-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OHgMIAa1GZyDwdp/7XgRdMO4C8VZDsrle0uZIykGEXbPrVeVs4iJFN3gJGXUoMOP 7hN0c4C3wDH8+0L+9cWMOg== 0000919893-06-000016.txt : 20061128 0000919893-06-000016.hdr.sgml : 20061128 20061128140330 ACCESSION NUMBER: 0000919893-06-000016 CONFORMED SUBMISSION TYPE: N-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060930 FILED AS OF DATE: 20061128 DATE AS OF CHANGE: 20061128 EFFECTIVENESS DATE: 20061128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLETON DRAGON FUND INC CENTRAL INDEX KEY: 0000919893 IRS NUMBER: 650473580 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-Q SEC ACT: 1940 Act SEC FILE NUMBER: 811-08394 FILM NUMBER: 061241781 BUSINESS ADDRESS: STREET 1: 500 E BROWARD BLVD. STREET 2: SUITE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394-3091 BUSINESS PHONE: 9545277500 MAIL ADDRESS: STREET 1: 500 E. BROWARD BLVD. STREET 2: SUITE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394-3091 N-Q 1 tdf-nq906.txt TDF NQ906 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-08394 --------- TEMPLETON DRAGON FUND, INC. -------------------------------------------------- (Exact name of registrant as specified in charter) 500 EAST BROWARD BLVD., SUITE 2100, FORT LAUDERDALE, FL 33394-3091 -------------------------------------------------------------------- (Address of principal executive offices) (Zip code) CRAIG S. TYLE, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906 ------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (954) 527-7500 -------------- Date of fiscal year end: 12/31 ----- Date of reporting period: 9/30/06 -------- ITEM 1. SCHEDULE OF INVESTMENTS. Templeton Dragon Fund, Inc. QUARTERLY STATEMENT OF INVESTMENTS SEPTEMBER 30, 2006 - -------------------------------------------------------------------------------- CONTENTS Statement of Investments ................................................... 3 Notes to Statement of Investments .......................................... 7 [LOGO](R) FRANKLIN TEMPLETON INVESTMENTS Franklin o TEMPLETON o Mutual Series Quarterly Statement of Investments | 1 This page intentionally left blank. Templeton Dragon Fund, Inc. STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------------------------------------------------------- COUNTRY SHARES VALUE - --------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS 95.3% AIR FREIGHT & LOGISTICS 0.1% Sinotrans Ltd., H .......................................................... China 3,017,000 $ 1,033,982 ------------ AIRLINES 0.4% Air China Ltd., H .......................................................... China 7,486,000 3,228,609 a Air China Ltd., H, 144A .................................................... China 1,364,000 588,274 ------------ 3,816,883 ------------ AUTO COMPONENTS 1.5% Cheng Shin Rubber Industry Co. Ltd. ........................................ Taiwan 10,923,563 10,689,321 Norstar Founders Group Ltd. ................................................ China 7,852,000 2,610,396 ------------ 13,299,717 ------------ AUTOMOBILES 0.3% Brilliance China Automotive Holdings Ltd. .................................. China 680,000 105,614 Chongqing Changan Automobile Co. Ltd., B ................................... China 4,384,169 2,234,107 ------------ 2,339,721 ------------ CAPITAL MARKETS 0.5% Yuanta Core Pacific Securities Co. ......................................... Taiwan 6,533,290 4,350,923 ------------ COMMERCIAL BANKS 11.0% a,b Bank of China Ltd., H, 144A ................................................ China 20,840,000 8,961,255 China Construction Bank, H ................................................. China 7,894,000 3,414,706 a China Construction Bank, H, 144A ........................................... China 38,097,000 16,479,612 a,b China Merchants Bank Co. Ltd., H, 144A ..................................... China 2,118,000 2,985,071 Chinatrust Financial Holding Co. Ltd. ...................................... Taiwan 15,631,896 11,661,366 HSBC Holdings PLC .......................................................... United Kingdom 1,985,377 36,212,905 Mega Financial Holding Co. Ltd. ............................................ Taiwan 27,217,000 19,276,311 ------------ 98,991,226 ------------ COMMUNICATIONS EQUIPMENT 0.4% D-Link Corp. ............................................................... Taiwan 3,604,962 3,810,742 ZTE Corp., H ............................................................... China 64,000 236,591 ------------ 4,047,333 ------------ COMPUTERS & PERIPHERALS 3.3% Acer Inc. .................................................................. Taiwan 4,216,621 7,144,441 Advantech Co. Ltd. ......................................................... Taiwan 1,803,865 5,192,037 Asustek Computer Inc. ...................................................... Taiwan 4,932,049 11,574,153 LITE-ON IT Corp. ........................................................... Taiwan 2,197,760 1,924,948 Lite-On Technology Corp. ................................................... Taiwan 2,821,424 3,480,978 ------------ 29,316,557 ------------ CONSTRUCTION MATERIALS 0.2% Anhui Conch Cement Co. Ltd., H ............................................. China 1,072,000 2,121,805 ------------
Quarterly Statement of Investments | 3 Templeton Dragon Fund, Inc. STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2006 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------------- COUNTRY SHARES VALUE - --------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) DISTRIBUTORS 2.9% China Resources Enterprise Ltd. ................................................ China 10,658,000 $ 23,092,687 Test-Rite International Co. Ltd. ............................................... Taiwan 5,246,760 2,804,822 ------------ 25,897,509 ------------ DIVERSIFIED TELECOMMUNICATION SERVICES 1.3% China Telecom Corp. Ltd., H .................................................... China 32,240,000 11,669,989 ------------ ELECTRIC UTILITIES 3.8% Cheung Kong Infrastructure Holdings Ltd. ....................................... Hong Kong 11,060,000 33,858,664 ------------ ELECTRICAL EQUIPMENT 0.8% BYD Co. Ltd., H ................................................................ China 1,193,500 3,446,921 Phoenixtec Power Co. Ltd. ...................................................... Taiwan 3,811,945 4,173,452 ------------ 7,620,373 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS 1.0% Delta Electronics Inc. ......................................................... Taiwan 3,275,268 9,397,477 ------------ FOOD & STAPLES RETAILING 14.1% Dairy Farm International Holdings Ltd. ......................................... Hong Kong 39,811,578 126,600,818 ------------ FOOD PRODUCTS 0.5% Uni-President Enterprises Corp. ................................................ Taiwan 5,455,030 4,794,363 ------------ HOTELS RESTAURANTS & LEISURE 0.6% Hongkong and Shanghai Hotels Ltd. .............................................. Hong Kong 4,358,838 5,539,011 ------------ HOUSEHOLD DURABLES 0.1% Samson Holding Ltd. ............................................................ China 1,982,000 954,028 ------------ INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 3.4% Datang International Power Generation Co. Ltd., H .............................. China 26,502,000 19,900,355 Guangdong Electric Power Development Co. Ltd., B ............................... China 13,956,700 6,861,322 Huadian Power International Corp. Ltd., H ...................................... China 8,404,000 2,383,991 Huaneng Power International Inc., H ............................................ China 1,454,000 1,048,883 ------------ 30,194,551 ------------ INDUSTRIAL CONGLOMERATES 4.4% Citic Pacific Ltd. ............................................................. China 7,081,000 21,813,841 LG Corp. ....................................................................... South Korea 174,970 5,084,994 Shanghai Industrial Holdings Ltd. .............................................. China 6,540,000 12,356,966 ------------ 39,255,801 ------------ INSURANCE 1.0% China Life Insurance Co. Ltd., H ............................................... China 4,609,000 9,016,085 ------------ IT SERVICES 0.4% Travelsky Technology Ltd., H ................................................... China 2,837,000 3,575,997 ------------
4 | Quarterly Statement of Investments Templeton Dragon Fund, Inc. STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2006 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------------- COUNTRY SHARES VALUE - --------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) MACHINERY 1.8% China International Marine Containers (Group) Co. Ltd., B .................... China 10,913,619 $ 13,756,457 Yungtay Engineering Co. Ltd. ................................................. Taiwan 5,686,000 2,893,660 ------------ 16,650,117 ------------ MEDIA 0.3% a Next Media Ltd., 144A ........................................................ Hong Kong 4,974,000 2,713,445 ------------ METALS & MINING 0.1% Aluminum Corp. of China Ltd., H .............................................. China 1,028,000 653,168 China Oriental Group Co. Ltd. ................................................ China 392,000 78,494 ------------ 731,662 ------------ OFFICE ELECTRONICS 0.1% Kinpo Electronics Inc. ....................................................... Taiwan 1,557,234 538,518 ------------ OIL, GAS & CONSUMABLE FUELS 17.8% China Petroleum and Chemical Corp., H ........................................ China 103,150,000 64,082,714 China Shenhua Energy Co. Ltd., H ............................................. China 6,448,000 10,378,841 CNOOC Ltd. ................................................................... China 18,177,000 15,119,016 a CNOOC Ltd., 144A ............................................................. China 14,270,000 11,869,305 PetroChina Co. Ltd., H ....................................................... China 45,320,000 48,748,384 a PetroChina Co. Ltd., H, 144A ................................................. China 9,200,000 9,895,965 ------------ 160,094,225 ------------ PHARMACEUTICALS 0.1% Tong Ren Tang Technologies Co. Ltd., H ....................................... China 628,000 1,086,615 ------------ REAL ESTATE 4.9% Cheung Kong (Holdings) Ltd. .................................................. Hong Kong 2,575,000 27,648,367 Hang Lung Group Ltd. ......................................................... Hong Kong 3,138,042 8,076,058 Henderson Investment Ltd. .................................................... Hong Kong 4,554,000 8,218,729 ------------ 43,943,154 ------------ SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 4.5% Elan Microelectronics Corp. .................................................. Taiwan 2,082,338 827,023 Faraday Technology Corp. ..................................................... Taiwan 1,150,143 1,799,378 Realtek Semiconductor Corp. .................................................. Taiwan 263,550 323,965 Samsung Electronics Co. Ltd. ................................................. South Korea 10,780 7,564,513 Sunplus Technology Co. Ltd. .................................................. Taiwan 6,903,006 6,588,191 Taiwan Semiconductor Manufacturing Co. Ltd. .................................. Taiwan 13,202,911 23,805,913 ------------ 40,908,983 ------------ TEXTILES, APPAREL & LUXURY GOODS 0.5% Tack Fat Group International Ltd. ............................................ Hong Kong 21,144,000 2,252,639 Tainan Enterprises Co. Ltd. .................................................. Taiwan 1,883,104 2,388,715 ------------ 4,641,354 ------------
Quarterly Statement of Investments | 5 Templeton Dragon Fund, Inc. STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2006 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------------- COUNTRY SHARES VALUE - --------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) TRANSPORTATION INFRASTRUCTURE 2.1% Cosco Pacific Ltd. ........................................................... China 3,354,000 $ 6,707,441 b Hainan Meilan International Airport Co. Ltd., H .............................. China 2,994,000 1,364,289 Hopewell Holdings Ltd. ....................................................... Hong Kong 3,764,000 10,725,780 ------------ 18,797,510 ------------ WIRELESS TELECOMMUNICATION SERVICES 11.1% China Mobile (Hong Kong) Ltd. ................................................ China 13,122,000 92,722,186 Taiwan Mobile Co. Ltd. ....................................................... Taiwan 7,047,764 6,747,633 ------------ 99,469,819 ------------ TOTAL COMMON STOCKS (COST $488,452,194) ...................................... 857,268,215 ------------ SHORT TERM INVESTMENTS (COST $40,253,335) 4.4% MONEY MARKET FUND 4.4% c Franklin Institutional Fiduciary Trust Money Market Portfolio, 4.95% ......... United States 40,253,335 40,253,335 ------------ TOTAL INVESTMENTS (COST $528,705,529) 99.7% .................................. 897,521,550 OTHER ASSETS, LESS LIABILITIES 0.3% .......................................... 2,270,173 ------------ NET ASSETS 100.0% ............................................................ $899,791,723 ============
a Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. These securities have been deemed liquid under guidelines approved by the Fund's Board of Directors. At September 30, 2006, the aggregate value of these securities was $53,492,927, representing 5.95% of net assets. b Non-income producing for the twelve months ended September 30, 2006. c The Franklin Institutional Fiduciary Trust Money Market Portfolio is managed by an affiliate of the Fund's investment manager. The rate shown is the annualized seven-day yield at period end. 6 | See Notes to Statement of Investments. | Quarterly Statement of Investments Templeton Dragon Fund, Inc. NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) Templeton Dragon Fund, Inc. (the Fund) is registered under the Investment Company Act of 1940 as a non-diversified, closed-end investment company. 1. INCOME TAXES At September 30, 2006, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows: Cost of investments ............................... $529,608,463 ============ Unrealized appreciation ........................... $375,092,496 Unrealized depreciation ........................... (7,179,409) ------------ Net unrealized appreciation (depreciation) ........ $367,913,087 ============ For information on the Fund's policy regarding valuation of investments and other significant accounting policies, please refer to the Fund's most recent semiannual or annual shareholder report. Quarterly Statement of Investments | 7 ITEM 2. CONTROLS AND PROCEDURES. (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant's management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio Holdings on Form N-Q, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant's management, including the Registrant's principal executive officer and the Registrant's principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on such evaluation, the Registrant's principal executive officer and principal financial officer concluded that the Registrant's disclosure controls and procedures are effective. (b) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this Quarterly Schedule of Portfolio Holdings on Form N-Q. ITEM 3. EXHIBITS. (a) Certifications pursuant to Section 30a-2 of the Investment Company Act of 1940 of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and Galen G. Vetter, Chief Financial Officer. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TEMPLETON DRAGON FUND, INC. By /s/JIMMY D. GAMBILL ----------------------- Jimmy D. Gambill Chief Executive Officer - Finance and Administration Date November 27, 2006 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/JIMMY D. GAMBILL ----------------------- Jimmy D. Gambill Chief Executive Officer - Finance and Administration Date November 27, 2006 By /s/GALEN G. VETTER ------------------------------ Galen G. Vetter Chief Financial Officer Date November 27, 2006 EX-99.CERT 2 cert_tdfi0906.txt CERTIFICATE I, Jimmy D. Gambill, certify that: 1. I have reviewed this report on Form N-Q of TEMPLETON DRAGON FUND, INC.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. November 27, 2006 S\JIMMY D. GAMBILL Jimmy D. Gambill Chief Executive Officer - Finance and Administration I, Galen G. Vetter, certify that: 1. I have reviewed this report on Form N-Q of TEMPLETON DRAGON FUND, INC.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. November 27, 2006 S\GALEN G. VETTER Galen G. Vetter Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----