<PAGE>
Portfolio of Investments as PRUDENTIAL GLOBAL GENESIS FUND,
of May 31, 1995 INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Description Value
Shares Description Value (Note 1)
<C> <S> <C>
------------------------------------------------------------
LONG-TERM INVESTMENTS--90.6%
COMMON STOCKS--84.2%
------------------------------------------------------------
Australia--4.5%
2,074,300 AAPC, Ltd. (Merchandising) $ 1,117,707
1,815,000 Australis Media, Ltd. (Services) 991,027
2,409,000 Burswood Property Trust (Leisure &
Tourism) 2,717,262
700,000 Publishing & Broadcasting, Ltd.
(Broadcasting & Publishing) 2,021,711
2,557,100 Sea World Property, Ltd. (Leisure &
Tourism) 2,030,042
-------------
8,877,749
- ------------------------------------------------------------
Belgium--1.3%
27,500 Barco Industries N.V. (Electronics) 2,673,400
- ------------------------------------------------------------
Brazil--1.0%
132,000 Rhodia Ster S A* (GDR) (Chemicals) 2,013,000
- ------------------------------------------------------------
Denmark--0.9%
24,000 Danske Traelastko (Merchandising) 1,696,574
- ------------------------------------------------------------
Federal Republic of Germany--1.3%
3,565 Bilfinger & Berger AG (Construction
& Housing) 1,816,882
1,371 Hornbach Baumarkt AG
(Merchandising) 868,551
-------------
2,685,433
- ------------------------------------------------------------
France--6.1%
35,600 Lapeyre (Building & Related
Industries) 2,449,114
13,048 Manutan (Merchandising) 1,274,835
9,216 Plastic Omnium SA (Automotive
Parts) 1,002,546
12,800 Rexel (Electronics) 2,111,845
17,700 Sidel SA (Machinery & Engineering) 5,213,014
-------------
12,051,354
Hong Kong--7.5%
3,430,000 Alco Holdings, Ltd. (Electronics) $ 638,527
3,400,000 Chen Hsong Holdings (Machinery) 2,120,797
5,000,000 Esprit Asia Holdings, Ltd. (Retail) 1,906,843
4,043,795 First Pacific Co., Ltd.
(Multi-Industry) 3,790,094
504,000 Guoco Group, Ltd. (Financial
Services) 2,371,673
6,593,000 Hung Hing Printing Group, Ltd.
(Forestry Products) 1,167,687
1,350,000 Jinhui Shipping (Transportation) 1,667,065
4,682,000 Kong Wah Holdings, Ltd.
(Electronics) 496,327
194,000 Liu Chong Hing Investment, Ltd.
(Financial Services) 166,781
8,713,000 Techtronic Industries Co.
(Machinery & Engineering) 698,364
-------------
15,024,158
- ------------------------------------------------------------
India--2.6%
99,000 Bajaj Auto Ltd.* (GDR) (Consumer
Durable Goods) 2,895,750
196,000 Gujarat Narmada Valley Fertilizers*
(GDR) (Materials) 2,180,500
-------------
5,076,250
- ------------------------------------------------------------
Indonesia--1.3%
1,000,000 Putra Surya Per Kasa*
(Multi-Industry) 651,246
536,400 Sekar Laut* (Multi-Industry) 289,099
505,000 Semen Cibinong (Construction &
Housing) 1,587,694
-------------
2,528,039
- ------------------------------------------------------------
Italy--0.6%
283,600 Sasib S.P.A. (Machinery) 1,273,172
- ------------------------------------------------------------
Japan--5.9%
87,000 Aiwa Co. (Appliances & Household
Durables) 2,059,293
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 3 -----
<PAGE>
<PAGE>
Portfolio of Investments as PRUDENTIAL GLOBAL GENESIS FUND,
of May 31, 1995 INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Description Value
Shares Description Value (Note 1)
<C> <S> <C>
------------------------------------------------------------
Japan--(cont'd.)
90,000 Kato Denki Co. (Merchandising) $ 2,077,046
52,300 Misumi Corp. (Services) 1,497,912
57,000 Nichiei Co. (Financial Services) 3,575,359
77,080 Nissen Co., Ltd. (Merchandising) 2,435,690
-------------
11,645,300
- ------------------------------------------------------------
Korea--4.3%
44,406 Chung Ho Computer (Rights)
(Electronics) 3,222,709
3,840 Kyungwon Century Co. (Consumer
Durable Goods) 143,902
11,800 Mando Machinery Corp. (Automotive
Parts) 773,847
18,812 Mando Machinery Corp.* (Automotive
Parts) 705,450
12,238 Samsung Electronics Co.
(Electronics) 1,784,389
2,421 Samsung Electronics Co. (New)*
(Electronics) 349,805
35,300 Shinwon Corp. (Retail) 1,574,375
-------------
8,554,477
- ------------------------------------------------------------
Malaysia--5.2%
406,000 Federal Furniture Holdings*
(Appliances & Household Durables) 596,163
350,000 Gadek Berhad (Machinery) 2,044,376
678,000 Hock Hua Bank Berhad (Banking) 2,337,646
340,000 Minho Berhad (Forest Products) 576,482
406,500 Park May Berhad
(Transportation-Shipping) 927,499
374,000 Resorts World (Leisure & Tourism) 2,442,461
438,000 Technology Resources Industries
Berhad (Data Processing &
Reproduction) 1,430,211
-------------
10,354,838
- ------------------------------------------------------------
Netherlands--3.2%
65,000 Baan Co. N.V.* (Electronics) 1,527,500
43,400 Hagemeyer (Services) 1,879,797
48,400 Randstad Holdings (Business & Public
Services) $ 3,005,299
-------------
6,412,596
- ------------------------------------------------------------
New Zealand--1.0%
379,000 Fletcher Challenge, Ltd. (Forest
Products) 1,007,610
677,600 Fletcher Forestry, Ltd. (Forest
Products) 923,253
-------------
1,930,863
- ------------------------------------------------------------
Singapore--5.8%
341,000 Jurong Engineering, Ltd.
(Engineering) 1,960,474
289,000 Robinson & Co., Ltd. (Merchandising) 1,349,982
459,250 Sembawang Maritime, Ltd.
(Transportation-Shipping) 2,095,751
1,100,000 Singapore Finance, Ltd. (Financial
Services) 1,747,036
524,000 Tiger Medicals, Ltd. (Health &
Personal Care) 662,767
1,873,000 Wing Tai Holdings (Real Estate) 3,661,200
-------------
11,477,210
- ------------------------------------------------------------
Spain--3.7%
19,800 Acerinox S.A. (Metals-Steel) 2,394,757
18,900 Azkoyen S.A. (Machinery &
Engineering) 1,336,660
25,920 Cubiertas Y Mzov (Construction) 1,831,017
96,725 Pryca SA (Merchandising) 1,785,206
-------------
7,347,640
- ------------------------------------------------------------
Sweden--2.9%
193,600 Allgon AB (Telecommunications
Equipment) 3,831,126
34,650 Hennes & Mauritz B Free (Retail) 2,009,765
-------------
5,840,891
- ------------------------------------------------------------
Thailand--0.5%
49,201 Land & House Public Co., Ltd. (Real
Estate) 988,805
</TABLE>
- --------------------------------------------------------------------------------
- ----- 4 See Notes to Financial Statements.
<PAGE>
<PAGE>
Portfolio of Investments as PRUDENTIAL GLOBAL GENESIS FUND,
of May 31, 1995 INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Description Value
Shares Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
United Kingdom--6.6%
748,000 BBA Group (Industrial Components) $ 2,832,434
297,000 Capital Radio PLC (Broadcasting) 2,065,382
269,400 Dorling Kindersley Holdings, Ltd.
(Publishing) 1,646,751
1,100,000 Morrison Supermarkets (Food
Retailing) 2,497,460
275,000 Smith Holdings (Forest Products) 2,510,558
200,000 Spirax-Sarco Engineering PLC
(Machinery) 1,676,616
-------------
13,229,201
- ------------------------------------------------------------
United States--18.0%
159,500 Adflex Solutions, Inc.*
(Electronics) 3,967,562
118,800 ADVO, Inc. (Advertising) 2,524,500
71,500 AGCO Corp. (Machinery) 2,708,062
130,000 Borders Group, Inc.* (Retail) 1,901,250
71,100 Coram Healthcare Corp.* (Health
Care Services) 1,279,800
25,000 Electroglas, Inc.* (Electronics) 1,281,250
38,500 Fritz Companies, Inc.*
(Transportation-Shipping) 2,030,875
104,400 General Magic, Inc.* (Electronics) 1,174,500
74,800 Globalstar Telecommunications*
(Telecommunications) 991,100
91,800 Haverty Furniture Cos., Inc.
(Merchandising) 952,425
67,800 Holophone Corp.* (Electronics) 1,406,850
61,700 Jacobs Engineering Group, Inc.*
(Rights) (Machinery &
Engineering) 1,349,688
45,000 Maxis, Inc.* (Electronics) 877,500
60,000 Nexgen, Inc.* (Electronics) 1,440,000
122,100 NEXTEL Communications, Inc.*
(Telecommunications) 1,648,350
30,000 Open Environment Corp.*
(Electronics) 637,500
61,600 Qualcomm, Inc.* (Telecommunications
Equipment) 1,578,500
50,000 Sierra On-Line, Inc.* (Electronics) 906,250
172,700 Sinter Metals, Inc.* (Materials) 1,705,412
121,300 Spectrum Holobyte, Inc.*
(Electronics) 1,698,200
49,700 T. Rowe Price & Associates, Inc.
(Financial Services) 1,814,050
14,000 The Learning Co.* (Electronics) $ 418,250
126,500 Western National Corp. (Insurance) 1,502,188
-------------
35,794,062
-------------
Total common stocks
(cost US$154,643,274) 167,475,012
-------------
PREFERRED STOCKS--5.8%
- ------------------------------------------------------------
Federal Republic of Germany--2.4%
2,310 Hornbach Holding AG (Retail) 2,796,036
9,300 Jungheinrich (Machinery) 2,040,701
-------------
4,836,737
- ------------------------------------------------------------
Italy--0.2%
140,000 Sasib S.P.A. (Machinery) 349,872
- ------------------------------------------------------------
Finland--3.0%
130,400 Nokia Corp. (Telecommunications
Equipment) 6,051,114
- ------------------------------------------------------------
Korea--0.2%
8,560 Mando Machinery Corp. (Automotive
Parts) 282,377
-------------
Total preferred stocks
(cost US$6,027,200) 11,520,100
-------------
Warrants
WARRANTS*--0.2%
- ------------------------------------------------------------
Japan--0.2%
218 Nissen Co., Ltd. expiring Nov. '96
@ Y1,138 (Merchandising) 229,981
3,300 Nitori Co. expiring Feb. '98 @
Y2,724 (Merchandising) 189,623
-------------
419,604
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 5 -----
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND, INC.
Portfolio of Investments as of May 31, 1995
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Description Value
Shares Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Malaysia
200 Multi-Purpose Holdings Berhad
expiring May '99 @ MYR 4.00
(Multi-Industry) $ 165
-------------
Total warrants (cost US$693,914) 419,769
-------------
Principal
Amount
(000)
CORPORATE BONDS--0.4%
- ------------------------------------------------------------
India--0.3%
USD$500 Gujarat Ambuja Cement 3.50%,
6/30/99 (Building & Related
Industries) 682,500
- ------------------------------------------------------------
Singapore--0.1%
SED173,000 Sembawang Maritime, Ltd.
Convertible unsecured Loan Stock,
1.50%, 10/25/98
(Transportation/Shipping) 261,707
-------------
Total corporate bonds (cost
US$734,961) 944,207
-------------
Total long-term investments (cost
US$162,099,349) 180,359,088
SHORT-TERM INVESTMENT--0.3%
- ------------------------------------------------------------
Repurchase Agreement--0.3%
US$ 465 Joint Repurchase Agreement Account,
6.14%, 6/1/95 (cost US$465,000;
Note 5) 465,000
- ------------------------------------------------------------
Total Investments--90.9%
(cost US$162,564,349; Note 4) 180,824,088
Other assets in excess of
liabilities--9.1% 18,204,752
-------------
Net Assets--100% $ 199,028,840
-------------
-------------
- ---------------
* Non-income producing security.
GDR--Global Depository Receipt.
</TABLE>
- --------------------------------------------------------------------------------
- ----- 6 See Notes to Financial Statements.
<PAGE>
<PAGE>
Statement of Assets and Liabilities PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS May 31, 1995
Investments, at value (cost $162,564,349).................................................................... $180,824,088
Foreign currency, at value (cost $19,907,484)................................................................ 20,684,521
Receivable for Fund shares sold.............................................................................. 3,043,882
Receivable for investments sold.............................................................................. 742,893
Dividends and interest receivable............................................................................ 544,821
------------
Total assets.............................................................................................. 205,840,205
------------
Liabilities
Bank overdraft............................................................................................... 46,081
Payable for investments purchased............................................................................ 5,058,024
Payable for Fund shares reacquired........................................................................... 1,164,291
Accrued expenses and other liabilities....................................................................... 221,085
Due to Distributors.......................................................................................... 141,504
Due to Manager............................................................................................... 84,025
Withholding taxes payable.................................................................................... 65,869
Deferred foreign capital gains tax liability................................................................. 30,486
------------
Total liabilities......................................................................................... 6,811,365
------------
Net Assets................................................................................................... $199,028,840
------------
Net assets were comprised of:
Common stock, at par...................................................................................... $ 110,735
Paid-in capital in excess of par.......................................................................... 182,340,784
------------
182,451,519
Undistributed net investment income....................................................................... 39,159
Accumulated net realized loss on investment and foreign currency transactions............................. (2,476,878)
Net unrealized appreciation on investment and foreign currency transactions............................... 19,015,040
------------
Net assets, May 31, 1995..................................................................................... $199,028,840
------------
------------
Class A:
Net asset value and redemption price per share
($44,051,253 / 2,388,639 shares of common stock issued and outstanding)................................ $18.44
Maximum sales charge (5% of offering price)............................................................... .97
Maximum offering price to public.......................................................................... $19.41
Class B:
Net asset value, offering and redemption price per share
($153,670,148 / 8,611,533 shares of common stock issued and outstanding)............................... $17.84
Class C:
Net asset value, offering price and redemption price per share
($1,307,439 / 73,267 shares of common stock issued and outstanding).................................... $17.84
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 7 -----
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND, INC. PRUDENTIAL GLOBAL GENESIS FUND, INC.
Statement of Operations Statement of Changes in Net Assets
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
Net Investment Income May 31, 1995
<S> <C>
Income
Dividends (net of foreign withholding taxes
of $281,878)............................. $ 2,502,148
Interest.................................... 399,543
------------
Total income............................. 2,901,691
------------
Expenses
Management fee, net of waiver of
$1,033,673............................... 1,033,673
Distribution fee--Class A................... 81,076
Distribution fee--Class B................... 1,735,907
Distribution fee--Class C................... 7,135
Custodian's fees and expenses............... 550,000
Transfer agent's fees and expenses.......... 460,000
Reports to shareholders..................... 140,000
Registration fees........................... 75,000
Audit fees and expenses..................... 57,000
Legal fees.................................. 45,000
Directors' fees............................. 25,000
Miscellaneous............................... 24,613
------------
Total expenses........................... 4,234,404
------------
Net investment loss............................ (1,332,713)
------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions
Net realized gain (loss) on:
Investments................................. (1,007,408)
Foreign currency transactions............... 1,525,962
------------
518,554
------------
Net change in unrealized
appreciation/depreciation on:
Investments (net of deferred foreign capital
gains tax of $30,486).................... (4,330,028)
Foreign currency transactions............... 795,560
------------
(3,534,468)
------------
Net loss on investments and foreign
currencies.................................. (3,015,914)
------------
Net Decrease in Net Assets
Resulting from Operations...................... $ (4,348,627)
------------
------------
</TABLE>
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended May 31,
in Net Assets 1995 1994
<S> <C> <C>
Operations
Net investment loss............ $ (1,332,713) $ (960,289)
Net realized gain on investment
and foreign currency
transactions................ 518,554 1,075,107
Net change in unrealized
appreciation/depreciation of
investments and foreign
currencies.................. (3,534,468) 14,010,981
------------ ------------
Net increase (decrease) in net
assets resulting from
operations.................. (4,348,627) 14,125,799
------------ ------------
Net equalization credits.......... 104,845 --
------------ ------------
Dividends to shareholders in excess
of net investment income (Note 1)
Class A........................ (163,968) (49,552)
Class B........................ (365,083) (148,112)
Class C........................ (1,822) --
------------ ------------
(530,873) (197,664)
------------ ------------
Distributions to shareholders from
net realized gains on
investment and foreign currency
transactions
Class A........................ (46,273) (192,564)
Class B........................ (303,736) (1,141,075)
Class C........................ (370) --
------------ ------------
(350,379) (1,333,639)
------------ ------------
Fund share transactions (Net of
share conversions) (Note 6)
Net proceeds from shares
subscribed.................. 224,701,575 228,856,244
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions........... 831,367 1,453,440
Cost of shares reacquired...... (225,259,494) (78,594,707)
------------ ------------
Net increase in net assets from
Fund share transactions..... 273,448 151,714,977
------------ ------------
Total increase (decrease)......... (4,851,586) 164,309,473
Net Assets
Beginning of year................. 203,880,426 39,570,953
------------ ------------
End of year....................... $199,028,840 $203,880,426
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
- ----- 8 See Notes to Financial Statements.
<PAGE>
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
Prudential Global Genesis Fund, Inc., (the ``Fund''), is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Fund's investment objective is long-term growth of capital which it
seeks to achieve by investing primarily in equity securities of foreign and
domestic companies with market capitalizations of less than U.S. $1 billion, as
measured at time of purchase.
- ------------------------------------------------------------
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Security Valuation: Securities traded on an exchange are valued at the last
reported sales price on the primary exchange on which they are traded.
Securities traded in the over-the-counter market (including securities listed on
exchanges for which a last sales price is not available) are valued at the
average of the last reported bid and asked prices. Securities for which market
quotations are not readily available, including restricted securities, will be
valued at fair value as determined in good faith according to a pricing
procedure developed by the Investment Adviser under procedures established by
and under the general supervison of the Fund's Board of Directors.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost which approximates market value.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, take
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction including accrued interest.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and liabilities--at the
daily closing rates of exchange.
(ii) purchases and sales of investment securities, income and expenses--at the
rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented using the foreign exchange
rates and market values at the close of the fiscal year, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the fiscal year end. Similarly, the Fund
does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of long-term portfolio
securities sold during the fiscal year.
Net realized gain on foreign currency transactions of $1,525,962 represents net
foreign exchange gains from disposition of foreign currencies, currency gains or
losses realized between the trade and settlement dates on security transactions,
and the difference between the amounts of dividends, interest and foreign taxes
recorded on the Fund's books and the U.S. dollar equivalent amounts actually
received or paid. Net unrealized currency gains and losses from valuing foreign
currency denominated assets and liabilities (other than investments) at fiscal
year end exchange rates are reflected as a component of net unrealized
appreciation on foreign currencies.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of domestic origin as a result of,
among other factors, the possibility of political and economic instability and
the level of governmental supervision and the regulation of foreign securities
markets.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses from investment and
currency transactions are calculated on the identified cost basis. Dividend
income is recorded on the ex-dividend date and interest income is recorded on an
accrual basis.
Net investment income (other than distribution fees) and unrealized and realized
gains or losses are allocated daily to each class of shares of the Fund based
upon the relative proportion of net assets of each class at the beginning of the
day.
Equalization: The Fund follows the accounting practice known as equalization by
which a portion of the proceeds from sales and costs of reacquisitions of Fund
shares, equivalent on a per share basis to the amount of distributable net
investment income on the date of the transaction, is credited or charged to
undistributed net investment income. As a result,
- --------------------------------------------------------------------------------
9 -----
<PAGE>
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
undistributed net investment income per share is unaffected by sales or
reacquisitions of the Fund's shares.
Taxes: It is the Fund's policy to continue to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income tax provision is required.
Withholding taxes on foreign interest, dividends and (realized and unrealized)
capital gains have been provided for in accordance with the Fund's understanding
of the applicable country's tax rules and rates. In addition, certain countries
impose taxes on capital gains realized on the sale of portfolio securities, and
as such, taxes have been accrued on the unrealized gains on such securities.
Dividends and Distributions: The Fund expects to pay dividends of net investment
income and distributions of net realized capital gains, if any, at least
annually. Dividends and distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments of wash
sales, passive investment companies, and foreign currencies transactions.
Reclassification of Capital Accounts: The Fund accounts and reports for
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants' Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain, and
Return of Capital Distributions by Investment Companies. The effect of applying
this statement was to increase paid-in capital in excess of par by $814,628,
increase undistributed net investment income by $1,302,032, and increase
accumulated net realized loss on investments and foreign currency transactions
by $2,116,660 for the year ended May 31, 1995. Net ralized gains and net assets
were not affected by this change.
- ------------------------------------------------------------
Note 2. Agreements
The Fund has a management agreement with Prudential Mutual Fund Management, Inc.
(``PMF''). Pursuant to this agreement, PMF has responsibility for all investment
advisory services and supervises the subadviser's performance of such services.
PMF has entered into a subadvisory agreement with The Prudential Investment
Corporation (``PIC''); PIC furnishes investment advisory services in connection
with the management of the Fund. PMF pays for the services of PIC, the
compensation of officers of the Fund, occupancy and certain clerical and
bookkeeping costs of the Fund. The Fund bears all other costs and expenses.
The management fee paid PMF is computed daily and payable monthly, at an annual
rate of 1% of the average daily net assets of the Fund. For the year ended May
31, 1995, PMF voluntarily waived 50% of its management fee. For the year ended
May 31, 1995, management fees waived amounted to $1,033,673 ($.08 per share and
.50% of average net assets).
The Fund has distribution agreements with Prudential Mutual Fund Distributors,
Inc. (``PMFD''), which acts as the distributor of the Class A shares of the
Fund, and Prudential Securities Incorporated (``PSI''), which acts as
distributor of the Class B shares and Class C shares of the Fund (collectively
the ``Distributors''). The Fund compensates the Distributors for distributing
and servicing the Fund's Class A, Class B and Class C shares, pursuant to plans
of distribution, (the ``Class A, B and C Plans'') regardless of expenses
actually incurred by them. The distribution fees are accrued daily and payable
monthly.
On July 19, 1994, shareholders of the Fund approved amendments to the Class A
and Class B Plans under which the distribution plans became compensation plans,
effective August 1, 1994. Prior thereto, the distribution plans were
reimbursement plans, under which PMFD and PSI were reimbursed for expenses
actually incurred by them up to the amount permitted under the Class A and Class
B Plans, respectively. The Fund is not obligated to pay any prior or future
excess distribution costs (costs incurred by the Distributors in excess of
distribution fees paid by the Fund or contingent deferred sales charges received
by the Distributors). The rate of the distribution fees charged to Class A and
Class B shares of the Fund did not change under the amended plans of
distribution. The Fund began offering Class C shares on August 1, 1994.
Pursuant to the Class A, B and C Plans, the Fund compensates the Distributors
for distribution-related activities at an annual rate of up to .30 of 1%, 1% and
1%, of the average daily net assets of the Class A, B and C shares,
respectively. Such expenses under the Plans were .25% of 1%, 1% and 1% of the
average daily net assets of the Class A, B and C shares, respectively, for the
year ended May 31, 1995.
PMFD has advised the Fund that it has received approximately $204,200 in
front-end sales charges resulting from sales of Class A shares during the year
ended May 31, 1995. From these fees, PMFD paid such sales charges to PSI and
PRUCO Securities Corporation, affiliated broker-dealers, which in turn paid
commissions to salespersons and incurred other distribution costs.
- --------------------------------------------------------------------------------
- ----- 10
<PAGE>
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
PSI advised the Fund that for the year ended May 31, 1995, it received
approximately $688,100 in contingent deferred sales charges imposed upon certain
redemptions by Class B and Class C shareholders.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are (indirect)
wholly-owned subsidiaries of The Prudential Insurance Company of America.
(``Prudential'')
- ------------------------------------------------------------
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services, Inc. (``PMFS''), a wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and during the year ended May 31, 1995,
the Fund incurred fees of approximately $383,700 for the services of PMFS. As of
May 31, 1995, approximately $33,900 of such fees were due to PMFS. Transfer
agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to non-affiliates.
- ------------------------------------------------------------
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the fiscal year ended May 31, 1995 aggregated $130,201,707 and $128,457,695,
respectively.
The federal income tax basis of the Fund's investments at May 31, 1995 was
$162,565,337 and accordingly, net unrealized appreciation for federal income tax
purposes was $18,258,751 (gross unrealized appreciation--$34,332,598; gross
unrealized depreciation--$16,073,847).
For federal income tax purposes, the Fund has a capital loss carryforward as of
May 31, 1995 of approximately $607,000 which will expire in 2003. Accordingly,
no capital gains distribution is expected to be paid to shareholders until
future net gains have been realized in excess of such carryforward.
- ------------------------------------------------------------
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment companies, transfers
uninvested cash balances into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or federal agency obligations. At May 31, 1995, the Fund had a
0.05% undivided interest in the repurchase agreements in the joint account. The
undivided interest for the Fund represented $465,000 in principal amount. As of
such date, each repurchase agreement in the joint account and the value of the
collateral therefor were as follows:
Goldman, Sachs & Co., 6.14%, in the principal amount of $310,000,000, repurchase
price $310,052,872, due 6/1/95. The value of the collateral including accrued
interest is $316,254,589.
Bear, Stearns & Co., 6.125%, in the principal amount of $280,000,000, repurchase
price $280,047,639, due 6/1/95. The value of the collateral including accrued
interest is $285,803,012.
CS First Boston Corporation, 6.14%, in the principal amount of $280,000,000,
repurchase price $280,047,756, due 6/1/95. The value of the collateral including
accrued interest is $285,702,358.
UBS Securities Inc., 6.15%, in the principal amount of $100,000,000, repurchase
price $100,017,083, due 6/1/95. The value of the collateral including accrued
interest is $102,000,930.
- ------------------------------------------------------------
Note 6. Capital
The Fund offers Class A, Class B and Class C shares. Class A shares are sold
with a front-end sales charge of up to 5%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a contingent
deferred sales charge of 1% during the first year. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately seven
years after purchase commencing in February 1995.
The Fund has authorized 500 million shares of common stock at $.01 par value per
share equally divided into three classes, designated Class A, Class B and Class
C common stock.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------------- ---------- ------------
<S> <C> <C>
Year ended May 31, 1995:
Shares sold.......................... 4,919,941 $ 87,907,236
Shares issued in reinvestment of
dividends and distributions........ 10,178 190,928
Shares reacquired.................... (4,974,729) (89,063,687)
---------- ------------
Net decrease in shares
outstanding before conversion...... (44,610) (965,523)
Shares issued upon conversion from
Class B............................ 874,774 14,922,433
---------- ------------
Net increase in shares
outstanding........................ 830,164 $ 13,956,910
---------- ------------
---------- ------------
Year ended May 31, 1994:
Shares sold.......................... 3,021,009 $ 55,660,417
Shares issued in reinvestment of
dividends and distributions........ 12,903 226,280
Shares reacquired.................... (1,699,370) (32,003,995)
---------- ------------
Net increase in shares
outstanding........................ 1,334,542 $ 23,882,702
---------- ------------
---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
11 -----
<PAGE>
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Shares Amount
- ------------------------------------- ---------- ------------
Year ended May 31, 1995:
<S> <C> <C>
Shares sold.......................... 7,639,531 $135,068,716
Shares issued in reinvestment of
dividends and distributions........ 36,014 638,262
Shares reacquired.................... (7,748,055) (135,790,426)
---------- ------------
Net decrease in shares
outstanding before conversion...... (72,510) (83,448)
Shares reacquired upon conversion
into Class A....................... (902,163) (14,922,433)
---------- ------------
Net decrease in shares
outstanding........................ (974,673) $(15,005,881)
---------- ------------
---------- ------------
Year ended May 31, 1994:
Shares sold.......................... 9,682,744 $173,195,827
Shares issued in reinvestment of
dividends and distributions........ 71,710 1,227,160
Shares reacquired.................... (2,588,620) (46,590,712)
---------- ------------
Net increase in shares
outstanding........................ 7,165,834 $127,832,275
---------- ------------
---------- ------------
<CAPTION>
Class C
- -------------------------------------
<S> <C> <C>
August 1, 1994* through
May 31, 1995:
Shares sold.......................... 96,874 $ 1,725,623
Shares issued in reinvestment of
dividends and distributions........ 127 2,177
Shares reacquired.................... (23,734) (405,381)
---------- ------------
Net increase in shares
outstanding........................ 73,267 $ 1,322,419
---------- ------------
---------- ------------
- ---------------
* Commencement of offering of Class C shares.
</TABLE>
- --------------------------------------------------------------------------------
- ----- 12
<PAGE>
<PAGE>
Financial Highlights PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class B
---------------------------------------------------- ---------------------------------
Year Ended May 31, Year Ended May 31,
---------------------------------------------------- ---------------------------------
PER SHARE OPERATING PERFORMANCE: 1995 1994 1993 1992 1991 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C> <C>
------- ------- ------ ------ ------ -------- -------- -------
Net asset value(c), beginning of
period............................. $ 18.75 $ 15.34 $12.62 $11.95 $12.62 $ 18.22 $ 14.93 $ 12.38
------- ------- ------ ------ ------ -------- -------- -------
Income from investment operations
Net investment income (loss)(b)...... -- (.03) .10 .02 (.03) (.13) (.16) --
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions.............. (.21) 3.83 2.62 .65 (.64) (.19) 3.74 2.55
------- ------- ------ ------ ------ -------- -------- -------
Total from investment
operations..................... (.21) 3.80 2.72 .67 (.67) (.32) 3.58 2.55
------- ------- ------ ------ ------ -------- -------- -------
Less distributions
Dividends from net investment
income............................. -- (.15) -- -- -- -- (.05) --
Dividends in excess of net investment
income............................. (.08) -- -- -- -- (.03) -- --
Distributions paid to shareholders
from net realized gains on
investment and foreign currency
transactions....................... (.02) (.24) -- -- -- (.03) (.24) --
------- ------- ------ ------ ------ -------- -------- -------
Total distributions............... (.10) (.39) -- -- -- (.06) (.29) --
------- ------- ------ ------ ------ -------- -------- -------
Net asset value, end of period....... $ 18.44 $ 18.75 $15.34 $12.62 $11.95 $ 17.84 $ 18.22 $ 14.93
------- ------- ------ ------ ------ -------- -------- -------
TOTAL RETURN (e):.................... (0.95)% 25.09% 21.55% 5.61% (5.31)% (1.73)% 24.16% 20.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)...... $44,051 $29,221 $3,435 $3,829 $4,059 $153,670 $174,659 $36,136
Average net assets (000)............. $32,430 $16,909 $3,106 $3,771 $2,569 $173,591 $102,451 $31,561
Ratios to average net assets:(d)
Expenses, including distribution
fees(b)........................ 1.42% 1.48% 1.49% 1.50% 2.72% 2.17% 2.25% 2.29%
Expenses, excluding distribution
fees(b)........................ 1.17% 1.25% 1.29% 1.30% 2.52% 1.17% 1.25% 1.29%
Net investment income (loss)(b)... 0.02% (0.17)% .79% .19% (.61)% (0.77)% (0.91)% (.01)%
Portfolio turnover rate.............. 64% 31% 67% 57% 95% 64% 31% 67%
- ---------------
<CAPTION>
Class C
August 1,
Through
May 31,
PER SHARE OPERATING PERFORMANCE: 1992 1991 1995
<S> <C> <C> <C>
------- ------- ---------
Net asset value(c), beginning of
period............................. $ 11.82 $ 12.58 $ 18.44
------- ------- ---------
Income from investment operations
Net investment income (loss)(b)...... (.07) (.15) (.12)
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions.............. .63 (.61) (.44)
------- ------- ---------
Total from investment
operations..................... .56 (.76) (.56)
------- ------- ---------
Less distributions
Dividends from net investment
income............................. -- -- --
Dividends in excess of net investment
income............................. -- -- (.03)
Distributions paid to shareholders
from net realized gains on
investment and foreign currency
transactions....................... -- -- (.01)
------- ------- ---------
Total distributions............... -- -- (.04)
------- ------- ---------
Net asset value, end of period....... $ 12.38 $ 11.82 $ 17.84
------- ------- ---------
TOTAL RETURN (e):.................... 4.74% (6.04)% (2.90)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)...... $35,644 $40,200 $ 1,307
Average net assets (000)............. $37,236 $37,689 $ 862
Ratios to average net assets:(d)
Expenses, including distribution
fees(b)........................ 2.30% 3.48% 2.27%(a)
Expenses, excluding distribution
fees(b)........................ 1.30% 2.48% 1.27%(a)
Net investment income (loss)(b)... (.57)% (1.45)% (0.90)%(a)
Portfolio turnover rate.............. 57% 95% 64%
- ---------------
</TABLE>
* Commencement of offering of Class C shares.
(a) Annualized.
(b) Net of expense subsidies and/or fee waivers (all reported periods
except 1991).
(c) Calculated based upon average shares outstanding during fiscal
period except 1991.
(d) Because of the recent commencement of its offering, the ratios for
Class C shares are not necessarily comparable to that of Class A or
Class B shares and are not necessarily indicative of future ratios.
(e) Total return does not consider the effects of sales loads. Total
return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends and distributions. Total returns for
periods of less than a full year are not annualized.
- --------------------------------------------------------------------------------
13 -----
<PAGE>
Report of Independent Accountants PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
Prudential Global Genesis Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Prudential Global Genesis Fund,
Inc. (the ``Fund'') at May 31, 1995, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
``financial statements'') are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at May 31,
1995 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
July 24, 1995
Tax Information PRUDENTIAL GLOBAL GENESIS FUND, INC.
- --------------------------------------------------------------------------------
We are required by the Internal Revenue Code to advise you within 60 days of the
Fund's fiscal year end (May 31, 1995) as to the federal income tax status of
dividends paid by the Fund during such fiscal year. Accordingly, we are advising
you that during its fiscal year ended May 31, 1995 the Fund paid distributions
for Class A shares totalling $0.135 per share, which was comprised of net
investment income and short-term capital gains which are taxable as ordinary
income. The Fund paid distributions for Class B shares totalling $0.065 per
share, which was comprised of net investment income and short-term capital gains
which are taxable as ordinary income. The Fund paid distributions for class C
shares totalling $0.065 per share, which was comprised of net investment income
and short-term capital gains which are taxable as ordinary income. Further, we
wish to advise you that 12.5% of the ordinary income dividends paid in the
fiscal year ended May 31, 1995 qualified for the corporate dividends received
deduction available to corporate taxpayers.
In January 1996 you will be advised on IRS Form 1099 DIV or substitute Form 1099
DIV, as to the federal tax status of the distributions received by you in
calendar 1995. The amounts that will be reported on such Form 1099 DIV will be
the amounts to use on your federal income tax return and will differ from the
amounts which we must report for the Fund's fiscal year ended May 31, 1995.
- --------------------------------------------------------------------------------
- ----- 14
<PAGE>
