisted securities. In addition, while it is intended
that the Company will normally invest in equity instruments,
the Investment Managers may invest in equity-related
investments (such as convertibles or derivatives) where they
believe that it is advantageous to do so.
The portfolio may frequently be overweight or underweight in
certain investments compared with the MSCI Emerging
Markets (Net Dividends) Index (the ‘Benchmark’) and may be
concentrated in a more limited number of sectors or
geographical areas than the Benchmark. Investments may be
made in Emerging Markets Companies outside the Benchmark
that meet the investment criteria.
Whilst there are no specific restrictions on investment in any
one sector or geographic area, the portfolio will be managed
in a way which aims to spread investment risk. The portfolio
may contain between 50 and 100 individual stocks but may, at
times, contain fewer or more than this range. No more than 12%
of the Company’s assets will be invested in the securities of
any one issuer at the time of investment, save that any
investment in unlisted securities of any one issuer will be
limited to no more than 2% of the Company’s assets, measured
at the time of investment.
The maximum borrowing will be limited to 20% of the
Company’s net assets, measured at the time of borrowing.
No more than 10%, in aggregate, of the value of the
Company’s assets will be invested in other listed
closed-ended investment funds.
In accordance with the UK Listing Rules, the Company will not
make any material change to its published investment policy
without the prior approval of the UK’s Financial Conduct
Authority (‘FCA’) and the approval of its shareholders by
ordinary resolution. Any material change would be announced
by the Company through the London Stock Exchange.
Distribution policy
The Company will ensure that its total annual dividends will be
paid out of the profits available for distribution under the
provisions of the relevant laws and regulations and will be at
least sufficient to enable it to qualify as an investment trust
under the Corporation Tax Act 2010 and the ongoing
requirements of The Investment Trust (Approved Company)
(Tax) Regulations 2011. If the Company has received an
exceptional level of income in any accounting year, the Board
may elect to pay a special dividend. The primary focus of the
investment policy is on generating capital returns, the
Company does not target a particular level of income and
there is no guarantee that dividend levels will be maintained
from one year to the next.
The Company will normally pay two dividends per year,
an interim dividend declared at the time when the half yearly
results are announced, and a final dividend proposed at the
time when the annual results are announced. The final
dividend will be subject to shareholder approval at the AGM
each year.
The Company may also distribute capital by means of share
buybacks when the Board believes that it is in the best interests
of shareholders to do so. The share buyback programme will be
subject to shareholder approval at each AGM.
Business model
The Company has no employees and all of its Directors are
non-executive. The Company delegates its day-to-day
activities to third parties.
Since 1 October 2021, Franklin Templeton Investment Trust
Management Limited (‘FTITML’, ‘AIFM’ or the ‘Manager’) has
been the Company’s AIFM and Company Secretary.
The Board is responsible for all aspects of the Company’s
affairs, including the setting of parameters for the monitoring
of the investment strategy and the review of investment
performance and policy. It also has responsibility for
overseeing all strategic policy issues, namely dividend,
gearing, share issuance and buybacks, share price and
discount/premium monitoring, corporate governance matters
and engagement with all the Company’s stakeholders.
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 37
Strategy
The Company seeks to achieve its objective by following
a strategy focused on the following:
Performance
At the heart of the strategy is the appointment and retention of
capable investment management professionals, whose aim is to
identify value and achieve superior long-term growth for
shareholders. FTEME, under the leadership of Chetan Sehgal,
continues to apply the same core investment philosophy that has
driven TEMIT’s performance since the Company’s launch. The
investment team aims to achieve long-term capital appreciation for
shareholders seeking exposure to global emerging markets by
investing in companies that they believe offer long-term sustainable
growth and good value, combined with strong management and
sound governance.
Investment Process and Environmental, Social and Governance
(‘ESG’) Considerations
As part of TEMIT’s stock research process, ESG factors are researched
alongside other important factors, such as company earnings power,
competitive positioning and management quality. These factors are
likely to materially impact the operating performance or financial
conditions of a company. This deepens our understanding of the
companies we research; it also guides us in our engagement activities
over a range of issues, better informing our research insights, as we
strive to protect shareholder value.
As TEMIT is an investment trust, the key ESG consideration is the
stewardship of its portfolio of investments. The Board has reviewed
andfully supports FTEME’s approach to stewardship, which is
described under ‘TEMIT’s approach to stewardship’ starting on page31
of this report. It receives regular reports on Franklin Templeton’s
policies and controls.
TEMIT has no greenhouse gas emissions to report from the
operations of the Company, as all of its activities are outsourced to
third parties. While as an investment trust TEMIT is exempt from
disclosures recommended by the Task Force on Climate-related
Financial Disclosures (‘TCFD’), Franklin Templeton continues to
develop metrics for our carbon footprint. Further information on our
approach to climate change can be found under ‘TEMIT’s approach
to stewardship’ above and in more detail in the full Stewardship
Report, available on our website (www.temit.co.uk).
TEMIT has no employees and is not an organisation that provides goods
or services as defined in the Modern Slavery Act 2015 and thus the
Company considers that the Act does not apply. The Company’s own
supply chain consists predominantly of professional services advisers.
Culture and Values
The Board believes in a culture of openness and constructive
challenge in its interactions with the Manager and other service
providers. The Board aims to maintain open and regular communication
with shareholders, as set out under Communication on page 39.
The Company is committed to acting professionally, fairly and with
integrity in all of its business dealings and relationships. 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
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. The Board notes that the
Manager has a robust whistleblowing policy in place.
Information on theCompany’s approach to Diversity is set out in the
Directors’ Report on pages 52 and 53.
Liquidity
The shares issued by the Company are traded on the London and
New Zealand stock exchanges. The Company has engaged
Winterflood Securities and JP Morgan as joint financial advisers
andstockbrokers.
Gearing
Fixed Term Loan
On 31 January 2020, the Company entered into a five-year £100
million loan at a fixed rate of 2.089% with Scotiabank Europe plc. The
loan was repaid in full at its maturity on 31 January 2025. The fixed
term loan was denominated in pounds sterling. Full details of the loan
are set out in Note 10 of the Notes to the Financial Statements on
pages 94 and 95.
Revolving Credit Facility
On 31 January 2025, the Company entered into a one-year £122
million multi-currency revolving loan facility with The Bank of Nova
Scotia, London Branch. Drawings may be in sterling, US dollars or
Chinese renminbi (‘CNH’). As at 31 March 2025, £80 million was drawn
down from this facility in sterling. Further details of the facility are set
out in Note 10 of the Notes to the Financial Statements on pages 94
and 95.
The Company has no other debt as at 31 March 2025. The net gearing
position was 0.2% (net of cash in the portfolio) at the year-end
(2024:0.0%)
(a)
.
The Board continues to monitor the level of gearing and currently
considers borrowing of up to 20% of net assets to be appropriate,
measured at the time of borrowing.
Affirmation of Shareholder Mandate
In accordance with the Company’s Articles of Association, the Board
must seek shareholders’ approval every five years for TEMIT to
continue as an investment trust. This allows shareholders the
opportunity to decide on the long-term future of the Company. The
last continuation vote took place at the AGM on 11 July 2024, when
99.30% of the votes cast were registered as votes in favour. The next
continuation vote will take place at the 2029 AGM.
(a) A glossary of alternative performance measures is included on pages 114 and 115.
01. Strategic Report
38
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Stability – Share Buybacks and Conditional Tender Offer
The Company has powers to buy back its shares as a discount control
mechanism and when this is in the best interests of the Company’s
shareholders and has a Conditional Tender Offer. The share price
discount to net asset value is discussed under Key Performance
Indicators on page 43.
Under the Conditional Tender Offer, if over the five-year period from
31March 2024 to 31 March 2029 the Company’s net asset value total
return fails to exceed the benchmark total return, the Board will put
forward proposals to shareholders to undertake a tender offer for up to
25 per cent of the issued share capital of the Company, at the discretion
of the Board.
Any such tender offer will be at a price equal to the then prevailing net
asset value less two per cent (and less the costs of the tender offer).
There will be no tender offer if the Company’s net asset value total
return exceeds the benchmark total return (MSCI Emerging Markets
(Net Dividends) Index) over the five-year period. Any tender offer
would take place following the Company’s 2029 AGM and will also be
conditional on shareholders approving the continuation vote in 2029
which is described under ‘Affirmation of Shareholder Mandate’ above.
A key point in the Investment Managers’ mandate is to take a
long-term view of investments and one of the advantages of a
closed-end fund is that the portfolio structure is not disrupted by
large inflows or outflows of cash. However, the Board and the
Investment Managers recognise that the returns experienced by
shareholders are in the form of movements in the share price, which
are not directly linked to NAV movements, and the shares may trade at
varying discounts or premiums to NAV. Many shareholders, both
professional and private investors, have expressed a view that a high
level of volatility in the discount is undesirable and that the Company
should continue its active share buyback programme. A less volatile
discount, and hence share price, is seen as important to investors. For
this reason, TEMIT uses share buybacks selectively with the intention
of limiting volatility in the share price. Details of the share buybacks
are included in the following table. All shares bought back in the year
werecancelled, with none being placed in treasury. In addition, the
Company cancelled 43,825,895 shares which were previously held in
treasury, and as at 31 March 2025, the Company held 60,000,000
shares in treasury (2024: 103,825,895 shares in treasury).
Discount management is reviewed regularly by the Board to ensure
that it remains effective in the light of prevailing market conditions.
The Conditional Tender Offer will not affect the Board’s current
approach to discount management. The Board will continue to
exercise the Company’s right to buy back shares when it believes this
to be in shareholders’ interests and with the aim of reducing volatility
in the discount.
2025 2024
Shares Bought Back and Cancelled During the Year 89,989,892 44,319,755
Proportion of Share Capital Bought Back and Cancelled 8.1% 3.8%
Total Cost of Share Buybacks £149.2m £65.9m
The Benefit to NAV £23.7m £10.6m
The Percentage Benefit to NAV 1.16% 0.54%
Share Price Discount to NAV
0
-2
-4
-6
-8
-10
-12
-14
-16
-18
March
2020
’21’22 ’25’24’23
TEMIT Share Price Discount, based on a 7 day moving average
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 39
Communication
The Board and Manager aim to ensure that investors are kept updated
regularly about the performance of TEMIT and of emerging markets
through clear communication and updates as detailed in this
section.The Board is fully committed to TEMIT’s marketing and
communications programme. There is a substantial annual marketing
and communication budget, and expenditure by TEMIT is matched by
a contribution to costs from the Manager.
TEMIT has received AIC Shareholder Communication awards for its
‘Your Future is Emerging’ campaigns in 2022, 2023 and 2024. Through
innovative use of broadcast media and direct marketing, TEMIT’s
profile has been elevated, showcasing the Company’s benefits and
conveying the dynamic growth story of emerging markets to a wider
audience. This follows a rebrand in January 2022, when TEMIT
unveiled a fresh corporate identity, establishing a unique brand for the
Company for the first time.
TEMIT seeks to keep shareholders updated on performance and
investment strategy through its Annual and Half Yearly Reports, along
with monthly factsheets and manager commentaries, which are
available on the Company’s website - temit.co.uk - offering a wealth of
updates, stock story videos, articles, portfolio details, and essential
documents. Connect with @TEMIT on Twitter / X for ongoing updates
and announcements as we expand our social media presence.
The Board encourages registration to our monthly email that keeps
subscribers appraised of the latest performance, insights and
announcements.
In addition, TEMIT has an active communications programme. Our
Investment Managers provide topical and informative comments to
journalists, host media briefings and events and publish articles on
issues relevant to investing in emerging markets. The Investment
Managers meet regularly with professional investors and analysts and
host interactive webinars. At each AGM the Investment Managers
make a presentation with the opportunity for all shareholders to ask
questions.
The Chairman regularly meets major shareholders to discuss
investment performance and developments in corporate governance.
We try to engage with a wide spectrum of our shareholders and aim to
address their concerns as far as practically possible. Shareholders are
welcome to contact the Chairman or the Senior Independent Director
at any time via temitcosec@frankl intempleton.com.
Philippines
01. Strategic Report
40
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Section 172 Report – Promoting the success of the Company
The Companies (Miscellaneous Reporting) Regulations 2018 require directors to explain how they have discharged their duties
under Section 172(1) of the Companies Act 2006 in promoting the success of their companies for the benefit of ‘members as
a whole’ and having regard for all stakeholders.
Section 172 Matter 1. The likely consequences of any decision in the long term.
2. The interests of the Company’s employees.
3. The need to foster the Company’s business relationships with suppliers, customers and others.
4. The impact of the Company’s operations on the community and the environment.
5. The desirability of the Company maintaining a reputation for high standards of business conduct.
6. The need to act fairly between members of the Company.
Board’s Statement 1. 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 Managers’ actions
on the marketability and reputation of the Company and the likely impact on the Company’s stakeholders of the
Company’s strategy.
2. The Company has no direct employees.
3. The Board’s approach to its key stakeholders is set out below.
4. The Board’s approach is set out in the section on Investment Process and ESG Considerations under Strategy
and Business Model on page 37.
5. The Board’s approach is set out in ‘Culture and Values’ on page 37.
6. The Board’s approach to its key stakeholders is set out below.
In addition to the primary focus of the Board, and with due regard to its obligations under Section 172 of the Companies
Act 2006, the following important matters were considered at Board meetings during the year:
•
Recruitment of Sarika Patel as a non-executive Director;
•
Changes to the risk matrix, monitoring such changes carefully and introducing alternative mitigating controls where necessary
and practicable to support the operation of an effective control environment;
•
Review of the marketing plan with the Manager;
•
Review of the share buyback programme;
•
Review of the dividend policy; and
•
Review of the gearing facility and in particular the decision to enter into a new revolving credit facility.
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 41
Stakeholders
Area of Engagement
Consideration Engagement Outcome
Shareholders
and Potential
Investors
Company Objective Delivering on the
Company’s objective to
shareholders over the
long term.
The Company’s objective and
investment policy are set out
on page 36.
The Company’s performance
against its objective is regularly
reviewed by the Board, taking
account of views expressed by
shareholders.
The Company holds a
continuation vote every five
years to allow shareholders to
decide on the long-term future
of the Company.
The Investment Managers’
commentary commencing on
page 12 gives a full commentary
on the Company’s portfolio as
well as on the approach and
considerations undertaken by the
Investment Managers for stock
selection within the portfolio.
A continuation vote took place at
the 2024 AGM, with 99.30% of
votes cast in favour. The next
continuation vote is scheduled to
take place at the 2029 AGM.
Shareholders
and Potential
Investors
Dividend The objective of the
Company is to provide
long term capital
appreciation, however,
the Board recognises the
importance of dividend
income to many
shareholders.
The Board reviews regularly
the level of dividends, taking
account of the income
generated by the Company’s
portfolio and the availability
of reserves.
In considering the
sustainability of the dividend
and of the Company, the
Board reviews the models
supporting the going concern
assessment and viability
statement.
Dividend payments are
discussed in the Chairman’s
Statement on page 10.
Shareholders
and Potential
Investors
Communication with
Shareholders
The Board understands
the importance of
communication with its
shareholders and
maintains open channels
of communication with
shareholders.
Working closely with the
Manager, the Board ensures
that there is a variety of regular
communication with
shareholders.
Full details of all Board and
Manager communication are
included on page 111.
Shareholders are invited to
submit questions for the Board to
address at the Company’s AGM.
The Board considers the main stakeholders in the Company to be its shareholders and its service providers, the principal one of
which is its Manager, along with its investee companies. A summary of the key areas of engagement undertaken by the Board with
its main stakeholders in the year under review and how Directors have acted upon this to promote the long-term success of the
Company are set out in the following table.
01. Strategic Report
42
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Stakeholders
Area of Engagement
Consideration Engagement Outcome
Shareholders
and Potential
Investors
Discount
Management
To smooth the volatility
in the discount.
The Board monitors the
discount closely and discusses
discount strategy with the
Investment Managers and the
Company’s joint stockbrokers
at every regular Board
meeting. The stockbrokers
provide a summary of the
discount and market
conditions to the Board and
Investment Managers at the
close of each trading day in
London. The Board also meets
with the Investment Managers
to discuss the Company’s
marketing strategy to ensure
effective communication with
existing shareholders and to
consider strategies to create
additional demand for the
Company’s shares.
TEMIT continues to adopt
an active buy back policy and has
a Conditional Tender Offer.
Details of these can be found
under ‘Stability – Share Buybacks
and Conditional Tender Offer’ on
page 38.
Further details of the current
discount and discount
management are detailed
in the Chairman’s Statement
under ‘Share price rating’ on
page 10.
Manager Communication
Between the Board
and the Manager
The Board’s oversight of
the Manager is very
important.
The Manager attends all
regular Board meetings where
it reviews and discusses
performance reports, changes
in the portfolio composition
and risk matrix. The Board
receives timely and accurate
information from the Manager
and engages with the
Investment Managers and the
Company Secretary between
meetings as well as with other
representatives of the
Manager as and when it is
deemed necessary.
The Board operates in
a supportive and open manner,
challenging the activity of the
Manager and its results. The
Board believes that the Company
is well managed and the Board
places great value on the
experience of the Investment
Managers to deliver superior
long-term returns from
investments and on the other
functions of the Manager to fulfil
their roles effectively.
Third-party
Service
Providers
Engagement with
Service Providers
The Board acknowledges
the importance of
ensuring that the
Company’s service
providers are delivering
a suitable level of service,
that the service level is
sustainable and that they
are fairly remunerated for
their service.
As an investment company
all services are outsourced
to third-party providers.
The Board considers the
support delivered by service
providers including the quality
of the service, succession
planning and any potential
interruption of service or
other potential risks.
The Manager maintains the
overall day-to-day relationship
with the service providers and
the Board undertakes an annual
review of the performance of the
Company’s service providers.
This review also includes the level
of fees paid. The Board meets
with service providers as and
when considered necessary.
Investee
Companies
Engagement
with Investee
Companies
The relationship between
the Company and the
investee companies is
very important.
On behalf of the Company
the Investment Managers
engage with investee
companies implementing
corporate governance
principles and discuss the
portfolio with the Board on
a quarterly basis.
The Investment Managers have
a dedicated research team
that is employed in making
investment decisions and when
voting at shareholder meetings of
investee companies.
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 43
Key performance indicators
The Board considers the following to be the key performance
indicators (‘KPIs’) for the Company:
•
Net asset value and share price total return over various
periods, compared to its benchmark;
•
Share price discount to net asset value;
•
Dividend and revenue earnings; and
•
Ongoing charges ratio.
The 10 Year Record of the KPIs is shown on page 8.
Net asset value and share price total return
(a)
Net asset value and share price total return data is presented
within the Financial Highlights on page 4 along with the
10 Year Record on page 8.
The Chairman’s Statement on pages 9 to 11 and the Investment
Managers’ Report on pages 13 to 28 include further
commentary on the Company’s performance.
Performance of the Company’s portfolio is measured in
pounds sterling (GBP) against the MSCI Emerging Markets
(Net Dividends) Index.
Share price discount to net asset value
(a)
Details of the Company’s share price discount to net asset
value are presented within the Financial Summary on page 7.
On 16 May 2025, the latest practicable date for which
information was available, the discount was 15.7%.
The Company has powers to buy back its shares as
a discount control mechanism when it is in the best interests
of the Company’s shareholders and has a Conditional Tender
Offer mechanism. These are described under ‘Stability – Share
Buybacks and Conditional Tender Offer’ on page 38.
Dividend and revenue earnings
Total income earned in the year was £70.4 million
(2024: £71.9million) which translates into net revenue earnings
of 5.41pence per share (2024: 5.18 pence per share), an
increase of 4.4% over the prior year.
The Company paid an interim dividend of 2.00 pence per
share on 31 January 2025. The Board is proposing a final
dividend of 3.25 pence per share, making total ordinary
dividends for the year of 5.25 pence per share.
Ongoing charges ratio
(a)
(‘OCR’)
The OCR reduced to 0.95% for the year ended 31 March 2025,
compared to 0.97% in the prior year. This was largely driven by
the AIFM fee reduction as detailed within the Chairman’s
Statement on page 10 and an uplift in the average net assets
over the year. The OCR has been calculated in line with the
Association of Investment Companies (‘AIC’) recommended
methodology.
Costs associated with the purchase and sale of investments
are taken to capital and are not included in the OCR.
Transaction costs are disclosed in Note 8 of the Notes to the
Financial Statements on page 93.
(a) A glossary of alternative performance measures is included on pages 114 and 115.
01. Strategic Report
44
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Principal Risk Mitigation
Market, Geopolitical
and Investment
Market risk arises from volatility in the prices of the
Company’s investments, from the risk of volatility in
global markets arising from macroeconomic and
geopolitical circumstances and conditions. Many of
the companies in which TEMIT invests are, by reason
of the locations in which they operate, exposed to the
risk of political or economic change. In addition,
sanctions, exchange controls, tax or other regulations
introduced in any country in which TEMIT invests may
affect its income and the value and the marketability of
its investments. Emerging markets can be subject to
greater price volatility than developed markets.
Geopolitical risk was highlighted by moves by the
United States to impose widespread tariffs on imports,
the continuing Russian war on Ukraine, the escalating
trade war between the United States and China and
military tensions over the Taiwan Strait, the continuing
conflict between Israel and Hamas and the recent
spike in tension between India and Pakistan. All of
these factors have depressed investor sentiment and
the Russian invasion of Ukraine has impacted global
trade posed by supply shocks, sanctions, higher levels
of inflation and volatility in asset prices.
Investment risk refers to the possibility that an
investment’s actual returns may differ from the expected
returns, potentially resulting in financial loss. As well as
market and geopolitical risk, this risk is impacted by the
decisions made by portfolio managers regarding sector,
country allocation, and stock selection.
The Board reviews regularly and discusses with the
Investment Managers the portfolio, the Company’s
investment performance and the execution of the
investment policy against the long-term objectives of
the Company. The Manager’s independent risk team
performs systematic risk analysis, including country
and industry specific risk monitoring, as well as stress
testing of the portfolio’s resilience to geopolitical
shocks. The Manager’s legal and compliance team
monitors sanctions. Where TEMIT is affected,
adherence to all sanctions and restrictions is ensured
by this team. The Board also regularly reviews reports
from the Manager’s risk, legal and compliance teams.
Technology Failure or breach of the security of information
technology systems of the Company’s service
providers may entail risk of financial loss, disruption
to operations or damage to the reputation
of the Company.
The Company benefits from Franklin Templeton’s
technology framework designed to mitigate the risk of
a cyber security breach.
For key third-party providers, the Audit and Risk
Committee receives regular independent reports on
their technology control environment.
Concentration Concentration risk arises from investing in relatively
few holdings, few sectors or a restricted geographic
area. NAV performance may be more volatile and
dividend payment less predictable, than with a greater
number of securities.
The Board reviews regularly the portfolio composition/
asset allocation and discusses related developments
with the Investment Managers and the independent
risk management team. The Investment Compliance
team of the Investment Managers monitors
concentration limits and highlights any concerns to
portfolio management for remedial action.
Principal and emerging risks
At least quarterly, the Board reviews with the AIFM and the Investment Managers a wide range of risk factors that may impact the
Company. A full review of risks and internal controls is held every September by the Audit and Risk Committee. These reviews
include 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. These are summarised in the table below.
Further explanation of the monitoring of risk and uncertainties is covered within the Report of the Audit and Risk Committee on
page 70. Information on the risks that TEMIT is subject to, including additional financial and valuation risks, are also detailed in
Note 15 of the Notes to the Financial Statements.
Due to the nature of the Company’s business, investment risk is a key focus and is reviewed on an ongoing basis by the Investment
Managers as part of every investment decision. Further information on this process is detailed on page 31.
01. Strategic Report
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 45
Principal Risk Mitigation
Key Personnel
The ability of the Company to achieve its objective is
significantly dependent upon the expertise of the
Investment Managers and their ability to attract and
retain suitable staff.
The Manager endeavours to ensure that the principal
members of its management teams are suitably
incentivised, participate in strategic leader programmes
and monitor key succession planning metrics. The
Board meets privately with the key personnel at least
twice a year. The Board discusses this risk regularly with
the Manager.
Foreign Currency
Currency exchange rate movements may affect
TEMIT’s performance. In general, if the value of sterling
increases compared with a foreign currency, an
investment traded in that foreign currency will be
worth less in sterling terms. This can have a negative
effect on the Company’s performance.
The Board monitors currency risk as part of the regular
portfolio and risk management oversight. TEMIT does
not hedge currency risk.
Discount Risk
The discount/premium at which the Company’s shares
trade relative to its net asset value can change. The
risk of a widening discount, and/or related volatility,
could reduce shareholder returns and confidence
in the Company.
The Board monitors the level of discount/premium at
which the shares trade and has an active investor
relations programme. The Company has authority to buy
back its existing shares when deemed by the Board to be
in the best interests of the Company and its shareholders.
Regulatory
The Company is an Alternative Investment Fund
(‘AIF’) and is listed on both the London and New
Zealand stock exchanges. The Company operates in
an increasingly complex regulatory environment and
faces numerous regulatory risks. Breaches of
regulations could lead to a number of detrimental
outcomes and reputational damage.
The Board, with the assistance of the Manager, ensures
that the Company complies with all applicable laws and
regulation and its internal risk and control framework
reduces the likelihood of breaches happening.
Sustainability and
Climate Change
The Company’s portfolio, and also the Company’s
service providers and the Investment Managers, are
exposed to risks arising from governance and
sustainability issues, including climate change. To the
extent that such a risk occurs, or occurs in a manner
that is not anticipated by the Investment Managers,
there may be a sudden, material negative impact on
the value of an investment, and the operations or
reputation of the Investment Managers.
The Investment Managers consider that sustainability
risks are relevant to the returns of the Company.
The Manager has implemented a policy in respect of the
integration of sustainability and climate change risks in its
investment decision making process. The Board receives
regular reports on the policies and controls in place on
ESG considerations. The Board has reviewed and fully
supports the Franklin Templeton Stewardship Statement
and its Sustainable Investing Principles and Policies.
Operational
and Custody
Like many other investment trust companies, TEMIT
has no employees. The Company therefore relies upon
the services provided by third parties and is
dependent upon the control systems of the
Investment Managers and of the Company’s other
service providers. The security, for example, of the
Company’s assets, dealing procedures, accounting
records and maintenance of regulatory and legal
requirements depends on the effective operation of
these systems.
The Manager’s systems are regularly tested and
monitored and an internal controls report, which includes
an assessment of risks together with an overview of
procedures to mitigate such risks, is prepared by the
Manager and reviewed by the Audit and Risk Committee.
J.P. Morgan Europe Limited is the Company’s
depositary. Its responsibilities include cash monitoring,
safe keeping of the Company’s financial instruments,
verifying ownership and maintaining a record of other
assets and monitoring the Company’s compliance with
investment limits and borrowing requirements. The
depositary is liable for any loss of financial instruments
held in custody and will ensure that the custodian and
any sub-custodians segregate the assets of the
Company. The depositary oversees the custody
function performed by JPMorgan Chase Bank. The
custodian provides a report on its key controls and
safeguards (SOC 1/ SSAE 16/ ISAE 3402) that is
independently reported on by its auditor, PwC.
The Board reviews regular operational risk management
reporting provided by the Investment Managers.
01. Strategic Report
46
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Emerging risks
The key emerging risk faced by the Company during the year
under review was the possible effects of the United States
moving to a more protectionist and isolationist stance in its
relations with the rest of the world. The Board and Investment
Managers continue to monitor the investment strategy
response, along with the continuing ramifications of the
Russian invasion of Ukraine, and tensions between the
UnitedStates and China, as noted under the market and
geopolitical risk above. The Board also continues to monitor
the potential risks on the portfolio and investee companies
posed by the dramatic progress of Artificial Intelligence (‘AI’).
Viability statement
The Board considers viability as part of its continuing
programme of monitoring risk. In preparing the Viability
Statement, in accordance with the UK Corporate
Governance Code and the AIC Corporate Governance
Code, the Directors have assessed the prospects of the
Company over a longer period than the 12 months required
by the ‘Going Concern’ provision.
The Board has considered the Company’s business and
investment cycles and is of the view that five years is a suitable
time horizon to consider the continuing viability of the
Company, balancing the uncertainties of investing in emerging
markets securities against having due regard to viability over
the longer term.
In assessing the Company’s viability, the Board has performed
a robust assessment of controls over the principal risks. The
Board considers, on an ongoing basis, each of the principal
and emerging risks as noted above and set out in Note 15 of
the Notes to the Financial Statements. The Board evaluated
various scenarios of possible future circumstances including
a material increase in expenses and a continued significant
and prolonged fall in emerging equity markets. The Board also
considered the latest assessment of the portfolio’s liquidity.
The Board monitors income and expense projections for the
Company, with the majority of the expenses being predictable
and modest in comparison with the assets of the Company.
The Company foresees no issues with meeting interest
payments and current liabilities relating to the £122 million
multi-currency revolving credit facility which matures on
30January 2026. A significant proportion of the Company’s
expenses is the ad valorem AIFM fee, which would naturally
reduce if the market value of the Company’s assets were to fall.
Considering the above, and with careful consideration given
to the current market situation, the ramifications of continuing
geopolitical tensions and the challenges posed by climate
change, the Board has concluded that there is a reasonable
expectation that, assuming that there will be a successful
continuation vote at the 2029 AGM, the Company will be able
to continue to operate and meet its liabilities as they fall due
over the next five years.
Future strategy
The Company was founded, and continues to be managed,
based on a long-term investment strategy that seeks to
generate superior returns from investments, principally in the
shares of carefully selected companies in emerging markets.
The Company’s results will be affected by many factors
including political decisions, economic factors, the
performance of investee companies and the ability of the
Investment Managers to choose investments successfully as
well as the current challenges.
The Board and the Investment Managers continue to believe
in investment with a long-term horizon in companies that are
undervalued by stock markets, but which are fundamentally
strong and growing. It is recognised that, at times, extraneous
political, economic and company-specific and other factors
will affect the performance of investments, but the Company
will continue to take a long-term view in the belief that
patience will be rewarded.
By order of the Board
Angus Macpherson
6 June 2025
01. Strategic Report
47
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
02.
Governance
48
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Supporting charitable causes
Over the past two years we have undertaken
extensive research into our shareholder
ownership, part of which was to establish
‘dormant shareholders’ for whom the
Company has no record other than name and
address and for whom any correspondence
from TEMIT is returned ‘unknown’.
With our AIFM and Registrar an extensive
shareholder tracing exercise was undertaken.
The exercise included mailings, social media
searches, telephone calls and even house
visits to those shareholders with whom loss
ofcontact was pre-2008. We were successful
in re-uniting over 50 shareholders with
theirholdings.
For the remaining unidentified shareholdings,
we commenced a legal forfeiture and disposal
exercise. The registration and servicing costs
of maintaining these shares are now saved.
40% of the realised value will be held in the
Company for three years in case of any verified
ownership is established in the future. The
remaining 60%, as per the UK Government
backed Dormant Assets Scheme, has been
unlocked for important UKsocial and
environmental initiatives.
Your Board researched a number of charities
for which a donation from TEMIT would have a
real impact. Four beneficiaries were selected.
Protecting species and ecosystems:
Rainforest Concern protects threatened
natural habitats through land purchase, legal
protection and registration of indigenous
territories. They fund environmental education
and work with local communities to develop
sustainable Iivelihoods. Research and
monitoring helps develop conservation
strategy and support legal cases. TEMIT’s
donation is specific to the Neblina Reserve in
NW Ecuador.
Accessing mental health support: Mental
Health Innovations uses data-driven analysis,
clinical expertise and technology to develop
digital products and services to improve
mental health in the UK. The main activity is
the Shout 85285 text service, the UK’s first
and only free, confidential, 24/7, national text
messaging mental health support service.
Sustaining unpaid home care: Carefree
provides unpaid home carers with time away
from their caring responsibilities. Unpaid
carers are disproportionally overworked,
isolated, financially stressed and physically
and mentally challenged. Carefree is a digital
charity partnering with social services and
with hotel groups willing to donate vacant
rooms for carer stays.
Cancer research: The Nottingham Breast
Cancer Research Centre has a number of
projects focused on treating breast cancer
early, stopping it spreading and personalised
treatments. TEMIT is funding equipment
which is distinctly unglamorous but massively
important to improve research precision,
reliability, speed and cost.
www.rainforestconcern.org
www.mentalhealthinnovations.org
www.carefreespace.org
www.nottingham.ac.uk/research/groups/
nottinghambreastcancerresearchcentre
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 49
Directors’ report
The Board is responsible for framing and executing the Company’s strategy and for monitoring
risks closely. The Board endeavours to run the Company in a manner which is responsible,
honest, transparent and fully accountable. In the Board’s view, good governance means
managing the Company’s business well and engaging effectively with investors and other
stakeholders. The Board considers the practice of good governance to be an integral part of the
way that it manages the Company and it is committed to maintaining the highest standards of
financial reporting, transparency and business integrity.
The Directors submit their Annual Report, together with the Financial Statements of the
Company, for the year ended 31 March 2025.
Board of Directors
Angus Macpherson
(Chairman of Board, Chairman of
Management Engagement Committee and
Chairman of Nomination and Remuneration
Committee: 1 January 2024)
Date of appointment: 6 October 2023
Angus is chairman of Noble and Company (UK) Limited, an independent boutique Scottish
corporate finance business. He was based in Asia between 1995 and 2004 in Singapore and
Hong Kong, latterly as head of capital markets and financing for Merrill Lynch for Asia. He was
previously Chairman of Pacific Horizon Investment Trust and of Henderson Diversified Income
Trust. Angus brings to the Board extensive experience in corporate finance in Europe and in
Asia and is an experienced chairman of investment trusts.
Other Current Appointments:
•
Schroder Japan Growth Fund plc (Non-Executive Director)
•
Hampden & Co plc (Non-Executive Director)
•
Noble and Company (UK) Limited (Chairman)
Angus is an independent Director.
Simon Jeffreys
(Chairman of the Audit and Risk
Committee: 13 July 2017, Senior Independent
Director: 14 July 2022)
Date of appointment: 15 July 2016
Simon has extensive experience in audit and he has a wide-ranging understanding of the business.
He draws on previous experience across internal audit, finance and compliance, as well as technical
knowledge, relevant to his role. He was a senior audit partner in PricewaterhouseCoopers for most
of his professional career, where he was the global leader of the firm’s investment management and
real estate practice. Simon was the Chief Administrative Officer for Fidelity International, and then
the Chief Operating Officer of The Wellcome Trust. Simon was Chair of the Audit Committee and a
member of the Remuneration, Nominations and Risk Committees of St James’s Place plc until
18May 2023 and Chair of the Audit and Risk Committee of SimCorp A/S until 3 November 2023.
Simon is stepping down from the Board at the conclusion of the AGM on 10 July 2025.
Other Current Appointments:
•
Mitsui Sumitomo Insurance Company (Europe) Limited (Chairman)
•
Amlin Underwriting Limited (Chairman of the Board)
•
Post Office Limited (Chair of Audit, Risk and Compliance Committee)
Simon is an independent Director.
David Graham
Date of appointment: 1 September 2016
David is a Chartered Accountant whose career was in investment management, firstly as an Asian
fund manager with Lazard and then building businesses across Asia Pacific, Europe, Middle East
and Africa for BlackRock and predecessor firms (Merrill Lynch Investment Managers and Mercury
Asset Management). David has worked in Hong Kong, Tokyo and Sydney and has been a
Representative Director in domestic, joint venture, fund management companies in India, China,
Thailand and Taiwan. David contributes extensive experience of Asia and other emerging markets.
Other Current Appointments:
•
Fidelity Japan Trust plc (Chairman)
•
JPMorgan China Growth & Income plc (Chair of the Audit Committee)
•
Jio-Blackrock Asset Management Private Limited (Non-executive Director)
David is an independent Director.
02. Governance
50
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Board of Directors
Magdalene Miller
Date of appointment: 10 May 2021
Magdalene is a former investment director who specialised in investments in global emerging
markets. Based in London and Edinburgh, she spent 32 years managing listed equity portfolios,
investing in Japanese, Asian Pacific and UK markets. Born in Hong Kong, Magdalene is fluent in
Cantonese and Mandarin and has travelled extensively in China and Asia over the course of her
career. She currently serves as
a trustee for an educational endowment fund and participates in volunteering work.
Other Current Appointments:
•
Baillie Gifford China Growth Trust plc (Non-Executive Director)
Magdalene is an independent Director.
Sarika Patel
Date of appointment: 1 January 2025
Sarika is an experienced business leader having worked as a senior corporate professional at
Zeus Caps (a principal investment and advisory platform focused on infrastructure and related
sectors operating in India, Europe and the Middle East) and Grant Thornton. She is a Chartered
Accountant and a Chartered Marketer. She also is a Bachelor in Law (LLB) and a Bachelor in
Commerce (BCom). Sarika will assume the role of Chair of the Audit Committee when Simon
Jeffreys retires at the conclusion of this year’s AGM.
Other Current Appointments:
•
abrdn Equity Income Trust plc (Chair)
•
SDCL Energy Efficiency Income Trust plc (Chair of Audit and Risk Committee)
•
Action for Children (Chair)
Sarika is an independent Director.
Charlie Ricketts
Date of appointment: 12 July 2018
With over 30 years’ experience in the investment trust sector, Charlie brings a wealth of
experience to the Board. He was Head of Investment Funds at Cenkos Securities for 8 years and
prior to that was Managing Director, Head of Investment Companies at UBS Investment Bank.
Since leaving full-time employment in 2014 Charlie has pursued both charitable and business
interests including a now completed senior non-executive director appointment at Asia Dragon
Trust plc and a present directorship with Cyclico, a board performance review company. Charlie
has a wide-ranging understanding of the investment companies sector and draws on previous
experience across corporate finance, corporate broking, marketing and risk management.
Other Current Appointments:
•
Cyclico Limited (Director)
•
Carefree (Chair)
Charlie is an independent Director.
Abigail Rotheroe
Date of appointment: 1 November 2022
Abigail has over 20 years of investment experience, most recently as the Investment Director at
Snowball Impact Management, a sustainable and impact-focused asset manager. Previously
Abigail has managed retail and institutional Asia Pacific portfolios in Hong Kong and London for
Schroders, HSBC Asset Management Hong Kong and Columbia Threadneedle Investments.
She is a CFA Charterholder and has experience in manager selection, sustainability, and impact
measurement.
Other Current Appointments:
•
Baillie Gifford Shin Nippon plc (Non-Executive Director)
•
HydrogenOne Capital Growth plc (Non-Executive Director)
•
Greencoat UK Wind plc (Non-Executive Director)
Abigail is an independent Director.
Details of the fees earned by each Director can be found on page 62. The Directors’ interests in the Company’s shares are
noted on page 64.
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 51
Appointment and re-election of Directors
Directors are initially appointed by the Board after a rigorous
selection process and each Director is then subject to annual
re-election by the shareholders. At the first AGM following
appointment a Director is subject to election by the
shareholders. Thereafter, a Director’s reappointment is subject
to a performance evaluation carried out each year and the
approval of shareholders at each AGM, in accordance with
corporate governance best practice. When making a
recommendation, the Board considers the ongoing
requirements of the UK Corporate Governance Code
(the‘Code’), including the need to refresh the Board and its
Committees.
The terms and conditions of the Directors’ appointments are
set out in their Letters of Appointment, which are available for
inspection on request at the registered office of the Company
and at the AGM. The terms of appointment provide that a
Director will be subject to re-election at each AGM. A Director
may be removed from office following three months’ notice.
The Board has agreed that the Directors should stand down
after nine years from their initial appointment other than in
exceptional circumstances. Directors are prepared to resign or
take steps that could lead to a loss of office at any time in the
interests of long-term shareholder value. The continuation of
an appointment is contingent on satisfactory annual
performance evaluation. A Director may resign by notice in
writing to the Board at any time and there is no notice period
for resignation.
The Board
The primary focus of the Directors at regular Board meetings
is the consideration of investment performance and outlook,
market activity, discount management mechanisms including
share buybacks, gearing, marketing, shareholder register
analysis, investor relations, peer group information, top risks
and investment risk management, regulatory updates,
corporate governance and industry issues.
The Board has reviewed the effectiveness of the Company’s
system of internal controls for the year ended 31 March 2025.
During its review the Board has not identified or been advised of
any significant failings or weaknesses relating to the Company.
Further details of the Directors’ responsibilities can be found in
the Statement of Directors’ Responsibilities on page 71.
Board evaluation
The Board undertakes an annual evaluation of its own
performance and that of its Committees and individual
Directors including the Chairman. The Board has also
considered the independence of each Director, including
the Chairman.
As required under corporate governance best practice of
FTSE 350 companies a formal performance evaluation of the
Board, its Committees and the individual Directors is
undertaken with an external agency every third year. In the
year under review, the annual performance process was
facilitated by the company secretary. The process included
the completion of questionnaires. The company secretary
prepared summary reports which were discussed by the
Directors. The independence of each Director was checked
considering the provisions of the Code. The experience,
balance of skills, diversity, time commitment, tenure of each
director, openness, spirit of debate and knowledge of the
Board were considered as well as Board effectiveness, role
and structure.
The Chairman confirms that, following the annual performance
evaluation, each Director’s performance continues to be
effective, demonstrating commitment to their role and each
independent Director is recommended for re-election at the
AGM. Sarika Patel is subject to election by shareholders as this
is the first AGM of the Company since her appointment on
1January 2025. The Chairman also confirms that each
Committee’s performance continues to be effective in fulfilling
its responsibilities and duties. Formal Board performance
evaluations will continue to take place at least annually with
the appointment of an external facilitator every three years.
02. Governance
52
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Diversity
TEMIT’s aim is to have an appropriate level of diversity in the
boardroom.
The Nomination and Remuneration Committee considers
diversity generally when making recommendations for
appointments to the Board, considering gender, social and
ethnic backgrounds, thought, experience and qualification.
The prime responsibility, however, is the strength of the Board
and the overriding aim in making any new appointments is
always to select the best candidate based on objective criteria
and merit.
In all the Board’s activities, there has been and will be no
discrimination on the grounds of gender, race, ethnicity,
religion, sexual orientation, age or physical ability.
The Board has made a commitment to consider diversity when
reviewing the composition of the Board and notes the new UK
Listing Rules requirements (UKLR 6.6.6 R (9)) regarding the
targets on board diversity:
•
At least 40% of individuals on the Board are women;
•
At least one senior Board position (chairman, 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 reporting for TEMIT
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 at 31 March 2025 it does not
currently meet the targets in relation to the number of senior
Board positions which should be held by a woman. The Board
notes that as an externally managed investment trust there is
no CEO or CFO and the Board considers the Chairman of the
Company, the Chairman of any of the Company’s Committees
and the Senior Independent Director to be senior positions.
Simon Jeffreys is stepping down from the Board at the
conclusion of the AGM on 10 July 2025 and Sarika Patel will
take on the role of Chair of the Audit Committee. Following the
conclusion of the AGM (i) the Board will consist of 3 men and
3women, (ii) 4 Board members will be White British and
2Board members will be Asian British and (iii) one woman will
hold a senior position on the Board.
Sex
Number of
Board Members
Percentage of
the Board
Number of Senior
Positions on the Board
Men 4 57% 2
Women 3 43% –
Not Specified/Prefer Not to Say – – –
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) 5 71% 2
Mixed/Multiple Ethnic Groups – – –
Asian/Asian British 2 29% –
Black/African/Caribbean/Black British – – –
Other Ethnic Group, Including Arab – – –
Not Specified/Prefer Not to Say – – –
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 53
Diversity at the Manager
The Board also takes a close interest in diversity, equity and
inclusion (‘DEI’) at the Manager. Franklin Templeton is
committed to building a workforce that respects, includes, and
values all of its employees, who span across generations,
genders, preferences, capabilities, and cultural identification.
The firm’s culture embraces the individual differences and
wealth of perspectives within its global workforce. This is at the
forefront of Franklin Templeton’s mission both to attract and
retain the best talent and to drive innovation and provide
better client outcomes.
The firm has allocated dedicated resources to achieve and
support these goals, including the establishment of a global
governance structure and the implementation of research-
based inclusion policies and procedures. In order to localise
its global strategy and approach, the firm also formed three
Regional Executive Inclusion Councils in the Americas, EMEA
and APAC. The firm also partners with organizations that seek
to promote principles of inclusion. In the UK, partnerships have
continued with organisations like Black Professionals UK and
the Business Disability Forum, the leading business
membership organisation in disability inclusion. The firm
remains an active partner and supporter of several
organisations that promote inclusion and social mobility in the
UK, such as the Diversity Project, 10,000 Interns Foundation,
the Robertson Trust, Leonard Cheshire and Career Ready.
Additionally, Franklin Templeton sponsors thousands of
volunteer activities each year through its global Involved
programme which helps to provide better outcomes for local
communities.
Succession planning and recruitment
When considering succession planning, the Nomination
and Remuneration Committee bears in mind the tenure,
balance of skills, knowledge, experience and diversity existing
on the Board.
The recruitment process which led to the appointment of
Sarika Patel was led by Angus Macpherson as Chairman and
commenced in May 2024, the process was facilitated by
Odgers Berndtson as the appointed external agency. Odgers
Berndtson does not undertake any other services for TEMIT
and has no connection with any of the Directors. The list of
candidates identified was discussed by the Nomination and
Remuneration Committee and the preferred candidates were
invited for interviews. The Nomination and Remuneration
Committee recommended that the Board appoint Sarika Patel
after assessing the candidates against objective criteria and
with due regard to the benefits of diversity (including gender,
social, ethnic backgrounds) as well as cognitive and personal
strengths and time available to discharge their responsibilities
fully and effectively. Sarika Patel was appointed as a
non-executive Director of the Company, with effect from
1 January 2025.
The succession plan agreed by the Nomination and
Remuneration Committee includes an emergency succession
plan identifying contingency arrangements.
The Nomination and Remuneration Committee also reviews
and recommends to the Board the reappointment of the
Directors. The recommendation is not automatic and will follow
a process of evaluation of each Director’s performance and
consideration of the Director’s independence. The Nomination
and Remuneration Committee also considers the mix of skills
and experience of the current Board members.
Meetings and committees
The Board delegates certain responsibilities and functions to
committees. Six Directors are members of all committees. The
Chairman is not a member of the Audit and Risk Committee,
but he attends the Audit and Risk Committee meetings
by invitation.
The table below details the number of Board and Committee
meetings attended by each Director. During the year, there
were five Board meetings, three Audit and Risk Committee
meetings, one Management Engagement Committee meeting
and one formal Nomination and Remuneration Committee
meeting.
02. Governance
54
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Board
Audit and
Risk Committee
Management
Engagement
Committee
Nomination and
Remuneration
Committee
David Graham 5/5 3/3 1/1 1/1
Simon Jeffreys 5/5 3/3 1/1 1/1
Angus Macpherson
(a)
5/5 3/3 1/1 1/1
Magdalene Miller 5/5 3/3 1/1 1/1
Sarika Patel
(b)
1/1 0/0 1/1 1/1
Charlie Ricketts 5/5 3/3 1/1 1/1
Abigail Rotheroe 5/5 3/3 1/1 1/1
The Audit and Risk Committee is chaired by Simon Jeffreys.
The formal Report of the Audit and Risk Committee is on pages
65 to 70.
The Management Engagement Committee is chaired by the
Chairman of the Board and all Directors are members of the
committee. The primary role of the committee is to review the
performance of, and the contractual arrangements with, the
Manager. The Management Engagement Committee held one
meeting during the year and undertook a formal review of the
Manager and of the Investment Managers.
The review considered investment strategy, investment
process, performance and risk, and was carried out through
meetings between the Management Engagement Committee
and members of the investment and risk management teams
of the Manager. When assessing the performance of the
Manager and of the Investment Managers, the committee
believes that it is appropriate to make this assessment over
a medium to long-term timeframe, which is in accordance with
the long-term approach taken to investment. As a result of the
evaluation process performed by the Management
Engagement Committee, the Board confirms that it is satisfied
that the continuing appointment of the Manager is in the
interests of shareholders as a whole.
The Nomination and Remuneration Committee is chaired
by the Chairman of the Board and all Directors are members of
the committee. The Nomination and Remuneration Committee
held one formal meeting during the year and discussed the
annual evaluation process for the Board, the individual
Directors and the Chairman and succession planning. The role
of the Nomination and Remuneration Committee is to regularly
review the Board structure, size and composition and make
recommendations to the Board with regard to any adjustments
that seem appropriate, to consider the rotation and renewal of
the Board, approve the candidate specification for all Board
appointments, approve the process by which suitable
candidates are identified and short-listed, and to nominate
candidates for consideration by the full Board, whose
responsibility it is to make appointments. The Nomination and
Remuneration Committee also considers theeffectiveness of
individual Directors and makes recommendations to the Board
in respect of re-elections. TheNomination and Remuneration
Committee keeps underreview the balance of skills,
independence, knowledge of the Company and experience
and length of service of theDirectors.
During the year under review, the Nomination and
Remuneration Committee managed the recruitment process
which led to the appointment of Sarika Patel.
The Nomination and Remuneration Committee annually
reviews the level of fees paid to the Chairman, the Chairman of
the Audit and Risk Committee, the Senior Independent
Director and other Directors relative to other comparable
companies and in the light of the Directors’ responsibilities.
The Committee may engage independent external advisors if
it considers this to be necessary.
The terms of reference for the Audit and Risk Committee,
Management Engagement Committee and Nomination and
Remuneration Committee are available to shareholders on the
TEMIT website (www.temit.co.uk) or upon request via email to
temitcosec@franklintempleton.com.
(a) Attended three out of three meetings of the Audit and Risk Committee by invitation including when the Annual Report and Half Yearly Report were being drafted and the Company’s risk matrix
was being reviewed.
(b) Appointed to the Board on 1 January 2025.
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 55
Conflicts of interest
The Company maintains a register of Directors’ interests which
has been disclosed to, and approved by, the Board. The list of
interests of each Director is reviewed at every Board meeting.
Directors who have potential conflicts of interest will not take
part in any discussions which relate to that particular conflict.
The Board confirms that at 31 March 2025 and the date of this
report there were no conflicts of interest.
Charlie Ricketts, a director of TEMIT, is both a donor to and
unpaid Chair of Carefree.
Indemnification and insurance
The Company has entered into deeds of indemnity with each
of the Directors. These are qualifying third-party indemnity
provisions and are in force as at the date of this report. This
information is disclosed in accordance with Sections 236(2)
and 236(3) of the Companies Act 2006. The Company
maintains appropriate insurance cover in respect of legal
action against the Directors.
The Company
Principal activity and investment company status in the UK
The Company is a public limited company in terms of the
Companies Act 2006 and is an investment company under
Section 833 of the Companies Act 2006.
The Company has been accepted as an approved investment
trust by HM Revenue & Customs for accounting periods
commencing on or after 1 April 2012, subject to continuing to
meet the eligibility conditions of Section 1158 of the
Corporation Tax Act 2010 and the ongoing requirements of
The Investment Trust (Approved Company) (Tax) Regulations
2011. The Directors are satisfied that the Company intends to
direct its affairs to ensure its continued approval as an
investment trust.
Results and dividends
The capital profit for the year was £95.8 million (2024: profit of
£81.5 million) and the revenue profit was £57.9 million (2024:
£58.9 million).
The full results for the Company are disclosed in the Statement
of Comprehensive Income on page 81.
The Directors propose a final ordinary dividend of 3.25 pence
per share. Including the interim dividend of 2.00 pence
pershare, which was paid by the Company on 31 January 2025,
this represents an annual ordinary dividend of 5.25pence
pershare (2024: 5.00 pence per share) and, if approved by
shareholders at the AGM on 10 July 2025, the final dividend will
be payable on 31 July 2025 to shareholders on the register at
close of business on 27 June 2025.
Financial
Share capital and gearing
Changes in the share capital of the Company are set out in
Note 12 of the Notes to the Financial Statements.
As part of the Company’s objective and current investment
policy, the Company may borrow up to 20% of its net assets.
The current gearing is discussed in the Business Review on
page 37.
Share buybacks
The Board is again seeking shareholder permission to
continue its programme of share buybacks as outlined under
‘Stability – Share Buybacks and Conditional Tender Offer’ on
page 38.
Auditor
Ernst & Young LLP was appointed in 2019 as the Company’s
auditor. Ernst & Young LLP has expressed a willingness to
continue in office as auditor and a resolution proposing its
reappointment will be submitted at the AGM. Further details
on the assessment of the auditor can be found within the
Report of the Audit and Risk Committee on page 68.
The Directors who held office at the date of approval of this
Directors’ Report confirm that, so far as they are each aware,
there is no relevant information of which the Company’s
auditor was unaware and that each Director had taken all steps
that they ought to have taken as a Director to make themselves
apprised of any relevant audit information and to establish that
the Company’s auditor was notified of that information. This
confirmation is given, and should be interpreted in accordance
with, the provisions of Section 418 of the Companies Act 2006.
02. Governance
56
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Substantial shareholdings
As at 16 May 2025, 31 March 2025 and 31 March 2024, the Company had been notified that the following were interested in 3% or
more of the issued share capital of the Company.
Name
16 May 2025
Number of Shares %
31 March 2025
Number of Shares %
31 March 2024
Number of Shares %
City of London Investment Management
Company Limited
254,027,170 25.0 284,423,711 27. 8 278,767,061
25.0
Lazard Asset Management LLC Group 91,828,495 9.0 97,872,005 9.6 108,523,992
9.7
Rathbone Brothers PLC
62,392,578 6.1 32,144,309 3.1 97,372,049 8.7
Allspring Global Investments, LLC 58,792,578 5.8 77,574,353 7.6 79,262,342
7.1
Evelyn Partners
42,082,300 4.1 41,145,053 4.0 30,119,252 2.7
RBC Brewin Dolphin 40,239,385 4.0 44,937,794 4.4 49,814,378
4.5
Quilter Cheviot Investment Management
(previously Old Mutual Plc)
39,168,368 3.9 40,393,918 3.9 41,942,497
3.8
Investec Wealth & Investment Limited
(formerly Rensburg Sheppards)
7,758,269 0.8 64,902,503 6.3 61,700,274
5.5
Principal service providers
Alternative Investment Fund Manager, Secretary
and Administrator
FTITML is the Alternative Investment Fund Manager, Secretary
and Administrator with the role of investment management
delegated to FTIML and TAML. Portfolio Managers from
FTIML and TAML form part of the wider FTEME as mentioned
on page 12.
The main secretarial duties involve compliance with statutory
and regulatory obligations which the Company must observe.
All Directors have access to the advice of the Company
Secretary, who is responsible for advising the Board on all
governance matters. The appointment of the Company
Secretary was discussed and approved by the Board and the
secretarial activity is reviewed on an annual basis.
With effect from 1 July 2024 the annual fee rate for the services
provided by FTITML, including investment management, risk
management, secretarial and administration services, was
reduced to:
•
1% of the first £1 billion of net assets;
•
0.7% of net assets between £1 billion and £2 billion; and
•
0.5% of net assets over £2 billion.
The previous fee structure was 1% of net assets up to £1 billion,
0.75% of net assets between £1 billion and £2 billion, and 0.5%
of net assets over £2 billion.
With effect from 1 July 2025 the fee rate for assets between
£1billion and £2 billion will be 0.6% and then with effect from
1July 2026 the fee for all assets above £1 billion will be 0.5%.
The agreement between the Company and FTITML may be
terminated by either party giving one year’s notice, but in
certain circumstances the Company may be required to pay
compensation to FTITML of an amount up to one year’s fee in
lieu of notice. No compensation is payable if at least one year’s
notice of termination is given.
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. FTITML’s remuneration disclosures are set
out on page 106.
The Board considers the arrangements for the provision of
investment management services to the Company on an
ongoing basis, and a formal review is conducted annually by
the Management Engagement Committee. In the opinion of
the Directors, the continuing appointment of FTITML is in the
best interests of the shareholders as a whole.
Depositary and custodian
J.P. Morgan Europe Limited performs the role of depositary
and JPMorgan Chase Bank performs the role of custodian.
The agreements in place may be terminated by either party
giving the other 90 days’ notice.
A detailed list of service providers, along with addresses, can
be found in the General Information section on page 112.
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 57
Corporate governance
The Company is committed to high standards of corporate
governance. The Board is accountable to the shareholders for
good governance and this statement describes how
governance principles have been applied.
Association of investment companies code of
corporate governance
The Board 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 provisions 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
FRC, provides the relevant information to shareholders.
The Company has complied with the Principles and
Provisions of the AIC Code which also meets the obligations
under the UK Code (and associated disclosure requirements
under paragraph 6.6.6 R of the UK Listing Rules). 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.
A statement explaining TEMIT’s compliance with the AIC Code
principles can be found at www.temit.co.uk.
Additional information for New Zealand
shareholders
As a result of a requirement for Overseas Issuers listed on the
New Zealand Stock Exchange, the following should be noted
by New Zealand shareholders:
•
The corporate governance rules and principles in TEMIT’s
home exchange jurisdiction of the United Kingdom may
materially differ from the New Zealand Stock Exchange
(‘NZX’) corporate governance rules and the principles of the
NZX Corporate Governance Code;
•
Investors may find more information about the corporate
governance and principles of TEMIT’s home exchange in
the United Kingdom in the above Corporate Governance
statement and online at www.frc.org.uk/corporate/
ukcgcode.cfm;
•
The Company relies on the Financial Markets Conduct
(Overseas FMC Reporting Entities) Exemption Notice 2021,
issued by the New Zealand Financial Markets Authority,
which exempts it from certain financial reporting obligations
under the Financial Markets Conduct Act 2013; and
•
The Company relies on the Financial Markets Conduct
(Climate-related Disclosures for Foreign Listed Issuers)
Exemption Notice 2024, which exempts it from Part 7A of
the New Zealand Financial Markets Conduct Act 2013 such
that the Company is exempt from climate-related disclosure
requirements under New Zealand law. Any climate
statements prepared by the Company from time to time are
made available, free of charge, on the Company’s website
at www.temit.co.uk.
Schedule of Reserved Matters
The Board has formally adopted a Schedule of Reserved
Matters, which details the matters which the Board has agreed
are specifically reserved for its collective decision. These
matters include, inter alia, approval of the Half Yearly and
Annual Financial Statements, the approval of interim and
special dividends, recommendation of the final dividend,
approval of any preliminary results announcements of the
Company, approval of any proposed changes to the
Company’s objective and/or investment policy, appointment
or removal of the Company’s Manager or Investment
Managers, gearing, Board membership and Board committee
membership and any major changes to the objective,
philosophy or investment policy of the Company, other than
any such changes delegated to the Investment Managers
under the Investment Management Agreement.
The day-to-day investment management of the portfolio of the
Company is delegated to the Investment Managers, who
manage the portfolio in accordance with the objectives of the
Company as set by the Board.
Articles of association
The Company may change its Articles of Association by
special resolution of its shareholders.
Internal control
Details of the Company’s system of internal controls can be
found on page 70.
02. Governance
58
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Annual General Meeting
The AGM will be held on Thursday 10 July 2025 at the offices
of Franklin Templeton, Cannon Place, 78 Cannon Street,
London, EC4M 6HL. Further details regarding the AGM are set
out in the Notice of Meeting on page 108.
Whether you intend to attend the meeting in person or not,
you are strongly encouraged to submit your votes on the AGM
resolutions in advance of the meeting. Submitting votes by
proxy does not preclude you attending the meeting or
changing your vote if you attend the AGM, but your votes will
be counted if you are unable to attend the AGM.
Ordinary business
The formal business of the Meeting will begin with resolution 1
which seeks shareholders’ approval to receive and adopt the
Directors’ and Auditor’s Reports and Financial Statements for
the year ended 31 March 2025.
Resolution 2 seeks shareholders’ approval of the Directors’
Remuneration Report for the year ended 31 March 2025.
Approval of the Directors’ Remuneration Report is sought at
each AGM and this year’s report is set out in full on pages 60
to 64 of the 2025 Annual Report.
Resolution 3 seeks shareholders’ approval to declare a final
ordinary dividend of 3.25 pence per share, payable on 31 July
2025 to shareholders on the register as at close of business on
27 June 2025.
Resolutions 4.1 to 4.5 seek shareholders’ approval to re-elect
Abigail Rotheroe, Charlie Ricketts, David Graham, Magdalene
Miller, and Angus Macpherson as Directors. Simon Jeffreys is
not seeking re-election and is stepping down from the Board
at the conclusion of the AGM on 10 July 2025.
Resolution 4.6 seeks shareholders’ approval to elect SarikaPatel
as a Director.
The Board recommends that each director is re-elected or
elected as appropriate, as set out under Board Evaluation on
page 51.
In accordance with the provisions of the UKCorporate
Governance Code, all independent Directors will offer
themselves for election at the first AGM following their
appointment and for re-election at each subsequent AGM.
Resolutions 5 and 6 seek shareholders’ approval to re-appoint
Ernst & Young LLP as auditor of the Company, and to authorise
the Directors to determine the auditor’s remuneration.
Following the recommendation of the Company’s Audit and
Risk Committee, shareholders will be asked to approve the
re-appointment of Ernst & Young LLP as the Company’s
auditor, to hold office until the conclusion of the Company’s
2026 Annual General Meeting. Shareholders will be asked to
grant authority to the Board to determine the remuneration of
the auditor.
Special business
The Special Business to be dealt with at the AGM is:
Authority for the Allotment of New Shares
The resolutions to allot shares are set out in resolutions 7
(ordinary resolution) and 8 (special resolution) in the Notice of
Annual General Meeting. These resolutions, if passed, will give
your Directors power to allot for cash equity securities of the
Company and/or to sell equity securities held as treasury
shares up to a maximum aggregate nominal amount of
£2,542,000(being an amount equal to 5% of the issued share
capital of the Company as at 16 May 2025) as if Section 561 of
the Companies Act 2006 (‘the 2006 Act’) did not apply (this
section requires, when shares are to be allotted for cash or
shares held as treasury shares are sold, that such shares first
be offered to existing shareholders in proportion to their
existing holdings of shares, this entitlement being known as
‘pre-emption rights’). The authorities contained in resolutions
7 and 8 will continue until the AGM of the Company in 2026
and your Directors envisage seeking the renewal of this
authority in 2026 and in each succeeding year. Such
authorities will only be used when your Directors believe that it
would be in the best interests of the Company to do so and
only at a price which is at or above the prevailing NAV per
share at the time of issue.
(i) Authority to Purchase Own Shares
At the AGM of the Company held on 11 July 2024, a Special
Resolution was passed authorising the Company to purchase
its shares in the market, limited to a maximum of 14.99% of the
shares in issue on 11 July 2024 equivalent to 163,081,606
shares. The present authority expires at the conclusion of the
AGM on 10 July 2025.
Under Resolution 9, the Directors are seeking renewal of the
authority to purchase the Company’s shares in the market,
limited to a maximum of 14.99% of the Company’s issued
ordinary share capital, excluding treasury shares, at the date of
the passing of this resolution (equivalent to 152,419,101 ordinary
shares of 5 pence per share as at 16 May 2025).
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 59
Any shares purchased pursuant to this authority may be
cancelled or held in treasury pursuant to the Companies
(Acquisition of own shares) (Treasury Shares) Regulations
2003. Purchases will only be made for cash, provided that:
(a) the maximum price which may be paid is the higher of:
•
5% above the average market value of the shares for the
five business days before the purchase is made;
•
the higher of the last independent trade price and the
highest current independent bid price on the London
Stock Exchange;
(b) the minimum price payable for the shares will be the
nominal value of 5 pence per share; and
(c) shares will only be purchased at a price which is at
a discount to the prevailing net asset value per share at the
time of purchase.
The authority to purchase shares (whether for cancellation or
to be held in treasury) will only be exercised if to do so would
be in the best interests of shareholders generally and would
result in an increase in net asset value per share for the
remaining shareholders. The purpose of holding some shares
in treasury is to allow the Company to re-issue those shares
quickly and cost-effectively, thus providing the Company with
flexibility in the management of its capital base. Whilst in
treasury, no dividends are payable on, or voting rights attach
to, these shares. No shares will be purchased by the Company
during periods when the Company would be prohibited from
making such purchases by the rules of the FCA. As at the date
of this report, there are no warrants or options outstanding to
subscribe for equity shares in the Company.
The Directors envisage seeking the renewal of the relevant
authority in 2026 and in each succeeding year.
(ii) Notice period for general meetings
At the AGM of the Company held on 11 July 2024, a Special
Resolution was passed authorising the Company to call
general meetings (other than Annual General Meetings) on
14days’ clear notice, up to the conclusion of the AGM in 2025.
The Directors are seeking renewal under Resolution 10 of the
authority to call general meetings (other than Annual General
Meetings) on 14 days’ clear notice.
This resolution is required to reflect the 2006 Act which
requires that all general meetings must be held with at least
21 days’ notice unless shareholders agree to a shorter
notice period.
The Directors only intend to call a general meeting on less
than 21 days’ notice where the proposals are time sensitive,
and the short notice would clearly be in the best interests of
the shareholders as a whole.
The approval will be effective until the Company’s AGM in
2026, when it is intended that a similar resolution will be
proposed. The Company will also be required to meet the
requirements for electronic voting under the Directive before it
can call a general meeting on 14 clear days’ notice.
Recommendation
The Directors believe that all the resolutions proposed are in
the best interests of the Company and the shareholders as
a whole and recommend that all shareholders vote in favour of
all the resolutions.
The results of the votes on the resolutions at the AGM will be
published on the Company’s website.
Going concern
The Company’s assets consist of equity shares in companies
listed on recognised stock exchanges and in most
circumstances are realisable within a short timescale. Having
made suitable enquiries, including considerations of the
Company’s objective, the nature of the portfolio, net current
assets, current liabilities relating to the £122 million
multi-currency revolving credit loan facility which matures
30January 2026, expenditure forecasts, the compliance with
loan covenants, the principal and emerging risks and
uncertainties described within the Annual Report and the
continuation vote in July 2024, the Directors are satisfied that
the Company has adequate resources to continue to operate
as a going concern for the period to 31 March 2027, which is at
least 12 months from the date of approval of these Financial
Statements, and are satisfied that the going concern basis is
appropriate in preparing the Financial Statements.
By order of the Board
Angus Macpherson
6 June 2025
02. Governance
60
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Directors’ remuneration report
This report has been prepared in accordance with the requirements of Section 420-422 of the
Companies Act 2006, with subsequent amendments. The Directors’ Remuneration Policy is
subject to a triennial binding shareholder vote and the Directors’ Remuneration Report is
subject to an annual shareholder vote, both as ordinary resolutions.
The law requires the Company’s auditor to audit certain of the disclosures provided. Where
disclosures have been audited, they are indicated as such. The auditor’s opinion is included in
its report on pages 73 to 80.
All Directors are non-executive, appointed under the terms of Letters of Appointment, and none
has a service contract. These letters are available for inspection by shareholders at the
Company’s registered address or at the AGM. The Directors’ Report includes, on page 51, details
of the Directors’ terms of appointment.
The Company has no employees. Details of the Nomination and Remuneration Committee can
be found on page 54 within the Directors’ Report.
Chile
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 61
Directors’ remuneration policy
This Policy provides details of the remuneration policy for the
Directors of the Company.
A resolution proposing the approval of the Directors’
remuneration policy was put to the shareholders at the 2023
AGM and passed by 748,951,673 (99.95%) of shareholders
voting in favour of the resolution, 404,878 (0.05%) voting
against and 156,977 abstaining from voting.
The Policy as set out below will apply until 14 July 2026 (being
three years from the date of shareholder approval of the policy)
unless renewed, varied or revoked by shareholders at a general
meeting.
The Board’s policy, which has been designed to support the
Company’s strategy and promote long-term sustainable
success, is that the remuneration of non-executive Directors
should reflect the responsibilities of the Board, Directors’ time
spent on the Company’s business, the experience of the
Board as a whole, and be fair and comparable to that of other
investment trusts similar in size, capital structure and objective.
The Chairman of the Board, Chairman of the Audit and Risk
Committee (who is also the Senior Independent Director) are
paid higher fees than the other Directors, reflecting the greater
amount of time spent on the Company’s business.
The review process involves an analysis of fees paid to
Directors of other companies having similar profiles to that
of the Company. This review is submitted to the Nomination
and Remuneration Committee and the Directors’ fees are
agreed for the next year. The Company has no Chief Executive
Officer and no employees and therefore there was no
consultation of employees and there is no employee
comparative data to provide, in relation to the setting of the
remuneration policy for Directors.
Directors’ and Officers’ liability insurance cover is maintained
by the Company, at its expense.
Directors’ remuneration is not linked to the performance of
the Company and Directors are not eligible for bonuses,
pension benefits, share options, long-term incentive schemes
or other benefits.
The independent non-executive Directors are entitled to
reclaim reasonable expenses incurred to perform their duties
as non-executive Directors for the Company. Directors are not
entitled to payment for loss of office and may be removed from
office by the Company on three months’ notice.
The Nomination and Remuneration Committee considers any
comments received from shareholders on the remuneration
policy on an ongoing basis and takes account of those views.
Directors’ remuneration implementation report
The Directors’ Remuneration Report, which includes details of
the Directors’ Remuneration Policy and its implementation, is
subject to an annual shareholders’ vote and an ordinary
resolution to approve the Remuneration Policy will be put to
shareholders at the forthcoming AGM. A review was carried out
during the financial year to 31 March 2025 and this review
recommended increases in fees as set out in the table below
for the forthcoming financial year. These changes to
remuneration are in line with the Directors’ Remuneration
Policy as set out above. The involvement of remuneration
consultants has not been deemed necessary as part of this
year’s review.
Role Component Current Annual Fee Proposed Annual Fee
Independent Directors Annual Fee £42,000 £43,000
Chairman Additional Fee £32,500 £33,000
Chairman of the Audit and Risk Committee Additional Fee £15,500 £16,000
Senior Independent Director Additional Fee £3,000 £3,500
02. Governance
62
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Directors’ fees for the year
Fees paid to each Director for the financial year to 31 March 2025 are set out below. A non-binding ordinary resolution proposing
adoption of the Directors’ Remuneration Report was put to shareholders at the Company’s AGM held on 11 July 2024 and was
passed by 657,196,869 (99.96%) of shareholders voting in favour of the resolution, 276,176 (0.04%) voting against and 197,986
abstaining from voting.
The Directors who served during the year received the following fees, which represented their total remuneration from the Company:
2025 2024
Audited Information
Annual
Fee £
Taxable
Benefits
(a)
£ Total £
Annual
Fee £
Taxable
Benefits
(a)
£ Total £
David Graham 42,000 – 42,000 41,000 – 41,000
Simon Jeffreys 60,500 738 61,238 58,500 357 58,857
Angus Macpherson
(b)
74,500 4,498 78,998 27,943 – 27,943
Magdalene Miller 42,000 3,787 45,787 41,000 2,747 43,747
Charlie Ricketts 42,000 6,741 48,741 41,000 2,755 43,755
Abigail Rotheroe 42,000 57 42,057 41,000 241 41,241
Sarika Patel
(c)
10,500 – 10,500 – – –
Paul Manduca
(d)
– – – 54,750 277 55,027
Total 313,500 15,821 329,321 305,193 6,377 311,570
(a) Taxable benefits relate to the reimbursement of expenses incurred in connection with the performance of the Directors’ duties and attendance at Board and Committee meetings. The figures
are shown gross of relevant taxes.
(b) Joined the Board on 6 October 2023 and took over as Chairman on 1 January 2024.
(c) Joined the Board on 1 January 2025.
(d) Retired from the Board on 31 December 2023. Chairman of the Board up to date of retirement.
Annual percentage change in Directors’ fees
The table below shows the annual percentage change in Directors’ fees over the five financial years preceding the year to
31March 2025:
Component 2025 £
% Change
from 2024
to 2025 2024 £
% Change
from 2023
to 2024 2023 £
% Change
from 2022
to 2023 2022 £
% Change
from 2021
to 2022 2021 £
% Change
from 2020
to 2021 2020 £
Independent Directors Annual fee 42,000 2.4 41,000 2.5 40,000 2.6 39,000 2.6 38,000 2.7 37,000
Chairman Additional fee 32,500 1.6 32,000 3.2 31,000 3.3 30,000 3.4 29,000 3.6 28,000
Chairman of the Audit
and Risk Committee
Additional fee 15,500 3.3 15,000 11.1 13,500 3.8 13,000 4.0 12,500 4.2 12,000
Senior Independent
Director
Additional fee 3,000 20.0 2,500 – 2,500 – 2,500 100 – – –
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 63
Performance graph
(a)
The line graph below details TEMIT’s share price total return against TEMIT’s benchmark, the MSCI Emerging Markets (Net
Dividends) Index total return over the past 10 years.
(a) Figures rebased to 100 at 31 March 2015.
(b) Directors’ Remuneration comprises Directors’ fees of £313,500 and Employer National Insurance Contributions of £30,411 for the financial year 2025 (2024: £305,193 and £28,158 respectively).
(c) Based on a proposed final dividend of 3.25 pence per share calculated using shares in issue as at 16 May 2025 and the interim dividend of 2.00 pence per share paid 31 January 2025.
50
100
150
20
0
250
March
2015
’16’17 ’18’19 ’20’21 ’2
2’
25’24’23
TEMIT Share Price Total Return
MSCI Emerging Markets (Net Dividends) Index Total Return
Relative cost of Directors’ fees
The table below shows the Company’s expenditure on Directors’ fees compared to distributions to shareholders:
The items detailed in the above table are as required by the Large and Medium-size Companies and Groups (Accounts and Reports)
2013.
2025
£’000
2024
£’000
Directors’ Remuneration
(b)
344 333
Distribution to Shareholders:
Dividends 54,027
(c)
55,381
Share Buybacks 149,230 65,929
02. Governance
64
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Statement of Directors’ shareholdings
The Directors’ interests (including any family interests) existing as at 31 March in the Company’s shares were as follows:
Approval
The Directors’ Remuneration Report was approved by the Board of Directors on 6 June 2025.
Angus Macpherson
6 June 2025
On 9 April 2025 Sarika Patel bought 7,089 shares in the Company. The Company has not received any other notifications ofchanges
in the above interests as at 16 May 2025.
Audited Information
2025
Number of Shares
2024
Number of Shares
David Graham 110,737 109,180
Simon Jeffreys 26,960 26,960
Angus Macpherson 68,000 68,000
Magdalene Miller 20,000 7,000
Sarika Patel – n/a
Charlie Ricketts 25,000 25,000
Abigail Rotheroe 27,110 27,110
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 65
Report of the audit and risk committee
Composition
As of 31 March 2025, the Audit and Risk Committee comprised
Simon Jeffreys (Chairman), David Graham, Magdalene Miller,
Sarika Patel, Charlie Ricketts and Abigail Rotheroe, all
independent non-executive Directors. Simon Jeffreys is
stepping down from the Board at the conclusion of the AGM
on 10 July 2025 and Sarika Patel will take on the role of Chair of
the Audit and Risk Committee.
The Board considers that the members of the Audit and Risk
Committee have sufficient recent and relevant financial
experience for it to perform its functions effectively, noting in
particular that the Audit and Risk Committee Chairman is a
Chartered Accountant and former senior audit partner.
DavidGraham and Sarika Patel are also Chartered Accountants.
The Directors’ biographies are given on pages 49 and 50.
Role and responsibilities
The Audit and Risk Committee plays an important role in the
appraisal and supervision of key aspects of the Company’s
business. The Committee carried out the following activities to
accomplish its principal objectives and reported to the Board
on how it discharged its responsibilities:
•
Provided advice to the Board on whether 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
position and performance, business model and strategy;
•
Monitored the integrity of the Financial Statements
including the review of and agreeing the appropriateness of
the Company’s accounting policies, accounting estimates
and judgements, treatment and disclosures of tax,
alternative performance measures and compliance with the
appropriate reporting requirements;
•
Oversaw the relationship with the external auditor, including
monitoring of any non-audit services in accordance with
the policy;
•
Reviewed and monitored the external auditor’s
effectiveness, objectivity and independence, and the
effectiveness of the audit process, taking into consideration
relevant UK professional and regulatory requirements;
•
Monitored, reviewed and confirmed the effectiveness of
the internal financial controls and internal controls and risk
management systems on which the Company is reliant;
•
Reviewed the effectiveness of the internal audit function
of Franklin Templeton and its reports, and was satisfied with
the results;
•
Reviewed the internal and external audit plans
and the findings of the audits, including the external
Auditor’s Report;
•
Reviewed and confirmed that the value and quality
of services provided to the Company by third parties
were satisfactory;
•
Reviewed in detail the contents of the Company’s risk
matrix;
•
Received regular updates from the Manager’s tax team on
ongoing claims for recoverable taxes; and
•
Reviewed other ad hoc items referred to the Audit and
Risk Committee by the Board.
This report summarises how the Committee discharged its role
and responsibilities, the work carried out by the Committee and
the conclusions reached.
As Chairman of the Audit and Risk Committee, I am pleased to present this report to shareholders. The
report contains details of the Audit and Risk Committee’s activities and responsibilities along with the
evaluation of effectiveness of the external and internal audit process for the year ended 31 March 2025.
02. Governance
66
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Activities during the year
The Committee met formally three times during the year. Also,
while in India, the Committee visited Franklin Templeton’s
office and met with representatives of the portfolio, research
and dealingteams.
The Chairman and other members of the Committee, also:
•
Reviewed and challenged the scenarios presented by
the Manager to support the use of the going concern
basis and the ongoing viability assessment. Upon review
and discussion with the Manager the Committee
concluded that the scenarios were appropriate to support
the use of the going concern basis and the ongoing
viability statement;
•
Met with the Manager to discuss its approach to
ESG considerations including the continued evolution of
the Stewardship Report for TEMIT;
•
Held meetings with the Manager to discuss with those
responsible all relevant matters relating to financial
reporting, company secretarial, taxation, internal audit and
risk and control framework;
•
Discussed with the investment and risk teams the ongoing
geopolitical tensions and their impacts on the portfolio as
well as any potential restrictions on the ability to invest in
certain companies;
•
Reviewed the Manager’s fair valuation process for the
holding in Swiggy, which was unlisted from the date of
purchase to 13 November 2024;
•
Discussed with the Manager the classification of the special
dividends received throughout the year and agreed the
capital and revenue split. The Committee concluded that
the treatment applied in the Statement of Comprehensive
Income was appropriate and therefore no significant
judgement was required; and
•
Reviewed the historic allocation of the AIFM fee and
finance costs and recommended to the Board that the split
be updated from 70% to 75% for the allocation to the capital
account, with the remainder being allocated to revenue.
The Committee maintains a programme of agenda items to
ensure that its workload is balanced across the year and that
matters are addressed at appropriate times.
Performance evaluation
The Board undertakes an annual evaluation of performance of
the Audit and Risk Committee and of its individual Directors,
further details of this review can be found on page 51. The
Board is satisfied with the performance and effectiveness of
the Audit and Risk Committee.
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 67
Annual Report and Financial Statements
A primary responsibility of the Audit and Risk Committee is to review the appropriateness of the Annual and Half Yearly Reports.
During the year, the work of the Committee included the following significant activities in relation to the Financial Statements:
Portfolio Valuation The Directors received regular portfolio reports, liquidity information and presentations from
the Manager and the Investment Managers. The Committee reviewed valuation reports from
the Manager and is satisfied that valuations are compliant with the accounting policies
commencing on page 86. In particular, the Committee reviewed, challenged and agreed with
the Manager on the basis of valuation for Swiggy.
Misappropriation of Assets and
Counterparty Risk
The Committee considered the risk of counterparty failure. The Company has appointed an
independent custodian (JPMorgan Chase Bank) to hold its investments. The Manager
reconciled the investment portfolio to the custodian’s records on a regular basis and any
material variances are reported to the Committee. In addition, the Committee received from
the Manager an annual review evaluating JPMorgan Chase Bank’s global custody and
sub-custody network including the results of an ISAE 3402 report by PricewaterhouseCoopers.
The results were satisfactory.
Going Concern and Viability The Committee considered that the Company’s assets consist of equity shares in companies
listed on recognised stock exchanges which in most circumstances are realisable within a short
timescale. Having made suitable enquiries, including consideration of the Company’s
objective, the nature of the portfolio, net current assets, current liabilities relating to the
£122million multi-currency revolving credit facility which will mature on 30 January 2026,
expenditure forecasts, the compliance with loan covenants, the principal and emerging risks
and uncertainties described within the Annual Report, the Committee is satisfied that the
Company has adequate resources to continue to operate as a going concern for the period to
31 March 2027, which is at least 12 months from the date of approval of these Financial
Statements. The Committee therefore concludes that it is appropriate to prepare the Financial
Statements on a going concern basis and makes its recommendations to the Board. The
scenarios considered include the liquidity of the portfolio, a sustained increase in the value of
the portfolio (which would result in an increase in running costs, particularly the AIFM fee), a
significant drop in value of the assets and a similar decrease in dividend income and confirms
that the Company could continue as a going concern. The Committee also considered such
scenarios over a five-year period, including for this purpose the continuation vote due to be
held in 2029, to support the Company’s ongoing viability as noted in the Viability Statement on
page 46.
Recognition of
Investment Income
Each quarter the Committee received and reviewed annual income forecast reports which
detail the income received and the estimated income due to be received in the financial year.
These forecasts included details of material variances compared with prior forecasts. The
Committee is satisfied with these analyses.
Compliance with Section 1158
of the Corporation Tax Act 2010
The Company has been accepted as an approved investment trust by HM Revenue & Customs
for accounting periods commencing on or after 1 April 2012, subject to continuing to meet the
eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing
requirements of The Investment Trust (Approved Company) (Tax) Regulations 2011. The
Committee is satisfied that the Company complies with these conditions and intends to direct
its affairs to ensure its continued approval as an investment trust.
02. Governance
68
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Areas of audit focus
The Committee reviewed and agreed the external audit plan
including the level of audit materiality which it challenged and
concluded was appropriate. The external auditor determined
the scope of their work and the Committee also discussed with
them key matters which they wanted to be covered and which
included the following:
•
Ownership and valuation of the portfolio given that the
majority of the Company’s assets are invested in its
portfolio companies. The external auditor validated the
ownership and valuations to its independent sources and
concluded that the results of their procedures did not
identify any material misstatements;
•
Income recognition to confirm that income has been
correctly recorded and received. The external auditor
recalculated all dividend income from independent sources
and tested a sample to bank statements, and assessed the
the classification of special dividends as revenue or capital
items in the Statement of Comprehensive Income. The
external auditor concluded that the results of their
procedures did not identify any material misstatements; and
•
Although not a key audit matter as determined by the
external auditor the Committee focused on Compliance
with S1158 regulations in order to ensure that the Company
is meeting its minimum distribution obligations. The external
auditor concluded that the Company was in compliance
with S1158 regulations as at the balance sheet date.
The Committee notes that there was no significant accounting
judgement required in relation to the classification of special
dividends received.
Further information on these key audit matters and the
external auditor’s observations reported to the Committee are
detailed within their audit report on pages 73 to 80. The
Committee reviewed and were satisfied with the conclusions
presented by the external auditor for each of these matters.
Conclusion
As a result of the work undertaken by the Committee as noted
on page 67 and from the conclusions presented by the external
auditor, the Committee has concluded that the Financial
Statements for the year ended 31 March 2025, taken as a whole,
are fair, balanced and understandable and provide the
information necessary for shareholders to assess the
Company’s position and performance, business model and
strategy, and has reported on these findings to the Board. The
Board’s conclusions in this respect are set out in the Statement
of Directors’ Responsibilities on page 71.
External auditor
Assessment of effectiveness and independence
of the external audit process
To assess the effectiveness and independence of the external
audit process, the auditor is asked, on an annual basis, to set
out the steps that it has taken to ensure objectivity and
independence. The auditor’s performance, behaviour and
effectiveness during the exercise of its duties are monitored
during the year by the Audit and Risk Committee. The Audit
and Risk Committee considered an annual independent Audit
Quality Review report by the FRC, that monitors audit quality of
the major audit firms in the UK and discussed with the external
auditor the results of its own quality control review and 2024
Transparency Report. Ernst & Young LLP presented its detailed
audit plan for the 2025 financial year end at the November
2024 Audit and Risk Committee meeting. The Audit and Risk
Committee also reviewed Ernst & Young LLP’s policies and
procedures including quality assurance procedures and
independence and concluded that they were satisfactory.
The outcome of these reviews and discussions with the Senior
Statutory Auditor were that the Committee is satisfied that
Ernst & Young LLP has a suitable culture, control environment
and risk framework to enable it to deliver a high-quality audit.
In assessing the quality of the audit, the Committee
considered areas where the auditor had demonstrated
professional scepticism and challenged management.
They noted that this had been demonstrated around the
valuation of Swiggy as at 30 September 2024 for the Half Yearly
Report and how the auditor had challenged management, the
Committee noting these discussions and concluding that the
pricing model applied was appropriate. In addition, the
Committee held meetings with the external auditor in private
and worked closely with the Manager during the audit process.
Taking into consideration all the above and its review and
discussions with the key parties the Committee concluded
that the external auditor had delivered a quality audit for the
financial year ended 31 March 2025.
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 69
Auditor rotation
The regulations on mandatory auditor rotation require an audit
tender to take place every ten years. An audit tender took
place during 2019 and shareholders approved the
appointment of Ernst & Young LLP as the Company’s external
auditor at the Annual General Meeting held on 11 July 2019.
The year ended 31 March 2025 was the third year for which
Ashley Coups (Senior Statutory Auditor) has served.
Non-audit services
Performance of any non-audit services by the external auditor
must be approved in advance by the Committee and must
comply with the guidelines set out in the FRC’s Revised Ethical
Standard 2019. The Committee concluded that the non-audit
service fees were appropriate relative to fees paid for audit
services. An engagement letter is issued for all non-audit work
and is reviewed by the Committee to ensure that the
independence and objectivity of the auditor is safeguarded.
During the year, Ernst & Young LLP was engaged to perform a
review of the Half Yearly Report. This is assurance related and
the Committee believes that Ernst & Young LLP is best placed
to provide this service for the shareholders.
Audited Information 2025 2024
Audit Services £56,200 £54,600
Non-Audit Services
- Review of Half Yearly Report £10,850 £10,500
Percentage of Audit Services 16.2% 19.2%
The Committee therefore confirms that the non-audit work undertaken by the auditor satisfies and does not compromise the tests
of the auditor’s independence, objectivity, effectiveness, resources and qualification.
The fees paid to the Auditor in the year were as follows:
02. Governance
70
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Internal control
The Committee monitors the risk management and system
of internal controls on an ongoing basis and engages
Franklin Templeton’s internal audit function to carry out
a review of specific areas that the Audit and Risk Committee
considers appropriate.
Internal audit is carried out by the internal audit department of
Franklin Templeton.
The Committee met representatives of the Manager and
Investment Managers, including its internal auditor, risk
manager and its compliance officer, who reported as to
the proper conduct of business in accordance with the
regulatory environment in which both the Company and the
Manager operate. Certain meetings held with the internal
auditors are conducted on a private basis, with no
representation from the Manager.
The Committee reviewed the Company’s risk matrix that
explains in detail the key risks identified by the Company,
assessing the likelihood of each risk materialising and the
impact that this would have on the Company. The Committee
also confirmed the effectiveness of the key operational
procedures and oversight by the Manager and the Board.
Other areas
TEMIT is able to rely on the Financial Markets Conduct
(Overseas FMC Reporting Entities) Exemption Notice 2021,
that exempts it from requirements to prepare audited Financial
Statements in accordance with the New Zealand Financial
Market Conduct Act 2013. This exemption recognises that
companies with a primary listing in the United Kingdom
prepare Financial Statements and are audited in accordance
with UK requirements. This exempts TEMIT from the New
Zealand requirement that firms be audited by a New Zealand
unlimited liability entity.
TEMIT is in compliance with the provisions of ‘The Statutory
Audit Services for Large Companies Market Investigation’
(Mandatory Use of Competitive Tender Processes and Audit
Committee Responsibilities) Order 2014 as issued by the
Competition & Markets Authority.
Simon Jeffreys
Audit and Risk Committee Chairman
6 June 2025
02. Governance
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 71
Statement of directors’ responsibilities
In respect of the Annual Report and
the Financial Statements
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable
law and regulations. Details of the Directors and members of
the committees are reported on pages 49 to 54.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
are required to prepare the Financial Statements in accordance
with UK adopted International Accounting Standards.
Under company law the Directors must be satisfied that the
Financial Statements give a true and fair view of the state of
affairs of the Company and of the profit or loss of the Company
for the period.
In preparing these Financial Statements, International
Accounting Standard 1 requires that Directors:
•
Properly select and apply accounting policies;
•
Present information, including accounting policies, in
a manner that provides relevant, reliable, comparable and
understandable information;
•
Provide additional disclosures when compliance with the
specific requirements of UK adopted International
Accounting Standards are insufficient to enable users to
understand the impact of particular transactions, other
events and conditions on the entity’s financial position and
financial performance; and
•
Assess the Company’s ability to continue as a going
concern.
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
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 Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website (www.temit.co.uk). Legislation in
the United Kingdom governing the preparation and
dissemination of Financial Statements may differ from
legislation in other jurisdictions.
Responsibility statement
Each of the Directors, who are listed on pages 49 and 50,
confirms that to the best of their knowledge:
•
The Financial Statements, which have been prepared in
accordance with UK adopted International Accounting
Standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company for the
year ended 31 March 2025; and
•
The Chairman’s Statement, Strategic Report and the Report
of the Directors include a fair review of the information
required by 4.1.8R to 4.1.11R of the FCA’s Disclosure
Guidance and Transparency Rules; and
•
The Annual Report and Audited Financial Statements,
taken as a whole, are fair, balanced and understandable
and provide the information necessary for shareholders
to assess the Company’s position and performance,
business model and strategy, and include a description of
the principal risks and uncertainties.
By order of the Board
Angus Macpherson
6 June 2025
02. Governance
72
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
03.
Financial
Review
74
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
03.
Financial
Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 73
74
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
03.
Financial
Review
Independent auditor’s report
to the members of Templeton Emerging Markets Investment Trust plc
Opinion
We have audited the Financial Statements of Templeton
Emerging Markets Investment Trust plc (the ‘Company’) for the
year ended 31 March 2025 which comprise the Statement of
Comprehensive Income, the Statement of Financial Position,
the Statement of Changes in Equity, the Statement of Cash
Flows, and the related notes 1 to 21 to the Financial
Statements, including material accounting policy information.
The financial reporting framework that has been applied in
their preparation is applicable law and UK adopted
International Accounting Standards.
In our opinion, the Financial Statements:
•
give a true and fair view of the Company’s affairs as at
31March 2025 and of its profit for the year then ended;
•
have been properly prepared in accordance with UK
adopted international accounting standards; 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 listed 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, for the period to 31 March
2027 which is at least 12 months from the date the Financial
Statements were authorised for issue. In preparing the
revenue forecast, 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
themethods used to calculate the revenue forecast
andthe 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.
•
In relation to the Company’s borrowing arrangements, we
inspected the Directors’ assessment of the risk of breaching
the debt covenants as a result of a reduction in the value of
the Company’s portfolio. We recalculated the Company’s
compliance with debt covenants in the scenarios assessed
by the Directors and reviewed the Directors’ reverse stress
testing in order to identify and challenge the factors which
would lead to the Company breaching the financial
covenants.
•
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.
03. Financial Review
74
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
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
assessed by the Directors, being the period to 31 March 2027
which is at least 12 months from when the Financial Statements
were authorised for issue.
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.
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 £19.85m (2024:
£20.35m) which represents 1% (2024:1%) of
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 as to how climate
change will impact companies. The Company has determined
that the impact of climate change could affect the Company’s
portfolio. This is explained in the principal and emerging risks
section on page 45, which forms part of the “Other information,”
rather than the audited Financial Statements. Our procedures
on these 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.
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 1(a) 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 UK adopted International Accounting Standards.
In line with UK adopted International Accounting Standards,
investments are valued at fair value, which for the Company are
quoted bid prices for investments in active markets.
Investments which are designated as level 3 are priced using
market-based valuation approaches. All investments therefore
reflect the market participants’ view of climate change risk on
the investments held by the Company. We also challenged the
Directors’ considerations of climate change in their assessment
of viability and associated disclosures.
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.
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 75
Risk Our response to the risk
Key observations communicated to the
Audit Committee
Incomplete or inaccurate revenue
recognition, including classification of
special dividends as revenue or capital
items in the Statement of Comprehensive
Income (as described on page 68 in the
Report of the Audit and Risk Committee and as
per the accounting policy set out on page 87).
The total income for the year to 31 March 2025
was £74.34m (2024: £78.45m) consisting
primarily of dividend income from listed
investments of £69.30m and other income in
the form of interest on cash and short-term
deposits of £5.04m.
The Company received special dividends
amounting to £8.6 million (2024: £8.2 million)
of which £3.9 million (2024: £6.6 million) was
classified as capital and £4.7 million (2024:
£1.6million) was classified as revenue.
There is a risk of incomplete or inaccurate
revenue recognition 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’.
As such, there is a manual and judgmental
element in classifying special dividends
between revenue and capital.
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 dividend income by
multiplying the investment holdings at the
ex-dividend date, traced from the accounting
records, by the dividend per share, which we
agreed to an independent data vendor. We
agreed a sample of dividend receipts to bank
statements.
For 100% of dividends accrued, we reviewed
the investee Company announcements to
assess whether the dividend entitlements
arose prior to 31 March 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 investments held during the year,
we reviewed the type of dividends paid with
reference to an external data vendor to
identify those which were special.
The Company received six special dividends
in the period. For the two special dividends
above our testing threshold, we assessed the
appropriateness of management’s
classification by reviewing the underlying
rationale of the distributions.
The results of our procedures identified
no material misstatement in relation to
the risk of incomplete or inaccurate
revenue recognition, including incorrect
classification of special dividends as
revenue or capital items in the Statement
of Comprehensive Income.
03. Financial Review
76
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Risk Our response to the risk
Key observations communicated to the
Audit Committee
Incorrect valuation or ownership of the
investment portfolio (as described on
page68 in the Report of the Audit and Risk
Committee and as per the accounting policy
set out on pages 88 and 89).
The valuation of the portfolio at 31 March
2025 was £2,002.62m (2024: £1,995.23m)
consisting of level 1 listed investments, and
two nil valued Russian securities designated
as level 3 investments (2024: two nil valued
Russian securities).
The fair value of financial instruments at the
year-end date is, ordinarily, based on the
latest quoted bid price at, or before, the US
market close (without deduction for any of the
estimated future selling costs), if the
instrument is held in active markets.
For all financial instruments not traded in an
active market or where market price is not
deemed representative of fair value, valuation
techniques are employed to determine
fairvalue.
We performed the following procedures:
We obtained an understanding of the
Administrator’s processes and controls
surrounding investment pricing and legal title
by performing walkthrough procedures.
For the Russian securities we have assessed
the reasonableness and appropriateness of
them being designated as level 3. We have
reviewed the appropriateness of valuing the
remaining Russian securities (Sberbank and
Lukoil) at nil.
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.
We confirmed with the Administrator that
there were no investments with stale prices as
at the year-end and therefore no stale pricing
report produced.
We compared the Company’s investment
holdings at 31 March 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.
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 77
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
£19.85million (2024: £20.35 million), which is 1% (2024: 1%) of
shareholders’ funds. We believe that shareholders’ funds
provides us with 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 £14.89m
(2024:£15.26m). We have set performance materiality at this
percentage due to our past experience of the audit that
indicates a lower risk of misstatements, both corrected and
uncorrected.
Given the importance of the distinction between revenue and
capital for investment trusts we also applied a separate testing
threshold for the revenue column of the Statement of
Comprehensive Income of £3.13m (2024: £3.21m) being 5%
(2024: 5%) of profit before tax.
Reporting threshold
An amount below which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit and Risk Committee that we would
report to them all uncorrected audit differences in excess of
£0.99m (2024: £1.02m), 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.
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.
03. Financial Review
78
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Opinions 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’ report 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
theaudit:
•
Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 59;
•
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 46;
•
Director’s statement on whether it has a reasonable
expectation that the group will be able to continue in
operation and meets its liabilities set out on page 59;
•
Directors’ statement on fair, balanced and understandable
set out on page 68;
•
Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
pages 44 to 46;
•
The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems set out on page 70; and;
•
The section describing the work of the Audit and Risk
Committee set out on pages 65 and 66.
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 79
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities
statement set out on page 71, 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.
Auditor’s responsibilities for the audit of the
Financial Statements
Our objectives are to obtain reasonable assurance about
whether the Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with 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 UK Adopted
International Accounting Standards, the Companies Act
2006, the UK Listing Rules, the UK Corporate Governance
Code and the AIC Corporate Governance, the Statement of
Recommended Practice for the Financial Statements of
Investment Trust Companies as issued by the Association of
Investment Companies, 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 and Risk
Committee and Company Secretary, review of the board
and committee minutes and review of papers provided to
the Audit and Risk Committee.
•
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 classification of special dividends as
revenue or capital items in the Statement of Comprehensive
Income. 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
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 auditor’s report.
03. Financial Review
80
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Other matters we are required to address
•
Following the recommendation from the audit committee,
we were appointed by the Company on 11 July 2019 to audit
the Financial Statements for the year ending 31 March 2020
and subsequent financial periods.
The period of total uninterrupted engagement including
previous renewals and reappointments is six years, covering
the years ending 31 March 2020 to 31 March 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.
Ashley Coups
(Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP,
Statutory Auditor
London
6 June 2025
Hungary
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 81
Statement of comprehensive income
For the year ended 31 March 2025
Year Ended 31 March 2025 Year Ended 31 March 2024
Note
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Net Gains/(Losses) on Investments and Foreign Exchange
Net Gains on Investments at Fair Value 8 – 115,856 115,856 – 94,636 94,636
Net Losses on Foreign Exchange – (403) (403) – (817) (817)
Income
Dividends 2 65,353 3,944 69,297 65,350 6,560 71,910
Other Income 2 5,038 – 5,038 6,536 – 6,536
70,391 119,397 189,788 71,886 100,379 172,265
Expenses
AIFM Fee 3 (4,792) (12,620) (17,412) (5,130) (11,970) (17,100)
Other Expenses 4 (2,294) – (2,294) (1,774) – (1,774)
(7,086) (12,620) (19,706) (6,904) (11,970) (18,874)
Profit Before Finance Costs and Taxation 63,305 106,777 170,082 64,982 88,409 153,391
Finance Costs 5 (700) (1,885) (2,585) (751) (1,747) (2,498)
Profit Before Taxation 62,605 104,892 167,497 64,231 86,662 150,893
Tax Expense 6 (4,682) (9,119) (13,801) (5,366) (5,201) (10,567)
Profit for the Year 57,923 95,773 153,696 58,865 81,461 140,326
Profit Attributable to Equity Holders of the Company 57,923 95,773 153,696 58,865 81,461 140,326
Earnings per Share 7 5.41p 8.95p 14.36p 5.18p 7.17p 12.35p
•
Under the Company’s Articles of Association, the capital element of return is not distributable.
•
The total column of this statement represents the profit and loss account of the Company.
•
The accompanying notes on pages 86 to 103 are an integral part of the Financial Statements.
03. Financial Review
82
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Note
As at 31 March 2025
£’000
As at 31 March 2024
£’000
Non-Current Assets
Investments at Fair Value Through Profit or Loss 8 2,002,617 1,995,232
Current Assets
Trade and Other Receivables 9 8,374 10,759
Cash and Cash Equivalents 75,549 145,736
Total Current Assets 83,923 156,495
Current Liabilities
Bank Loan 10 (80,000) (100,000)
Other Payables 10 (4,406) (6,401)
Provisions 11 (416) –
Total Current Liabilities (84,822) (106,401)
Net Current (Liabilities)/Assets (899) 50,094
Non-Current Liabilities
Capital Gains Tax Provision 6 (16,276) (10,463)
Total Assets Less Liabilities 1,985,442 2,034,863
Share Capital and Reserves
Equity Share Capital
12,
1(j)
54,241 60,932
Capital Redemption Reserve 1(j) 28,428 21,737
Capital Reserve 1(j) 1,334,729 1,388,186
Special Distributable Reserve 1(j) 433,546 433,546
Revenue Reserve 1(j) 134,498
130,462
Equity Shareholders’ Funds 1,985,442 2,034,863
Net Asset Value Pence per Share
(a)
193.7 182.5
The accompanying notes on pages 86 to 103 are an integral part of the Financial Statements.
The Financial Statements of Templeton Emerging Markets Investment Trust plc (company registration number SC118022) on
pages 81 to 103 were approved for issue by the Board and signed on 6 June 2025.
Angus Macpherson
Chairman
Simon Jeffreys
Director
(a) Based on shares in issue excluding shares held in treasury.
Statement of financial position
As at 31 March 2025
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 83
Statement of changes in equity
For the year ended 31 March 2025
Note
Equity Share
Capital
£’000
Capital
Redemption
Reserve
£’000
Capital
Reserve
£’000
Special
Distributable
Reserve
£’000
Revenue
Reserve
£’000
Total
£’000
Balance at 31 March 2023 63,148 19,521 1,372,654 433,546 128,634 2,017,503
Profit for the Year – – 81,461 – 58,865 140,326
Equity Dividends 13 – – – – (57,037) (57,037)
Purchase and Cancellation of Own Shares 12 (2,216) 2,216 (65,929) – – (65,929)
Balance at 31 March 2024 60,932 21,737 1,388,186 433,546 130,462 2,034,863
(Loss)/Profit for the Year – – 95,773 – 57,923 153,696
Equity Dividends 13 – – – – (53,887) (53,887)
Purchase and Cancellation of Own Shares 12 (4,500) 4,500 (149,230) – – (149,230)
Cancellation of Treasury Shares 12 (2,191) 2,191 – – – –
Balance at 31 March 2025 54,241 28,428 1,334,729 433,546 134,498 1,985,442
The accompanying notes on pages 86 to 103 are an integral part of the Financial Statements.
03. Financial Review
84
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Note
For the Year to 31 March 2025
£’000
For the Year to 31 March 2024
£’000
Cash Flows From Operating Activities
Profit Before Taxation 167,497 150,893
Adjustments to Reconcile Profit Before Taxation
to Cash Used in Operations:
Bank and Deposit Interest Income Recognised (5,015) (6,518)
Dividend Income Recognised (69,297) (71,910)
Finance Costs 2,585 2,498
Net Gains on Investments at Fair Value 8 (115,856) (94,636)
Net Losses on Foreign Exchange 403 817
Decrease/(Increase) in Debtors 85 (23)
Increase/(Decrease) in Creditors 10 (29)
Cash Used in Operations (19,588) (18,908)
Bank and Deposit Interest Received 5,089 6,434
Dividends Received 69,421 71,024
Bank Overdraft Interest Paid (2) (2)
Tax Paid (7,614) (9,945)
Net Realised Losses on Foreign Currency (82) (435)
Net Cash Inflow From Operating Activities 47,224 48,168
Cash Flows From Investing Activities
Purchases of Non-Current Financial Assets (402,009) (463,750)
Sales of Non-Current Financial Assets 509,268
553,641
Net Cash Inflow From Investing Activities 107,259 89,891
Cash Flows From Financing Activities
Equity Dividends Paid 13 (53,887) (57,037)
Purchase and Cancellation of Own Shares (149,034) (65,784)
Repayment of Fixed Term Loan (100,000) –
Drawdown of Revolving Credit Facility 80,000 –
Interest and Fees Paid on Bank Loans (2,165) (2,490)
Proceeds from Share Forfeiture 821 –
Refund of Unclaimed Dividends 220 –
Charity Donations (625) –
Net Cash Outflow From Financing Activities (224,670) (125,311)
Net (Decrease)/Increase in Cash
(70,187) 12,748
Cash at the Start of the Year
145,736 132,988
Net Unrealised Gains/(Losses) on Foreign Currency Cash and Cash
Equivalents
0 0
Cash at the End of the Year
75,549 145,736
Statement of cash flows
For the year ended 31 March 2025
The accompanying notes on pages 86 to 103 are an integral part of the Financial Statements.
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 85
Reconciliation of Liabilities Arising From Bank Loans
Liabilities as
at 31 March 2024
£’000
Cash Flows
£’000
Profit & Loss
£’000
Liabilities as
at 31 March 2025
£’000
Revolving Credit Facility – 80,000 - 80,000
- Interest and Fees Payable – (71) 838 767
Fixed Term Loan 100,000 (100,000) - -
- Interest and Fees Payable 349 (2,094) 1,745 -
Total Liabilities From Bank Loans 100,349 (22,165) 2,583 80,767
Liabilities as
at 31 March 2023
£’000
Cash Flows
£’000
Profit & Loss
£’000
Liabilities as
at 31 March 2024
£’000
Revolving Credit Facility – – – –
- Fees Payable – (401) 401 –
Fixed Term Loan 100,000 – – 100,000
- Interest and Fees Payable 343 (2,089) 2,095 349
Total Liabilities From Bank Loans 100,343 (2,490) 2,496 100,349
03. Financial Review
86
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Notes to the financial statements
As at 31 March 2025
Accounting Policies
Basis of preparation
The Financial Statements of the Company have been
prepared in accordance with UK adopted International
Accounting Standards. The Financial Statements have
also been prepared in accordance with the Statement of
Recommended Practice (‘SORP’) for investment trusts
issued by the Association of Investment Companies
(‘AIC’) and updated in July 2022 insofar as the SORP is
compatible with International Accounting Standards.
The Financial Statements have been prepared on the
historical cost basis, except for the measurement at fair
value of certain financial instruments. All financial assets
and financial liabilities are recognised (or derecognised)
on the date of the transaction using ‘trade date
accounting’. The principal accounting policies adopted
are set out below.
1
(a)
Accounting Standards
Effective Date for Annual Periods Beginning On or After
IAS 21 Amendments: Lack of Exchangeability 1 January 2025
The Directors expect that the amendments listed above will have either no impact or that any impact will not be material to the
Financial Statements of the Company in the next reporting periods.
Adoption of new and revised Accounting Standards
At the date of authorisation of these Financial
Statements, the following standards were assessed to be
relevant and are effective for annual periods beginning
on or after 1 January 2024:
•
IAS 1 Amendments: Classification of Liabilities as
Current or Non-Current. This amendment is designed
to help preparers determine whether debt and other
liabilities in the statement of financial position with an
uncertain settlement date should be classified as
current or non-current.
The amendments listed above did not have any impact
on the amounts recognised in the current reporting
period.
At the date of authorisation of these Financial
Statements, the following standards and interpretations
which have not been applied in these Financial
Statements were in issue but not yet applicable:
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 87
Going concern
The Directors have a reasonable expectation that the
Company has sufficient resources to continue in
operational existence for the period to 31 March 2027,
which is at least 12months from the date of the approval
of these Financial Statements. The Directors reviewed
income forecasts covering the next two financial years,
including interest and fees arising from the revolving
credit loan facility. The Directors considered the
principal and emerging risks and uncertainties disclosed
on pages 44 to 46.
At 31 March 2025, the Company had net current
liabilities of £899,000 (31 March 2024: net current assets
of £50,094,000). In addition, the Company holds
a portfolio of largely liquid assets that, if required, can be
sold to maintain adequate cash balances to meet its
expected cash flows, including current liabilities relating
to the loans under the £122 million multi-currency
revolving credit facility which will mature on 30 January
2026. The Directors also reviewed scenarios of a
significant drop in value of the assets and noted that in
those scenarios they would still be significantly higher
than the Company’s liabilities. They have also confirmed
the resiliency of the Company’s key service providers
and are satisfied that their contingency plans and
working arrangements are sustainable.
The Board has established a framework of prudent and
effective controls performed periodically by the Audit
and Risk Committee, which enable risks to be assessed
and managed. Therefore, the going concern basis has
been adopted in preparing the Company’s Financial
Statements. The Going Concern statement is set out on
page 59.
Functional currency
As the Company is a UK investment trust, whose share
capital is issued in the UK and denominated in sterling,
the Directors consider that the functional currency of
the Company is sterling.
Estimates, assumptions and judgements
There have been no significant estimates, assumptions
or judgements for the year.
In preparing these Financial Statements, the Directors
have considered the impact of climate change as a
principal risk as set out on page 45 and have concluded
that there was no further impact of climate change to be
considered as the investments are valued based on
market pricing. In line with UK adopted International
Accounting Standards the investments are valued at fair
value, which for the Company are the bid prices quoted
on the relevant stock exchange at the date of the
Statement of Financial Position and therefore reflect
market participants’ views of climate change risk on the
investments held.
Presentation of statement of
comprehensive income
To reflect accurately the activities of an investment trust
company and in accordance with guidance issued by
the AIC, supplementary information which analyses the
Statement of Comprehensive Income between items of
a revenue and capital nature has been presented within
the Statement of Comprehensive Income. In
accordance with the Company’s Articles of Association,
net capital profits may not be distributed by way of
dividend. Additionally, the net revenue is the measure
that the Directors believe appropriate in assessing the
Company’s compliance with certain requirements set
out in Section 1158 of the Corporation Tax Act 2010.
(b)
Income
Dividends receivable on equity shares are treated as
revenue for the year on an ex-dividend basis. Where no
ex-dividend date is available, dividends are recognised
on their due date. Provision is made for any dividends
not expected to be received.
Where the Company has elected to receive its dividends
in the form of additional shares rather than in cash, the
amount of the cash dividend is recognised in the
revenue column of the Statement of Comprehensive
Income. Any excess in the value of the shares received
over the amount of the cash dividend forgone is
recognised in the capital column of the Statement of
Comprehensive Income.
Special dividends receivable are treated as repayment
of capital or as revenue depending on the facts of each
particular case. Interest on bank deposits is recognised
on an accrual basis.
Stock lending income is shown gross of associated costs
and recognised in revenue as earned.
(c)
03. Financial Review
88
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Expenses
All expenses are accounted for on an accrual basis
and are charged through the revenue and capital
sections of the Statement of Comprehensive Income
according to the Directors’ expectation of future returns
except as follows:
•
Expenses relating to the purchase or disposal of an
investment are treated as capital. Details of
transaction costs on purchases and sales of
investments are disclosed in Note 8; and
•
Expenses are treated as capital where a connection
with the maintenance or enhancement of the value
of the investments can be demonstrated. From
1October 2024, the allocation of the annual AIFM fee to
the capital account was changed from 70% to 75%, with
the remainder being allocated to revenue. The Board
believes that this is more reflective of the expected
long-term split of returns between capital and revenue.
(d)
Finance costs
Finance costs relating to bank loans are accounted for
on an accrual basis using the effective interest method in
the Statement of Comprehensive Income according to
the Directors’ expectations of future returns. Finance
costs relate to interest and fees on bank loans and
overdrafts. From 1 October 2024, the allocation of finance
costs to the capital account, except for interest and fees
on overdrafts, was changed from 70% to 75%. The Board
believes that this is more reflective of the expected
long-term split of returns between capital and revenue.
(e)
Taxation
The tax expense represents the sum of current and
deferred tax. Tax receivables will be recognised when it
is probable that the benefit will flow to the entity and the
benefit can be reliably measured. In line with the
recommendations of the SORP, the allocation method
used to calculate tax relief on expenses presented
against capital returns in the supplementary information
in the Statement of Comprehensive Income is the
‘marginal basis’. Under this basis, if taxable income is
capable of being offset entirely by expenses presented
in the revenue return column of the Statement of
Comprehensive Income, then no tax relief is transferred
to the capital return column.
Deferred taxation is recognised in respect of all taxable
temporary differences that have originated but not
reversed at the year-end date, where transactions or
(f)
Investments held at fair value
through profit or loss
The Company classifies its equity investments based on
their contractual cash flow characteristics and the
Company’s business model for managing the assets.
The Company’s business is investing in financial assets
with a view to profiting from their total return in the
form of revenue and capital growth. This portfolio of
financial assets is managed, and its performance
evaluated on a fair value basis, in accordance with
a documented investment strategy, and information
about the portfolio is provided internally on that basis to
the Company’s Directors and other key management
personnel. Equity investments do not meet the
contractual cash flows test so are measured at fair value.
Accordingly, upon initial recognition, all the Company’s
non-current asset investments are held at ‘fair value
through profit or loss’. They are included initially at fair
value, which is taken to be their cost excluding expenses
incidental to the acquisition.
Subsequently, the investments are valued at ‘fair value’,
which is measured as follows:
(g)
events that result in an obligation to pay more tax in the
future or rights to pay less tax in the future have
occurred at the year-end date.
This is subject to deferred tax assets only being
recognised to the extent that it is probable that taxable
profit will be available against which the deductible
temporary difference can be utilised. Deferred tax assets
and liabilities are measured at the rates applicable to the
legal jurisdictions in which they arise.
Due to the Company’s status as an investment trust
company, and its intention to continue to meet the
eligibility conditions of Section 1158 of the Corporation
Tax Act 2010 and the ongoing requirements of The
Investment Trust (Approved Company) (Tax) Regulations
2011, the Company has not provided deferred tax in
respect of UK corporation tax on any capital gains and
losses arising on the revaluation or disposal of
investments. Where appropriate, the Company provides
for deferred tax in respect of overseas taxes on any
capital gains arising on the revaluation of investments.
The carrying amount of deferred tax assets is reviewed
at each year-end date and reduced to the extent
that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset
to be recovered.
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 89
Foreign currencies
Transactions involving foreign currencies are translated
to sterling (the Company’s functional currency) at the
spot exchange rates ruling on the date of the
transactions. Assets and liabilities in foreign currencies
are translated at the rates of exchange at the year-end
date. Foreign currency gains and losses are included in
the Statement of Comprehensive Income and allocated
as capital or income depending on the nature of the
transaction giving rise to the gain or loss.
(h)
Financial instruments
Cash comprises cash in hand and demand deposits.
Cash equivalents are short-term, highly liquid
investments that are readily convertible to known
amounts of cash that are subject to an insignificant risk
of changes in value.
Bank loans are classified as financial liabilities at
amortised cost. They are initially measured as the
proceeds net of direct issue costs and subsequently
measured at amortised cost. Interest payable on the
bank loan is accounted for on an accrual basis in the
Statement of Comprehensive Income. The amortisation
of direct issue costs is accounted for on an accrual basis
in the Statement of Comprehensive Income using the
effective interest method.
(i)
The fair value of financial instruments at the year-end
date is, ordinarily, based on the latest quoted bid price
at, or before, the US market close (without deduction for
any of the estimated future selling costs), if the
instrument is held in active markets. This represents a
Level 1 classification under IFRS 13. For all financial
instruments not traded in an active market or where
market price is not deemed representative of fair value,
valuation techniques are employed to determine fair
value. Valuation techniques include the market
approach (i.e. using recent arm’s length market
transactions adjusted as necessary and reference to the
market value of another instrument that is substantially
the same) and the income approach (i.e., discounted
cash flow analysis making use of available and
supportable market data as possible).
Gains and losses arising from changes in fair value are
included in the net profit or loss for the period as a
capital item in the Statement of Comprehensive Income.
Share capital and reserves
Equity Share Capital – represents the nominal value of
the issued share capital. This reserve is not distributable.
Capital Redemption Reserve – represents the nominal
value of shares repurchased and cancelled. This reserve
is not distributable.
Capital Reserve – gains and losses on realisation of
investments; changes in fair value of investments which
are readily convertible to cash, without accepting
adverse terms; realised exchange differences of a
capital nature; changes in the fair value of investments
that are not readily convertible to cash, without
accepting adverse terms; and the amounts by which
other assets and liabilities valued at fair value differ from
their book value are within this reserve. Additionally, from
1 October 2024 75% (prior to 1October2024: 70%) of the
annual AIFM fee and finance costs are charged to this
reserve in accordance with accounting policies 1(d) and
1(e). Purchases of the Company’s own shares are funded
from the realised component of the Capital Reserve. The
Company’s Articles of Association preclude it from
making any distribution of capital profits by way of
dividend. If treasury shares are subsequently cancelled,
the nominal value is transferred out of Equity Share
Capital and into the Capital Redemption Reserve.
Special Distributable Reserve – reserve created upon
the transfer of the balances of the Share Premium
Account and of the Capital Redemption Reserve in
December 2008. This reserve is fully distributable.
Revenue Reserve – represents net income earned that
has not been distributed to shareholders. This reserve is
fully distributable.
Income recognised in the Statement of Comprehensive
Income is allocated to applicable reserves in the
Statement of Changes in Equity.
(j)
03. Financial Review
90
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Income
2
2025 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Dividends
(a)
International Dividends 65,234 3,944 69,178 64,489 6,560 71,049
UK Dividends 119 – 119 861 – 861
65,353 3,944 69,297 65,350 6,560 71,910
Other Income
Bank and Deposit Interest 5,015 – 5,015 6,518 – 6,518
Stock Lending Income 23 – 23 18 – 18
5,038 – 5,038 6,536 – 6,536
Total 70,391 3,944 74,335 71,886 6,560 78,446
(a) The Company received special dividends amounting to £8.6 million (2024: £8.2 million) of which £3.9 million (2024: £6.6 million) was classified as capital and £4.7 million (2024: £1.6 million) was
classified as revenue.
The AIFM fee is paid monthly and based on the month end total net assets of the Company. From 1 July 2024, the AIFM fee was
reduced to 1% of the first £1 billion of net assets, 0.70% of net assets between £1 billion and £2 billion, and 0.50% of net assets over
£2 billion. The previous fee structure was 1% of the first £1 billion of net assets, 0.75% of net assets between £1 billion and £2 billion,
and 0.50% of net assets over £2 billion.
From 1 October 2024, 75% of the annual AIFM fee has been allocated to the capital account, with the remainder being allocated to
revenue. The previous allocation was 70%.
AIFM Fee
3
2025 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
AIFM Fee 4,792 12,620 17,412 5,130 11,970 17,100
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 91
Other Expenses
4
2025
£’000
2024
£’000
Custody Fees 502 432
Marketing Fees 352 344
Directors’ Remuneration 344 333
Membership Fees 205 171
Tax Advisory Fees/(Tax Advisory Fees Net of Refund) 175 (98)
Registrar Fees 172 117
Depository Fees 169 166
Auditor’s Remuneration
- Audit of the Annual Financial Statements
- Review of the Half Yearly Report
56
11
55
10
Broker Fees 43 40
Printing and Postage Fees 23 17
Other Expenses 242 187
Total 2,294 1,774
Finance Costs
5
2025 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Fixed Term Loan 488 1,257 1,745 629 1,466 2,095
Revolving Credit Facility 210 628 838 120 281 401
Bank Overdraft Interest 2 – 2 2 – 2
Total 700 1,885 2,585 751 1,747 2,498
03. Financial Review
92
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
2025
£’000
2024
£’000
Profit Before Taxation 167,497 150,893
Theoretical Tax at UK Corporation Tax Rate of 25% 41,874 37,723
Effects of:
- Capital Element of (Profit)/Loss (29,849) (25,095)
- Irrecoverable Overseas Withholding Tax 4,682 5,366
- Excess Management Expenses 2,733 2,224
- Overseas Capital Gains Tax Paid 3,306 4,482
- Dividends Not Subject to Corporation Tax (14,543) (14,421)
- Movement in Overseas Capital Gains Tax Liability 5,813 719
- UK Dividends (30) (215)
- Overseas Tax Expensed (185) (216)
Actual Tax Charge 13,801 10,567
Tax on Ordinary Activities
6
2025 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Irrecoverable Overseas Withholding Tax 4,682 – 4,682 5,366 – 5,366
Capital Gains Tax Paid – 3,306 3,306 – 4,482 4,482
Total Current Tax 4,682 3,306 7,988 5,366 4,482 9,848
Capital Gains Tax Provision – 5,813 5,813 – 719 719
Total 4,682 9,119 13,801 5,366 5,201 10,567
As at 31 March 2025 the Company had unutilised management expenses and non-trade deficits of £315.3 million carried forward
(2024: £304.4 million). These balances have been generated because a large part of the Company’s income is derived from
dividends which are not taxed. Based on current UK tax law, the Company is not expected to generate taxable income in a future
period in excess of deductible expenses for that period and, accordingly, is unlikely to be able to reduce future tax liabilities by
offsetting these excess management expenses. These excess management expenses are therefore not recognised as a deferred
tax asset of £78.8 million (2024: £76.1 million) based on a prospective corporation tax rate of 25% (2024: 25%). The UK corporation
tax rate is currently 25%.
Movement in Provision for Capital Gains Tax
(a)
2025
£’000
2024
£’000
Balance Brought Forward 10,463 9,744
Charge For the Year 9,119 5,201
Capital Gains Tax Paid (3,306) (4,482)
Balance Carried Forward 16,276 10,463
(a) A provision for deferred capital gains tax has been recognised in relation to unrealised gains for holdings in India.
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 93
Earnings per Share
7
2025 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Earnings 57,923 95,773 153,696 58,865 81,461 140,326
The earnings per share is based on the profit attributable to equity holders and on the weighted average number of shares in
issue, excluding shares held in treasury, during the year of 1,070,018,105 (year to 31 March 2024: 1,136,517,365).
2025 2024
Revenue
pence
Capital
pence
Total
pence
Revenue
pence
Capital
pence
Total
pence
Earnings per Share 5.41 8.95 14.36 5.18 7.17 12.35
All investments have been recognised at fair value with gains and losses recorded through the Statement of Comprehensive
Income. Transaction costs for the year on purchases were £404,000 (2024: £546,000) and transaction costs for the year on sales
were £978,000 (2024: £1,210,000). The aggregate transaction costs for the year were £1,382,000 (2024: £1,756,000).
Financial Assets - Investments
8
2025
£’000
2024
£’000
Opening Investments
Book Cost 1,740,112 1,705,635
Net Unrealised Gains 255,120 287,140
Opening Fair Value 1,995,232 1,992,775
Movements in the Year
Additions at Cost 399,390 463,628
Disposals Proceeds (507,861) (555,807)
Net Gains on Investments at Fair Value 115,856 94,636
2,002,617 1,995,232
Closing Investments
Book Cost 1,710,894 1,740,112
Net Unrealised Gains 291,723 255,120
Closing Investments 2,002,617 1,995,232
2025
£’000
2024
£’000
Net Gains/(Losses) on Investments at Fair Value Comprise:
Net Realised Gains on Sale of Investments at Fair Value 79,253 126,656
Net Movement in Unrealised Gains/(Losses) 36,603 (32,020)
Net Gains on Investments at Fair Value 115,856 94,636
03. Financial Review
94
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
2025
£’000
2024
£’000
Dividends Receivable 8,153 8,277
Overseas Tax Recoverable 142 516
Sales Awaiting Settlement 55 1,783
Other Debtors 24 183
Total 8,374 10,759
Trade and Other Receivables
9
2025
£’000
2024
£’000
Revolving Credit Facility Payable 80,000 –
AIFM Fee 1,446 1,369
Purchase of Investments for Future Settlement 1,048 3,667
Interest and Fees on Revolving Credit Facility 767 –
Amounts Owed for Share Buybacks 658 462
Accrued Expenses 487 554
Fixed Term Loan – 100,000
Interest and Fees on Fixed Term Loan – 349
Total 84,406 106,401
Current Payables
10
Fixed term loan
On 31 January 2020, the Company entered into a term loan (the ‘term loan’) for a period of five years with Scotiabank Europe plc for
£100 million. With effect from 28 September 2022, the term loan was transferred by novation from Scotiabank Europe plc to The
Bank of Nova Scotia, London Branch. All other contractual terms and conditions remained the same. The term loan was fully repaid
upon its maturity on 31 January 2025.
The term loan incurred interest at the fixed rate of 2.089%. Under the conditions of the term loan, the net assets were not to be less
than £1,015 million and the adjusted net asset coverage to all borrowings was not to be less than 3.5:1.
The facility was shown at amortised cost. From 1 October 2024, interest costs were charged to capital (75%) and revenue (25%).
Thisis in accordance with the Company’s revised accounting policies. Previously, interest costs were charged to capital (70%) and
revenue (30%). The Board believes that this is more reflective of the expected long-term split of returns between capital and
revenue.
Revolving credit facility
On 31 January 2025, the Company entered into a £122 million multi-currency unsecured revolving credit facility (the ‘facility’) for a
period of one year with The Bank of Nova Scotia, London Branch.
The fee on unutilised commitments is a flat fee of 0.40% per annum.
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 95
Under the facility balances can be drawn down in GBP, USD or CNH. The interest margin is 1.10% as follows: USD drawdowns incur
interest at 1.10% per annum over the daily secured overnight financing rate (‘SOFR’) administered by the Federal Reserve Bank of
New York, GBP drawdowns incur interest at 1.10% per annum over the daily sterling overnight index average (‘SONIA’) published by
the Bank of England and CNH drawdowns incur interest at 1.10% per annum over the Hong Kong Interbank Offered Rate (‘HIBOR’)
as quoted by the Hongkong and Shanghai Banking Corporation Limited.
Under the terms of the facility, the net assets cannot be less than £1,015 million and the adjusted net asset coverage to all
borrowings cannot be less than 3.5:1.
On 31 January 2025, the Company drew down £80 million in GBP from the revolving credit facility, of which £40 million is
repayable within three months. The remaining £40 million is repayable within six months. Facility drawdowns are shown at
amortised cost and revalued for exchange rate movements. Any gain or loss arising from changes in exchange rates is included in
the capital reserves and shown in the capital column of the Statement of Comprehensive Income. Interest costs are charged to
capital (75%) and revenue (25%) in accordance with the Company’s accounting policies.
Provisions
2025
£’000
2024
£’000
Provision for claims arising from share forfeitures 416 –
Total 416 –
11
2025 2024
Ordinary Shares Held In Treasury
£’000 Number £’000 Number
Opening Ordinary Shares of 5 Pence 5,191 103,825,895 5,191 103,825,895
Cancellation of Shares (2,191) (43,825,895) – –
Closing Ordinary Shares of 5 Pence 3,000 60,000,000 5,191 103,825,895
Total Ordinary Shares In Issue and Held In Treasury
at the End of the Year
54,241 1,084,828,725 60,932 1,218,644,512
The Company’s shares (except those held in treasury) have unrestricted voting rights at all general meetings, are entitled to all of
the profits available for distribution by way of dividend and are entitled to repayment of all of the Company’s capital on winding up.
Equity Share Capital
2025 2024
Ordinary Shares In Issue
£’000 Number £’000 Number
Opening Ordinary Shares of 5 Pence 55,741 1,114,818,617 57,957 1,159,138,372
Purchase and Cancellation of Own Shares (4,500) (89,989,892) (2,216) (44,319,755)
Closing Ordinary Shares of 5 Pence 51,241 1,024,828,725 55,741 1,114,818,617
12
The Company completed a shareholder tracing exercise for unidentified shareholdings and completed a legal forfeiture and
disposal exercise. This resulted in £821,000 and £220,000 being returned to the Company for forfeited shares and unclaimed
dividends, respectively. A donation of £625,000 was subsequently made by the Company to four charities selected by the Board.
The remaining £416,000 will be kept for a period of 3 years in the case that verified ownership is established. Further details can
be found on page 48.
03. Financial Review
96
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Dividends
2025 2024
Rate (pence) £’000 Rate (pence) £’000
Declared and Paid in the Financial Year
Dividend on Shares:
Final Dividends for the Years Ended 31 March 2024 and
31 March 2023
3.00 32,906 3.00 34,562
Interim Dividends for the Six-Month Periods Ended 30 September
2024 and 30 September 2023
2.00 20,981 2.00 22,475
Total 5.00 53,887 5.00 57,037
Proposed for Approval at the Company’s AGM
Dividend on Shares:
Final Dividend for the Year Ended 31 March 2025 3.25 33,046 3.00 33,138
Dividends are recognised when the shareholders’ right to receive the payment is established. In the case of the final dividend, this
means that it is not recognised until approval is received from shareholders at the AGM. The proposed final dividend of 3.25pence
per share will be funded from the revenue reserve and the payment of this dividend will not threaten the going concern or viability
of the Company.
13
During the year, 89,989,892 shares were bought back for cancellation at a cost of £149,230,200 (2024: 44,319,755 shares were
bought back for cancellation at a cost of £65,929,000). All shares bought back in the year were cancelled, with none being placed
in treasury (2024: no shares were placed into treasury).
On 25 March 2025, 43,825,895 shares held in Treasury were cancelled. Following cancellation, 60,000,000 shares remained
inTreasury.
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 97
Related Party Transactions
There were no transactions with related parties, other
than the fees paid to the Directors and the AIFM during
the financial years ended 31 March 2025 and 31 March
2024 respectively, which have a material effect on the
results or the financial position of the Company. Details
of fees paid to the Directors are included on page 62
and details of the fee paid to the AIFM are included on
page 90.
Risk Management
In pursuing the Company’s objective, as set out on
page 36 of this Annual Report, the Company holds a
number of financial instruments which are exposed to a
variety of risks that could result in either a reduction in
the Company’s net assets or a reduction in the profits
available for dividends.
The main risks arising from the Company’s financial
instruments are investment and concentration risk,
market risk (which comprises market price risk, foreign
currency risk and interest rate risk), liquidity risk and
counterparty and credit risk.
The objectives, policies and processes for managing
these risks, and the methods used to measure the risks,
are set out below. These policies have remained
unchanged since the beginning of the year to which
these Financial Statements relate.
Investment and concentration risk
The Company may invest a greater portion of its assets
than the benchmark in the securities of one issuer,
securities of a particular country, or securities within one
sector. As a result, there is the potential for an increased
concentration of exposure to economic, business,
political or other changes affecting similar issues or
securities, which may result in greater fluctuation in the
value of the portfolio. Investment risk and a certain
degree of concentration risk is a known and necessary
effect of the stated investment approach in line with the
investment policy. The Directors regularly review the
portfolio composition and asset allocation and discuss
related developments with the Investment Managers.
Security, country, and sector concentrations are
monitored by the Manager’s risk and compliance teams
on a regular basis and any concerns are highlighted to
the Investment Managers for remedial action and
brought to the attention of the Directors.
Market price risk
Market risk arises mainly from uncertainties about future
prices of financial instruments held. It represents the
potential loss that the Company might suffer through
holding market positions in the face of price movements.
The Directors meet quarterly to consider the asset
allocation of the portfolio and to discuss the risks
associated with particular securities, countries or
sectors. The Investment Managers select securities in
the portfolio in accordance with the investment policy,
and the overall asset allocation parameters described
above, and seek to ensure that individual stocks also
meet the intended risk/reward profile.
The Company does not use derivative instruments to
hedge the investment portfolio against market price risk.
100% (2024: 100%) of the Company’s investment
portfolio is listed on stock exchanges. If share prices as
at 31 March 2025 had decreased by 30% (2024: 30%
decrease) with all other variables remaining constant,
the Statement of Comprehensive Income capital return
and the net assets attributable to equity shareholders
would have decreased by £600,785,000 (2024:
£598,570,000). A 30% increase (2024: 30% increase) in
share prices would have resulted in a proportionate
equal and opposite effect on the above amounts, on the
basis that all other variables remain constant.
Foreign currency risk
Currency translation movements can significantly affect
the income and capital value of the Company’s
investments, as the majority of the Company’s assets
and income are denominated in currencies other than
sterling, which is the Company’s functional currency.
The Investment Managers have identified three
principal areas where foreign currency risk could affect
the Company:
•
Movements in rates affect the value of investments;
•
Movements in rates affect short-term timing
differences; and
•
Movements in rates affect the income received.
14
15
03. Financial Review
98
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
The Company does not hedge the sterling value of investments that are priced in other currencies. The Company may be subject
to short-term exposure to exchange rate movements, for instance where there is a difference between the date on which an
investment purchase or sale is entered into and the date on which it is settled.
The Company receives income in currencies other than sterling and the sterling values of this income can be affected by
movements in exchange rates. The Company converts all receipts of income into sterling on or near the date of receipt. However,
it does not hedge or otherwise seek to avoid rate movement risk on income accrued but not received.
The fair value of the Company’s items denominated in a foreign currency as at 31 March are shown below:
The above tables are based on the currencies of the country where shares are listed rather than the underlying currencies of the
countries where the companies earn revenue.
As at 31 March 2025, 70.2% (2024: 69.3%) of investments denominated in US dollar, Hong Kong dollar and Euro are Chinese
companies with exposure to the Chinese yuan. The total exposure to Chinese yuan was £549.3 million (2024: £490.3 million), out
of which £42.2 million (2024: £33.0 million) were investments denominated in Chinese yuan.
2025
Currency
Trade and
Other Receivables
£’000
Cash at Bank
£’000
Trade, Bank Loans,
and Other Payables
£’000
Total Net Foreign
Currency Exposure
£’000
Investments at
Fair Value Through
Profit or Loss
£’000
Hong Kong dollar 51 – – 51 390,136
Taiwan dollar 1,165 – (406) 759 335,133
Korean won 5,373 – – 5,373 310,143
Indian rupee – – (16,312) (16,312) 280,837
US dollar 889 – (609) 280 198,907
Euro – – – – 132,880
Other 872 48 (1) 919 352,538
2024
Currency
Trade and
Other Receivables
£’000
Cash at Bank
£’000
Trade, Bank Loans,
and Other Payables
£’000
Total Net Foreign
Currency Exposure
£’000
Investments at
Fair Value Through
Profit or Loss
£’000
Korean won – – – – 426,407
Hong Kong dollar 1,783 1 – 1,784 371,454
Taiwan dollar 516 – – 516 358,245
Indian rupee – – – – 246,587
US dollar – – – – 183,034
Other – 99 (3,667) (3,568) 382,705
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 99
Foreign currency sensitivity
The following table illustrates the foreign currency sensitivity on the revenue and capital return. The revenue return impact
represents the impact on total income (which is mainly comprised of dividend income) had sterling strengthened relative to all
currencies by 10% throughout the year.
The capital return impact represents the impact of the financial assets and liabilities of the Company if sterling had strengthened
by 10% relative to all currencies on the reporting date. With all other variables held constant, the revenue and capital return would
have decreased by the below amounts.
A 10% weakening of sterling against all currencies would have resulted in an equal and opposite effect on the above amounts.
Interest rate risk
The Company is permitted to invest in interest bearing securities. Any change to the interest rates relevant to particular
securities may result in income either increasing or decreasing, or the Investment Managers being unable to secure similar returns
on the expiry of contracts or the sale of securities. In addition, changes to prevailing rates or changes in expectations of future
rates may result in an increase or decrease in the value of the securities held and the interest payable on bank loans when interest
rates are reset.
The fixed term loan incurred a fixed rate of interest and was carried at amortised cost rather than fair value. Hence, movements in
interest rates would not affect net asset values, as reported under the Company’s accounting policies.
Interest rate risk profile
The exposure of the financial assets and liabilities to floating interest rate risks at 31 March is shown below:
2025 2024
Revenue Return
£’000
Capital Return
£’000
Revenue Return
£’000
Capital Return
£’000
Hong Kong Dollar 72 39,013 655 37,324
Taiwan Dollar 888 33,589 1,253 35,876
Korean Won 789 31,552 853 42,641
Indian Rupee 243 26,452 237 24,659
US Dollar
54 19,979 789 18,303
Other
4,482 48,633 2,663 37,914
Total 6,528 199,218 6,450 196,717
Exposures vary throughout the year as a consequence of changes in the make-up of the net assets of the Company. Cash
balances are held on call deposit and earn interest at the bank’s daily rate. The Company’s net assets are sensitive to changes in
interest rates on borrowings. There was no exposure to fixed interest investment securities during the year or at the year end.
2025
£’000
2024
£’000
Cash 75,549 145,736
Bank loans – Revolving Credit Facility (80,000) –
Net Exposure at Year End (4,451) 145,736
03. Financial Review
100
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Interest rate sensitivity
If the above level of cash and revolving credit facility were maintained for a year and interest rates were 100 basis points higher or
lower, the net profit after taxation would be impacted by the following amounts:
Liquidity risk
The Company’s assets comprise mainly securities listed on the stock exchanges of emerging economies. Liquidity can vary from
market to market and some securities may take a significant period to sell. As a closed ended investment trust, liquidity risks
attributable to the Company are less significant than for an open-ended fund.
The risk of the Company not having sufficient liquidity at any time to meet its obligations associated with financial liabilities is
considered by the Board to be mitigated, given the large number of quoted investments held in the portfolio and the liquid nature
of the portfolio of investments.
The Investment Managers review liquidity at the time of making each investment decision and monitor the evolving liquidity profile
of the portfolio regularly.
The below table details the maturity profile of the Company’s financial liabilities as at 31 March 2025, based on the earliest date on
which payment can be required and current exchange rates as at the balance sheet date:
2025 2024
100 Basis Points
Increase in Rate
£’000
100 Basis Points
Decrease in Rate
£’000
100 Basis Points
Increase in Rate
£’000
100 Basis Points
Decrease in Rate
£’000
Revenue 555 (555) 1,457 (1,457)
Capital (600) 600 – –
Total (45) 45 1,457 (1,457)
As at 31 March 2025
In One Year
or Less £’000
More Than One Year
and Not Later Than
Two Years £’000
More Than Two Years
and Not Later Than
Three Years £’000
More Than
Three Years £’000 Total £’000
Revolving Credit Facility 84,596 – – – 84,596
Fixed Term Loan – – – – –
Other Payables 4,055 – – – 4,055
Total 88,651 – – – 88,651
As at 31 March 2024
In One Year
or Less £’000
More Than One Year
and Not Later Than
Two Years £’000
More Than Two Years
and Not Later Than
Three Years £’000
More Than
Three Years £’000 Total £’000
Revolving Credit Facility – – – – –
Fixed Term Loan 102,095 – – – 102,095
Other Payables 6,052 – – – 6,052
Total 108,147 – – – 108,147
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 101
Counterparty and credit risk
Certain transactions in securities that the Company enters into
expose it to the risk that the counterparty will not deliver the
investment (purchase) or cash (in relation to sale or declared
dividend) after the Company has fulfilled its responsibilities.
The Company only buys and sells through brokers which have
been approved by the Investment Managers as an acceptable
counterparty. Limits are set as to the maximum exposure to
any individual broker that may exist at any time. Total exposure
is compared to monetary limits that vary based on the size and
creditworthiness of the counterparty. Counterparty spreads
and capital ratios are reviewed periodically. The amounts
under trade and other receivables and cash and cash
equivalents shown in the Statement of Financial Position
represent the maximum credit risk exposure at the year end.
The Company has an ongoing contract with its custodian
(JPMorgan Chase Bank) for the provision of custody services.
As part of the annual risk and custody review, the Company
reviewed the custody services provided by JPMorgan Chase
Bank and concluded that, while there are inherent custody risks
in investing in emerging markets, the custody network
The maximum aggregate value of securities on loan at any time during the year was £3,887,541 (2024: £5,892,895). Full details of the
collateral received is noted on page 104.
Fair value
Fair values are derived as follows:
•
Where assets are denominated in a foreign currency, they are converted into the sterling amount using period-end
rates of exchange;
•
Investments held by the Company on the basis set out in the accounting policies included in Note 1; and
•
Other financial assets and liabilities at the carrying value which is a reasonable approximation of the fair value.
31 March 2025 31 March 2024
Counterparty
Market Value of
Securities on
Loan £’000
Market Value of
Collateral
Received £’000
Market Value of
Securities on
Loan £’000
Market Value of
Collateral
Received £’000
Merrill Lynch International – – 3,831 5,082
UBS – – 211 276
Total – – 4,042 5,358
employed by TEMIT has appropriate controls in place to
mitigate those risks, and that these controls are consistent with
recommended industry practices and standards.
Securities held in custody are held in the Company’s name or
to its accounts. Details of holdings are received and
reconciled monthly. Cash is actively managed by Franklin
Templeton and is typically invested in overnight time deposits
in the name of TEMIT with an approved list of counterparties.
Any excess cash not invested will remain in a JPMorgan Chase
interest bearing account. There is no significant risk on debtors
and accrued income or tax at the year end.
During the year, the Company participated in a securities
lending programme through JPMorgan as the lending agents.
All securities on loan are Level 1 financial instruments, and
their value is determined by reference to the trading prices on
the stock market. As at 31 March 2025, the market value of the
securities on loan and the corresponding collateral received
were as follows:
03. Financial Review
102
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
The tables below analyse financial instruments carried at fair value by valuation method. The different levels have been defined
as follows:
Quoted prices (unadjusted) in active markets for identical assets and liabilities;
Inputs other than quoted prices included with level 1 that are observable for the asset or liability, either directly
(prices) or indirectly (derived from prices); and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The hierarchy valuation of listed investments through profit and loss is shown below:
31 March 2025 31 March 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Listed Investments 2,002,617 – –
(a)
2,002,617 1,995,232 – –
(a)
1,995,232
Level 1.
Level 2.
Level 3.
The following table presents the movement in Level 3 investments for the year ended:
The fixed term loan was shown at amortised cost within the Statement of Financial Position. If the fixed term loan was shown at
fair value the impact would be:
The fair value of the fixed term loan included in the table above was calculated by aggregating the expected future cash flows which
was discounted at a rate comprising the sum of the SONIA rate plus a spread. The fixed term loan at fair value was classed as Level 2.
The fixed term loan matured on 31 January 2025.
31 March 2025
£’000
31 March 2024
£’000
Opening Balance – –
Additions at Cost – Purchase of Level 3 Assets 37,952
(b)
–
Transfers From Level 3 Into Level 1 (55,095)
(b)
–
Disposal Proceeds – Sale of Level 3 Assets – (7,766)
(c)
Net Gains on Investments at Fair Value 18,122 7,766
Net Losses on Foreign Exchange (979) –
Level 3 Closing Balance – –
31 March 2025
£’000
31 March 2024
£’000
Fixed Term Loan at Amortised Cost – 100,000
Fixed Term Loan at Fair Value – 96,770
Increase in Net Assets – 3,230
(a) As at 31 March 2025 investments in Russian securities, LUKOIL and Sberbank of Russia, continue to be fair valued at zero and classified as Level 3 due to the inability of the Company to access
the local Moscow equity markets and the very limited access to the over-the-counter market. The fair value of these investments is based on a liquidity discount of 100% to the last traded price
for an exit price of zero.
(b) Represents the investment in Swiggy which was acquired during the year and initially classified as Level 3 due to its unlisted status. Following an initial public offering and its subsequent listing
on 13 November 2024, the holding in Swiggy was transferred from Level 3 to Level 1.
(c) Represents the sale of the holding in Yandex on 23 May 2023 for £7,766,000.
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 103
Significant Holdings in Investee Undertakings
As at 31 March 2025, TEMIT had no significant holdings of 3% or more of the issued class of security within the portfolio
whose shares are admitted to trading. As at 31 March 2024, TEMIT held 3% or more of the issued class of security in the
following portfolio holding whose shares are admitted to trading:
Contingent Liabilities
No contingent liabilities existed as at 31 March 2025
or 31 March 2024.
Contingent Assets
No contingent assets existed as at 31 March 2025 or
31 March 2024.
Financial Commitments
No financial commitments existed as at 31 March
2025 or 31 March 2024.
Events After the Reporting Period
The £40m tranche of debt matured on 30 April 2025,
this was partly replaced by borrowing CNH
300million, equivalent to £30.9 million at the time of
drawdown.
The proposed final dividend, which is disclosed in
Note 13.
Capital Management Policies
and Procedures
The Company’s objective is to provide long-term
capital appreciation for private and institutional
investors seeking exposure to global emerging
markets, supported by a culture of both strong
customer service and corporate governance.
The Board monitors and regularly reviews the
structure of the Company’s capital on an ongoing
basis. This review includes the investment
performance and outlook, discount management
mechanisms including share buybacks, gearing 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 Company’s investment policy allows borrowing
of up to 20% of net assets, measured at the time
of borrowing.
As at 31 March 2025, the Company had share capital
and reserves of £1,985,442,000 (31 March 2024:
£2,034,863,000). The Company’s policies and
procedures for managing capital are consistent with
the previous year.
31 March 2025 31 March 2024
Holding
% of Issued
Security Class
Held by TEMIT
Fair Value
£’000
% of Issued
Security Class
Held by TEMIT
Fair Value
£’000
Haier Smart Home – – 3.0 9,072
16
17
18
19
20
21
03. Financial Review
104
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Securities financing transactions – unaudited
The Company engages in Securities Financing Transactions (as defined in Article 3 of Regulation (EU) 2015/2365) as a result of its
stock lending programme. In accordance with Article 13 of the Regulation, the Company’s involvement in and exposures related to
SFT for the accounting period ended 31 March 2025 are detailed below.
Amount of securities on loan
The total value of securities on loan as a proportion of the
Company’s total lendable assets, as at the balance sheet
date, was 0.0%. Total lendable assets represent the aggregate
value of assets forming part of the Company’s securities
lending programme.
Re-use of collateral
Non-cash collateral received by way of title transfer collateral
arrangements in relation to securities lending transactions
cannot be sold, re-invested or pledged. The Company has the
right to sell or re-pledge non-cash collateral received in
circumstances such as default.
Collateral received
All collateral received by the Company in respect of securities
lending transactions is held at the Company’s custodian,
JPMorgan Chase Bank.
Collateral
The following table sets out details of the non-cash collateral
received by the Company by way of title transfer collateral
arrangements in securities lending transactions as at the
balance sheet date:
Issuer
Type and Quality
of Collateral
(a)
Currency Maturity Tenor
31 March 2025
£000
31 March 2024
£000
Kingdom of Belgium Government Sovereign Euro More than 1 year – 276
United Kingdom Government Sovereign Sterling More than 1 year – 5,082
Total Non-Cash Collateral Received – 5,358
(a) Quality of collateral pertaining to bond instruments has been assessed and reported in accordance with whether they are considered investment grade or below investment grade. Investment
grade securities are those issued by an entity with a minimum investment grade credit rating from at least one globally recognised credit rating agency.
Counterparties
The following table provides details of the counterparties (based on gross volume of outstanding transactions) in respect of
securities lending transactions as at the balance sheet date and their country of incorporation.
Counterparty Country of Incorporation
31 March 2025
£000
31 March 2024
£000
Merrill Lynch International United Kingdom – 3,831
UBS Switzerland – 211
Total Gross Volume of Outstanding Transactions – 4,042
03. Financial Review
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 105
Maturity tenor of securities on loan
The following table provides an analysis of the maturity tenor of securities on loan outstanding as at the balance sheet date.
The above maturity tenor analysis has been based on the respective transaction contractual maturity date. Open maturity
transactions are those transactions that are recallable or terminable on a daily basis.
31 March 2025
£’000
31 March 2024
£’000
Open Maturity – 4,042
Total Securities on Loan – 4,042
03. Financial Review
106
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
AIFMD report on remuneration - unaudited
Although FTITML does not directly employ staff it does utilise the services and employees of Franklin Templeton Global Investors
Limited (‘FTGIL’) and its subsidiaries (‘FTGIL Group’) and as such the following remuneration disclosure relates to the FTGIL Group.
The purpose of this Disclosure is to provide investors with quantitative disclosures of FTGIL Group Remuneration (as it applies to
FTITML and its activities relating to TEMIT) in accordance with the provisions in the UK implementing the Alternative Investment
Fund Managers Directive (‘AIFMD’), the European Commission Delegated Regulation implementing AIFMD and the “Guidelines
on sound remuneration policies under the AIFMD” issued by the European Securities and Markets Agency.
The total remuneration disclosed below relates to those staff within the FTGIL Group who are fully or partly involved in the
activities of TEMIT and includes those individuals within the FTGIL Group who perform risk and portfolio management functions in
respect of TEMIT.
The remuneration indicated reflects the estimated proportion of total remuneration for these individuals that is attributable to the
activities of FTTIML in respect of TEMIT.
Total amount of fixed remuneration paid by the FTGIL Group to relevant staff during the year ended
30 September 2024 as it relates to the activities of FTITML in respect of TEMIT.
(a)
£329,000
Total amount of variable remuneration paid by the FTGIL Group to relevant staff during the year ended
30 September 2024 as it relates to the activities of FTITML in respect of TEMIT.
(a)
£969,000
Number of staff of the FTGIL Group who have a material impact on the risk profile of the Group as at
30 September 2024.
24
Total amount of compensation paid by the FTGIL Group to senior managers during the year ended
30 September 2024 as it relates to the activities of FTITML in respect of TEMIT.
(a)
£79,000
Total amount paid by the FTGIL to other members of staff who have a material impact on the risk profile of the
Company during the year ended 30 September 2024 as it relates to the activities of FTITML in respect of TEMIT.
(a)
£495,000
(a) Total amount of compensation paid to the relevant FTGIL Group staff has been allocated to TEMIT based on its pro rata share of net assets of the AIFM for the year ended 30 September 2024.
03. Financial Review
107
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Investor
Information
04.
108
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Notice of meeting
Notice is hereby given that the Annual
General Meeting (‘AGM’) will be held on
Thursday 10 July 2025 at 12 noon at Franklin
Templeton, Cannon Place, 78 Cannon Street,
EC4M 6HL.
The AGM will transact the following business:
To consider and, if thought fit, to pass the
following resolutions. Resolutions 1 to 7
will be proposed as ordinary resolutions
and resolutions 8 to 10 will be proposed as
special resolutions.
Ordinary Business
1. To receive and adopt the Directors’ and Auditor’s Reports
and Financial Statements for the year ended 31 March 2025.
2. To approve the Directors’ Remuneration Report for the year
ended 31 March 2025.
3. To declare a final dividend of 3.25 pence per share for the
year ended 31 March 2025.
4. To appoint the Directors:
4.1. To re-elect Abigail Rotheroe as a Director.
4.2. To re-elect Charlie Ricketts as a Director.
4.3. To re-elect David Graham as a Director.
4.4. To re-elect Magdalene Miller as a Director.
4.5. To re-elect Angus Macpherson as a Director.
4.6. To elect Sarika Patel as a Director.
5. To re-appoint Ernst & Young LLP as auditor of the
Company, to act until the conclusion of the next general
meeting of the Company at which audited accounts are
laid before the members.
6. To authorise the Directors to determine the auditor’s
remuneration.
Special Business
Ordinary Resolution
7. That, in substitution for any existing authority, the Directors
be generally and unconditionally authorised to allot equity
securities (as defined in Section 560 of the Companies Act
2006 (the ‘Act’)) pursuant to Section 551 of the Act, up to an
aggregate nominal amount of £2,542,000 (being an amount
equal to 5% of the existing issued share capital of the
Company as at 16 May 2025, being the latest practicable
date before the date of this notice), provided that this
authority shall, unless renewed, varied or revoked by the
Company, expire on 30September 2026 or, if earlier, the
conclusion of the Company’s AGM to be held in 2026 save
that the Company may, before such expiry, make offers or
agreements which would or might require equity securities to
be allotted and the Directors may allot equity securities in
pursuance of such offer or agreement notwithstanding that
the authority conferred by this resolution has expired.
Special Resolutions
8. That, in substitution for any existing authority, subject to the
passing of resolution 7, the Directors be given the general
power pursuant to sections 570 and 573 of the Act to allot
equity securities (as defined by Section 560 of the Act) for
cash pursuant to the authority conferred by resolution 8,
and/or to sell equity securities held as treasury shares for
cash pursuant to Section 727 of the Act, in each case as if
Section 561(1) of the Act did not apply to any such allotment
or sale, provided that this power shall be limited to:
(a) any such allotment and/or sale of equity securities in
connection with an offer or issue by way of rights or other
pre-emptive offer or issue, open for acceptance for
a period fixed by the directors, to holders of ordinary
shares (other than the Company) on the register on any
record date fixed by the directors in proportion (as nearly
as may be) to the respective number of ordinary shares
deemed to be held by them, subject to such exclusions or
other arrangements as the directors may deem necessary
or expedient in relation to fractional entitlements, legal or
practical problems arising in any overseas territory, the
requirements of any regulatory body or stock exchange or
any other matter whatsoever;
(b) any such allotment and/or sale, otherwise than pursuant
to sub paragraph (a) above, of ordinary shares having an
aggregate nominal value, not exceeding the sum of
£2,542,000 (being an amount equal to 5% of the
Company's existing issued share capital, excluding
treasury shares, as at 16 May 2025, being the latest
practicable date before the date of this notice); and
04. Investor Information
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 109
(c) any allotment pursuant to sub-paragraph (b) above being
at a price which is at or above the prevailing NAV per
share at the time of issue.
The power granted by this resolution will expire on
30September 2026 or, if earlier, at the conclusion of the
Company’s AGM to be held in 2026 (unless renewed, varied
or revoked by the Company prior to or on such date) save
that the Company may, before such expiry, make offers or
agreements which would or might require equity securities to
be allotted or equity securities held as treasury shares to be
sold after such expiry and the Directors may allot and/or sell
equity securities and equity securities held as treasury
shares in pursuance of any such offer or agreement
notwithstanding that the power conferred by this resolution
has expired.
9. That in substitution for any existing authority, the Company
be and is hereby authorised in accordance with Section 701
of the Companies Act 2006 to make market purchases
(within the meaning of Section 693(4) of the Companies Act
2006), of its ordinary shares in issue, provided that:
(i) the maximum number of ordinary shares hereby
authorised to be purchased shall not exceed 14.99%
of the Company’s issued ordinary share capital,
excluding treasury shares, at the date of the passing of
this resolution;
(ii) the minimum price which may be paid for a share
shall be the nominal value of an ordinary share (excluding
expenses);
(iii) the maximum price which may be paid (excluding
expenses) for a share shall not be more than the higher
of: (a) an amount equal to 105 per cent of the average of
the closing mid-market price for the ordinary shares (as
derived from the Daily Official List of the London Stock
E
xchange) for the five business days immediately
preceding the date of purchase; and (b) the higher of the
last independent trade price and the highest current
independent purchase bid price on the trading venue
where the purchase is carried out;
(iv) unless renewed, the authority hereby conferred shall
expire 15 months after the date of passing of this
resolution or, if earlier, at the conclusion of the
Company’s AGM to be held in 2026, save that the
Company may, and prior to such expiry, enter into
a contract to purchase shares which will or may be
completed wholly or partly after such expiry; and
(v) shares will only be purchased at a price which is at
a discount to the prevailing NAV per share at the time
of purchase.
10. That a general meeting, other than an AGM, may be called
on not less than 14 clear days’ notice, such authority to
expire at the conclusion of the AGM in 2026.
By order of the Board
Angus Macpherson
6 June 2025
Registered Office: 5 Morrison Street,
Edinburgh, EH3 8BH
04. Investor Information
110
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Notes:
1. THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in
any doubt as to what action you should take, you are recommended to seek your own
financial advice from your stockbroker or other independent financial adviser authorised
under the Financial Services and Markets Act 2000.
2. If you have sold or transferred all of your shares in the Company, please forward this
document, together with the accompanying documents, as soon as possible either to the
purchaser or transferee or to the person who arranged the sale or transfer so that they can
pass these documents to the person who now holds the shares.
3. The Company specifies that only those members registered on the Company’s register of
members at 6.30 pm on 8 July 2025 shall be entitled to vote at the annual general meeting
(the ‘Meeting’).
4. A member of the Company entitled to vote at the Meeting may appoint a proxy or proxies to
vote thereat instead of him. A proxy need not be a member of the Company.
5. A member may appoint more than one proxy provided that each proxy is appointed to
exercise rights attached to different shares held by that member. A member may not appoint
more than one proxy to exercise rights attached to one share. Please contact the Company’s
registrar Equiniti, at Aspect House, Lancing, West Sussex BN99 6DA to appoint more than
one proxy. In the case of joint holders, the vote of the senior holder who tenders a vote shall
be accepted to the exclusion of the votes of the other joint holders. Seniority is determined
by the order in which the names of the joint holders appear in the Company’s register of
members in respect of the joint holding (the first named being the most senior).
6. The right to appoint a proxy does not apply to persons whose shares are held on their behalf
by another person and who have been nominated to receive communications from the
Company in accordance with Section 146 of the Companies Act 2006 (‘nominated persons’).
Nominated persons may have a right under an agreement with the registered shareholder
who holds the shares on their behalf to be appointed (or to have someone else appointed)
as a proxy. Alternatively, if nominated persons do not have such a right, or do not wish to
exercise it, they may have a right under such an agreement to give instructions to the
person holding the shares as to the exercise of voting rights.
7. A proxy form is enclosed with copies of this Report which are sent to registered shareholders.
A member can only appoint a proxy using the procedures set out in these notes and the
notes to the proxy form.
8. A proxy form must be returned to the Company’s registrar, Equiniti, Aspect House, Lancing,
West Sussex BN99 6DA to arrive not later than 12 noon on 8 July 2025. New Zealand
registered shareholders must return a proxy form to Computershare, Private Bag 92119,
Victoria Street West, Auckland 1142, New Zealand (if sent by post) or to Computershare, Level
2, 159 Hurstmere Road, Takapuna, Auckland 0622, New Zealand (if delivered in person or by
courier) to arrive not later than 5.00pm on 7 July 2025 (New Zealand time).
9. 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.
10. As at 16 May 2025, the Company’s issued share capital was 1,016,805,213 shares of 5pence
each. Each share carries the right to vote at an annual general meeting of the Company
and, therefore, the total number of voting rights in the Company as at 16 May 2025 was
1,016,805,213.
11. Copies of the letters of appointment of the Directors of the Company and the Articles of
Association are available for inspection at the Company’s registered office at 5 Morrison
Street, Edinburgh, EH3 8BH, and online at www.temit.co.uk until the close of the meeting
and at the Meeting (for 15 minutes prior to the Meeting and during the Meeting).
12. Electronic proxy appointment for CREST members (for UK only). 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 which can be viewed at www.euroclear.com. 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 sponsor 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 using the CREST service to be valid, the
appropriate CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in
accordance with Euroclear UK & Ireland Limited’s (‘EUI’) specifications and must contain the
information required for such instructions, as described in the CREST Manual. The message,
regardless of whether it constitutes the appointment of a proxy or an amendment to the
instruction given to a previously appointed proxy must, in order to be valid, be transmitted
so as to be received by the issuer’s agent (RA19) by the latest time(s) for receipt of
appointments specified in the Notice of Meeting or, in the event of an adjournment of the
Meeting, 48 hours before the adjourned meeting. For this purpose, the time of receipt will
be taken to be the time (as determined by the timestamp applied to the message by the
CREST Applications Host) from which the issuer’s agent is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST. After this time any change of
instructions to proxies appointed through CREST should be communicated to the
appointee through other means. CREST members and, where applicable, their CREST
sponsors or voting service providers should note that EUI 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 providers 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.
13. Electronic proxy appointment for non-CREST members (for UK only). Shareholders who
prefer to register the appointment of their proxy electronically via the Internet can do so
through the Equiniti website at www.shareview.co.uk where full instructions on the
procedure are given. You will need to create an online portfolio using your Shareholder
Reference Number printed on your Form of Proxy. Alternatively, shareholders who have
already registered with Equiniti’s on-line portfolio service, Shareview, can appoint their
proxy electronically by logging on to their portfolio at www.shareview.co.uk using their user
ID and password. Once logged in, click ‘View’ on the ‘My Investments’ page, click on the link
to vote then follow the on screen instructions.
A proxy appointment made electronically will not be valid if sent to any address other than
those provided or if received after 12 noon on 8 July 2025. Please note that any electronic
communication found to contain a computer virus will not be accepted.
14. Proxymity Voting - if you are an institutional investor you may 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 by 12 noon on 8 July 2025 in order to be
considered valid. 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.
15. Electronic proxy appointment for New Zealand registered shareholders. New Zealand
registered investors who prefer to register the appointment of their proxy electronically via
the Internet can do so through the Computershare website at www.investorvote.co.nz, and
enter the control number 104860 where full instructions on the procedure are given. Your
CSN (Common Shareholder Number) and postal code will be required to use this electronic
proxy appointment system. A proxy appointment made electronically will not be valid if sent
to any address other than that provided or if received after 5.00pm (New Zealand time) on
7 July 2025. Please note that any electronic communication found to contain a computer
virus will not be accepted. New Zealand registered investors cannot appoint more than
one proxy when registering the appointment of their proxy electronically.
16. A member of the Company may make a request in accordance with Section 527 of the
Companies Act 2006 to have a statement published on the Company’s website setting out
an audit concern. This allows a member or members having a right to vote at the Meeting
and holding at least 5% of the total voting rights of the Company, or at least 100 members
having a right to vote at the Meeting and holding, on average, at least £100 of the paid up
share capital, to make a request so that the Company must publish on its website
a statement setting out any matter that such members propose to raise at the Meeting
relating to the audit of the Company’s accounts (including the auditor’s report and the
conduct of the audit) that are to be laid before the Meeting. Where the Company is
required to publish such a statement on its website: (i) it may not require the members
making the request to pay any expenses incurred by the Company in complying with the
request; (ii) it must forward the statement to the Company’s auditor no later than the time at
which the statement is made available on the Company’s website; and (iii) the statement
may be dealt with as part of the business of the Meeting. A member wishing to request
publication of such a statement on the Company’s website must send the request to the
Company in hard copy form to the Company Secretary or by email to enquiries@
franklintempleton.co.uk. The request must either set out the statement in full or, if
supporting a statement sent by another member, clearly identify the statement which is
being supported and be received by the Company at least one week before the Meeting.
Please note that any electronic communication found to contain a computer virus will not
be accepted.
17. Any member has the right to ask questions. Pursuant to Section 319A of the Companies Act
2006, the Company must provide an answer to any question which is put by a member
relating to the business being considered, except if a response would not be in the interests
of the Company or for the good order of the Meeting or if to do so would involve the
disclosure of confidential information. The Company may, however, elect to provide
an answer to a question within a reasonable period of days after the conclusion of the
Meeting. The answers to questions raised by shareholders will be provided on our website.
18. In accordance with Section 311A of the Companies Act 2006, the contents of this Notice of
Meeting, details of the total number of shares in respect of which members are entitled to
exercise voting rights at the Meeting and, if applicable, any members’ statements,
members’ resolutions or members’ matters of business received by the Company after the
date of this notice will be available on the Company’s website, www.temit.co.uk.
19. You may not use any electronic address provided either in this Notice of Meeting or any
related documents (including the Form of Proxy) to communicate with the Company for any
purposes other than those expressly stated.
04. Investor Information
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 111
Receive all the latest information direct to your email
inbox every month. Our newsletter provides you with all
the updates, announcements and information on emerging
markets like our stock story and manager update videos,
factsheets and insights.
Join our mailing list at
www.temit.co.uk today
Subscribe to our monthly newsletter
Shareholder communications
Follow us
Twitter / X twitter.com/temit
LinkedIn
www.linkedin.com/company/franklin-templeton/
YouTube
Templeton Emerging Markets Investment Trust (TEMIT)
Website
www.temit.co.uk
Our website
The Board and Manager aim to keep shareholders informed
and release the following information on the Company’s
website www.temit.co.uk.
The website offers a wealth of information and updates on
TEMIT and emerging markets and is a comprehensive
resource for shareholders:
•
Factsheets and commentary
•
Portfolio Manager updates
•
Stock story videos
•
Latest research
•
Investment performance
•
Useful insights and guides
•
Corporate announcements
04. Investor Information
112
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
REGISTERED OFFICE
5 Morrison Street
Edinburgh
EH3 8BH UK
(Registered No. SC118022)
www.temit.co.uk
REGISTRAR – UK
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA UK
www.shareview.co.uk
Tel +44 (0)371 384 2505
REGISTRAR – NEW ZEALAND
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna Auckland 0622
New Zealand
enquiry@computershare.co.nz
Tel +649 488 8777
ALTERNATIVE INVESTMENT
FUND MANAGER AND COMPANY SECRETARY
Franklin Templeton Investment Trust
Management Limited
5 Morrison Street
Edinburgh
EH3 8BH UK
JOINT FINANCIAL ADVISER AND STOCKBROKER
Winterflood Securities Limited
Riverbank House
2 Swan Lane
London
EC4R 3GA UK
JOINT FINANCIAL ADVISER AND STOCKBROKER
JPMorgan Cazenove Limited
25 Bank Street
Canary Wharf
London E14 5JP UK
SOLICITOR
CMS Cameron McKenna Nabarro Olswang LLP
Saltire Court
20 Castle Terrace
Edinburgh
EH1 2EN UK
SOLICITOR
Buddle Findlay
HSBC Tower
Level 18, 188 Quay Street
PO Box 1433
Auckland 1140
New Zealand
CUSTODIAN
JPMorgan Chase Bank
25 Bank Street
London
E14 5JP UK
DEPOSITARY
J.P. Morgan Europe Limited
25 Bank Street
London
E14 5JP UK
AUDITOR
Ernst & Young LLP
25 Churchill Place
Canary Wharf
London
E14 5EY UK
General information
04. Investor Information
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 113
Shareholder information
How to invest
There are three main ways to invest in TEMIT:
1. Through an investment platform. A number of fund
supermarkets or investment platforms allow you to buy, hold
and sell shares in investment trusts such as TEMIT quickly
and easily at a low cost. Many have no minimum investment
requirements. There are a number of companies that offer
these services and may also allow you to include TEMIT as
an investment in an Individual Savings Account (‘ISA’) or
Self-Invested Pension Plan (‘SIPP’). Some of the most popular
include Hargreaves Lansdown, Interactive Investor, Fidelity,
Charles Stanley Direct and AJ Bell.
Please note that this is not a complete list of ISA or SIPP
providers, and you should not consider this list to be a
recommendation of the services which these providers offer.
The Association of Investment Companies (‘AIC’) provides
an independent analysis of platform costs and charges on
their website in the ‘Ready to Invest’ section.
2. Directly through the stock market. You can invest directly in
TEMIT by purchasing shares in the stock market through
a stockbroker or authorised Financial Adviser.
3. Through Equiniti, the Registrar, which offers an online or
telephone service where you can buy shares in TEMIT as
part of an Investment Account or an ISA.
Financial advice
We strongly recommend that you take independent financial
advice before making any investment. If you have a financial
adviser, then they will advise you on the best way to invest in
TEMIT. If you currently do not have a financial adviser, there
are a number of resources online to help you. For investors
based in the UK, websites such as www.unbiased.co.uk or
www.vouchedfor.co.uk will provide you with details of financial
advisers in your area.
Codes
Ticker TEM
ISIN GB00BKPG0S09
SEDOL BKPG0S0
Final Dividend Ex-Date 26 June 2025
Final Dividend Record Date 27 June 2025
AGM 10 July 2025
Final Dividend Payment Date 31 July 2025
Half Year End 30 September 2025
Half Yearly Report Published December 2025
Interim Dividend Record Date December 2025
Year End 31 March 2026
NAV publication and reference codes
The NAV is released every London Stock Exchange business
day through the London and New Zealand stock exchanges.
It is also published on our website: www.temit.co.uk and
published in the Financial Times.
Dividend Reinvestment Plan (‘DRIP’)
If you are a UK shareholder and your shares are held in your
own name on the Company’s share register, you can request
that any dividend payments are used to purchase further
shares in the Company. You can download and complete the
relevant application forms through Equiniti’s secure website
www.shareview.co.uk/info/drip or you can contact Equiniti by
phone on +44 (0)371 384 2505.
If you invest through a nominee or investment platform and
wish to reinvest dividends you will need to contact them
directly to find out what arrangements they offer.
Financial calendar
04. Investor Information
114
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Glossary of alternative performance measures
NAV Total Return Calculation 2025 2024
a) Opening NAV (As at 31 March
2024/2023) (see following table)
182.8 174.5
b) Closing NAV (As at 31 March
2025/2024) (see following table)
193.7 182.8
c) Dividends Paid
(a)
5.0 5.0
d) Effect of Dividend Reinvestment 0.1 0.4
e) Adjusted Closing NAV e = (b+c+d) 198.8 188.2
NAV Total Return (e-a)/a 8.8% 7.9%
Net asset value total return
A measure showing how the net asset value (‘NAV’) per share
has performed over a period of time, considering both capital
returns and dividends paid to shareholders in sterling terms.
Total return measures allow shareholders to compare
performance between investment trusts where the dividend
yield may differ.
To calculate total return, it is assumed that dividends are
reinvested into the assets of the Company at the prevailing
NAV on the day that the shares first trade ex-dividend
(see page 4). The NAVs include income for the current
period (‘cum-income’) and the debt at fair value to be
consistent with the daily NAV released to the stock exchange
and with common market practice and the requirements of
statistics agencies.
Share Price Total Return Calculation 2025 2024
a) Opening Share Price (as at 31 March
2024/2023)
154.4 152.2
b) Closing Share Price (as at 31 March
2025/2024)
169.6 154.4
c) Dividends Paid
(a)
5.0 5.0
d) Effect of Dividend Reinvestment 0.3 0.3
e) Adjusted Closing Share Price e = (b+c+d) 174.9 159.7
Share Price Total Return (e-a)/a 13.3% 4.9%
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 in sterling terms. Total return
measures allow shareholders to compare performance
between investment trusts where the dividend yield may differ.
To calculate total return, it is assumed that dividends are
reinvested into the shares of the Company at the prevailing
share price on the day that the shares first trade ex-dividend
(see page 4).
2025
£’000
2024
£’000
2023
£’000
a) Net Assets per
the Statement of
Financial Position
1,985,442 2,034,863 2,017,503
b) Difference Between
Debt at Cost and Debt
at Fair Value (Note 15)
– 3,230 5,530
c) Number of Ordinary
Shares in Issue
– 1,114,818,617 1,159,138,372
NAV Pence per Share
with Debt at Fair Value
(a+b)/c
– 182.8 174.5
The following table sets out the difference between NAV with
debt at cost and NAV with debt at fair value:
(a) Dividends assumed to be reinvested on ex-date. 2025: Final dividend of 3.00p relating to financial year 2024 first traded ex-dividend on 20 June 2024 and interim dividend of 2.00p for financial
year 2025 first traded ex-dividend 19 December 2024 (2024: Final dividend of 3.00p relating to financial year 2023 first traded ex-dividend on 22 June 2023 and interim dividend of 2.00p for
financial year 2023 first traded ex-dividend 14 December 2023).
Share price discount to net asset value (‘NAV’)
A measure showing the relationship between the share price
and the NAV (cum-income), which is expressed as a
percentage of the NAV per share (see page 7). As at 31 March
2025 the Company’s share price was 169.6 pence and the NAV
per share was 193.7 pence, therefore the discount was
(169.6 - 193.7)/193.7 = 12.4% (31 March 2024: 15.4%).
If the share price is lower than the NAV per share, the shares
are said to be trading at a discount. If the share price is higher
than the NAV per share, the shares are said to be trading at
a premium.
The average share price discount to NAV over the year is
calculated using the daily NAV and market close share price.
04. Investor Information
TEMIT.co.uk
Templeton Emerging Markets Investment Trust plc 115
Net Gearing Calculation
2025
£’000
2024
£’000
a) Bank Loans 80,000 100,000
b) Cash Held 75,549 145,736
c) Net Assets (Excluding Loans) 2,065,442 2,134,863
Total Gearing (a-b)/c 0.2% 0.0%
Gearing/net gearing
A term used to describe the process of borrowing money for
investment purposes in the expectation that the returns on the
investments purchased using the borrowings will exceed the
costs of those borrowings.
For example, a figure of 5% means that the shareholder funds
are exposed to NAV returns by an additional 5%, positive or
negative, as a result of borrowings (see page 7).
A net gearing figure of 0.0% means that the cash held in the
Company is equal to or higher than the total bank loans.
Ongoing Charges Calculation
2025
£’000
2024
£’000
a) Total AIFM Fee and Other Expenses 19,439 18,874
b) Average Net Assets 2,042,653 1,954,521
Ongoing Charges (a/b) 0.95% 0.97%
Ongoing charges ratio
The OCR represents the annualised ongoing charges
(excluding finance costs, transaction costs and taxation)
divided by the average daily net asset values of the Company
for the period and has been prepared in accordance with the
AIC’s recommended methodology. Ongoing charges reflect
expenses likely to recur in the foreseeable future. As at
31March 2025 the OCR was 0.95% (31 March 2024: 0.97%).
Benchmark return
The Company’s benchmark is the MSCI Emerging Markets
(Net Dividends) Index.
The benchmark is a recognised index of stocks which should
not be taken as wholly representative of the Company’s
investment universe. The Company’s investment strategy does
not track this index and, consequently, there may be material
divergence between the Company’s performance and that of
the benchmark.
Although not an alternative performance measure, total return
of the benchmark is calculated on a closing market value to
closing market value basis, assuming that all dividends net of
local taxes received were reinvested into the shares of the
relevant companies at the time at which the shares were
quoted ex-dividend (see page 4).
Returns are converted by the index provider into pounds
sterling at prevailing exchange rates.
Benchmark performance source: MSCI.
Gross total return
Gross total return is net asset value total return before the
deduction of expenses (see page 16).
Excess return
The difference between the gross total return of TEMIT and
the benchmark total return (see page 16).
Residual return
A measure representing the difference between the actual
excess return and the excess return explained by the
attribution model. This amount results from several factors,
most significantly the difference between the actual trade
price of securities included in actual performance and the end
of day price used by the benchmark indices and hence to
calculate attribution (see page 16).
04. Investor Information
116
Templeton Emerging Markets Investment Trust plc TEMIT.co.uk
Notes
Annual Report and Accounts to 31 March 2025
Templeton Emerging Markets Investment Trust plc
5 Morrison Street, Edinburgh, EH3 8BH, UK
temitcosec@franklintempleton.com
www.temit.co.uk
© 2025 Franklin Templeton. All rights reserved.
EMEA_EUK_2466005_2366005
TEMIT ANNUAL REPORT 03/25