<PAGE>
Templeton
Emerging Markets Fund, Inc.
[PHOTO APPEARS HERE]
J. Mark Mobius, Ph.D.
President
Templeton Emerging
Markets Fund, Inc.
- --------------------------------------------------------------------------------
Dr. Mobius has been living overseas since earning his Ph.D. in economics and
political science at Massachusetts Institute of Technology in 1964. During his
extensive travels, he has acquired a thorough knowledge of the business
practices and customs that are unique to developing nations. Together with his
team of Templeton analysts, Dr. Mobius currently oversees more than $6 billion
in emerging markets investments for the Templeton Group of Funds.
- --------------------------------------------------------------------------------
Your Fund's Objective:
The Templeton Emerging Markets Fund, Inc. seeks long-term capital appreciation
by investing primarily in emerging country equity securities.
- --------------------------------------------------------------------------------
April 17, 1995
Dear Shareholder:
The six-month period ended February 28, 1995 was especially challenging for the
Templeton Emerging Markets Fund, Inc. and for many other emerging-market
investments around the world. As you know, stock prices in emerging markets were
bid up to spectacularly high levels in 1993, only to suffer severe corrections
in 1994 due to rising interest rates and the weakness of the U.S. dollar. While
short-term volatility can be disconcerting, declines of as much as 40% to 50%
are not unusual in emerging markets. For example, the Hong Kong market has
increased 1000% in the last 15 years, but has suffered nine declines of more
than 20% during that time.
1
<PAGE>
During the period under review, your Fund posted a total return of -18.17% in
market-price terms, as shown in the Performance Summary on page 5. However,
we have always maintained a long-term perspective in managing the Fund, and
we urge shareholders to view their investments in the same manner. As you can
see in the Performance Summary, the Fund provided a cumulative total return
of 396.21% for the eight-year period since its inception in February 1987.
The most significant change in the geographical breakdown of your Fund was the
reduction of its Latin American exposure, from 28.7% to 19.6% of total net
assets. Mexico's massive devaluation of its peso in December 1994 caused the
Mexican stock market to tumble, resulted in a flight of foreign capital from all
over Latin America, and created ripple effects in emerging markets around the
world. Some investors sold shares in other Latin American markets in order to
cover losses in Mexico, while others feared that Argentina's dollarized currency
might also face devaluation.
Between December 19, 1994 and February 28, 1995, the value of the Mexican
peso versus the US dollar fell by
- --------------------------------------------------------------------------------
Templeton Emerging Markets Fund
Geographic Distribution on 2/28/95
Based on Total Net Assets
[PIE CHART APPEARS HERE]
Aslan Stocks 44.1%
European Stocks 15.7%
Latin America Stocks 19.6%
Short-Term Obligations
& Other Net Assets 20.3%
Other Stocks 0.3%
72% and the Mexican stock market index declined by 60% in US dollar terms.
During that same period, the relationship between Brazil's currency and the
US dollar remained virtually unchanged, but Brazil's stock market index
declined by 34% in US dollar terms. Although there wasn't much change in the
relationship of its currency to the US dollar, Argentina's stock market index
declined by 32% in US dollar terms.
2
<PAGE>
We viewed this so-called meltdown as an opportunity to seek new buying
opportunities. In addition to meetings with management teams of many impressive
Latin American companies since the devaluation, economic and political changes
have convinced us that the long-term outlook for Latin America's business
climate is positive. The Mercosul agreement, which went into effect in January
1995, is integrating the economies of Argentina, Brazil, Paraguay and Uruguay,
and it is clear that Latin American companies now have greater potential to
explore the large North American market.
While many emerging markets may have been oversold, it's possible that some may
decline further. For example, fears about China's takeover of Hong Kong in 1997
have created a great deal of uncertainty among international investors. In our
opinion, many Hong Kong and Chinese companies offer attractive investment
opportunities. Although short-term market sentiment concerning them may be
dampened by rising interest rates and weak Hong Kong real estate prices, we
believe they should benefit over the long-term by their significant exposure to
China's fast growing economy.
- --------------------------------------------------------------------------------
Templeton Emerging Markets Fund
Asset Allocation on 2/28/95
Based on Total Net Assets
[PIE CHART APPEARS HERE]
Equity 79.7%
Short-Term Obligations
& Other Net Assets 20.3%
As of February 28, 1995, 79.7% of the Fund's total net assets were invested
in equities, with the remaining 20.3% in cash and other liquid assets. As you
can see in the Investment Portfolio section of this report, our investments
were allocated across 22 emerging markets, with no one market accounting for
more than 14% of the Fund's total net assets. The largest portion was
invested in Asia (44.1%), followed by Latin America (19.6%), Southern Europe
(15.3%), Eastern Europe (0.4%), the Middle East (0.2%), and South Africa (0.1%).
3
<PAGE>
- --------------------------------------------------------------------------------
Templeton Emerging Markets Fund
Top 10 Holdings on 2/28/95
Based on Total Net Assets
<TABLE>
<CAPTION>
% of Total
Company, Industry, Country Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Philippine Long Distance Telephone Co.;
Telecommunications Philippines 5.0%
- --------------------------------------------------------------------------------
Philippine National Bank; Banking, Philippines 3.3%
- --------------------------------------------------------------------------------
Banco Comercial Portugues SA; Banking
Portugal 3.0%
- --------------------------------------------------------------------------------
Cheung Kong Holdings Ltd.; Multi-Industry,
Hong Kong 2.8%
- --------------------------------------------------------------------------------
Antofagasta Holdings PLC; Metals & Mining,
Chile 2.6%
- --------------------------------------------------------------------------------
Portuguesa Radio Marconi SA;
Telecommunications Portugal 2.4%
- --------------------------------------------------------------------------------
Telefonos de Mexico SA , L, ADR;
Telecommunications, Mexico 2.3%
- --------------------------------------------------------------------------------
Eregli Demir ve Celik Fabrikalari AS;
Metals & Mining, Turkey 2.3%
- --------------------------------------------------------------------------------
Singapore Bus Service Ltd, fgn; Transportation,
Singapore 2.2%
- --------------------------------------------------------------------------------
Oriental Holdings, Bhd., Automobiles, Malaysia 2.2%
- --------------------------------------------------------------------------------
</TABLE>
For a detailed listing of portfolio holdings, see page 11 of this report.
Looking forward, we remain optimistic about long-term prospects for emerging
market economies. Despite their recent weakness, we think they will continue
to grow faster than mature economies, and we remain committed to the
Templeton strategy of long-term value investing. This means that we intend
to: (1) search the world for the best investment bargains, (2) focus on the
long-term, not the short-term, (3) use common sense, and (4) buy when others
are despondently selling and sell when others are greedily buying.
It should be remembered, of course, that investing in emerging markets
involves special considerations, which may include risks related to market
and currency volatility, adverse social and political developments, and the
relatively small size and lesser liquidity of these markets. While short-term
volatility can be disconcerting, declines of as much as 40-50% are not
unusual in emerging markets. For example, the Hong Kong market has increased
1,000% in the last 15 years, but has suffered nine declines of more than 20%
during that time.
We thank you for your participation in the Templeton Emerging Markets Fund
and welcome your comments and suggestions.
4
<PAGE>
Performance Summary
In market-price terms, the Templeton Emerging Markets Fund produced a total
return of -18.17% for the six-month period ended February 28, 1995. Based on the
change in actual net asset value (in contrast to market price), the Fund
delivered a total return of -16.57% for the same period. Both total return
figures assume reinvestment of dividends and capital gains in accordance with
the dividend reinvestment plan. As you know, we have always maintained a long-
term perspective when managing the Fund, and we encourage shareholders to view
their investments in a similar manner. As you can see from the chart to the
right, based on the change in market price, the Fund delivered a cumulative
total return of +396.21% for the period between its inception on February 26,
1987 and February 28, 1995.
During the reporting period, the Fund's closing price on the New York Stock
Exchange decreased from $27.00 on August 31, 1994 to $19.25 on February 28,
1995, while the net asset value decreased from $22.77 to $16.30 for the same
period. Shareholders received combined distributions totaling $3.155 per share,
including long-term capital gains of $2.98, short-term capital gains of 7.5
cents ($0.075) and income distributions totaling 10 cents ($0.10) per share.
Distributions will vary, however, depending on income earned by the Fund and any
profits realized from the sale of securities in the portfolio. Past performance
is not predictive of future results.
- --------------------------------------------------------------------------------
TEMPLETON EMERGING MARKETS FUND
Cumulative Total Returns*
Periods ended 2/28/95
<TABLE>
<CAPTION>
Since
Inception
Six-Month One-Year Five-Year (2/26/87)
<S> <C> <C> <C> <C>
Based on change
in net asset value -16.57% -16.06% 209.71% 422.59%
Based on change
in market price -18.17% -13.75% 213.29% 396.21%
</TABLE>
*Cumulative total return calculations show the change in value of an investment
over the periods indicated. These calculations assume reinvestment of all
distributions and capital gains at net asset value or at market price on the
reinvestment date. Past performance is not predictive of future results.
5
<PAGE>
The Following Letter was
Written by Dr. Mobius After a
Recent Visit to Mexico City.
In Mexico, as in other emerging markets, significant political and social
changes are taking place which will have an inestimable impact on the overall
development of the economy. One party, the Partido Revolucionario Institucional
(PRI), has controlled the government since the 1920s. However, its position has
been weakened as a result of the on-going Zapatista uprising in Chiapas, the
unsolved murder of presidential candidate Luis Donaldo Colosio in March 1994,
and the September 1994 assassination of Jose Francisco Ruiz Massieu, the PRI's
secretary general.
In February 1995, Mexico's attorney general announced that one of the leaders in
charge of security on the day candidate Colosio was shot, had hired a former
colleague to assassinate Massieu. Even more shocking, was the accusation by
Massieu's brother, Mario Ruiz Massieu, that the chain of command led back from
the gunman to a PRI deputy, arousing suspicion that others in Mexico's ruling
party might be involved. Then, in March of this year, Raul Salinas, brother of
former Mexican President Carlos Salinas, was arrested on suspicion of
masterminding Massieu's assassination. Since the families of former heads of
state have had an unspoken immunity for more than six decades, this was a brave
move for President Ernesto Zedillo and Attorney General Antonio Lozano, an
appointment from outside the PRI.
According to two economists I met in Mexico City this March, Mexico's currency
problems started in September 1994, when Massieu was assassinated. They
estimated that reserves fell from US$29 billion in September to US$17 billion in
October. But even though money was leaving Mexico at an astonishing rate, the
market continued to rely on the new government's ability to defend its currency
and cover its deficits.
When President Zedillo took office on December 1, 1994, the exchange rate was
US$1 = peso 3.438. His inauguration speech did nothing to allay the market's
fears that something was amiss. When he went to Chiapas on December 8, he was
not well received by the populace, and the rebels questioned the qualifications
of the newly inaugurated governor.
6
<PAGE>
[MAP APPEARS HERE]
On Friday, December 16, the treasury minister stated that he would hike interest
rates before devaluing the peso. Two-to-three billion US dollars left the
country that day. At that time, the exchange rate was US$1 = peso 3.462. On
Monday, December 19, the outflow continued. By December 20, reserves were down
to US$9 billion. Finance Minister Serra and the Pacto Group, comprised of
business, labor, and government officials, held an emergency meeting and agreed
to raise the ceiling of the US$-to-peso trading band, from 3.4712 to 4.0016. The
next morning, Serra went on radio and TV to say that this was not a devaluation.
With that, the panic was on. By evening, reserves had declined to US$3 billion.
On December 21, the exchange rate was US$1 = peso 3.977. The Pacto Group held
another meeting on December 22, and decided to float the currency. The exchange
rate shot to US$1 = peso 4.70 and ended the year at US$1 = peso 4.90. Between
December 1 and December 31, 1994, the peso had been devalued by 43%. The
Government was paralysed.
During this period, we witnessed the extreme reaction one would expect under
such conditions. The world was shocked by the devaluation, and the credibility
of the central bank was greatly damaged. Investors remembered that, just a few
months earlier, Mexican officials had assured them such a devaluation was out of
the question. Some said they felt betrayed. Mexico had been praised almost
unanimously, and now market commentators questioned whether the Mexican
financial system was sound enough to resist pressures from the aftershocks of
devaluation. Fears surfaced that US$25 billion in peso-denominated Cetes
(Treasury Bills) or Tesobonos (US dollar-denominated government obligations)
maturing within six months would
7
<PAGE>
create a crisis, threatening the remaining central bank reserves and credit
lines from the International Monetary Fund and the United States.
Why did so much go wrong in such a short time? I believe that overconsumption,
low domestic savings, an unfavorable trade balance and a huge current account
deficit were the root causes. In my opinion, the Mexican government was overly
complacent about its large trade imbalance. The Salinas administration believed
that the imbalance was caused by companies importing capital goods, and that
these goods would eventually improve productivity and result in GDP growth and
increased exports. Instead, economic growth brought higher inflation and an
overvalued currency, making exports less competitive and leading to an even
larger trade imbalance.
An additional factor was Mexico's heavy reliance on foreign fixed income
portfolio inflows instead of direct foreign equity investments in hard assets.
Finally, the U.S. government, multilateral institutions and others, did not
issue warnings which could have led to a more effective and orderly adjustment.
Major institutions were emphasising short-term profit opportunities and
encouraging short-term investments into Mexico in search of high profit margins.
What can we learn from the Mexican experience? For starters, it shows us that
global markets are increasingly impacted in the short term by rapid, dramatic
changes in other markets because international investors view those markets as
part of the global whole. As we have seen, investors all over the world reacted
to the Mexican situation. Securities markets in Brazil, Argentina and other
countries fell rapidly in sympathy with Mexico, despite fundamentally different
economic frameworks and experiences. In such cases investor psychology usually
dominates, and if many investors become bearish about Latin America, emerging
markets in general may turn down, even though the financial and economic
realities may not warrant it. Over the long term, however, we can expect to see
significant divergencies among different markets. Some will go up while others
go down, and it is important not to confuse the
8
<PAGE>
macroeconomic picture with the microeconomic picture.
Another important point to remember is that often the best opportunities to
purchase stocks at bargain prices may arise when a country's debt position,
trade balance and other indicators seem disastrous. Taking advantage of such
opportunities, of course, requires considerable research, a willingness to take
risks and an ability to take a long view. Those who are impatient and afraid of
short-term movements should not invest in emerging markets such as Mexico.
Sincerely,
/s/ J. Mark Mobius
J. Mark Mobius, Ph.D.
President
Templeton Emerging Markets Fund, Inc.
9
<PAGE>
Templeton Emerging Markets Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 28, 1995 ------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
----------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 22.77 $ 17.94 $ 18.74 $ 18.16 $ 15.40 $ 12.44
-------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income .01 .10 .29 .41 .21 .24
Net realized and
unrealized gain (loss) (3.33) 5.87 4.93 4.21 4.43 3.05
-------- -------- -------- -------- -------- --------
Total from investment
operations (3.32) 5.97 5.22 4.62 4.64 3.29
-------- -------- -------- -------- -------- --------
Distributions:
Dividends from net
investment income (.10) (.29) (.39) (.08) (.24) (.16)
Distributions from net
realized gains (3.05) (.85) (5.63) (3.96) (1.64) (.17)
-------- -------- -------- -------- -------- --------
Total distributions (3.15) (1.14) (6.02) (4.04) (1.88) (.33)
-------- -------- -------- -------- -------- --------
Change in net asset
value (6.47) 4.83 (.80) .58 2.76 2.96
-------- -------- -------- -------- -------- --------
Net asset value, end of
period $ 16.30 $ 22.77 $ 17.94 $ 18.74 $ 18.16 $ 15.40
======== ======== ======== ======== ======== ========
TOTAL RETURN*
Based on market value (18.17)% 26.11% 44.30% 34.90% 57.92% 20.31%
Based on net asset value (16.57)% 33.39% 34.30% 24.09% 36.08% 26.73%
RATIO/SUPPLEMENTAL DATA:
Net assets, end of
period (000) $263,830 $363,760 $285,407 $243,261 $210,579 $177,372
Ratio of expenses to
average net assets 1.78%** 1.78% 1.84% 1.91% 1.91% 1.89%
Ratio of net investment
income to
average net assets 0.16%** 0.46% 2.07% 2.34% 1.43% 1.67%
Portfolio turnover rate 4.64% 6.50% 21.55% 53.45% 33.53% 23.53%
</TABLE>
* NOT ANNUALIZED IN PERIODS OF LESS THAN ONE YEAR.
** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Templeton Emerging Markets Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY** VALUE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
LONG TERM SECURITIES: 79.7%
- -----------------------------------------------------------------------------------------
Argentina: 0.2%
*Industrias
Petroquimicas Koppers Chemicals 176,191 $ 537,356
Sevel Argentina SA, C Automobiles 1,258 2,328
YPF Sociedad Anonima,
ADR Energy Sources 4,000 76,000
------------
615,684
- -----------------------------------------------------------------------------------------
Brazil: 13.2%
Banco Bradesco SA Banking 155,836,802 1,090,216
Banco Bradesco SA, PN. Banking 134,932,225 1,059,785
Banco do Brazil SA, PN. Banking 21,000,000 271,605
Banco do Estado de Sao
Paulo SA, PN. Banking 41,250,000 296,340
Cia Energetica de Minas
Gerais, PN. Utilities 39,545,054 3,184,993
*Cia Mesbla SA, PN. Merchandising 6,825,690 722,295
Copene-Petroquimica do
Nordeste
SA, A, PN. Chemicals 6,292,800 5,327,164
Duratex SA, PN. Forest Products & Paper 3,287,300 170,066
Eletrobras-Centrais
Eletricas Brasileiras
SA, B, PN. Utilities 13,761,977 3,025,693
Investimentos Itau SA,
PN. Multi-Industry 7,947,346 3,737,729
Light SA Utilities 4,073,000 1,316,961
*Mannesmann SA Machinery & Engineering 31,968 10,374
*Mannesmann SA, PN. Machinery & Engineering 2,085,844 760,272
*Marcopolo SA, B, PN. Automobiles 2,248,100 420,280
Petrobras-Petroleo
Brasileiro SA, PN. Energy Sources 44,186,667 4,494,519
Telebras-
Telecomunicacoes
Brasileiras SA Telecommunications 77,991,950 1,870,706
Telebras-
Telecomunicacoes
Brasileiras
SA, PN. Telecommunications 128,676,643 3,797,512
*Telecomunicacoes do
Rio de Janeiro
SA, PN. Telecommunications 858,999 38,380
Unibanco-Uniao de
Bancos Brasileiros
SA, PN. Banking 9,150,468 250,575
Vale de Rio Doce, PN. Metals & Mining 15,077,300 2,198,219
*Varig SA, PN. Transportation 307,440 918,163
------------
34,961,847
- -----------------------------------------------------------------------------------------
Chile: 2.6%
Antofagasta Holdings
PLC Metals & Mining 1,585,000 6,978,508
- -----------------------------------------------------------------------------------------
China: 0.4%
Shanghai Chlor-Alkali
Chemical
Co. Ltd., B Chemicals 1,088,000 278,528
Shanghai Erfangji
Textile Machinery
Co. Ltd., B Machinery & Engineering 276,000 54,096
</TABLE>
11
<PAGE>
Templeton Emerging Markets Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY** VALUE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -----------------------------------------------------------------------------------------
China (cont.)
*Shanghai Forever Recreation, Other Consumer
Bicycle Co. Ltd., B Goods 295,000 $ 58,410
*Shanghai Industrial
Sewing Machine Corp. Machinery & Engineering 190,000 58,140
Shanghai Jinqiao Export
Processing Zone
Development, B Real Estate 108,000 68,256
Shanghai Lian Hua Fibre
Corp., B Textiles & Apparel 61,300 21,455
*Shanghai Outer Gaoqiao
Free Trade Zone
Develop. Co., B Real Estate 125,000 66,000
*Shanghai Steel Tube
Co. Ltd., B Machinery & Engineering 454,000 103,512
Shanghai Tyre & Rubber
Co. Ltd., B Industrial Components 173,000 51,554
Shanghai Vacuum
Electron Devices Appliances & Household
Co. Ltd., B Durables 438,000 81,468
Shanghai Yaohua Building Materials &
Pilkington Glass, B Components 97,000 97,000
Shenzhen Gintian
Industrial Co. Ltd., B Multi-Industry 54,000 19,277
Shenzhen Properties &
Resources Develop.
(Group) Ltd., B Real Estate 170,000 64,865
------------
1,022,561
- -----------------------------------------------------------------------------------------
Czech Republic: 0.1%
*CEZ, GDS Utilities 4,000 174,000
- -----------------------------------------------------------------------------------------
Greece: 7.3%
Alpha Credit Bank Banking 97,620 4,491,318
Delta Dairy SA, pfd. Food & Household Products 5,160 89,276
Elais Oleaginous
Products SA Food & Household Products 14,145 843,160
Ergo Bank SA Banking 134,800 5,221,433
Fourlis Brothers Corp. Appliances & Household
SA Durables 134,030 1,730,536
Hellas Can-Container
Manufacturers SA Food & Household Products 12,000 206,585
Hellenic Bottling Co.
SA Food & Household Products 93,115 3,334,266
National Bank of Greece
SA Banking 11,940 564,240
Building Materials &
*Titan Cement Co., SA Components 91,996 2,850,748
------------
19,331,562
- -----------------------------------------------------------------------------------------
Hong Kong: 7.4%
C.P. Pokphand Co. Ltd. Food & Household Products 909,000 224,561
Cheung Kong Holdings
Ltd. Multi-Industry 1,688,000 7,357,641
Dairy Farm
International Holdings
Ltd. Food & Household Products 250,342 301,129
Dairy Farm Int'l
Holdings Ltd., 6.50%,
conv., pfd. Food & Household Products 29,000 25,738
Goldlion Holdings Ltd. Textiles & Apparel 500,000 111,233
Hang Lung Development
Co. Ltd. Real Estate 3,179,000 4,707,954
*Hang Lung Development
Co. Ltd., wts. Real Estate 317,900 55,920
HSBC Holdings PLC Banking 205,522 2,159,822
</TABLE>
12
<PAGE>
Templeton Emerging Markets Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY** VALUE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -----------------------------------------------------------------------------------------
Hong Kong (cont.)
Jardine Strategic
Holdings Ltd. Multi-Industry 100,000 $ 372,000
K Wah International Building Materials &
Holdings Ltd. Components 2,143,796 341,055
Lai Sun Development Co.
Ltd. Real Estate 100,000 13,451
New World Development
Co. Ltd. Real Estate 577,658 1,576,484
Stelux Holdings Ltd. Multi-Industry 585,133 172,176
Sun Hung Kai Properties
Ltd. Real Estate 260,000 1,748,690
Yaohan Hongkong Corp.
Ltd. Merchandising 3,244,000 398,603
------------
19,566,457
- -----------------------------------------------------------------------------------------
Hungary: 0.3%
*Chinoin Pharmaceutical
& Chemical Works Co.
Ltd. Health & Personal Care 2,000 789,128
Ibusz Leisure & Tourism 800 8,157
------------
797,285
- -----------------------------------------------------------------------------------------
India: 0.7%
ATV Project India Ltd. Machinery & Engineering 200,000 222,744
Essar Shipping Ltd. Transportation 59,250 127,262
Garden Silk Mills Ltd. Textiles & Apparel 85,700 184,074
*Industrial Credit &
Investment Corp. of
India Ltd. Financial Services 200,000 859,154
*Videocon International Appliances & Household
Ltd. Durables 90,000 350,821
------------
1,744,055
- -----------------------------------------------------------------------------------------
Indonesia: 2.7%
PT Astra International,
fgn. Multi-Industry 41,100 69,535
PT Charoen Pokphand
Indonesia, fgn. Food & Household Products 250,000 572,411
*PT Charoen Pokphand
Indonesia, rts. Food & Household Products 250,000 459,621
PT Duta Pertiwi
Nusantara, fgn. Chemicals 409,750 129,404
PT Eratex Djaja, fgn. Textiles & Apparel 283,000 121,295
PT Hadtex Indosyntec,
fgn. Textiles & Apparel 953,000 494,451
PT Intan Wijaya
Chemical Industry,
fgn. Chemicals 526,000 189,849
PT Jakarta
International Hotel &
Development, fgn. Real Estate 100,000 97,000
PT Japfa Comfeed
Indonesia, fgn. Food & Household Products 539,000 492,432
PT Metrodata
Electronic, fgn. Electrical & Electronics 347,000 266,140
PT Multipolar Corp.,
fgn. Electrical & Electronics 39,000 23,314
PT Polysindo Eka
Perkasa, fgn. Textiles & Apparel 1,587,000 2,863,975
*PT Pudjiadi Prestige
Ltd., fgn. Real Estate 425,000 275,632
PT Unggul Indah Corp.,
fgn. Chemicals 1,082,000 1,110,557
------------
7,165,616
- -----------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
Templeton Emerging Markets Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY** VALUE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -----------------------------------------------------------------------------------------
Israel: 0.2%
*Bank Hapoalim BM Banking 33,148 $ 40,210
Clal Industries Ltd. Multi-Industry 40,000 185,909
*Discount Investment
Corp. Multi-Industry 6,000 325,368
*The First
International Bank of
Israel Banking 977 97,279
------------
648,766
- -----------------------------------------------------------------------------------------
Korea: 0.7%
Central Investment &
Finance Corp. Financial Services 15,976 323,708
Dae Yu Co. Textiles & Apparel 3,500 80,669
*Dae Yu Co. Ltd., new Textiles & Apparel 840 18,722
Daegu Bank Co. Ltd. Banking 20,190 255,427
Daehan Synthetic Fiber
Co. Ltd. Textiles & Apparel 2,500 395,745
Hae In Corp. Ltd. Merchandising 4,951 215,683
Hankook Cosmetics Co.
Ltd. Health & Personal Care 6,700 265,573
Samseong Publishing Co.
Ltd. Business & Public Services 5,270 106,781
Yuhwa Corp. Textiles & Apparel 3,580 198,574
------------
1,860,882
- -----------------------------------------------------------------------------------------
Malaysia: 6.3%
Federal Flour Mills
Bhd. Food & Household Products 779,999 2,062,681
Malayawata Steel Bhd.,
fgn. Metals & Mining 797,000 1,317,665
Malaysian International
Shipping Corp. Bhd.,
fgn. Transportation 1,930,667 5,294,678
Oriental Holdings Bhd. Automobiles 1,088,200 5,755,416
Perlis Plantations Bhd. Multi-Industry 626,879 2,075,270
Perlis Plantations
Bhd., fgn. Multi-Industry 50,000 165,524
------------
16,671,234
- -----------------------------------------------------------------------------------------
Mexico: 3.0%
Building Materials &
Cemex SA, B Components 128,250 321,108
DESC Sociedad de
Fomento
Industrial SA, A Multi-Industry 138,000 251,749
DESC Sociedad de
Fomento
Industrial SA, B Multi-Industry 1,000 1,951
Grupo Financiero
Bancomer SA, C Banking 85,000 15,364
Grupo Financiero Serfin
SA, B Banking 112,000 99,347
Grupo Industrial Alfa
SA, A Multi-Industry 161,000 1,174,828
Telefonos de Mexico SA,
L, ADR Telecommunications 217,700 6,013,963
------------
7,878,310
- -----------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
Templeton Emerging Markets Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY** VALUE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -----------------------------------------------------------------------------------------
Philippines: 11.0%
A. Soriano Corp., B Multi-Industry 4,685,742 $ 583,439
Keppel Philippine
Holdings Inc., B Machinery & Engineering 20,045 10,920
Philex Minning Corp., B Metals & Mining 3,733,339 450,325
Philippine Commercial
International
Bank Inc. Banking 387,989 2,928,789
Philippine Long
Distance Telephone Co. Telecommunications 223,753 13,229,396
Philippine National
Bank Banking 783,556 8,689,237
RFM Corp. Food & Household Products 1,192,500 1,902,432
Sime Darby Pilipinas
Inc. Industrial Components 576,386 1,121,374
------------
28,915,912
- -----------------------------------------------------------------------------------------
Portugal: 8.0%
Banco Chemical Portugal
SA Banking 800 8,460
Banco Comercial
Portugues SA Banking 633,896 7,968,739
Banco Espirito Santo e
Comercial de Lisboa Banking 35,000 577,859
Banco Portugues de
Investimento SA Banking 196,860 3,291,843
Banco Totta & Acores SA Banking 27,000 553,206
Cel-Cat Fabrica
Nacional de
Conductores Electronic Components &
Electricos SA Instruments 29,805 532,077
Compta-Equipamentos e
Servicos de
Informatica SA Business & Public Services 30,000 301,388
Espirito Santo
Financial Holding SA,
ADR Banking 114,000 1,325,250
Portuguesa Radio
Marconi SA Telecommunications 39,230 1,568,681
Portuguesa Radio
Marconi SA, br. Telecommunications 121,700 4,870,413
------------
20,997,916
- -----------------------------------------------------------------------------------------
Singapore: 3.6%
Jaya Holdings Ltd. Transportation 919,500 989,938
*Jaya Holdings Ltd.,
wts. Transportation 66,832 44,464
Jaya Holdings Ltd.,
3.50%, conv., 9/07/97 Transportation 183,900** 97,090
Jaya Holdings Ltd.,
3.00%, conv., 8/31/98 Transportation 15,900** 24,141
Prima Ltd. Food & Household Products 530,000 2,030,021
Singapore Bus Service
Ltd., fgn. Transportation 903,600 5,861,863
TIBS Holdings Ltd. Transportation 134,600 421,728
------------
9,469,245
- -----------------------------------------------------------------------------------------
South Africa: 0.2%
Amalgamated Bank of
South Africa Banking 44,000 125,714
Del Monte Royal Foods
Ltd. Food & Household Products 22,025 36,521
Engen Ltd. Energy Sources 11,341 80,284
</TABLE>
15
<PAGE>
Templeton Emerging Markets Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY** VALUE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -----------------------------------------------------------------------------------------
South Africa (cont.)
First National Bank
Holdings Ltd. Banking 28,900 $ 156,665
Rembrandt Group Ltd. Multi-Industry 8,400 56,250
------------
455,434
- -----------------------------------------------------------------------------------------
Sri Lanka: 0.1%
Building Materials &
Lanka Ceramic Ltd. Components 162,000 172,858
Lanka Walltile Ltd. Multi-Industry 27,300 37,199
United Motor Lanka Ltd. Automobiles 158,600 81,040
------------
291,097
- -----------------------------------------------------------------------------------------
Thailand: 0.2%
Asia Fibre Co. Ltd.,
fgn. Textiles & Apparel 233,600 210,746
*Kian Gwan (Thailand)
Co. Ltd., fgn. Real Estate 26,000 90,176
Padaeng Industry Co.
Ltd., fgn. Metals & Mining 35,100 61,573
*United Standard
Terminal
Public Co. Ltd., fgn. Transportation 60,000 92,622
------------
455,117
- -----------------------------------------------------------------------------------------
Turkey: 11.0%
Akbank TAS Banking 16,831,324 3,854,811
*Akbank, new Banking 8,415,662 1,825,963
Building Materials &
Akcimento Ticaret AS Components 552,000 612,150
Alcatel Teletas
Endustri Tic AS Telecommunications 152,000 46,721
Appliances & Household
Arcelik AS Durables 24,737,557 5,128,809
Bagfas Bandirma Gubre
Fabrikalari AS Chemicals 2,805,790 727,151
Appliances & Household
Bekoteknik AS Durables 2,966,250 400,458
Celik Halat ve Sanayii Building Materials &
ve Ticaret AS Components 2,749,000 331,365
*Cimentas Izmir Cimento Building Materials &
Fabrikasi TAS Components 1,500,000 795,564
Cimsa Cimento Sanayi ve Building Materials &
Ticaret AS Components 128,000 274,638
Compagnie Financiere
Ottomane SA Banking 37,000 1,318,478
Cukurova Elektrik AS Utilities 5,685,033 1,219,788
Eregli Demir ve Celik
Fabrikalari AS Metals & Mining 54,444,250 5,972,067
Finans Bank AS, br. Banking 16,829,637 1,298,333
Izocam Ticaret ve Building Materials &
Sanayii AS, br. Components 1,625,475 313,496
Kartonsan Karton
Sanayii ve Ticaret AS Forest Products & Paper 206,000 80,702
Koc Holding AS Multi-Industry 1,565,568 905,825
Koc Yatirim AS Multi-Industry 1,432,897 846,335
Marshall Boya AS Industrial Components 2,081,520 426,541
Otosan Otomobil Sanayii
AS Automobiles 4,215,288 792,653
Peg Profilo Elektrikli Appliances & Household
Gerecler Sanayii AS Durables 5,144,154 545,667
Tekstil Bankasi AS, br. Banking 638,755 31,953
</TABLE>
16
<PAGE>
Templeton Emerging Markets Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY** VALUE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
LONG TERM SECURITIES (CONT.)
- -----------------------------------------------------------------------------------------
Turkey (cont.)
*Tekstil Bankasi AS,
new Banking 31,937 $ 982
*Tekstil Bankasi AS,
rts. Banking 638,755 4,023
Appliances & Household
Turk Demir Dokum, br. Durables 6,114,820 855,013
*Turkiye Garanti
Bankasi AS Banking 1,390,907 295,082
Vakif Finansal Kiralama
AS Financial Services 1,872,600 169,292
------------
29,073,860
- -----------------------------------------------------------------------------------------
Venezuela: 0.5%
Consolidada Carabobo, B Building Materials & 840,000 101,053
Components
Electricidad de Caracas Utilities 750,128 654,247
Manufacturera de Appliances & Household 36,000 61,714
Aparatos Domesticos SA Durables
Siderurgica Venezolana
Sivensa SA Metals & Mining 1,455,440 396,507
*Siderurgica Venezolana
Sivensa SA, Venprecar
GDS Metals & Mining 1,764 10,319
------------
1,223,840
- -----------------------------------------------------------------------------------------
TOTAL LONG TERM SECURITIES (cost $155,122,863) 210,299,188
- -----------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 18.5% (cost $48,828,412)
- -----------------------------------------------------------------------------------------
U.S. Treasury Bills,
5.18% to 5.65% with
maturities to 4/27/95 U.S. 49,015,000 48,833,894
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 98.2% (cost $203,951,275) 259,133,082
OTHER ASSETS, LESS
LIABILITIES: 1.8% 4,696,582
------------
TOTAL NET ASSETS: 100.0% $263,829,664
============
</TABLE>
* NON-INCOME PRODUCING.
** PRINCIPAL AMOUNT IN CURRENCY OF COUNTRY INDICATED.
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
Templeton Emerging Markets Fund, Inc.
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1995 (unaudited)
<TABLE>
<S> <C>
Assets:
Investment in securities, at value
(identified cost $203,951,275) $259,133,082
Cash 19,762
Receivables:
Investment securities sold 5,356,050
Dividends and interest 149,469
------------
Total assets 264,658,363
------------
Liabilities:
Payables for investment securities purchased 22,164
Accrued expenses 806,535
------------
Total liabilities 828,699
------------
Net assets, at value $263,829,664
============
Net assets consists of:
Undistributed net investment income $ 184,207
Net unrealized appreciation 55,130,308
Accumulated net realized gain 21,924,586
Net capital paid in on shares of
capital stock 186,590,563
------------
Net assets, at value $263,829,664
============
Shares outstanding 16,184,253
============
Net asset value per share
($263,829,664 / 16,184,253) $ 16.30
============
</TABLE>
STATEMENT OF OPERATIONS
for the six months endedFebruary 28,1995 (unaudited)
<TABLE>
<S> <C> <C>
Investment income: (net of $138,840
foreign taxes withheld)
Dividends $ 1,725,902
Interest 1,227,168
-----------
Total income $ 2,953,070
Expenses:
Management fees (Note 3) 1,910,605
Administrative fees (Note 3) 229,272
Transfer agent fees 23,000
Custodian fees 403,000
Reports to shareholders 81,000
Audit fees 16,500
Legal fees 28,000
Registration and filing fees 600
Directors' fees and expenses 17,000
Other 5,343
-----------
Total expenses 2,714,320
------------
Net investment income 238,750
Realized and unrealized
gain (loss):
Net realized gain (loss) on:
Investments 22,886,436
Foreign currency transactions (484,154)
-----------
22,402,282
-----------
Net unrealized appreciation (depreciation) on:
Investments (76,827,612)
Foreign currency translation of other assets and
liabilities 21,586
-----------
(76,806,026)
-----------
Net realized and unrealized loss (54,403,744)
------------
Net decrease in net assets resulting from
operations $(54,164,994)
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
Templeton Emerging Markets Fund, Inc.
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28, 1995 YEAR ENDED
(UNAUDITED) AUGUST 31, 1994
----------------- ---------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 238,750 $ 1,542,948
Net realized gain from security and for-
eign currency transactions 22,402,282 51,099,159
Net unrealized appreciation (depreciation) (76,806,026) 42,443,010
------------ ------------
Net increase (decrease) in net assets re-
sulting from operations (54,164,994) 95,085,117
Distributions to shareholders:
From net investment income (1,597,491) (4,645,083)
From net realized gain (48,808,530) (13,503,973)
Capital share transactions (Note 2) 4,640,626 1,417,186
------------ ------------
Net increase (decrease) in net assets (99,930,389) 78,353,247
Net assets:
Beginning of period 363,760,053 285,406,806
------------ ------------
End of period $263,829,664 $363,760,053
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
Templeton Emerging Markets Fund, Inc.
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Emerging Markets Fund, Inc. (the Fund) is a closed-end, diversified
management investment company registered under the Investment Company Act of
1940. The following summarizes the Fund's significant accounting policies.
a. Securities Valuations:
Securities listed or traded on a recognized national or foreign stock exchange
or NASDAQ are valued at the last reported sales prices on the principal ex-
change on which the securities are traded. Over-the-counter securities and
listed securities for which no sale is reported are valued at the mean between
the last current bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
and approved in good faith by the Board of Directors.
b. Foreign Currency Translations:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of portfolio securities and income items denominated in foreign curren-
cies are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customar-
ily enters into foreign exchange contracts to minimize foreign exchange risk
between the trade date and the settlement date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of for-
eign currencies, currency gains or losses realized between the trade and set-
tlement dates on security transactions, the differences between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at the end
of the fiscal period, resulting from changes in the exchange rates.
The Brazilian Government has exercised and may continue to exercise substantial
influence over exchange of their currency. Under current Brazilian law, when-
ever there occurs a serious imbalance of Brazil's balance of payments or seri-
ous reasons to foresee the imminence of such an imbalance, Brazil's National
Monetary Council may, for a limited period, impose restrictions of foreign cap-
ital remittances abroad. Exchange control regulations may restrict repatriation
of investment income, capital, or the proceeds of securities sales by foreign
investors. The Fund has investments in Brazilian companies with a value of ap-
proximately $35 million as of February 28, 1995.
c. Income Taxes:
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all its
taxable income to its shareholders. Therefore, no provision has been made for
income taxes.
d. Security Transactions, Investment Income, Distributions and Expenses:
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on the ex-dividend date. Certain dividend income on foreign securi-
ties is recorded as soon as information is available to the Fund. Interest in-
come and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
2. TRANSACTIONS IN SHARES OF CAPITAL STOCK
At February 28, 1995 there were 30,000,000 shares of capital stock authorized
($0.01 par value). During the six months ended February 28, 1995 and the year
ended August 31, 1994, 209,342 shares were issued for $4,640,626 and 62,769
shares were issued for $1,417,186 from reinvested distributions, respectively.
20
<PAGE>
Templeton Emerging Markets Fund, Inc.
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton In-
vestment Management (Hong Kong) Limited (TIML) and Templeton Global Investors,
Inc. (TGII), the Fund's investment manager and administrative manager, respec-
tively. The Fund pays monthly an investment management fee to TIML equal, on an
annual basis, to 1.25% of the average daily net assets of the Fund. The Fund
pays TGII monthly a fee computed at an annual rate of 0.15% of the Fund's aver-
age daily net assets.
An officer of the Fund is a partner of Dechert Price & Rhoads, legal council
for the Fund, which firm received fees of $28,000 for the six months ended Feb-
ruary 28, 1995.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the six
months ended February 28, 1995 aggregated $12,101,795 and $40,447,940, respec-
tively. The cost of securities for federal income tax purposes is $203,866,462.
Realized gains and losses are reported on an identified cost basis.
At February 28, 1995, the aggregate gross unrealized appreciation and deprecia-
tion of portfolio securities, based on cost for federal income tax purposes,
was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 73,513,610
Unrealized depreciation (18,246,990)
------------
Net unrealized appreciation $ 55,266,620
============
</TABLE>
5. UNAUDITED QUARTERLY RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
NET INCREASE
NET GAIN (LOSS) (DECREASE)
ON SECURITY AND IN NET ASSETS
INVESTMENT NET INVESTMENT FOREIGN CURRENCY RESULTING FROM
INCOME INCOME TRANSACTIONS OPERATIONS
---------------- ------------------ -------------------- --------------------
PER PER PER PER
TOTAL SHARE TOTAL SHARE TOTAL SHARE TOTAL SHARE
---------- ----- ----------- ----- ------------ ------ ------------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995
For quarters ended
November 30, 1994 $1,859,722 $.11 $ 394,240 $ .02 $(65,913,697) $(4.03) $(65,519,457) $(4.01)
February 28, 1995 1,093,348 .07 (155,490) (.01) 11,509,953 .70 11,354,463 .69
---------- ---- ----------- ----- ------------ ------ ------------ ------
$2,953,070 $.18 $ 238,750 $ .01 $(54,403,744) $(3.33) $(54,164,994) $(3.32)
========== ==== =========== ===== ============ ====== ============ ======
1994
For quarters ended
November 30, 1993 $1,415,389 $.09 $ 7,920 -- $ 56,121,216 $ 3.53 $ 56,129,136 $ 3.53
February 28, 1994 436,384 .03 (1,102,585) $(.07) 37,933,221 2.38 36,830,636 2.31
May 31, 1994 3,373,504 .15 1,945,571 .12 (47,278,826) (2.96) (45,333,255) (2.84)
August 31, 1994 2,249,677 .10 692,042 .05 46,766,558 2.92 47,458,600 2.97
---------- ---- ----------- ----- ------------ ------ ------------ ------
$7,474,954 $.37 $ 1,542,948 $ .10 $ 93,542,169 $ 5.87 $ 95,085,117 $ 5.97
========== ==== =========== ===== ============ ====== ============ ======
</TABLE>
21
<PAGE>
Templeton Emerging Markets Fund, Inc.
Annual Meeting of Shareholders, February 21, 1995
- --------------------------------------------------------------------------------
An Annual Meeting of Shareholders of the Fund was held at the Fund's offices,
700 Central Avenue, St. Petersburg, Florida, on February 21, 1995. The purpose
of the meeting was to elect four directors of the Fund and to ratify the selec-
tion of McGladrey & Pullen, LLP, as the Fund's independent public accountants
for the fiscal year ending August 31, 1995. At the meeting, the following per-
sons were elected by the shareholders to serve as directors of the Fund: Harmon
E. Burns, F. Bruce Clarke, Andrew H. Hines, Jr., and John G. Bennett, Jr. In
addition to the directors elected at the Annual Meeting, the following persons
also serve as directors of the Fund: John M. Templeton, Nicholas F. Brady,
Hasso-G von Diergardt-Naglo, Betty P. Krahmer, Fred R. Millsaps, Harris J. Ash-
ton, S. Joseph Fortunato and Gordon S. Macklin. In addition, the shareholders
ratified the selection of McGladrey & Pullen, LLP, to serve as the Fund's inde-
pendent public accountants for the fiscal year ending August 31, 1995. No other
business was transacted at the Annual Meeting.
The results of the voting at the Annual Meeting are as follows:
1. Election of four (4) Directors:
<TABLE>
<CAPTION>
% OF % OF % OF
OUTSTANDING SHARES OUTSTANDING
FOR SHARES VOTED AGAINST % ABSTAIN SHARES
---------- ----------- ------ ------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Harmon
E.
Burns 10,286,324 64.00% 99.00% -0- -0- 90,032 0.56%
F. Bruce
Clarke 10,253,676 63.00% 99.00% -0- -0- 122,680 0.76%
Andrew
H.
Hines,
Jr. 10,280,079 63.00% 99.00% -0- -0- 96,277 0.59%
John G.
Bennett,
Jr. 10,280,083 63.00% 99.00% -0- -0- 96,273 0.59%
2. Ratification of the selection of McGladrey & Pullen, LLP, as independent
public accountants of the Fund for the fiscal year ending August 31, 1995:
<CAPTION>
% OF % OF % OF % OF
OUTSTANDING SHARES OUTSTANDING OUTSTANDING
FOR SHARES VOTED AGAINST SHARES ABSTAIN SHARES
---------- ----------- ------ ------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
10,199,920 63.03% 98.30% 52,824 0.33% 123,612 0.76%
</TABLE>
22
<PAGE>
The Franklin Templeton Group
- --------------------------------------------------------------------------------
To receive a free brochure and prospectus, which contain more complete informa-
tion, including charges and expenses on each of the funds listed below, call
Franklin Fund Information, toll free, at 1-800-DIAL-BEN (1-800-342-5236) or
Templeton Fund Information at 1-800-292-9293. Please read the prospectus care-
fully before you invest or send money.
TEMPLETON
FAMILY OF FUNDS
Franklin Templeton Japan Fund
Templeton American Trust
Templeton Americas
Government Securities Fund
Templeton Developing
Markets Trust
Templeton Foreign Fund
Templeton Global
Infrastructure Fund
Templeton Global
Opportunities Trust
Templeton Global Rising
Dividends Fund
Templeton Growth Fund
Templeton Income Fund
Templeton Money Fund
Templeton Real Estate
Securities Fund
Templeton Smaller
Companies Growth Fund
Templeton World Fund
FRANKLIN GROUP OF FUNDS(R)
FRANKLIN GLOBAL/
INTERNATIONAL FUNDS
Franklin Global Health Care
Fund
Franklin Global Government
Income Fund
Franklin Global Utilities Fund
Franklin International Equity
Fund
Franklin Pacific Growth Fund
FUNDS SEEKING CAPITAL GROWTH
Franklin California Growth
Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
Franklin Small Cap Growth
Fund
FUNDS SEEKING GROWTH AND
INCOME
Franklin Balance Sheet
Investment Fund
Franklin Convertible
Securities Fund
Franklin Income Fund
Franklin Equity Income Fund
Franklin Utilities Fund
FUNDS SEEKING HIGH CURRENT
INCOME
Franklin's AGE High Income
Fund
Franklin Investment Grade Income
Fund
Franklin Premier Return Fund
Franklin U.S. Government
Securities Fund
FUNDS SEEKING TAX-FREE
INCOME
Franklin Federal Tax-Free
Income Fund
Franklin High Yield Tax-Free
Income Fund
Franklin California High Yield
Municipal Fund
Franklin Alabama Tax-Free
Income Fund
Franklin Arizona Tax-Free
Income Fund
Franklin California Tax-Free
Income Fund
Franklin Colorado Tax-Free
Income Fund
Franklin Connecticut Tax-Free
Income Fund
Franklin Florida Tax-Free
Income Fund
Franklin Georgia Tax-Free
Income Fund
Franklin Hawaii Municipal
Bond Fund
Franklin Indiana Tax-Free
Income Fund
Franklin Kentucky Tax-Free
Income Fund
Franklin Louisiana Tax-
Free Income Fund
Franklin Maryland Tax-
Free Income Fund
Franklin Missouri Tax-Free
Income Fund
Franklin New Jersey Tax-
Free Income Fund
Franklin New York Tax-
Free Income Fund
Franklin North Carolina
Tax-Free Income Fund
Franklin Oregon Tax-Free
Income Fund
Franklin Pennsylvania Tax-
Free Income Fund
Franklin Puerto Rico Tax-
Free Income Fund
Franklin Texas Tax-Free
Income Fund
Franklin Virginia Tax-Free
Income Fund
Franklin Washington
Municipal Bond Fund
FUNDS SEEKING TAX-FREE
INCOME THROUGH INSURED
PORTFOLIOS
Franklin Insured Tax-Free
Income Fund
Franklin Arizona Insured
Tax-Free Income Fund
Franklin California Insured
Tax-Free Income Fund
Franklin Florida Insured
Tax-Free Income Fund
Franklin Massachusetts
Insured Tax-Free Income
Fund
Franklin Michigan Insured
Tax-Free Income Fund
Franklin Minnesota Insured
Tax-Free Income Fund
Franklin New York Insured
Tax-Free Income Fund
Franklin Ohio Insured Tax-
Free Income Fund
FUNDS SEEKING HIGH CURRENT
INCOME AND STABILITY OF
PRINCIPAL
Franklin Adjustable Rate
Securities Fund
Franklin Adjustable U.S.
Government Securities
Fund
Franklin Short-
Intermediate U.S.
Government Securities
Fund
FUND SEEKING HIGH AFTER-TAX
INCOME FOR CORPORATIONS
Franklin Corporate
Qualified Dividend Fund
MONEY MARKET FUNDS SEEKING
SAFETY OF PRINCIPAL AND
INCOME
Franklin Money Fund
Franklin Federal Money
Fund
Franklin Tax-Exempt
Money Fund
Franklin California Tax-
Exempt Money Fund
Franklin New York Tax-
Exempt Money Fund
IFT Franklin U.S. Treasury
Money Market Portfolio
FUNDS FOR
NON-U.S. INVESTORS
FRANKLIN PARTNERS FUNDS(R)
Franklin Tax-Advantaged
High Yield Securities Fund
Franklin Tax-Advantaged
International Bond Fund
Franklin Tax-Advantaged
U.S. Government
Securities Fund
<PAGE>
- --------------------------------------------------------------------------------
TEMPLETON EMERGING
MARKETS FUND, INC.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Investors should be aware that the value of investments made for the Fund may
go up as well as down and that the Investment Manager may make errors in
selecting securities for the Fund's portfolio. Like any investment in
securities, the Fund's portfolio will be subject to the risk of loss from
market, currency, economic, political and other factors. The Fund and Fund
investors are not protected from such losses by the Investment Manager.
Therefore, investors who cannot accept the risk of such losses should not
invest in shares of the Fund.
To ensure the highest quality of service, telephone calls to or from our
service departments may be monitored, recorded and accessed. These calls can be
determined by the presence of a regular beeping tone.
- --------------------------------------------------------------------------------
TEMPLETON
EMERGING
MARKETS
FUND, INC.
Semi-Annual Report
February 28, 1995
[LOGO OF FRANKLIN TEMPLETON APPEARS HERE]
[RECYCLING LOGO APPEARS HERE]
TLEMF 595 04/95
