<PAGE>
========
Templeton
Developing
Markets
Trust
========
Annual Report
December 31, 1995
[LOGO OF FRANKLIN TEMPLETON APPEARS HERE]
<PAGE>
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 $7 billion
in emerging markets investments for the Templeton Group of Funds.
[PHOTO OF J. MARK MOBIUS APPEARS HERE]
- --------------------------------------------------------------------------------
J. Mark Mobius, Ph.D.
President
Templeton Developing Markets Trust
<PAGE>
==========
Management
Discussion
==========
Your Fund's Objective:
The Templeton Developing Markets Trust seeks long-term capital appreciation by
investing in securities of issuers of countries having developing markets.
February 15, 1996
This report covers the twelve months ended December 31, 1995, a disappointing
period for the Templeton Developing Markets Trust. During this time, many
investors turned away from emerging markets because of the Mexican peso crisis,
the excellent total returns available in the U.S. stock market, and a reluctance
to accept the volatility inherent in developing markets. They received a strong
reminder that, although emerging markets can experience rapid appreciation as
they did in 1993, they can also fall rapidly within a specific period of time.
It is important to remember, however, that 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 584% in the last 15
years, but has suffered six declines of more than 20% during that time./1/
Mexico's currency devaluation in December 1994, and the subsequent collapse of
its stock market, sparked fears of similar devaluations and declines in other
emerging market countries. The peso's failure to rebound significantly during
1995 also made many investors wary of investing in other emerging markets.
Within this environment, the Trust's Class I shares posted a total return of
0.36% for the twelve months ended December 31, 1995, as shown in the Performance
Summary on page 4. The unmanaged International Finance Corporation's (IFC)
Investable Composite Index, composed entirely of emerging market stocks,
reported a total return of -8.34%, and the unmanaged Morgan Stanley Capital
International World Index (MSCI), which was heavily weighted (33.4%) in the
booming U.S. market, reported a total return of 21.32% for the period.
Taking advantage of the price declines in emerging markets, we became more fully
invested during the reporting period.
- --------------------------------------------------------------------------------
1. Source: Bloomberg. Based on quarterly percentage change over 15 years ended
December 31, 1995.
1
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Geographic Distribution on 12/31/95 Based on Total Net Assets
[GRAPH APPEARS HERE]
Asia 39.7%
Latin America 24.1%
Europe 17.6%
Mid-East/Africa 2.0%
Short-Term Obligations
& Other Net Assets 16.6%
By December 31, 1995, 83.4% of the Fund's total net assets were invested in
equities, while 16.6% were in cash and other liquid instruments. These
investments were allocated across 28 different countries, with none accounting
for more than 20% of the Fund's assets. The largest portion was in Asia (39.7%),
followed by Latin America (24.1%), Europe (17.6%), and the Mid-East/Africa
(2.0%).
During 1995, we weighted the Asian portion of our portfolio in favor of Hong
Kong. Although its economy has decelerated from its strong growth rate of the
past decade, real growth in Gross Domestic Product remained healthy, at about 5%
in 1995. We believe that fears surrounding Hong Kong's reversion to China in
1997 are already reflected in present market valuations, and we anticipate that
this market's performance should continue to reflect Hong Kong's strong economic
fundamentals.
In Latin America, the investment environment improved markedly during the past
few months of the reporting period. For example, the Argentine inflation rate
fell below 3% in 1995 from 3.9% in 1994. Also, in August, Finance Minister
Domingo Cavallo helped the country recover from a liquidity crisis by changing
the banking sector's reserve requirements. The Fund's largest investment in
Argentina throughout the year was Perez Companc (1.3% of total net assets), an
oil and gas producer, while some of our other large Latin American investments
included the Brazilian oil company
- --------------------------------------------------------------------------------
- -------------------------------------------------------
Top 10 Holdings on 12/31/95
As a Percentage of Total Net Assets
Company,
Industry, % of Total
Country Net Assets
- -------------------------------------------------------
Cheung Kong Holdings Ltd.,
Multi-Industry,
Hong Kong 3.4%
- -------------------------------------------------------
Telmex-Telefonos de Mexico SA, ADR, L,
Telecommunications,
Mexico 3.2%
- -------------------------------------------------------
HSBC Holdings PLC,
Banking,
Hong Kong 2.8%
- -------------------------------------------------------
Banco Bilbao Vizcaya SA,
Banking,
Spain 2.2%
- -------------------------------------------------------
New World Development Co. Ltd.,
Real Estate,
Hong Kong 2.1%
- -------------------------------------------------------
Electrobras-Centrais Eletricas,
Brasileiras SA, B, pfd.,
Utilities - Electrical & Gas,
Brazil 2.0%
- -------------------------------------------------------
Sun Hung Kai Properties Ltd.,
Real Estate,
Hong Kong 1.9%
- -------------------------------------------------------
Telebras-Telecomunicacoes Brasileiras SA,
Telecommunications,
Brazil 1.8%
- -------------------------------------------------------
Banco Comercial Portugues SA,
Banking,
Portugal 1.7%
- -------------------------------------------------------
Bankinter SA,
Banking,
Spain 1.7%
- -------------------------------------------------------
For a complete list of portfolio holdings, see page 10 of this report.
2
<PAGE>
TEMPLETON DEVELOPING MARKETS TRUST
Asset Allocation on 12/31/95
Based on Total Net Assets
[GRAPH APPEARS HERE]
Equity 83.4%
Short-Term
Obligations & Other
Net Assets 16.6%
Petrobras (1.3%), and the Mexican telephone company Telefonos de Mexico (3.2%).
We also purchased shares in the Mexican merchandising company, Cifra, at a
favorable price/earnings ratio.
In Europe, the Turkish market fell 5% in U.S. dollar terms after the coalition
government of Prime Minister Tansu Ciller collapsed. Although the political
orientation of Turkey's next government has been somewhat uncertain following
the recent December election, we believe that fundamental factors underpinning
Turkey's economy remain unshaken. In our opinion, corporate earnings have the
potential to improve as the country moves closer to a full customs union with
Europe.
Looking forward, we will continue with our proven "bottom-up" investment style,
choosing stocks that are selling at prices below our estimate of their true
value. Although emerging markets were disappointing in 1995, and we cannot
predict what any particular stock will do in the short term, we believe that
over the long term emerging markets should continue to grow. Of course,
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. These special risks and other considerations are discussed in the
Fund's prospectus.
This discussion reflects the strategies we employed for the Fund during the past
year, and includes our opinions as of the close of the period. Since economic
and market conditions are constantly changing, our strategies, and our
evaluations, conclusions and decisions regarding portfolio holdings, may change
in light of new circumstances as they arise. Although past performance of a
specific investment or sector cannot guarantee future performance, such
information can be useful in analyzing securities we purchase or sell for the
Fund.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 COUNTRIES
REPRESENTED IN THE
TRUST ON 12/31/95
As a Percentage of Total Net Assets
Country % of Total Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Hong Kong 19.1%
- --------------------------------------------------------------------------------
Brazil 9.1%
- --------------------------------------------------------------------------------
Mexico 7.5%
- --------------------------------------------------------------------------------
Argentina 6.2%
- --------------------------------------------------------------------------------
Portugal 5.3%
- --------------------------------------------------------------------------------
Spain 4.9%
- --------------------------------------------------------------------------------
Turkey 4.5%
- --------------------------------------------------------------------------------
Greece 4.2%
- --------------------------------------------------------------------------------
Philippines 3.4%
- --------------------------------------------------------------------------------
Indonesia 2.4%
- --------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
=============
Performance
Summary
Class I Shares
=============
Class II
Performance
Summary
begins on
page 6
The Templeton Developing Markets Trust Class I shares reported a total return of
0.36% for the one-year period ended December 31, 1995. Total return measures the
change in value of an investment, assuming reinvestment of dividends and capital
gains distributions, and does not include the initial sales charge. As the chart
on this page illustrates, the Fund's Class I shares delivered a cumulative total
return of 45% since inception on October 17, 1991.
During the reporting period, Class I shareholders received distributions of 20.0
cents ($0.20) per share in income dividends, 4.0 cents ($0.04) in short-term
capital gains, and 20.5 cents ($0.205) in long-term capital gains. As measured
by net asset value, the price of the Fund's Class I shares decreased from $13.42
on December 31, 1994 to $13.01 on December 31, 1995. 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 on page 5 compares the performance of the Fund's Class I shares with
that of the broad-based Morgan Stanley Capital International (MSCI) World Index.
The index contains approximately 1,450 companies, representing the stock markets
of 22 countries, including the U.S., Canada, Australia, New Zealand and several
countries in Europe and Asia. It differs from the Fund because it includes
stocks from some developed countries such as the United States where the Fund is
not allowed to invest. On December 31, 1995, the index's U.S. weighting was
33.4%.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Templeton Developing
Markets Trust - Class I Shares
Periods ended December 31, 1995
Since
Inception
1-Year 3-Year (10/17/91)
<S> <C> <C> <C>
Average Annual
Total Return/1/ -5.42% 14.70% 7.70%
Cumulative
Total Return/2/ 0.36% 60.09% 45.00%
</TABLE>
1. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the maximum 5.75% initial
sales charge. See note below.
2. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 5.75% initial sales
charge. See note below.
Note: All total return calculations reflect the deduction of a proportional
share of Fund expenses on an annual basis and assume that all dividends and
capital gains distributions were reinvested when paid. From October 17, 1991 to
December 31, 1992, expense limitations increased the Fund's total return.
Investment return and principal value will fluctuate with market conditions,
currencies and the economic and political climates of the countries where
investments are made. Developing markets involve heightened risks related to the
same factors, in addition to those associated with the relatively small size and
lesser liquidity of these markets. Thus, your shares, when redeemed, may be
worth more or less than their original cost. Past performance is not predictive
of future results.
- --------------------------------------------------------------------------------
4
<PAGE>
The graph also compares the Fund's performance with that of the more narrow
International Finance Corporation's (IFC) Investable Composite Index. The IFC
Index was designed to reflect the performance of emerging market investments and
includes 650 stocks that foreigners can buy in 18 countries, including Mexico,
South Korea, Brazil, Jordan and Turkey.
Please remember that the Fund's performance differs from that of the indices
because the indices are unmanaged, do not contain cash (the Fund generally
carries a certain percentage of cash at any given time), and include no sales
charges or management expenses. The Fund's performance can also be markedly
different because our philosophy of investing in bargain stocks may result in
our purchasing stocks which are not predominant in any index, and not "popular"
index stocks. Of course, one cannot invest directly in an index.
- --------------------------------------------------------------------------------
TEMPLETON DEVELOPING MARKETS TRUST - CLASS I
Total Return Index Comparison
$10,000 Investment (10/17/91 - 12/31/95)
[COMPARISON GRAPH SHOWING TEMPLETON DEVELOPING MARKETS TRUST - CLASS I/1/, MSCI
WORLD INDEX/2/, AND IFC INVESTABLE COMPOSITE INDEX/2/ APPEARS HERE]
<TABLE>
<CAPTION>
10/91 12/95
--------- ---------
<S> <C> <C>
Templeton Developing Markets Trust-Class I $ 10,000 $ 13,666
MSCI World Index 10,000 15,557
IFC Investable Composite Index 10,000 17,077
</TABLE>
1. Includes all sales charges and represents the change in value of an
investment over the period shown. Total return assumes reinvestment of
dividends and capital gains. Past performance is not predictive of future
results.
2. Indices are unmanaged and include reinvested dividends.
- --------------------------------------------------------------------------------
5
<PAGE>
===============
Performance
Summary
Class II Shares
===============
Class I
Performance
Summary
begins on
page 4
The Templeton Developing Markets Trust Class II shares reported a total return
of 1.70% since inception on May 1, 1995. Total return measures the change in
value of an investment, assuming reinvestment of dividends and capital gains
distributions, and does not include sales charges.
During the reporting period, Class II shareholders received distributions of
18.48 cents ($0.1848) per share in income dividends, 4.0 cents ($0.04) in short-
term capital gains and 14.0 cents ($0.14) in long-term capital gains. As
measured by net asset value, the price of the Fund's Class II shares decreased
from $13.10 at inception on May 1, 1995, to $12.95 on December 31, 1995. 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 on page 7 compares the eight-month performance of the Fund's Class II
shares with that of the broad-based Morgan Stanley Capital International (MSCI)
World Index. The index contains approximately 1,450 companies, representing the
stock markets of 22 countries, including the U.S., Canada, Australia, New
Zealand and several countries in Europe and Asia. It differs from the Fund
because it includes stocks from some developed countries, such as the United
States, where the Fund is not allowed to invest. On December 31, 1995, the
index's U.S. weighting was 33.4%.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Templeton Developing
Markets Trust - Class II Shares
Period ended December 31, 1995
Since
Inception
(5/1/95)
<S> <C>
Average Total Return/1/ -0.27%
Cumulative Total Return/2/ 1.70%
</TABLE>
1. Aggregate total return, which includes the 1.00% initial sales charge,
represents the change in value of an investment since the inception date of
Class II shares. It also includes the 1.00% contingent deferred sales charge
(CDSC) applicable to shares redeemed within 18 months of purchase. Since these
shares have existed for less than one year, average annual total returns are not
provided. See note below.
2. Cumulative total return measures the change in value of an investment since
the inception date of Class II shares and does not include the 1.00% initial
sales charge or the 1.00% CDSC, applicable to shares redeemed within the first
18 months of investment. See note below.
Note: All total return calculations reflect the deduction of a proportional
share of Fund expenses on an annual basis and assume that all dividends and
capital gains distributions were reinvested when paid.
Investment return and principal value will fluctuate with market conditions,
currencies and the economic and political climates of the countries where
investments are made. Developing markets involve heightened risks related to the
same factors, in addition to those associated with the relatively small size and
lesser liquidity of these markets. Thus, your shares, when redeemed, may be
worth more or less than their original cost. Past performance is not predictive
of future results.
- --------------------------------------------------------------------------------
6
<PAGE>
The graph also compares the Fund's performance with that of the more narrow
International Finance Corporation's (IFC) Investable Composite Index. The IFC
Index was designed to reflect the performance of emerging market investments and
includes 650 stocks that foreigners can buy in 18 countries, including Mexico,
South Korea, Brazil, Jordan and Turkey.
Please remember that the Fund's performance differs from that of the indices
because the indices are unmanaged, do not contain cash (the Fund generally
carries a certain percentage of cash at any given time), and include no sales
charges or management expenses. The Fund's performance can also be markedly
different because our philosophy of investing in bargain stocks may result in
our purchasing stocks which are not predominant in any index, and not "popular"
index stocks. Of course, one cannot invest directly in an index.
- --------------------------------------------------------------------------------
TEMPLETON DEVELOPING MARKETS TRUST - CLASS II
Total Return Index Comparison
$10,000 Investment (5/1/95 - 12/31/95)
[COMPARISON GRAPH SHOWING TEMPLETON DEVELOPING MARKETS TRUST - CLASS II/1/, MSCI
WORLD INDEX/2/, AND IFC INVESTABLE COMPOSITE INDEX/2/ APPEARS HERE]
<TABLE>
<CAPTION>
5/95 12/95
--------- ---------
<S> <C> <C>
Templeton Developing Markets Trust-Class II
MSCI World Index
IFC Investable Composite Index
</TABLE>
1. Includes all sales charges and represents the change in value of an
investment over the period shown. Total return assumes reinvestment of
dividends and capital gains. Past performance is not predictive of future
results.
2. Indices are unmanaged and include reinvested dividends.
- --------------------------------------------------------------------------------
7
<PAGE>
=========
THE FOLLOWING
LETTER WAS
WRITTEN BY
DR. MOBIUS AFTER
A RECENT TRIP
TO ATHENS.
=========
[PHOTO APPEARS HERE]
Dear Shareholder:
Greece is an important emerging market, and, due to the fundamental economic
changes it is experiencing, along with its growing integration into the European
Community, I believe it holds great promise as an area of investment for the
Fund's shareholders.
On a recent visit, I found Athens warm and welcoming after a two-hour flight
from cold, rainy Budapest. Upon arrival, I was told that agreement had been
reached concerning the construction of a new Athens airport, one of many new
infrastructure projects expected to boost the Greek economy. Certainly, the old
airport has always been severely overcrowded at the peak of the tourist season,
but tourism fell significantly in 1995, and some say it was due to the congested
airport. Others claim that European tour operators conspired to boycott Greece
because of rising prices. However, inflation no longer presents the problem it
did in the past. In two years, it has fallen from more than 14% to below 9%, and
the government expects it to drop to 5% by the end of 1996. My economic
consultants in Greece told me: "People are getting so used to declining
inflation, soon it will no longer be news." Of course, even the government's
goal of 5% inflation would be double the average for the European Union (EU). As
a member of the EU, however, Greece will most likely move closer to many
European norms, including the rate of inflation.
While I was in Athens, one topic of great interest to many people was Prime
Minister Papandreous' health. Some Greeks told me that the country would be in
trouble if something happened to Papandreous, because it would result in a
dangerous political-power vacuum. My assessment at the time was that the Greeks
were being too sensitive to local political events, and that as their economy
becomes more integrated with the EU, it will be difficult for local politicians
to redirect the course of economic development. In fact, after the election of
K. Simitis as prime minister following Mr. Papandreous' resignation in January,
1996 due to ill health, Greek politics seemed to continue on a stable course
with little substantial policy deviation.
Over the course of five days in Athens, I visited 14 companies, including
Intracom, a telecommunications equipment manufacturer. Managers there told me
Greece has a 52% penetration rate for telephones, which is high for an emerging
market. However, you have to wait a year for a phone connection, telephone lines
are of
8
<PAGE>
[MAP OF GREECE APPEARS HERE]
poor quality, and there is plenty of room for expansion of over-all capacity and
upgrading of existing technology. To me, this indicates the potential for growth
in the Greek telecommunication industry. We also visited Strintzis Lines, a
shipping company, where we were told that the war in Bosnia had appreciably
increased the demand for ferries to carry trucks and goods to Italy. Now, trucks
and cars go by ferry to Italy and then north to the rest of Europe. Although
this new trade route has attracted a great deal of competition, it is dominated
by Greek firms.
As we left for the Athens airport, the driver told us we were lucky to be
leaving because there was going to be a demonstration near the hotel later that
day. During our visit, negotiations had been held in New York to end the long
and bitter dispute between Greece and the Former Yugoslav Republic of Macedonia,
which the Greeks insist on calling Skopje. According to a United Nations plan,
Greece would drop trade sanctions against its northern neighbor in return for
guarantees that Skopje would change its flag and renounce any territorial
ambitions. Apparently, the Greek and Macedonian foreign ministers had agreed to
the plan, and the Greeks had decided to stop the embargo against Macedonia.
However, die-hard opponents of the plan were arranging to hold a protest march
at the peak of rush-hour traffic.
Of course, there is more political trouble in the region than just the Skopje
dispute. But the day-to-day political situation in a country need not have a
major long-term impact on investors, and market declines caused by political
tensions are often a chance for us to increase our purchases of bargain
companies. I believe that Greece's increasing alignment with the large European
market will help drive long-term economic growth and that investing there now
offers the Fund's shareholders a potential benefit in the future.
Sincerely,
/s/ J. Mark Mobius
J. Mark Mobius, Ph.D.
President
Templeton Developing Markets Trust
9
<PAGE>
Templeton Developing Markets Trust
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE (For a share outstanding throughout the period)
<TABLE>
<CAPTION>
CLASS I OCTOBER 17,1991
-------------------------------------------- (COMMENCEMENT OF
YEAR ENDED DECEMBER 31
-------------------------------------------- OPERATIONS) TO
1995 1994 1993 1992 DECEMBER 31, 1991
---------- ---------- ---------- -------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 13.42 $ 15.27 $ 8.86 $ 10.02 $ 10.00
---------- ---------- ---------- -------- -------
Income from investment
operations:
Net investment income .21 .14 .04 .08 .01
Net realized and
unrealized gain (loss) (.18) (1.44) 6.55 (1.06) .03
---------- ---------- ---------- -------- -------
Total from investment
operations .03 (1.30) 6.59 (.98) .04
---------- ---------- ---------- -------- -------
Distributions:
Dividends from net
investment income (.20) (.12) (.05) (.07) (.01)
Distributions from net
realized gains (.24) (.43) (.13) (.11) --
Distributions from
other sources -- -- -- -- (.01)
---------- ---------- ---------- -------- -------
Total distributions (.44) (.55) (.18) (.18) (.02)
---------- ---------- ---------- -------- -------
Change in net asset
value (.41) (1.85) 6.41 (1.16) .02
---------- ---------- ---------- -------- -------
Net asset value, end of
year $ 13.01 $ 13.42 $ 15.27 $ 8.86 $ 10.02
========== ========== ========== ======== =======
TOTAL RETURN* .36% (8.64)% 74.50% (9.75)% .40%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of year
(000) $2,147,664 $2,009,154 $1,396,392 $180,189 $23,744
Ratio of expenses to
average net assets 2.10% 2.11% 2.20% 2.52% 3.78%**
Ratio of expenses, net
of reimbursement, to
average net assets 2.10% 2.11% 2.20% 2.25% 2.25%**
Ratio of net investment
income to average net
assets 1.66% 1.08% .57% 1.30% .86%**
Portfolio turnover rate 9.76% 18.57% 16.01% 21.98% --
</TABLE>
* TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS. NOT ANNUALIZED FOR PERIODS
OF LESS THAN ONE YEAR.
** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Templeton Developing Markets Trust
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE (For a share outstanding throughout the period)
<TABLE>
<CAPTION>
CLASS II
-----------------
FOR THE PERIOD
MAY 1, 1995+
THROUGH
DECEMBER 31, 1995
-----------------
<S> <C>
Net asset value, beginning of period $ 13.10
-------
Income from investment operations:
Net investment income .02
Net realized and unrealized gain .19
-------
Total from investment operations .21
-------
Distributions:
Dividends from net investment income (.18)
Distributions from net realized gains (.18)
-------
Total distributions (.36)
-------
Change in net asset value (.15)
-------
Net asset value, end of year $ 12.95
=======
TOTAL RETURN* 1.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000) $41,012
Ratio of expenses to average net assets 2.73%**
Ratio of net investment income to average net assets .19%**
Portfolio turnover rate 9.76%
</TABLE>
* TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS OR THE CONTINGENT DEFERRED
SALES CHARGE. NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR.
** ANNUALIZED.
+ COMMENCEMENT OF SALES.
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES:
83.4%
- ----------------------------------------------------------------------------------------
Argentina: 6.2%
Aluar Aluminio Misc Materials &
Argentino SA, B Commodities 56,669 $ 509,945
*Astra Cia Argentina de
Petroleo SA Energy Sources 2,234,900 4,133,945
*Atanor Cia Nacional
Para la Industria
Quimica SA, D Chemicals 637,233 1,522,758
*Banco Bansud SA, B Banking 371,343 2,766,090
Banco de Galicia y
Buenos Aires SA, B Banking 3,214,099 16,710,810
Banco Frances del Rio
de la Plata SA Banking 1,662,450 14,710,476
Capex SA, A Utilities Electrical & Gas 98,644 719,993
Central Costanera SA, B Utilities Electrical & Gas 804,852 2,478,572
*Central
Termoelectricia de
Buenos Aires Utilities Electrical & Gas 27,855 32,864
*Ciadea SA Automobiles 867,998 4,512,910
*Citicorp Equity
Investment SA, A Financial Services 268,223 938,640
*Comercial de Plata SA Multi-Industry 6,511,700 17,253,417
Industrias
Petroquimicas Koppers
(IPAKO) Chemicals 1,612,631 6,046,459
Building Materials &
*Juan Minetti SA Components 413,049 1,362,857
Molinos Rio de Plata
SA, B Food & Household Products 1,868,815 15,321,985
Nobleza Piccardo Sdad
Industrial Comercial y
Financial Beverages & Tobacco 60,252 228,923
Perez Companc SA, B Energy Sources 5,404,927 28,641,817
*Sevel Argentina SA, C Automobiles 1,773,343 3,173,807
Transportadora de Gas
del Sur SA, B Energy Sources 1,808,401 4,357,593
YPF Sociedad Anonima,
ADR Energy Sources 450,900 9,750,713
*Zanella Hermanos SA Automobiles 931,434 156,457
--------------
135,331,031
- ----------------------------------------------------------------------------------------
Bolivia: 0.1%
Compania Boliviana de
Energia Electricas SA Utilities Electrical & Gas 28,590 950,618
- ----------------------------------------------------------------------------------------
Brazil: 9.1%
Banco Bradesco SA Banking 1,000,719,112 7,721,995
Banco Bradesco SA, pfd. Banking 485,333,863 4,244,393
*Banco do Brasil SA Banking 154,142,792 1,633,490
*Banco do Brazil SA,
pfd. Banking 553,801,120 6,267,619
*Banespa-Banco do
Estado de Sao Paulo
SA, pfd. Banking 1,282,693,850 6,598,559
Brasmotor SA, pfd. Multi-Industry 16,292,231 3,235,146
*Cia Mesbla SA, pfd. Merchandising 75,117,000 927,418
Confab Industrial SA,
pfd. Industrial Components 2,252,340 614,095
Copene-Petroquimica do
Nordeste SA, A, pfd. Chemicals 8,383,550 3,743,379
Duratex SA, pfd. Forest Products & Paper 227,966,600 7,927,641
Eletrobras-Centrais
Eletricas Brasileiras
SA, B, pfd. Utilities Electrical & Gas 160,885,847 43,534,110
Itausa-Investimentos
Itau SA, pfd. Multi-Industry 37,366,579 20,375,829
Light SA Utilities Electrical & Gas 2,375,000 759,941
Mannesmann SA Machinery & Engineering 3,182,010 500,898
Mannesmann SA, pfd. Machinery & Engineering 5,137,562 872,109
*Marcopolo SA, B, pfd. Automobiles 14,371,400 2,129,206
Petrobras-Petroleo
Brasileiro SA, pfd. Energy Sources 321,316,333 27,435,611
Refripar-Refrigeracao Appliances & Household
Parana Sa, pfd. Durables 632,250,000 1,261,963
Telebras-
Telecomunicacoes
Brasileiras SA Telecommunications 584,255,294 22,601,985
Telebras-
Telecomunicacoes
Brasileiras SA, pfd. Telecommunications 329,573,973 15,869,193
*Telerj-
Telecomunicacoes do
Rio de Janeiro SA,
pfd. Telecommunications 12,944,703 839,052
Telesp-Telecomunicacoes
de Sao Paulo SA, pfd. Telecommunications 26,157 3,848
Unibanco-Uniao de
Bancos Brasileiros SA,
pfd. Banking 129,161,186 5,049,771
Vale de Rio Doce, pfd. Metals & Mining 92,418,650 15,213,729
--------------
199,360,980
- ----------------------------------------------------------------------------------------
Chile: 0.2%
Antofagasta Holdings
PLC Metals & Mining 898,550 4,081,654
- ----------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES
(CONT.)
- ----------------------------------------------------------------------------------------
China: 1.7%
China First Pencil Co. Recreation, Other Consumer
Ltd., B Goods 366,000 $ 122,244
China Merchants Shekou
Port Service Co. Ltd.,
B Transportation 1,000,000 362,108
China Southern Glass Building Materials &
Co. Ltd., B Components 2,297,200 950,668
*China Textile
Machinery Co. Ltd., B Machinery & Engineering 2,115,100 338,416
Chiwan Wharf Holdings
Ltd., B Transportation 7,840,000 2,950,456
*Foshan Electrical and Appliances & Household
Lighting Co. Ltd., B Durables 790,000 531,264
Guangzhou Shipyard
International Co.
Ltd., H Machinery & Engineering 5,972,000 1,513,756
Luoyang Glass Co. Ltd., Misc Materials &
H Commodities 1,997,000 513,939
Qing Ling Motors Co.
Ltd., H Automobiles 3,000,000 872,939
Shandong Huaneng Power Utilities Electrical & Gas 284,000 1,917,000
Shanghai Chlor-Alkali
Chemical Co. Ltd., B Chemicals 12,105,300 3,074,746
*Shanghai Dazhong Taxi
Shareholding Co. Ltd.,
B Transportation 1,100,000 840,400
*Shanghai Erfangji
Textile Machinery Co.
Ltd., B Machinery & Engineering 7,973,460 1,132,231
Shanghai Industrial
Sewing Machine Corp. Machinery & Engineering 3,573,700 578,939
Shanghai Jin Jiang
Tower Co. Ltd., B Leisure & Tourism 5,136,000 1,448,352
Shanghai Jinqiao Export
Processing Zone
Development, B Real Estate 5,299,000 1,981,826
Shanghai Lian Hua Fibre
Corp., B Textiles & Apparel 798,360 135,721
Shanghai Lujiaxui
Finance & Trade Zn Dev
Stock Co Ltd, B Real Estate 10,713,100 6,085,041
Shanghai Narcissus
Electric Appliances Appliances & Household
Co. Ltd., B Durables 734,500 124,865
Shanghai Pechemical Co.
Ltd., H Chemicals 13,464,000 3,874,219
*Shanghai Refrigerator
Compressor Co. Ltd., B Industrial Components 240,008 85,443
*Shanghai Rubber Belt
Co. Ltd., B Industrial Components 600,480 97,878
Shanghai Steel Tube Co.
Ltd., B Machinery & Engineering 1,273,800 178,332
Shanghai Tyre & Rubber
Co. Ltd., B Industrial Components 2,012,000 414,472
*Shanghai Vacuum
Electron Devices Co. Appliances & Household
Ltd., B Durables 1,086,000 251,952
Shanghai Wingsung Recreation, Other Consumer
Stationery Co. Ltd., B Goods 485,400 95,138
Shanghai Yaohua Building Materials &
Pilkington Glass, B Components 3,373,000 2,968,240
Shenzhen China Bicycles Recreation, Other Consumer
Co. (Holdings) Ltd., B Goods 1,526,400 250,699
Shenzhen Gintian
Industrial Co. Ltd., B Multi-Industry 892,320 305,806
Shenzhen Huafa
Electronics Co. Ltd., Appliances & Household
B Durables 212,000 36,327
Shenzhen Konka
Electronic Group Co. Appliances & Household
Ltd., B Durables 1,000,000 510,831
Shenzhen Petrochemical
(Group) Shareholding
Co. Ltd., B Chemicals 249,600 54,875
Shenzhen Properties &
Resources Develop.
(Group) Ltd., B Real Estate 1,631,960 327,131
Shenzhen Tellus
Machinery &
Electronics Co. Ltd.,
B Multi-Industry 246,400 35,689
Shenzhen Vanke Co.
Ltd., B Real Estate 5,005,926 1,845,055
Tsann Kuen Enterprise Appliances & Household
Co. Ltd., B Durables 648,000 125,703
Zhuhai Sez Lizhu
Pharmaceutical, B Health & Personal Care 1,196,800 394,677
--------------
37,327,378
- ----------------------------------------------------------------------------------------
Colombia: 0.1%
Promigas SA Utilities Electrical & Gas 61,311 160,897
- ----------------------------------------------------------------------------------------
Czech Republic: 0.5%
*CEZ, GDR Utilities Electrical & Gas 191,440 6,939,700
*CEZ, GDS, 144A Utilities Electrical & Gas 30,000 1,087,500
*SPT Telecom AS Telecommunications 29,000 2,740,569
--------------
10,767,769
- ----------------------------------------------------------------------------------------
Greece: 4.2%
Alpha Credit Bank Banking 528,526 30,540,327
Alpha Leasing SA Financial Services 250,690 6,132,701
Delta Dairy SA, pfd. Food & Household Products 189,101 2,791,571
Elais Oleaginous Co. Food & Household Products 169,100 5,491,881
Ergo Bank SA Banking 284,220 11,322,527
Etba Leasing Financial Services 120,040 2,189,772
Fourlis Brothers Corp. Appliances & Household
SA Durables 300,960 3,586,031
Hellas Can--Container
Manufacturers Metals & Mining 208,290 4,173,004
Hellenic Bottling Co.
SA Food & Household Products 193,385 6,321,371
</TABLE>
13
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES
(CONT.)
- ----------------------------------------------------------------------------------------
Greece (cont.)
Intracom SA Electrical & Electronics 91,000 $ 1,961,323
National Bank of Greece
SA Banking 129,105 6,580,766
Building Materials &
Titan Cement Co., reg. Components 246,410 10,341,134
Titan Cement Co., reg. Building Materials &
pfd. Components 7,100 203,336
X. Benrubi & Son SA Food & Household Products 220,900 1,248,496
--------------
92,884,240
- ----------------------------------------------------------------------------------------
Hong Kong: 19.1%
C.P. Pokphand Co. Ltd. Food & Household Products 5,879,000 2,356,922
Cheung Kong Holdings
Ltd. Multi-Industry 12,111,000 73,770,204
China Overseas Land &
Investment Ltd. Real Estate 17,075,000 3,003,168
*China Treasure
Telecomunications
Holdings Ltd. Electrical & Electronics 2,066,000 92,144
*China Treasure
Telecomunications
Holdings Ltd., wts. Electrical & Electronics 442,000 4,001
CNT Group Ltd. Multi-Industry 37,771,789 2,247,012
Cross Harbour Tunnel
Co. Ltd. Transportation 1,459,598 2,765,355
Dairy Farm
International Holdings
Ltd. Merchandising 9,676,893 8,902,742
Dickson Concepts
(International) Ltd. Merchandising 9,030,000 8,408,147
East Asiatic Co. (Hong Wholesale & International
Kong) Ltd. (The) Trade 2,976,000 354,080
*Fairwood Holdings Ltd. Food & Household Products 8,792,000 670,841
Fortei Holdings Ltd. Merchandising 5,768,000 216,323
*Fu Hui Jewellery Co. Recreation, Other Consumer
(H.K.) Ltd. Goods 4,808,000 186,537
Gold Peak Industries
(Holdings) Ltd. Electrical & Electronics 2,216,000 1,096,178
Goldlion Holdings Ltd. Textiles & Apparel 11,414,000 8,340,006
Great Wall Electronic
International Ltd. Electrical & Electronics 3,812,000 281,001
Hang Lung Development
Co. Ltd. Real Estate 17,628,000 28,040,660
*Hang Lung Development
Co. Ltd., wts. Real Estate 1,399,100 209,888
Hongkong Electric
Holdings Ltd. Utilities Electrical & Gas 1,878,000 6,156,780
Hopewell Holdings Ltd. Construction & Housing 13,401,002 7,712,183
HSBC Holdings PLC Banking 4,020,529 60,834,386
Appliances & Household
Hualing Holdings Ltd. Durables 1,332,000 160,202
IMC Holdings Ltd. Transportation 793,000 466,621
Jardine International
Motor Holdings Ltd. Automobiles 6,361,000 7,239,159
Jardine Matheson
Holdings Ltd.
(Singapore) Multi-Industry 2,149,529 14,724,274
Jardine Strategic
Holdings Ltd.
(Singapore) Multi-Industry 5,349,562 16,369,660
*Jardine Strategic
Holdings Ltd., wts. Multi-Industry 536,062 171,540
JCG Holdings Ltd. Financial Services 2,951,000 2,156,243
Joyce Boutique Holdings
Ltd. Merchandising 6,627,000 1,542,658
K Wah International Building Materials &
Holdings Ltd. Components 30,020,959 4,503,629
*K Wah International Building Materials &
Holdings Ltd., wts. Components 2,901,142 91,921
Recreation, Other Consumer
KTP Holdings Ltd. Goods 8,000,000 268,995
Lai Sun Development Co.
Ltd. Real Estate 43,650,000 5,249,855
Lai Sun Garment
International Ltd. Multi-Industry 4,127,000 4,002,910
*Laws International
Holdings Ltd. Textiles & Apparel 7,054,000 629,455
Le Saunda Holdings Ltd. Merchandising 2,598,000 215,030
Leefung-Asco Printers
Holdings Ltd. Broadcasting & Publishing 940,000 133,721
Linkful International
Holdings Ltd. Merchandising 1,600,000 111,736
Luks Industrial Co. Appliances & Household
Ltd. Durables 3,214,000 328,362
New World Development
Co. Ltd. Real Estate 10,703,250 46,647,207
Peregrine Investments
Holdings Ltd. Financial Services 2,544,000 3,290,010
S. Megga International Electronic Components &
Holdings Ltd. Instruments 5,782,000 216,848
Semi-Tech (Global) Co. Appliances & Household
Ltd. Durables 3,145,861 5,065,111
*South Sea Development
Co. Ltd. Real Estate 1,115,000 34,751
Stelux International
Holdings Ltd. Multi-Industry 14,002,570 3,585,527
Sun Hung Kai & Co. Ltd. Financial Services 17,472,000 3,728,264
Sun Hung Kai Properties
Ltd. Real Estate 5,169,900 42,288,545
Swire Pacific Ltd., B Multi-Industry 4,852,500 6,055,820
Tian An China
Investments Co. Ltd. Real Estate 23,396,000 2,904,644
</TABLE>
14
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES:
(CONT.)
- ----------------------------------------------------------------------------------------
Hong Kong (cont.)
Top Form International
Ltd. Textiles & Apparel 5,204,000 $ 275,931
Tungtex (Holdings) Co.
Ltd. Textiles & Apparel 6,914,000 715,318
Vitasoy International
Holdings Ltd. Food & Household Products 2,474,000 1,055,829
Wai Kee Holdings Ltd. Construction & Housing 9,583,600 1,202,210
Wheelock & Co. Ltd. Multi-Industry 10,613,000 18,185,871
Wing Shan International
Ltd. Utilities Electrical & Gas 6,442,000 666,486
Wo Kee Hong Holdings
Ltd. Merchandising 16,443,000 2,573,040
Yaohan Hongkong Corp.
Ltd. Merchandising 9,530,000 505,309
Yue Yuen Industrial Recreation, Other Consumer
(Holdings) Ltd. Goods 19,690,000 5,220,110
--------------
418,231,360
- ----------------------------------------------------------------------------------------
Hungary: 0.4%
Chinoin Pharmaceutical
& Chemical Works Co.
Ltd. Health & Personal Care 9,831 2,428,429
*Egis RT Multi-Industry 6,100 135,501
*Fotex First Hungarian-
American Photo-Service Multi-Industry 2,630,400 1,524,530
*Gedeon Richter Ltd. Multi-Industry 45,000 866,250
+*Ibusz Leisure & Tourism 94,260 504,289
+*Ibusz, new Leisure & Tourism 31,420 155,333
+*OTP Bank, GDR Banking 370,000 2,559,101
Pick Szeged RT, GDR Food & Household Products 11,000 412,500
--------------
8,585,933
- ----------------------------------------------------------------------------------------
India: 1.6%
Aban Loyd Chiles
Offshore Ltd. Energy Sources 245,000 759,420
ATV Project India Ltd. Machinery & Engineering 1,732,000 1,182,084
*Bharat Heavy
Electricals Ltd. Machinery & Engineering 40,000 100,100
Bharat Petroleum Corp.,
Ltd. Energy Sources 1,069,000 7,174,293
*Bombay Dyeing &
Manufacturing Co. Ltd. Chemicals 22,000 205,830
Bses Ltd. Utilities Electrical & Gas 303,350 1,181,827
DCW Ltd. Chemicals 500,000 529,646
Dr. Reddys Laboratories
Ltd. Health & Personal Care 94,200 610,766
Essar Shipping Ltd. Transportation 773,500 698,383
Flex Industries Ltd. Food & Household Products 20,000 83,179
Ganesh Benzoplast Ltd. Chemicals 159,100 214,908
Garden Silk Mills Ltd. Textiles & Apparel 229,600 207,303
Grasim Industries Ltd. Multi-Industry 170,000 2,600,882
Great Eastern Shipping
Co. Ltd. Transportation 200,000 265,889
Hindalco Industries Metals & Mining 5,000 127,968
*Hindustan Petroleum
Corp. Ltd. Energy Sources 286,000 2,374,861
Indian Petrochemicals
Corp. Ltd. Chemicals 933,000 3,104,251
Indian Rayon &
Industries Ltd., GDR Multi-Industry 86,000 1,053,500
Indian Rayon and
Industries Ltd. Multi-Industry 62,000 751,088
Industrial Credit &
Investment Corp. of
India Ltd. Financial Services 3,380,100 7,641,631
*Mahanagar Telephone
Nigam Ltd. Telecommunications 50,000 213,280
*National Aluminium Co.
Ltd. Metals & Mining 50,000 27,869
Oriental Bank of
Commerce Banking 74,600 118,800
Reliance Industries
Ltd. Chemicals 469,000 2,760,785
*SCICI Ltd. Banking 200,000 211,858
Videocon International Appliances & Household
Ltd. Durables 404,000 861,652
Wockhardt Health & Personal Care 118,800 675,672
--------------
35,737,725
- ----------------------------------------------------------------------------------------
Indonesia: 2.4%
PT Anwar Sierad,fgn. Food & Household Products 1,515,500 712,514
PT Aqua Golden
Mississippi, fgn. Beverages & Tobacco 511,225 357,735
PT Astra International,
fgn. Multi-Industry 122,100 253,652
PT Bank Dagang Nasional
Indonesia, fgn. Banking 800,000 656,024
</TABLE>
15
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES
(CONT.)
- ------------------------------------------------------------------------------------------
Indonesia (cont.)
PT Bank PDFCI, fgn. Banking 623,000 $ 395,080
PT Barito Pacific Timber,
fgn. Forest Products & Paper 15,008,000 10,994,271
PT BBL Dharmala Finance,
fgn. Financial Services 953,000 1,000,306
*PT Bimantara Citra, fgn. Multi-Industry 4,629,000 3,846,534
PT Branta Mulia, fgn. Automobiles 1,386,000 1,636,650
PT Charoen Pokphand
Indonesia, fgn. Food & Household Products 2,355,000 4,789,307
PT Cipendawa Farm
Enterprises, fgn. Food & Household Products 65,000 71,069
PT Dharmala Intiland,
fgn. Real Estate 821,500 449,103
PT Duta Anggada Realty,
fgn. Real Estate 635,500 305,729
PT Duta Pertiwi
Nusantura, fgn. Chemicals 687,500 210,475
PT Eratex Djaja, fgn. Textiles & Apparel 567,000 198,382
PT Ficorinvest Bank, fgn. Banking 459,000 401,487
PT Gadjah Tunggal, fgn. Automobiles 5,845,500 3,259,572
PT Gajah Surya Multi
Finance, fgn. Financial Services 1,866,200 836,586
PT Ganda Wangsa Utama,
fgn. Textiles & Apparel 1,022,000 279,357
PT Hadtex Indosyntec,
fgn. Textiles & Apparel 2,918,000 1,371,900
PT Hotel Prapatan, fgn. Leisure & Tourism 1,185,000 1,036,519
PT Intan Wijaya Chemical
Industry, fgn. Chemicals 1,490,500 342,232
PT Inter-Pacific Bank,
fgn. Banking 738,000 597,113
PT Jakarta International
Hotel & Development,
fgn. Real Estate 899,500 1,101,509
PT Japfa Comfeed
Indonesia, fgn. Food & Household Products 3,839,500 1,889,105
PT Metrodata Electronic,
fgn. Electrical & Electronics 345,500 217,212
PT Multibreeder Adirama,
fgn. Food & Household Products 858,750 300,459
PT Multipolar Corp., fgn. Electrical & Electronics 346,000 158,889
PT Polysindo Eka Perkasa,
fgn. Textiles & Apparel 13,398,000 7,617,494
PT Pudjiadi Prestige
Ltd., fgn. Real Estate 762,500 533,567
+PT Sarasa Nugraha, fgn. Textiles & Apparel 2,567,000 1,698,048
PT Sari Husada, zero,
6/21/96 Corporate Bond 124,560,000** 43,036
*PT Sinar Mas Multi
Artha, fgn. Financial Services 4,496,500 3,883,922
PT Sumalindo Lestari
Jaya, fgn. Forest Products & Paper 10,000 8,091
PT Summarecon Agung, fgn. Real Estate 400,500 236,464
PT Unggul Indah Corp.,
fgn. Chemicals 1,410,200 1,295,176
--------------
52,984,569
- ------------------------------------------------------------------------------------------
Israel: 0.5%
*Agis Industries Ltd. Health & Personal Care 7,152 50,705
Bank Hapoalim BM Banking 876,348 1,446,432
Clal Industries Ltd. Multi-Industry 347,178 1,862,885
Discount Investment Corp. Multi-Industry 81,732 5,412,688
Super Sol Ltd. Merchandising 18,398 385,851
The First International
Bank of Israel Banking 16,977 2,054,128
--------------
11,212,689
- ------------------------------------------------------------------------------------------
Italy: 1.8%
Banco Ambrosiano Veneto
SPA, di Risp Banking 2,138,000 2,748,809
Istituto Mobiliare
Italiano SPA Banking 1,069,000 6,730,678
+Italmobiliare SPA Multi-Industry 556,710 7,705,084
+Italmobiliare SPA, di
Risp, conv. Multi-Industry 906,100 7,071,944
*Italmobiliare SPA, wts. Multi-Industry 162,360 79,225
Mediobanca/Italmobiliare,
6.00%, conv., 12/31/99 Corporate Bond 2,922,480,000** 1,665,073
Sirti SPA Construction & Housing 2,368,500 13,322,952
+Teleco Cavi SPA Telecommunications 1,000 3,324
+Teleco Cavi SPA, di Risp Telecommunications 557,000 1,157,312
--------------
40,484,401
- ------------------------------------------------------------------------------------------
Korea (South): 1.8%
*Boram Bank Co. Ltd. Banking 360,000 4,710,280
Central Investment &
Finance Corp. Financial Services 187,994 3,501,790
</TABLE>
16
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES
(CONT.)
- ----------------------------------------------------------------------------------------
Korea (cont.)
Choil Aluminium Mfg.
Co. Ltd. Metals & Mining 54,592 $ 1,400,426
*Choil Aluminum
Manufacturing Co.
Ltd., new Metals & Mining 8,734 218,420
*Dae Duck Electronics
Co. Ltd. Electrical & Electronics 14,270 568,409
Daegu Bank Co. Ltd. Banking 347,730 5,337,762
*Daegu Bank Co. Ltd.,
new Banking 59,068 868,640
Daehan Synthetic Fiber
Co. Ltd. Textiles & Apparel 16,650 2,049,726
Hae In Corp. Ltd. Merchandising 17,628 1,280,487
Hankook Cosmetics Co.
Ltd. Health & Personal Care 52,400 1,469,159
Kyong Nam Bank Banking 152,000 1,558,698
Kyung Dong Boiler Co Energy Equipment &
Ltd Services 31,060 1,277,234
*Kyung Dong Boiler Co. Energy Equipment &
Ltd., new Services 4,969 199,529
*Shinsung Industries
Co. Ltd. Electrical & Electronics 40,000 1,309,700
*Ssangyong Oil Refining Energy Equipment &
Co Ltd Services 296,430 8,387,546
*Tong Yang Investment
and Finance Co. Ltd. Financial Services 208,000 3,700,161
Yuhwa Textiles & Apparel 23,310 1,194,422
--------------
39,032,389
- ----------------------------------------------------------------------------------------
Malaysia: 2.1%
Aokam Perdana Bhd. Multi-Industry 435,000 702,248
Federal Flour Mills
Bhd. Food & Household Products 2,221,250 5,203,936
Malayawata Steel Bhd. Metals & Mining 1,626,000 2,650,565
Malayawata Steel Bhd.,
fgn. Metals & Mining 1,418,000 2,311,501
Malaysian International
Shipping Corp. Bhd.,
fgn. Transportation 5,291,000 13,854,058
Oriental Holdings Bhd. Automobiles 300,000 1,523,802
Oriental Holdings Bhd.,
fgn. Automobiles 1,753,160 8,904,896
Perlis Plantations Bhd. Multi-Industry 1,228,600 3,845,875
Perlis Plantations
Bhd., fgn. Multi-Industry 1,430,000 4,476,316
Shangri La Hotels
(Malaysia) Bhd., fgn. Leisure & Tourism 414,000 402,638
Shangri La Hotels
(Malaysia) Bhd. Leisure & Tourism 2,252,202 2,190,492
--------------
46,066,327
- ----------------------------------------------------------------------------------------
Mexico: 7.5%
Building Materials &
Cemex SA, B Components 3,433,750 12,462,087
*Cifra SA, C Merchandising 13,992,824 14,110,716
*DESC SA, A Multi-Industry 500,000 1,647,764
*DESC SA, B Multi-Industry 1,024,108 3,756,611
*DESC SA, C Multi-Industry 188,000 670,123
Grupo Financiero
Banamex Accival SA, B Banking 7,679,000 12,859,712
Grupo Financiero
Banamex Accival SA, L Banking 5,876,750 8,729,430
*Grupo Financiero
Bancomer SA de CV, B Banking 35,846,000 9,989,488
*Grupo Financiero
Bancomer SA de CV, L Banking 12,716,518 3,296,570
*Grupo Financiero
Serfin SA, B Banking 8,031,500 4,164,096
Grupo Industrial Alfa
SA, A Multi-Industry 1,340,514 17,184,295
Grupo Industrial Maseca
SA de CV, B Food & Household Products 185,093 113,239
Telmex-Telefonos de
Mexico SA, L Telecommunications 181,000 289,975
Telmex-Telefonos de
Mexico SA, L, ADR Telecommunications 2,189,300 69,783,938
Vitro SA Food & Household Products 3,078,387 4,788,159
--------------
163,846,203
- ----------------------------------------------------------------------------------------
Pakistan: 0.7%
*Bank of Punjab Banking 2,126,620 1,584,906
Building Materials &
*DG Khan Cement Co. Components 1,952,500 1,711,928
*DG Khan Cement Co., Building Materials &
rts. Components 585,750 205,431
Engro Chemical Chemicals 510,000 2,109,113
Energy Equipment &
Exide Pakistan Ltd. Services 18,400 20,435
Fauji Fertilizer Co.
Ltd. Chemicals 1,437,800 2,153,603
Khadim Ali Sham Bukhari
& Co. Ltd. Financial Services 223,310 166,426
</TABLE>
17
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES
(CONT.)
- ----------------------------------------------------------------------------------------
Pakistan (cont.)
*Kohinoor Industries
Ltd. Textiles & Apparel 358,720 $ 110,082
National Development
Leasing Corp. Financial Services 918,853 449,815
Appliances & Household
*Pakistan Electron Ltd. Durables 337,406 355,000
*Pakistan Telecom Corp.
PTC Telecommunications 7,000 609,000
*Pakistan Telecom Corp.
PTC Telecommunications 6,776,000 6,030,232
+*Trust Modaraba Financial Services 2,427,000 478,792
*Union Bank Ltd. Banking 830,025 523,984
--------------
16,508,747
- ----------------------------------------------------------------------------------------
Philippines: 3.4%
*A Soriano Corp. Multi-Industry 19,372,567 1,957,198
*Belle Corp. Real Estate 70,000,000 9,607,320
*Keppel Philippine
Holdings Inc., B Machinery & Engineering 568,875 238,567
*Philex Minning Corp.,
B Metals & Mining 16,921,095 1,935,314
Philippine Commercial
International Bank
Inc. Banking 157,840 1,456,244
Philippine Long
Distance Telephone
Co., ADR Telecommunications 650,575 35,212,372
*Philippine National
Bank Banking 1,541,336 17,041,077
RFM Corp. Food & Household Products 26,760,250 5,713,206
Sime Darby Pilipinas
Inc. Industrial Components 659,658 502,980
--------------
73,664,278
- ----------------------------------------------------------------------------------------
Poland: 0.5%
Bank Przemyslowo-
Handlowy SA Banking 67,470 1,956,644
Bank Rozwoju Eksportu
SA Banking 45,000 684,445
Bank Slaski SA W
Katowicach Banking 21,700 1,263,010
Elektrim Towarzystwo
Handlowe SA Utilities Electrical & Gas 1,150,316 3,895,818
*Polifarb Ceiszyu SA Chemicals 54,300 205,924
*Raciborska Fabryka Energy Equipment &
Kotlow SA Services 25,000 199,757
*Warta SA Insurance 74,000 1,170,554
Wielkopolski Bank
Kredytowy SA Banking 843,903 1,745,652
--------------
11,121,804
- ----------------------------------------------------------------------------------------
Portugal: 5.3%
Banco Chemical
(Portugal) Banking 218,015 2,417,938
Banco Comercial
Portugues SA Banking 1,864,552 25,350,682
Banco Comercial
Portugues, 8.75%,
conv., 5/21/02 Corporate Bond 8,780,000** 11,889,373
Banco Espirito Santo e
Comercial de Lisboa Banking 1,499,045 22,654,684
*Banco Fomento Exterior Banking 92,300 854,087
Banco Portugues de
Investimento SA Banking 1,093,480 13,069,890
*Banco Portugues de
Investimento SA, new Banking 600,014 6,770,828
Banco Totta & Acores SA Banking 836,990 13,834,730
*Banco Totta & Acores
SA, new Banking 76,090 1,156,029
*Cel-Cat Fabrica
Nacional de
Conductores Electricos Electronic Components &
SA Instruments 64,581 1,008,357
+Compta-Equipamentos e
Servicos de
Informatica SA Business & Public Services 150,000 1,528,311
Espirito Santo
Financial Holding SA,
ADR Banking 863,200 10,250,500
*Portucel Industrial
Empresa Product de
Celulose SA Forest Products & Paper 571,000 3,376,215
*Sociedade Portuguesa
de Celulose SA Forest Products & Paper 97,940 2,027,834
--------------
116,189,458
- ----------------------------------------------------------------------------------------
Singapore: 1.3%
Acma Ltd. Electrical & Electronics 730,400 2,426,921
Chemical Industries
(Far East) Ltd. Chemicals 660,000 1,465,111
First Capital Corp.
Ltd., fgn. Real Estate 154,000 426,780
G.P. Batteries
International Ltd. Electrical & Electronics 37,000 89,170
*GP Batteries
International Ltd.,
wts. Electrical & Electronics 9,250 6,290
Hai Sun Hup Group Ltd. Transportation 1,534,000 1,030,258
Hinds Hotels
International Ltd. Leisure & Tourism 784,000 931,156
</TABLE>
18
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES
(CONT.)
- ----------------------------------------------------------------------------------------
Singapore (cont.)
Hour Glass Ltd. Merchandising 913,000 $ 832,641
Wholesale & International
Inchcape Bhd., fgn. Trade 1,137,000 3,649,332
Isetan (Singapore)
Ltd., fgn. Merchandising 370,000 721,951
Jaya Holdings Ltd. Transportation 2,741,000 3,042,326
Jaya Holdings Ltd.,
3.00%, conv. ln. stk.,
8/31/98 Transportation 508,800** 827,317
*Jaya Holdings Ltd.,
wts., expires 8/31/98 Transportation 89,071 64,859
*Jaya Holdings Ltd.,
wts., expires 10/09/99 Transportation 164,760 117,062
Natsteel Ltd., fgn. Metals & Mining 1,360,000 2,788,264
*Osprey Maritime Ltd. Transportation 399,000 837,900
Prima Ltd. Food & Household Products 975,000 3,722,163
*Resources Development Building Materials &
Corp. Ltd. Components 186,000 670,626
Singapore Bus Service
(1978) Ltd., fgn. Transportation 328,200 2,343,457
TIBS Holdings Ltd. Transportation 788,800 1,929,479
*TIBS Holdings Ltd.,
wts. Transportation 236,640 197,409
WBL Corp. Ltd. Multi-Industry 22,000 51,014
--------------
28,171,486
- ----------------------------------------------------------------------------------------
South Africa: 1.4%
BTR Dunlop Ltd. Industrial Components 192,100 368,866
Del Monte Royal Foods
Ltd Food & Household Products 1,768,650 2,450,057
Engen Ltd. Energy Sources 1,560,102 11,768,703
First National Bank
Holdings Ltd. Banking 797,200 7,325,799
Kersaf Investments Ltd. Leisure & Tourism 80,600 1,005,980
Nedcor Ltd. Banking 173,196 2,993,101
Palabora Mining Co.
Ltd. Metals & Mining 2,000 30,723
Rembrandt Group Ltd. Multi-Industry 413,900 3,973,803
Sun International
(South Africa) Ltd. Leisure & Tourism 358,500 590,043
--------------
30,507,075
- ----------------------------------------------------------------------------------------
Spain: 4.9%
Banco Bilbao Vizcaya Banking 1,341,200 48,318,582
Bankinter SA Banking 382,750 37,233,718
Endesa-Empresa Nacional
de Electricidad SA Utilities Electrical & Gas 245,500 13,904,246
Telefonica de Espana SA Telecommunications 35,000 484,749
Union Electrica-Fenosa,
SA Utilities Electrical & Gas 1,224,267 7,367,806
--------------
107,309,101
- ----------------------------------------------------------------------------------------
Sri Lanka: 0.1%
Aitken Spence & Co.
Ltd. Multi-Industry 150,000 518,964
Associated Motorways
Ltd. Automobiles 281,088 228,823
Ceylon Holiday Resorts
Ltd. Leisure & Tourism 144,600 98,986
*Colombo Dock Yard Ltd. Transportation 40,000 8,326
Building Materials &
*Lanka Ceramic Ltd. Components 309,100 231,611
Lanka Orix Leasing Co.
Ltd. Financial Services 819 2,273
*National Development
Bank of Sri Lanka Banking 140,000 569,843
United Motor Lanka Ltd. Automobiles 284,840 139,653
--------------
1,798,479
- ----------------------------------------------------------------------------------------
Thailand: 1.1%
American Standard
Sanitaryware Thailand Building Materials &
Public Co. Ltd. Components 246,800 4,219,114
Asia Fibre Public Co.
Ltd., fgn. Textiles & Apparel 943,500 505,647
Ayudhya Insurance
Public Co. Ltd., fgn. Insurance 239,000 1,556,014
Bangkok Bank Public Co.
Ltd. Banking 130,000 1,114,728
Bangkok Land Co. Ltd. Real Estate 269,000 357,741
Bangkok Land Co. Ltd.,
fgn. Real Estate 1,002,500 1,532,205
Bank of Ayudhya Ltd.,
fgn. Banking 118,300 662,179
Chareon Pokphand
Feedmill Public Co.
Ltd., fgn. Food & Household Products 338,500 1,652,858
</TABLE>
19
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES
(CONT.)
- ----------------------------------------------------------------------------------------
Thailand (cont.)
Charoen Pokphand
Feedmill Public Co.
Ltd. Food & Household Products 330,000 $ 1,545,852
Hua Thai Manufacturing
Public Co. Ltd. Textiles & Apparel 35,000 107,334
Karat Sanitaryware Building Materials &
Public Co. Ltd., fgn. Components 246,900 999,754
Kian Gwan (Thailand)
Public Co. Ltd., fgn. Real Estate 96,000 258,198
*Padaeng Industry
Public Co. Ltd., fgn. Metals & Mining 357,110 262,268
*Royal Ceramic Industry Building Materials &
Public Co. Ltd., fgn. Components 53,200 83,422
Saha Pathanapibul Co
Ltd., fgn. Food & Household Products 284,400 558,865
Saha Union Public Co.
Ltd. Multi-Industry 456,000 511,393
Saha Union Public Co.
Ltd., fgn. Multi-Industry 2,183,080 2,469,940
Sanyo Universal
Electric Public Co Appliances & Household
Ltd., fgn. Durables 587,800 2,473,474
Textile Prestige Corp.
Ltd., fgn. Textiles & Apparel 66,000 126,419
Thai Asahi Glass Public Building Materials &
Co. Ltd. Components 72,700 148,633
Thai Rayon Public Co.
Ltd. Textiles & Apparel 43,700 381,659
Thai Rayon Public Co.
Ltd., fgn. Textiles & Apparel 11,000 97,707
Thai Wacoal Public Co.
Ltd. Textiles & Apparel 94,000 507,503
Thai Wacoal Public Co.
Ltd., fgn. Textiles & Apparel 99,000 743,777
Thai Wah Public Co.
Ltd., fgn. Multi-Industry 208,900 257,082
United Motor Works
(Siam) Public Co. Ltd. Machinery & Engineering 30,400 148,440
United Standard
Terminal Public Co. Wholesale & International
Ltd., fgn. Trade 155,600 299,587
--------------
23,581,793
- ----------------------------------------------------------------------------------------
Turkey: 4.5%
Akbank Banking 113,668,666 21,464,526
Building Materials &
Akcimento Components 7,149,000 2,699,951
Aksigorta AS Insurance 25,334,000 1,975,969
Alarko Sanayii ve Appliances & Household
Ticaret SA Durables 1,920,000 535,961
*Alcatel Teletas
Endustri Tic AS Telecommunications 4,152,000 1,141,970
Anadolu Anonim Turk
Sigorta Sirketi Insurance 8,682,000 345,712
Appliances & Household
Arcelik AS Durables 110,133,198 8,861,292
Bagfas Chemicals 9,437,000 2,905,480
Appliances & Household
Bekoteknik AS Durables 31,364,375 2,111,559
Borusan AS Industrial Components 4,089,000 822,500
*Celik Halat ve Sanayii Building Materials &
ve Ticaret AS Components 10,489,022 688,934
Cimentas Izmir Cimento Building Materials &
Fabrikasi Turk AS Components 4,925,250 2,911,478
Cimsa Cimento Sanayi ve Building Materials &
Ticaret AS Components 6,263,000 2,725,279
Compagnie Financiere
Ottomane SA Banking 52,500 1,915,999
*Erciyas Biracilik Food & Household Products 20,000,000 9,359,606
Eregli Demir ve Celik
Fabrikalari AS Metals & Mining 96,552,750 7,927,155
Finans Bank AS, br. Banking 46,638,831 1,857,129
*Goodyear Lastikleri
TAS, Industrial Components 37,000 9,721
Izocam Ticaret ve Building Materials &
Sanayii AS, br. Components 4,819,826 443,202
Kartonsan Forest Products & Paper 22,483,000 5,906,864
Koc Holding AS Multi-Industry 8,331,000 1,190,143
*Koc Yatirim ve Sanayii
Mamullesi Pazarlanca
AS Multi-Industry 20,621,054 4,401,867
Marshall Boya ve Vernik
Sanayii AS Industrial Components 12,544,392 1,215,302
Netas Northern Electric
Telekomunic Asyon AS Electrical & Electronics 6,895,000 1,953,017
*Otosan Otomobil
Sanayii AS Automobiles 10,524,000 1,728,079
*Tat Konserve Sanayii
AS Food & Household Products 1,629,869 1,030,377
Tekstil Bankasi AS, br. Banking 107,363 3,482
Tofas Turk Otomobil
Fabrikasi AS Automobiles 23,916,800 2,317,063
Building Materials &
Trakya Cam Sanayii AS Components 10,572,030 1,076,299
Appliances & Household
Turk Demir Dokum, br. Durables 9,893,322 974,712
Turkiye Garanti Bankasi
AS Banking 65,254,175 5,464,635
Vakif Finansal Kiralama
AS Financial Services 13,460,077 331,529
--------------
98,296,792
- ----------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
Templeton Developing Markets Trust
Investment Portfolio, December 31, 1995 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL IN
INDUSTRY LOCAL CURRENCY VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG TERM SECURITIES
(CONT.)
- ----------------------------------------------------------------------------------------
Venezuela: 0.9%
Banco Provincial SAICA Banking 68,035 $ 74,147
Banco Venezolano de
Credito Banking 18,648 384,495
Building Materials &
Ceramica Carabobo CA, A Components 286,800 249,039
Ceramica Carabobo CA, Building Materials &
A, ADR Components 130,000 135,980
Building Materials &
Ceramica Carabobo CA, B Components 1,924,658 1,502,310
Building Materials &
Consolidada Carabobo, A Components 5,684,664 255,349
Building Materials &
Consolidada Carabobo, B Components 25,280,208 1,061,099
Electricidad de Caracas Utilities Electrical & Gas 10,186,033 6,960,706
Fabrica Nacional de Building Materials &
Cementos CA Components 1,221,000 88,113
H.L. Boulton & Co. SA Multi-Industry 12,912,748 304,277
Industrias Ventane Utilities Electrical & Gas 3,960,414 828,246
Inmuebles y Valores Building Materials &
Caracas CA Components 1,015,000 837,113
*Manufacturera de Appliances & Household
Aparatos Domesticos SA Durables 545,225 425,540
Mavesa SA, ADR Food & Household Products 976,683 3,624,803
Siderurgica Venezolana
Sivensa Saica Svs Metals & Mining 150,000 48,159
Siderurgica Venezolana
Sivensa Saica SVS, ADR Metals & Mining 640,750 1,028,597
+Vencemos de Cementos Building Materials &
SA Components 1,821,144 2,236,869
+Venezolana de Building Materials &
Cementos-Vencemos, #2 Components 832,000 894,492
--------------
20,939,334
--------------
TOTAL LONG TERM
SECURITIES (cost
$1,841,636,298) 1,825,134,510
- ----------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS:
16.5% (cost
$362,141,656)
- ----------------------------------------------------------------------------------------
U.S. Treasury Bills,
4.65% to 5.40% with
maturities to 2/08/96 363,196,000** 362,363,748
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 99.9%
(cost $2,203,777,954 ) 2,187,498,258
OTHER ASSETS, LESS
LIABILITIES: 0.1% 1,177,799
--------------
TOTAL NET ASSETS: 100.0% $2,188,676,057
==============
</TABLE>
* NON-INCOME PRODUCING.
** PRINCIPAL AMOUNT IN CURRENCY OF COUNTRIES INDICATED.
+ SEE NOTE 5.
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
Templeton Developing Markets Trust
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (identified cost
$2,203,777,954) $2,187,498,258
Cash 2,194,680
Receivables:
Investment securities sold 1,687,620
Fund shares sold 16,250,703
Dividends and interest 4,464,911
--------------
Total assets 2,212,096,172
--------------
Liabilities:
Payables:
Investment securities purchased 9,431,741
Fund shares redeemed 8,255,594
Accrued expenses 5,732,780
--------------
Total liabilities 23,420,115
--------------
Net assets, at value $2,188,676,057
==============
Net assets consist of:
Undistributed net investment income $ 2,196,486
Net unrealized depreciation (16,897,872)
Accumulated net realized gain 6,537,420
Net capital paid in on shares of beneficial interest 2,196,840,023
--------------
Net assets, at value $2,188,676,057
==============
Class I
Net asset value per share ($2,147,664,368 / 165,080,709
shares outstanding) $ 13.01
==============
Maximum offering price ($13.01 / 94.25%) $ 13.80
==============
Class II
Net asset value per share ($41,011,689 / 3,167,973
shares outstanding) $ 12.95
==============
Maximum offering price ($12.95 / 99.0%) $ 13.08
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
Templeton Developing Markets Trust
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
for the year ended December 31, 1995
<TABLE>
<S> <C> <C>
Investment income: (net of $3,574,849 foreign
taxes withheld)
Dividends $ 47,626,262
Interest 31,467,990
------------
Total income $ 79,094,252
Expenses:
Management fees (Note 3) 26,314,151
Administrative fees (Note 3) 2,153,848
Distribution fees (Note 3)
Class I 7,316,486
Class II 125,940
Transfer agent fees (Note 3) 3,820,000
Custodian fees 2,562,000
Reports to shareholders 1,620,000
Audit fees 65,000
Legal fees (Note 3) 15,000
Registration and filing fees 230,000
Trustees' fees and expenses 89,000
Other 49,592
------------
Total expenses 44,361,017
------------
Net investment income 34,733,235
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments 39,691,675
Foreign currency transactions (2,872,173)
------------
36,819,502
Net unrealized depreciation on:
Investments (66,825,433)
Foreign currency translation of other assets
and liabilities (618,176)
------------
(67,443,609)
------------
Net realized and unrealized loss (30,624,107)
------------
Net increase in net assets resulting from
operations $ 4,109,128
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
Templeton Developing Markets Trust
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 34,733,235 $ 20,199,930
Net realized gain on investment and foreign
currency transactions 36,819,502 56,154,084
Net unrealized depreciation (67,443,609) (253,449,533)
-------------- --------------
Net increase (decrease) in net assets
resulting from operations 4,109,128 (177,095,519)
Distributions to shareholders:
From net investment income
Class I (32,067,523) (17,351,463)
Class II (535,755) --
From net realized gain
Class I (38,696,973) (59,144,627)
Class II (521,839) --
Capital share transactions (Note 2)
Class I 204,236,626 866,353,985
Class II 42,998,205 --
-------------- --------------
Net increase in net assets 179,521,869 612,762,376
Net assets:
Beginning of year 2,009,154,188 1,396,391,812
-------------- --------------
End of year $2,188,676,057 $2,009,154,188
============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
Templeton Developing Markets Trust
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Developing Markets Trust (the Fund) is a Massachusetts business trust
and an open-end, diversified management investment company registered under the
Investment Company Act of 1940.
A. Securities Valuations:
Securities listed or traded on a recognized national or foreign exchange or
NASDAQ are valued at the last reported sales prices on the principal exchange
on which the securities are traded. Over-the-counter 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 Trustees.
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 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 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.
The Brazilian government has exercised and may continue to exercise substantial
influence over the exchange of Brazilian currency. Under current Brazilian law,
whenever there occurs a serious imbalance, Brazil's National Monetary Council
may, for a limited period, impose restrictions on foreign capital remittances
abroad. Exchange control regulations may restrict repatriation of investment
income, capital, or the proceeds of securities sales by foreign investors.
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.
25
<PAGE>
Templeton Developing Markets Trust
Notes to Financial Statements (cont.)
- --------------------------------------------------------------------------------
2. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Effective May 1, 1995, the Fund offered two classes of shares: Class I shares
and Class II shares. Shares of each class are identical except for their ini-
tial sales load, a contingent deferred sales charge on Class II shares, distri-
bution fees, and voting rights on matters affecting a single class. All Fund
shares outstanding before May 1, 1995 were designated as Class I shares. At De-
cember 31, 1995, there were an unlimited number of shares of beneficial inter-
est authorized for each class of shares ($0.01 par value). Transactions in the
Fund's shares were as follows:
<TABLE>
<CAPTION>
CLASS I
-------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- --------------
<S> <C> <C> <C> <C>
Shares sold 48,470,874 $ 646,712,609 84,733,238 $1,257,587,619
Shares issued on
reinvestment of
distributions 4,711,716 59,816,280 4,603,992 63,556,714
Shares redeemed (37,809,132) (502,292,263) (31,092,171) (454,790,348)
----------- ------------- ----------- --------------
Net increase 15,373,458 $ 204,236,626 58,245,059 $ 866,353,985
=========== ============= =========== ==============
</TABLE>
<TABLE>
<CAPTION>
CLASS II
----------------------
FOR THE PERIOD
MAY 1, 1995 THROUGH
DECEMBER 31, 1995
----------------------
SHARES AMOUNT
--------- -----------
<S> <C> <C>
Shares sold 3,421,478 $46,480,813
Shares issued on
reinvestment of
distributions 66,344 839,919
Shares redeemed (319,849) (4,322,527)
--------- -----------
Net increase 3,167,973 $42,998,205
========= ===========
</TABLE>
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton Asset
Management Ltd. (TAML), Templeton Global Investors, Inc. (TGII), Franklin Tem-
pleton Distributors, Inc. (FTD) and Franklin Templeton Investor Services, Inc.
(FTIS), the Fund's investment manager, administrative manager, principal under-
writer, and transfer agent, respectively.
The Fund pays monthly an investment management fee to TAML equal, on an annual
basis, to 1.25% of the average daily net assets of the Fund. The Fund pays TGII
monthly an administrative fee of 0.15% per annum on the first $200 million of
the Fund's aggregate 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. For the year ended December 31, 1995, FTD received
net commissions of $2,087,056 from the sale of the Fund's shares and FTIS re-
ceived fees of $3,820,000.
Under the distribution plans for Class I and Class II shares, the Fund reim-
burses FTD quarterly for FTD's costs and expenses in connection with activities
that are primarily intended to result in a sale of Fund shares, subject to a
maximum of 0.35% and 1.00% per annum of the average daily net assets of Class I
and Class II shares, respectively. Under the Class I distribution plan, costs
and expenses exceeding the maximum may be reimbursed in subsequent periods. At
December 31, 1995, unreimbursed expenses amounted to $195,657. Class II shares
redeemed within 18 months are subject to a contingent deferred sales charge.
Contingent deferred sales charges of $17,978 were paid to FTD for the year
ended December 31, 1995.
An officer of the Fund is a partner of Dechert Price & Rhoads, legal counsel
for the Fund, which firm received fees of $15,000 for the year ended December
31, 1995.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the
year ended December 31, 1995 aggregated $716,414,495 and $151,421,789, respec-
tively. 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 December 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 $ 259,141,743
Unrealized depreciation (275,421,439)
-------------
Net unrealized depreciation $ (16,279,696)
=============
</TABLE>
5. HOLDING OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
The Investment Company Act of 1940 defines "affiliated companies" as invest-
ments in portfolio companies in which the Fund owns 5% or more of the outstand-
ing voting securities. Investments in "affiliated companies" at December 31,
1995 amounted to $25,992,899. For the year ended December 31, 1995, dividends
and interest income from "affiliated companies" was $630,865 and net realized
gains from disposition of "affiliated companies" were $202,497.
26
<PAGE>
Templeton Developing Markets Trust
Independent Auditor's Report
- -------------------------------------------------------------------------------
The Board of Trustees and Shareholders
Templeton Developing Markets Trust
We have audited the accompanying statement of assets and liabilities, includ-
ing the investment portfolio, of Templeton Developing Markets Trust as of De-
cember 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 the periods indicated in
the accompanying financial statements. These financial statements and finan-
cial highlights are the responsibility of the Fund's management. Our responsi-
bility is to express 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
highlights 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 De-
cember 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant esti-
mates made by management, as well as evaluating the overall financial state-
ment presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Tem-
pleton Developing Markets Trust as of December 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 princi-
ples.
/s/McGladrey + Pullen, LLP
New York, New York
January 31, 1996
27
<PAGE>
NOTES
-----
<PAGE>
The Franklin Templeton Group
Literature Request - Call today for a free descriptive brochure and prospectus
on any of the funds listed below. The prospectus contains more complete
information, including fees, charges and expenses, and should be read carefully
before investing or sending money.
Templeton Funds
Americas Government
Securities Fund
Developing Markets Trust
Foreign Fund
Global Infrastructure Fund
Global Opportunities Trust
Global Rising Dividends Fund
Growth Fund
Income Fund
Real Estate
Securities Fund
Smaller Companies
Growth Fund
World Fund
Franklin Funds Seeking
Tax-Free Income
Federal Tax-Free
Income Fund
Federal Intermediate-Term
Tax-Free Income Fund
High Yield Tax-Free
Income Fund
Insured Tax-Free
Income Fund***
Puerto Rico Tax-Free
Income Fund
Franklin State-Specific
Funds Seeking Tax-Free Income
Alabama
Arizona*
Arkansas**
California*
Colorado
Connecticut
Florida*
Georgia
Hawaii**
Indiana
Kentucky
Louisiana
Maryland
Massachusetts***
Michigan***
Minnesota***
Missouri
New Jersey
New York*
North Carolina
Ohio***
Oregon
Pennsylvania
Tennessee
Texas
Virginia
Washington**
Franklin Funds
Seeking Capital Growth
California Growth Fund
DynaTech Fund
Equity Fund
Global Health
Care Fund
Gold Fund
Growth Fund
International
Equity Fund
Japan Fund
Pacific Growth Fund
Real Estate Securities Fund
Small Cap Growth Fund
Franklin Funds Seeking Growth and Income
Balance Sheet
Investment Fund
Convertible Securities Fund
Equity Income Fund
Global Utilities Fund
Income Fund
Premier Return Fund
Rising DividendsFund
Strategic Income Fund
Utilities Fund
Franklin Funds Seeking
High Current Income
AGE High Income Fund
Global Government
Income Fund
Investment Grade
Income Fund
U.S. Government
Securities Fund
Franklin Funds Seeking
High Current Income and Stability of Principal
Adjustable Rate
Securities Fund
Adjustable U.S. Government Securities Fund
Short-Intermediate U.S. Government
Securities Fund
Franklin Funds for
Non-U.S. Investors
Tax-Advantaged High Yield Securities Fund
Tax-Advantaged International Bond Fund
Tax-Advantaged U.S. Government Securities Fund
Franklin Templeton Global Currency Funds
German Government
Bond Fund
Global Currency Fund
High Income Currency Fund
Hard Currency Fund
Franklin Money
Market Funds
Money Fund
Federal Money Fund
Tax-Exempt Money
Fund
California Tax-Exempt
Money Fund
New York Tax-Exempt
Money Fund
IFT U.S. Treasury Money
Market Portfolio
Franklin Fund for Corporations
Corporate Qualified
Dividend Fund
Franklin Tax-Deferred
Annuity
Franklin Valuemark
Franklin Templeton
Valuemark Income Plus
(an immediate annuity)
Fund Information: 1-800/292-9293
Account Services: 1-800/393-3001
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.
*Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and a high yield
portfolio (CA).
**The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
***Portfolio of insured municipal securities.
<PAGE>
Templeton Developing
Markets Trust
Principal Underwriter:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Account Services
1-800-393-3001
Fund Information
1-800-292-9293
This report must be preceded or accompanied by the prospectus of Templeton
Developing Markets Trust. 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.
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