<PAGE>
Templeton Capital
Accumulator Fund
- --------------------
[PHOTO OF
GARY P. MOTYL
APPEARS HERE]
- --------------------
Gary P. Motyl, CFA
President
Templeton Capital
Accumulator Fund
====================
Your Fund's Objective:
The Templeton Capital Accumulator Fund seeks long-term capital growth by
investing in a portfolio primarily composed of common stocks in various nations
throughout the world.
October 16, 1995
Dear Shareholder:
We are pleased to bring you this fifth annual report of the Templeton Capital
Accumulator Fund, which covers the fiscal year ended August 31, 1995. During
this period, global equity and currency markets were quite volatile for several
reasons: Mexico devalued its peso, the world's major central banks coordinated
efforts to raise the value of the U.S. dollar from historical lows versus the
Japanese yen, contradictory reports raised questions regarding U.S. economic
growth, and many domestic and international investors restructured their
portfolios. Within this environment, the Fund posted a total return of 3.40%,
compared with an 8.80% increase in the Morgan Stanley Capital International
(MSCI) World Index./1/ We are pleased to report, however, as shown in the
Performance Summary on page 5, that since inception, the Fund's
/1/ The Fund's performance differs from that of the index because in addition to
not being managed according to any investment strategy, the index does not
contain cash (the Fund generally carries a certain percentage of cash at any
given time) and includes no management expenses or sales and creation charges.
Of course, one cannot invest directly in an index, and past performance is not
predictive of future results.
1
<PAGE>
================================================================================
Templeton Capital Accumulator Fund
Geographic Distribution on 8/31/95
Based on Total Net Assets
[PIE CHART APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C>
European Stocks 43.0%
Canadian Stocks 1.9%
Australian & New Zealand Stocks 9.3%
United States Stocks 26.4%
Latin American Stocks 4.0%
Asian Stocks 9.8%
Short-Term Obligations & Other Net Assets 5.6%
</TABLE>
total return has outpaced the MSCI. Total return measures the change in value of
an investment, assuming reinvestment of dividends and capital gains, and does
not include sales and creation charges.
The Fund's underperformance primarily reflected its relatively low weighting of
U.S. equities. This market was very strong over the past few months, in large
part due to gains in the high-tech sector. However, we felt that valuations of
many stocks in this group were too high to warrant inclusion in the Fund.
Responding to the events mentioned above, we took profits in several stocks
during the first half of the fiscal year, raising the Fund's cash position to
unusually high levels. We used this cash during the second half of the year in
seeking to take advantage of share price volatility by purchasing several stocks
at attractive prices. For example, we sold our position in Telebras, the
Brazilian telecommunications company, in September 1994 for more than $61 per
share and initiated a new position during August 1995 for less than $42 per
share. We added to our holdings of VEBA, a diversified German company whose
primary businesses are electrical utilities and telecommunications, and invested
in several new companies we considered attractive, long-term situations. These
include Hafslund Nycomed, a Norwegian producer of medical products for use in
imaging; Burns Philp and Company, an Australian food products manufacturer; and
Beacon Properties Corporation and Carr Realty
2
<PAGE>
- --------------------------------------------------------------------------------
Templeton Capital
Accumulator Fund
Top 10 Holdings on 8/31/95
As a Percentage of Total Net Assets
<TABLE>
<CAPTION>
% of Total
Company, Industry, Country Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Qantas Airways, Ltd., ADR, 144a ;
Transportation, Australia 1.6%
- --------------------------------------------------------------------------------
Brambles Industries, Ltd.;
Transportation, Australia 1.6%
- --------------------------------------------------------------------------------
Telefonica de Espana, SA;
Telecommunications, Spain 1.5%
- --------------------------------------------------------------------------------
Goodyear Tire & Rubber Co.;
Industrial Components, United States 1.4%
- --------------------------------------------------------------------------------
Electrolux, AB, B;
Appliances & Household Durables, Sweden 1.3%
- --------------------------------------------------------------------------------
SIG (Schweizerische Industrie Gesellschaft)
Holdings AG; Metals & Mining, Switzerland 1.3%
- --------------------------------------------------------------------------------
Hafslund Nycomed SA, B;
Health & Personal Care, Norway 1.3%
- --------------------------------------------------------------------------------
Unitor AS; Transportation,
Norway 1.3%
- --------------------------------------------------------------------------------
Societe Elf Acquitane SA;
Energy Sources, France 1.3%
- --------------------------------------------------------------------------------
VEBA AG; Utilities -
Electrical & Gas, Germany 1.3%
- --------------------------------------------------------------------------------
</TABLE>
For a complete list of portfolio holdings, see page 7 of this report.
Corporation, U.S. companies in the real estate industry. Although Japan
announced its sixth fiscal stimulus plan within three years, it remains to be
seen whether such action can overcome its economic problems, and we continue to
have great difficulty identifying Japanese companies that meet our value-based
criteria.
In our opinion, the worldwide investment climate remains strong. The U.S. and
European economies appear to be growing modestly, with low inflation. Some Latin
American economies appear to be recovering, and most emerging economies in Asia
continue to do well. Corporate earnings reports indicate that economic growth
and cost reduction programs have allowed profit margins to expand, and we expect
these earnings to continue rising over the next few quarters, but at a somewhat
slower rate. However, we are uncertain whether upward movements of the U.S.
dollar last summer represented
3
<PAGE>
the beginning of a sustainable upswing, establishment of a new trading range, or
merely a brief respite from the long-term problems of large, U.S. budget and
trade deficits. We feel more time and information are necessary to reach a firm
conclusion on this subject.
As always, we remind our shareholders that, in general, investments in foreign
securities involve special risks, such as market and currency volatility and
adverse economic, social and political developments in the countries where the
Fund is invested. While short-term price 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 763% in the last 15 years, but has
suffered six declines of more than 20% during that time./2/ Developing markets
are represented in the Fund's portfolio, and involve heightened risks related to
the same factors, in addition to risks associated with the relatively small size
and lesser liquidity of these markets. These special risks and other
considerations are discussed in the Fund's prospectus.
/2/Source: Bloomberg. Based on quarterly percentage change over 15 years.
In closing, we would like to mention that, although Sir John Templeton has not
been involved in investment management of the Templeton funds since October
1992, we were saddened by his recent decision to step down as Chairman and
Director of the U.S.-registered Templeton funds. The Fund's Board of Directors
has elected John Wm. Galbraith, former vice chairman of Templeton, Galbraith &
Hansberger, Ltd. to succeed him. The investment manager will continue to use the
investment philosophies and principles established by Sir John.
We appreciate your support, welcome your comments and look forward to serving
you in the future.
Sincerely,
/s/ Gary P. Motyl
Gary P. Motyl, CFA
President
Templeton Capital
Accumulator Fund, Inc.
4
<PAGE>
Performance Summary
The Templeton Capital Accumulator Fund reported a total return of 3.40% for the
one-year period ended August 31, 1995. Total return measures the change in value
of an investment, assuming reinvestment of dividend and capital gains
distributions, and includes no sales and creation charges. Of course, 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, the Fund has delivered a cumulative total
return of more than 78% between its inception on March 1, 1991 and
August 31, 1995.
As measured by net asset value, the Fund's share price decreased from $16.21 on
August 31, 1994, to $15.94 on August 31, 1995. During the reporting period,
shareholders received distributions of 19.5 cents ($0.195) in dividend income
and 57.5 cents per share in capital gains, of which 50.5 cents ($0.505)
represented long-term gains and 7.0 cents ($0.07) represented short-term gains.
Of course, past performance is not predictive of future results, and
distributions will vary depending on income earned by the Fund, as well as any
profits realized from the sale of securities in the portfolio.
The graph to the right shows that, since inception, the Templeton Capital
Accumulator Fund has outperformed the unmanaged Morgan Stanley Capital
International (MSCI) World Index, which tracks 22 equity markets worldwide. You
can also see from the graph how an investment in the Fund over the same period
has kept your purchasing power ahead of inflation, as measured by the Consumer
Price Index (CPI). Please remember that the Fund's performance differs from that
of the index because the index does not contain cash (the Fund generally carries
a certain percentage of cash at any given time) and includes no sales and
creation charges or management expenses. Of course, one cannot invest directly
in an index.
- --------------------------------------------------------------------------------
Templeton Capital Accumulator Fund
Total Return Index Comparison
$10,000 Investment (3/1/91 -- 8/31/95)
[GRAPH APPEARS HERE SHOWING COMPARISON BETWEEN TEMPLETON CAPITAL ACCUMULATOR
FUND, MSCI WORLD INDEX AND THE CPI]
<TABLE>
<CAPTION>
3/91 8/95
------- -------
<S> <C> <C>
Templeton Capital Accumulator Fund $10,000 $17,861
MSCI World Index/1/ 10,000 14,629
CPI/2/ 10,000 11,365
</TABLE>
1. Represents the change in value of an investment over the shown, assuming
reinvestment of dividends and capital gains, and does not include sales and
creation charges. Past performance is not predictive of future results.
2. Index is unmanaged and includes reinvested dividends.
3. Source: U.S. Bureau of Labor Statistics.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Templeton Capital Accumulator Fund
Periods Ended 8/31/95
<TABLE>
<CAPTION>
Since
Inception
One-Year Three-Year (3/1/91)
<S> <C> <C> <C>
Cumulative
Total Return* 3.40% 61.10% 79.58%
</TABLE>
*Cumulative total return represents the change in value of an investment over
the specified periods, assuming reinvestment of dividends and capital gains. It
does not include any sales and creation charges. Investment return and principal
value will fluctuate so that your shares, when redeemed, may be worth more or
less than their initial cost. Past performance is not predictive of future
results.
Note: The Fund's manager has agreed in advance to waive a portion of its
management fees and to make certain payments to reduce expenses, which increases
total return to shareholders. If the manager had not taken this action, the
Fund's total return would have been lower. The fee waiver may be discontinued at
any time, upon notice to the Fund's Board of Directors.
- --------------------------------------------------------------------------------
5
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE (For a share outstanding throughout the period)
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31
-----------------------------------------
1995 1994 1993 1992 1991+
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 16.21 $ 13.74 $ 10.95 $10.42 $10.00
------- ------- ------- ------ ------
Income from investment operations:
Net investment income .28 .19 .20 .17 .15
Net realized and unrealized gain .23 2.60 2.88 .55 .27
------- ------- ------- ------ ------
Total from investment operations .51 2.79 3.08 .72 .42
------- ------- ------- ------ ------
Distributions:
Dividends from net investment
income (.20) (.14) (.20) (.19) --
Distributions from net realized
gains (.58) (.18) (.09) -- --
------- ------- ------- ------ ------
Total distributions (.78) (.32) (.29) (.19) --
------- ------- ------- ------ ------
Change in net asset value (.27) 2.47 2.79 .53 .42
------- ------- ------- ------ ------
Net asset value, end of period $ 15.94 $ 16.21 $ 13.74 $10.95 $10.42
======= ======= ======= ====== ======
TOTAL RETURN* 3.40% 20.64% 29.11% 7.01% 4.20%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000) $65,538 $38,323 $18,365 $8,690 $3,635
Ratio of expenses to average net
assets 1.34% 1.58% 1.91% 1.84% 3.99%**
Ratio of expenses, net of
reimbursement, to average net
assets 1.00% 1.00% 1.00% 1.00% 1.00%**
Ratio of net investment income to
average net assets 2.37% 1.58% 1.99% 2.06% 3.80%**
Portfolio turnover rate 12.91% 15.25% 14.97% 16.42% --
</TABLE>
+ PERIOD FROM MARCH 1, 1991 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1991.
* NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR.
** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS: 92.7%
- -------------------------------------------------------------------------------
Appliances & Household Durables: 1.8%
Electrolux AB, B Swe. 20,250 $ 883,292
Fisher & Paykel Ltd. N.Z. 100,000 305,828
-----------
1,189,120
- -------------------------------------------------------------------------------
Automobiles: 2.3%
Ciadea SA Arg. 26,667 109,394
Ford Motor Co. U.S. 24,000 735,000
General Motors Corp. U.S. 14,000 658,000
-----------
1,502,394
- -------------------------------------------------------------------------------
Banking: 8.6%
ABN AMRO NV Neth. 15,000 592,069
Australia & New Zealand Banking Group
Ltd. Aus. 200,000 811,780
Banco Bilbao Vizcaya Sp. 20,000 605,167
Banco Portugues de Investimento SA Port. 18,240 269,203
Bank of Montreal Can. 10,000 219,698
Bankinter SA Sp. 7,500 651,810
Barclays PLC U.K. 22,100 246,897
HSBC Holdings PLC H.K. 55,200 741,610
Korea Long Term Credit Bank Kor. 5,000 147,342
Korea Long Term Credit Bank, new Kor. 250 7,302
NationsBank Corp. U.S. 5,800 355,975
Philippine National Bank Phil. 16,170 171,557
PT Panin Bank, fgn. Indo. 71,500 101,737
Sparbanken Sverige AB, A Swe. 30,000 252,677
Sparbanken Sverige AB, A, 144a Swe. 51,800 436,290
-----------
5,611,114
- -------------------------------------------------------------------------------
Broadcasting & Publishing: 0.6%
News Corp. Ltd. Aus. 70,000 401,981
- -------------------------------------------------------------------------------
Building Materials & Components: 2.2%
*Owens Corning Fiberglas Corp. U.S. 5,500 215,875
Pioneer International Ltd. Aus. 275,815 717,313
*Unione Cementi Marchino Emiliane
(Unicem) Itl. 80,000 540,891
-----------
1,474,079
- -------------------------------------------------------------------------------
Business & Public Services: 4.7%
Esselte AB, B Swe. 40,000 509,463
Lex Service PLC U.K. 100,000 498,076
Societe Generale de Surveillance
Holdings Ltd., br. Swtz. 460 826,507
</TABLE>
7
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, August 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------
Business & Public Services (cont.)
Wheelabrator Technologies Inc. U.S. 45,000 $ 703,125
WMX Technologies Inc. U.S. 18,000 528,750
-----------
3,065,921
- ---------------------------------------------------------------------------
Chemicals: 3.0%
Bayer AG Ger. 420 108,519
Great Lakes Chemical Corp. U.S. 7,400 489,325
Rhone-Poulenc SA, A Fr. 36,000 738,048
Solvay SA Bel. 1,200 629,968
-----------
1,965,860
- ---------------------------------------------------------------------------
Construction & Housing: 0.5%
*National Gypsum Co. U.S. 6,500 348,563
- ---------------------------------------------------------------------------
Data Processing & Reproduction: 1.1%
Newbridge Networks Corp. Can. 24,000 697,077
- ---------------------------------------------------------------------------
Electrical & Electronics: 3.7%
Alcatel Alsthom SA Fr. 6,661 667,624
BBC Brown Boveri Ltd., br. Swtz. 652 687,740
G.P. Batteries International Ltd. Sing. 56,000 151,200
Motorola Inc. U.S. 4,000 299,000
Philips Electronics NV Neth. 13,940 625,203
-----------
2,430,767
- ---------------------------------------------------------------------------
Electronic Components & Instruments: 0.7%
Intel Corp. U.S. 8,000 491,000
- ---------------------------------------------------------------------------
Energy Equipment & Services: 0.9%
*Parker Drilling Co. U.S. 25,000 140,625
Sun Co. Inc. U.S. 16,000 426,000
-----------
566,625
- ---------------------------------------------------------------------------
Energy Sources: 8.6%
Amerada Hess Corp. U.S. 3,000 142,125
*Barrett Resources Corp. U.S. 26,000 559,000
Norsk Hydro AS Nor. 10,000 422,184
Royal Dutch Petroleum Co. Neth. 800 95,400
Saga Petroleum AS, B Nor. 49,070 596,270
Societe Elf Aquitane SA Fr. 11,500 841,694
Tosco Corp. U.S. 15,600 501,150
Total SA, B Fr. 13,000 763,244
</TABLE>
8
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, August 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- -----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS (CONT.)
- -----------------------------------------------------------------------------
Energy Sources (cont.)
USX-Marathon Group Inc. U.S. 25,000 $ 515,625
Valero Energy Corp. U.S. 32,650 746,869
YPF Sociedad Anonima, ADR Arg. 25,000 440,625
-----------
5,624,186
- -----------------------------------------------------------------------------
Financial Services: 1.0%
American Express Co. U.S. 6,050 244,269
Onbancorp Inc. U.S. 14,000 400,750
-----------
645,019
- -----------------------------------------------------------------------------
Food & Household Products: 1.5%
Burns Philp & Co. Ltd. Aus. 385,200 819,384
Nestle SA Swtz. 170 171,982
-----------
991,366
- -----------------------------------------------------------------------------
Forest Products & Paper: 5.9%
Boise Cascade Corp. U.S. 7,000 300,125
Enso Gutzeit OY, R Fin. 60,900 527,327
Georgia-Pacific Corp. U.S. 7,000 630,000
Hansol Paper Co. Ltd., GDR, 144a Kor. 16,687 350,436
Hansol Paper Co. Ltd., GDS, 144a Kor. 2,252 46,611
International Paper Co. U.S. 5,500 450,313
Maderas Y Sinteticos SA, ADR Chil. 16,000 298,000
Portucel Industrial Empresa Product
Celulose, ADR, 144a Port. 49,100 357,179
Stora Kopparbergs Bergslags AB, B Swe. 45,000 560,821
Unipapel SA Sp. 12,000 315,261
-----------
3,836,073
- -----------------------------------------------------------------------------
Health & Personal Care: 4.9%
Astra AB, B Swe. 20,000 649,155
Ciba-Geigy AG Swtz. 800 566,331
Hafslund Nycomed SA, B Nor. 36,000 852,469
Internatio-Mueller NV Neth. 7,000 477,302
Windmere Corp. U.S. 90,000 697,500
-----------
3,242,757
- -----------------------------------------------------------------------------
Industrial Components: 3.2%
BW/IP Inc. U.S. 31,000 554,125
Goodyear Tire & Rubber Co. U.S. 23,000 920,000
SKF AB, B Swe. 30,000 608,069
-----------
2,082,194
- -----------------------------------------------------------------------------
</TABLE>
9
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, August 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------
Insurance: 4.7%
Aegon NV Neth. 17,500 $ 588,119
American International Group Inc. U.S. 10,250 826,406
International Nederlanden Group Neth. 13,000 737,259
Kemper Corp. U.S. 6,000 288,000
Progressive Corp. Ohio U.S. 2,000 88,750
Swiss Reinsurance Co. Swtz. 100 80,999
Swiss Reinsurance Co., br. Swtz. 605 490,045
-----------
3,099,578
- ---------------------------------------------------------------------------
Machinery & Engineering: 1.4%
Sasib SPA, di Risp Itl. 185,856 508,999
VA Technologie AG, br., 144a Aust. 4,000 441,668
-----------
950,667
- ---------------------------------------------------------------------------
Merchandising: 2.3%
Burton Group PLC U.K. 450,000 715,693
Dayton-Hudson Corp. U.S. 9,000 658,125
K Mart Corp. U.S. 10,000 136,250
-----------
1,510,068
- ---------------------------------------------------------------------------
Metals & Mining: 2.1%
Pechiney SA, invt. ctf. Fr. 8,000 518,179
SIG (Schweizerische Industrie
Gesellschaft) Holdings AG Swtz. 400 866,426
-----------
1,384,605
- ---------------------------------------------------------------------------
Multi-Industry: 4.1%
Cheung Kong Holdings Ltd. H.K. 160,000 793,696
Dairy Farm International Holdings
LTd. H.K. 450,000 418,500
Hutchison Whampoa Ltd. H.K. 101,500 489,078
Jardine Matheson Holdings Ltd.
(Singapore) H.K. 32,336 232,819
Swire Pacific Ltd., A H.K. 85,000 636,869
Swire Pacific Ltd., B H.K. 100,000 118,848
-----------
2,689,810
- ---------------------------------------------------------------------------
Real Estate: 2.0%
Beacon Properties Corp U.S. 24,000 516,000
Carr Realty Corp. U.S. 24,000 462,000
*Catellus Development Corp. U.S. 50,000 318,750
-----------
1,296,750
- ---------------------------------------------------------------------------
</TABLE>
10
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, August 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS (CONT.)
- -------------------------------------------------------------------------------
Telecommunications: 4.6%
Compania de Telecomunicaciones de
Chile SA, ADR Chil. 4,500 $ 328,500
Philippine Long Distance Telephone
Co. Phil. 3,000 189,236
STET (Sta Finanziaria Telefonica
Torino) SPA Itl. 197,100 602,505
Telecomunicacoes Brasileiras SA, ADR,
144a Braz. 227 9,789
Telefonica de Argentina SA, B, ADR Arg. 16,600 410,850
Telefonica de Espana SA Sp. 70,500 955,589
Telmex-Telefonos de Mexico SA, L, ADR Mex. 15,000 491,250
-----------
2,987,719
- -------------------------------------------------------------------------------
Textiles & Apparel: 2.9%
*Fruit of the Loom Inc., A U.S. 22,500 528,750
PT Indorama Synthetics, fgn. Indo. 220,417 734,237
Shaw Industries Inc. U.S. 43,000 645,000
-----------
1,907,987
- -------------------------------------------------------------------------------
Transportation: 7.1%
American President Cos. Ltd. U.S. 20,000 587,500
Brambles Industries Ltd. Aus. 105,000 1,055,990
British Airways PLC U.K. 31,500 208,214
Cathay Pacific Airways Ltd. H.K. 150,000 225,746
Kvaerner Industrier AS, A Nor. 12,000 467,363
*Qantas Airways Ltd., ADR, 144a Aus. 65,000 1,064,375
Shun Tak Holdings H.K. 276,000 231,753
Unitor AS Nor. 60,000 845,926
-----------
4,686,867
- -------------------------------------------------------------------------------
Utilities Electrical & Gas: 5.0%
Electricidad de Caracas Venz. 200,628 154,619
Endesa-Empresa Nacional de
Electricidad SA Sp. 4,800 249,147
Entergy Corp. U.S. 16,500 396,000
Evn Energie-Versorgung
Niederoesterreich AG Aust. 2,000 261,320
Iberdrola SA Sp. 90,000 691,038
Nova Corp. Can. 36,200 296,556
Texas Utilties Electric Co. U.S. 10,500 364,875
VEBA AG Ger. 22,000 840,736
-----------
3,254,291
- -------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, August 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMON STOCKS (CONT.)
- --------------------------------------------------------------------------------------------
Wholesale & International Trade: 1.3%
Brierley Investments
Ltd. N.Z. 1,000,000 $ 741,796
Sime Darby Hongkong Ltd. H.K. 90,000 109,288
-----------
851,084
-----------
TOTAL COMMON STOCKS (cost $53,024,622) 60,785,522
- --------------------------------------------------------------------------------------------
PREFERRED STOCKS: 1.7%
- --------------------------------------------------------------------------------------------
ABN Amro NV, conv., pfd. Neth. 333 12,162
Concessioni e
Costruzioni Autostrade
SPA,
B, pfd. Itl. 490,000 572,967
News Corp. Ltd., conv.,
pfd. Aus. 35,000 180,471
Telebras-
Telecomunicacoes
Brasileiras SA, pfd.,
ADR Braz. 8,200 356,700
-----------
TOTAL PREFERRED STOCKS (cost $1,059,496) 1,122,300
- --------------------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY**
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
BOND: 0.8% (cost $536,875)
- --------------------------------------------------------------------------------------------
Essar Gujarat Ltd.,
5.50%, conv., 8/05/98 U.S. 500,000 502,500
- --------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 5.2% (cost $3,405,350)
- --------------------------------------------------------------------------------------------
U. S. Treasury Bills,
5.28% to 5.41% with
maturities to 10/19/95 U.S. 3,425,000 3,405,818
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 100.4% (cost $58,026,343) 65,816,140
OTHER ASSETS, LESS LIABILITIES: (0.4%) (278,514)
-----------
TOTAL NET ASSETS: 100.0% $65,537,626
===========
</TABLE>
*NON-INCOME PRODUCING.
**CURRENCY OF COUNTRIES INDICATED.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
<TABLE>
<S> <C>
Assets:
Investments in securities, at value
(identified cost $58,026,343) $65,816,140
Cash 12,377
Receivables:
Investment securities sold 2,999,207
Capital shares sold 20,572
Dividends and interest 111,983
Other 12,653
-----------
Total assets 68,972,932
-----------
Liabilities:
Payables:
Investment securities purchased 3,264,832
Capital shares redeemed 13,041
Accrued expenses 157,433
-----------
Total liabilities 3,435,306
-----------
Net assets, at value $65,537,626
===========
Net assets consist of:
Undistributed net investment income $ 1,017,645
Net unrealized appreciation 7,789,797
Accumulated net realized loss (51,626)
Net capital paid in on shares of
capital stock 56,781,810
-----------
Net assets, at value $65,537,626
===========
Shares outstanding 4,111,171
===========
Net asset value per share ($65,537,626 / 4,111,171) $ 15.94
===========
</TABLE>
STATEMENT OF OPERATIONS
for the year ended August 31, 1995
<TABLE>
<S> <C> <C>
Investment income:
(net of $103,532
foreign taxes withheld)
Dividends $943,350
Interest 759,930
--------
Total income $1,703,280
Expenses:
Management fees (Note 3) 378,859
Administrative fees (Note 3) 75,773
Custodian fees 37,425
Reports to shareholders 130,155
Audit fees 16,400
Legal fees (Note 3) 7,500
Registration and filing fees 20,000
Directors' fees and expenses 8,000
Other 2,858
--------
Total expenses 676,970
Less expenses reimbursed (Note 3) (170,528)
--------
Total expenses less reimbursement 506,442
----------
Net investment income 1,196,838
Realized and unrealized
gain (loss):
Net realized gain (loss) on:
Investments 436,028
Foreign currency transactions (24,801)
--------
411,227
Net unrealized appreciation on investments 961,710
--------
Net realized and
unrealized gain 1,372,937
----------
Net increase in net assets resulting from operations $2,569,775
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended August 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 1,196,838 $ 439,034
Net realized gain on investment and foreign
currency transactions 411,227 1,079,019
Net unrealized appreciation 961,710 3,568,551
----------- -----------
Net increase in net assets resulting from
operations 2,569,775 5,086,604
Distributions to shareholders:
From net investment income (584,857) (207,482)
From net realized gain (1,459,126) (269,390)
Capital share transactions (Note 2) 26,689,267 15,348,130
----------- -----------
Net increase in net assets 27,215,059 19,957,862
Net assets:
Beginning of year 38,322,567 18,364,705
----------- -----------
End of year $65,537,626 $38,322,567
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Capital Accumulator Fund, Inc. (the Fund) is an open-end, diversified
management investment company registered under the Investment Company Act of
1940. Shares of the Fund are offered to the general public only through Temple-
ton Capital Accumulation Plans. 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 Transactions:
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 a foreign exchange contract 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 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 securities 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.
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 of 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 from foreign secu-
rities is recorded as soon as information is available to the Fund. Interest
income 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 August 31, 1995, there were 100 million shares of capital stock authorized
($0.01 par value). Transactions in the Fund's shares for the years ended August
31, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,748,863 $26,758,403 1,072,392 $16,053,892
Shares issued on
reinvestment of
distributions 135,355 2,042,103 33,496 475,853
Shares redeemed (137,739) (2,111,239) (78,036) (1,181,615)
--------- ----------- --------- -----------
Net increase 1,746,479 $26,689,267 1,027,852 $15,348,130
========= =========== ========= ===========
</TABLE>
15
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Notes to Financial Statements (cont.)
- --------------------------------------------------------------------------------
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton In-
vestment Counsel, Inc. (TICI) and Templeton Global Investors, Inc. (TGII), the
Fund's investment manager and administrative manager, respectively. The Fund
pays monthly an investment management fee to TICI equal, on an annual basis, to
0.75% per annum of its average daily net assets. The Fund pays to TGII monthly
a fee of 0.15% per annum, on the first $200 million of the Fund's average daily
net assets, 0.135% of the next $500 million, 0.10% of the next $500 million and
0.075% per annum of such average net assets in excess of $1.2 billion. TGII has
voluntarily agreed to limit the total expenses of the fund to an annual rate of
1.00% of the Fund's average net assets. The amount of the reimbursement for the
year ended August 31, 1995 is set forth in the Statement of Operations.
An officer of the Company is a partner of Dechert Price & Rhoads, legal counsel
for the Fund, which firm received fees of $7,500 for the year ended August 31,
1995.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the
year ended August 31, 1995, aggregated $32,183,097 and $4,860,242, respective-
ly. The cost of securities for federal income tax purposes is the same as that
shown in the investment portfolio. Realized gains and losses are reported on an
identified cost basis.
At August 31, 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 $ 9,247,872
Unrealized depreciation (1,458,075)
-----------
Net unrealized appreciation $ 7,789,797
===========
</TABLE>
16
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Independent Auditor's Report
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders Templeton Capital Accumulator Fund,
Inc.
We have audited the accompanying statement of assets and liabilities, including
the investment portfolio, of Templeton Capital Accumulator Fund, Inc. as of Au-
gust 31, 1995, and the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the four years in the pe-
riod then ended and for the period from March 1, 1991 (commencement of opera-
tions) to August 31, 1991. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to ex-
press an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial high-
lights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of Au-
gust 31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement pre-
sentation. We believe that our audits provide a reasonable basis for our opin-
ion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Tem-
pleton Capital Accumulator Fund, Inc. as of August 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
/s/ McGladrey & Pullen, LLP
New York, New York
September 29, 1995
17
<PAGE>
Notes
-----
<PAGE>
Notes
-----
<PAGE>
- --------------------------------------------------------------------------------
TEMPLETON CAPITAL
ACCUMULATOR FUND,
INC.
Auditors
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, New York 10017-2416
PRINCIPAL UNDERWRITER:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Account Services
1-800-354-9191
Sales Information
1-800-292-9293
This report must be preceded or accompanied by the prospectus of Templeton
Capital Accumulator Fund, Inc. which contains more complete information
including charges and expenses.
Like any investment in securities, the value of the Fund's portfolio will be
subject to the risk of loss from market, currency, economic, political, and
other factors, as well as investment decisions by the investment manager which
will not always be profitable or wise. The Fund and its investors are not
protected from such losses by the investment manager. Therefore, investors who
cannot accept this risk 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.
- --------------------------------------------------------------------------------
[RECYCLED PAPER LOGO APPEARS HERE]
TLCAP A95 10/95
TEMPLETON
CAPITAL
ACCUMULATOR
FUND, INC.
Annual Report
August 31, 1995
[LOGO OF FRANKLIN TEMPLETON APPEARS HERE]
