United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-08201
AllianceBernstein Greater China '97 Fund, Inc.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Edmund P. Bergan, Jr.
Alliance Capital Management, L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: July 31, 2003
Date of reporting period: July 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] AllianceBernstein(SM)
Investment Research and Management
AllianceBernstein Greater China '97 Fund
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International
Regional Annual Report--July 31, 2003
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Investment Products Offered
---------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
---------------------------
This shareholder report must be preceded or accompanied by the Fund's prospectus
for individuals who are not current shareholders of the Fund.
You may obtain a description of the Fund's proxy voting policies and procedures,
without charge, upon request by visiting Alliance Capital's web site at
www.investor.alliancecapital.com or on the Securities and Exchange Commision's
web site at http://www.sec.gov, or by calling Alliance Capital at (800)
227-4618.
AllianceBernstein Investment Research and Management, Inc., the principal
underwriter of the AllianceBernstein mutual funds and an affiliate of Alliance
Capital Management L.P., the manager of the funds, is a member of the NASD.
September 30, 2003
Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Greater China '97 Fund (the "Fund") for the annual reporting
period ended July 31, 2003.
Investment Objective and Policies
This open-end fund is a non-diversified management investment company that seeks
long-term capital appreciation by investing at least 80% of its total assets in
equity securities issued by Greater China companies ("Greater China" refers to
the People's Republic of China ("China"), the Hong Kong Special Administrative
Region ("Hong Kong") and the Republic of China ("Taiwan")).
Investment Results
The following table provides the performance results for the Fund for the six-
and 12-month periods ended July 31, 2003, relative to its benchmarks, the Morgan
Stanley Capital International (MSCI) Indices (China, Hong Kong and Taiwan) and
the Lipper China Region Funds Average (the "Lipper Average"). Funds in the
Lipper Average generally have similar investment objectives to the Fund.
INVESTMENT RESULTS*
Periods Ended July 31, 2003
--------------------
Returns
--------------------
6 Months 12 Months
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AllianceBernstein Greater China '97 Fund
Class A 22.84% 18.35%
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Class B 22.41% 17.32%
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Class C 21.95% 17.05%
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MSCI China Index 23.82% 18.00%
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MSCI Hong Kong Index 9.44% -1.01%
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MSCI Taiwan Index 12.55% 8.61%
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Lipper China Region Funds Average 21.68% 13.21%
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* The Fund's investment results are for the periods shown and are based on
the net asset value (NAV) of each class of shares as of July 31, 2003.
Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. All fees and
expenses related to the operation of the Fund have been deducted, but no
adjustment has been made for sales charges that may apply when shares are
purchased or redeemed. Returns for Advisor Class shares will vary due to
different expenses associated with this class. Returns for the Fund
include the reinvestment of any distributions paid during each period.
During the reporting period, the Advisor waived a portion of its advisory
fee or reimbursed the Fund for a portion of its expenses to the extent
necessary to limit the Fund's expenses to 2.50% for Class A, 3.20% for
Class B, 3.20% for Class C and 2.20% for Advisor Class. This waiver
extends through the Fund's current fiscal year and may be extended by the
Advisor for additional one-year terms. Without the waiver, the Fund's
expenses would have been higher and its performance would have been lower
than that shown above. Past performance is no guarantee of future results.
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ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 1
The Morgan Stanley Capital International (MSCI) China Index, MSCI Hong
Kong Index and MSCI Taiwan Index are market capitalization-weighted
indices of companies located in their respective countries, and are
respectively comprised of 46, 34 and 90 companies as of the period ended
July 31, 2003. The Lipper China Region Funds Average represents funds that
invest in equity securities whose primary trading markets or operations
are concentrated in the China region or in a single country within this
region. These funds generally have similar investment objectives to the
Fund, although investment policies for the various funds may differ. For
the six- and 12-month periods ended July 31, 2003, the Lipper Average
included 22 funds for each of the respective periods. All comparative
indices and the average are unmanaged and reflect no fees or expenses. An
investor cannot invest directly in an index or average, and its results
are not indicative of any specific investment, including AllianceBernstein
Greater China '97 Fund.
Additional investment results appear on page 5.
During the six- and 12-month periods ended July 31, 2003, the Fund outperformed
its peer group of funds, as represented by the Lipper Average. This was mainly
due to the Fund's overweight positions in cyclicals, consumer and selected
technology counters. Additionally, we increased the Fund's exposure to China and
Taiwan at the expense of Hong Kong during the period under review.
Market Review and Investment Strategy
During the 12-month reporting period, the MSCI China and Taiwan indices posted
positive gains. For the six-month period ended July 31, 2003, the MSCI China,
Hong Kong and Taiwan indices all posted positive returns. Returns were impacted
by a variety of factors. The Greater China stock markets recovered strongly from
the impact of SARS on the region and finished strongly during the second quarter
of the year. Stocks were helped by a stronger U.S. equity market and expectation
of further interest rate cuts by the U.S. Federal Reserve. China-related stocks
were strong performers due to robust economic growth. The Taiwan stock market
also benefited from a rebound in the technology sector.
During the reporting period, we overweighted the Fund's cyclicals, consumer and
selected technology counters. At the country level, our strategy has been to
increase the Fund's exposure to China and Taiwan, due to their geared exposure
to the U.S. economy, at the expense of Hong Kong.
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2 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Performance Update
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PERFORMANCE UPDATE
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
GROWTH OF A $10,000 INVESTMENT
9/3/97* TO 7/31/03
AllianceBernstein Greater China '97 Fund Class A: $8,630
MSCI Hong Kong Index: $7,360
MSCI Taiwan Index: $4,993
MSCI China Index: $2,115
AllianceBernstein Greater
China '97 Fund Class A MSCI China Index MSCI Hong Kong Index MSCI Taiwan Index
9/3/97* $9,579 $10,000 $10,000 $10,000
7/31/98 $4,675 $ 2,943 $ 5,176 $ 5,832
7/31/99 $7,920 $ 4,565 $ 9,350 $ 7,051
7/31/00 $9,987 $ 3,587 $10,885 $ 8,168
7/31/01 $8,161 $ 2,219 $ 8,395 $ 4,210
7/31/02 $7,292 $ 1,792 $ 7,435 $ 4,597
7/31/03 $8,630 $ 2,115 $ 7,360 $ 4,993
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Greater China '97 Fund Class A shares (from 9/3/97* to
7/31/03) as compared to the performance of appropriate indices. Returns do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The chart reflects the deduction
of the maximum 4.25% sales charge from the initial $10,000 investment in the
Fund and assumes the reinvestment of dividends and capital gains. Performance
for Class B, Class C and Advisor Class shares will vary from the results shown
above due to differences in expenses charged to these classes. Past performance
is not indicative of future results, and is not representative of future gain or
loss in capital value or dividend income.
The unmanaged Morgan Stanley Capital International (MSCI) China Index, MSCI Hong
Kong Index and MSCI Taiwan Index are market capitalization-weighted indices of
companies located in their respective countries, and are respectively comprised
of 46, 34 and 90 companies as of July 31, 2003.
When comparing AllianceBernstein Greater China '97 Fund to the indices shown
above, you should note that no charges or expenses are reflected in the
performance of the indices. An investor cannot invest directly in an index, and
its results are not indicative of any specific investment, including
AllianceBernstein Greater China '97 Fund.
*Fund data is from the Fund's Class A share inception date of 9/3/97. Returns
for the benchmarks are from the closest month end to the Fund's inception date;
therefore the benchmark data is from 8/31/97.
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ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 3
Portfolio Summary
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PORTFOLIO SUMMARY
July 31, 2003
INCEPTION DATES PORTFOLIO STATISTICS
Class A Shares Net Assets ($mil): $13.8
9/3/97
Class B Shares
9/3/97
Class C Shares
9/3/97
COUNTRY BREAKDOWN
78.8% Hong Kong
15.8% Taiwan
4.6% Singapore [PIE CHART OMITTED]
0.4% United States
0.4% United Kingdom
SECTOR BREAKDOWN
15.3% Basic Industry
12.6% Technology
12.3% Finance
11.8% Capital Goods
9.6% Consumer Manufacturing [PIE CHART OMITTED]
9.1% Transportation
8.5% Consumer Staples
6.3% Consumer Services
6.2% Energy
5.2% Multi-Industry
3.1% Health Care
All data as of July 31, 2003. The Fund's country and sector breakdowns are
expressed as a percentage of total investments and may vary over time.
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4 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Investment Results
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INVESTMENT RESULTS
AVERAGE ANNUAL RETURNS AS OF JULY 31, 2003
Class A Shares
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Without Sales Charge With Sales Charge
1 Year 18.35% 13.25%
5 Year 13.05% 12.09%
Since Inception* -1.75% -2.46%
Class B Shares
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Without Sales Charge With Sales Charge
1 Year 17.32% 13.32%
5 Years 12.18% 12.18%
Since Inception* -2.50% -2.50%
Class C Shares
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Without Sales Charge With Sales Charge
1 Year 17.05% 16.05%
5 Years 12.13% 12.13%
Since Inception* -2.54% -2.54%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT QUARTER-END (JUNE 30, 2003)
Class A Class B Class C
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1 Year -4.02% -4.35% -1.63%
5 Years 7.26% 7.38% 7.33%
Since Inception* -4.26% -4.28% -4.32%
The Fund's investment results represent average annual returns. Returns do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The returns reflect reinvestment
of dividends and/or capital gains distributions in additional shares without and
with the effect of the 4.25% maximum front-end sales charge for Class A or
applicable contingent deferred sales charge for Class B (4% year 1, 3% year 2,
2% year 3, 1% year 4); and for Class C shares (1% year 1). Returns for Class A
shares do not reflect the imposition of the 1 year, 1% contingent deferred sales
charge for accounts over $1,000,000. Returns for Advisor Class shares will vary
due to different expenses associated with this class.
Since the Fund invests in foreign currency denominated securities, fluctuations
may be magnified by changes in foreign exchange rates. The Fund will invest
substantially all of its assets in Greater China companies and is subject to
greater risk than would a fund with a more diversified portfolio. Investments in
Greater China companies entail risks different from, and in certain cases,
greater than, risks associated with investments in the U.S. or in other
international markets.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception date: 9/3/97, all share classes.
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ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 5
Ten Largest Holdings
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TEN LARGEST HOLDINGS
July 31, 2003
Percent of
Company U.S. $ Value Net Assets
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China Shipping Development Co.,
Ltd. Cl. H $ 484,665 3.5%
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Anhui Conch Cement Co., Ltd. Cl. H 415,427 3.0
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Maanshan Iron & Steel Co., Ltd. Cl. H 409,273 3.0
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Huaneng Power International, Inc. Cl. H 407,734 3.0
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Angang New Steel Co., Ltd. Cl. H 357,729 2.6
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Tsingtao Brewery Co., Ltd. Cl. H 354,844 2.6
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Aluminum Corp. of China, Ltd. Cl. H 353,882 2.6
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GP Batteries International, Ltd. 299,551 2.2
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Denway Motors, Ltd. 294,421 2.1
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Sinopec Shanghai Petrochemical Co.,
Ltd. Cl. H 291,697 2.1
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$3,669,223 26.7%
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6 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Portfolio of Investments
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PORTFOLIO OF INVESTMENTS
July 31, 2003
Company Shares U.S. $ Value
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COMMON STOCKS & OTHER INVESTMENTS-93.9%
Hong Kong-73.9%
Aluminum Corp. of China, Ltd. Cl. H ............ 1,200,000 $ 353,882
Angang New Steel Co., Ltd. Cl. H ............... 1,200,000 357,729
Anhui Conch Cement Co., Ltd. Cl. H ............. 600,000 415,427
ASM Pacific Technology, Ltd. ................... 26,500 84,945
Baltrans Holdings, Ltd. ........................ 354,000 130,494
Brilliance China Automotive Holdings, Ltd. ..... 750,000 228,389
Chen Hsong Holdings, Ltd. ...................... 300,000 158,670
Cheung Kong (Holdings), Ltd. ................... 40,000 262,847
China Merchants Holdings International Co., Ltd. 300,000 275,028
China Mobile (Hong Kong), Ltd. ................. 70,000 179,954
China National Aviation Co., Ltd. .............. 560,000 82,573
China Petroleum and Chemical Corp. Cl. H ....... 650,000 177,101
China Pharmaceutical Group, Ltd. ............... 796,000 267,912
China Resources Enterprise, Ltd. ............... 88,000 79,547
China Shipping Development Co., Ltd. Cl. H ..... 1,200,000 484,665
China Southern Airlines Co., Ltd. Cl. H(a) ..... 300,000 91,355
Citic International Financial Holdings, Ltd. ... 312,333 95,111
CNOOC, Ltd. .................................... 130,000 224,190
COFCO International, Ltd. ...................... 400,000 158,991
Coslight Technology International Group, Ltd. .. 300,000 102,895
Denway Motors, Ltd. ............................ 550,000 294,421
Esprit Holdings, Ltd. .......................... 80,000 205,149
Fountain Set (Holdings), Ltd. .................. 100,000 89,112
Fujikon Industrial Holdings, Ltd. .............. 132,000 27,418
Hang Seng Bank., Ltd. .......................... 7,900 85,086
Harbin Brewery Group, Ltd.(a) .................. 400,000 141,040
Harbin Power Equipment Co., Ltd. Cl. H ......... 600,000 102,318
HKR International, Ltd.(a) ..................... 600,000 116,166
Hong Kong Exchanges & Clearing, Ltd. ........... 120,000 195,405
Hongkong.com Corp.(a) .......................... 1,200,000 141,553
Hopewell Highway Infrasctructure, Ltd.
Warrants, expiring 8/05/06(a) ............... 22,000 -0-
Hopewell Holdings, Ltd. ........................ 220,000 234,127
HSBC Holdings Plc .............................. 23,200 284,080
Huaneng Power International, Inc. Cl. H ........ 300,000 407,734
Hutchison Whampoa, Ltd. ........................ 13,200 86,317
Industrial and Commercial Bank of China
(Asia), Ltd. ................................ 120,000 117,704
Jiangsu Expressway Co., Ltd. Cl. H ............. 250,000 103,376
Jiangxi Copper Co., Ltd. Cl. H ................. 400,000 84,624
Jingwei Textile Machinery Co., Ltd. Cl. H ...... 700,000 258,039
Kingdee International Software Group Co., Ltd. . 228,000 58,175
Li & Fung, Ltd. ................................ 62,000 87,842
Lianhua Supermarket Holdings Co., Ltd. Cl. H(a) 250,000 150,656
Maanshan Iron & Steel Co., Ltd. Cl. H .......... 1,900,000 409,273
PetroChina Co., Ltd. Cl. H ..................... 392,000 116,858
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ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 7
Portfolio of Investments
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Company Shares U.S. $ Value
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Prosten Technology Holdings, Ltd.
Warrants, expiring 1/08/04(a) ............... 162,180 $ 208
Shangri-La Asia, Ltd. .......................... 150,000 119,243
Shun Tak Holdings, Ltd. ........................ 442,000 143,098
Sinopec Shanghai Petrochemical Co.,
Ltd. Cl. H .................................. 1,300,000 291,697
Sinopec Zhenhai Refining and Chemical Co.,
Ltd. Cl. H .................................. 350,000 173,896
Sinotrans, Ltd. Cl. H(a) ....................... 350,000 109,947
Swire Pacific, Ltd. Cl. A ...................... 8,500 38,908
The Wharf (Holdings), Ltd. ..................... 17,000 33,241
Tom.com, Ltd.(a) ............................... 450,000 121,166
Tong Ren Tang Technologies Co., Ltd. Cl. H ..... 80,000 134,373
TPV Technology, Ltd. ........................... 250,000 96,164
Tsingtao Brewery Co., Ltd. Cl. H ............... 450,000 354,844
Wheelock and Co., Ltd. ......................... 200,000 180,788
Wing Hang Bank, Ltd. ........................... 17,500 69,783
Yue Yuen Industrial (Holdings), Ltd. ........... 70,000 201,944
Zhejiang Expressway Co., Ltd. Cl. H ............ 200,000 94,240
-----------
10,171,718
-----------
Singapore-4.3%
Autron Corp., Ltd.(a) .......................... 2,000,000 289,888
GP Batteries International, Ltd. ............... 170,000 299,551
-----------
589,439
-----------
Taiwan-14.9%
Asustek Computer, Inc.(a) ...................... 40,000 130,384
Basso Industry Corp. ........................... 75,000 137,515
China Motor Co., Ltd. .......................... 41,000 80,544
Compal Electronics, Inc. ....................... 149,500 213,198
EVA Airways Corp.(a) ........................... 200,270 68,777
Hon Hai Precision Industry Co., Ltd.(a) ........ 37,800 172,718
Kaulin Manufacturing Co., Ltd.(a) .............. 70,000 128,347
MediaTek, Inc. ................................. 13,000 155,501
Nan Ya Plastics Corp. .......................... 105,894 118,653
Nien Made Enterprise Co., Ltd. ................. 50,240 89,192
Quanta Computer, Inc. .......................... 2,970 7,001
SinoPac Holdings Co. ........................... 137,920 48,168
Soft-World International Corp. ................. 11,522 56,336
Taiwan Semiconductor Manufacturing Co., Ltd.(a) 108,914 187,018
United Microelectronics Corp.(a) ............... 204,812 146,039
Wan Hai Lines, Ltd.(a) ......................... 130,000 129,395
Wintek Corp. ................................... 116,480 89,835
Yieh Phui Enterprise ........................... 100,000 87,311
-----------
2,045,932
-----------
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6 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Portfolio of Investments
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Company Shares U.S. $ Value
- -----------------------------------------------------------------------------
United Kingdom-0.4%
Cathay Financial Holding Co., Ltd. (GDR)(a) .... 4,200 $ 48,678
-----------
United States-0.4%
Chunghwa Telecom Co., Ltd. (ADR) ............... 4,100 56,539
-----------
Total Investments-93.9%
(cost $10,140,363) .......................... 12,912,306
Other assets less liabilities-6.1% ............. 842,286
-----------
Net Assets-100% ................................ $13,754,592
===========
(a) Non-income producing security.
Glossary of terms:
ADR-American Depositary Receipt
GDR-Global Depositary Receipt
See notes to financial statements.
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ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 9
Statement of Assets & Liabilities
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STATEMENT OF ASSETS & LIABILITIES
July 31, 2003
Assets
Investments in securities, at value (cost $10,140,363) ....... $ 12,912,306
Cash ......................................................... 256,341
Foreign cash, at value (cost $50,997) ........................ 51,262
Receivable for capital stock sold ............................ 603,887
Receivable from Adviser ...................................... 65,537
Dividends receivable ......................................... 22,014
Receivable for investment securities sold .................... 2,716
------------
Total assets ................................................. 13,914,063
------------
Liabilities
Payable for investment securities purchased .................. 48,846
Distribution fee payable ..................................... 7,663
Payable for capital stock redeemed ........................... 1,893
Accrued printing ............................................. 36,157
Accrued custody .............................................. 31,287
Accrued legal ................................................ 21,374
Other accrued expenses ....................................... 12,251
------------
Total liabilities ............................................ 159,471
------------
Net Assets ................................................... $ 13,754,592
============
Composition of Net Assets
Capital stock, at par ........................................ $ 1,598
Additional paid-in capital ................................... 13,217,933
Undistributed net investment income .......................... 16,773
Accumulated net realized loss on investment
and foreign currency transactions ......................... (2,253,909)
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities ....... 2,772,197
------------
$ 13,754,592
============
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($3,958,595/449,036 shares of capital stock issued
and outstanding) .......................................... $8.82
Sales charge--4.25% of public offering price ................. .39
-----
Maximum offering price ....................................... $9.21
=====
Class B Shares
Net asset value and offering price per share
($4,631,658/543,690 shares of capital stock issued
and outstanding) .......................................... $8.52
=====
Class C Shares
Net asset value and offering price per share
($4,855,715/570,951 shares of capital stock issued
and outstanding) .......................................... $8.50
=====
Advisor Class Shares
Net asset value, redemption and offering price per share
($308,624/34,517 shares of capital stock issued and
outstanding) .............................................. $8.94
=====
See notes to financial statements.
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10 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Statement of Operations
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Year Ended July 31, 2003
Investment Income
Dividends (net of foreign taxes
withheld of $5,849) ......................... $ 218,517
Interest ....................................... 2,879 $ 221,396
------------
Expenses
Advisory fee ................................... 71,762
Distribution fee--Class A ...................... 6,507
Distribution fee--Class B ...................... 31,852
Distribution fee--Class C ...................... 15,929
Custodian ...................................... 155,586
Administrative ................................. 135,000
Audit and legal ................................ 96,093
Registration ................................... 61,462
Transfer agency ................................ 52,907
Printing ....................................... 43,713
Directors' fees ................................ 14,950
Amortization of organization expenses .......... 13,934
Miscellaneous .................................. 688
------------
Total expenses ................................. 700,383
Less: expense waived and reimbursed
by the Adviser (see Note B) ................. (488,169)
Less: expense offset arrangement
(see Note B) ................................ (51)
------------
Net expenses ................................... 212,163
-----------
Net investment income .......................... 9,233
-----------
Realized and Unrealized Gain (Loss)
on Investment and Foreign Currency
Transactions
Net realized gain (loss) on:
Investment transactions ..................... (844,010)
Foreign currency transactions ............... 563
Net change in unrealized
appreciation/depreciation of:
Investments ................................. 2,847,974
Foreign currency denominated assets
and liabilities ............................. 132
-----------
Net gain on investment and
foreign currency transactions ............... 2,004,659
-----------
Net Increase in Net Assets from
Operations ................................. $ 2,013,892
===========
See notes to financial statements.
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ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 11
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
July 31, July 31,
2003 2002
============ ===========
Increase (Decrease) in Net Assets
from Operations
Net investment income ........................ $ 9,233 $ 43,772
Net realized loss on investment
and foreign currency transactions ......... (843,447) (839,587)
Net change in unrealized
appreciation/depreciation
of investments and foreign
currency denominated assets
and liabilities ........................... 2,848,106 184,928
------------ -----------
Net increase (decrease) in net assets
from operations ........................... 2,013,892 (610,887)
Dividends to Shareholders from
Net investment income
Class A ................................... (23,187) -0-
Class B ................................... (14,269) -0-
Class C ................................... (5,705) -0-
Advisor Class ............................. (2,310) -0-
Capital Stock Transactions
Net increase ................................. 4,769,657 1,091,599
------------ -----------
Total increase ............................... 6,738,078 480,712
Net Assets
Beginning of period .......................... 7,016,514 6,535,802
------------ -----------
End of period (including undistributed
net investment income of $16,773 and
$52,448 at July 31, 2003 and 2002,
respectively) ............................. $ 13,754,592 $ 7,016,514
============ ===========
See notes to financial statements.
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12 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
July 31, 2003
NOTE A
Significant Accounting Policies
AllianceBernstein Greater China '97 Fund, Inc. (the "Fund"), formerly Alliance
Greater China '97 Fund, Inc., was organized as a Maryland corporation on April
30, 1997 and is registered under the Investment Company Act of 1940 as a
non-diversified, open-end management investment company. The Fund offers Class
A, Class B, Class C and Advisor Class shares. Class A shares are sold with an
initial sales charge of up to 4.25% for purchases not exceeding $1,000,000. With
respect to purchases of $1,000,000 or more, Class A shares redeemed within one
year of purchase may be subject to a contingent deferred sales charge of 1%.
Class B shares are sold with a contingent deferred sales charge which declines
from 4% to zero depending on the period of time the shares are held. Class B
shares will automatically convert to Class A shares eight years after the end of
the calendar month of purchase. Class C shares are subject to a contingent
deferred sales charge of 1% on redemptions made within the first year after
purchase. Advisor Class shares are sold without an initial or contingent
deferred sales charge and are not subject to ongoing distribution expenses.
Advisor Class shares are offered to investors participating in fee-based
programs and to certain retirement plan accounts. All four classes of shares
have identical voting, dividend, liquidation and other rights, except that each
class bears different distribution expenses and has exclusive voting rights with
respect to its distribution plan. The financial statements have been prepared in
conformity with accounting principles generally accepted in the United States
which require management to make certain estimates and assumptions that affect
the reported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the reporting period. Actual results could
differ from those estimates. Additional information about some of the items
discussed in these Notes to Financial Statements is contained in the Fund's
Statement of Additional Information, which is available upon request. The
following is a summary of significant accounting policies followed by the Fund.
1. Security Valuation
In accordance with Pricing Policies adopted by the Board of Directors of the
Fund (the "Pricing Policies") and applicable law, portfolio securities are
valued at current market value or at fair value. The Board of Directors has
delegated to the Adviser, subject to the Board's continuing oversight, certain
responsibilities with respect to the implementation of the Pricing Policies.
Pursuant to the Pricing Policies, securities for which market quotations are
readily available are valued at their current market value. In general, the
market value of these securities is determined as follows:
Securities listed on a national securities exchange or on a foreign securities
exchange are valued at the last sale price at the close of the exchange or
foreign securities exchange. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and asked prices on such
day. If no bid or
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 13
Notes to Financial Statements
- --------------------------------------------------------------------------------
asked prices are quoted on such day, then the security is valued in good faith
at fair value in accordance with the Pricing Policies. Securities listed on more
than one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
Nasdaq Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuations, the last available closing settlement price is used;
securities traded in the over-the-counter market, (but excluding securities
traded on NASDAQ) are valued at the mean of the current bid and asked prices as
reported by the National Quotation Bureau or other comparable sources; U.S.
Government securities and other debt instruments having 60 days or less
remaining until maturity are valued at amortized cost if their original maturity
was 60 days or less, or by amortizing their fair value as of the 61st day prior
to maturity if their original term to maturity exceeded 60 days; fixed-income
securities, including mortgage backed and asset backed securities, may be valued
on the basis of prices provided by a pricing service or at a price obtained from
one or more of the major broker/dealers. In cases where broker/dealer quotes are
obtained, the Pricing Policies provide that the Adviser may establish procedures
whereby changes in market yields or spreads are used to adjust, on a daily
basis, a recently obtained quoted price on a security; and OTC and other
derivatives are valued on the basis of a quoted bid price or spread from a major
broker/dealer in such security. Securities for which market quotations are not
readily available are valued at fair value in accordance with the Pricing
Policies.
2. Organization Expenses
Organization expenses of approximately $326,500 have been deferred and were
amortized on a straight-line basis through August 2002.
3. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the mean
of the quoted bid and asked prices of such currencies against the U.S. dollar.
Purchases and sales of portfolio securities are translated into U.S. dollars at
the rates of exchange prevailing when such securities were acquired or sold.
Income and expenses are translated into U.S. dollars at rates of exchange
prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign currencies,
currency gains or losses realized between the trade and settlement dates on
for-
- --------------------------------------------------------------------------------
14 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Notes to Financial Statements
- --------------------------------------------------------------------------------
eign investment transactions, and the difference between the amounts of
dividends, interest and foreign withholding 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 at period end exchange rates are reflected as a component of net
unrealized appreciation or depreciation of investments and foreign currency
denominated assets and liabilities.
4. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
5. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. Investment gains and losses are determined on the identified
cost basis. The Fund accretes discounts as adjustments to interest income.
6. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees than
Class A and Advisor Class shares. Advisor Class shares have no distribution
fees.
7. Dividends and Distributions
Dividends and distributions to shareholders, if any, are recorded on the
ex-dividend date. Income dividends and capital gains distributions are
determined in accordance with federal tax regulations and may differ from those
determined in accordance with accounting principles generally accepted in the
United States. To the extent these differences are permanent, such amounts are
reclassified within the capital accounts based on their federal tax basis
treatment; temporary differences do not require such reclassification.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the "Adviser") an advisory fee at an annual rate of 1%
of the Fund's average daily net assets. Such fee is accrued daily and paid
monthly.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 15
Notes to Financial Statements
- --------------------------------------------------------------------------------
The Adviser has agreed for the current fiscal year to waive its fee and bear
certain expenses so that total expenses do not exceed on an annual basis to
2.50%, 3.20%, 3.20%, and 2.20% of average daily net assets, respectively, for
the Class A, Class B, Class C and Advisor Class shares. For the year ended July
31, 2003, such reimbursement amounted to $353,169.
Pursuant to the advisory agreement, the Fund may reimburse the Adviser for
certain legal and accounting services provided to the Fund by the Adviser. For
the year ended July 31, 2003, the Adviser agreed to waive its fees for such
services. Such waiver amounted to $135,000.
The Fund compensates Alliance Global Investor Services, Inc. (AGIS), a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Fund. For the year ended July 31, 2003, such fees amounted to $35,620.
For the year ended July 31, 2003, the Fund's expenses were reduced by $51 under
an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, Inc. (the "Distributor"),
formerly Alliance Fund Distributors, Inc., a wholly-owned subsidiary of the
Adviser, serves as the distributor of the Fund's shares. The Distributor has
advised the Fund that it has retained front-end sales charges of $974 from the
sale of Class A shares and received $5,881 and $2,851 in contingent deferred
sales charges imposed upon redemptions by shareholders of Class B and Class C
shares, respectively, for the year ended July 31, 2003.
Brokerage commissions paid on investment transactions for the year ended July
31, 2003, amounted to $45,513, none of which was paid to Sanford C. Bernstein &
Co. LLC, an affiliate of the Adviser.
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30 of 1% of the Fund's average daily net assets
attributable to Class A shares and 1% of the Fund's average daily net assets
attributable to both Class B and Class C shares. There are no distribution and
servicing fees on the Advisor Class shares. The fees are accrued daily and paid
monthly. The Agreement provides that the Distributor will use such payments in
their entirety for distribution assistance and promotional activities. The
Distributor has advised the Fund that it has incurred expenses in excess of the
distribution costs reimbursed by the Fund in the amounts of $1,864,427 and
$595,893 for Class B and
- --------------------------------------------------------------------------------
16 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Notes to Financial Statements
- --------------------------------------------------------------------------------
Class C shares, respectively; such costs may be recovered from the Fund in
future periods so long as the Agreement is in effect. In accordance with the
Agreement, there is no provision for recovery of unreimbursed distribution
costs, incurred by the Distributor beyond the current fiscal year for Class A
shares. The Agreement also provides that the Adviser may use its own resources
to finance the distribution of the Fund's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the year ended July 31, 2003, were as follows:
Purchases Sales
=========== ===========
Investment securities (excluding
U.S. government securities) ................. $11,668,171 $ 7,222,461
U.S. government securities ..................... -0- -0-
At July 31, 2003, the cost of investments for federal income tax purposes, gross
unrealized appreciation and unrealized depreciation (excluding foreign currency
transactions) are as follows:
Cost $ 10,324,641
============
Gross unrealized appreciation ......................... $ 2,895,078
Gross unrealized depreciation ......................... (307,413)
------------
Net unrealized appreciation ........................... $ 2,587,665
============
Forward Exchange Currency Contracts
The Fund may enter into forward exchange currency contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings, to hedge certain firm purchase and sales commitments
denominated in foreign currencies and for investment purposes. A forward
exchange currency contract is a commitment to purchase or sell a foreign
currency on a future date at a negotiated forward rate. The gain or loss arising
from the difference between the original contract and the closing of such
contract would be included in net realized gain or loss on foreign currency
transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation or
depreciation by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at least
equal to the aggregate amount of the Fund's commitments under forward exchange
currency contracts entered into with respect to position hedges. Risks may arise
from the potential inability of a counterparty to meet the terms of a contract
and from unanticipated movements in the value of foreign currency relative to
the U.S. dollar. The face or contract amount, in U.S. dollars reflects the total
exposure the Fund has in that particular currency contract.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 17
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE E
Capital Stock
There are 12,000,000,000 shares of $.001 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class. Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
----------------------------- -----------------------------
Shares Amount
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002
-------------------------------------------------------------
Class A
Shares sold 1,067,796 964,947 $ 7,841,000 $ 7,604,643
- ---------------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 2,677 -0- 18,418 -0-
- ---------------------------------------------------------------------------------------
Shares converted from
Class B 11,194 3,078 77,423 24,592
- ---------------------------------------------------------------------------------------
Shares redeemed (930,890) (911,140) (6,739,131) (7,232,579)
- ---------------------------------------------------------------------------------------
Net increase 150,777 56,885 $ 1,197,710 $ 396,656
=======================================================================================
Class B
Shares sold 2,528,499 1,608,417 $ 17,414,309 $ 12,226,131
- ---------------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 1,747 -0- 11,653 -0-
- ---------------------------------------------------------------------------------------
Shares converted to
Class A (11,581) (3,179) (77,423) (24,592)
- ---------------------------------------------------------------------------------------
Shares redeemed (2,422,584) (1,551,790) (16,700,679) (11,833,634)
- ---------------------------------------------------------------------------------------
Net increase 96,081 53,448 $ 647,860 $ 367,905
=======================================================================================
Class C
Shares sold 4,401,475 1,020,049 $ 30,883,247 $ 7,868,132
- ---------------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 747 -0- 4,984 -0-
- ---------------------------------------------------------------------------------------
Shares redeemed (4,009,743) (948,395) (28,032,481) (7,396,556)
- ---------------------------------------------------------------------------------------
Net increase 392,479 71,654 $ 2,855,750 $ 471,576
=======================================================================================
Advisor Class
Shares sold 76,366 41,166 $ 581,179 $ 332,447
- ---------------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 79 -0- 549 -0-
- ---------------------------------------------------------------------------------------
Shares redeemed (67,463) (60,848) (513,391) (476,985)
- ---------------------------------------------------------------------------------------
Net increase
(decrease) 8,982 (19,682) $ 68,337 $ (144,538)
=======================================================================================
- --------------------------------------------------------------------------------
18 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE F
Concentration of Risk
Investing in securities of foreign companies involves special risk which include
the possibility of future political and economic developments which could
adversely affect the value of such securities. Moreover, securities of many
foreign companies and their markets may be less liquid and their prices more
volatile than those of comparable United States companies.
The Fund has invested approximately 74% of its net assets in Hong Kong equity
securities. Political, social or economic changes in this market may have a
greater impact on the value of the Fund's portfolio due to this concentration.
NOTE G
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $500 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the year ended July 31, 2003.
NOTE H
Distributions to Shareholders
The tax character of distributions paid during the fiscal years ended July 31,
2003 and July 31, 2002 were as follows:
2003 2002
======= =======
Distributions paid from:
Ordinary income ...................................... $45,471 $ -0-
------- -------
Total taxable distributions ............................. 45,471 -0-
------- -------
Total distributions paid ................................ $45,471 $ -0-
------- -------
As of July 31, 2003, the components of accumulated earnings/(deficit) on a tax
basis were as follows:
Undistributed ordinary income ........................... $ 85,289
Accumulated capital and other losses .................... (2,138,147)(a)
Unrealized appreciation/(depreciation) .................. 2,587,919(b)
-----------
Total accumulated earnings/(deficit) .................... $ 535,061
===========
(a) On July 31, 2003, the Fund had a net capital loss carryforward for federal
income tax purposes of $1,733,828 of which $138,490 expires in the year
2007, $12,025 expires in the year 2009, $671,116 expires in the year 2010
and $912,197 expires in the year 2011. To the extent future capital gains
are offset by capital loss carryforwards, such gains will not be
distributed. Net capital losses incurred after October 31, and within the
taxable year are deemed to arise on the first business day of the Fund's
next taxable year. For the year ended July 31, 2003, the Fund deferred to
August 1, 2003, post October capital losses of $404,319.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral
of losses on wash sales and the tax mark to market on passive foreign
investment companies.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 19
Notes to Financial Statements
- --------------------------------------------------------------------------------
During the current fiscal year, permanent differences, primarily due to foreign
currency gains, resulted in a net increase in undistributed net investment
income and a corresponding increase in accumulated net realized loss on
investment and foreign currency transactions. This reclassification had no
effect on net assets.
NOTE I
Subsequent Events
Alliance Capital Management L.P., ("Alliance Capital") the Fund's Adviser, has
been contacted by the Office of the New York State Attorney General ("NYAG")
and the United States Securities and Exchange Commission ("SEC") in connection
with their investigation of practices in the mutual fund industry identified as
"market timing" and "late trading" of mutual fund shares. Alliance Capital has
been providing full cooperation with respect to these investigations.
Based on the preliminary results of its own ongoing internal investigation
concerning mutual fund transactions, Alliance Capital has identified conflicts
of interest in connection with certain market timing transactions. In this
regard, Alliance Capital has suspended two of its employees, neither of which
was a portfolio manager or officer of the Fund. Alliance Capital continues to
review the facts and circumstances relevant to the SEC's and NYAG's
investigations, including whether third parties may have engaged in illegal
late trading in the Funds and whether any of its employees knowingly
facilitated such late trading. Consistent with the best interests of the Fund
and its shareholders, Alliance Capital intends to vigorously pursue its rights,
and the rights of the Fund and its shareholders, if it is determined that such
trading occurred. At the present time, management of Alliance Capital is unable
to estimate the impact, if any, that the outcome of these investigations may
have on the Fund or Alliance Capital's results of operations or financial
condition.
Alliance Capital also announced that its Board of Directors authorized a
special committee, comprised of the members of Alliance Capital's Audit
Committee and the other independent member of the Board, to direct and oversee
a comprehensive review of the facts and circumstances relevant to the SEC's and
the NYAG's investigations.
On October 2, 2003, a class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint"), was
filed in federal district court in the Southern District of New York against
Alliance Capital Management Holding L.P.; Alliance Capital; Alliance Capital
Management Corporation (collectively, the "Alliance Capital defendants");
certain of the AllianceBernstein Mutual Funds, including the Fund, AXA
Financial, Inc.; Gerald Malone; Charles Schaffran; Edward J. Stern; Canary
Capital Partners, LLC; Canary Investment Management LLC; Canary Capital
Partners, Ltd.; and other unnamed defendants. The action, which is brought
on behalf of a putative class of all persons who purchased shares in one or
more of the defen-
- --------------------------------------------------------------------------------
20 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Notes to Financial Statements
- --------------------------------------------------------------------------------
dant mutual funds between October 2, 1998 and September 29, 2003, alleges
violations of the Securities Act of 1933, the Securities Exchange Act of 1934
and the Investment Advisors Act of 1940. The principal allegations of the Hindo
Complaint are that the Alliance Capital defendants entered into agreements
under which certain named and unnamed parties were permitted to engage in
late trading and market timing transactions in the defendant funds. According
to the Complaint, these agreements were fraudulent and a breach of fiduciary
duty to fund shareholders. In addition, plaintiffs allege that the prospectuses
for the named AllianceBernstein mutual funds were false and misleading because
they: (i) failed to disclose the existence of these late trading and market
timing agreements; and (ii) represented that fund shareholders would be
safeguarded against the effects of such agreements. Plaintiffs seek
unspecified damages, the rescission of plaintiffs' contracts with Alliance
Capital, and recovery of any fees paid in connection therewith. Alliance
Capital is evaluating the claims in the Hindo Complaint and intends to
vigorously defend against them. At the present time, management of Alliance
Capital is unable to estimate the impact, if any, that the outcome of this
action may have on the Fund or on Alliance Capital's results of operations or
financial condition. On October 8, 2003, a similar complaint was filed in
federal district court in the Eastern District of New York in which all
AllianceBernstein Funds are named as nominal defendants. Alliance Capital
understands that additional lawsuits that are similar to these lawsuits have
been filed, and believes that others may be filed, against Alliance Capital
defendants and related parties.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 21
Financial Highlights
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
-------------------------------------------------------------------
Class A
-------------------------------------------------------------------
Year Ended July 31,
-------------------------------------------------------------------
2003 2002 2001 2000 1999
-------------------------------------------------------------------
Net asset value,
beginning of period ................. $ 7.55 $ 8.45 $ 10.34 $ 8.20 $ 4.84
-------------------------------------------------------------------
Income From Investment
Operations
Net investment
income (loss)(a)(b) ................. .04 .09 (.01) (.04) .02
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions ........................ 1.32 (.99) (1.88) 2.18 3.34
-------------------------------------------------------------------
Net increase (decrease)
in net asset value from
operations .......................... 1.36 (.90) (1.89) 2.14 3.36
-------------------------------------------------------------------
Less: Dividends
Dividends from
net investment income ............... (.09) -0- -0- -0- -0-
-------------------------------------------------------------------
Net asset value,
end of period ....................... $ 8.82 $ 7.55 $ 8.45 $ 10.34 $ 8.20
===================================================================
Total Return
Total investment return based
on net asset value(c) ............... 18.35% (10.65)% (18.28)% 26.10% 69.42%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ..................... $ 3,958 $ 2,253 $ 2,039 $ 2,471 $ 1,011
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .................... 2.50% 2.50% 2.51%(d) 2.52%(d) 2.52%(d)
Expenses, before waivers/
reimbursements .................... 9.24% 10.82% 9.50% 9.92% 19.68%
Net investment
income (loss)(b) .................... .58% 1.18% (.09)% (.42)% .36%
Portfolio turnover rate ................ 102% 63% 64% 158% 94%
See footnote summary on page 25.
- --------------------------------------------------------------------------------
22 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
-------------------------------------------------------------------
Class B
-------------------------------------------------------------------
Year Ended July 31,
-------------------------------------------------------------------
2003 2002 2001 2000 1999
-------------------------------------------------------------------
Net asset value,
beginning of period ................. $ 7.30 $ 8.21 $ 10.13 $ 8.12 $ 4.82
-------------------------------------------------------------------
Income From Investment
Operations
Net investment
income (loss)(a)(b) ................. (.01) .03 (.07) (.11) (.01)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions ........................ 1.27 (.94) (1.85) 2.12 3.31
-------------------------------------------------------------------
Net increase (decrease)
in net asset value from
operations .......................... 1.26 (.91) (1.92) 2.01 3.30
-------------------------------------------------------------------
Less: Dividends
Dividends from
net investment income ............... (.04) -0- -0- -0- -0-
-------------------------------------------------------------------
Net asset value,
end of period ....................... $ 8.52 $ 7.30 $ 8.21 $ 10.13 $ 8.12
===================================================================
Total Return
Total investment return based
on net asset value(c) ............... 17.32% (11.08)% (18.95)% 24.75% 68.46%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ..................... $ 4,632 $ 3,266 $ 3,234 $ 4,047 $ 1,902
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .................... 3.20% 3.20% 3.21%(d) 3.22%(d) 3.22%(d)
Expenses, before waivers/
reimbursements .................... 9.98% 11.56% 10.28% 10.72% 20.22%
Net investment
income (loss)(b) .................... (.11)% .41% (.81)% (1.13)% (.22)%
Portfolio turnover rate ................ 102% 63% 64% 158% 94%
See footnote summary on page 25.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 23
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
-------------------------------------------------------------------
Class C
-------------------------------------------------------------------
Year Ended July 31,
-------------------------------------------------------------------
2003 2002 2001 2000 1999
-------------------------------------------------------------------
Net asset value,
beginning of period ................. $ 7.30 $ 8.21 $ 10.13 $ 8.11 $ 4.82
-------------------------------------------------------------------
Income From Investment
Operations
Net investment
income (loss)(a)(b) ................. (.01) .04 (.08) (.13) (.03)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions ........................ 1.25 (.95) (1.84) 2.15 3.32
-------------------------------------------------------------------
Net increase (decrease)
in net asset value from
operations .......................... 1.24 (.91) (1.92) 2.02 3.29
-------------------------------------------------------------------
Less: Dividends
Dividends from
net investment income ............... (.04) -0- -0- -0- -0-
-------------------------------------------------------------------
Net asset value,
end of period ....................... $ 8.50 $ 7.30 $ 8.21 $ 10.13 $ 8.11
===================================================================
Total Return
Total investment return based
on net asset value(c) ............... 17.05% (11.08)% (18.95)% 24.91% 68.26%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ..................... $ 4,856 $ 1,302 $ 877 $ 1,372 $ 162
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .................... 3.20% 3.20% 3.21%(d) 3.22%(d) 3.22%(d)
Expenses, before waivers/
reimbursements .................... 10.19% 11.28% 10.13% 10.01% 20.41%
Net investment
income (loss)(b) .................... (.15)% .50% (.84)% (1.31)% (.49)%
Portfolio turnover rate ................ 102% 63% 64% 158% 94%
See footnote summary on page 25.
- --------------------------------------------------------------------------------
24 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
-------------------------------------------------------------------
Advisor Class
-------------------------------------------------------------------
Year Ended July 31,
-------------------------------------------------------------------
2003 2002 2001 2000 1999
-------------------------------------------------------------------
Net asset value,
beginning of period ................. $ 7.66 $ 8.53 $ 10.41 $ 8.24 $ 4.85
-------------------------------------------------------------------
Income From Investment
Operations
Net investment income
(loss)(a)(b) ........................ .08 .10 .06 (.02) .04
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions ........................ 1.31 (.97) (1.94) 2.19 3.35
-------------------------------------------------------------------
Net increase (decrease)
in net asset value from
operations .......................... 1.39 (.87) (1.88) 2.17 3.39
-------------------------------------------------------------------
Less: Dividends
Dividends from
net investment income ............... (.11) -0- -0- -0- -0-
-------------------------------------------------------------------
Net asset value, end of period ......... $ 8.94 $ 7.66 $ 8.53 $ 10.41 $ 8.24
===================================================================
Total Return
Total investment return based
on net asset value(c) ............... 18.55% (10.20)% (18.06)% 26.34% 69.90%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ..................... $ 309 $ 196 $ 386 $ 273 $ 161
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .................... 2.20% 2.20% 2.21%(d) 2.22%(d) 2.22%(d)
Expenses, before waivers/
reimbursements .................... 8.69% 10.57% 9.35% 9.61% 19.01%
Net investment
income (loss)(b) .................... 1.14% 1.28% .71% (.15)% .58%
Portfolio turnover rate ................ 102% 63% 64% 158% 94%
(a) Based on average shares outstanding
(b) Net of expenses waived/reimbursed by the Adviser.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total return does not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption
of fund shares. Total investment return calculated for a period of less
than one year is not annualized.
(d) Ratios reflect expenses grossed up for expense offset arrangement with the
Transfer Agent. For the periods shown below, the net expense ratios were
as follows:
Year Ended July 31,
-----------------------------
2001 2000 1999
-----------------------------
Class A ......... 2.50% 2.50% 2.50%
Class B ......... 3.20% 3.20% 3.20%
Class C ......... 3.20% 3.20% 3.20%
Advisor Class ... 2.20% 2.20% 2.20%
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 25
Report of Ernst & Young LLP, Independent Auditors
- --------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
To the Shareholders and Board of Directors of AllianceBernstein Greater China
'97 Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
AllianceBernstein Greater China '97 Fund, Inc., formerly Alliance Greater China
'97 Fund, Inc., (the "Fund"), including the portfolio of investments, as of July
31, 2003, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 and financial highlights. Our procedures included
confirmation of securities owned as of July 31, 2003, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement 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
AllianceBernstein Greater China '97 Fund, Inc. at July 31, 2003, 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 accounting
principles generally accepted in the United States.
/s/ Ernst & Young LLP
New York, New York
September 12, 2003,
except for Note I, as to which
the date is October 9, 2003
TAX INFORMATION
(unaudited)
For the fiscal year ended July 31, 2003,
certain dividends paid by the Fund may
be subject to a maximum tax rate of
15%, as provided for by the Jobs and
Growth Tax Relief Reconciliation Act
of 2003. The Fund has no qualified div-
idend income, which is taxed at a max-
imum rate of 15%. The information
and distributions reported herein may
differ from the information and distri-
butions taxable to the shareholders for
the calendar year ending December 31,
2003. Complete information will be
computed and reported in conjunction
with your 2003 Form 1099-DIV.
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26 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Board of Directors
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BOARD OF DIRECTORS
John D. Carifa, Chairman and President
David H. Dievler(1)
William H. Foulk, Jr.(1)
Clifford L. Michel(1)
Tak-Lung Tsim
OFFICERS
Matthew W. S. Lee, Senior Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Distributor
AllianceBernstein Investment
Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-Free (800) 221-5672
Independent Auditors
Ernst & Young LLP
5 Times Square
New York, NY 10036
(1) Member of the Audit Committee.
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ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 27
Management of the Fund
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MANAGEMENT OF THE FUND
Board of Directors Information
The business and affairs of the Fund are managed under the direction of the
Board of Directors. Certain information concerning the Fund's Directors is set
forth below.
PORTFOLIOS
IN FUND OTHER
NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY
(YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
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INTERESTED DIRECTORS
John D. Carifa,**, 58 President, Chief Operating 116 None
1345 Avenue of the Officer and a Director of
Americas Alliance Capital Management
New York, NY 10105 Corporation ("ACMC"), with
(6) which he has been associated
since prior to 1998.
Tak-Lung Tsim,**, 57 A Principal of T.L. Tsim & 1 Chairman of
T.L. Tsim & Associates Associates Limited, a New-Alliance
Limited consulting company which he Asset
Suite 1001 established in August 1994. Management
Century Square Chairman of New-Alliance (Asia) Limited.
1 D'Aguilar St. Asset Management (Asia) Director of
Central Hong Kong (6) Limited. Member of Li Po Playmates
Chun United World College. Holdings
Director of Playmates Holdings Limited. Far
Limited. Far Eastern Polychem Eastern
Industries and China Medical Polychem
Science Limited. Industries
and China
Medical
Science
Limited.
DISINTERESTED DIRECTORS
David H. Dievler,#+, 73 Independent consultant. Until 101 None
P.O. Box 167 December 1994, Senior Vice
Spring Lake, NJ 07762 President of ACMC responsible
(6) for mutual fund administration.
Prior to joining ACMC in 1984,
Chief Financial Officer of
Eberstadt Asset Management
since 1968. Prior to that,
Senior Manager at Price
Waterhouse & Co. Member of
American Institute of Certified
Public Accountants since 1953.
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28 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Management of the Fund
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PORTFOLIOS
IN FUND OTHER
NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY
(YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
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DISINTERESTED DIRECTORS
(continued)
William H. Foulk, Jr., #+, 71 Investment Adviser and an 113 None
2 Sound View Drive independent consultant.
Suite 100 Formerly Senior Manager
Greenwich, CT 06830 of Barrett Associates, Inc., a
(6) registered investment adviser,
with which he had been
associated since prior to 1998.
Formerly Deputy Comptroller of
the State of New York and, prior
thereto, Chief Investment Officer
of the New York Bank for
Savings.
Clifford L. Michel, #+, 64 Senior Counsel of the law firm 97 Placer Dome,
15 St. Bernard's Road of Cahill Gordon & Reindel Inc.
Gladstone, NJ 07934 since February 2001 and a
(1) partner of that firm for more
than 25 years prior thereto.
President and Chief Executive
Officer of Wenonah Development
Company (investments) and a
Director of the Placer Dome Inc.
(mining).
* There is no stated term of office for the Fund's Directors.
** Mr. Carifa is an "interested director", as defined in the 1940 Act, due to
his position as President and Chief Operating Officer of ACMC, the Fund's
investment adviser. Mr. Tsim is an "interested director", as defined in
the 1940 Act, due to his position as Consultant of T.L. Tsim & Associates
Limited.
# Member of the Audit Committee.
+ Member of the Nominating Committee.
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ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 29
Management of the Fund
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Officer Information
Certain information concerning the Fund's Officers is listed below.
NAME, POSITION(S) PRINCIPAL OCCUPATION
ADDRESS,* AND AGE HELD WITH FUND DURING PAST 5 YEARS**
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John D. Carifa, 58 Chairman and President See biography above.
Matthew W.S. Lee, 40 Senior Vice President Vice President of ACMC**, with which
and Chief Investment he has been associated since prior to
Officer 1998.
Edmund P. Bergan, Jr., 53 Secretary Senior Vice President and General
Counsel of AllianceBernstein
Investment Research and
Management, Inc. ("ABIRM")** and
Alliance Global Investor Services Inc.
("AGIS")**, with which he has been
associated since prior to 1998.
Mark D. Gersten, 52 Treasurer and Chief Senior Vice President of AGIS** and
Financial Officer Vice President of ABIRM**, with which
he has been associated since prior to
1998.
Vincent S. Noto, 38 Controller Vice President of AGIS**, with which
he has been associated since prior to
1998.
* The address for each of the Fund's Officers is 1345 Avenue of the
Americas, New York, NY 10105.
** ACMC, ABIRM and AGIS are affiliates of the Fund.
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Directors and Officers and is available
without charge upon request. Contact your financial representative or
Alliance Capital at 1-800-227-4618 for a free prospectus or SAI.
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30 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
AllianceBernstein Family of Funds
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ALLIANCEBERNSTEIN FAMILY OF FUNDS
Wealth Strategies Funds
Balanced Wealth Strategy
Wealth Appreciation
Wealth Preservation
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation
Tax-Managed Wealth Preservation
U.S. Growth Funds
Growth Fund
Health Care Fund
Mid-Cap Growth Fund
Premier Growth Fund
Quasar Fund
Select Investor Series Biotechnology Portfolio
Select Investor Series Premier Portfolio
Select Investor Series Technology Portfolio
Technology Fund
U.S. Value Funds
Balanced Shares
Disciplined Value Fund
Growth & Income Fund
Real Estate Investment Fund
Small Cap Value Fund
Utility Income Fund
Value Fund
Blended Style Series
U.S. Large Cap Portfolio
Global & International Growth Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Global & International Value Funds
Global Value Fund
International Value Fund
Bond Funds
Americas Government Income Trust
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Quality Bond Portfolio
U.S. Government Portfolio
Municipal Income Funds
Intermediate California
Intermediate Diversified
Intermediate New York
Arizona
California
Insured California
Insured National
Florida
Massachusetts
Michigan
Minnesota
National
New Jersey
New York
Ohio
Pennsylvania
Virginia
Closed-End Funds
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
AllianceBernstein also offers AllianceBernstein Exchange Reserves, which serves
as the money market fund exchange vehicle for the AllianceBernstein mutual
funds.
To obtain a prospectus for any AllianceBernstein fund, call your investment
professional, or call AllianceBernstein at (800) 227-4618 or visit our web site
at www.alliancebernstein.com.
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ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 31
NOTES
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32 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] AllianceBernstein(SM)
Investment Research and Management
(SM) This service mark used under license from the owner, Alliance Capital
Management L.P.
GCFAR0703
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its principal
executive officer, principal financial officer and principal accounting officer.
A copy of the registrant's code of ethics is filed herewith as Exhibit 10(a)(1).
(b) During the period covered by this report, no amendments were made to the
provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit waivers to
the provisions of the code of ethics adopted in 2(a) above were granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors has determined that independent directors
Messrs. David H. Dievler and William H. Foulk qualify as audit committee
financial experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Form N-CSR disclosure requirement not yet effective with respect to the
registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
have concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended)
are effective at the reasonable assurance level based on their evaluation of
these controls and procedures as of a date within 90 days of the filing date of
this document.
(b) There were no significant changes in the registrant's internal controls that
could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
Exhibit No. DESCRIPTION OF EXHIBIT
10 (a) (1) Code of ethics that is subject to the disclosure of Item 2
hereof
10 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
10 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
10 (c) Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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.
(Registrant): AllianceBernstein Greater China '97 Fund, Inc.
By: /s/John D. Carifa
---------------------------------
John D. Carifa
President
Date: October 9, 2003
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/John D. Carifa
---------------------------------
John D. Carifa
President
Date: October 9, 2003
By: /s/Mark D. Gersten
-------------------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: October 9, 2003