Templeton Emerging Markets Investment Trust PLC (“TEMIT”)

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

UNAUDITED HALF YEARLY REPORT TO 30

SEPTEMBER 2017

Company Overview

Launched in 1989, Templeton Emerging Markets Investment Trust PLC (“TEMIT” or the “Company”) is an investment company
that invests principally in emerging market companies with the aim of delivering capital growth to shareholders over the long
term. Shares are listed on both the London and New Zealand Stock Exchanges.

The Company is governed by a Board of Directors who are committed to ensuring that shareholders’ best interests are at the
forefront of all decisions. Under the guidance of the Chairman, the Board of Directors is responsible for the overall strategy of the
Company and monitoring its performance. Only one member of the Board has a connection with Franklin Templeton Investments,
with all others being independent.

TEMIT’s research-driven investment approach and strong performance has helped it to grow to be the largest emerging market
investment trust in the UK, with assets of £2.3 billion as at 30 September 2017.

Net Asset Value Total Return 2017
(a)(b)
Total Net Assets 2017
(b)

11.4%

£2,334 million
(2016: 29.6%) (31 March 2017: £2,148 million)

Share Price Total Return 2017
(a)(b)
MSCI Emerging Markets Index Total Return 2017
(a)(b)(c)

14.5%

7.1%
(2016: 29.1%) (2016: 21.7 %)

(a)
In sterling terms for the 6 months ended 30 September 2017 and 2016, with net dividends reinvested.
(b)
A glossary of alternative performance measures is included in Shareholder Information on page 30.
(c)
Source: MSCI. The Company’s benchmark is the MSCI Emerging Markets Index, with net dividends reinvested.

Performance to 30 September 2017

Cumulative Total Return %

6 Months 1 Year 3 Year 5 Year 10 Year
11.4 27.0 38.3 48.5 92.6
14.5 31.6 34.6 44.6 97.7
7.1 19.0 41.0 49.0 78.9

Annualised Total Return %

3 Year 5 Year 10 Year Since Launch
11.4 8.2 6.8 13.3
10.4 7.7 7.1 12.8
12.1 8.3 6.0 10.3

■ Net Asset Value
■ Share Price
■ MSCI Emerging Markets Index

Chairman’s Statement

Market Overview and Investment Performance
In the six months under review the recovery in the performance of emerging markets continued. The tables on page 1 set out the
performance of TEMIT’s NAV and share price over the six months and longer time periods.

Once again, I am pleased to be able to report further outperformance of broad benchmark indices by our Investment Manager. 30
September 2017 marked the second anniversary of the appointment of Carlos Hardenberg as our lead portfolio manager. Over the
two years, Carlos and the Franklin Templeton management team have done much both to deliver strong returns to investors and to
rebuild your Company’s track record.

Revenue Earnings and Dividend
Our reported revenue earnings are set out in the table on page 27. Underlying revenues were significantly higher than the
equivalent period last year and net revenues also increased as a result of the Board’s review of TEMIT’s allocation of expenses,
following which we now charge 70% of the AIFM fee and 70% of the cost of borrowing to the capital account. The Directors will
not make a dividend forecast at this stage. As I have noted before, our Investment Manager’s primary focus is on generating
capital returns and we do not target a particular level of income.

Managing the Discount
During the half year under review, TEMIT’s shares traded at discounts of between 10.2% and 14.5%, and the discount stood at
11.0% on 30 September 2017.

We have continued to be active in buying back shares and bought back a total of 4,033,554 shares in the six month period at an
average discount of 13.1%. At this year’s AGM, shareholders gave permission for us to transfer shares which are bought back into
Treasury and we have done so with 328,521 shares.

Share buy backs can be helpful in dealing with an excess supply of shares in the market but we have also continued our efforts to
stimulate demand. Franklin Templeton has put in place a comprehensive marketing plan for TEMIT. Highlights of this over the
last six months were the launch of a revamped website www.temit.co.uk, the launch on Twitter of @TEMIT and an effective
media relations programme all of which have done much to increase our profile.

We will continue in our efforts both in share buy backs and in seeking to stimulate demand for your Company’s shares.

Asset Allocation and Borrowing
Part of the borrowing facility announced in January 2017 continues to be drawn down, with the balance remaining available for
investment as opportunities arise. As at 30 September 2017, gearing, net of cash in the portfolio, was 1.1%
(a)
. We continue to take
a cautious approach to the deployment of gearing given recent market performance.

(a)
A glossary of alternative performance measures is included in Shareholder Information on page 30.

The Board
As set out in the Annual Report, Peter Harrison and Chris Brady both retired from the Board at this year’s AGM. I would like to
repeat my thanks to Peter and Chris for their contribution to TEMIT since 2007. Simon Jeffreys duly took over the role of Chair of
the Audit Committee following Peter Harrison’s retirement.

Our current plan is that Hamish Buchan will retire at next year’s AGM. We plan to appoint a new non-executive Director on
Hamish’s retirement and will start the process of searching for suitable candidates with the assistance of professional search
consultants.

Outlook
Having experienced a continuing strong run in markets we are mindful of the current level of valuations but, as explained in the
Investment Manager’s report, there are strong grounds to believe that there remains the potential for further growth from your
Company’s investments. Our Investment Manager has performed particularly well in technology stocks, which have developed to
become a key driver of performance in emerging markets. Your Board is encouraged to note that the Investment Manager focuses
on valuations and manages risk by thorough, continuing analysis and by diversification of the portfolio.

We remain of the view that investment in emerging markets equities should prove rewarding over the long term.

Paul Manduca
Chairman
27 November 2017

Interim Management Report

Principal risks
The Company invests, where possible, directly in the stock markets of emerging markets. The principal risks facing the Company,
as determined by your Board, are detailed below.

• Investment and concentration;

• Market;

• Foreign currency;

• Credit;

• Operational and custody;

• Key personnel;

• Regulatory; and

• Cyber security.

The Board has provided the Investment Manager with guidelines and limits for the management of these principal risks. Further
information on risks is given in the Strategic Report within the Annual Report and Audited Accounts, which is available on the
Company’s website (www.temit.co.uk). In the Board’s view, these principal risks are equally applicable to the remaining six
months of the financial year as they were to the six months under review.

Related party transactions
There were no transactions with related parties, other than the fees paid to the Directors, during the six months ended 30
September 2017 which have a material effect on the results or the financial position of the Company. Under the AIC SORP
November 2014 and updated in January 2017, the Franklin Templeton entities are not classified as related parties under IAS 24
(as adopted by the EU).

Going concern
The Company’s assets consist of equity shares in companies listed on recognised stock exchanges and in most circumstances are
realisable within a short timescale. Having made suitable enquiries, including considerations of the Company’s investment
objective, the nature of the portfolio, expenditure forecasts and the principal risks and uncertainties, the Directors are satisfied that
the Company has adequate resources to continue to operate as a going concern for the foreseeable future and, as such, a going
concern basis is appropriate in preparing the Financial Statements.

Statement of Directors’ Responsibilities
The Disclosure and Transparency Rules of the UK Listing Authority require the Directors to confirm their responsibilities in
relation to the preparation and publication of the Interim Management Report and Financial Statements.

The Directors confirm that to the best of their knowledge:

(a) the condensed set of financial statements, for the period ended 30 September 2017, have been prepared in accordance with the
applicable International Accounting Standard (IAS) 34 “Interim Financial Reporting” as adopted by the EU; and

(b) the Half Yearly Report includes a fair review of the information required by:

(i) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during
the first six months of the financial year and their impact on the condensed set of financial statements, and a description of
the principal risks and uncertainties for the remaining six months of the year; and

(ii) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six
months of the current financial year and that have materially affected the financial position or performance of the entity
during that period, and any changes in the related party transactions described in the last annual report that could do so.

The Half Yearly Report was approved by the Board on 27 November 2017 and the above responsibility statement was signed on
its behalf by

Paul Manduca
Chairman
27 November 2017

Portfolio Report

Market Overview
Emerging markets continued their recent positive run over the six months to the end of September, with the MSCI Emerging
Markets Index rising by 7.1% in sterling terms. This was despite a slight decline in September, which was the first negative month
of the period.

Global financial markets have been relatively calm over the last six months, doing a reasonably good job of looking through some
bouts of volatility (political, geopolitical, and otherwise) and generally showing modest levels of growth. This positive growth and
solid fundamentals in some developed markets has led to concerns that the US, in particular, will begin to unwind their
quantitative easing programme and start a gradual increase in interest rates.

Emerging markets have also been relatively calm over the period, with a number of countries such as Brazil, India and Argentina
making progressive political reforms, while a broad range of companies are showing strong earnings growth and more robust
corporate governance. Despite encouraging growth, emerging markets’ equity valuations have remained attractive compared to
equivalent developed market businesses. This has stimulated investment as has the ensuing improved performance, with the
period witnessing strong investment flows into emerging markets funds.

Information Technology (IT) remained a key driver of performance. We have outlined previously the huge structural change that
has occurred in emerging markets, leading to the dominance of world-leading technology companies in the sector. For us, this
theme offers continued opportunity and diversification, stretching from a manufacturer of components for autonomous cars, or
smart phones in Asia, a digital bank in Africa, to an internet business in Russia.

The consumer sector is also a key growth area. There is still plenty of space for sales of goods and services in emerging markets
and this is allowing companies to develop and grow. Household incomes are rising steadily in emerging and frontier markets. This
increased household spending power has led to improving demand for domestic goods and services. We see many companies
taking advantage of this trend, building strong local brands. This effect is not only seen in traditional consumer goods; consumers
with increased wealth are also spending on banking, pharmaceuticals and health care.

Looking in more detail at China, better than expected first-quarter GDP growth and reducing concerns over capital outflows and
renminbi depreciation supported the Chinese equity market early in the period. A credit-rating downgrade by Moody’s in May had
already been reflected in market valuations and caused little concern. A short boost came from the announcement by MSCI that it
would start to phase-in inclusion of China A-Shares in its benchmark indices from next year. For TEMIT’s portfolio, we currently
have very limited exposure to the A-Share market as we are finding better value opportunities investing through our more
traditional routes such as Hong Kong. In July and August, China’s industrial output, retail sales and fixed asset investment all
showed strong growth but at lower rates than in previous periods and missing consensus estimates. (Source: National Bureau of
Statistics of China). The International Monetary Fund raised its forecast for China’s GDP growth between 2017 and 2021, but
warned that the country’s debt levels were handicapping the economy’s long-term growth potential. In our view, as a managed
economy, China has the tools at its disposal to navigate this risk, particularly in the short-term, but we remain vigilant in
monitoring the risk. The Chinese market ended the six months with a solid double-digit performance.

We are still seeing some opportunities in South Korea, despite intensifying geopolitical tensions. These tensions are nothing new
for the Korean peninsula, dating back decades and are generally reflected in market pricing. The equity market in South Korea
was supported by foreign investment and strength in the IT, health care, materials and energy sectors. Our largest holding
Samsung Electronics has performed strongly, both in terms of earnings growth and stock price appreciation. We took advantage
of market weakness to increase our position as the attractive fundamentals became available at cheap valuations. We remain alert
to sentiment and risk in the country.

A strengthening rupee early in the period defied net-selling by foreign investors and mixed first quarter results to support the
Indian market. India has been generally positive on the back of certain long-term planned reforms being pushed through by the
Modi administration. The effects can be faltering though, and India has many structural issues which hold it back. Although not
universally acclaimed, the implementation of a new unified tax regime replaces a collection of previously disparate, regionally-
focused systems which made intra-country trade difficult at best. This should be a game-changer, making doing business easier in
the long term. Indeed a smooth initial implementation boosted markets in July when, combined with the positive effect of good
second-quarter earnings and expectation of rate cuts, India was the region’s top performer for that month. Otherwise though, India
generally lagged its regional peers over the period and ended with a slight negative return overall.

After a long and deep recession, Brazil finally saw economic growth turn positive with first-quarter GDP growth announced at the
start of the period. Although Brazil has been hurt in the short term by political allegations against President Temer, consensus
seems to be that as an interim president (with little prospect for re-election) he is the best placed to push reforms through as he has
no interest in garnering a populist vote. As such he has been able to make dramatic changes to implement much needed economic
and structural reforms such as employment/labour reforms and the promotion of widespread privatisation. These, together with an
easing in monetary policy, were supportive factors for equities. However, weakness in the real and the government’s fiscal
position, together with emerging political allegations, weighed at the start of the period leading to a flat market. Overall, the
Brazilian market came out in positive territory over the six months.

Mexico has come from a position of low valuations and a very cheap currency earlier in the year. This was mostly sentiment
driven which was supportive of some normalisation during the review period. Certainly the peso was hugely over-sold on the back
of worries over President Trump’s policies but it has since recovered, being one of the most highly traded emerging market
currencies. The Mexican market has responded well to positive political news, including the trouble which President Trump has
had pushing through many of his controversial policies. Economic fundamentals came to the fore instead and showed good
incremental improvements, supported in the latter half of the period by strong trade and manufacturing data. Although not
growing at a huge rate, the economy in Mexico is performing well. Hints of an end to monetary tightening also raised investor
confidence later in the period, spurring markets upwards. Markets gave back some of their gains towards the end of the period,
partly because of currency weakness.

In Russia crude oil price declines and depreciation of the rouble put pressure on equities despite a supportive cut to the benchmark
interest rate. Investors were also concerned that lower oil prices could impact corporate earnings growth. Additional US sanctions
spawned negative sentiment, although the actual impact has not been too great and some business sectors have even been
strengthened. Macroeconomic data showed promise, pointing to a recovery, with GDP expanding in the first half of 2017 after
two years of contraction. We expect the economy to remain fairly stable but believe that macro risks remain high, given the
volatility of commodity prices.

Investment Performance and Portfolio Changes
The following sections detail how the Company’s performance over the period is attributed across investment factors such as
stocks, sectors and geographies. The primary driver of TEMIT’s outperformance of its MSCI benchmark was once again stock
selection (as seen in the table below). This reflects the emphasis that we put on our ‘bottom-up’ stock selection driven investment
process. We select companies based on their individual attributes and ability to provide risk-adjusted returns for investors, rather
than allocating funds to investment sectors or geographies.

While we consider politics and macroeconomic events, a fundamental focus on individual companies and their earnings can often
play a bigger role in achieving our stated objectives. Avoiding stocks from the index which do not fit our investment criteria can
be as important as investing in the diverse range of companies that do; for example not owning almost three quarters of the stocks
in the benchmark index contributed 2.7% of relative outperformance in the period.

Our investment style is based on finding good value in the companies in which we invest. We define value by reference to our
projections of the growth potential of companies, with a strong focus on risks to that potential. This means that we look beyond
traditional measures of value such as price/earnings ratios to a detailed analysis of cost compared with potential return.

Performance Attribution Analysis %

To 30 September 2017 6 months
Total Return (Net)
(a)
11.4
Expenses
(b)
0.6
Total Return (Gross)
(c)
12.0
Benchmark Total Return
(d)
7.1
Excess Return
(e)
4.9
Sector Allocation 1.8
Stock Selection 2.7
Currency 0.1
Residual
(f)
0.3
Total Portfolio Manager Contribution 4.9

Source: FactSet and Franklin Templeton Investments.

(a)
The NAV return inclusive of dividends reinvested.
(b)
Expenses incurred by the Company for period to 30 September 2017.
(c)
Gross Return is Total Return (Net) plus expenses. This is preferable for attribution analysis and other value-added reporting as
it evaluates the contribution of the Investment Manager.
(d)
MSCI Emerging Markets (Total Return) Index, inclusive of dividends reinvested. Indices are comparable to gross returns as
they include no expenses.
(e)
Excess return is the difference between the gross return of the portfolio and the return of the benchmark.
(f)
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.

Contributors and Detractors by Security

Top Contributors to Relative Performance by Security (%)
(a)


Relative

Share Price Contribution to
Top Contributors Total Return Portfolio
Brilliance China Automotive 48.8 2.7
Hon Hai Precision Industry 23.4 0.5
CIA Hering
(b)
55.4 0.5
Ping An Insurance Group 44.5 0.4
Mail.Ru, GDR
(b)
39.5 0.4
Yandex
(b)
40.5 0.3
Banco Bradesco, ADR 12.2 0.3
Naspers 17.1 0.3
China Mobile (6.0 ) 0.2
Samsung Electronics 13.9 0.2

(a)
For the period 31 March 2017 to 30 September 2017.
(b)
Security not included in the MSCI Emerging Markets Index.

Brilliance China Automotive manufactures and sells cars and commercial vehicles for the Chinese domestic market,
predominantly through its joint venture with German luxury car manufacturer BMW. There is also a joint venture with Renault
SA for production of minibuses and light commercial vehicles. Another subsidiary, Xinchen China Power, is an internal
combustion engine manufacturer which has an engine assembly licensing agreement with BMW. Performance during the last 6
months was driven by strong 2017 first-half results, with the contribution from the BMW joint venture increasing by 40%. The
announcement of the joint venture with Renault added to market optimism with the current loss-making subsidiary in that venture
expected to break even by 2020. TEMIT took some profits in Brilliance based on the strong performance over the period. It
remains one of our largest holdings.

Hon Hai Precision Industry, based in Taiwan, is one of the world’s largest electronics manufacturing service (EMS) company in
terms of design, manufacturing, global logistics and after-market services. It has developed a unique business model which helps
build up the economic scale along the electronics ‘food chain’, strengthening a dominant position and creating high barriers to
entry. Hon Hai Precision performed strongly on the back of solid earnings and expectations for a positive impact from the launch
of the iPhone 8 and X. It is the sole supplier of the touch screen for the iPhone X. TEMIT took some profits based on the strong
performance over the period.

CIA Hering is one of the largest apparel manufacturers and retailers in Brazil. Internally designed casual wear is sold under three
brands: Hering, PUC and DZARM. The retail structure includes company-owned, franchised and online stores and multi-brand
retail stores. There are also 17 franchised stores in other countries in Latin America and three web stores. Hering’s stock price was
driven by 2017 second-quarter results beating market estimates by a wide margin. Investors increasingly like the stock to gain
exposure to improving discretionary consumer spending in Brazil.

Top Detractors to Relative Performance by Security (%)
(a)


Share Price Relative Contribution
Top Detractors Total Return to Portfolio
Astra International (14.2 ) (0.5 )
IMAX
(b)
(37.7 ) (0.4 )
MCB Bank (12.4 ) (0.4 )
Hyundai Development (19.9 ) (0.3 )
Glenmark Pharmaceuticals (34.6 ) (0.3 )
Massmart (23.6 ) (0.3 )
SK Hynix
(c)
49.4 (0.2 )
Buenaventura, ADR (0.2 ) (0.2 )
Evergrande Real Estate Group
(c)
251.0 (0.2 )
Tencent 40.7 (0.2 )

(a)
For the period 31 March 2017 to 30 September 2017.
(b)
Security not included in the MSCI Emerging Markets Index.
(c)
Security not held by TEMIT.

Astra International has four core businesses: automotive, financial services, heavy equipment and agribusiness. Its automotive
business can be further broken down into motorcycles, cars and auto parts. It has a 50/50 joint venture with Honda of Japan to
manufacture and distribute Honda motorcycles in Indonesia. It is also the principal distributor for Toyota, Daihatsu, Isuzu, BMW,
and Peugeot cars as well as Nissan trucks in Indonesia. Its financial services arm provides purchase financing, motor and other
insurance services through various subsidiaries. The financial services arm also owns a stake in Bank Permata. Astra suffered a
fall in share price over the period as 2017 second quarter results were behind market expectations, especially in the automotive
division. We continue to like Astra as one of our key holdings exposed to the growing Indonesian economy.

IMAX is one of the world’s leading entertainment technology companies, specialising in immersive motion picture technologies.
IMAX offers a unique end-to-end cinematic solution combining proprietary software, theatre architecture and equipment to create
a high quality, immersive motion picture experience. The Company’s principal businesses are the design and manufacture of
premium theatre systems plus the digital re-mastering of films into the IMAX format and the exhibition of those films in the
IMAX theatre network. IMAX theatre systems are in over 1,100 theatres globally with most growth in its 68.5% held IMAX
China Holdings. IMAX has experienced a share price fall since March 2017 as weekly box office results were below expectations,
resulting in disappointing 2017 second quarter numbers. Although listed in the US, we continue to like the stock because of its
growing China business. The stock price has started to recover since reaching a one-year low in late August 2017.

MCB Bank is the fourth largest bank in Pakistan with around an eight percent market share. It has a branch network of 1,227
domestic and 11 international branches. MCB Ltd was formed in 1959 and was the first Pakistani bank to be privatised in 1991.
The bank is controlled by Nishat Group, the largest economic group in Pakistan, with interests in cement, insurance, textiles and
power. The main advantage of MCB is a low cost deposit base, giving it industry-high interest margins. MCB’s stock price was
volatile during the last six months. It spiked in mid-May 2017 and subsequently fell, related to the upgrade of Pakistan from the
MSCI Frontier Markets Index to the MSCI Emerging Markets Index. We like the stock due to its strong franchise in an
underpenetrated banking market, high net interest margin and healthy capital position.

Top Contributors and Detractors to Relative Performance by Sector (%)
(a)


MSCI




MSCI




Emerging




Emerging




Markets Index Relative


Markets Index Relative

Sector Total Contribution


Sector Total Contribution
Top Contributors Return to Portfolio Top Detractors Return to Portfolio
Consumer Discretionary 6.2 2.5 Real Estate 22.6 (0.4 )
Financials 4.2 1.4 Energy 0.5 (0.3 )
Telecommunication Services (1.4 ) 0.5 Health Care 0.6 (0.2 )
Information Technology 19.7 0.5 Industrials (1.5 ) (0.1 )
Consumer Staples 0.6 0.2
Utilities (2.3 ) 0.1
Materials 2.5 0.1

(a)
For the period 31 March 2017 to 30 September 2017.

From a sector perspective, as we have described, the main themes remain information technology and the consumer, reflecting our
overweight positions compared to the MSCI Emerging Markets Index. As you can see in the table above, these themes contributed
heavily to portfolio returns. Large underweights (by a factor of ten) in the telecommunications services and utilities sectors also
boosted relative performance as they yielded small negative returns. We believe high levels of regulation, coupled with the fact
they are no longer in a fast growth phase in emerging markets, make investment in these sectors hard to justify from a risk
perspective. Real estate, energy and health care were detractors from relative performance as was industrials despite a reasonably
significant underweight. Although real estate performed well, we remain heavily underweight due to our concerns over generally
low transparency and poor corporate governance in the sector as a whole.

Top Contributors and Detractors to Relative Performance by Country (%)
(a)


MSCI

MSCI


Emerging

Emerging


Markets Index Relative

Markets Index Relative

Country Total Contribution

Country Total Contribution
Top Contributors Return to Portfolio Top Detractors Return to Portfolio
China/Hong Kong 18.4 2.4 Indonesia 0.3 (0.6 )
Brazil 7.1 1.0 United States
(c)
– (0.4 )
Taiwan 3.0 0.8 Pakistan (24.4 ) (0.3 )
Russia (0.7 ) 0.6 Thailand 5.7 (0.3 )
South Africa 0.2 0.6 Peru 14.0 (0.3 )
Qatar
(b)
(22.6 ) 0.2 India (1.3 ) (0.1 )
Malaysia
(b)
(0.2 ) 0.2 Poland
(b)
16.2 (0.1 )
Kenya
(c)
– 0.2 Saudi Arabia
(c)
– (0.1 )
United Kingdom
(c)
– 0.2 Hungary 21.9 (0.1 )
South Korea 5.6 0.1 Turkey
(b)
12.0 (0.1 )

(a)
For the period 31 March 2017 to 30 September 2017.
(b)
No companies held by TEMIT in this country.
(c)
No companies included in the MSCI Emerging Markets Index in this country.

Geographically, stock selection in China/Hong Kong was once again a significant contributor to relative performance. Selection
and allocation in Brazil (overweight relative to the benchmark index) and stock selection in Taiwan also contributed. On the other
hand, an overweight position in Pakistan detracted from relative performance against the benchmark index due to the fall
experienced by the market after Pakistan was promoted from frontier to emerging market status by MSCI. Stock selection in
Thailand and Indonesia also detracted. Although we reduced some Taiwan holdings in August, we also started a position in
PChome Online, a large e-commerce company.

Over the six month period, TEMIT sold out of América Móvil in Mexico, Guangzhou Automobile Group and Sunny Optical
Technology in China/Hong Kong, Hankook Tire and Hyundai Wia in South Korea, MercadoLibre in Argentina and MTN
Group in South Africa. Positions were started in BBVA Banco Francés in Argentina, B2W Digital in Brazil, Crédit Real in
Mexico, FIT Hon Teng and PChome Online in Taiwan, Naver Corp and POSCO in South Korea, Ping An Bank and China
Mobile in China/Hong Kong and Novus Holdings in South Africa.

We continue to utilise our research-based, active approach to investing to help us find companies with high standards of corporate
governance, that respect their shareholder base and who understand the local intricacies that may determine consumer trends and
habits. We aim to maintain close contact with the board and senior management and believe in engaging constructively with our
investee companies.

In addition we are mindful of the amount of flows from passive investment and the impact which these flows are likely to have on
stock valuations. As a result of their structure, most passive funds are forced to replicate the weighting of stocks in the index,
buying or selling indiscriminately as a company’s stock weighting in the index changes. With the heavy concentration of
countries, sectors and companies in the index, investors can therefore move in and out of companies quickly, causing share price
volatility. We factor this into our research and decision making as it sometimes creates opportunity or additional risk. With current
investment and geopolitical risks in mind, we remain focused on ensuring that the portfolio is not too heavily exposed to any one
company, sector or market.

Our resulting portfolio is listed by size of holding on pages 15 to 18.

Portfolio changes by Sector












Total Return in sterling

31 Mar 2017

Market 30 Sep 2017

MSCI Emerging

Market Value Purchases Sales Movement Market Value TEMIT Markets Index
Sector £m £m £m £m £m % %
Information Technology 626 54 76 107 711 19.0 19.7
Financials 439 84 28 40 535 10.8 4.2
Consumer Discretionary 476 19 81 83 497 18.5 6.2
Consumer Staples 176 5 7 7 181 4.5 0.6
Energy 186 8 16 (11 ) 167 (1.8 ) 0.5
Materials 129 20 15 3 137 3.6 2.5
Industrials 68 2 4 (9 ) 57 (15.3 ) (1.5 )
Health Care 34 15 – (5 ) 44 (11.9 ) 0.6
Real Estate 13 – – – 13 5.4 22.6
Telecommunication Services 11 12 12 – 11 (5.5 ) (1.4 )
Utilities 8 – – (4 ) 4 (40.6 ) (2.3 )
Other Net Assets (18 ) – – (5 ) (23 ) – –
Total 2,148 219 239 206 2,334


Sector Asset Allocation
As at 30 September 2017

Sector weightings vs benchmark (%)

Sector
TEMIT
MSCI Emerging
Markets Index
Information Technology 30.5 27.6
Financials 22.9 23.4
Consumer Discretionary 21.3 10.3
Consumer Staples 7.7 6.5
Energy 7.2 6.8
Materials 5.9 7.2
Industrials 2.3 5.4
Health Care 1.9 2.3
Real Estate 0.6 2.9
Telecommunication Services 0.5 5.1
Utilities 0.2 2.6

Portfolio changes by Country













Total Return in sterling

31 March 2017

Market 30 September 2017

MSCI Emerging

Market Value Purchases Sales Movement Market Value TEMIT Markets Index
Country £m £m £m £m £m % %
China/Hong Kong 471 46 132 146 531 33.2 18.4
South Korea 266 52 11 16 323 5.9 5.6
Brazil 173 56 2 38 265 16.0 7.1
Taiwan 220 19 23 14 230 9.5 3.0
Russia 168 3 – 15 186 11.4 (0.7 )
South Africa 116 – 4 11 123 9.4 0.2
India 132 15 15 (10 ) 122 (7.1 ) (1.3 )
Thailand 123 – 2 (2 ) 119 1.4 5.7
Other 497 28 50 17 458 – –
Other Net Assets (18 ) – – (5 ) (23 ) – –
Total 2,148 219 239 206 2,334

Geographic Asset Allocation
As at 30 September 2017

Country weightings vs benchmark (%)
(a)


Country
TEMIT
MSCI Emerging
Markets Index
China/Hong Kong 22.7% 29.5%
South Korea 13.7% 15.0%
Brazil 11.4% 7.6%
Taiwan 9.8% 11.5%
Russia 8.0% 3.4%
India 5.3% 8.4%
South Africa 5.3% 6.3%
Thailand 5.1% 2.2%
Indonesia 4.1% 2.3%
United Kingdom
(b)
3.5% 0.0%
Peru 2.8% 0.4%
Mexico 2.1% 3.5%
Kenya
(b)
1.5% 0.0%
Pakistan 1.3% 0.1%
Hungary 1.1% 0.3%
United States
(b)
0.9% 0.0%
Saudi Arabia
(b)
0.6% 0.0%
Cambodia
(b)
0.6% 0.0%
Philippines 0.5% 1.1%
Czech Republic 0.5% 0.2%
Argentina
(b)
0.2% 0.0%
Nigeria
(b)
0.0% 0.0%

(a)
Other countries included in the benchmark are Chile, Colombia, Egypt, Greece, Malaysia, Poland, Qatar, Romania, Turkey
and United Arab Emirates.
(b)
Countries not included in the MSCI Emerging Markets Index.

Portfolio Investments by Fair Value
As at 30 September 2017


Fair Value % of net
Holding Country Sector Trading
(a)
£’000 assets
Samsung Electronics South Korea Information Technology IH 186,482 8.0
Brilliance China Automotive China/Hong Kong Consumer Discretionary PS 156,915 6.7
Naspers South Africa Consumer Discretionary NT 107,766 4.6
Taiwan Semiconductor Manufacturing Taiwan Information Technology NT 102,179 4.3
Alibaba, ADR
(b)
China/Hong Kong Information Technology IH 87,342 3.8
Unilever
(c)
United Kingdom Consumer Staples PS 81,438 3.5
Tencent China/Hong Kong Information Technology PS 69,598 3.0
Banco Bradesco, ADR
(b)(d)
Brazil Financials IH 65,892 2.8
Buenaventura, ADR
(b)
Peru Materials NT 64,235 2.8
Itaú Unibanco, ADR
(b)
Brazil Financials IH 60,364 2.6
TOP 10 LARGEST INVESTMENTS

982,211 42.1
Astra International Indonesia Consumer Discretionary NT 54,796 2.4
Hon Hai Precision Industry Taiwan Information Technology PS 49,037 2.1
ICICI Bank India Financials NT 46,042 2.0
LUKOIL, ADR
(b)
Russia Energy NT 39,224 1.7
Ping An Insurance Group China/Hong Kong Financials IS 36,137 1.5
Bank Danamon Indonesia Indonesia Financials PS 35,771 1.5
Sberbank Of Russia, ADR
(b)
Russia Financials IH 35,605 1.5
CIA Hering Brazil Consumer Discretionary NT 34,486 1.5
Mail.Ru, GDR
(e)
Russia Information Technology NT 33,918 1.5
Grupo Financiero Santander
Mexico, ADR
(b)


Mexico Financials NT 32,795 1.4
TOP 20 LARGEST INVESTMENTS

1,380,022 59.2

(a)
Trading activity during the year: (NH) New Holding, (IH) Increased Holding, (PS) Partial Sale, (IS) Increased Holding and
Partial Sale and (NT) No Trading.
(b)
US listed American Depositary Receipt.
(c)
This company, listed on stock exchanges in developed markets, has significant exposure to operations from emerging
markets.
(d)
Preferred Shares.
(e)
UK listed Global Depositary Receipt.

Fair Value % of net
Holding Country Sector Trading
(a)
£’000 assets
Kasikornbank Thailand Financials NT 28,933 1.2
Lojas Americanas Brazil Consumer Discretionary IH 28,758 1.2
Largan Precision Taiwan Information Technology NT 28,648 1.2
Gazprom, ADR
(b)
Russia Energy NT 28,150 1.2
Yandex Russia Information Technology NT 28,057 1.2
MCB Bank Pakistan Financials PS 28,028 1.2
CNOOC China/Hong Kong Energy IH 26,190 1.1
BM&F Bovespa Brazil Financials IH 25,734 1.1
Gedeon Richter Hungary Health Care NT 25,217 1.1
Kiatnakin Bank Thailand Financials PS 25,188 1.1
TOP 30 LARGEST INVESTMENTS

1,652,925 70.8
China Petroleum and Chemical China/Hong Kong Energy NT 24,993 1.1
Hyundai Development South Korea Industrials IS 24,446 1.0
Thai Beverages Thailand Consumer Staples PS 23,085 1.0
Daelim Industrial South Korea Industrials PS 21,934 0.9
IMAX
(c)
United States Consumer Discretionary IH 21,708 0.9
POSCO South Korea Materials NH 21,571 0.9
NetEase, ADR
(b)
China/Hong Kong Information Technology NT 21,084 0.9
Hanon Systems South Korea Consumer Discretionary NT 20,282 0.9
Uni-President China China/Hong Kong Consumer Staples PS 20,251 0.8
Catcher Technology Taiwan Information Technology NT 17,808 0.8
TOP 40 LARGEST INVESTMENTS

1,870,087 80.0
Baidu, ADR
(b)
China/Hong Kong Information Technology NT 17,215 0.7
Ping An Bank China/Hong Kong Financials NH 17,182 0.7
Siam Commercial Bank Thailand Financials NT 16,314 0.7
TOTVS Brazil Information Technology PS 15,843 0.7
Glenmark Pharmaceuticals India Health Care IH 15,829 0.7
Massmart South Africa Consumer Staples NT 15,347 0.7
KCB Group Kenya Financials NT 15,267 0.7
Norilsk Nickel, ADR
(b)
Russia Materials NT 14,321 0.6
Pegatron Taiwan Information Technology NT 14,178 0.6
Tata Chemicals India Materials NT 13,265 0.6
TOP 50 LARGEST INVESTMENTS

2,024,848 86.7

(a)
Trading activity during the year: (NH) New Holding, (IH) Increased Holding, (PS) Partial Sale, (IS) Increased Holding and
Partial Sale and (NT) No Trading.
(b)
US listed American Depositary Receipt.
(c)
This company, listed on stock exchanges in developed markets, has significant exposure to operations from emerging
markets.

Fair Value % of net
Holding Country Sector Trading
(a)
£’000 assets
Land and Houses Thailand Real Estate NT 13,198 0.6
MGM China China/Hong Kong Consumer Discretionary NT 13,142 0.6
NagaCorp Cambodia Consumer Discretionary NT 13,070 0.6
M. Dias Branco Brazil Consumer Staples NT 12,334 0.5
Equity Group Kenya Financials NT 11,922 0.5
SK Innovation South Korea Energy NT 11,795 0.5
Infosys Technologies India Information Technology PS 11,572 0.5
SABIC, Participatory Note Saudi Arabia Materials PS 11,257 0.5
China Mobile China/Hong Kong Telecommunication Services NH 11,220 0.5
Wiz Soluções e Corretagem Brazil Financials NT 10,815 0.5
TOP 60 LARGEST INVESTMENTS

2,145,173 92.0
Moneta Money Bank Czech Republic Financials IH 10,568 0.5
Naver Corp South Korea Information Technology NH 10,425 0.4
Coal India India Energy NT 9,867 0.4
PTT Exploration and Production Thailand Energy NT 9,337 0.4
FIT Hon Teng Taiwan Information Technology NH 9,219 0.4
Nemak Mexico Consumer Discretionary IH 9,087 0.4
Bloomage Biotechnology China/Hong Kong Materials NT 8,920 0.4
Bajaj Holdings & Investments India Financials IH 8,662 0.4
PChome Online Taiwan Information Technology NH 8,605 0.4
Hite Jinro South Korea Consumer Staples NT 8,292 0.4
TOP 70 LARGEST INVESTMENTS

2,238,155 96.1
Tata Motors India Consumer Discretionary NT 8,282 0.3
East African Breweries Kenya Consumer Staples IH 8,196 0.3
Dairy Farm China/Hong Kong Consumer Staples NT 6,894 0.3
COSCO Pacific China/Hong Kong Industrials NT 6,858 0.3
TMK, GDR
(e)
Russia Energy IH 6,766 0.3
Reliance Industries India Energy PS 6,722 0.3
BDO Unibank Philippines Financials NT 6,628 0.3
B2W Digital Brazil Consumer Discretionary NH 6,234 0.3
Youngone South Korea Consumer Discretionary NT 6,110 0.3
Security Bank Philippines Financials IH 5,710 0.2
TOP 80 LARGEST INVESTMENTS

2,306,555 99.0

(a)
Trading activity during the year: (NH) New Holding, (IH) Increased Holding, (PS) Partial Sale, (IS) Increased Holding and
Partial Sale and (NT) No Trading.
(e)
UK listed Global Depositary Receipt.

Fair Value % of net
Holding Country Sector Trading
(a)
£’000 assets
KT Skylife South Korea Consumer Discretionary NT 5,232 0.2
MAHLE Metal Leve Brazil Consumer Discretionary NT 4,910 0.2
Crédit Real Mexico Financials NH 4,546 0.2
Perusahaan Gas Negara Persero Indonesia Utilities NT 4,444 0.2
BBVA Banco Francés, ADR
(b)
Argentina Financials NH 4,169 0.2
Inner Mongolia Yitai Coal China/Hong Kong Energy PS 4,149 0.2
iMarketKorea South Korea Industrials NT 3,365 0.1
Industrias Peñoles Mexico Materials NT 3,244 0.1
Weifu High-Technology China/Hong Kong Consumer Discretionary NT 3,033 0.1
Interpark South Korea Consumer Discretionary NT 3,025 0.1
TOP 90 LARGEST INVESTMENTS

2,346,672 100.6
United Bank Pakistan Financials NT 2,584 0.1
Univanich Palm Oil Thailand Consumer Staples PS 2,450 0.1
Biocon India Health Care NT 2,083 0.1
Savola Group, Participatory Note Saudi Arabia Consumer Staples IH 1,930 0.1
Nigerian Breweries Nigeria Consumer Staples NT 550 0.0
Novus Holdings South Africa Financials NH 84 0.0
TOTAL INVESTMENTS

2,356,353 101.0
OTHER NET ASSETS

(22,662 ) (1.0 )
TOTAL NET ASSETS

2,333,691 100.0

(a)
Trading activity during the year: (NH) New Holding, (IH) Increased Holding, (PS) Partial Sale, (IS) Increased Holding and
Partial Sale and (NT) No Trading.
(b)
US listed American Depositary Receipt.

Portfolio Summary

As at 30 September 2017
All figures are in %



Consumer
Discretionary
Consumer
Staples Energy Financials
Health
Care Industrials
Information
Technology Materials
Real
Estate
Telecommunication
Services Utilities
Total
Equities
Other Net
Assets
30 September
2017 Total
31 March
2017 Total

Argentina – – – 0.2 – – – – – – –
0.2
–
0.2 0.2
Brazil 3.2 0.5 – 7.0 – – 0.7 – – – –
11.4
–
11.4 8.1
Cambodia 0.6 – – – – – – – – – –
0.6
–
0.6 0.6
China/Hong
Kong 7.4 1.1 2.4 2.2 – 0.3 8.4 0.4 – 0.5 –
22.7
–
22.7 21.9

Czech Republic – – – 0.5 – – – – – – –
0.5
–
0.5 0.4
Hungary – – – – 1.1 – – – – – –
1.1
–
1.1 1.2
India 0.3 – 0.7 2.4 0.8 – 0.5 0.6 – – –
5.3
–
5.3 6.1
Indonesia 2.4 – – 1.5 – – – – – – 0.2
4.1
–
4.1 5.3
Kenya – 0.3 – 1.2 – – – – – – –
1.5
–
1.5 1.2
Mexico 0.4 – – 1.6 – – – 0.1 – – –
2.1
–
2.1 2.5
Nigeria – 0.0 – – – – – – – – –
0.0
–
0.0 0.0
Pakistan – – – 1.3 – – – – – – –
1.3
–
1.3 2.4
Peru – – – – – – – 2.8 – – –
2.8
–
2.8 3.0
Philippines – – – 0.5 – – – – – – –
0.5
–
0.5 0.5
Russia – – 3.2 1.5 – – 2.7 0.6 – – –
8.0
–
8.0 7.8
Saudi Arabia – 0.1 – – – – – 0.5 – – –
0.6
–
0.6 1.3
South Africa 4.6 0.7 – – – – – – – – –
5.3
–
5.3 5.4
South Korea 1.5 0.4 0.5 – – 2.0 8.4 0.9 – – –
13.7
–
13.7 12.4
Taiwan – – – – – – 9.8 – – – –
9.8
–
9.8 10.2
Thailand – 1.1 0.4 3.0 – – – – 0.6 – –
5.1
–
5.1 5.7
United Kingdom – 3.5 – – – – – – – – –
3.5
–
3.5 3.7
United States 0.9 – – – – – – – – – –
0.9
–
0.9 0.9
Other Net
Assets – – – – – – – – – – –
–
(1.0 )
(1.0 ) (0.8 )
30 September
2017 Total 21.3 7.7 7.2 22.9 1.9 2.3 30.5 5.9 0.6 0.5 0.2 101.0 (1.0 ) 100.0 –
31 March
2017 Total 22.1 8.1 8.8 20.5 1.6 3.1 29.1 6.0 0.6 0.5 0.4 100.8 (0.8 ) – 100.0


Less than £1.5bn to Greater than Other Net
Market Capitalisation Breakdown
(a)
(%) £1.5bn £5bn £5bn Assets
30 September 2017 10.2 15.9 74.9 (1.0)
31 March 2017 9.3 18.9 72.6 (0.8)

(a)
A glossary of alternative performance measures is included in Shareholder Information on page 30.
Source: FactSet

Split Between Markets
(b)
(%) 30 September 2017 31 March 2017
Emerging Markets 92.8 92.4
Frontier Markets 2.9 3.8
Developed Markets
(c)
5.3 4.6
Other Net Assets (1.0 ) (0.8 )

(b)
Geographic split between “Emerging Markets”, “Frontier Markets” and “Developed Markets” are as per MSCI index
classifications.
(c)
Developed markets exposure represented by companies listed in the United Kingdom and United States.
Source: FactSet Research System, Inc.

Market Outlook

We believe that the recovery in emerging markets which has been underway since 2016 is showing little sign of abating. Prior to
the turning point in 2016, the gap between emerging market growth and that of developed markets was shrinking. Now it is
growing and this is one of the key indicators of a sustainable recovery as it has shown a strong correlation historically with
emerging market outperformance of developed markets. In addition, emerging market currencies are on average still undervalued,
earnings are improving and emerging markets generally continue to trade at a discount to their developed market peers. The
combination of all of these factors should support emerging market equities in the near future. There will undoubtedly be volatility
ahead, particularly as investment flows can often reflect ever changing attitudes to perceived risk, with inflows as investors move
‘risk-on’ and outflows as they move ‘risk-off’ in outlook. Less mature markets tend to be heavily sentiment driven and so will
naturally quickly reflect any scepticism in share prices. The supportive economic fundamentals combined with discounted
valuations should, however, make emerging markets less susceptible to negative global news flow as there is not as high a level of
‘unwinding’ of trades to occur as there would be in developed markets. Furthermore we are still seeing underweight exposure to
emerging markets from large institutional investors, sovereign wealth funds and large insurers, below what we would expect given
the proportion of global GDP and market capitalisation that emerging markets represent. This should support continuing capital
inflows.

Asia remains the most exciting region for us. In China, at the Communist Party Congress in October, Xi Jingping and the Party
leadership clearly demonstrated a desire to promote stability, both geopolitically and in the economy. Chinese internet stocks
continue to surprise with their growth on a global scale whilst the government’s aim of moving to a consumer driven economy
remains on target. While we invest in the more established larger Asian nations and gain many outstanding opportunities from

them, we are also seeing lots of interesting opportunities in the smaller countries such as Indonesia, the Philippines and Vietnam.
These countries are very quickly developing their own niches of expertise with interesting companies able to take advantage of
improving domestic consumption. Whilst the Korean peninsula remains a concern to the world, many analysts and commentators
believe that there is plenty of space for diplomacy with neither side actually benefitting from starting a conflict. We will keep a
close eye on events, but, in any case, a US-North Korea military conflict will have global implications that would not be confined
to emerging markets.

Latin America also remains interesting from an investment perspective and we recently started a new investment in Argentina.
Although there are challenges in Brazil from massive unemployment and corruption scandals, we are seeing good opportunities,
buoyed by the massive reform efforts of the Temer regime. Investors in Mexico need to monitor developments surrounding the
renegotiation of the North American Free Trade Agreement (NAFTA).

In Europe, Russia has been unpopular with investors for some time – suffering under sanctions and simply being run in a
generally sub-optimal fashion. However it is still possible to find well run companies operating in the private sector. These
companies are able to exploit the situation and demonstrate fast growth. This is enabling us to gain access to the country and its
consumer growth and development at attractive valuations due to the overall negative market sentiment.

There are many frontier markets in Africa and Latin America where we are also seeing potential. However, they are currently
looking at a longer time horizon of beyond five years. This suits our ethos as a long term investor.

Technology remains the key driver for the emerging markets. We are continuing to see high levels of investment in R&D and
workforce demographics comprising younger populations that are benefitting from increased investment in education. We are now
seeing a huge number of patent registrations – almost half of the global total – coming from emerging markets and, increasingly,
companies are not only supporting the products from developed markets with component or licensed device manufacture, but are
actually developing desirable branded technology products which are being exported to the rest of the world, gaining traction and
market share. It is the idea generation occurring in emerging markets and driving business models there which we are keen to
invest in.

We must not ignore macroeconomic, political and regulatory risk. While our investment process helps us to uncover attractively-
priced businesses with the potential to be successful, we need to examine carefully any potential roadblocks to their business
growth. Looking through multiple risk perspectives and ensuring that the portfolio has a high a degree of diversification, we aim
to recognise any associated risks and make sure that we are rewarded for taking them. We particularly like companies which
exhibit diversity in their underlying business models and are thinking globally, not just locally – this is a big mitigating factor to
risks and volatility. Corporate governance is still a significant risk in emerging markets and can be greater still in frontier markets.
We have a rigorous assessment of these factors as part of our investment process and only invest in those companies
demonstrating the highest standards.

We believe our rigorous research and investment process places TEMIT in a good position to weather any periods of volatility and
to benefit from ongoing performance in these dynamic markets.

Carlos Hardenberg
27 November 2017

Income Statement
For the six months to 30 September 2017


For the six months to
30 September 2017 (unaudited)


Revenue Capital Total

£’000 £’000 £’000
Gains/(losses) on investments and foreign exchange

Gains on investments at fair value – 210,139 210,139
Gains/(losses) on foreign exchange – 6,646 6,646
Revenue

Dividends 40,680 – 40,680
Bank and deposit interest 40 – 40

40,720 216,785 257,505
Expenses

AIFM fee (3,730 ) (8,702 ) (12,432 )
Other expenses (1,113 ) – (1,113 )

(4,843 ) (8,702 ) (13,545 )
Profit before finance costs and taxation 35,877 208,083 243,960
Finance costs (591 ) (1,380 ) (1,971 )
Profit before taxation 35,286 206,703 241,989
Tax expense (3,963 ) (596 ) (4,559 )
Profit for the period 31,323 206,107 237,430
Profit attributable to equity holders of the Company 31,323 206,107 237,430
Earnings per share 11.19 p 73.67 p 84.86 p
Ongoing charges ratio
(a)


1.12 %

(a)
A glossary of alternative performance measures is included in Shareholder Information on page 30.

Under the Company’s Articles of Association the capital element of return is not distributable.

The total column is the Income Statement of the Company.

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

With effect from 1 April 2017, 70% of the annual AIFM fee and 70% of the finance costs have been allocated to the capital
account. For the year ended 31 March 2017, 100% of the annual AIFM fee and the finance costs were allocated to the income
account.

From 1 July 2017, the annual AIFM fee was reduced from 1.1% of net assets per annum to 1% of net assets up to £2 billion and
0.85% of net assets above that level.


For the six months to
30 September 2016 (unaudited)
Year ended
31 March 2017 (audited)

Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000

– 425,774 425,774 – 682,120 682,120
– (1,275 ) (1,275 ) – (1,357 ) (1,357 )

27,986 – 27,986 46,071 – 46,071
48 – 48 49 – 49
28,034 424,499 452,533 46,120 680,763 726,883

(9,571 ) – (9,571 ) (20,735 ) – (20,735 )
(890 ) – (890 ) (1,857 ) – (1,857 )
(10,461 )
–
(10,461 ) (22,592 )
–
(22,592 )
17,573 424,499 442,072 23,528 680,763 704,291
– – – (418 ) – (418 )
17,573 424,499 442,072 23,110 680,763 703,873
(2,395 ) (1,129 ) (3,524 ) (4,084 ) (377 ) (4,461 )
15,178 423,370 438,548 19,026 680,386 699,412
15,178 423,370 438,548 19,026 680,386 699,412
5.18 p 144.71 p 149.89 p 6.59 p 235.71 p 242.30 p

1.21 %

1.20 %

Balance Sheet
As at 30 September 2017


As at As at

As at

30 September 30 September

31 March

2017 2016

2017

£’000 £’000

£’000

(unaudited) (unaudited)

(audited)
Non-current assets



Investments at fair value through profit or loss
2,356,353 1,870,982

2,165,950
Current assets



Trade and other receivables 5,466 12,298 6,390
Cash and cash equivalents 99,165 61,248 65,265
Total current assets 104,631 73,546

71,655
Current liabilities



Bank loans (123,799 ) – (83,732 )
Trade and other payables (2,741 ) (16,409 ) (5,286 )
Capital gains tax provision (753 ) (1,352 ) (490 )
Total liabilities (127,293 ) (17,761 ) (89,508 )
Net current (liabilities)/assets (22,662 ) 55,785

(17,853 )
Total assets less current liabilities 2,333,691 1,926,767

2,148,097
Share capital and reserves



Equity Share Capital 69,480 72,017 70,406
Capital Redemption Reserve 13,189 10,652 12,263
Special Distributable Reserve 433,546 433,546 433,546
Capital Reserve 1,713,307 1,318,417 1,535,899
Revenue Reserve 104,169 92,135 95,983
Equity Shareholders’ Funds 2,333,691 1,926,767

2,148,097
Net Asset Value pence per share
(a)
840.7 668.9 762.8

(a)
Based on shares in issue excluding shares held in Treasury.

Statement of Changes in Equity
For the six months to 30 September 2017 (unaudited)


Capital Special


Equity Share Redemption Distributable Capital Revenue


Capital Reserve Reserve Reserve Reserve Total

£’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2016 74,505 8,164 433,546 944,961 101,089 1,562,265
Profit for the period – – – 423,370 15,178 438,548
Equity dividends – – – – (24,132 ) (24,132 )
Purchase and cancellation of own
shares (2,488 ) 2,488 – (49,914 ) – (49,914 )
Balance at 30 September 2016 72,017 10,652 433,546 1,318,417 92,135 1,926,767
Profit for the period – – – 257,016 3,848 260,864
Equity dividends – – – – – –
Purchase and cancellation of own
shares (1,611 ) 1,611 – (39,534 ) – (39,534 )
Balance at 31 March 2017 70,406 12,263 433,546 1,535,899 95,983 2,148,097
Profit for the period – – – 206,107 31,323 237,430
Equity dividends – – – – (23,137 ) (23,137 )
Purchase and cancellation of own
shares (926 ) 926 – (26,198 ) – (26,198 )
Purchase of shares into Treasury – – – (2,501 ) – (2,501 )
Balance at 30 September 2017 69,480 13,189 433,546 1,713,307 104,169 2,333,691

Cash Flow Statement
For the six months to 30 September 2017


For the six For the six For the

months to months to year to

30 September 30 September 31 March

2017 2016 2017

£’000 £’000 £’000

(unaudited) (unaudited) (audited)
Cash flows from operating activities



Profit before finance costs and taxation 243,960 442,072 704,291
Adjustments for:
Gains on investments at fair value (210,139 ) (425,774 ) (682,120 )
Realised (gains)/losses on foreign exchange (6,646 ) 1,275 1,357
Stock dividends received in period (74) (797 ) (1,108 )
Increase/(decrease) in debtors 571 655 (785 )
Increase in creditors 382 134 528
Cash generated from operations 28,054 17,565 22,163
Tax paid (4,296 ) (2,498 ) (4,296 )
Net cash inflow from operating activities 23,758 15,067 17,867
Cash flows from investing activities



Purchases of non-current financial assets (221,207 ) (274,995 ) (556,380 )
Sales of non-current financial assets 245,525 317,995 556,971
Net cash inflow from investing activities 24,318 43,000 591
Cash flows from financing activities



Equity dividends paid (23,137 ) (24,132 ) (24,132 )
Purchase and cancellation of own shares (26,644 ) (50,046 ) (89,734 )
Repurchase of shares into Treasury (2,491 ) – –
Movement in bank loans outstanding 40,145 – 83,390
Bank loan interest paid (2,049 ) – (76 )
Net cash outflow from financing activities (14,176 ) (74,178 ) (30,552 )
Net increase/(decrease) in cash 33,900 (16,111 ) (12,094 )
Cash at the start of the period 65,265 77,359 77,359
Cash at the end of the period 99,165 61,248 65,265


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. A pdf version of the full Half Yearly Report to 30
th
September 2017
will be available by accessing the following hyperlink http://www.temit.co.uk/content-common/semi-annual-report/en_GB/local-
GB/TEMIT-semi-annual-report.pdf

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