Annual Financial Report

Temple Bar Investment Trust plc Final Results Announcement for the year ended 31 December 2012 Chairman's Statement The total return on the net assets of Temple Bar during 2012 was 18.0%, which compares with a total return on the FTSE All-Share Index of 12.3%. The share price total return was 21.6% reflecting an increase over the year in the premium at which the shares trade. Temple Bar continues significantly to outperform its benchmark over both five and ten year periods. Revenue on the portfolio rose by 9.5%; however, virtually all of this increase was due to how the revenue on some bonds held on the portfolio has been recognized. The actual and anticipated early repayment of certain bonds necessitates the profit between the buy price and maturity price to be amortised over a significantly shorter period than previously forecast. Excluding this one-off effect, revenue was in line with the manager's forecasts a year earlier. Although most dividends across the portfolio rose, overall income was affected by Avon Products cutting its dividend, lower revenue generated from the fixed interest portfolio as some of the bonds reached maturity and a greater amount of cash being held on the portfolio. Post-tax earnings rose by 10.3%. Excluding the bond revenue recognition treatment previously referred to, post-tax earnings rose by 0.6%. The Board is recommending a final dividend of 22.0p, to produce a total increase of 4.0% for the year. The dividend will be payable on 28 March 2013 to shareholders on the register at 15 March 2013. The shares become ex-dividend on 13 March 2013. This is the 29th consecutive year in which the dividend has been increased. At the year-end, gearing (calculated net of cash and related liquid assets) was 2.0 %. Equity markets performed well in 2012 and investors seemed reluctant to fight the Federal Reserve and other central banks. Time will tell how deep is this commitment to equities. Investment Trust Tax Rules New legislation was introduced last year which has resulted in the removal of the prohibition on the distribution of capital profits by way of dividend. The board is therefore seeking shareholder approval at the Annual General Meeting to amend the Company's Articles of Association to permit the distribution of realised capital gains by way of dividend. I would emphasise that this does not in any way indicate that there will be a change in dividend policy. There is, at present, no intention to utilise the ability to make distributions from capital profits, but the directors believe that it is prudent to provide the flexibility to do so in the event of unforeseen changes, such as those to future taxation policies. Investment Policies The portfolio manager currently has the authority to invest up to 10% of the Company's investment portfolio in listed international equities in developed economies. The Board is requesting shareholder approval to increase this limit to 20%, principally to reflect the increasingly international nature of investment markets where the place of a company's listing often bears little resemblance to the countries in which it is active and where its profits are generated. The Board is also seeking approval for a minor change to the Company's principal investment objective of providing growth in income and capital to achieve a long term total return greater than the benchmark FTSE All Share Index, through investment in a broad spread of (primarily UK) securities with typically the majority of the portfolio selected from the constituents of the FTSE 100 index. It is proposed that the majority of the portfolio be selected from the FTSE 350 index rather than just the FTSE 100 index, in order to provide greater flexibility in portfolio construction. The ability for the portfolio manager to select investments broadly from the companies within the FTSE 350 Index will bring the portfolio more in line with the benchmark FTSE All Share Index. Resolutions will be proposed at the AGM to put the above changes into effect. Industry Developments There are a number of forthcoming changes which will impact the Company, including two of particular significance. The first relates to the implementation in the UK of the European Union's Alternative Investment Fund Managers Directive which will result in the introduction of further regulatory oversight for investment trusts, such as the requirement to appoint a Depositary that is, in turn, required to accept fairly onerous responsibilities. The changes are due to come into effect in 2014 and the Board is already considering the full implications of this legislation. The second event of significance is the introduction in January this year of the Retail Distribution Review (`RDR') which, amongst other things, prevents commission payments to advisers. In general RDR is viewed as a positive development in the longer term for the investment trust industry, which has historically not paid commissions, through the creation of a level playing field in the provision of investment advice. The Board believes that the Company is relatively well placed to benefit from this development given its scale, performance, the liquidity of its shares and other attributes. Annual General Meeting Our AGM this year will be held at Woolgate Exchange, 25 Basinghall Street, London EC2V 5HA on 25 March 2013 at 11.00am. The Board encourages as many shareholders as possible to attend this meeting. In addition to the formal business of the meeting the portfolio manager, Alastair Mundy, will make a presentation reviewing the past year and commenting on the outlook. He will also be available to answer any questions alongside the directors. Outlook This is an environment where new investment opportunities are few and far between. The portfolio manager prefers to wait for better times before acting. John Reeve Chairman 19 February 2013 Twenty Largest Investments as at 31 December 2012 Company Super Sector Place of Valuation % of listing portfolio 31 December 2012 £'000 HSBC Financials UK 51,242 8.08 Royal Dutch Shell Oil & Gas UK 48,563 7.65 Signet Jewelers Consumer Services UK/USA 48,438 7.63 Unilever Consumer Goods UK 41,491 6.54 GlaxoSmithKline Health Care UK 38,462 6.06 Travis Perkins Industrials UK 27,119 4.27 Vodafone Telecommunications UK 26,687 4.21 UK Treasury 4.5% 2013 Fixed Interest UK 25,892 4.08 BT Telecommunications UK 25,776 4.06 Grafton Group Industrials UK/ 24,922 3.93 Ireland AstraZeneca Health Care UK 23,626 3.72 QinetiQ Industrials UK 19,888 3.13 Royal Bank of Scotland Financials UK 19,211 3.03 SIG Industrials UK 16,166 2.55 BP Oil & Gas UK 15,392 2.43 Centrica Utilities UK 14,636 2.31 British American Tobacco Consumer Goods UK 14,368 2.26 Avon Products Consumer Goods USA 12,651 1.99 Games Workshop Consumer Goods UK 10,483 1.65 CRH Industrials UK/ 9,744 1.54 Ireland 514,757 81.12 Statement of Comprehensive Income for the year ended 31 December 2012 2012 2011 Revenue Capital Revenue Capital return return Total Return return Total £'000 £'000 £'000 £'000 £'000 £'000 Investment 28,164 - 28,164 25,640 - 25,640 income Other operating 3 - 3 79 - 79 income 28,167 - 28,167 25,719 - 25,719 Gains/(losses) on investments Gains/(losses) - 72,438 72,438 - (19,776) (19,776) on investments held at fair value through profit or loss Total income/ 28,167 72,438 100,605 25,719 (19,776) 5,943 (loss) Expenses Management fees (890) (1,334) (2,224) (816) (1,224) (2,040) Other expenses (580) (448) (1,028) (527) (569) (1,096) Profit before 26,697 70,656 97,353 24,376 (21,569) 2,807 finance costs and tax Finance costs (1,824) (2,753) (4,577) (1,824) (2,753) (4,577) Profit/(loss) 24,873 67,903 92,776 22,552 (24,322) (1,770) before tax Tax - - - - - - Profit/(loss) 24,873 67,903 92,776 22,552 (24,322) (1,770) for the year Earnings/(loss) 41.39p 113.00p 154.39p 38.08p (41.07)p (2.99)p per share (basic & diluted) The total column of this statement represents the Statement of Comprehensive Income prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance issued by the Association of Investment Companies. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year. There are no minority interests. Statement of Changes in Equity for the year ended 31 December 2012 Ordinary Share share premium Capital Retained Total capital account reserves earnings equity £'000 £'000 £'000 £'000 £'000 Balance at 1 14,740 8,507 486,832 29,943 540,022 January 2011 Loss for the year - - (24,322) 22,552 (1,770) Issue of share 185 5,935 - - 6,120 capital Dividends paid to - - - (22,332) (22,332) equity shareholders Balance at 31 14,925 14,442 462,510 30,163 522,040 December 2011 Profit for the - - 67,903 24,873 92,776 year Issue of share 213 7,663 - - 7,876 capital Dividends paid to - - - (21,501) (21,501) equity shareholders Balance at 31 15,138 22,105 530,413 33,535 601,191 December 2012 Statement of Financial Position as at 31 December 2012 31 December 2012 31 December 2011 £'000 £'000 £'000 £'000 Non-current assets 634,503 578,048 Investments held at fair value through profit or loss 634,503 578,048 Current assets Other receivables 2,826 4,634 Cash and cash equivalents 28,063 3,883 30,889 8,517 Total assets 665,392 586,565 Current liabilities Other payables (744) (1,085) Total assets less current 664,648 585,480 liabilities Non-current liabilities Interest bearing borrowings (63,457) (63,440) Net assets 601,191 522,040 Equity attributable to equity holders Ordinary share capital 15,138 14,925 Share premium 22,105 14,442 Capital reserves 530,413 462,510 Retained earnings 33,535 30,163 601,191 522,040 Total equity 601,191 522,040 Net asset value per share 992.86p 874.42p Statement of Cash Flows for the year ended 31 December 2012 2012 2011 £'000 £'000 £000 £'000 Cash flows from operating activities Profit/(Loss) before tax 92,776 (1,770) Adjustments for: Purchases of investments¹ (120,275) (162,877) Sales of investments¹ 136,258 163,921 15,983 1,044 (Gains)/Loss on investments (72,438) 19,776 Financing costs 4,577 4,577 Operating cash flows before 40,898 23,627 movements in working capital Increase in accrued income (1) (4) Decrease/(increase) in 1,327 (1,428) receivables Increase in payables 140 485 Net cash flows from operating 42,364 22,680 activities before and after income tax Cash flows from financing activities Proceeds from issue of new 7,876 6,120 shares (4,559) (4,559) Interest paid on borrowings Equity dividends paid (21,501) (22,332) Net cash used in financing (18,184) (20,771) activities Net increase in cash and cash 24,180 1,909 equivalents Cash and cash equivalents at 3,883 1,974 the start of the year Cash and cash equivalents at 28,063 3,883 the end of the year ¹ Purchases and sales of investments are considered to be operating activities of the Company, given its purpose, rather than investing activities. Notes i. The figures set out above are prepared on the same basis as set out in the previous year's annual accounts and are derived from the audited accounts of Temple Bar Investment Trust Plc for the year ended 31 December 2011 and 31 December 2012. The 2012 accounts will be sent to shareholders shortly. ii. The financial information contained in this announcement does not constitute full accounts within the meaning of Section 434 of the Companies Act 2006. The 2012 accounts, on which the report of the auditors is unqualified, will be filed with the Registrar of Companies in due course. The audited accounts for the year ended 31 December 2011 on which the report of the auditors was unqualified and did not contain a statement under Section 498 of the Companies Act 2006, have been filed with the Registrar of Companies. 19 February 2013 Contact: Alastair Mundy Telephone 020 7597 2000 Investec Asset Management Limited

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