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)
Mark R. Manley
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, 2004
Date of reporting period: July 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
- -------------------------------------------------------------------------------
International Regional
- -------------------------------------------------------------------------------
[LOGO] AllianceBernstein (SM)
Investment Research and Management
AllianceBernstein Greater China '97 Fund
Annual Report -- July 31, 2004
Investment Products Offered
- ---------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
- ---------------------------
The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or Alliance at
(800) 227-4618. Please read the prospectus carefully before you invest.
You may obtain performance information current to the most recent month-end by
visiting www.alliancebernstein.com (click on Investors/ Products & Services/
Mutual Funds).
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, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit Alliance Capital's web site at
www.alliancebernstein.com (click on Investors, then the "Proxy voting policies"
link or "Proxy voting records" link on the left side of the page), or go to the
Securities and Exchange Commission's, (The "Commission") web site at
www.sec.gov, or call Alliance Capital at (800) 227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. Alliance publishes full
portfolio holdings for the Fund monthly at www.alliancebernstein.com.
AllianceBernstein Investment Research and Management, Inc., is an affiliate of
Alliance Capital Management L.P., the manager of the funds, and is a member of
the NASD.
September 20, 2004
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, 2004.
Investment Objectives 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 table on page 3 shows the Fund's performance compared to its benchmark, the
MSCI Golden Dragon Index, and the Lipper China Region Funds Average (the
"Lipper Average"), for the six- and 12-month periods ended July 31, 2004. The
MSCI Golden Dragon Index is a composite index consisting of equity securities
of companies based in China, Hong Kong and Taiwan. These are the countries in
which the great majority of the Fund's securities are located. Funds in the
Lipper Average have generally similar investment objectives to the Fund,
although some may have different investment policies and sales and management
fees.
During the 12-month period ended July 31, 2004, the Fund outperformed the MSCI
Golden Dragon Index due mainly to our overweighting in the cyclicals, capital
goods and energy sectors that benefited from the fixed investment boom in
China. Our overweighting in the consumer sector also contributed positively
with the pick-up in consumer spending following the SARS impact.
The Fund underperformed the MSCI Golden Dragon Index during the six-month
reporting period due mainly to the sharp sell-off of China-related stocks in
the second quarter of 2004. This occurred when investors turned negative on
China as macro control issues were introduced to cool down the economy.
Market Review and Investment Strategy
During the reporting period, the Greater China stock markets went through a
sharp rebound in the first six-month period following the SARS impact and the
Gulf War. In the last six-month period, the Greater China stock markets were
affected by a number of factors, including: concern of overheating in China,
the trend of U.S. interest rates, rising oil prices and a weak technology
sector outlook.
We overweighted the cyclicals, capital goods, energy and consumer sectors in
the first six-month period in order to benefit from the fixed asset investment
boom and consumption recovery. We trimmed our exposure to the cyclicals and
capital goods sectors in the last six-month period due to the macro control
measures introduced in China.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 1
Historical Performance
- -------------------------------------------------------------------------------
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.alliancebernstein.com
(click on Investors/Products & Services/Mutual Funds).
The investment return and principal value of an investment in the Fund will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or Alliance at
(800) 227-4618. You should read the prospectus carefully before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Fund have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. SEC returns reflect the applicable sales charges
for each share class: a 4.25% maximum front-end sales charge for Class A
shares; the applicable contingent deferred sales charge for Class B shares (4%
year 1, 3% year 2, 2% year 3, 1% year 4); a 1% 1 year contingent deferred sales
charge for Class C shares. Returns for Advisor Class shares will vary due to
different expenses associated with this class. Performance assumes reinvestment
of distributions and does not account for taxes. 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 on
an annual basis to 2.50%, 3.20%, 3.20% and 2.20% of the average daily net
assets of Class A, Class B, Class C and Advisor Class shares, respectively.
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.
Benchmark Disclosure
The unmanaged Morgan Stanley Capital International (MSCI) Golden Dragon Index
is an aggregate of the MSCI Hong Kong Index, the MSCI China Index and the MSCI
Taiwan at 65% Index (the MSCI Taiwan Index has an inclusion weight at 65% of
its market capitalization in the MSCI Index series). The Lipper China Region
Funds Average (the Lipper 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. For the six- and
12-month periods ended July 31, 2004, the Lipper Average consisted of 22 funds
for both periods. These funds have generally similar investment objectives to
the Fund, although some may have different investment policies and sales and
management fees. Investors cannot invest directly in an index or average, and
its results are not indicative of any specific investment, including the Fund.
A Word About Risk
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. While the Fund invests principally in common stocks and
other equity securities, in order to achieve its investment objectives, the
Fund may at times use certain types of investment derivatives, such as options,
futures, forwards and swaps. These instruments involve risks different from,
and in certain cases, greater than the risks presented by more traditional
investments. These risks are more fully discussed in the prospectus.
(Historical Performance continued on next page)
_______________________________________________________________________________
2 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Historical Performance
- -------------------------------------------------------------------------------
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE FUND VS. ITS BENCHMARKS -------------------------
PERIODS ENDED JULY 31, 2004 6 Months 12 Months
- -------------------------------------------------------------------------------
AllianceBernstein Greater China '97 Fund
Class A -13.31% 22.30%
- -------------------------------------------------------------------------------
Class B -13.56% 21.41%
- -------------------------------------------------------------------------------
Class C -13.59% 21.34%
- -------------------------------------------------------------------------------
Advisor Class -13.12% 22.72%
- -------------------------------------------------------------------------------
MSCI Golden Dragon Index -10.89% 18.43%
- -------------------------------------------------------------------------------
Lipper China Region Funds Average -9.84% 20.40%
- -------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE FUND
9/3/97* TO 7/31/04
AllianceBernstein Greater China '97 Fund Class A: $10,550
MSCI Golden Dragon Index: $7,171
[THE FOLLOWING TABLE WAS DEPICTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL.]
AllianceBernstein
Greater China '97 MSCI Golden
Fund Class A Dragon Index
- -------------------------------------------------------------------------------
9/03/97* $ 9,575 $ 10,000
7/31/98 $ 4,673 $ 5,163
7/31/99 $ 7,916 $ 8,187
7/31/00 $ 9,982 $ 9,396
7/31/01 $ 8,158 $ 6,089
7/31/02 $ 7,289 $ 5,710
7/31/03 $ 8,626 $ 6,055
7/31/04 $ 10,550 $ 7,171
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
7/31/04) as compared to the performance of the Fund's benchmark and the Lipper
Average.
* Since inception of the Fund's Class A shares on 9/3/97.
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 3
Historical Performance
- -------------------------------------------------------------------------------
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF JULY 31, 2004
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 22.30% 17.12%
5 Years 5.91% 5.00%
Since Inception* 1.41% 0.78%
Class B Shares
1 Year 21.41% 17.41%
5 Years 5.07% 5.07%
Since Inception* 0.65% 0.65%
Class C Shares
1 Year 21.34% 20.34%
5 Years 5.04% 5.04%
Since Inception* 0.61% 0.61%
Advisor Class Shares
1 Year 22.72%
5 Years 6.22%
Since Inception* 1.71%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (JUNE 30, 2004)
- --------------------------------------------------------------
Class A Shares
1 Year 33.18%
5 Years 4.26%
Since Inception* 1.12%
Class B Shares
1 Year 33.87%
5 Years 4.33%
Since Inception* 0.98%
Class C Shares
1 Year 36.84%
5 Years 4.29%
Since Inception* 0.94%
* Class A, B, C and Advisor Class share inception date: 9/3/97.
See Historical Performance disclosures on page 2.
_______________________________________________________________________________
4 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Fund Expenses
- -------------------------------------------------------------------------------
FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid
February 1, 2004 July 31, 2004 During Period*
- -------------------------------------------------------------------------------
CLASS A
Actual $1,000 $ 866.93 $10.77
Hypothetical
(5% return before expenses) $1,000 $1,013.33 $11.61
- -------------------------------------------------------------------------------
CLASS B
Actual $1,000 $ 864.44 $14.65
Hypothetical
(5% return before expenses) $1,000 $1,009.15 $15.79
- -------------------------------------------------------------------------------
CLASS C
Actual $1,000 $ 864.10 $14.46
Hypothetical
(5% return before expenses) $1,000 $1,009.35 $15.59
- -------------------------------------------------------------------------------
ADVISOR CLASS
Actual $1,000 $ 868.84 $ 9.80
Hypothetical
(5% return before expenses) $1,000 $1,014.37 $10.57
- -------------------------------------------------------------------------------
* Expenses are equal to the classes' annualized expense ratios of 2.32%,
3.16%, 3.12% and 2.11% respectively, multiplied by the average account value
over the period, multiplied by the number of days in the most recent fiscal
half-year/366 (to reflect the one-half year period).
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 5
Portfolio Summary
- -------------------------------------------------------------------------------
PORTFOLIO SUMMARY
July 31, 2004
PORTFOLIO STATISTICS
Net Assets ($mil): $42.9
SECTOR BREAKDOWN*
18.5% Finance
14.3% Multi-Industry
12.9% Technology
10.3% Basic Industry
8.6% Energy
8.3% Consumer Staples
6.1% Consumer Manufacturing [PIE CHART OMITTED]
5.2% Capital Goods
4.7% Consumer Services
4.6% Healthcare
4.3% Transportation
2.2% Utilities
COUNTRY BREAKDOWN*
74.0% Hong Kong
18.0% Taiwan
7.0% Singapore [PIE CHART OMITTED]
1.0% Canada
* All data is as of July 31, 2004. The Fund's sector and country breakdowns
are expressed as a percentage of total investments and may vary over time.
_______________________________________________________________________________
6 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Ten Largest Holdings
- -------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
July 31, 2004
Percent of
Company U.S. $ Value Net Assets
_______________________________________________________________________________
PetroChina Co., Ltd. Cl. H $ 1,490,442 3.5%
- -------------------------------------------------------------------------------
CNOOC, Ltd. 1,442,363 3.3
- -------------------------------------------------------------------------------
Huaneng Power International, Inc. Cl. H 1,430,824 3.3
- -------------------------------------------------------------------------------
Lifestyle International Holdings, Ltd. 1,295,800 3.0
- -------------------------------------------------------------------------------
Yanzhou Coal Mining Co., Ltd. Cl. H 1,211,585 2.8
- -------------------------------------------------------------------------------
Skyworth Digital Holdings, Ltd. 1,115,428 2.6
- -------------------------------------------------------------------------------
Lianhua Supermarket Holdings, Ltd. Cl. H 1,025,680 2.4
- -------------------------------------------------------------------------------
GP Batteries International, Ltd. 970,987 2.3
- -------------------------------------------------------------------------------
Cheung Kong (Holdings), Ltd. 884,649 2.1
- -------------------------------------------------------------------------------
China Life Insurance Co., Ltd. Cl. H 826,955 1.9
- -------------------------------------------------------------------------------
$ 11,694,713 27.2%
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 7
Portfolio of Investments
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
July 31, 2004
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS-99.3%
Canada-1.0%
Sino Forest Corp. Cl. A(a) 200,000 $ 421,274
-------------
Hong Kong-73.4%
AV Concept Holdings, Ltd. 2,500,000 371,809
Chen Hsong Holdings, Ltd. 300,000 165,391
Cheung Kong (Holdings), Ltd. 120,000 884,649
China Life Insurance Co., Ltd. Cl. H(a) 1,500,000 826,955
China Mengniu Dairy Co., Ltd.(a) 742,000 468,524
China Merchants Holdings International
Co., Ltd. 500,000 701,950
China Oilfield Services, Ltd. Cl. H 2,500,000 745,221
China Resources Enterprise, Ltd. 458,000 563,714
China Resources Power Holdings Co., Ltd.(a) 1,200,000 619,255
China Shipping Development Co., Ltd. Cl. H 1,200,000 784,646
China Telecom Corp., Ltd. Cl. H 774,000 255,529
CNOOC, Ltd. 3,000,000 1,442,363
COFCO International, Ltd. 750,000 310,108
Esprit Holdings, Ltd. 100,000 446,171
Fountain Set (Holdings), Ltd. 750,000 514,443
Giordano International, Ltd. 500,000 302,896
Global Bio-chem Technology Group Co., Ltd. 700,000 547,457
Harbin Power Equipment Co., Ltd. Cl. H 1,000,000 247,445
Hong Kong Exchanges & Clearing, Ltd. 200,000 412,836
Hongkong Land Holdings, Ltd. 240,000 436,800
Hopewell Holdings, Ltd. 220,000 434,376
HSBC Holdings Plc. 23,200 342,064
Huaneng Power International, Inc. Cl. H 1,800,000 1,430,824
Industrial and Commercial Bank of China
(Asia), Ltd. 400,000 538,482
Kingboard Chemical Holdings, Ltd. 300,000 555,791
Kingdee International Software Group Co., Ltd. 400,000 121,800
Li & Fung, Ltd. 300,000 415,401
Lianhua Supermarket Holdings, Ltd. Cl. H 1,000,000 1,025,680
Lifestyle International Holdings, Ltd.(a) 949,000 1,295,800
Midland Realty (Holdings), Ltd. 1,600,000 410,272
Nam Tai Electronic & Electrical Products, Ltd.(a) 877,000 314,833
Norstar Founders Group, Ltd.(a) 1,500,000 399,054
NWS Holdings, Ltd. 500,000 570,535
Oriental Press Group, Ltd. 1,200,000 457,710
Pacific Century Insurance Holdings, Ltd. 1,000,000 410,272
PetroChina Co., Ltd. Cl. H 3,000,000 1,490,442
Ping An Insurance (Group) Co. of China,
Ltd. Cl. H(a) 277,500 355,783
Ports Design, Ltd. 200,000 376,296
Raymond Industrial, Ltd. 150,000 49,040
Shandong Weigao Group Medical Polymer
Co., Ltd. Cl. H(a) 6,980,000 572,740
_______________________________________________________________________________
8 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Portfolio of Investments
- -------------------------------------------------------------------------------
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Shun Tak Holdings, Ltd. 442,000 $ 221,008
Sinopec Shanghai Petrochemical Co.,
Ltd. Cl. H 1,300,000 462,518
Sinotrans, Ltd. Cl. H 500,000 169,878
Skyworth Digital Holdings, Ltd. 4,000,000 1,115,428
Solomon Systech International, Ltd.(a) 2,000,000 453,864
Standard Chartered Plc. 20,000 326,936
Swire Pacific, Ltd. Cl. A 20,500 136,672
Tai Cheung Holdings, Ltd. 600,000 200,008
Tong Ren Tang Technologies Co., Ltd. Cl. H 300,000 692,334
TPV Technology, Ltd. 500,000 333,346
Tsingtao Brewery Co., Ltd. Cl. H 900,000 784,646
Vital Biotech Holdings, Ltd. 3,000,000 165,391
Weiqiao Textile Co., Ltd. Cl. H 360,000 533,097
Wing Hang Bank, Ltd. 52,500 315,685
Wing Lung Bank, Ltd. 40,000 287,191
Wumart Stores, Inc. Cl. H(a) 500,000 817,339
Yantai North Andre Juice Co., Ltd. Cl. H 3,900,000 410,016
Yanzhou Coal Mining Co., Ltd. Cl. H 1,000,000 1,211,585
Zhejiang Expressway Co., Ltd. Cl. H 400,000 294,883
-------------
31,547,182
-------------
Singapore-7.0%
Autron Corp., Ltd. 2,500,000 399,733
Elec & Eltek International Co., Ltd. 200,000 554,000
GP Batteries International, Ltd. 500,000 970,987
Osim International, Ltd. 960,000 569,335
Want Want Holdings, Ltd. 500,000 515,000
-------------
3,009,055
-------------
Taiwan-17.9%
Asustek Computer, Inc. 200,000 441,306
Cathay Financial Holding Co., Ltd. 300,000 494,263
Cathay Financial Holding Co., Ltd. (GDR)(a)(b) 4,200 69,510
Cheng Loong Co. 1,483,200 473,455
Chinatrust Financial Holding Co., Ltd. 500,000 510,444
Chunghwa Telecom Co., Ltd. (ADR) 4,100 65,928
Compal Electronics, Inc.(a) 100,000 99,735
Flexium Interconnect, Inc. 336,000 263,936
Hon Hai Precision Industry Co., Ltd. 205,360 740,118
Jenn Feng Industrial Co., Ltd.(a) 240,000 441,306
MediaTek, Inc. 76,231 439,579
Mega Financial Holding Co., Ltd. 1,000,000 623,713
Nan Ya Plastics Corp. 424,947 567,596
Taiwan Semiconductor Manufacturing Co., Ltd. 455,107 574,407
Tong-Tai Machine & Tool Co., Ltd. 300,000 426,302
United Microelectronics Corp.(a) 1,031,196 658,339
Wan Hai Lines, Ltd. 449,240 376,680
Yageo Corp.(a) 1,000,000 413,357
-------------
7,679,974
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 9
Portfolio of Investments
- -------------------------------------------------------------------------------
U.S. $ Value
- -------------------------------------------------------------------------------
Total Investments-99.3%
(cost $40,341,921) $ 42,657,485
Other assets less liabilities-0.7% 290,292
-------------
Net Assets-100% $ 42,947,777
=============
(a) Non-income producing security.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security is considered liquid and may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At July
31, 2004, this security amounted to $69,510 or 0.2% of net assets.
Glossary of terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
See notes to financial statements.
_______________________________________________________________________________
10 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
July 31, 2004
ASSETS
Investments in securities, at value (cost $40,341,921) $ 42,657,485
Cash 44,104
Foreign cash, at value (cost $394,039) 393,351
Dividends receivable 112,747
Receivable for capital stock sold 54,093
-------------
Total assets 43,261,780
-------------
LIABILITIES
Payable for capital stock redeemed 127,927
Advisory fee payable 29,050
Distribution fee payable 25,277
Transfer Agent fee payable 6,882
Accrued expenses 124,867
-------------
Total liabilities 314,003
-------------
Net Assets $ 42,947,777
=============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 4,086
Additional paid-in capital 40,837,586
Accumulated net realized loss on investment
and foreign currency transactions (208,048)
Net unrealized appreciation of investments
and foreign currency denominated assets and liabilities 2,314,153
-------------
$ 42,947,777
=============
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share
($17,718,810/1,647,980 shares of capital stock
issued and outstanding) $10.75
Sales charge--4.25% of public offering price 0.48
------
Maximum offering price $11.23
======
Class B Shares
Net asset value and offering price per share
($12,871,980/1,245,908 shares of capital stock
issued and outstanding) $10.33
======
Class C Shares
Net asset value and offering price per share
($10,977,716/1,065,725 shares of capital stock
issued and outstanding) $10.30
======
Advisor Class Shares
Net asset value, redemption and offering price per share
($1,379,271/126,217 shares of capital stock
issued and outstanding) $10.93
======
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 11
Statement of Operations
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Year Ended July 31, 2004
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $33,558) $ 878,162
Interest 9,877 $ 888,039
------------
EXPENSES
Advisory fee 433,758
Distribution fee--Class A 58,710
Distribution fee--Class B 118,697
Distribution fee--Class C 106,393
Custodian 263,465
Transfer agency 126,733
Audit and legal 112,233
Administrative 109,500
Registration 66,599
Printing 48,186
Directors' fees 12,300
Miscellaneous 3,620
------------
Total expenses 1,460,194
Less: expenses waived and reimbursed
by the Adviser and the Transfer Agent
(see Note B) (253,763)
Less: expense offset arrangement
(see Note B) (9)
------------
Net expenses 1,206,422
------------
Net investment loss (318,383)
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain on:
Investment transactions 2,071,748
Foreign currency transactions 53,896
Net change in unrealized
appreciation/depreciation of:
Investments (456,379)
Foreign currency denominated
assets and liabilities (1,665)
------------
Net gain on investment and foreign
currency transactions 1,667,600
------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 1,349,217
============
See notes to financial statements.
_______________________________________________________________________________
12 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
July 31, July 31,
2004 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss) $ (318,383) $ 9,233
Net realized gain (loss) on investment and
foreign currency transactions 2,125,644 (843,447)
Net change in unrealized
appreciation/depreciation
of investments and foreign
currency denominated
assets and liabilities (458,044) 2,848,106
------------- -------------
Net increase in net assets from
operations 1,349,217 2,013,892
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (56,673) (23,187)
Class B (14,331) (14,269)
Class C (13,116) (5,705)
Advisor Class (5,465) (2,310)
CAPITAL STOCK TRANSACTIONS
Net increase 27,933,553 4,769,657
------------- -------------
Total increase 29,193,185 6,738,078
NET ASSETS
Beginning of period 13,754,592 7,016,514
------------- -------------
End of period (including undistributed net
investment income of $0 and $16,773,
respectively) $ 42,947,777 $ 13,754,592
============= =============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 13
Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
July 31, 2004
NOTE A
Significant Accounting Policies
AllianceBernstein Greater China '97 Fund, Inc. (the "Fund") 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 U.S. generally accepted accounting principles 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 Alliance Capital Management L.P. (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 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
_______________________________________________________________________________
14 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Notes to Financial Statements
- -------------------------------------------------------------------------------
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. 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 foreign 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 and depreciation of investments
and foreign currency denominated assets and liabilities.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 15
Notes to Financial Statements
- -------------------------------------------------------------------------------
3. 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. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Fund is
informed of the dividend. 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 on short-term securities as adjustments to interest
income.
5. 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.
6. 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 U.S. generally accepted accounting principles. 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 the Adviser
a fee at an annual rate of 1% of the Fund's average daily net assets. Such fee
is accrued daily and paid monthly.
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, 2004, such reimbursement amounted to $62,082.
_______________________________________________________________________________
16 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Notes to Financial Statements
- -------------------------------------------------------------------------------
Effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee so as to charge the Fund at the reduced annual rate of .75% of the first
$2.5 billion, .65% of the next $2.5 billion and .60% in excess of $5 billion,
of the average daily net assets of the Fund. Through July 31, 2004, such waiver
amounted to $78,811. The waiver was made in contemplation of the final
agreement with the Office of the New York Attorney General ("NYAG") described
in "Legal Proceedings" below.
For the year ended July 31, 2004, the Adviser voluntarily agreed to reimburse a
portion of certain audit fees related to the investigations described under
"Legal Proceedings" below in the amount of $1,125.
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, 2004, the Adviser voluntarily agreed to waive its fees
for such services. Such waiver amounted to $109,500.
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. Such compensation amounted to $66,386 for the year ended July 31, 2004.
During the period, AGIS voluntarily agreed to waive a portion of its fees for
such services. Such waiver amounted to $3,370.
For the year ended July 31, 2004, the Fund's expenses were reduced by $9 under
an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, Inc. (the "Distributor"),
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 $26,091 from the sale of Class A shares and received
$9,988, $34,435 and $42,726 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the year ended July 31, 2004.
Brokerage commissions paid on investment transactions for the year ended July
31, 2004, amounted to $250,394, 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 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
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 17
Notes to Financial Statements
- -------------------------------------------------------------------------------
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 $2,192,795 and
$778,196 for Class B and 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, 2004, were as follows:
Purchases Sales
============= =============
Investment securities (excluding
U.S. government securities) $ 64,292,801 $ 36,044,814
U.S. government securities -0- -0-
At July 31, 2004, the cost of investments for federal income tax purposes,
gross unrealized appreciation and unrealized depreciation (excluding foreign
currency transactions) are as follows:
Cost $ 40,446,309
=============
Gross unrealized appreciation $ 5,181,242
Gross unrealized depreciation (2,970,066)
-------------
Net unrealized appreciation $ 2,211,176
=============
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 gains or losses on foreign
currency transactions. Fluctuations in the value of open forward exchange
currency contracts are recorded for financial reporting purposes as unrealized
appreciation and 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
_______________________________________________________________________________
18 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Notes to Financial Statements
- -------------------------------------------------------------------------------
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.
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, 2004 July 31, 2003 July 31, 2004 July 31, 2003
------------ ------------ -------------- --------------
CLASS A
Shares sold 3,383,026 1,067,796 $38,987,894 $ 7,841,000
- -------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 3,929 2,677 44,053 18,418
- -------------------------------------------------------------------------------
Shares converted from
Class B 24,581 11,194 281,975 77,423
- -------------------------------------------------------------------------------
Shares redeemed (2,212,592) (930,890) (25,727,641) (6,739,131)
- -------------------------------------------------------------------------------
Net increase 1,198,944 150,777 $13,586,281 $ 1,197,710
===============================================================================
CLASS B
Shares sold 1,694,629 2,528,499 $17,996,666 $17,414,309
- -------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 984 1,747 10,662 11,653
- -------------------------------------------------------------------------------
Shares converted to
Class A (25,516) (11,581) (281,975) (77,423)
- -------------------------------------------------------------------------------
Shares redeemed (967,879) (2,422,584) (10,073,297) (16,700,679)
- -------------------------------------------------------------------------------
Net increase 702,218 96,081 $ 7,652,056 $ 647,860
===============================================================================
CLASS C
Shares sold 1,778,712 4,401,475 $19,037,472 $30,883,247
- -------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 1,019 747 11,009 4,984
- -------------------------------------------------------------------------------
Shares redeemed (1,284,957) (4,009,743) (13,414,541) (28,032,481)
- -------------------------------------------------------------------------------
Net increase 494,774 392,479 $ 5,633,940 $ 2,855,750
===============================================================================
ADVISOR CLASS
Shares sold 247,363 76,366 $ 2,806,476 $ 581,179
- -------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 217 79 2,469 549
- -------------------------------------------------------------------------------
Shares redeemed (155,880) (67,463) (1,747,669) (513,391)
- -------------------------------------------------------------------------------
Net increase 91,700 8,982 $ 1,061,276 $ 68,337
===============================================================================
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 19
Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTE F
Risks Involved in Investing in the Fund
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 72% 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.
In the ordinary course of business, the Fund enters into contracts that contain
a variety of indemnifications. The Fund's maximum exposure under these
arrangements is unknown. However, the Fund has not had prior claims or losses
pursuant to these indemnification provisions and expects the risk of loss
thereunder to be remote.
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, 2004.
NOTE H
Distributions to Shareholders
The tax character of distributions paid during the fiscal years ended July 31,
2004 and July 31, 2003 were as follows:
2004 2003
============= =============
Distributions paid from:
Ordinary income $ 89,585 $ 45,471
------------- -------------
Total taxable distributions 89,585 45,471
------------- -------------
Total distributions paid $ 89,585 $ 45,471
------------- -------------
_______________________________________________________________________________
20 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Notes to Financial Statements
- -------------------------------------------------------------------------------
As of July 31, 2004, the components of accumulated earnings/(deficit) on a tax
basis were as follows:
Accumulated capital and other losses $ (103,660)(a)
Unrealized appreciation/(depreciation) 2,209,765(b)
-------------
Total accumulated earnings/(deficit) $ 2,106,105
=============
(a) On July 31, 2004, the Fund had a net capital loss carryforward for federal
income tax purposes of $103,660 which expires in the year 2011. To the extent
future capital gains are offset by capital loss carryforwards, such gains will
not be distributed. The Fund utilized $1,630,168 of capital loss carryforward
during the year.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales.
During the current fiscal year, permanent differences, primarily due to foreign
currency losses, net investment loss, resulted in a net increase in accumulated
net realized loss on investments and foreign currency transactions, decrease in
accumulated net investment loss, and a corresponding decrease in additional
paid-in capital. This reclassification had no effect on net assets.
NOTE I
Legal Proceedings
As has been previously reported in the press, the staff of the U.S. Securities
and Exchange Commission ("SEC") and the NYAG have been investigating practices
in the mutual fund industry identified as "market timing" and "late trading" of
mutual fund shares. Certain other regulatory authorities have also been
conducting investigations into these practices within the industry and have
requested that the Adviser provide information to them. The Adviser has been
cooperating and will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 21
Notes to Financial Statements
- -------------------------------------------------------------------------------
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. For more information on this waiver, please see "Advisory Fee and Other
Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
_______________________________________________________________________________
22 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Notes to Financial Statements
- -------------------------------------------------------------------------------
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
Morgan Stanley violated federal securities laws relating to its receipt of
compensation for selling specific mutual funds and the disclosure of such
compensation. The SEC has indicated publicly that, among other things, it is
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC has issued subpoenas to the Adviser in connection with
this matter and the Adviser has provided documents and other information to the
SEC and is cooperating fully with its investigation.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein Mutual Funds, including the
Fund, as nominal defendants. The Aucoin Complaint was filed in the United
States District Court for the Southern District of New York by an alleged
shareholder of the AllianceBernstein Growth & Income Fund. The Aucoin Complaint
alleges, among other things, (i) that certain of the defendants improperly
authorized the payment of excessive commissions and other fees from
AllianceBernstein Fund assets to broker-dealers in exchange for preferential
marketing services, (ii) that certain of the defendants misrepresented and
omitted from registration statements and other reports material facts
concerning such payments, and (iii) that certain defendants caused such conduct
as control persons of other defendants. The Aucoin Complaint asserts claims for
violation of Sections 34(b), 36(b) and 48(a) of the Investment Company Act,
Sections 206 and 215 of the Advisers Act, breach of common law fiduciary
duties, and aiding and abetting breaches of common law fiduciary duties.
Plaintiffs seek an unspecified amount of compensatory damages and punitive
damages, rescission of their contracts with the Adviser, including recovery of
all fees paid to the Adviser pursuant to such
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 23
Notes to Financial Statements
- -------------------------------------------------------------------------------
contracts, an accounting of all AllianceBernstein Fund-related fees,
commissions and soft dollar payments, and restitution of all unlawfully or
discriminatorily obtained fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on the Fund or
its ability to perform advisory services relating to the Fund.
_______________________________________________________________________________
24 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Financial Highlights
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
---------------------------------------------------------------
Year Ended July 31,
---------------------------------------------------------------
2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $8.82 $7.55 $8.45 $10.34 $8.20
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income (loss)(a)(b) (.04)(c) .04 .09 (.01) (.04)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions 2.01 1.32 (.99) (1.88) 2.18
Net increase (decrease)
in net asset value from
operations 1.97 1.36 (.90) (1.89) 2.14
LESS: DIVIDENDS
Dividends from
net investment income (.04) (.09) -0- -0- -0-
Net asset value,
end of period $10.75 $8.82 $7.55 $8.45 $10.34
TOTAL RETURN
Total investment return based
on net asset value(d) 22.30% 18.35% (10.65)% (18.28)% 26.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $17,719 $3,958 $2,253 $2,039 $2,471
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 2.38% 2.50% 2.50% 2.51%(e) 2.52%(e)
Expenses, before waivers/
reimbursements 2.94% 9.24% 10.82% 9.50%(e) 9.92%(e)
Net investment
income (loss)(b) (.37)%(c) .58% 1.18% (.09)% (.42)%
Portfolio turnover rate 89% 102% 63% 64% 158%
See footnote summary on page 29.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 25
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
---------------------------------------------------------------
Year Ended July 31,
---------------------------------------------------------------
2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $8.52 $7.30 $8.21 $10.13 $8.12
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income (loss)(a)(b) (.12)(c) (.01) .03 (.07) (.11)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions 1.95 1.27 (.94) (1.85) 2.12
Net increase (decrease)
in net asset value from
operations 1.83 1.26 (.91) (1.92) 2.01
LESS: DIVIDENDS
Dividends from
net investment income (.02) (.04) -0- -0- -0-
Net asset value,
end of period $10.33 $8.52 $7.30 $8.21 $10.13
TOTAL RETURN
Total investment return based
on net asset value(d) 21.41% 17.32% (11.08)% (18.95)% 24.75%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $12,872 $4,632 $3,266 $3,234 $4,047
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 3.18% 3.20% 3.20% 3.21%(e) 3.22%(e)
Expenses, before waivers/
reimbursements 3.79% 9.98% 11.56% 10.28%(e) 10.72%(e)
Net investment
income (loss)(b) (1.11)%(c) (.11)% .41% (.81)% (1.13)%
Portfolio turnover rate 89% 102% 63% 64% 158%
See footnote summary on page 29.
_______________________________________________________________________________
26 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
---------------------------------------------------------------
Year Ended July 31,
---------------------------------------------------------------
2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $8.50 $7.30 $8.21 $10.13 $8.11
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income (loss)(a)(b) (.12)(c) (.01) .04 (.08) (.13)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions 1.94 1.25 (.95) (1.84) 2.15
Net increase (decrease)
in net asset value from
operations 1.82 1.24 (.91) (1.92) 2.02
LESS: DIVIDENDS
Dividends from
net investment income (.02) (.04) -0- -0- -0-
Net asset value,
end of period $10.30 $8.50 $7.30 $8.21 $10.13
TOTAL RETURN
Total investment return based
on net asset value(d) 21.34% 17.05% (11.08)% (18.95)% 24.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $10,978 $4,856 $1,302 $877 $1,372
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 3.15% 3.20% 3.20% 3.21%(e) 3.22%(e)
Expenses, before waivers/
reimbursements 3.75% 10.19% 11.28% 10.13%(e) 10.01%(e)
Net investment
income (loss)(b) (1.07)%(c) (.15)% .50% (.84)% (1.31)%
Portfolio turnover rate 89% 102% 63% 64% 158%
See footnote summary on page 29.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 27
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
---------------------------------------------------------------
Year Ended July 31,
---------------------------------------------------------------
2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $8.94 $7.66 $8.53 $10.41 $8.24
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income (loss)(a)(b) (.02)(c) .08 .10 .06 (.02)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions 2.05 1.31 (.97) (1.94) 2.19
Net increase (decrease)
in net asset value from
operations 2.03 1.39 (.87) (1.88) 2.17
LESS: DIVIDENDS
Dividends from
net investment income (.04) (.11) -0- -0- -0-
Net asset value, end of period $10.93 $8.94 $7.66 $8.53 $10.41
TOTAL RETURN
Total investment return based
on net asset value(d) 22.72% 18.55% (10.20)% (18.06)% 26.34%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $1,379 $309 $196 $386 $273
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 2.14% 2.20% 2.20% 2.21%(e) 2.22%(e)
Expenses, before waivers/
reimbursements 2.71% 8.69% 10.57% 9.35%(e) 9.61%(e)
Net investment
income (loss)(b) (.13)%(c) 1.14% 1.28% .71% (.15)%
Portfolio turnover rate 89% 102% 63% 64% 158%
See footnote summary on page 29.
_______________________________________________________________________________
28 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Financial Highlights
- -------------------------------------------------------------------------------
(a) Based on average shares outstanding.
(b) Net of expenses waived/reimbursed by the Adviser.
(c) Net of expenses waived by the Transfer Agent.
(d) 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.
(e) 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
-----------------------------
Class A 2.50% 2.50%
Class B 3.20% 3.20%
Class C 3.20% 3.20%
Advisor Class 2.20% 2.20%
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 29
Report of Independent Registered Public Accounting Firm
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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., including the portfolio of
investments, as of July 31, 2004, 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 the standards of the Public Company
Accounting Oversight Board (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, 2004, by correspondence with the custodian and others. 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, 2004, 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 U.S.
generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
September 10, 2004
TAX INFORMATION
(unaudited)
For the fiscal year ended July 31, 2004, 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 designates a maximum amount of
$911,720 as qualified dividend income, which is taxed at a maximum rate of
15%.The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2004.Complete information will be computed and reported in
conjunction with your 2004 Form 1099-DIV.
_______________________________________________________________________________
30 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Board of Directors
- -------------------------------------------------------------------------------
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
David H. Dievler(1)
Clifford L. Michel(1)
Tak-Lung Tsim
OFFICERS
Marc O. Mayer, President
Matthew W. S. Lee(2), Senior Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Principal Underwriter
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 Registered Public Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036
(1) Member of the Audit Committee.
(2) Mr. Lee is the person primarily responsible for the day-to-day management
of the Fund's investment portfolio.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 31
Management of the Fund
- -------------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTORS
Tak-Lung Tsim,**, 58 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
William H. Foulk, Jr., #+, 72 Investment Adviser and an 113 None
2 Sound View Drive Independent Consultant. He
Suite 100 was formerly Senior Manager
Greenwich, CT 06830 of Barrett Associates, Inc., a
(7) registered investment adviser,
(Chairman of the Board) with which he had been
associated since prior to 1999.
He was formerly Deputy
Comptroller and Chief
Investment Officer of the State of
New York and, prior thereto,
Chief Investment Officer of the
New York Bank for Savings.
David H. Dievler,#+, 74 Independent consultant. Until 98 None
P.O. Box 167 December 1994, he was Senior
Spring Lake, NJ 07762 Vice President of ACMC responsible
(7) for mutual fund administration.
Prior to joining ACMC in 1984,
he was Chief Financial Officer of
Eberstadt Asset Management
since 1968. Prior to that, he was a
Senior Manager at Price Waterhouse
& Co. Member of the American
Institute of Certified Public
Accountants since 1953.
_______________________________________________________________________________
32 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Management of the Fund
- -------------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
Clifford L. Michel, #+, 65 Senior Counsel to the law firm 96 Placer Dome,
15 St. Bernard's Road of Cahill Gordon & Reindel Inc.
Gladstone, NJ 07934 since February 2001 and a
(2) partner of that firm for more
than 25 years prior thereto.
He is 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. 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.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 33
Management of the Fund
- -------------------------------------------------------------------------------
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**
- --------------------------------------------------------------------------------------------------------------
Marc O. Mayer, **,46 President Executive Vice President of ACMC
since 2001; prior thereto, Chief
Executive Officer of Sanford C.
Bernstein & Co., LLC ("SCB & Co.")
and its predecessor since prior to
1999.
Matthew W.S. Lee, 41 Senior Vice President Vice President of ACMC**, with which
and Chief Investment he has been associated since prior to
Officer 1999.
Mark R.Manley, 41 Secretary Senior Vice President and Chief
Compliance Officer of ACMC, with
which he has been associated since
prior to 1999.
Mark D. Gersten, 53 Treasurer and Chief Senior Vice President of Alliance Global
Financial Officer Investor Services, Inc. ("AGIS")** and
Vice President of AllianceBernstein
Investment Research and
Management, Inc. ("ABIRM")**, with
which he has been associated since
prior to 1999.
Vincent S. Noto, 39 Controller Vice President of AGIS**, with which
he has been associated since prior to
1999.
* 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.
_______________________________________________________________________________
34 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
AllianceBernstein Family of Funds
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN FAMILY OF FUNDS
- --------------------------------------------
Wealth Strategies Funds
- --------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy*
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy**
- --------------------------------------------
Blended Style Funds
- --------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
- --------------------------------------------
Growth Funds
- --------------------------------------------
Domestic
Growth Fund
Health Care Fund
Mid-Cap Growth Fund
Premier Growth Fund
Small Cap Growth Fund
Technology Fund
Global & International
All-Asia Investment Fund
Global Research Growth Fund
Global Small Cap Fund
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
- --------------------------------------------
Value Funds
- --------------------------------------------
Domestic
Balanced Shares
Disciplined Value Fund
Growth & Income Fund
Real Estate Investment Fund
Small Cap Value Fund
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
- --------------------------------------------
Taxable 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
Short Duration Portfolio
U.S. Government Portfolio
- --------------------------------------------
Municipal Bond Funds
- --------------------------------------------
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
- --------------------------------------------
Intermediate Municipal Bond Funds
- --------------------------------------------
Intermediate California
Intermediate Diversified
Intermediate New York
- --------------------------------------------
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
We also offer Exchange Reserves,+ which serves as the money market fund
exchange vehicle for the AllianceBernstein mutual funds.
For more complete information on any AllianceBernstein mutual fund, including
investment objectives and policies, sales charges, expenses, risks and other
matters of importance to prospective investors, visit our web site at
www.alliancebernstein.com or call us at (800) 227-4618 for a current
prospectus. Please read the prospectus carefully before you invest or send
money.
* Formerly Growth Investors Fund.
** Formerly Conservative Investors Fund.
+ An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 35
NOTES
_______________________________________________________________________________
36 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.
GCFAR0704
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 11(a)(1).
(b) During the period covered by this report, no material 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
David H. Dievler and William H. Foulk, Jr. qualify as audit committee
financial experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The following table sets forth the aggregate fees billed by the
independent auditor, Ernst & Young LLP, for the Fund's last two fiscal years for
professional services rendered for: (i) the audit of the Fund's annual financial
statements included in the Fund's annual report to stockholders; (ii) assurance
and related services that are reasonably related to the performance of the audit
of the Fund's financial statements and are not reported under (i), which include
multi-class distribution testing, advice and education on accounting and
auditing issues, and consent letters; (iii) tax compliance, tax advice and tax
return preparation; and (iv) aggregate non-audit services provided to the Fund,
the Fund's Adviser and entities that control, are controlled by or under common
control with the Adviser that provide ongoing services to the Fund ("Service
Affiliates"), which include conducting an annual internal control report
pursuant to Statement on Auditing Standards No. 70. No other services were
provided to the Fund during this period.
All Fees for
Non-Audit Services
Provided to the
Portfolio, the
Adviser
Audit-Related and Service
Audit Fees Fees Tax Fees Affiliates
- -------------------------------------------------------------------------------
2003: $25,125 $9,933 $11,100 $708,448
2004: $24,000 $7,721 $13,479 $858,801
Beginning with audit and non-audit service contracts entered into on or
after May 6, 2003, the Fund's Audit Committee policies and procedures require
the pre-approval of all audit and non-audit services provided to the Fund by the
Fund's independent auditors. The Fund's Audit Committee policies and procedures
also require pre-approval of all audit and non-audit services provided to the
Adviser and Service Affiliates to the extent that these services are directly
related to the operations or financial reporting of a Fund. Accordingly, all of
the amounts in the table for Audit Fees, Audit-Related Fees and Tax Fees for
the entire period ended 2003 and 2004 are for services pre-approved by the
Fund's Audit Committee. The amounts of the Fees for Non-Audit Services
provided to the Fund, the Adviser and Service Affiliates in the table for the
Fund, that were subject to pre-approval by the Audit Committee for the entire
period ended 2003 and 2004 were as follows:
Non-Audit Services Pre-Approved
by the Audit Committee
---------------------------------------
Audit
Related Tax
Fees Fees Total
-------- -------- ----------
2003 $293,833 $11,100 $304,933
2004 $254,466 $13,479 $267,945
The Audit Committee of the Fund has considered whether the provision of any
non-audit services not pre-approved by the Audit Committee provided by the
Fund's independent auditor to the Adviser and Service Affiliates is compatible
with maintaining the auditor's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last provided
disclosure in response to this item.
ITEM 10. 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 11. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- -----------------------
11 (a) (1) Code of ethics that is subject to the disclosure of
Item 2 hereof
11 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
11 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
11 (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/ Marc O. Mayer
---------------------
Marc O. Mayer
President
Date: September 29, 2004
---------------------
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/ Marc O. Mayer
---------------------
Marc O. Mayer
President
Date: September 29, 2004
---------------------
By: /s/ Mark D. Gersten
---------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: September 29, 2004
---------------------