Preliminary Statement of Annual Results

RNS Number : 0812Q

Templeton Emerging Markets IT PLC

12 June 2015

TEMPLETON EMERGING MARKETS INVESTMENT TRUST PLC ("TEMIT" or "the Company")

Strategic Report

Financial Summary

The Directors present the Strategic Report for the year ended 31 March 2015, which includes pages 3 to 20 (in the full annual report to 31 March 2015) and incorporates the Chairman's Statement which 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 by bringing together into one place all the information about the Company's strategy, the risks it faces, how it is performing and the direction in which it is heading.

Financial Summary

2014-2015

		Year ended 31 March 2015	Year ended 31 March 2014	Capital Return %	Total Return^(a) %
Net Assets and Shareholders' Funds (£ million)		2,045.0	1,913.6	6.9
Net Asset Value (pence per share)		641.2	591.8	8.3	9.6
Highest Net Asset Value (pence per share)		693.2	716.8
Lowest Net Asset Value (pence per share)		580.3	553.1
MSCI Emerging Markets Index				10.0	13.2
Share Price (pence per share)		556.0	527.0	5.5	6.9
Highest Share Price (pence per share)		623.5	651.5
Lowest Share Price (pence per share)		517.5	493.5
Dividend (pence per share)	^(b⁾	8.25	7.25	13.8
Revenue Earnings (pence per share)	^(c⁾	9.28	9.14	1.5
Capital Earnings (pence per share)	^(c⁾	46.54	-114.65
Total Earnings (pence per share)	^(c⁾	55.82	-105.51
Share Price Discount to Net Asset Value at end of the year		13.3%	10.9%
Average Share Price Discount to Net Asset Value over the year		10.3%	9.6%
Ongoing Charges Ratio	^(d⁾	1.20%	1.30%

Source: Franklin Templeton and FactSet.

^(a) Capital return with income reinvested.

^(b) A dividend of 8.25 pence per share on the Company's profits for the year ended 31 March 2015 has been proposed.

^(c) The Revenue, Capital and Total Earnings per share figure are based on the Earnings Per Share row in the Income Statement on page 81 of the annual report to 31 March 2015 and Note 4 of the Notes to the Financial Statements.

^(d) From 1 July 2014 Franklin Templeton agreed a reduction of 0.10% per annum in its fees to 1.10%.

Ten Year Record

2005-2015

	Total Net
	Assets and				Earnings per			Ongoing
	Shareholders'		Share	Year-end	share -	Dividend		Charges
	Funds	NAV	Price	Discount	undiluted	per share		Ratio^(e)
Year ended	(£m)	(pence)	(pence)	(%)	(pence)	(pence)		(%)
30 Apr 2005	1,066.0	198.9	167.3	15.9	3.42	2.67		1.50
30 Apr 2006	1,866.2	348.2	310.3	10.9	3.65	2.76		1.41
30 Apr 2007	1,925.5	359.2	327.3	8.9	4.16	3.13		1.32
30 Apr 2008	2,291.4	484.8	438.0	9.6	4.07	3.50		1.33
30 Apr 2009^(a)	1,208.3	365.7	340.5	6.9	7.69	3.75	^(c)	1.34
31 Mar 2010^(b)	2,046.4	620.3	577.0	7.0	2.88	3.75		1.29
31 Mar 2011	2,368.4	718.0	660.0	8.1	6.14	4.25		1.31
31 Mar 2012	2,098.6	636.3	588.5	7.5	7.91	5.75		1.31
31 Mar 2013	2,302.7	702.3	640.5	8.2	8.45	6.25		1.30
31 Mar 2014	1,913.6	591.8	527.0	10.9	9.14	7.25		1.30
31 Mar 2015	2,045.0	641.2	556.0	13.3	9.28	8.25	^(d)	1.20

Ten Year Growth Record

(rebased to 100.0 at 30 April 2005)

2005-2015

					MSCI
					Emerging	Revenue
				Share	Markets	Earnings
		NAV total	Share	Price total	Index total	per share -	Dividend
Year ended	NAV	return^(f)	Price	return^(f)	return^(f)	undiluted	per share
30 Apr 2005	100.0	100.0	100.0	100.0	100.0	100.0	100.0
30 Apr 2006	175.1	177.1	185.5	187.8	171.2	106.7	103.4
30 Apr 2007	180.6	184.0	195.6	200.2	183.9	121.6	117.2
30 Apr 2008	243.7	250.0	261.8	270.3	233.4	119.0	131.1
30 Apr 2009^(a)	183.9	189.7	203.5	212.0	178.7	224.9	140.4	^(c)
31 Mar 2010^(b)	311.9	380.8	344.9	424.8	306.6	84.2	140.4
31 Mar 2011	361.0	443.0	394.5	489.2	344.6	179.5	159.2
31 Mar 2012	319.9	395.1	351.8	439.2	316.3	231.3	215.4
31 Mar 2013	353.1	439.1	384.3	483.3	340.5	247.1	234.1
31 Mar 2014	297.5	374.9	315.0	402.1	306.8	267.3	271.5
31 Mar 2015	322.4	353.8	332.3	369.8	307.7	271.3	309.0	^(d)

^(a) The results for the year ended 30 April 2009 reflect £633m returned to the shareholders as a result of the tender offer in 2008.

^(b) 11 months to 31 March 2010.

^(c) Excludes the special dividend of 2.50 pence per share in 2009.

^(d) A dividend of 8.25 pence per share on the Company's profits for the year ended 31 March 2015 has been proposed.

^(e) From the year ending 31 March 2012, the Ongoing Charges Ratio (OCR) replaces the Total Expense Ratio. Prior year numbers have not been restated as the ratios are not materially different.

^(f) Includes dividends re-invested.

Chairman's Statement

Overview and Investment Performance

Quantitative easing continues in developed markets, with the European Union the latest to adopt such policies following moves a few years ago by the USA and UK and latterly Japan. These policies increased the money supply and contributed to avoiding a severe recession in the countries in which they were implemented and, more generally, supported economic growth around the world. The effect of loose monetary policy has been particularly pronounced on the local stock markets where quantitative easing has taken place, but there has been something of a broader effect on the markets in which TEMIT invests. Emerging market economies in aggregate have shown a good level of growth over the twelve months under review and, while stock market returns do not directly correlate with economic growth, our benchmark index recorded a strong total return of 13.2% in sterling terms.

As the Investment Manager reports on pages 21 to 44 of the annual report to 31 March 2015, there are differences in individual markets. In China, the government continues, apparently successfully, to seek to control overheating while simultaneously ensuring a relatively high rate of growth. Other countries in our investment universe sought varying approaches to different economic issues, as demonstrated by the fact that some raised interest rates while others reduced them. A major reduction in the oil price - which few predicted - will also have a major economic impact if it persists. Political uncertainty continues in Ukraine and large parts of the Middle East while India and Indonesia, countries with very large populations, elected business-friendly governments. In 2014 Brazil re-elected the government led by Dilma Rousseff, which was initially seen as an unfavourable outcome for markets, but the economic situation in the country may dictate a more moderate course of action in its second term.

It is very disappointing to report that TEMIT's investment performance has significantly lagged its benchmark for last year, and now for the last five years. Shareholders should be reassured that your Board is well aware of this, and tests the investment model with the Investment Manager at each quarterly board meeting. Despite this run of poor returns, the Investment Manager remains convinced that the prospects for emerging country economies will eventually translate into market returns which will outweigh the inevitable risks of such investment. Shareholders will note that some of the more recent purchases are in consumer-facing companies at relatively depressed valuations.

Your Investment Manager focuses on long-term investment in companies which have the potential for high levels of growth and which are assessed as being available at favourable valuations. This means that the portfolio which TEMIT owns bears little relationship to the benchmark index and indeed the "Active Share" - a measure of how much the portfolio deviates from the index - was 95.7% as at 31 March 2015 and is usually at a similar level.

On 26 May, the latest date for which information was available, the NAV per share had fallen by 2.9% to 622.7 pence and the share price by 0.7% to 552.0 pence.

Investment Income and the Dividend

Despite the poor capital performance, shareholders will note that the dividends from the portfolio continue to grow, allowing a significant rise in TEMIT's own dividend to shareholders. The Income Statement on page 81 of the annual report to 31 March 2015 shows total income earned of £59.2 million in the year to 31 March 2015. This translates into net earnings of 9.3 pence per share, an increase of 1.5% over the prior year.

As a result, your Board is proposing a further increase in the dividend to 8.25 pence per share, which is 13.8% higher than last year's dividend, and, if approved by shareholders at the Annual General Meeting ("AGM"), would be payable on 22 July 2015.

I would caution shareholders that your Investment Manager seeks primarily to achieve capital growth and that the distributions of companies in Emerging Markets can often be volatile.

Discount and Share Buy Backs

During the year your Company's shares traded at discounts between 7.9% and 13.3% of NAV, with a daily average of 10.3%, and the discount ended the year at 13.3%. Demand for emerging markets investment trust shares in the London market remained subdued and, in consequence, during the financial year under review the Company bought back 4,404,900 shares, at a total cost of £24.7 million and at an average discount of 10.9% resulting in a small benefit of £3.1 million to the NAV of the remaining shares and hence to continuing shareholders.

Your Board continually monitors the share price discount to net asset value and exercises its right to buy back shares when the Board considers that it is in shareholders' interests to do so. In the two weeks preceding this report, the average discount had returned to 11.6%.

Asset Allocation and Gearing

The general policy of the Company is to be fully invested. As at 31 March 2015, 94.9% of TEMIT's net assets were invested in equities (31 March 2014: 96.9%). The high level of cash at the year-end was due to assets having been sold with the resultant cash held pending reinvestment.

Your Board regularly reviews its policy on gearing and we continue to take a cautious stance. This caution is borne out by the periods of volatility, which are a feature of emerging equity markets and are generally unpredictable in both timing and extent. Borrowing facilities have not been used in recent years.

Management Fees

As previously announced, with effect from 1 July 2014 the fees payable to Franklin Templeton reduced from 1.20% to 1.10% per annum.

Regulation

Having successfully dealt with the implementation of the EU's Alternative Investment Fund Managers Directive last year, the next challenge facing the investment trust industry will be the completion and then implementation of the second iteration of the EU Markets in Financial Instruments Directive ("MiFID 2"). At the time of writing, implementation of the directive is under consultation but, if implemented as currently proposed it is apparent that it may be more difficult for private investors to invest in investment trusts, which would clearly be detrimental. Your Board and Manager fully support the efforts of the AIC and others in seeking to minimise the potential impact on demand for our shares.

The Board

The Board's Nomination and Remuneration Committee carries out an annual appraisal of the Board, considering the skills and contribution of each of the Directors. This year, the appraisal was facilitated by an external advisor, Trust Associates. Following the appraisal, the Committee recommended the continuing appointment of each individual Director. In line with the UK Corporate Governance Code, each of the existing Directors will stand for re-election at the AGM.

Investor Communications

The Board and Manager aim to keep shareholders informed and up-to-date with information about the Company as well as seeking feedback and comment from investors. We hold investor briefings and discussions on a regular basis and distribute the Annual and Half-Yearly Report, as well as notices of any significant Company events, to registered shareholders. We also release information through the stock exchanges where we are listed. Our website (www.temit.co.uk) displays the latest news, price and performance information, portfolio details, web updates from the Investment Manager and a blog dealing with topical issues in emerging markets. Via the website you can also ask to have the latest Company information e-mailed directly to you. I encourage all shareholders to register on our website and make full use of the facilities and materials available to help keep you informed about your Company.

I am aware that shareholders may, on occasion, wish to contact me or my fellow board members directly and not via our Manager. While our Manager will, in most cases, be best placed to handle enquiries, I am at your disposal to receive any questions or comments, as are the Senior Independent Director or any of the other Directors, all of whom may be reached via our brokers whose contact details are enclosed at the end of this document.

Outlook

TEMIT's focus remains on companies which are expected to be best able to ride out short-term political and economic storms and benefit from the effects of strongly growing economies and the growing spending power of increasingly wealthy populations. Some of this year's new investments reflect the latter point with their exposure to the growing number of middle class consumers. Our Investment Manager's approach is contrarian, which means that investments may be made in stocks which are unfashionable and which others are selling. This is illustrated by further purchases of commodity stocks which, while they have detracted from performance in the short term, are expected to yield results in future years.

I had hoped that by now we would have been seeing improved economic and investment performance in emerging markets, but the challenges and structural changes consequent on the global financial crisis have had a much more significant and longer impact than we had expected. The demographics and the potential to increase per capita disposable income, as well as investment opportunities, are all there but patience will be required before the gains come through in terms of both relative and absolute investment performance.

Your Board and the Investment Manager remain of the view that emerging markets offer the potential for superior economic growth compared with developed markets and that, by careful stock selection for the long term, TEMIT can profit from this.

AGM

I would like to invite all shareholders to attend the AGM to be held at Stationers' Hall, Ave Maria Lane, London EC4M 7DD at 12 noon on Friday 17 July 2015 where there will be an opportunity to meet the Board and the Investment Manager and to hear the latest news on your Company, its investments and the markets, as well as taking part in the formal annual meeting of the Company. More details of this meeting can be found on pages 100 to 103 of the annual report to 31 March 2015.

Peter Smith

12 June 2015

Strategy and Business Model

Company Objective

Our objective is that TEMIT is the investment of choice for private and institutional investors seeking exposure to global emerging markets, supported by both strong customer service and corporate governance.

Company Strategy

Our strategy is that TEMIT:

Delivers superior long-term investment performance compared to our benchmark index and peers;

Maintains liquidity in its shares to support buyers and sellers;

Provides relative stability in the discount to net asset value;

Through periodic Continuation votes, affirms the shareholder mandate; and

Through regular communication keeps investors up-to-date with the progress of the Company as well as seeking feedback and comment from investors.

Delivering the Strategy

Performance

At the heart of this strategy is the appointment and retention of highly regarded investment management professionals, who will identify value and achieve superior growth for shareholders. The Investment Manager, Templeton Asset Management Ltd. under the leadership of Mark Mobius, continues to apply the same core investment principles of value investment, and detailed company research to achieve long-term capital appreciation for shareholders. See page 23 of the annual report to 31 March 2015 for details of the Investment Manager's process.

Liquidity

The Company is listed on the London and New Zealand Stock Exchanges. The Company has engaged Winterflood as Financial Adviser and Stockbroker who actively works as a market maker for investors wishing to buy and sell shares in the Company. They also continually monitor the market for our shares.

Stability

The Board has powers to buy back the Company's shares as a discount control mechanism when it is in the best interests of the Company's shareholders. On a daily basis, the Board ensures that the share price discount to NAV is actively monitored and controlled. Discount management is reviewed regularly by the Board to ensure that it remains effective in the light of prevailing market conditions. This is discussed in more detail in the Directors' Report on page 50 of the annual report to 2015.

Affirmation of Shareholder Mandate

In accordance with the Company's Articles of Association, the Board must seek shareholders' approval for TEMIT to continue as an investment trust every five years. This allows shareholders the opportunity to decide on the long-term future of the Company. The last continuation vote took place at the 2014 AGM where 99.74% of shareholders voted in favour.

Communication

We ensure that investors are informed regularly about the performance of TEMIT and emerging markets through clear communication and updates.

At TEMIT, we seek to keep you updated on our performance and investment strategy through our website (www.temit.co.uk). Here you will find all the latest information on the Company, including monthly factsheets, stock exchange notices and notes from the Investment Manager on the latest news on emerging markets.

We also hold investor briefings and discussions in order better to understand investor needs.

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. For the period 1 April 2014 to 30 June 2014, Templeton Asset Management Ltd. ("TAML") acted as Investment Manager to the Company and Franklin Templeton Investment Management Limited ("FTIML") as Company Secretary and Administrator.

Implementation of the European Union's Alternative Investment Fund Managers Directive ("AIFMD") necessitated a number of changes to the investment management and administration agreements with Franklin Templeton. With effect from 1 July 2014, the Company appointed Franklin Templeton International Services S.à r.l. ("FTIS") as its Alternative Investment Fund Manager (AIFM) with Investment Management sub-delegated to TAML. FTIS is a Luxembourg domiciled company and is authorised and regulated by the Commission de Surveillance de Secteur Financier ("CSSF") in Luxembourg. More information on TAML can be found on page 21 of the annual report to 31 March 2015.

As a result of the implementation of AIFMD, the Company appointed J.P. Morgan Europe Limited as depositary on 1 July 2014.

The Board conducts regular reviews of the Company's primary service providers as discussed on pages 55 to 57 of the annual report to 31 March 2015 to ensure that the services provided are of the quality expected by TEMIT, in that they do not take undue risks and represent value for money. The Directors also ensure that the Company's primary service providers have adopted an appropriate framework of controls, monitoring and reporting to enable the Directors to evaluate these risks.

The Board reviews at least quarterly, with the Manager and the Investment Manager a wide range of risk factors that may impact the Company. Further analysis of these risks is described on pages 14 to 17 of the annual report to 31 March 2015. The risks include the benchmark and contributors and detractors to performance, major overweights and underweights and portfolio information including purchases and sales. This culminates in a full risk and internal controls review held every September at the Audit Committee meeting. Due to the nature of the Company's business, investment risk is a key focus and is reviewed on an ongoing basis as part of every investment decision of the Investment Manager. Further information on this process is detailed on pages 14 and 15 of the annual report to 31 March 2015.

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 all strategic policy issues namely dividend, gearing, share issuance and buy backs, share price and discount/premium monitoring, and corporate governance matters.

Key Performance Indicators

The Board considers the following as the key performance indicators for the Company:

• Net Asset Value total return compared over various periods to its benchmark;

• Movement in the Share Price and Discount;

• Dividend and Earnings per share; and

• Ongoing Charges Ratio.

The 10 year records of the KPI's are shown on pages 5 and 6 of the annual report to 31 March 2015.

Performance

In the year to 31 March 2015, the Company's net asset value per share produced a total return (dividend reinvested) of 9.6%. This underperformed the Company's benchmark, the MSCI Emerging Markets Index, which returned 13.2%. Over 5 years the comparable returns for TEMIT are 7.9% (1.5% per annum compounded) and 13.3% (2.5% per annum compounded) for the MSCI Emerging Markets Index.

The graphs on page 6 of the annual report to 31 March 2015 show the total return of TEMIT's NAV and share price relative to the MSCI Emerging Markets Index and the relative annual total return of TEMIT's NAV and share price against the MSCI Emerging Markets Index, over the last 10 years.

The Chairman's Statement on pages 7 to 9 of the annual report to 31 March 2015 and the Investment Manager's Report on pages 21 to 44 of the annual report to 31 March 2015 include a review of the main developments during the year and the investment outlook.

Share Capital and Discount

The Board has powers to buy back the Company's shares as a discount control mechanism when it is in the best interests of the Company's shareholders. The Board was authorised at the Company's AGM on 18 July 2014 to buy back up to 48,343,033 shares (or 14.99% of the Company's issued share capital on that date, whichever was lower). The present authority expires on the conclusion of the AGM on 17 July 2015. The Directors are seeking to renew this authority at the 2015 AGM, as further detailed in the Directors' Report on page 67 of the annual report to 31 March 2015.

The share price of TEMIT increased by 5.5% to 556.0 pence over the year to 31 March 2015, while the Company's share price discount to NAV widened to 13.3% from 10.9% as at 31 March 2014 and has been in the range of 7.9% to 13.3%. On 26 May, the latest date for which information was available, the discount had narrowed to 11.4%.

Share Price Discount to NAV

During the year 4,404,900 shares were repurchased, representing 1.36% of the issued share capital as at 31 March 2015, at a cost to the Company of £24.7 million. These shares were cancelled which resulted in an uplift of 0.25% to the net asset value per share. They were bought back at discounts ranging from 8.7% to 13.3% and at prices ranging from 513.0 pence to 597.5 pence.

In the period from 1 April to 26 May 2015, 1,605,500 shares were bought back and cancelled by the Company.

Dividend and Earnings Per Share (EPS)

Total income earned for the year was £59.2 million (2014: £60.4 million) which translates into net earnings of 9.28 pence per share (2014: 9.14 pence per share), an increase of 1.5% over the prior year.

The Board is proposing a dividend of 8.25 pence per share, which is 13.8% higher than last year's dividend of 7.25 pence per share.

Ongoing Charges Ratio

The Ongoing Charges Ratio ("OCR") represents the annualised ongoing charges of the Company divided by the average daily net asset values of the Company for the year. The OCR fell to 1.20% for the year end 31 March 2015, compared to 1.30% in the prior year. This was due to the 0.10% fee reduction Franklin Templeton agreed with the Board from 1 July 2014. The fee for all services provided by FTIS is currently 1.10% per annum.

Costs associated with the purchase and sale of investments are taken to capital and are not included in the OCR. Transaction costs totalled £1,968,000 for the year to 31 March 2015 (2014: £930,000). The increase from the previous year is due to a higher number and value of trades during the year.

Principal Risks and Uncertainties

The principal risks facing the Company, as determined by your Board, are summarised below.

Investment and Concentration risk

Where possible, investment will generally be made directly in the stock markets of emerging countries. Where the Investment Manager considers it appropriate, for example to gain access to markets closed to foreign portfolio investors, investment may be made in emerging markets through Collective Investment Schemes, although such investment is not likely to be substantial. As at 31 March 2015 the Company had no such investments. In addition, investment in companies listed on more developed countries' stock exchanges may also be made where those companies have a significant source of their revenue from emerging countries.

It is intended that the Company will normally invest in equity investments. However, the Investment Manager may invest in equity-related investments (such as convertibles) where there are believed to be advantages to so doing. The portfolio may frequently be overweight or underweight against the MSCI Emerging Markets Index and may be concentrated in a more limited number of sectors, geographical areas or countries. This is consistent with the stated investment approach of long-term value investing. The Investment Manager evaluates investment opportunities with updated financial ratios on a regular basis, and, where opportunities are identified, adjusts the portfolio to seek optimal exposures to stocks, which are assessed to be the best value in global emerging markets.

The Company may also invest a significant portion of its assets in the securities of one issuer, securities domiciled in a particular country, or securities within one industry.

In addition, emerging markets can be subject to greater price volatility and more rapid and more exaggerated re-rating than developed markets.

The general policy of the Board is to be fully invested. However, in response to market conditions, the Investment Manager may hold funds temporarily in cash or other appropriate assets.

Market risk

Many of the companies in which TEMIT invests or may invest are, by reason of the locations in which they operate, exposed to the risk of political or economic change. In addition, exchange control, tax or other regulations introduced in any country in which TEMIT invests may affect its income and the value and marketability of its investments. Investors in emerging markets may face settlement and custodial problems. Furthermore, companies in emerging markets are not always subject to accounting, auditing and financial standards which are equivalent to those applicable in the UK and there may also be less government supervision and regulation. The Investment Manager will invest directly only in countries where it is satisfied, in so far as is possible, that acceptable custodial and other arrangements are in place to safeguard TEMIT's investments and in companies where there is evidence of satisfactory governance procedures. These risks can increase the potential for losses in the Company and affect its share price. For these reasons, a long-term approach to investing in emerging markets is taken.

Foreign currency risk

Currency 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 decrease in value because it will be worth less in sterling. This can have a negative effect on fund performance. Conversely, when, in general, sterling weakens in relation to a foreign currency, investments traded in that foreign currency will increase in value, which can contribute to an improvement in the Company's performance. TEMIT does not hedge this risk.

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.

Operational and custody risk

Like many other investment trust companies, the Company has no employees. The Company therefore relies upon the services provided by third parties and is dependent upon the control systems of the Manager and 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. These are regularly tested and monitored and an internal control 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 Committee annually.

The implementation of AIFMD introduced the obligation on the Company to appoint a depositary. As noted on page 56 of the annual report to 31 March 2015, TEMIT appointed J.P. Morgan Europe Limited in this capacity and their 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 leverage requirements. The depositary is liable for the loss of financial instruments held in custody and will ensure that the custodian and any sub-custodian segregate the assets of the Company. The depositary has delegated the custody function to JPMorgan Chase Bank. The custodian prepares a report on its key controls and safeguards (SSAE 16/ISAE 3402) which is independently reviewed by its auditor PwC.

The depositary will provide the Audit Committee with an annual report on its monitoring activities.

Key personnel

The ability of the Company to achieve its investment objective is significantly dependent upon the expertise of the Investment Manager and its ability to attract and retain suitable staff. The Investment Manager has endeavoured to ensure that the principal members of its management teams are suitably incentivised, but the retention of such staff cannot be guaranteed.

Diversity

The Board supports the principle of boardroom diversity. The selection policy of the Board is to appoint the best qualified person for the job, by considering factors such as diversity of thought, experience and qualification. Further details of the selection policy for the Board can be found on page 59 of the annual report to 31 March 2015.

Regulatory risk

The Company operates in an increasingly complex regulatory environment and faces a number of regulatory risks. A breach of s1158 of the Corporation Tax Act 2010 or the accompanying Investment Trust (Approved Company) (Tax) Regulations 2011 may potentially result in the Company being subject to corporation tax on chargeable gains on realised portfolio gains.

The Company is an Alternative Investment Fund (AIF) under the European Union Alternative Investment Fund Managers Directive.

Breaches of other regulations, such as the UK Listing Authority rules, could lead to a number of detrimental outcomes and reputational damage.

The Board monitors risk on a quarterly basis as part of the Board meetings including benchmark and performance attribution, risk analysis, contributors and detractors to performance, major overweights and underweights and portfolio information including purchases and sales.

A more detailed explanation of the monitoring of risk and uncertainties is covered within the Report of the Audit Committee on page 74 of the annual report to 31 March 2015. Further information on the risks that TEMIT is subject to, including additional financial and valuation risks, are also detailed in Note 12 of the Notes to the Financial Statements.

Environmental, Social, and other matters

As an Investment Trust, TEMIT has no direct social, community or employee responsibilities. More information can be found in the Directors' Report on pages 64 and 65 of the annual report to 31 March 205.

TEMIT has no greenhouse gas emissions to report from the operations of the Company, as all of its activities are outsourced to third parties, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.

Future Strategy

The Company was founded, and continues to be managed, on the basis of a long-term investment strategy which 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 Manager to choose investments successfully.

The Board and the Investment Manager 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. This has delivered long-term benefits to its shareholders. It is recognised that, at times, extraneous political, economic and company-specific 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.

The Company's overall strategy remains unchanged and is expected to remain consistent with these aims for the foreseeable future.

By order of the Board

Peter Smith

12 June 2015

Portfolio Holdings by Geography

Geographical analysis (by country of incorporation)

As at 31 March 2015

		Fair Value	^(a)	% of Issued	MSCI Index	^(b)	% of Net
Country	Sector	£'000		Share Class	Weighting		Assets
AUSTRIA

OMV^(c)	Energy	14,656		0.2	N/A		0.7
		14,656					0.7
BRAZIL
Banco Bradesco, ADR^(d)(e)	Financials	72,113		0.5	0.8		3.5
CIA Hering	Consumer Discretionary	16,575		2.9	N/A		0.8
Itau Unibanco, ADR^(e)	Financials	77,261		0.4	0.8		3.8
Petroleo Brasileiro, ADR^(d)(e)	Energy	21,573		0.1	0.6		1.1
Vale, ADR^(d)(e)	Materials	38,601		0.6	0.4		1.9
		226,123					11.1
HONG KONG/CHINA
Aluminum Corp. of China, H^(f)	Materials	34,192		2.6	0.1		1.7
Brilliance China Automotive	Consumer Discretionary	224,780		3.4	0.1		11.1
China International Marine Containers, B^(g)	Industrials	18,770		0.9	-		0.9
China Petroleum and Chemical, H^(f)	Energy	38,037		0.3	0.5		1.9
Dairy Farm	Consumer Staples	80,290		0.9	N/A		3.9
Guangzhou Automobile Group, H^(f)	Consumer Discretionary	51,636		3.6	0.1		2.5
Inner Mongolia Yitai Coal	Energy	16,926		0.6	-		0.8
PetroChina, H^(f)	Energy	63,099		0.4	0.6		3.1
Victory City International	Consumer Discretionary	12,148		6.8	N/A		0.6
VTech	Information Technology	80,082		3.3	N/A		3.9
		619,960					30.4
INDIA
Infosys Technologies	Information Technology	11,991		0.0	0.8		0.6
Oil & Natural Gas	Energy	28,606		0.1	0.1		1.3
Peninsula Land	Financials	4,685		5.6	N/A		0.3
Tata Consultancy Services	Information Technology	69,917		0.1	0.5		3.4
		115,199					5.6

^(a)Fair value represents the bid value of a security as required by International Financial Reporting Standards (IFRS).

^(b) N/A: These stocks are not held by the MSCI Emerging Markets Index.

^(c)These companies, listed on stock exchanges in developed markets, have significant exposure to operations in emerging markets.

^(d) pfd: preferred shares.

^(e)US Listed American Depositary Receipt.

^(f)Shares eligible for foreign investment on a Chinese stock exchange.

^(g)Shares eligible for foreign investment on the Hong Kong stock exchange.

		Fair Value	^(a)	% of Issued	MSCI Index	^(b)	% of Net
Country	Sector	£'000		Share Class	Weighting		Assets
INDONESIA
Astra International	Consumer Discretionary	87,253		0.5	0.3		4.3
Bank Central Asia	Financials	24,943		0.1	0.4		1.2
Bank Danamon Indonesia	Financials	35,758		1.4	-		1.7
		147,954					7.2
JORDAN
Arab Potash	Materials	727		0.1	N/A		-
		727					-
NIGERIA
Nestlé Nigeria	Consumer Staples	2,018		0.1	N/A		0.1
		2,018					0.1
PAKISTAN
MCB Bank	Financials	63,710		3.5	N/A		3.1
Oil & Gas Development	Energy	20,902		0.4	N/A		1.0
		84,612					4.1
PERU
Buenaventura, ADR^(e)	Materials	44,437		2.4	-		2.2
		44,437					2.2
RUSSIA
Gazprom, ADR^(e)	Energy	28,861		0.0	0.7		1.4
OAO TMK	Energy	3,205		0.2	N/A		0.2
		32,066					1.6
SINGAPORE
Sembcorp Marine^(c)	Industrials	8,043		0.3	N/A		0.4
		8,043					0.4
SOUTH AFRICA
Impala Platinum	Materials	18,595		0.9	0.1		0.9
Kumba Iron Ore	Materials	33,600		1.2	-		1.6
Truworths International	Consumer Discretionary	17,332		0.8	0.1		0.8
		69,527					3.3

^(a)Fair value represents the bid value of a security as required by International Financial Reporting Standards (IFRS).

^(b) N/A: These stocks are not held by the MSCI Emerging Markets Index.

^(c)These companies, listed on stock exchanges in developed markets, have significant exposure to operations in emerging markets.

^(e)US Listed American Depositary Receipt.

Portfolio Holdings by Geography (continued)

		Fair Value	^(a)	% of Issued	MSCI Index	^(b)	% of Net
Country	Sector	£'000		Share Class	Weighting		Assets
SOUTH KOREA
Hyundai Development	Industrials	91,271		3.5	0.1		4.5
SK Innovation	Energy	37,843		0.7	0.1		1.9
		129,114					6.4
THAILAND
Kasikornbank	Financials	78,366		0.7	0.3		3.8
Kiatnakin Bank	Financials	18,149		2.7	N/A		0.9
Land and Houses	Financials	19,063		0.9	N/A		0.9
Land and Houses (warrants)	Financials	2,346		0.9	N/A		0.1
PTT	Energy	34,969		0.2	0.3		1.7
PTT Exploration and Production	Energy	28,850		0.3	0.1		1.4
Siam Cement	Materials	4,445		0.0	0.2		0.2
Siam Commercial Bank	Financials	93,821		0.8	0.2		4.6
Univanich Palm Oil	Consumer Staples	9,970		5.0	N/A		0.5
		289,979					14.1
TURKEY
Akbank	Financials	50,231		0.6	0.2		2.5
Tupras-Turkiye Petrol	Energy	36,936		0.9	0.1		1.8
		87,167					4.3
UNITED KINGDOM
Unilever^(c)	Consumer Staples	69,579		0.2	N/A		3.4
		69,579					3.4
TOTAL INVESTMENTS		1,941,161					94.9
OTHER NET ASSETS		103,870					5.1
TOTAL NET ASSETS		2,045,031					100.0

^(a)Fair value represents the bid value of a security as required by International Financial Reporting Standards (IFRS).

^(b)N/A: These stocks are not held by the MSCI Emerging Markets Index.

^(c)These companies, listed on stock exchanges in developed markets, have significant exposure to operations in emerging markets.

The Investment Manager

Investment Manager

Templeton Asset Management Ltd. ("TAML") is the Investment Manager of the Company.

TAML is a subsidiary of Franklin Resources which is one of the world's largest asset management companies. TAML is a pioneer of emerging market investment, having created one of the first dedicated emerging market mutual funds more than 25 years ago. As of 31 March 2015, the Templeton Emerging Markets Team managed US$49.0 billion in emerging markets assets for retail, institutional and professional investors across the globe.

The Templeton Emerging Markets Team, headed by Dr. Mark Mobius, is one of the largest of its kind. It includes 53 dedicated emerging markets portfolio managers, analysts and product specialists. Their on-the-ground presence in 18 countries, and years of relevant industry experience, greatly assists their understanding of the companies researched for inclusion in the TEMIT portfolio.

The TEMIT investment team includes Dr. Mark Mobius, along with Allan Lam as lead allocator, and Carlos Hardenberg and Chetan Sehgal as lead analysts, all senior team members with significant expertise in emerging markets.

Mark Mobius, Ph.D.

Executive Chairman

Dr. Mobius has spent more than 40 years working in emerging markets all over the world. He joined Franklin Templeton in 1987 as the president of Templeton Emerging Markets Fund, Inc. In 1999, he was appointed joint chairman of the Global Corporate Governance Forum Investor Responsibility Taskforce of the World Bank and Organization for Economic Cooperation and Development.

Allan Lam, CPA

Senior Executive Vice President & Senior Managing Director

Allan Lam joined Franklin Templeton in 1987. Mr. Lam manages investment portfolios dedicated to global emerging markets and Asia (ex Japan). He has research responsibilities for companies in the real estate and the oil & gas sectors, and also specialises in analysing companies listed in the Philippines. Mr. Lam worked for a number of years in the accounting field with Deloitte Touche Tohmatsu CPA and KPMG Peat Marwick CPA. His knowledge of accounting practices became an important tool for his equity analysis.

Chetan Sehgal, CFA

Executive Vice President & Managing Director

Chetan Sehgal joined Franklin Templeton in 1995. His main research responsibilities include the Indian and Israeli markets and the software and IT services industries. Prior to joining Franklin Templeton, Mr. Sehgal was a senior ratings analyst for the Credit Rating Information Services of India, Ltd. Mr. Sehgal earned a B.E. mechanical (honours) from the University of Bombay and a post-graduate 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. Mr. Sehgal is a Chartered Financial Analyst (CFA) Charterholder.

Carlos Hardenberg

Senior Vice President & Managing Director

Carlos Hardenberg is primarily responsible for the Turkish market and coverage of the central and eastern European, Middle East and North Africa regions. Prior to joining Franklin Templeton in 2002, Mr. Hardenberg was an analyst in the Corporate Finance Department for Bear Stearns International in London. He entered the financial services industry in 2000. Mr. Hardenberg holds a M.Sc., with distinction, in investment management from London City University Business School (UK) and a B.Sc., with honours, in business studies from the University of Buckingham (UK).

Investment Manager's Process

Investment Philosophy

TAML employs a time-tested investment philosophy built upon a disciplined, yet flexible, long-term approach to value-oriented emerging markets investing which allows the portfolio managers to look beyond short-term news, noise, and emotion.

Value

Our goal is to identify those companies that appear to be trading at a discount to what our estimates indicate to be their projected future intrinsic value which, over time, should produce a strong share price return.

Patience

On a short-term basis, stocks may overreact to news and noise. On a long-term basis, we believe that markets are efficient and that patience will reward those who have identified undervalued stocks.

Bottom-up

We identify value through rigorous fundamental analysis, proprietary screens and a worldwide network of experienced research resources. Research is carried out on a company by company basis - in different countries and industries - to determine what we consider the economic worth of a company to be, based on many factors including projected future earnings, cash flow or asset value potential as well as management capability and governance.

The Investment Manager follows a rigorous five step process:

1. Identify Potential Bargains Does this stock meet TAML's criteria of valuation, size and liquidity? Is it a potential bargain within the global universe, its sector and on a historical basis?	All portfolio managers are also research analysts, resulting in a deep and experienced research team. While our philosophy remains unchanged, continual refinement and improvement is part of the TAML culture. TAML is able to leverage 60+ years of global investing by Franklin Templeton Investments to build an extensive network of local contacts around the world.
2. In Depth Fundamental Analysis Is this stock a candidate for the TAML Action List? Is the stock trading at a substantial discount to what our research indicates the company may be worth over the long-term?	Within the framework of a disciplined, long-term approach, analysts look beyond short-term noise to estimate long-term economic worth. Bottom up fundamental analysis, industry knowledge and access to company management drive original research.
3. Review Team Evaluation Has analysis met TAML standards? Does the recommendation pass the TAML Review Team's approval?	A collaborative team culture that leverages the experience of the entire TAML Group produces comprehensive research insights.
4. Allocate Portfolio What do we consider to represent the best combination of stocks for creating a diversified fund with the greatest potential for appreciation?	The Action List is reviewed weekly. Taking into account the investment objective and guidelines, the portfolio is constructed with attention to diversification and risk levels. The process seeks to reduce portfolio turnover. The fund combines the potential of our best ideas with the risk benefits of diversification.
5. Portfolio Evaluation and Attribution Analysis What are the performance contributors/detractors?	Portfolios are subject to weekly review, while a semi- annual review evaluates methodology, resources, themes, country level issues and global trends. TAML's investment process combines the benefits of individual and team portfolio management.

Risk Management

Investment in emerging markets equities inevitably involves risk in a volatile asset class, and portfolios constructed from the "bottom up" may be exposed to risks that become evident when viewed from the "top down". Franklin Templeton Investments uses a comprehensive approach to managing risks within our portfolios. The goal of our investment risk management process is not to avoid risk, but to ensure that risks are "understood, intended and compensated". This philosophy is integrated into each step of the investment process:

Risk management is led first and foremost by experienced portfolio managers. It is integrated within each step of our fundamental, research-driven process, and includes regular interaction with our independent Performance Analysis and Investment Risk (PAIR) team. The PAIR team consists of over 100 investment risk and performance professionals across 20 global locations. PAIR's mission is to integrate investment risk insight and information into each step of the investment process. This is accomplished via regular meetings with the Emerging Markets investment team:

Weekly engagement in the weekly call, and weekly performance & risk summary sent out to TAML

Monthly summary of latest TEMIT performance and risk profile sent to portfolio and senior management

Quarterly in-depth review meetings on the performance of TEMIT, Index and Peers

Risk Management

Recognised

• Identify and understand risk at the security, portfolio and operational level

Rational

• Affirm that identified risks are an intended and rational part of each portfolio's strategy

Rewarded

• Verify that every risk provides the potential for a commensurate long-term reward

PORTFOLIO MANAGERS

Our approach

Dedicated Risk Management Specialists

• Provide robust analytics and critical, unbiased insight

• Locally positioned to work consultatively with portfolio teams around the globe

Oversight Committees

Focus on most complex risk factors:

• Counterparty Risk

• Complex Securities

• Pricing and Liquidity

• Global Products

Tools and Platforms

Centrally supported, best-in-class platforms for:

• Data Analytics and Modelling

• Portfolio Compliance

• Trade Monitoring and Execution

Portfolio Report

Market Overview

The global economy expanded moderately during the 12 months under review amid an accommodating monetary policy environment of low interest rates. Although several emerging market countries faced headwinds such as soft domestic demand, weak exports and geopolitical crises, emerging market economies overall continued to grow faster than developed market economies. China's slowing rate of economic growth appeared to stabilise in the second half of 2014 as fiscal and monetary stimulus measures began to gain traction. Strength in production and consumer spending helped offset weakness in fixed-asset investment. Domestic demand continued to account for a greater portion of China's gross domestic product, as the government's market-friendly policies supported entrepreneurial and consumer facing businesses. The country's non-manufacturing sector expanded during the period, but the manufacturing sector weakened near the year-end. India's manufacturing and services sectors strengthened as they benefited from the new government's pro-business economic reforms. Other emerging market countries showing signs of economic improvement included Mexico, Qatar and Thailand, while several economies, including those of Turkey, Russia and South Africa, showed signs of strain. Brazil exited recession as government spending drove third-quarter economic growth and consumer spending supported fourth-quarter expansion, but the country's economy continued to face headwinds such as high inflation, lower commodity prices and severe drought.

Central bank actions varied across emerging markets during the 12-month period. Some central banks, including those of Brazil, South Africa and Russia, raised interest rates in response to rising inflation and weakening currencies. In contrast, several central banks, including those of India, Turkey and South Korea, lowered interest rates to promote economic growth. In China, in addition to cutting its benchmark interest rate, the People's Bank of China provided short-term liquidity, extended its medium-term lending facility and lowered the reserve requirement ratio for commercial banks. With inflationary pressures trending downward, policymakers may have the flexibility to implement additional measures to support the economy.

Emerging markets experienced volatility during the period amid concerns about global economic growth, such as the future course of US monetary policy, political instability and geopolitical crises in certain regions, Greece's debt negotiations and the devaluation of many currencies against the US dollar. Also weighing on investor sentiment was a sharp decline in crude oil prices, which put pressure on several oil-producing countries' financial positions and currencies. However, China's fiscal and monetary stimulus measures, the European Central Bank's monetary easing and the US Federal Reserve Board's continued sympathetic policy provided investors with some optimism. A temporary solution to Greece's dispute with the country's international creditors and a Russia-Ukraine ceasefire agreement bolstered emerging market stocks in February, but renewed uncertainties then tempered stock performance near the year end.

Russia was one of the weakest emerging market performers in the 12-month period ended March 2015 as a decline in commodity prices and sanctions over events in Ukraine limited the sources of relief for an economy that was already slowing. Efforts by investors to withdraw from Russia put the equity market and the ruble under severe pressure, with efforts to defend the currency through much higher interest rates having little effect. A credit downgrade by the international ratings agency Standard & Poor's of the country's sovereign credit rating from BBB- to BB+, that is to below investment grade status, citing deteriorating asset quality in the financial system, further impacted investor sentiment.

A number of Asian markets enjoyed notably strong performances during the year, reflecting monetary easing, benefits of lower oil prices and the progress of reform measures. China, including Hong Kong, and India enjoyed particularly substantial gains, while Indonesia and Thailand also recorded double-digit returns. South Africa also gained significant ground, while various combinations of oil and commodity price sensitivity and political issues depressed Brazil and Russia. In Brazil, the re-election of incumbent President Dilma Rousseff diminished earlier market hopes for a more market-friendly political environment. Sluggish economic data, an increase in interest rates, falling commodity prices, devaluation of the real and a corruption scandal affecting the state oil company, all impacted investor sentiment in the Brazilian market.

South Korea, Pakistan and Turkey, despite reporting positive returns, lagged their regional peers.

Performance Attribution Analysis

Performance Attributions %

Year ended 31 March 2015

Total Return (Net)⁽¹⁾	9.6
Expenses⁽²⁾	1.2
Total Return (Gross)⁽³⁾	10.8
Benchmark Total Return⁽⁴⁾	13.2
Excess Return⁽⁵⁾	(2.4	)
Sector Allocation	(7.8	)
Stock Selection	(0.1	)
Currency	6.0
Residual⁽⁶⁾	(0.5	)
Total Portfolio Manager Contribution	(2.4	)

Notes

⁽¹⁾Total Return (Net) is the NAV return inclusive of dividends reinvested.

⁽²⁾ Expenses incurred by the Company for the year to 31 March 2015.

⁽³⁾Gross return is Total Return (Net) plus Expenses. Gross of fee performance is preferable for attribution and other value-added reporting as it evaluates the contribution of the Investment Manager.

⁽⁴⁾MSCI Emerging Markets (Total Return) Index, inclusive of gross dividends reinvested. Indices are comparable to gross returns as they include no expenses.

⁽⁵⁾Excess return is the difference between the gross return of the portfolio and the return of benchmark.

⁽⁶⁾The "Residual" represents 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 to calculate attribution.

Source: FactSet and Franklin Templeton Investments.

For the 12 months ending 31 March 2015, the MSCI Emerging Markets Index rose by 13.2% in sterling terms on a total return basis. On the London Stock Exchange, TEMIT's share price produced a total return of 6.9% for the same period, while the net asset value (NAV) per share total return was 9.6%. The NAV total return was higher than the share price return because the discount widened over the period.

TEMIT's portfolio is managed with a strategy which is built on the belief that superior investment returns can be achieved by investing in companies which the Investment Manager believes are undervalued by the market, fundamentally strong and growing. Our stock selection is based on companies, not market indices and so both TEMIT's portfolio and its performance are likely to vary from the index.

By sector, investments in materials, energy and financials were the major detractors to the performance relative to the benchmark index. Although positive stock selection in the information technology sector offset some of the detraction from an underweight exposure, the sector as a whole remained a detractor. TEMIT maintained an underweight position due to excessive valuations and concerns about shortening product cycles and possible obsolescence risks, which may result in relatively high capital expenditure in the future.

Stocks in the energy sector were impacted by lower oil and gas prices as well as oversupply concerns. Key detractors included Petroleo Brasileiro (Petrobras), SK Innovation and PTT Exploration and Production.

Petrobras is Brazil's main producer, refiner and distributor of oil and gas and has an exceptional portfolio of production and exploration assets. Nervousness amongst investors, attributed to long delays in the release of corporate results due to the alleged irregular transactions, the company's heavy debt burden, and sharply weakening oil and gas prices, resulted in a 48% decrease in share price in sterling terms. The share price rebounded strongly post the period-end, with a 38% return in sterling terms in April, as a rise in oil prices supported the stock and the publication of 2014 accounts removed a significant source of uncertainty for investors.

PTT Exploration and Production is the listed oil and gas exploration and production arm of Thailand's state energy company. We believe that economic growth in emerging markets including Thailand and the wider Asian region should support long term demand growth for oil and gas. In addition, reform of Thailand's regulation of its oil and gas industry could benefit the profitability of the company.

SK Innovation is a South Korean energy based conglomerate. The core of the business is the oil refining activities in petrochemicals, lubricants and some exploration activities. In our opinion, and despite recent performance, oil refining and petrochemical assets in Asia could potentially earn attractive returns due to the expected rapid economic growth and increasing demand for petroleum products in the region.

After re-examining our holdings in the energy sector, we increased our positions in all of these companies.

In the financial sector, overweight positions in major Brazilian commercial banks, Itau Unibanco and Banco Bradesco, were the largest detractors. Both stocks experienced single-digit declines in share price during the reporting period. Lack of exposure to Bank of China, China Construction Bank and Industrial and Commercial Bank of China, which reported strong gains during the period, also worked against TEMIT's performance relative to the benchmark index. Substantial fund flows from mainland China via the newly implemented Hong Kong-Shanghai Stock Connect program pushed share prices up. The Investment Manager prefers to hold Brazilian, Thai and Indonesia banks as opposed to Chinese banks due to their higher profitability, attractive fundamentals and long-term growth prospects. Banks in these countries can offer an effective means to gain exposure to domestic economic growth in Southeast Asia and Latin America; in particular to access the expansion of consumer spending as rising regional wealth fuels a growing middle class. Holdings in Kasikornbank, Siam Commercial Bank and Bank Central Asia all saw double-digit gains and contributed positively to performance in the past 12 months. Moreover, over the last five years these stocks have significantly outperformed the Chinese banks.

TEMIT's positions in materials companies, Vale, Kumba Iron Ore and Impala Platinum were the largest detractors to performance in the last 12 months.

Vale (1.9%) is a major mining company based in Brazil which owns very large reserves of iron ore and nickel as well as transport and logistics assets. The Brazilian market as a whole was pressured by political turbulence and economic weakness in the latter part of the reporting period, and weakness of the Brazilian real against the U.S. dollar further impacted Vale's share price. We believe that over the long-term emerging market economic growth is likely to drive demand for commodities such as iron ore higher, and that Vale is well placed to benefit as a low cost producer.

Share Price Total Return

-53.4%

Relative contribution to portfolio

-1.5%

Kumba Iron Ore (1.6%) is a South Africa based iron ore mining company, the majority of which is owned by Anglo American. A decline in iron ore prices due to rising supplies and sluggish demand impacted the share price of these companies. Iron ore is perceived by investors to be one of the most oversupplied of all metals and minerals. However, iron ore is also one of the most consolidated markets with a handful of dominant players around the world. Steel and thus iron ore demand is expected to continue to grow rapidly especially in emerging and frontier markets because of infrastructure development and other sources of demand. We are of the opinion that Kumba, as a pure iron ore company, could be in a more advantageous and profitable position in relation to its parent, Anglo American Corporation, which has a more diversified portfolio.

Share Price Total Return

-53.3%

Relative contribution to portfolio

-1.0%

Impala Platinum (0.9%) is a world leading platinum producer with operations located in South Africa and Zimbabwe, which have two of the leading major platinum-group metals (PGM) deposits in the world. These two countries account for more than 80% of the global platinum production. Weak platinum prices and a five month strike in the first half of 2014 impacted earnings. However, there has been increased stability in the labour market and some recovery in production levels. Impala's comparatively low cost operations make it a major beneficiary of an expected consolidation in the PGM space. The use of PGM in auto catalysts as more stringent emission legislation comes into effect globally could support metal prices over the longer term. The company is also a beneficiary of the weaker rand compared with the US dollar, as output is priced in US dollar but costs are based in rands.

Share Price Total Return

-52.1%

Relative contribution to portfolio

-0.8%

It is the Templeton philosophy to invest in companies that are well managed and profitable, but have fallen out of favour due to short-term uncertainties. As a result, the Investment Manager used this share price correction as an opportunity to invest in, or increase TEMIT's investments in all three materials companies described above.

On the positive side, investments in consumer discretionary were by far the top performers while industrials also had a positive impact. Major contributors at the stock level included Brilliance China Automotive, Tata Consultancy Services and Siam Commercial Bank.

The top three contributors to relative performance in the last 12 months were overweight positions in Brilliance China Automotive, Hyundai Development and Tata Consultancy Services.

Brilliance China Automotive (11.1%) is a Chinese car maker with a joint venture with German luxury car maker BMW. Resilient sales of luxury cars in China drove strong earnings, with BMW cars taking an increasing share of the market segment and the weakness in the Euro exchange rate also benefitting profit margins. News of an extension of the joint venture agreement to 2026 also buoyed the share price. We believe that Brilliance China's capacity expansion plans, coupled with the BMW brand's increasing popularity in China and strong management, should allow the company to continue enjoying growing demand and rising market share.

Share Price Total Return

+42.1%

Relative contribution to portfolio

+2.3%

Hyundai Development (4.5%) is one of the leading residential property developers in South Korea. With a strong brand name - "I-Park", the company is estimated to have the largest market share in the residential construction business. Measures by the South Korean authorities to stimulate the housing market coupled with interest rate cuts boosted investor sentiment during the reporting period. The company also reported solid corporate earnings for the fourth quarter of 2014, supported by better than expected operating profits. In addition to being a beneficiary of growth in consumer wealth, we believe that the group is well placed to benefit from additional government initiatives to stimulate the housing market both through relaxation of mortgage lending conditions and through encouragement of refurbishment and upgrading activity.

Share Price Total Return

+106.7%

Relative contribution to portfolio

+1.9%

One of India's largest and oldest IT consulting companies, Tata Consultancy Services (3.4%), is a beneficiary of improving trends in global IT outsourcing due to its extensive global exposure and comprehensive range of services. In addition to benefiting from the strong performance of the Indian market as a whole, weakness in the rupee during the year was advantageous for the company whose cost-base is concentrated in rupees, while its revenues arise primarily in foreign currencies. We believe that India has a major competitive advantage in the provision of outsourcing services due to a combination of available technological expertise and relatively low labour costs.

Share Price Total Return

+34.0%

Relative contribution to portfolio

+1.0%

For the five years ended 31 March 2015, the MSCI Emerging Markets Index posted a 13.3% total return. On the London Stock Exchange, TEMIT's share price produced a total return of 1.2% for the same period. The Investment Manager has a value investing style and, while recognising that it is not TEMIT's benchmark index, it is worth noting that the MSCI Emerging Markets Value Index produced a total return of 4.9% over the five year period, compared with TEMIT's net asset valuetotal return of 7.9%.

The difference in performance between TEMIT's NAV and the MSCI EM Index during the five-year period was mainly attributed to two stocks in the materials sector, Vale in Brazil and Sesa Sterlite in India. Vale declined by 77% in sterling terms over the period as a decline in iron ore prices and sentiment on the Brazilian market weakened. Vale remains one of the world's lowest cost producers of iron ore and other metals and should emerge as an even stronger player once the short-term overcapacity is absorbed, iron ore prices recover and sentiment in the Brazilian market improves. We re-assessed our position and decided to increase our investment based on our long-term conviction which stems from the belief that demand will grow while supply is limited, which should support iron ore prices in the years ahead. Indeed, in the one month since the end of the reporting period, the share price of Vale rose by more than 20% as commodity prices rebounded and sentiment in Brazil improved. Sesa Sterlite, however, was sold in 2014 due to a change in the company fundamentals after its merger with other interests of its parent company the Vedanta Group resulted in iron ore accounting for a smaller portion of the new company's earnings.

We continue to believe in the economic and social development of emerging markets and this has led us over the last five years to continue to hold selective positions in materials stocks which, as a sector, has been the major detractor from performance relative to the benchmark.

On the other side of the performance analysis, relative and absolute performance was strongly supported by the consumer discretionary sector where our holding in Brilliance China Automotive was the major contributor to performance, with the stock returning close to 600% in sterling term over the 5-year period, while exposure to Astra International also helped returns. Elsewhere, the industrials and financials sectors also made a positive contribution to performance. Hyundai Development, China International Marine Containers (CIMC) and a number of Asian banks, Siam Commercial Bank, Kasikornbank, Bank Central Asia and MCB Bank have all seen their share price nearly, or more than double in the last 5 years.

Our high conviction and long-term approach to investing in emerging markets has contributed to outperformance over the longer term. Since inception, TEMIT has delivered a total NAV return of +2,362% versus our benchmarks' +1,544%, in sterling terms. We believe that emerging markets in general, and our stock holdings in particular, stand to benefit from attractive valuations and improving global growth prospects; and we continue to maintain faith in our approach and our portfolio selection.

New Holdings

Security	Country	Amount £(m)
Kumba lron Ore	South Africa	55
CIA Hering	Brazil	21
lnner Mongolia Yitai Coal	Hong Kong/China	16
Industries Qatar*	Qatar	16
Truworths International	South Africa	16
Sembcorp Marine	Singapore	8
Nestlé Nigeria	Nigeria	2
Total		134

*A new holding was established early in the year and was sold in September 2014.

Kumba Iron Ore is a South Africa based iron ore mining company, the majority of which is owned by Anglo American. The company also operates the port operations at Saldanha Bay, from where its iron ore is shipped to various destinations. The stock was added to the portfolio due to its attractive valuations, strong balance sheet and high profit margins along with high dividend payout percentage. While investors may be concerned about a prolonged slowdown in China's economy and its impact on iron ore demand and iron ore prices, China's GDP growth rate remains robust at about 7%. The long-term demand for steel is thus expected to remain strong with ongoing project development in the cities across China requiring steel products.

CIA Hering is one of the largest apparel manufacturers and retailers in Brazil. A strong brand, attractive valuations, high profit margins and net cash levels should bode well for the company in the long-term. Share price weakness during the reporting year provided an attractive investment opportunity.

Inner Mongolia Yitai Coal is one the largest coal producers in China. The company produces high quality thermal coal, and also has coal-to-oil technology, railway transportation, pharmaceuticals and solar power generation businesses. High quality coal reserves, high profit margins and a strong balance sheet bode well for the company. Any closures of smaller and unproductive mines could also result in market share expansion for larger miners such as Yitai.

Truworths International is one of South Africa's leading fashion retailers. It specialises in the sale of clothing, footwear and perfumes for men and women. The stock was added to the portfolio due to its attractive valuations, strong portfolio of brands, high profit margins and return on equity.

Listed in Singapore, Sembcorp Marine is a global leader in marine and offshore engineering, offering a full spectrum of integrated solutions in ship repair, shipbuilding, ship conversion, rig building, and offshore engineering and construction. The stock was added to the portfolio based on its attractive valuations, high return on equity and sizeable order backlog. Share price weakness during the reporting year provided an attractive investment opportunity.

A 60% owned subsidiary of Nestlé, Nestlé Nigeria manufactures and markets an array of high quality branded food and beverage products. The company has been operational in Nigeria for more than five decades. The company's strong market position and support from its parent in areas such as production development and expansion makes it a key beneficiary of the growing consumer market in Nigeria. High profitability and return on equity further increases the company's attractiveness.

Increased Holdings

Security	Country	Amount £(m)
Unilever	United Kingdom	61
Petroleo Brasileiro, ADR	Brazil	17
Vale, ADR	Brazil	14
Impala Platinum	South Africa	11
PetroChina, H	Hong Kong/China	4
Buenaventura, ADR	Peru	4
China Petroleum and Chemical, H	Hong Kong/China	3
PTT Exploration and Production	Thailand	3
SK Innovation	South Korea	2
Guangzlhou Automobile Group, H	Hong Kong/China	1
Bank Danamon Indonesia	Indonesia	1
Total		121

An evaluation of existing holdings in the portfolio led to additional purchases in eleven companies that remained attractive to us. Purchases were made in two key sectors - consumer staples and energy.

In the consumer staples sector, the position in Unilever, a UK listed company which derives a substantial portion of its revenues from emerging markets, was increased. Energy-related companies that were added to included Petroleo Brasileiro, Brazil's national oil and gas company, leading Chinese oil and gas companies, PetroChina and China Petroleum and Chemical, PTT Exploration and Production, a Thai national petroleum exploration and production company, and SK Innovation, South Korea's largest oil refiner.

Holdings in selected companies in the materials sector were also increased, even though there was an overall reduction in the exposure to this sector (as discussed below). These included Vale, one of the world's largest iron ore producers, Impala Platinum, a leading global platinum producer and Buenaventura, one of the top 10 gold mining companies in the world.

Holdings were also increased in Guangzhou Automobile Group, a leading Chinese automobile manufacturer with joint ventures with international partners including Honda, Toyota and Fiat, and also in Bank Danamon Indonesia, one of the ten largest banks in Indonesia.

Partial Sales

Security	Country	Amount £(m)
Tata Consultancy Services	India	(81)
Infosys Technologies	India	(21)
Brilliance China Automotive	Hong Kong/China	(19)
Akbank	Turkey	(12)
Tupras-Turkiye Petrol	Turkey	(9)
Oil & Natural Gas	India	(8)
Total		(150)

Exposure to the information technology (IT) sector was reduced as holdings in two Indian IT consulting companies, Tata Consultancy Services and Infosys Technologies were top-sliced to realise profits and raise funds for other investment opportunities.

Our holding in Brilliance China Automotive was trimmed as part of efforts to reduce concentration in the stock. The company remains our top holding, signalling our continued confidence in the business. Holdings in Akbank, a major Turkish Bank, Tupras-Turkiye Petrol, Turkey's largest industrial company and one of Europe's biggest refiners, and Oil & Natural Gas, India's dominant company in the Indian upstream sector, were also reduced.

Total Sales

Security	Country	Amount £(m)
Sesa Sterlite	India	(40)
Wal-Mart de Mexico	Mexico	(37)
Norilsk Nickel, ADR	Russia	(30)
Anglo American	South Africa	(29)
Industries Qatar*	Qatar	(17)
Norilsk Nickel	Russia	(9)
National Aluminium	India	(8)
Total		(170)

* A new holding was established early in the year and fully sold off in September 2014.

Disposals were concentrated in India, Russia and Turkey to raise funds for more attractive opportunities elsewhere, as described above. Exposure to Mexico was also eliminated after the sale of the only holding in that market, the major retail chain Wal-Mart de Mexico.

Some switching was undertaken in the materials sector, which resulted in an overall reduction in exposure to the sector. Positions in Sesa Sterlite, an iron ore miner in India, Norilsk Nickel, a Russian nickel producer, Anglo American, a diversified mining company with significant operations based in South Africa, and National Aluminium, an Indian aluminium producer, were sold.

Industries Qatar, an industrial company with interests in petrochemicals, fertilisers and steel, was added to the portfolio and subsequently sold during the reporting period. The company is essentially a publicly listed holding structure for the government's interests in four of the largest non-gas industrial companies in Qatar. The upgrade of Qatar by MSCI to emerging market from frontier market status led to substantial speculative fund flows into the market, which reduced our expectation of future price increases. This prompted the Investment Manager to sell our holding.

Securities: Top contributors and detractors to relative performance (%)*

	Contribution			Contribution
	to Relative	Share Price		to Relative		Share Price
Top Contributors	Performance	Total Return	Top Detractors	Performance		Total Return
Brilliance China Automotive	2.3	42.1	Vale, ADR	(1.5	)	(53.4)
Hyundai Development	1.9	106.7	Kumba Iron Ore	(1.0	)	(53.3)
Tata Consultancy Services	1.0	34.0	Impala Platinum	(0.8	)	(52.1)
Kasikornbank	0.6	41.8	Petroleo Brasileiro, ADR	(0.7	)	(48.0)
VTech^†	0.6	32.8	Tencent Holdings^	(0.7	)	53.6

* For the period 31 March 2014 to 31 March 2015.

^ Company not held by TEMIT.

† Company not in the MSCI Emerging Markets Index.

Top 10 portfolio weights (%)

* As at 31 March 2015.

† Company not in the MSCI Emerging Markets Index.

Sectors: Top contributors and detractors to relative performance(%)*

MSCI

Emerging

MSCI

Markets

Emerging

Contribution

Index Total

Contribution

Markets Index

Factors

to Relative

Sector

Factors affecting

to Relative

Total Sector

affecting

Top Contributors

Performance

Return

Performance

Top Detractors

Performance

Return

performance

Consumer

2.3

11.1

Strong stock

Materials

(2.0

)

(7.9

)

Stock selection

Discretionary

selection and

overweight

Industrials

2.0

10.8

Strong stock

Energy

(1.6

)

(11.5

)

Stock selection

selection

and overweight

Consumer

0.2

10.7

Stock selection

Financials

(1.1

)

18.6

Stock selection

Staples

Utilities^

0.1

9.1

Sector not held by

Information

(0.5

)

29.5

Stock selection

TEMIT

Technology

Health Care^

(0.5

)

41.1

Sector not

held by TEMIT

Telecommunication

(0.4

)

19.4

Sector not

Services^

held by TEMIT

* For the period 31 March 2014 to 31 March 2015.

^ No companies held by TEMIT in these sectors.

Sector weightings vs benchmark (%)*

* As at 31 March 2015.

^ No companies held by TEMIT in these sectors.

Country: Top contributors and detractors to relative performance(%)*

MSCI

Emerging

MSCI

Markets

Emerging

Contribution

Index Total

Factors

Contribution

Markets Index

Factors

to Relative

Country

affecting

to Relative

Total Country

affecting

Top Contributors

Performance

Return

performance

Top Detractors

Performance

Return

performance

South Korea

2.3

6.8

Strong stock

South Africa

(2.1

)

17.0

Underweight

selection

exposure

Thailand

0.8

25.1

Strong stock

Brazil

(2.0

)

(19.5

)

Stock

selection and

selection

overweight

Greece^

0.6

(59.6)

Country

Taiwan^

(1.4

)

27.1

Country not

not held by

held by TEMIT

TEMIT

Malaysia^

0.5

(0.9)

Country

Hong Kong/China

(1.3

)

39.6

Stock

not held by

selection

TEMIT

Mexico^

0.5

5.2

Country

Peru

(0.5

)

11.8

Stock

not held by

selection

TEMIT

* For the period 31 March 2014 to 31 March 2015.

^ No companies held by TEMIT in these countries.

Country weightings vs benchmark (%)*

* As at 31 March 2015.

** Other countries held by the benchmark are Chile, Colombia, Czech Republic, Egypt, Greece, Hungary, Malaysia, Mexico, Philippines, Poland, Qatar, Taiwan, and United Arab Emirates.

† Country not in the MSCI Emerging Markets Index.

Outlook

High economic growth rates remain a key attraction of emerging markets. Even with major economies like Brazil and Russia slowing down, emerging markets' growth in 2015 is expected to be comfortably in excess of that achieved by developed markets, with China and India driving Asia to particularly strong growth. In addition, what also makes emerging markets attractive to us is the fact that, in general, they have much less debt and hold significant foreign reserves compared to developed markets.

The direction of policy across most Asian countries appears favourable for economic growth. The Chinese authorities are continuing the major programme of reforms laid out in late 2013 and in India Prime Minister Modi is starting to introduce ambitious reform measures in line with his election manifesto. Positive structural changes are under way in many other markets across the region while free trade initiatives, most notably the planned Association of Southeast Asian Nations Economic Community and the Trans Pacific Partnership could provide a further boost to growth.

In Latin America, while Brazil has been facing a difficult economic situation due to the reasons discussed above, taking a longer-term view, the currency devaluation could boost competitiveness going forward and moves to root out corruption could lead to improved corporate governance and economic performance. Moreover, significant benefits could arise should the government adopt more favourable policies and reforms. Thus, we used the market correction as an opportunity to add to our holdings in Brazil at attractive prices.

Central European emerging markets and Turkey could benefit from economic recovery in the Eurozone area. Elsewhere in the region, economic sanctions and anticipation of prolonged political confrontation led us to trim our holdings in Russia during the year. However, we continue to maintain some exposure and monitor the situation in that market.

TEMIT is characterised by a long-term investment approach. Accordingly, we do not make major changes to portfolio holdings based upon short-term macro factors, but will typically take advantages of stock specific valuation opportunities. We continue to focus on companies which are well managed and have sound business models, strong cash flows, good dividend payouts or clear competitive advantages. As discussed above, we continue to identify and invest in new opportunities in various markets, which we believe will support performance over the long term. Also, in cases where price declines cannot be justified and where cheap stocks have become cheaper, we have proceeded to add to the Company's holdings. Similarly, in cases where fundamentals have deteriorated and the continued holding of the stock cannot be justified, we have sold down or liquidated holdings. We continue to search for stocks in the emerging market universe that are out of favour and trading at attractive valuations.

Mark Mobius, Ph.D.

Portfolio Summary

Portfolio Distribution as at 31 March 2015 and 31 March 2014

All figures are in %

	Austria	Brazil	Hong Kong/China	India	Indonesia	Jordan	Mexico	Nigeria	Pakistan	Peru	Russia	Singapore	South Africa	South Korea	Thailand	Turkey	United Kingdom	Other Net Assets	2015 Total	2014 Total
Consumer Discretionary	-	0.8	14.2	-	4.3	-	-	-	-	-	-	-	0.8	-	-	-	-	-	20.1	16.2
Consumer Staples	-	-	3.9	-	-	-	-	0.1	-	-	-	-	-	-	0.5	-	3.4	-	7.9	6.4
Energy	0.7	1.1	5.8	1.3	-	-	-	-	1.0	-	1.6	-	-	1.9	3.1	1.8	-	-	18.3	20.3
Financials	-	7.3	-	0.3	2.9	-	-	-	3.1	-	-	-	-	-	10.3	2.5	-	-	26.4	26.1
Industrials	-	-	0.9	-	-	-	-	-	-	-	-	0.4	-	4.5	-	-	-	-	5.8	3.3
Information Technology	-	-	3.9	4.0	-	-	-	-	-	-	-	-	-	-	-	-	-	-	7.9	10.8
Materials	-	1.9	1.7	-	-	-	-	-	-	2.2	-	-	2.5	-	0.2	-	-	-	8.5	13.8
Total Equities	0.7	11.1	30.4	5.6	7.2	-	-	0.1	4.1	2.2	1.6	0.4	3.3	6.4	14.1	4.3	3.4	-	94.9	96.9
Other Net Assets	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	5.1	5.1	3.1
2015 Total	0.7	11.1	30.4	5.6	7.2	-	-	0.1	4.1	2.2	1.6	0.4	3.3	6.4	14.1	4.3	3.4	5.1	100.0	100.0
2014 Total	1.1	13.3	26.0	11.9	6.6	0.1	1.8	-	4.5	2.3	4.3	-	2.7	4.6	12.6	4.9	0.2	3.1	100.0	100.0

	Less than	£1.5bn	Greater than	Liquid
Market Capitalisation Breakdown^(a) (%)	£1.5bn	to £5bn	£5bn	Net Assets^(b)
31 March 2015	7.8	32.9	54.2	5.1
31 March 2014	5.3	28.2	63.4	3.1

^(a)Market Capitalisation - The total market value of a company's shares. For a vehicle like TEMIT, which invests in a number of companies, this is calculated by the share price on a certain date multiplied by the number of shares in issue.

^(b)Other Net Assets are the result of sales proceeds awaiting reinvestment.

Source: FactSet Research System, Inc

	31 March	31 March
Split Between Markets^(c) (%)	2015	2014
Emerging Markets	86.2	91.0
Frontier Markets	4.2	4.6
Developed Markets^(d)	4.5	1.3
Other Net Assets	5.1	3.1

^(c)Geographic split between "Emerging Markets", "Frontier Markets" and "Developed Markets" are as per MSCI index classifications.

^(d)Developed markets exposure represented by Austria, the United Kingdom and Singapore.

Source: FactSet Research System, Inc

Investment Changes - Geographical

								Movement in year
										MSCI
	31 March 2014				Market		31 March 2015			Emerging
	Market Value	Purchases	Sales		Movement		Market Value	TEMIT		Markets Index
Country	£m	£m	£m		£m		£m	%		%
Hong Kong/China	496	24	(19	)	119		620	23.8		39.6
Thailand	241	3	-		46		290	18.9		25.1
Brazil	254	52	-		(80	)	226	(26.1	)	(19.6)
Indonesia	126	1	-		21		148	16.5		20.7
South Korea	87	2	-		40		129	44.9		6.8
Other	650	173	(301	)	6		528	-		-
Other Net Assets	60	-	-		44		104	-		-
Total	1,914	255	(320	)	196		2,045

Investment Changes - Sector

								Movement in year
										MSCI
	31 March 2014				Market		31 March 2015			Emerging
	Market Value	Purchases	Sales		Movement		Market Value	TEMIT		Markets Index
Sector	£m	£m	£m		£m		£m	%		%
Financials	499	1	(12	)	52		540	10.7		18.6
Consumer Discretionary	310	38	(19	)	81		410	24.6		11.1
Energy	388	45	(17	)	(42	)	374	(10.1	)	(11.5)
Materials	265	84	(116	)	(58	)	175	(24.9	)	(7.9)
Information Technology	207	-	(102	)	57		162	54.3		29.5
Other	185	87	(54	)	62		280	-		-
Other Net Assets	60	-	-		44		104	-		-
Total	1,914	255	(320	)	196		2,045

10 Largest Investments

In order of Portfolio Market Value as at 31 March 2015

BRILLIANCE CHINA AUTOMOTIVE

Country	% of net assets	Market value £'000
HONG KONG/CHINA	11.1%	224,780

Brilliance China Automotive is a major automobile manufacturer in China with a joint venture with luxury car maker BMW. Via this joint venture, China has surpassed the United States as BMW's largest single market and the company plans to be able to produce 400,000 vehicles in the medium-term as it also develops local engine assembly capacity. At present, the company manufactures BMW X1, 3 series and 5 series models as well as its most recent venture, China's first all-electric vehicle, the ZINORO 1E. The company has consistently delivered strong growth in earnings, and remains a beneficiary of the robust growth in China's luxury automobile market, driven by the country's growing middle class.

Web site: www.brillianceauto.com

Source : FactSet. Prices rebased to 100 as at 1 April 2010.

*Capital return expressed in sterling.

SIAM COMMERCIAL BANK

Country	% of net assets	Market value £'000
THAILAND	4.6%	93,821

Siam Commercial Bank was Thailand's first indigenous bank, established in 1906 under Royal Charter and is now one of the country's largest banks. Its 2014 net profits of baht 53.3 billion increased by 6.2% year on year, were a further new record for the bank and represented the fifth consecutive year of net profit growth. The Bank provides a full range of financial services, including corporate and personal lending, retail and wholesale banking, foreign currency operations, international trade financing, cash management, custodial services, credit and charge card services and investment banking services, through its extensive branch network.

Web site: www.scb.co.th

HYUNDAI DEVELOPMENT

Country	% of net assets	Market value £'000
SOUTH KOREA	4.5%	91,271

Hyundai Development Company is a construction company in Korea which was established in 1986. Its major area of focus is construction where it is the leader in the domestic housing market and is involved in major civil engineering projects but it also has operations in petrochemicals, retail, property and financial management, healthcare, leisure, musical instrument production, sports and finance. The company reported growing sales in 2014, returned to profit having made a loss in 2013 and reduced its debt.

Web site: www.hyundai-dvp.com

Source : FactSet. Prices rebased to 100 as at 1 April 2010.

*Capital return expressed in sterling.

ASTRA INTERNATIONAL

Country	% of net assets	Market value £'000
INDONESIA	4.3%	87,253

Astra International is a diversified Indonesian conglomerate which was founded in 1957. It has four main businesses: automotive, financial services, heavy equipment and agribusiness. Its automotive business, which accounts for about half of its earnings, can be further broken down into motorcycles, cars and auto parts. Astra is the principal distributor for Toyota, Daihatsu, Isuzu, BMW and Peugeot cars as well as Nissan trucks in Indonesia. The company provides diversified exposure to the growing Indonesian economy. Results were almost unchanged in 2014 compared with 2013.

Web site: www.astra.co.id

DAIRY FARM

Country	% of net assets	Market value £'000
HONG KONG/CHINA	3.9%	80,290

Dairy Farm is a leading pan-Asian retailer which processes food, wholesales food and personal hygiene products in the Pacific region and in China. At 31 December 2014, the Dairy Farm Group and its associates and joint ventures operated over 6,100 outlets and employed over 100,000 people. It had total annual sales in 2014 exceeding US$13 billion.

The company describes its mission as "bringing to Asian consumers the benefits of modern retailing" and its strategy as offering "consumers value-for-money through efficient, low-cost distribution of high-quality fresh foods as well as consumer and durable goods in our supermarkets, hypermarkets, health and beauty stores, convenience stores and home furnishings stores".

Web site: www.dairyfarmgroup.com

Source : FactSet. Prices rebased to 100 as at 1 April 2010.

*Capital return expressed in sterling.

VTECH

Country	% of net assets	Market value £'000
HONG KONG/CHINA	3.9%	80,082

VTech is the world's largest manufacturer of cordless telephones, and the largest supplier of electronic learning products from infancy to preschool in the US and Western Europe. It also provides highly sought-after contract manufacturing services. Founded in 1976, VTech's mission is to be the most cost effective designer and manufacturer of innovative, high quality consumer electronics products and to distribute them to markets worldwide in the most efficient manner. With headquarters in the Hong Kong Special Administrative Region and state-of-the-art manufacturing facilities in China, VTech currently has operations in 11 countries and regions and approximately 37,000 employees, including around 1,500 R&D professionals in R&D centres in Canada, Hong Kong and China. The company's profits improved marginally in the year to March 2014 and it reported further improvements in the half year to September 2014.

Apart from the well-known VTech brand, the Group is licensed to design, manufacture and distribute AT&T branded wireline telephones and accessories in North America and China, as well as Telstra branded fixed-line telephones in Australia.

Web site: www.vtech.com-

KASIKORNBANK

Country	% of net assets	Market value £'000
THAILAND	3.8%	78,366

Kasikornbank is a leading bank in Thailand and is ranked number four in the country by assets, loans and deposits. The company describes itself as customer-centric with an overall strategy "to be the customer's main bank". Kasikornbank provides banking services to private individuals, small companies and larger corporate clients in Thailand. It has over 1,124 branches and 9,853 ATMs. From a strong domestic base, it expects to develop its international business with both Thai companies' international operations and foreign companies with operations in Thailand.

Last year, earnings before taxes increased by 11.9%.

Web site: www.kasikornbank.com

Source : FactSet. Prices rebased to 100 as at 1 April 2010.

*Capital rebased expressed in sterling.

ITAU UNIBANCO

Country	% of net assets	Market value £'000
BRAZIL	3.8%	77,261

Itau Unibanco is the largest Latin American bank and one of the largest banks in the world, with over 93,000 employees and operations in 20 countries. It is a universal bank with a range of services and products serving a varied client profile. In Brazil, Itau has over 5,000 branches and 28,000 ATMs. The bank has invested heavily in technology for its retail operations.

Itau has a strong record of growth, claiming 18.4% compound annual growth in assets from 2006 to 2014 and 13.9% compound annual growth in stockholders' equity over the same period.

Web site: www.itau.com

BANCO BRADESCO

Country	% of net assets	Market value £'000
BRAZIL	3.5%	72,113

Banco Bradesco is one of Brazil's largest private sector banks in terms of total assets. It provides a wide range of banking and financial products and services in Brazil and abroad to individuals, small to mid-sized companies and major local and international corporations and institutions. It has the most extensive private sector branch and service network in Brazil, which permits it to reach a diverse customer base. Services and products encompass banking operations, credit card issuance, consortiums, leasing, payment collection and processing, pension plans, asset management and brokerage services. It is the largest insurance company in Latin America. Bradesco's net income increased by 25.6% in 2014 compared with 2013.

Web site: www.bradesco.com.br

Source : FactSet. Prices rebased to 100 as at 1 April 2010.

*Capital return expressed in sterling.

TATA CONSULTANCY SERVICES

Country	% of net assets	Market value £'000
INDIA	3.4%	69,917

Tata Consultancy Services is an IT services, consulting and business solutions organisation. It offers a consulting-led, integrated portfolio of IT, BPS, infrastructure, engineering and assurance services. This is delivered through its unique Global Network Delivery Model™, recognised as the benchmark of excellence in software development. As part of the Tata group, India's largest industrial conglomerate, the company generated consolidated revenues of US$15.5 billion for year ended 31 March 2015 and its net income was up by 12.8%.

Web site: www.tcs.com

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.

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 International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Under company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements, 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 in IFRSs 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

• make an assessment of 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

We confirm that to the best of our knowledge:

• the financial statements, within this Annual Report, which have been prepared in accordance with IFRS give a fair, balanced and understandable view of the assets, liabilities, financial position and profit or loss of the Company for the year ended 31 March 2015; 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 and Transparency Rules; and

• the Annual Report and Audited Accounts taken as a whole are fair, balanced and understandable and provide the information necessary to assess the Company's performance, business model and strategy, principal risks and uncertainties.

By Order of the Board

Peter Smith

Chairman
12 June 2015

Financial Statements

Income Statement

For the Year Ended 31 March 2015

			Year ended 31 March 2015						Year ended 31 March 2014
	Note		Revenue £'000		Capital £'000		Total £'000		Revenue £'000		Capital £'000		Total £'000
Gains/(losses) on investments and foreign exchange
Gains/(losses) on investments at fair value		5		-		151,723		151,723		-		(372,663	)	(372,663	)
Gains/(losses) on foreign exchange				-		113		113		-		(202	)	(202	)
Revenue
Dividends		1		58,816		-		58,816		60,227		-		60,227
Bank and deposit interest		1		389		-		389		141		-		141
				59,205		151,836		211,041		60,368		(372,865	)	(312,497	)
Expenses
AIFM fee		2		(16,735	)	-		(16,735	)	-		-		-
Investment management fee		2		(4,944	)	-		(4,944	)	(19,870	)	-		(19,870	)
Other expenses		2		(3,082	)	-		(3,082	)	(6,068	)	-		(6,068	)
Profit/(loss) before taxation				34,444		151,836		186,280		34,430		(372,865	)	(338,435	)
Tax expense		3		(4,591	)	(2,172	)	(6,763	)	(4,660	)	(721	)	(5,381	)
Profit/(loss) for the year				29,853		149,664		179,517		29,770		(373,586	)	(343,816	)
Profit/(loss) attributable to equity holders of the Company				29,853		149,664		179,517		29,770		(373,586	)	(343,816	)
Earnings per share		4		9.28	p	46.54	p	55.82	p	9.14	p	(114.65	)p	(105.51	)p
Ongoing charges ratio								1.20	%					1.30	%

The capital element of return is not distributable.

The total column is the Income Statement of the Company.

The supplementary revenue and capital return columns are both prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations.

There is no other income for this year and therefore no separate statement of comprehensive income has been presented.

The Ongoing Charges Ratio (OCR) represents the annualised ongoing charges of the Company divided by the average of the daily net assets of the Company for the year. From 1 July 2014 Franklin Templeton agreed to a reduction of 0.10% per annum in Franklin Templeton fees to 1.10% per annum.

Dividend Policy

In accordance with the Company's stated policy, no interim dividend is declared for the year.

An ordinary dividend of 8.25 pence per share is proposed at a cost of £26,181,000.

(An ordinary dividend of 7.25 pence per share for the year ended 31 March 2014 was paid on 23 July 2014 at a cost of £23,373,000).

Further details can be found in Note 10 on page 94 of the annual report to 31 March 2015.

Balance Sheet

As at 31 March 2015

	Note		As at 31 March 2015 £'000			As at 31 March 2014 £'000
ASSETS
Non-current assets
Investments at fair value through profit or loss		5		1,941,161			1,853,554
Current Assets
Trade and other receivables		6		8,384			7,421
Cash				112,012			56,281
				120,396			63,702

Current Liabilities
Trade and other payables		7		(14,264	)		(2,970	)
Capital gains tax provision		3		(2,262	)		(721	)
				(16,526	)		(3,691	)
NET ASSETS				2,045,031			1,913,565
ISSUED SHARE CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY SHAREHOLDERS
Equity Share Capital		8		79,736			80,837
Capital Redemption Reserve				2,933			1,832
Special Distributable Reserve				433,546			433,546
Capital Reserve				1,423,461			1,298,542
Revenue Reserve				105,355			98,808
EQUITY SHAREHOLDERS' FUNDS				2,045,031			1,913,565
Net Asset Value per share (in pence)		9		641.2			591.8

These Financial Statements of Templeton Emerging Markets Investment Trust PLC (company registration number SC118022) were approved for issue by the Board and signed on the 12 June 2015.

Peter Smith	Peter Harrison
Chairman	Director

Statement of Changes in Equity

For the Year Ended 31 March 2015

	Equity Share Capital £'000		Capital Redemption Reserve £'000	Special Distributable Reserve £'000	Capital Reserve £'000		Revenue Reserve £'000		Total £'000
Balance at 31 March 2013	81,969		700	433,546	1,697,011		89,494		2,302,720
Profit/(loss) for the year	-		-	-	(373,585	)	29,770		(343,815	)
Equity dividends	-		-	-	-		(20,456	)	(20,456	)
Purchase and cancellation of own shares	(1,132	)	1,132	-	(24,884	)	-		(24,884	)
Balance at 31 March 2014	80,837		1,832	433,546	1,298,542		98,808		1,913,565
Profit for the year	-		-	-	149,664		29,853		179,517
Equity dividends	-		-	-	-		(23,373	)	(23,373	)
Unclaimed dividends*					-		67		67
Purchase and cancellation of own shares	(1,101	)	1,101	-	(24,745	)	-		(24,745	)
Balance at 31 March 2015	79,736		2,933	433,546	1,423,461		105,355		2,045,031

*Any dividend unclaimed after a period of twelve years from the date of declaration of such dividend shall be forfeited and shall revert to the Company.

Cash Flow Statement

For the Year Ended 31 March 2015

	For the year to 31 March 2015 £'000			For the year to 31 March 2014 £'000
Cash flows from operating activities
Profit/(loss) before taxation		186,280			(338,435	)
Adjustments for:
(Gains)/losses on investments at fair value		(151,723	)		372,663
Realised (gains)/losses on foreign exchange		(113	)		202
Stock dividends received in year		(863	)		(704	)
Increase in debtors		1,447			1,871
Decrease in creditors		(299	)		(365	)
Cash generated from operations		34,729			35,232
Taxation paid		(5,222	)		(4,660	)
Net cash inflow from operating activities		29,507			30,572
Cash flows from investing activities
Purchases of non-current financial assets		(243,494	)		(142,342	)
Sales of non-current financial assets		317,709			192,614
		74,215			50,272
Cash flows from financing activities
Equity dividends paid (Note 10)		(23,373	)		(20,456	)
Unclaimed distribution		67			-
Purchase and cancellation of own shares		(24,685	)		(24,362	)
		(47,991	)		(44,818	)
Net increase in cash		55,731			36,026
Cash at the start of year		56,281			20,255
Cash at the end of year		112,012			56,281

Notes to the Financial Statements

For the Year Ended 31 March 2015

1 Income

	2015	2014
	£'000	£'000
Income from investments
Other overseas dividends	54,916	58,636
UK dividends	2,231	-
Stock dividends	863	237
Other EU dividends	806	1,354
	58,816	60,227
Other income
Bank and deposit interest	389	141
Total other income	389	141
Total income comprises:
Dividends	58,816	60,227
Interest	389	141
	59,205	60,368
Income from investments
Listed overseas	56,585	60,227

2 Expenses

	2015		2014
	£'000		£'000
Manager's expenses
AIFM fee	16,735	*	-
Investment management fee	4,944	**	19,870
Other expenses
Secretarial and administration expenses	1,059	**	4,096
Custody fees	735		891
Depositary fees	138		-
Directors' emoluments	282		271
Shareholder communications and marketing	226		44
Printing and postage costs	150		121
Registrar fees	129		182
Auditors' remuneration
Audit of the annual financial statements	29		28
Non-audit work***	-		10
Other services:
- Half yearly financial report	5		5
Membership fees	115		116
Legal fees****	60		148
Other expenses	154		156
Total other expenses	3,082		6,068

* For the 9 months to 31 March 2015.

** For the 3 months to 30 June 2014.

*** Fee in respect of advice in relation to Alternative Investment Fund Managers Directive.

**** Including professional fees relating to AIFMD amounting to £20,000 (2014: £109,000).

The Company appointed Franklin Templeton International Services S.à r.l. ("FTIS") as its Alternative Investment Fund Manager on 1 July 2014.

The contract between the Company and FTIS may be terminated at any date by either party giving one year's notice of termination. FTIS receives a fee paid monthly in arrears, at an annual rate of 1.10% of the monthly trading total net assets of the Company. As at 31 March 2015, £1,647,000 in fees were payable and outstanding to FTIS. These were paid in full in April 2015.

Templeton Asset Management Ltd. ("TAML") were the Company's Investment Manager and Franklin Templeton Investments Management Ltd. ("FTIML") provided secretarial and administration services until they were replaced by FTIS on 1 July 2014. TAML received a fee paid monthly in arrears, at an annual rate of 1.00% of the monthly trading total net assets of the Company. As at 31 March 2015, there were no fees outstanding to TAML (31 March 2014: £1,940,000). FTIML received a fee paid monthly in arrears, at an annual rate of 0.20% of the monthly trading total net assets of the Company. As at 31 March 2015, there were no fees outstanding to FTIML (31 March 2014: £317,000).

Fees in respect of services as Directors are paid by the Company only to those Directors who are independent of Franklin Templeton. Included within these costs are Employer National Insurance contributions.

3 Tax on ordinary activities

	2015			2014
	Revenue	Capital	Total	Revenue		Capital	Total
	£'000	£'000	£'000	£'000		£'000	£'000
Overseas withholding tax	4,591	-	4,591	5,208		-	5,208
Overseas capital gains tax	-	631	631	-		-	-
Prior period adjustments	-	-	-	(548	)	-	(548	)
Total current tax	4,591	631	5,222	4,660		-	4,660
Deferred tax	-	1,541	1,541	-		721	721
Total tax	4,591	2,172	6,763	4,660		721	5,381

Taxation	2015		2014
	£'000		£'000
Profit/(loss) before taxation	186,280		(338,435	)
Theoretical tax at UK corporation tax rate of 21% (2014: 23%)	39,119		(77,840	)
Effects of:
- Capital element of profit	(31,886	)	85,759
- Irrecoverable overseas tax	4,591		5,208
- Excess management expenses	2,599		3,137
- Movement in overseas capital gains tax liability	1,541		721
- Overseas capital gains tax	631		-
- Non-deductible expenses	1		19
- Dividends not subject to corporation tax	(8,978	)	(10,453	)
- UK dividends	(468	)	-
- Overseas tax expensed	(380	)	(507	)
- Income taxable in different periods	(7	)	(115	)
- Prior period adjustments	-		(548	)
Actual tax charge	6,763		5,381

As at 31 March 2015, the Company had unutilised management expenses of £71.0 million carried forward (2014: £58.6 million). These balances have been generated because a large part of the Company's income is derived from dividends which are no longer taxable. 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.

Movement in provision for deferred tax	2015	2014
	£'000	£'000
Balance brought forward	721	-
Charge for the year	1,541	721
Balance carried forward	2,262	721
Provision consists of:
- Overseas capital gains tax liability	2,262	721
	2,262	721

A provision for deferred capital gains tax has been recognised in relation to short-term unrealised gains on Indian holdings.

4 Earnings per share

	2015			2014
	Revenue	Capital	Total	Revenue	Capital		Total
	£'000	£'000	£'000	£'000	£'000		£'000
	29,853	149,664	179,517	29,770	(373,586	)	(343,816	)
Earnings per share
	2015			2014

	Revenue	Capital	Total	Revenue	Capital		Total
	pence	pence	pence	pence	pence		pence
	9.28	46.54	55.82	9.14	(114.65	)	(105.51	)

The earnings per share is based on the profit/(loss) on ordinary activities after tax and on the weighted average number of shares in issue during the year of 321,591,165 (year to 31 March 2014: 325,840,591).

5 Financial assets - investments

	2015		2014
	£'000		£'000
Opening investments	1,853,554		2,277,465
Movements in year:
Purchases	255,890		142,053
Sales	(320,006	)	(193,301	)
Realised profits	146,256		128,664
Net appreciation/(depreciation)	5,467		(501,327	)
Closing investments	1,941,161		1,853,554

All investments have been recognised at fair value through the Income Statement.

Transaction costs for the year on purchases were £1,113,000 (2014: £347,000) and transaction costs for the year on sales were £855,000 (2014: £583,000). The aggregate transaction costs for the year were £1,968,000 (2014: £930,000).

Realised and unrealised gains on investments comprise of:
Realised gain based on carrying value at 31 March 2015	146,256	128,664
Net movement in unrealised (depreciation)/appreciation	5,467	(501,327	)
Realised and unrealised (losses)/gain on investments	151,723	(372,663	)

6 Trade and other receivables

	2015	2014
	£'000	£'000
Dividends receivable	5,376	6,507
Sales awaiting settlement	2,895	485
Overseas tax recoverable	72	415
Other debtors	41	14
	8,384	7,421

7 Trade and other payables

	2015	2014
	£'000	£'000
Purchase of investments for future settlement	11,532	-
Accrued expenses	2,149	2,448
Other creditors	583	522
	14,264	2,970

8 Called-up share capital

	2015				2014
	Allotted, issued & fully paid				Allotted, issued & fully paid
	£'000		Number		£'000		Number
Shares of 25p each
Opening balance	80,837		323,349,892		81,969		327,874,892
Shares repurchased during the year	(1,101	)	(4,404,900	)	(1,132	)	(4,525,000	)
Closing balance	79,736		318,944,992		80,837		323,349,892

The Company's shares 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.

During the year, 4,404,900 shares were bought back for cancellation at a cost of £24,745,000 (2014: 4,525,000 shares were bought back for cancellation at a cost of £24,884,000).

9 Net asset value per share

	Net asset value per share		Net asset value Attributable
	2015	2014	2015	2014
	pence	pence	£'000	£'000
Shares	641.2	591.8	2,045,031	1,913,565

10 Dividend

	2015		2014
	Rate (pence)	£'000	Rate (pence)	£'000
Declared and paid in the year
Dividend on shares:
Final dividend for year	7.25	23,373	6.25	20,456
		23,373		20,456
Proposed for approval at the Company's AGM
Dividend on shares:
Final dividend for the year ended 31	8.25	26,313
March 2015 (31 March 2014: 7.25p)
		26,313

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.

11 Related party transactions

The following are considered to be related parties:

- Franklin Templeton International Services S.à r.l ("FTIS")

- Templeton Asset Management Ltd ("TAML")

- Franklin Templeton Investment Management Limited ("FTIML")

- The Directors of the Company

All material related party transactions, as set out in International Accounting Standard 24 Related Party, have been disclosed in the Directors' Report and Note 2. Details of the remuneration of all Directors can be found on page 70 of the annual report to 31 March 2015.

Other funds managed by TAML may be investors in the same securities as the Company.

12 Risk management

In pursuing the investment objectives set out on page 10 of the annual report of 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 of the profits available for dividends.

The main risks arising from the Company's financial instruments are market risk (which comprises market price risk, foreign currency risk and interest rate risk), other price risk, liquidity risk and credit risk.

The objectives, policies and processes for managing these risks, and the methods used to measure the risk, 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 in the securities of one issuer, securities domiciled in a particular country, or securities within one industry group than other types of fund investments. As a result, there is the potential for 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.

Market price risk

Market risk arises mainly from uncertainties about future prices of financial instruments held. It represents the potential loss 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 in order to minimise the risk associated with particular countries or industry sectors whilst continuing to follow the investment objectives. The Investment Manager has responsibility for monitoring the existing portfolio selected in accordance with the overall asset allocation parameters described above and seeks to ensure that individual stocks also meet the risk/ reward profile on an ongoing basis.

The Investment Manager does not use derivative instruments to hedge the investment portfolio against market price risk, as in its opinion, the cost of such a process would result in an unacceptable reduction in the potential for capital growth.

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 Manager has 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.

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 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; it, however, does not hedge or otherwise seek to avoid rate movement risk on income accrued but not received.

The fair value of the Company's monetary items that have foreign currency exposure at 31 March are shown below:

2015								Investments at
	Trade and			Trade and		Total net		fair value
	other	Cash		other		foreign currency		through
	receivables	at bank		payables		exposure		profit or loss
Currency	£'000	£'000		£'000		£'000		£'000
Hong Kong dollar	2,895	(2,681	)	(214	)	-		522,744
US dollar	1,530	2,641		(2,641	)	1,530		383,267
Thai baht	1,130	-		-		1,130		289,979
Indonesian rupiah	-	343		(404	)	(61	)	147,954
Korean won	409	-		-		409		129,114
Indian rupee	374	1,261		(2,262	)	(627	)	115,199
Other	2,005	6,559		(8,274	)	290		283,325

2014								Investments at
	Trade and			Trade and		Total net		fair value
	other	Cash		other		foreign currency		through
	receivables	at bank		payables		exposure		profit or loss
Currency	£'000	£'000		£'000		£'000		£'000
US dollar	1,343	-		-		1,343		449,227
Hong Kong dollar	-	-		-		-		421,966
Thai baht	1,549	-		-		1,549		240,580
Indian rupee	444	-		(721	)	(277	)	227,585
Indonesian rupiah	203	-		-		203		126,244
Turkish lira	830	-		-		830		94,579
Other	3,038	(485	)	-		2,553		289,563

Sensitivity

The following table illustrates the sensitivity of the profit after taxation for the year and the equity in regard to the Company's monetary financial assets and liabilities and its equity if sterling had strengthened by 10% relative to all currencies on the reporting date, with all other variables held constant.

		2015			2014
			Capital			Capital
	Revenue		Return	Revenue		Return
Financial Assets and Liabilities	£'000		£'000	£'000		£'000
Hong Kong dollar	1,225		52,274	1,198		42,197
US dollar	1,761		38,327	1,935		44,923
Thai baht	792		28,998	907		24,058
Indonesian rupiah	329		14,795	417		12,624
Korean won	46		12,911	120		8,733
Indian rupee	544		11,520	382		22,759
	4,697		158,825	4,959		155,294

A 10% weakening of the sterling against the above currencies would have resulted in an equal and opposite effect on the above amounts.

Interest rate risk

The Company is permitted to invest in fixed rate securities. Any change to the interest rates relevant to particular securities may result in either income increasing or decreasing, or the Investment Manager 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.

Interest rate risk profile

The majority of the Company's financial assets are non-interest bearing equity investments.

The carrying amount, by the earlier of contractual re-pricing or maturity date, of the Company's financial instruments was as follows:

	Within	Within
	one year	one year
	2015	2014
	£'000	£'000
Cash flow interest rate risk
Cash	112,012	56,281

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.

There was no exposure to fixed interest investment securities during the year or at the year end.

Liquidity risk

The Company's assets mainly comprise securities listed on the stock exchanges of emerging economies. Liquidity can vary from market to market and some securities may take longer 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 is not considered by the Board to be significant, given the large number of quoted investments held in the portfolio and the liquid nature of the portfolio of investments.

The Investment Manager reviews liquidity at the time of making each investment decision and monitors the evolving liquidity profile of the portfolio regularly.

Investments held by the Company are valued in accordance with the accounting policies at bid price. Other financial assets and liabilities of the Company are included in the balance sheet at fair value.

Credit risk

Certain transactions in securities that the Company enters into expose it to the risk that the counter-party 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 Manager as an acceptable counter-party. In addition, limits are set as to the maximum exposure to any individual broker that may exist at any time. These limits are reviewed regularly.

The amount of credit risk that the Company is exposed to is disclosed under interest rate risk profile and represents the maximum credit risk at the Balance Sheet date.

The Company has ongoing contracts with its depositary, J.P. Morgan Europe Limited, and custody services are provided by JPMorgan Chase Bank. All of the equity assets and cash of the Company are held within the custodial network of the custodian.

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 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's Trading Desk in Edinburgh and is typically invested in overnight time deposits in the name of TEMIT with an approved list of counterparties. Any excess cash not invested by the Trading Desk will remain in a JPMorgan Chase bank account. There was no significant risk on debtors and accrued income (or tax) at the year end.

Fair Value

Fair values are derived as follows:

- Where assets are denominated in a foreign currency, they are converted into the sterling amount using year-end rates of exchange.

- Non-current financial assets - on the basis set out in the accounting policies.

- Cash - at the face value of the account.

The tables below analyse financial instruments carried at fair value by valuation method. The different levels have been defined as follows:

Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2 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).

Level 3 Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Valuation hierarchy fair value through profit and loss

	31 March 2015				31 March 2014
£000	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Listed investments	1,941,161	-	-	1,941,161	1,853,554	-	-	1,853,554

13 Significant holdings in investee undertakings

As at 31 March 2015 the Company held 3% or more in the issued share capital of the following companies:

Name	% of issued share capital* 2015		Fair Value £'000		% of issued share capital* 2014		Fair Value £'000
Brilliance China Automotive		3.4		224,780		3.8		173,601
Hyundai Development		3.5		91,271		3.5		44,506
VTech		3.3		80,082		3.3		64,181
MCB Bank		3.5		63,710		3.5		59,893
Guangzhou Automobile, H		3.6		51,636		3.5		48,945
Victory City International		6.8		12,148		6.7		10,193
Univanich Palm Oil		5.0		9,970		5.0		9,340
Peninsula Land		5.6		4,685		5.6		4,995

*This is the percentage of the class of security held by TEMIT.

14 Contingent liabilities

No contingent liabilities existed as at 31 March 2015 or 31 March 2014.

15 Financial commitments

There were no financial commitments at 31 March 2015 or 31 March 2014.

16 Post balance sheet events

The only material post balance sheet event is in respect of the proposed dividend, which has been disclosed in Note 10.

This preliminary statement was approved by the Board on 12 June 2015. The financial information set out above does not constitute the Company's Audited statutory accounts. While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company will publish full financial statements that comply with IFRSs on its website.

The statutory accounts for the financial period ended 31^st March 2014 have been delivered to the Registrar of Companies, received an audit report which was unqualified, did not include a reference to any matters to which the Auditors drew attention by way of emphasis without qualifying the report, and did not contain statements under section 498(2) and (3) of the Companies Act 2006.

The statutory accounts for the period ended 31 March 2015 received an audit report which was unqualified, did not include a reference to any matters to which the Auditors drew attention by way of emphasis without qualifying the report, and did not contain statements under section section 498(2) and (3) of the Companies Act 2006, and will be delivered to the Registrar of Companies.

The Annual Report and Accounts will be mailed to Shareholders shortly. Copies will be uploaded and available for viewing on the National Storage Mechanism, copies will also be posted to the website www.temit.co.uk and may also be requested during normal business hours from Client Dealer Services at Franklin Templeton Investment Management Limited on freephone 0800 305 306.

Stephen Westwood (Investor Relations) +44 (0) 7533 178 381 or Joe Winkley at Winterflood (Corporate Broker) on + 44 (0) 20 3100 0301.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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Templeton Emerging Markets Inv Trust (TEM)

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GAW AMGO ITH

Games Workshop shares jump in early trade as interim results are on track to impress, and Ithaca Energy continues its march higher off yesterday’s dividend news but Amigo slips as options for the future remain limited.

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