N-CSR 1 d220938dncsr.htm ALLIANCEBERNSTEIN GREATER CHINA '97 FUND, INC. AllianceBernstein Greater China '97 Fund, Inc.

 

 

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)

Joseph J. Mantineo

AllianceBernstein 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, 2011

Date of reporting period: July 31, 2011

 

 

 


ITEM 1.    REPORTS TO STOCKHOLDERS.


ANNUAL REPORT

 

AllianceBernstein
Greater China ’97 Fund

 

 

 

 

July 31, 2011

 

Annual Report

 

LOGO


 

Investment Products Offered

   

Are Not FDIC Insured

   

May Lose Value

   

Are Not Bank Guaranteed

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at www.alliancebernstein.com or contact your AllianceBernstein Investments representative. Please read the prospectus and/or summary prospectus carefully before investing.

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 AllianceBernstein’s website at www.alliancebernstein.com, or go to the Securities and Exchange Commission’s (the “Commission”) website at www.sec.gov, or call AllianceBernstein 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 website 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. AllianceBernstein publishes full portfolio holdings for the Fund monthly at www.alliancebernstein.com.

AllianceBernstein Investments, Inc. (ABI) is the distributor of the AllianceBernstein family of mutual funds. ABI is a member of FINRA and is an affiliate of AllianceBernstein L.P., the manager of the funds.

AllianceBernstein® and the AB Logo are registered trademarks and service marks used by permission of the owner, AllianceBernstein L.P.


September 12, 2011

 

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, 2011.

Investment Objective and Policies

The Fund’s investment objective is long-term capital appreciation through investment of at least 80% of its total assets in equity securities of Greater China companies. Under normal circumstances, the Fund will invest at least 80%, and normally substantially all, of its net assets in equity securities of Greater China companies, which are companies in China, Hong Kong and Taiwan. Of these countries, the Fund expects to invest a significant portion of its assets, which may be greater than 50%, in Hong Kong companies and may invest all of its assets in Hong Kong companies or companies of either of the other Greater China countries. The Fund also may invest in convertible securities and equity-linked debt securities issued or guaranteed by Greater China companies or Greater China Governments, their agencies, or instrumentalities. In addition to investing in equity securities of Greater China companies, the Fund may invest up to 20% of its total assets in (i) debt securities issued or guaranteed by Greater China companies or by Greater China Governments, their agencies or instrumentalities and (ii) equity or debt securities issued by issuers other than Greater China companies. The Fund will invest only in investment-grade securities. The Fund normally invests in approximately 45-65 companies.

 

Currencies can have a dramatic impact on equity returns, significantly adding to returns in some years and greatly diminishing them in others. Currency and equity positions are evaluated separately. AllianceBernstein L.P. (the “Adviser”) may seek to hedge the currency exposure resulting from securities positions when it finds the currency exposure unattractive. To hedge a portion of its currency risk, the Fund may from time to time invest in currency-related derivatives, including forward currency exchange contracts, futures, options on futures, swaps and options. The Adviser may also seek investment opportunities by taking long or short positions in currencies through the use of currency-related derivatives.

Investment Results

The table on page 5 shows the Fund’s performance compared to its benchmark, the Morgan Stanley Capital International (MSCI) Golden Dragon Index (net and gross) and to the Lipper China Region Funds Average (the “Lipper Average”). 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 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.

The Fund declined and underperformed its benchmark for the six-month period ended July 31, 2011

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       1   


and underperformed for the 12-month period ended July 31, 2011, before sales charges. The Fund underperformed its Lipper Average during both periods as well.

Stock selection detracted during the 12-month period. Stock selection in the industrials sector was the largest detractor, including positions in shipping companies which underperformed due to the natural disaster in Japan and weaker prospects on freight revenue given global economic outlook. Somewhat mitigating these losses was the Fund’s underweight to the industrials sector.

Stock selection in the industrials sector was again the leading detractor for the six-month period. An underweight in the defensive utilities and telecommunications sector also detracted. Contributing was stock selection in the consumer discretionary sector.

The Fund did not utilize derivatives or leverage during the six- or 12-month periods ended July 31, 2011.

Market Review and Investment Strategy

Global equities retreated in the six-month period ended July 31, 2011, influenced by the natural disaster in Japan, ongoing concern over the Middle East political situation and further monetary tightening in China. Concerns over the debt situation in the euro area and in the United States also resurfaced, causing investors to worry about the pace of the global economic recovery. The rapid reduction in risk appetite resulted in the Fund trailing

its benchmark for both the six- and 12-month periods. The research of the Hong Kong/China Portfolio Oversight Group (the “Group”) suggests that the threats to the Greater China region’s economic growth are limited, as from past cycles, and they are positioning the Fund with stocks that the Group believes have exceptional long-term growth potential, particularly in the domestic consumer sectors.

While the Group does not think China’s central bank will ease policy soon, there are global growth concerns that the country is not likely to have more rate hikes in 2011. Inflation is also likely to taper off from a high level.

The shift towards lower growth and peaking inflation should be positive for growth stocks. As fewer companies are able to exceed expectations, stocks that consistently outperform should expect to be rewarded with superior share price gains. The Group believes this will be positive for the Fund’s investment approach, as it strives to uncover the relatively few stocks with underestimated earnings power.

Despite increases in interest rates over the 12-month period ended July 31, 2011, real interest rates in China remain negative. The weaker U.S. economic growth outlook suggests that interest rates are likely to stay accommodative in the near future. This is likely to drive more international capital into China. Taiwan’s economy has already moved into a steadier state of self-sustaining growth, but may still be affected by a weaker global economy.

 

2     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND


Hong Kong authorities, like their Chinese counterparts, are taking action to quell segments of the property market and inflation.

 

The Fund is overweight the consumer discretionary, consumer staples, financials and technology sectors and underweight the telecom, utilities, industrials and energy sectors.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       3   


HISTORICAL PERFORMANCE

An Important Note About Historical Performance

The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. 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.

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 the different share classes will vary due to different expenses associated with each class. Performance assumes reinvestment of distributions and does not account for taxes.

Benchmark Disclosure

The unmanaged MSCI Golden Dragon Index does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The MSCI Golden Dragon Index (net and gross; free float-adjusted market capitalization) represents the equity market performance in the China region. Net returns include the reinvestment of dividends after deduction of non-U.S. withholding tax; gross returns include reinvestment of dividends prior to such deduction. MSCI makes no express or implied warranties or representations, and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices, any securities or financial products. This report is not approved, reviewed or produced by MSCI. The 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. An investor cannot invest directly in an index or average, and its results are not indicative of the performance for any specific investment, including the Fund.

A Word About Risk

Market Risk: The market values of the portfolio’s holdings rise and fall from day to day, so investments may lose value.

Foreign (Non-U.S.) Risk: Non-U.S. securities may be more volatile because of political, regulatory, market and economic uncertainties associated with such securities. Fluctuations in currency exchange rates may negatively affect the value of the investment or reduce returns. These risks are magnified in emerging or developing markets.

Focused Portfolio Risk: Portfolios that hold a smaller number of securities may be more volatile than more diversified portfolios, since gains or losses from each security will have a greater impact on the portfolio’s overall value.

Derivatives Risk: Investing in derivative instruments such as options, futures, forwards or swaps can be riskier than traditional investments, and may be more volatile, especially in a down market.

Country/Geographic Risk: Investments in issuers located in a particular country or geographic region may have more risk because of particular market factors affecting that country or region, including political instability or unpredictable economic conditions.

These risks are fully discussed in the Fund’s prospectus.

(Historical Performance continued on next page)

 

4     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Historical Performance


HISTORICAL PERFORMANCE

(continued from previous page)

 

        
THE FUND VS. ITS BENCHMARK
PERIODS ENDED JULY 31, 2011
  NAV Returns      
  6 Months        12 Months       

AllianceBernstein Greater China ’97 Fund

        

Class A

    -4.10%           8.62%     

 

Class B*

    -4.50%           7.80%     

 

Class C

    -4.44%           7.83%     

 

Advisor Class**

    -3.98%           8.91%     

 

MSCI Golden Dragon Index (net)

    -1.61%           15.10%     

 

MSCI Golden Dragon Index (gross)

    -1.34%           15.51%     

 

Lipper China Region Funds Average

    -2.69%           12.24%     

 

*    Effective January 31, 2009, Class B shares are no longer available for purchase to new investors. Please see Note A for more information.

**  Please note that this share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Funds.

 

        

GROWTH OF A $10,000 INVESTMENT IN THE FUND 7/31/01- 7/31/11

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AllianceBernstein Greater China ‘97 Fund Class A shares (from 7/31/01 to 7/31/11) as compared to the performance of the Fund’s benchmark, the MSCI Golden Dragon Index. 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 distributions.

See Historical Performance and Benchmark disclosures on previous page.

(Historical Performance continued on next page)

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       5   

Historical Performance


HISTORICAL PERFORMANCE

(continued from previous page)

 

AVERAGE ANNUAL RETURNS AS OF JULY 31, 2011  
     NAV Returns        SEC Returns  
       
Class A Shares        

1 Year

     8.62        4.01

5 Years

     8.55        7.61

10 Years

     11.44        10.95
       
Class B Shares        

1 Year

     7.80        3.80

5 Years

     7.76        7.76

10 Years(a)

     10.80        10.80
       
Class C Shares        

1 Year

     7.83        6.83

5 Years

     7.79        7.79

10 Years

     10.63        10.63
       
Advisor Class Shares        

1 Year

     8.91        8.91

5 Years

     8.86        8.86

10 Years

     11.78        11.78

The Fund’s current prospectus fee table shows the Fund’s total annual operating expense ratios as 1.88%, 2.67%, 2.64% and 1.63% for Class A, Class B, Class C and Advisor Class shares, respectively, gross of any fee waivers or expense reimbursements. These waivers/reimbursements extend through the Fund’s current fiscal year and may be extended by the Adviser for additional one-year terms. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

 

(a)   Assumes conversion of Class B shares into Class A shares after eight years.

 

    This share class is offered at net asset value (NAV) to eligible investors and its SEC returns are the same as its NAV returns. Please note that this share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Funds.

See Historical Performance disclosures on page 4.

(Historical Performance continued on next page)

 

6     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Historical Performance


HISTORICAL PERFORMANCE

(continued from previous page)

 

SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (JUNE 30, 2011)
 
         SEC Returns  
    
Class A Shares     

1 Year

       13.20

5 Years

       7.88

10 Years

       9.95
    
Class B Shares     

1 Year

       13.36

5 Years

       8.05

10 Years(a)

       9.81
    
Class C Shares     

1 Year

       16.32

5 Years

       8.06

10 Years

       9.63
    
Advisor Class Shares     

1 Year

       18.55

5 Years

       9.14

10 Years

       10.77

 

(a)    Assumes conversion of Class B shares into Class A shares after eight years.

 

    Please note that this share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Funds.

See Historical Performance disclosures on page 4.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       7   

Historical Performance


FUND EXPENSES

(unaudited)

 

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 table below provides information about actual account values and actual expenses. You may use the information, 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 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 table below also 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 hypothetical example 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
Account Value
February 1, 2011
     Ending
Account Value
July 31, 2011
     Expenses Paid
During Period*
 
     Actual      Hypothetical      Actual      Hypothetical**      Actual      Hypothetical  
Class A    $   1,000       $   1,000       $   959.00       $   1,014.48       $   10.10       $   10.39   
Class B    $ 1,000       $ 1,000       $ 955.00       $ 1,010.76       $ 13.72       $ 14.11   
Class C    $ 1,000       $ 1,000       $ 955.62       $ 1,010.86       $ 13.63       $ 14.01   
Advisor Class    $ 1,000       $ 1,000       $ 960.22       $ 1,015.87       $ 8.75       $ 9.00   
*   Expenses are equal to the classes’ annualized expense ratios of 2.08%, 2.83%, 2.81% and 1.80%, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

**   Assumes 5% return before expenses.

 

8     ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND

Fund Expenses


PORTFOLIO SUMMARY

July 31, 2011 (unaudited)

 

PORTFOLIO STATISTICS

Net Assets ($mil): $51.7

LOGO

LOGO

 

*   All data are as of July 31, 2011. The Fund’s sector and country breakdowns are expressed as a percentage of total investments and may vary over time.

Please note: The sector classifications presented herein are based on the Global Industry Classification Standard (GICS) which was developed by Morgan Stanley Capital International and Standard & Poor’s. The components are divided into sector, industry group, and industry sub-indices as classified by the GICS for each of the market capitalization indices in the broad market. These sector classifications are broadly defined. The “Portfolio of Investments” section of the report reflects more specific industry information and is consistent with the investment restrictions discussed in the Fund’s prospectus.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       9   

Portfolio Summary


TEN LARGEST HOLDINGS*

July 31, 2011 (unaudited)

 

Company    U.S. $ Value        Percent of
Net Assets
 

Industrial & Commercial Bank of China – Class H

   $ 2,997,294           5.8

CNOOC Ltd.

     2,967,123           5.7   

Taiwan Semiconductor Manufacturing Co., Ltd.

     2,648,459           5.1   

AIA Group Ltd.

     2,001,782           3.9   

China Construction Bank Corp. – Class H

     1,848,591           3.6   

China Unicom Hong Kong Ltd.

     1,569,974           3.0   

HTC Corp.

     1,499,272           2.9   

Tencent Holdings Ltd.

     1,366,875           2.7   

Springland International Holdings Ltd.

     1,356,549           2.6   

Focus Media Holding Ltd. (ADR)

     1,292,577           2.5   
   $   19,548,496           37.8

 

 

 

*   Long-term investments.

 

10     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Ten Largest Holdings


PORTFOLIO OF INVESTMENTS

July 31, 2011

 

Company    Shares     U.S. $ Value  

 

 
    

COMMON STOCKS – 99.8%

    

Financials – 36.4%

    

Commercial Banks – 15.2%

    

BOC Hong Kong Holdings Ltd.

     179,500      $ 535,802   

China Construction Bank Corp. – Class H

     2,293,600        1,848,591   

Chinatrust Financial Holding Co., Ltd.

     1,002,000        904,845   

Hang Seng Bank Ltd.

     33,100        520,360   

Industrial & Commercial Bank of China – Class H

     3,940,020        2,997,294   

Standard Chartered PLC

     40,981        1,047,671   
    

 

 

 
       7,854,563   
    

 

 

 

Diversified Financial Services – 3.1%

    

Fubon Financial Holding Co., Ltd.

     404,000        659,093   

Hong Kong Exchanges and Clearing Ltd.

     46,500        959,268   
    

 

 

 
       1,618,361   
    

 

 

 

Insurance – 7.5%

    

AIA Group Ltd.(a)

     545,000        2,001,782   

Cathay Financial Holding Co., Ltd.

     582,063        872,694   

China Life Insurance Co., Ltd. – Class H

     63,000        210,107   

Ping An Insurance Group Co. – Class H

     78,500        763,917   
    

 

 

 
       3,848,500   
    

 

 

 

Real Estate Management & Development – 10.6%

    

Cheung Kong Holdings Ltd.

     74,000        1,127,319   

China Overseas Land & Investment Ltd.

     334,000        744,469   

Longfor Properties Co., Ltd.

     719,500        1,107,592   

Sun Hung Kai Properties Ltd.

     83,000        1,261,514   

Wharf Holdings Ltd.

     168,000        1,229,686   
    

 

 

 
       5,470,580   
    

 

 

 
       18,792,004   
    

 

 

 

Information Technology – 20.4%

    

Communications Equipment – 4.2%

    

HTC Corp.

     50,400        1,499,272   

Wistron NeWeb Corp.

     193,000        683,003   
    

 

 

 
       2,182,275   
    

 

 

 

Electronic Equipment, Instruments & Components – 5.5%

    

Chroma ATE, Inc.

     439,074        1,105,602   

Delta Electronics, Inc.

     72,000        254,848   

Largan Precision Co., Ltd.

     12,000        404,077   

Unimicron Technology Corp.

     617,000        1,097,724   
    

 

 

 
       2,862,251   
    

 

 

 

Internet Software & Services – 3.5%

    

Baidu, Inc./China (Sponsored ADR)(a)

     2,700        424,089   

Tencent Holdings Ltd.

     52,600        1,366,875   
    

 

 

 
       1,790,964   
    

 

 

 

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       11   

Portfolio of Investments


Company    Shares     U.S. $ Value  

 

 
    

Semiconductors & Semiconductor Equipment – 7.2%

    

Kinsus Interconnect Technology Corp.

     43,000      $ 177,616   

MediaTek, Inc.

     23,000        206,018   

Taiwan Semiconductor Manufacturing Co., Ltd.

     1,065,714        2,648,459   

Trina Solar Ltd. (Sponsored ADR)(a)

     37,200        666,252   
    

 

 

 
       3,698,345   
    

 

 

 
       10,533,835   
    

 

 

 

Consumer Discretionary – 13.2%

    

Hotels, Restaurants & Leisure – 2.3%

    

Ajisen China Holdings Ltd.

     365,000        719,007   

Sands China Ltd.(a)

     151,600        456,280   
    

 

 

 
       1,175,287   
    

 

 

 

Media – 2.5%

    

Focus Media Holding Ltd. (ADR)(a)

     39,300        1,292,577   
    

 

 

 

Multiline Retail – 2.6%

    

Springland International Holdings Ltd.

     1,433,000        1,356,549   
    

 

 

 

Specialty Retail – 5.8%

    

Belle International Holdings Ltd.

     347,000        757,410   

L’Occitane International SA(a)

     301,750        828,000   

Man Wah Holdings Ltd.

     380,000        344,831   

Zhongsheng Group Holdings Ltd.

     512,000        1,085,720   
    

 

 

 
       3,015,961   
    

 

 

 
       6,840,374   
    

 

 

 

Materials – 8.3%

    

Chemicals – 2.1%

    

Formosa Chemicals & Fibre Corp.

     133,000        481,857   

Formosa Plastics Corp.

     165,000        621,296   
    

 

 

 
       1,103,153   
    

 

 

 

Construction Materials – 2.9%

    

BBMG Corp.

     630,500        910,699   

China Resources Cement Holdings, Ltd.

     604,000        578,548   
    

 

 

 
       1,489,247   
    

 

 

 

Metals & Mining – 3.3%

    

China Metal Recycling Holdings Ltd.

     214,800        288,010   

China Steel Corp.

     436,800        455,652   

Jiangxi Copper Co., Ltd. – Class H

     81,000        283,872   

Mongolian Mining Corp.(a)

     547,500        674,357   
    

 

 

 
       1,701,891   
    

 

 

 
       4,294,291   
    

 

 

 

Energy – 8.2%

    

Oil, Gas & Consumable Fuels – 8.2%

    

China Shenhua Energy Co., Ltd. – Class H

     65,500        328,843   

CNOOC Ltd.

     1,336,000        2,967,123   

PetroChina Co., Ltd. – Class H

     360,000        513,677   

 

12     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Portfolio of Investments


Company    Shares     U.S. $ Value  

 

 
    

Yanzhou Coal Mining Co., Ltd. – Class H

     108,000      $ 413,738   
    

 

 

 
       4,223,381   
    

 

 

 

Consumer Staples – 5.9%

    

Food & Staples Retailing – 0.8%

    

President Chain Store Corp.

     65,000        415,857   
    

 

 

 

Food Products – 5.1%

    

Besunyen Holdings Co.

     1,352,000        463,171   

China Mengniu Dairy Co., Ltd.

     271,000        938,241   

China Yurun Food Group Ltd.

     395,000        1,239,753   
    

 

 

 
       2,641,165   
    

 

 

 
       3,057,022   
    

 

 

 

Industrials – 3.3%

    

Airlines – 1.5%

    

Air China Ltd.

     250,000        263,814   

Eva Airways Corp.(a)

     574,000        511,790   
    

 

 

 
       775,604   
    

 

 

 

Construction & Engineering – 0.6%

    

China Communications Construction Co., Ltd.

     350,000        298,219   
    

 

 

 

Marine – 1.2%

    

SITC International Holdings Co., Ltd.

     1,509,000        638,359   
    

 

 

 

Transportation Infrastructure – 0.0%

    

China Merchants Holdings International Co., Ltd.

     1,698        6,039   
    

 

 

 
       1,718,221   
    

 

 

 

Telecommunication Services – 3.1%

    

Diversified Telecommunication Services – 3.1%

    

China Unicom Hong Kong Ltd.

     786,000        1,569,974   
    

 

 

 

Health Care – 1.0%

    

Pharmaceuticals – 1.0%

    

China Shineway Pharmaceutical Group Ltd.

     174,000        292,936   

Sihuan Pharmaceutical Holdings Group Ltd.(a)

     543,000        239,433   
    

 

 

 
       532,369   
    

 

 

 

Total Investments – 99.8%
(cost $39,681,889)

       51,561,471   

Other assets less liabilities – 0.2%

       121,848   
    

 

 

 

Net Assets – 100.0%

     $ 51,683,319   
    

 

 

 

 

(a)   Non-income producing security.

Glossary:

ADR – American Depositary Receipt

See notes to financial statements.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       13   

Portfolio of Investments


STATEMENT OF ASSETS & LIABILITIES

July 31, 2011

 

Assets   

Investments in securities, at value
Unaffiliated issuers (cost $39,681,889)

   $ 51,561,471  

Foreign currencies, at value (cost $241,842)

     241,994  

Receivable for investment securities sold

     781,273  

Dividends and interest receivable

     248,648  

Receivable for capital stock sold

     62,254  
  

 

 

 

Total assets

     52,895,640  
  

 

 

 
Liabilities   

Due to Custodian

     594,474  

Payable for investment securities purchased

     260,312  

Payable for capital stock redeemed

     119,689  

Advisory fee payable

     33,751  

Administrative fee payable

     30,430  

Distribution fee payable

     23,564  

Transfer Agent fee payable

     10,823  

Accrued expenses and other liabilities

     139,278  
  

 

 

 

Total liabilities

     1,212,321  
  

 

 

 

Net Assets

   $ 51,683,319  
  

 

 

 
Composition of Net Assets   

Capital stock, at par

   $ 3,875  

Additional paid-in capital

     32,945,875  

Accumulated net realized gain on investment
and foreign currency transactions

     6,853,699  

Net unrealized appreciation of investments
and foreign currency denominated assets and liabilities

     11,879,870  
  

 

 

 
   $     51,683,319  
  

 

 

 

Net Asset Value Per Share—12 billion shares of capital stock authorized, $.001 par value

 

Class   Net Assets        Shares
Outstanding
       Net Asset
Value
 
A   $   28,089,291          2,035,482        $   13.80

 

 
B   $ 7,450,195          594,828        $ 12.52  

 

 
C   $ 11,239,426          899,855        $ 12.49  

 

 
Advisor   $ 4,904,407          344,351        $ 14.24  

 

 

 

*   The maximum offering price per share for Class A shares was $14.41, which reflects a sales charge 4.25%.

See notes to financial statements.

 

14     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Statement of Assets & Liabilities


STATEMENT OF OPERATIONS

Year Ended July 31, 2011

 

Investment Income      

Dividends

     

Unaffiliated issuers (net of foreign taxes withheld of $166,342)

   $     1,320,493     

Affiliated issuers

     424     

Interest

     24      $ 1,320,941  
  

 

 

    
Expenses      

Advisory fee (see Note B)

     458,948     

Distribution fee—Class A

     102,483     

Distribution fee—Class B

     91,385     

Distribution fee—Class C

     129,740     

Transfer agency—Class A

     75,376     

Transfer agency—Class B

     24,628     

Transfer agency—Class C

     31,434     

Transfer agency—Advisor Class

     10,993     

Custodian

     108,758     

Administrative

     82,257     

Registration fees

     70,528     

Audit

     47,260     

Legal

     47,850     

Directors’ fees

     39,036     

Printing

     34,773     

Miscellaneous

     26,956     
  

 

 

    

Total expenses

        1,382,405  
     

 

 

 

Net investment loss

        (61,464 )
     

 

 

 
Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions      

Net realized gain on:

     

Investment transactions

        9,829,108  

Foreign currency transactions

        41,830  

Net change in unrealized appreciation/depreciation of:

     

Investments

            (4,484,447 )

Foreign currency denominated assets and liabilities

        47  
     

 

 

 

Net gain on investment and foreign currency transactions

        5,386,538  
     

 

 

 

Net Increase in Net Assets from Operations

      $ 5,325,074  
     

 

 

 

See notes to financial statements.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       15   

Statement of Operations


STATEMENT OF CHANGES IN NET ASSETS

 

     Year Ended
July 31, 2011
    Year Ended
July 31, 2010
 
Increase in Net Assets from Operations     

Net investment loss

   $ (61,464 )   $ (128,103 )

Net realized gain on investment and foreign currency transactions

     9,870,938       19,171,736  

Net change in unrealized appreciation/depreciation of investments and foreign currency denominated assets and liabilities

     (4,484,400 )     (15,431,077 )
  

 

 

   

 

 

 

Net increase in net assets from operations

     5,325,074       3,612,556  
Dividends and Distributions
to Shareholders from
    

Net investment income

    

Class A

     – 0  –     (304,414 )

Class B

     – 0  –     (37,552 )

Class C

     – 0  –     (48,562 )

Advisor Class

     – 0  –     (44,194 )

Net realized gain on investment and foreign currency transactions

    

Class A

     (1,637,463 )     – 0  –

Class B

     (496,629 )     – 0  –

Class C

     (666,687 )     – 0  –

Advisor Class

     (202,492 )     – 0  –
Capital Stock Transactions     

Net decrease

         (10,388,644 )     (56,069,660 )
  

 

 

   

 

 

 

Total decrease

     (8,066,841 )     (52,891,826 )
Net Assets     

Beginning of period

     59,750,160           112,641,986  
  

 

 

   

 

 

 

End of period (including accumulated net investment loss and distributions in excess of net investment income of $0 and ($10,279), respectively)

   $     51,683,319     $     59,750,160  
  

 

 

   

 

 

 

See notes to financial statements.

 

16     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Statement of Changes in Net Assets


NOTES TO FINANCIAL STATEMENTS

July 31, 2011

 

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 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 a front-end 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. Effective January 31, 2009, sales of Class B shares of the Fund to new investors were suspended. Class B shares will only be issued (i) upon the exchange of Class B shares from another AllianceBernstein Mutual Fund, (ii) for purposes of dividend reinvestment, (iii) through the Fund’s Automatic Investment Program (the “Program”) for accounts that established the Program prior to January 31, 2009, and (iv) for purchases of additional shares by Class B shareholders as of January 31, 2009. The ability to establish a new Program for accounts containing Class B shares was suspended as of January 31, 2009. 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 the classes bear different distribution and transfer agency expenses. Each class 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 (“U.S. GAAP”), 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. The following is a summary of significant accounting policies followed by the Fund.

1. Security Valuation

Portfolio securities are valued at their current market value determined on the basis of market quotations or, if market quotations are not readily available or are deemed unreliable, at “fair value” as determined in accordance with procedures established by and under the general supervision of the Fund’s Board of Directors.

In general, the market value of securities which are readily available and deemed reliable are determined as follows. Securities listed on a national securities

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       17   

Notes to Financial Statements


 

exchange (other than securities listed on the NASDAQ Stock Market, Inc. (“NASDAQ”)) 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 ask prices on such day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed or over the counter market (“OTC”) put or call options are valued at the mid level between the current bid and ask prices. If either a current bid or current ask price is unavailable, AllianceBernstein L.P. (the “Adviser”) will have discretion to determine the best valuation (e.g. last trade price); open futures contracts 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 valuation, the last available closing settlement price is used; 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 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 using the Adviser’s pricing models which utilize pricing-related information from external sources. Investments in money market funds are valued at their net asset value each day.

Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer’s financial statements or other available documents. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund values its securities at 4:00 p.m., Eastern Time (see Note A.2).

2. Fair Value Measurements

In accordance with U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The U.S. GAAP disclosure requirements establish a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable

 

18     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Notes to Financial Statements


 

inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

 

   

Level 1—quoted prices in active markets for identical investments

   

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

   

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of July 31, 2011:

 

Investments in
Securities

   Level 1     Level 2     Level 3     Total  

Common Stocks:

        

Financials

   $ – 0  –   $ 18,792,004     $ – 0  –    $ 18,792,004  

Information Technology

     1,090,341       9,443,494       – 0  –      10,533,835  

Consumer Discretionary

     1,292,577       5,547,797       – 0  –      6,840,374  

Materials

     – 0  –      4,294,291       – 0  –      4,294,291  

Energy

     – 0  –      4,223,381       – 0  –      4,223,381  

Consumer Staples

     463,171       2,593,851       – 0  –      3,057,022  

Industrials

     – 0  –      1,718,221       – 0  –      1,718,221  

Telecommunication Services

     – 0  –      1,569,974       – 0  –      1,569,974  

Health Care

     – 0  –      532,369       – 0  –      532,369  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Investments in Securities

     2,846,089       48,715,382       – 0  –      51,561,471  

Other Financial Instruments*:

     – 0  –      – 0  –      – 0  –      – 0  – 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $   2,846,089     $   48,715,382     $   – 0  –    $   51,561,471  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

*   Other financial instruments are derivative instruments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

 

  The earlier close of the foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred between the close of the foreign markets and the time at which the Fund values its securities which may materially affect the value of securities trading in such markets. To account for this, the Fund may frequently value many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available. Accordingly, a significant portion of the Fund’s investments are categorized as Level 2 investments.

3. Currency Translation

Assets and liabilities denominated in foreign currencies and commitments under forward currency exchange 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

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       19   

Notes to Financial Statements


 

rates of exchange prevailing when such securities were acquired or sold. Income and expenses are translated into U.S. dollars at the 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.

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. 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.

In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Fund’s tax positions taken or expected to be taken on federal and state income tax returns for all open tax years (the current and the prior three tax years) and has concluded that no provision for income tax is required in the Fund’s financial statements.

5. 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 or losses are determined on the identified cost basis. The Fund amortizes premiums and accretes discounts as adjustments to interest income.

6. Class Allocations

All income earned and expenses incurred by the Fund are borne on a pro-rata basis by each settled class of shares, based on the proportionate interest in the Fund represented by the net assets of such class, except for class specific expenses which are allocated to the respective class. Realized and unrealized gains and losses are allocated among the various share classes based on their respective net assets.

 

20     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Notes to Financial Statements


 

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 U.S. GAAP. 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 the investment advisory agreement, the Fund pays the Adviser an advisory fee at an 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 Fund’s average daily net assets. The fee is accrued daily and paid monthly.

The Adviser had agreed to waive its fee and bear certain expenses to the extent necessary to limit total operating expenses on an annual basis to 2.50%, 3.20%, 3.20% and 2.20% of the daily average net assets for Class A, Class B, Class C and Advisor Class shares, respectively (the “Expense Caps”). The Expense Caps will expire on July 31, 2012 and then may be extended by the Adviser for additional one year terms. For the year ended July 31, 2011, there was no such reimbursement.

Pursuant to the investment 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, 2011, such fee amounted to $82,257.

The Fund compensates AllianceBernstein Investor Services, Inc. (“ABIS”), 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. ABIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. Such compensation retained by ABIS amounted to $71,734 for the year ended July 31, 2011.

For the year ended July 31, 2011, there was no reduction to the expenses of Class A, Class B, Class C and Advisor Class shares under an expense offset arrangement with ABIS.

AllianceBernstein Investments, 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 $1,530 from the sale of Class A shares and received $100, $9,005 and $570 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, 2011.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       21   

Notes to Financial Statements


 

The Fund may invest in the AllianceBernstein Fixed-Income Shares, Inc.—Government STIF Portfolio, an open-end management investment company managed by the Adviser. The Government STIF Portfolio is offered as a cash management option to mutual funds and other institutional accounts of the Adviser, and is not available for direct purchase by members of the public. The Government STIF Portfolio pays no investment management fees but does bear its own expenses. A summary of the Fund’s transactions in shares of the Government STIF Portfolio for the year ended July 31, 2011 is as follows:

 

Market Value
July 31, 2010
(000)

    Purchases
at Cost
(000)
    Sales
Proceeds
(000)
    Market Value
July 31, 2011
(000)
    Dividend
Income
(000)
 
$     242      $     14,032      $     14,274      $     – 0  –    $     0

 

*   Amount is less than $500.

Brokerage commissions paid on investment transactions for the year ended July 31, 2011 amounted to $142,362, of which $0 and $498 was paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited, respectively, affiliates 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 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. Since the commencement of the Fund’s operations, the Distributor has incurred expenses in excess of the distribution costs reimbursed by the Fund in the amounts of $2,091,903 and $1,482,755 for Class B and Class C shares, respectively. While such costs may be recovered from the Fund in future periods so long as the Agreement is in effect, the rate of the distribution and servicing fees payable under the Agreement may not be increased without a shareholder vote. 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.

 

22     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Notes to Financial Statements


 

NOTE D

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the year ended July 31, 2011, were as follows:

 

     Purchases     Sales  

Investment securities (excluding
U.S. government securities)

   $     46,627,091     $     60,092,328  

U.S. government securities

     – 0  –     – 0  –

The cost of investments for federal income tax purposes, gross unrealized appreciation and unrealized depreciation (excluding forward currency exchange contracts) are as follows:

 

Cost

   $     40,254,061  
  

 

 

 

Gross unrealized appreciation

   $ 13,435,490  

Gross unrealized depreciation

     (2,128,080
  

 

 

 

Net unrealized appreciation

   $ 11,307,410  
  

 

 

 

1. Derivative Financial Instruments

The Fund may use derivatives to earn income and enhance returns, to hedge or adjust the risk profile of its portfolio, to replace more traditional direct investments, or to obtain exposure to otherwise inaccessible markets.

The Fund did not engage in derivative transactions for the year ended July 31, 2011.

2. Currency Transactions

The Fund may invest in non-U.S. Dollar securities on a currency hedged or unhedged basis. The Fund may seek investment opportunities by taking long or short positions in currencies through the use of currency-related derivatives, including forward currency exchange contracts, futures and options on futures, swaps, and other options. The Fund may enter into transactions for investment opportunities when it anticipates that a foreign currency will appreciate or depreciate in value but securities denominated in that currency are not held by the Fund and do not present attractive investment opportunities. Such transactions may also be used when the Adviser believes that it may be more efficient than a direct investment in a foreign currency-denominated security. The Fund may also conduct currency exchange contracts on a spot basis (i.e., for cash at the spot rate prevailing in the currency exchange market for buying or selling currencies).

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       23   

Notes to Financial Statements


 

NOTE E

Capital Stock

Each class consists of 3,000,000,000 authorized shares. Transactions in capital shares for each class were as follows:

 

            
     Shares         Amount      
     Year Ended
July 31, 2011
    Year Ended
July 31, 2010
        Year Ended
July 31, 2011
    Year Ended
July 31, 2010
     
  

 

 

   
Class A             

Shares sold

     258,306       884,238       $ 3,687,769     $ 11,382,758    

 

   

Shares issued in reinvestment of dividends and distributions

     105,256       20,513         1,518,839       276,520    

 

   

Shares converted from Class B

     57,964       80,645         833,022       1,024,877    

 

   

Shares redeemed

     (880,142 )     (4,908,266 )       (12,548,609 )     (61,602,035 )  

 

   

Net decrease

     (458,616 )     (3,922,870 )     $ (6,508,979 )   $ (48,917,880 )  

 

   
            
Class B             

Shares sold

     26,748       86,130       $ 355,386     $ 1,029,536    

 

   

Shares issued in reinvestment of dividends and distributions

     34,896       2,817         459,575       35,037    

 

   

Shares converted to Class A

     (63,625 )     (87,635 )       (833,022 )     (1,024,877 )  

 

   

Shares redeemed

     (187,906 )     (256,350 )       (2,444,519 )     (3,016,262 )  

 

   

Net decrease

     (189,887 )     (255,038 )     $ (2,462,580 )   $ (2,976,566 )  

 

   
            
Class C             

Shares sold

     65,982       143,041       $ 853,919     $ 1,693,314    

 

   

Shares issued in reinvestment of dividends and distributions

     47,698       3,574         626,272       44,320    

 

   

Shares redeemed

     (280,065 )     (489,469 )       (3,633,634 )     (5,735,182 )  

 

   

Net decrease

     (166,385 )     (342,854 )     $ (2,153,443 )   $ (3,997,548 )  

 

   
            
Advisor Class             

Shares sold

     155,870       169,415       $ 2,310,957     $ 2,267,051    

 

   

Shares issued in reinvestment of dividends and distributions

     12,184       2,945         181,044       40,692    

 

   

Shares redeemed

     (120,415 )     (185,268 )       (1,755,643 )     (2,485,409 )  

 

   

Net increase (decrease)

     47,639       (12,908 )     $ 736,358     $ (177,666 )  

 

   

 

24     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Notes to Financial Statements


 

NOTE F

Risks Involved in Investing in the Fund

Foreign Securities Risk—Investing in securities of foreign companies or foreign governments involves special risks which include changes in foreign currency exchange rates and the possibility of future political and economic developments which could adversely affect the value of such securities. Moreover, securities of many foreign companies or foreign governments and their markets may be less liquid and their prices more volatile than those of comparable U.S. companies and the U.S. government.

The Fund has invested approximately 53% of its net assets in China 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.

Currency Risk—This is the risk that changes in foreign currency exchange rates may negatively affect the value of the Fund’s investments or reduce the returns of the Fund. For example, the value of the Fund’s investments in foreign currency-denominated securities or currencies may decrease if the U.S. Dollar is strong (i.e., gaining value relative to other currencies) and other currencies are weak (i.e., losing value relative to the U.S. Dollar). Currency markets are generally not as regulated as securities markets. Independent of the Fund’s investments denominated in foreign currencies, the Fund’s positions in various foreign currencies may cause the Fund to experience investment losses due to the changes in exchange rates and interest rates.

Emerging Market Risk—Investments in emerging market countries may have more risk because the markets are less developed and less liquid as well as being subject to increased economic, political, regulatory or other uncertainties.

Focused Portfolio Risk—Investments in a limited number of companies may have more risk because changes in the value of a single security may have a more significant effect, either negative or positive, on the Fund’s NAV.

Derivatives Risk—The Fund may enter into derivative transactions such as forwards, options, futures and swaps. Derivatives may be illiquid, difficult to price, and leveraged so that small changes may produce disproportionate losses for the Fund, and subject to counterparty risk to a greater degree than more traditional investments. Derivatives may result in significant losses, including losses that are far greater than the value of the derivatives reflected in the statement of assets and liabilities.

Indemnification Risk—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. Therefore, the Fund has not accrued any liability in connection with these indemnification provisions.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       25   

Notes to Financial Statements


 

NOTE G

Joint Credit Facility

A number of open-end mutual funds managed by the Adviser, including the Fund, participate in a $140 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, 2011.

NOTE H

Distributions to Shareholders

The tax character of distributions paid during the fiscal years ended July 31, 2011 and July 31, 2010 were as follows:

 

     2011     2010  

Distributions paid from:

    

Ordinary income

   $ – 0  –   $ 417,417  

Long-term capital gains

     3,003,271       17,305  
  

 

 

   

 

 

 

Total taxable distributions

   $     3,003,271     $     434,722  
  

 

 

   

 

 

 

As of July 31, 2011, the components of accumulated earnings/(deficit) on a tax basis were as follows:

 

Undistributed ordinary income

   $ 160,091   

Undistributed capital gain

     7,265,780   

Unrealized appreciation/(depreciation)

     11,307,698 (a) 
  

 

 

 

Total accumulated earnings/(deficit)

   $     18,733,569   
  

 

 

 

 

(a)   

The difference between book-basis and tax-basis unrealized appreciation/depreciation is attributable primarily to the tax deferral of losses on wash sales.

During the current year, permanent differences primarily due to foreign currency reclassifications and a net operating loss resulted in a net decrease in accumulated net investment loss, a net decrease in accumulated net realized gain on investment and foreign currency transactions, and a net increase in additional paid-in capital. These reclassifications had no effect on net assets.

 

26     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Notes to Financial Statements


 

NOTE I

New Accounting Pronouncement

In May 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) to develop common requirements for measuring fair value and for disclosing information about fair value measurements in U.S. GAAP and International Financial Reporting Standards (“IFRS”). The amendments are intended to improve the comparability of fair value measurements presented and disclosed in the financial statements prepared in accordance with U.S. GAAP and IFRS. The ASU is effective during interim or annual periods beginning after December 15, 2011. At this time, management is evaluating the implication of this ASU and its impact on the financial statements has not been determined.

NOTE J

Subsequent Events

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       27   

Notes to Financial Statements


FINANCIAL HIGHLIGHTS

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period

 

    Class A  
    Year Ended July 31,  
    2011     2010     2009     2008     2007  
 

 

 

 

Net asset value, beginning of period

    $  13.29        $  12.54        $  21.04        $  25.78        $  16.19   
 

 

 

 
         

Income From Investment Operations

         

Net investment income(a)

    .02        .02        .10        .15 (b)      .04 (b) 

Net realized and unrealized gain (loss) on investment and foreign currency transactions

    1.16        .84        (4.60     (3.00     10.72   
 

 

 

 

Net increase (decrease) in net asset value from operations

    1.18        .86        (4.50     (2.85     10.76   
 

 

 

 

Less: Dividends and Distributions

         

Dividends from net investment income

    – 0  –      (.11     (.14     (.09     (.10

Distributions from net realized gain on investment and foreign currency transactions

    (.67     – 0  –      (3.86     (1.80     (1.07
 

 

 

 

Total dividends and distributions

    (.67     (.11     (4.00     (1.89     (1.17
 

 

 

 

Net asset value, end of period

    $  13.80        $  13.29        $  12.54        $  21.04        $  25.78   
 

 

 

 

Total Return

         

Total investment return based on net asset value(c)

    8.62  %      6.82  %      (11.92 )%      (13.00 )%      69.53  % 

Ratios/Supplemental Data

         

Net assets, end of period (000’s omitted)

    $28,089        $33,146        $80,444        $46,250        $62,614   

Ratio to average net assets of:

         

Expenses, net of waivers/reimbursements

    2.02  %(d)      1.88  %(d)      2.02  %      1.61  %      1.63  % 

Expenses, before waivers/reimbursements

    2.02  %(d)      1.88  %(d)      2.02  %      1.64  %      1.71  % 

Net investment income

    .13  %(d)      .13  %(d)      .95  %      .57  %(b)      .19  %(b) 

Portfolio turnover rate

    78  %      86  %      105  %      46  %      43  % 

See footnote summary on page 32

 

28     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,  
    2011     2010     2009     2008     2007  
 

 

 

 
         

Net asset value, beginning of period

    $  12.20        $  11.54        $  19.78        $  24.43        $  15.41   
 

 

 

 

Income From Investment Operations

         

Net investment loss(a)

    (.08     (.10     (.06     (.04 )(b)      (.11 )(b) 

Net realized and unrealized gain (loss) on investment and foreign currency transactions

    1.07        .80        (4.32     (2.81     10.20   
 

 

 

 

Net increase (decrease) in net asset value from operations

    .99        .70        (4.38     (2.85     10.09   
 

 

 

 

Less: Dividends and Distributions

         

Dividends from net investment income

    – 0  –      (.04     – 0  –      – 0  –      – 0  – 

Distributions from net realized gain on investment and foreign currency transactions

    (.67     – 0  –      (3.86     (1.80     (1.07
 

 

 

 

Total dividends and distributions

    (.67     (.04     (3.86     (1.80     (1.07
 

 

 

 

Net asset value, end of period

    $  12.52        $  12.20        $  11.54        $  19.78        $  24.43   
 

 

 

 

Total Return

         

Total investment return based on net asset value(c)

    7.80  %      6.04  %      (12.59 )%      (13.66 )%      68.40  % 

Ratios/Supplemental Data

         

Net assets, end of period (000’s omitted)

    $7,450        $9,577        $12,000        $18,382        $26,697   

Ratio to average net assets of:

         

Expenses, net of waivers/reimbursements

    2.76  %(d)      2.67  %(d)      2.92  %      2.32  %      2.36  % 

Expenses, before waivers/reimbursements

    2.76  %(d)      2.67  %(d)      2.92  %      2.36  %      2.45  % 

Net investment loss

    (.64 )%(d)      (.82 )%(d)      (.55 )%      (.16 )%(b)      (.54 )%(b) 

Portfolio turnover rate

    78  %      86  %      105  %      46  %      43  % 

See footnote summary on page 32

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       29   

Financial Highlights


Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period

 

    Class C  
    Year Ended July 31,  
    2011     2010     2009     2008     2007  
 

 

 

 

Net asset value, beginning of period

    $  12.17        $  11.50        $  19.73        $  24.37        $  15.38   
 

 

 

 
         

Income From Investment Operations

         

Net investment loss(a)

    (.07     (.09     (.05     (.03 )(b)      (.10 )(b) 

Net realized and unrealized gain (loss) on investment and foreign currency transactions

    1.06        .80        (4.32     (2.81     10.16   
 

 

 

 

Net increase (decrease) in net asset value from operations

    .99        .71        (4.37     (2.84     10.06   
 

 

 

 

Less: Dividends and Distributions

         

Dividends from net investment income

    – 0  –      (.04     – 0  –      – 0  –      – 0  – 

Distributions from net realized gain on investment and foreign currency transactions

    (.67     – 0  –      (3.86     (1.80     (1.07
 

 

 

 

Total dividends and distributions

    (.67     (.04     (3.86     (1.80     (1.07
 

 

 

 

Net asset value, end of period

    $  12.49        $  12.17        $  11.50        $  19.73        $  24.37   
 

 

 

 

Total Return

         

Total investment return based on net asset value(c)

    7.83  %      6.15  %      (12.56 )%      (13.66 )%      68.34  % 

Ratios/Supplemental Data

         

Net assets, end of period (000’s omitted)

    $11,239        $12,975        $16,211        $25,388        $31,363   

Ratio to average net
assets of:

         

Expenses, net of waivers/reimbursements

    2.74  %(d)      2.64  %(d)      2.88  %      2.32  %      2.34  % 

Expenses, before waivers/reimbursements

    2.74  %(d)      2.64  %(d)      2.88  %      2.35  %      2.42  % 

Net investment loss

    (.56 )%(d)      (.76 )%(d)      (.51 )%      (.14 )%(b)      (.50 )%(b) 

Portfolio turnover rate

    78  %      86  %      105  %      46  %      43  % 

See footnote summary on page 32

 

30     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,  
    2011     2010     2009     2008     2007  
 

 

 

 

Net asset value, beginning of period

    $  13.66        $  12.88        $  21.54        $  26.36        $  16.52   
 

 

 

 
         

Income From Investment Operations

         

Net investment income(a)

    .08        .05        .04        .23 (b)      .07 (b) 

Net realized and unrealized gain (loss) on investment and foreign currency transactions

    1.17        .88        (4.60     (3.09     10.98   
 

 

 

 

Net increase (decrease) in net asset value from operations

    1.25        .93        (4.56     (2.86     11.05   
 

 

 

 

Less: Dividends and Distributions

         

Dividends from net investment income

    – 0  –      (.15     (.24     (.16     (.14

Distributions from net realized gain on investment and foreign currency transactions

    (.67     – 0  –      (3.86     (1.80     (1.07
 

 

 

 

Total dividends and distributions

    (.67     (.15     (4.10     (1.96     (1.21
 

 

 

 

Net asset value, end of period

    $  14.24        $  13.66        $  12.88        $  21.54        $  26.36   
 

 

 

 

Total Return

         

Total investment return based on net asset value(c)

    8.91  %      7.18  %      (11.65 )%      (12.82 )%      70.01  % 

Ratios/Supplemental Data

         

Net assets, end of period (000’s omitted)

    $4,904        $4,052        $3,987        $7,100        $10,013   

Ratio to average net
assets of:

         

Expenses, net of waivers/reimbursements

    1.74  %(d)      1.63  %(d)      1.87  %      1.31  %      1.32  % 

Expenses, before waivers/reimbursements

    1.74  %(d)      1.63  %(d)      1.87  %      1.34  %      1.40  % 

Net investment income

    .55  %(d)      .37  %(d)      .39  %      .85  %(b)      .35  %(b) 

Portfolio turnover rate

    78  %      86  %      105  %      46  %      43  % 

See footnote summary on page 32

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       31   

Financial Highlights


(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)   The ratio includes expenses attributable to costs of proxy solicitation.

 

 

See notes to financial statements.

 

32     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Financial Highlights


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. (the “Fund”), including the portfolio of investments, as of July 31, 2011, and the related statement of operations for the year then ended, the statements 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. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2011, by correspondence with the custodian and others, or by other appropriate auditing procedures where replies from others were not received. 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, 2011, 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.

LOGO

New York, New York

September 26, 2011

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       33   

Report of Independent Registered Public Accounting Firm


2011 FEDERAL TAX INFORMATION

(unaudited)

For Federal income tax purposes, the following information is furnished with respect to the earnings of the Fund for the taxable year ended July 31, 2011. For such taxable year, the Fund designates $7,265,780 as capital gain dividends.

The Fund intends to make an election to pass through foreign taxes to its shareholders. For the taxable year ended July 31, 2011, $166,342 of foreign taxes may be passed through and the associated foreign source income for information reporting purposes is $1,487,056.

Shareholders should not use the above information to prepare their income tax returns. The information necessary to complete your income tax returns will be included with your Form 1099-DIV which will be sent to you separately in January 2012.

 

34     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

2011 Federal Tax Information


BOARD OF DIRECTORS

William H. Foulk, Jr.(1) , Chairman

John H. Dobkin(1)

Michael J. Downey(1)

D. James Guzy(1)

Nancy P. Jacklin(1)

Robert M. Keith, President and Chief Executive Officer

Garry L. Moody(1)

Marshall C. Turner, Jr.(1)

Earl D. Weiner(1)

OFFICERS

Philip L. Kirstein, Senior Vice President and Independent Compliance Officer

Richard Chow(2), Vice President

Emilie D. Wrapp, Secretary

Joseph J. Mantineo, Treasurer and Chief Financial Officer

Stephen M. Woetzel, Controller

 

Principal Underwriter

AllianceBernstein Investments, Inc.

1345 Avenue of the Americas

New York, NY 10105

 

Custodian and Accounting Agent

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

AllianceBernstein 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, the Governance and Nominating Committee and the Independent Directors Committee. Mr. Foulk is the sole member of the Fair Value Pricing Committee.

 

(2)   The day-to-day management of, and investment decisions for, the Fund’s portfolio are made by the Adviser’s Hong Kong/China Investment Team. Mr. Richard Chow is the investment professional with the most significant responsibility for the day-to-day management of the Fund’s portfolio.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       35   

Board of Directors


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.

 

NAME,
ADDRESS,* AGE AND

(FIRST YEAR ELECTED**)

 

PRINCIPAL

OCCUPATION(S)

DURING PAST FIVE YEARS

AND OTHER RELEVANT

QUALIFICATIONS***

  PORTFOLIOS
IN FUND
COMPLEX
OVERSEEN BY
DIRECTOR
    OTHER
DIRECTORSHIPS
HELD BY
DIRECTOR IN
PAST FIVE YEARS
INTERESTED DIRECTOR    

Robert M. Keith, +

1345 Avenue of the Americas
New York, NY 10105

51

(2010)

  Senior Vice President of AllianceBernstein L.P. (the “Adviser”) and the head of AllianceBernstein Investments, Inc. (“ABI”) since July 2008; Director of ABI and President of the AllianceBernstein Mutual Funds. Previously, he served as Executive Managing Director of ABI from December 2006 to June 2008. Prior to joining ABI in 2006, Executive Managing Director of Bernstein Global Wealth Management, and prior thereto, Senior Managing Director and Global Head of Client Service and Sales of the Adviser’s institutional investment management business since 2004. Prior thereto, he was Managing Director and Head of North American Client Service and Sales in the Adviser’s institutional investment management business, with which he had been associated since prior to 2004.     101      None
     
DISINTERESTED DIRECTORS    

William H. Foulk, Jr., #, ##

Chairman of the Board

79

(1997)

  Investment Adviser and an Independent Consultant since prior to 2006. Previously, he was Senior Manager of Barrett Associates, Inc., a registered investment adviser. 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. He has served as a director or trustee of various AllianceBernstein Funds since 1983 and has been Chairman of the AllianceBernstein Funds and of the Independent Directors Committee of such Funds since 2003. He is also active in a number of mutual fund related organizations and committees.     101      None

 

36     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Management of the Fund


 

NAME,
ADDRESS,* AGE AND

(FIRST YEAR ELECTED**)

 

PRINCIPAL

OCCUPATION(S)

DURING PAST FIVE YEARS

AND OTHER RELEVANT

QUALIFICATIONS***

  PORTFOLIOS
IN FUND
COMPLEX
OVERSEEN BY
DIRECTOR
    OTHER
DIRECTORSHIPS
HELD BY
DIRECTOR IN
PAST FIVE YEARS

DISINTERESTED DIRECTORS

(continued)

   
John H. Dobkin, #
69
(2010)
  Independent Consultant since prior to 2006. Formerly, President of Save Venice, Inc. (preservation organization) from 2001-2002; Senior Advisor from June 1999-June 2000 and President of Historic Hudson Valley (historic preservation) from December 1989-May 1999. Previously, Director of the National Academy of Design. He has served as a director or trustee of various AllianceBernstein Funds since 1992, and as Chairman of the Audit Committees of a number of such Funds from 2001-2008.     100      None
     

Michael J. Downey, #

67
(2010)

  Private Investor since prior to 2006. Formerly, managing partner of Lexington Capital, LLC (investment advisory firm) from December 1997 until December 2003. From 1987 until 1993, Chairman and CEO of Prudential Mutual Fund Management, director of the Prudential Mutual funds, and member of the Executive Committee of Prudential Securities, Inc. He has served as a director or trustee of the AllianceBernstein Funds since 2005 and is a director of two other registered investment companies (and Chairman of one of them).     100      Asia Pacific Fund, Inc., The Merger Fund since prior to 2006 and Prospect Acquisition Corp. (financial services) since 2007 until 2009
     

D. James Guzy, #

75
(2010)

  Chairman of the Board of PLX Technology (semi-conductors) and of SRC Computers Inc., with which he has been associated since prior to 2006. He was a director of Intel Corporation (semi-conductors) from 1969 until 2008, and served as Chairman of the Finance Committee of such company for several years until May 2008. He has served as a director or trustee of one or more of the AllianceBernstein Funds since 1982.     100      Cirrus Logic Corporation (semi-conductors), and PLX Technology Inc. (semi-conductors) since prior to 2006 and Intel Corporation (semi-conductors) since prior to 2006 until 2008
     

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       37   

Management of the Fund


 

NAME,
ADDRESS,* AGE AND

(FIRST YEAR ELECTED**)

 

PRINCIPAL

OCCUPATION(S)

DURING PAST FIVE YEARS

AND OTHER RELEVANT

QUALIFICATIONS***

  PORTFOLIOS
IN FUND
COMPLEX
OVERSEEN BY
DIRECTOR
    OTHER
DIRECTORSHIPS
HELD BY
DIRECTOR IN
PAST FIVE YEARS

DISINTERESTED DIRECTORS

(continued)

   

Nancy P. Jacklin, #

63
(2010)

  Professorial Lecturer at the Johns Hopkins School of Advanced International Studies since 2008. Formerly, U.S. Executive Director of the International Monetary Fund (December 2002-May 2006); Partner, Clifford Chance (1992-2002); Sector Counsel, International Banking and Finance, and Associate General Counsel, Citicorp (1985-1992); Assistant General Counsel (International), Federal Reserve Board of Governors (1982-1985); and Attorney Advisor, U.S. Department of the Treasury (1973-1982). Member of the Bar of the District of Columbia and of New York; and member of the Council on Foreign Relations. She has served as a director or trustee of the AllianceBernstein Funds since 2006.     100      None
     

Garry L. Moody, #

59

(2010)

  Independent Consultant. Formerly, Partner, Deloitte & Touche LLP (1995-2008) where he held a number of senior positions, including Vice Chairman, and U.S. and Global Investment Management Practice Managing Partner; President, Fidelity Accounting and Custody Services Company (1993-1995); and Partner, Ernst & Young LLP (1975-1993), where he served as the National Director of Mutual Fund Tax Services. He is also a member of the Governing Council of the Independent Directors Council (IDC), an organization of independent directors of mutual funds, and serves on that organization’s Education and Communications Committee. He has served as a director or trustee, and as Chairman of the Audit Committee, of most of the AllianceBernstein Funds since 2008.     100      None
     

 

38     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Management of the Fund


 

NAME,
ADDRESS,* AGE AND

(FIRST YEAR ELECTED**)

 

PRINCIPAL

OCCUPATION(S)

DURING PAST FIVE YEARS

AND OTHER RELEVANT

QUALIFICATIONS***

  PORTFOLIOS
IN FUND
COMPLEX
OVERSEEN BY
DIRECTOR
    OTHER
DIRECTORSHIPS
HELD BY
DIRECTOR IN
PAST FIVE YEARS

DISINTERESTED DIRECTORS

(continued)

   

Marshall C. Turner, Jr., #

69
(2010)

  Private Investor since prior to 2006. Interim CEO of MEMC Electronic Materials, Inc. (semi-conductor and solar cell substrates) from November 2008 until March 2009. He was Chairman and CEO of Dupont Photomasks, Inc. (components of semi-conductor manufacturing), 2003-2005, and President and CEO, 2005-2006, after the company was acquired and renamed Toppan Photomasks, Inc. He has extensive experience in venture capital investing including prior service as general partner of three institutional venture capital partnerships, and serves on the boards of a number of education and science-related non-profit organizations. He has served as a director or trustee of one or more of the AllianceBernstein Funds since 1992.     100      Xilinx, Inc. (programmable logic semi-conductors) and MEMC Electronic Materials, Inc. (semi-conductor and solar cell substrates) since prior to 2006
     

Earl D. Weiner, #

72
(2010)

  Of Counsel, and Partner prior to January 2007, of the law firm Sullivan & Cromwell LLP and member of ABA Federal Regulation of Securities Committee Task Force to draft editions of the Fund Director’s Guidebook. He also serves as a director or trustee of various non-profit organizations and has served as Chairman or Vice Chairman of a number of them. He has served as a director or trustee of the AllianceBernstein Funds since 2007 and is Chairman of the Governance and Nominating Committees of most of the Funds.     100      None

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       39   

Management of the Fund


 

 

*   The address for each of the Fund’s disinterested Directors is c/o AllianceBernstein L.P., Attention: Philip L. Kirstein, 1345 Avenue of the Americas, New York, NY 10105.

 

**   There is no stated term of office for the Fund’s Directors.

 

***   The information above includes each Director’s principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to each Director’s qualifications to serve as a Director, which led to the conclusion that each Director should serve as a Director for the Fund.

 

+   Mr. Keith is an “interested person” of the Fund, as defined in the 1940 Act, due to his position as a Senior Vice President of the Adviser.

 

#   Member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee.

 

##   Member of the Fair Value Pricing Committee.

 

40     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

Management of the Fund


 

Officer Information

Certain information concerning the Fund’s Officers is listed below.

 

NAME, ADDRESS*
AND AGE
  

POSITION(S)

HELD WITH FUND

  

PRINCIPAL OCCUPATION

DURING PAST FIVE YEARS**

Robert M. Keith,

51

   President and Chief Executive Officer    See biography above.
     

Philip L. Kirstein,

66

   Senior Vice President and Independent Compliance Officer    Senior Vice President and Independent Compliance Officer of the AllianceBernstein Funds, with which he has been associated since October 2004. Prior thereto, he was Of Counsel to Kirkpatrick & Lockhart, LLP from October 2003 to October 2004, and General Counsel of Merrill Lynch Investment Managers, L.P. prior to March 2003.
     

Richard Chow,

40

   Vice President    Senior Vice President of AllianceBernstein Limited,** and Vice President of the Adviser,** with which he has been associated since prior to 2006.
     

Emilie D. Wrapp,

55

   Secretary    Senior Vice President, Assistant General Counsel and Assistant Secretary of ABI,** with which she has been associated since prior to 2006.
     

Joseph J. Mantineo,

52

   Treasurer and Chief Financial Officer    Senior Vice President of ABIS,** with which he has been associated since prior to 2006.
     

Stephen M. Woetzel,

39

   Controller    Vice President of ABIS,** with which he has been associated since prior to 2006.

 

*   The address for each of the Fund’s Officers is 1345 Avenue of the Americas, New York, NY 10105.

 

**   The Adviser, ABI, ABIS and AllianceBernstein Limited 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 AllianceBernstein at 1-800-227-4618, or visit www.alliancebernstein.com, for a free prospectus or SAI.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       41   

Management of the Fund


 

Information Regarding the Review and Approval of the Fund’s Advisory Agreement

The disinterested directors (the “directors”) of AllianceBernstein Greater China ‘97 Fund, Inc. (the “Fund”) unanimously approved the continuance of the Fund’s Advisory Agreement with the Adviser at a meeting held on May 3-5, 2011.

Prior to approval of the continuance of the Advisory Agreement, the directors had requested from the Adviser, and received and evaluated, extensive materials. They reviewed the proposed continuance of the Advisory Agreement with the Adviser and with experienced counsel who are independent of the Adviser, who advised on the relevant legal standards. The directors also reviewed an independent evaluation prepared by the Fund’s Senior Officer (who is also the Fund’s Independent Compliance Officer) of the reasonableness of the advisory fee in the Advisory Agreement wherein the Senior Officer concluded that the contractual fee for the Fund were reasonable. The directors also discussed the proposed continuance in private sessions with counsel and the Fund’s Senior Officer.

The directors considered their knowledge of the nature and quality of the services provided by the Adviser to the Fund gained from their experience as directors or trustees of most of the registered investment companies advised by the Adviser, their overall confidence in the Adviser’s integrity and competence they have gained from that experience, the Adviser’s initiative in identifying and raising potential issues with the directors and its responsiveness, frankness and attention to concerns raised by the directors in the past, including the Adviser’s willingness to consider and implement organizational and operational changes designed to improve investment results and the services provided to the AllianceBernstein Funds. The directors noted that they have four regular meetings each year, at each of which they receive presentations from the Adviser on the investment results of the Fund and review extensive materials and information presented by the Adviser.

The directors also considered all other factors they believed relevant, including the specific matters discussed below. In their deliberations, the directors did not identify any particular information that was all-important or controlling, and different directors may have attributed different weights to the various factors. The directors determined that the selection of the Adviser to manage the Fund and the overall arrangements between the Fund and the Adviser, as provided in the Advisory Agreement, including the advisory fee, were fair and reasonable in light of the services performed, expenses incurred and such other matters as the directors considered relevant in the exercise of their business judgment. The material factors and conclusions that formed the basis for the directors’ determinations included the following:

Nature, Extent and Quality of Services Provided

The directors considered the scope and quality of services provided by the Adviser under the Advisory Agreement, including the quality of the investment

 

42     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND


 

research capabilities of the Adviser and the other resources it has dedicated to performing services for the Fund. They also noted the professional experience and qualifications of the Fund’s portfolio management team and other senior personnel of the Adviser. The directors also considered that the Advisory Agreement provides that the Fund will reimburse the Adviser for the cost to it of providing certain clerical, accounting, administrative and other services provided at the Fund’s request by employees of the Adviser or its affiliates. Requests for these reimbursements are approved by the directors on a quarterly basis and, to the extent requested and paid, result in a higher rate of total compensation from the Fund to the Adviser than the fee rates stated in the Fund’s Advisory Agreement. The directors noted that the methodology used to determine the reimbursement amounts had been reviewed by an independent consultant retained by the Fund’s Senior Officer. The quality of administrative and other services, including the Adviser’s role in coordinating the activities of the Fund’s other service providers, also were considered. The directors concluded that, overall, they were satisfied with the nature, extent and quality of services provided to the Fund under the Advisory Agreement.

Costs of Services Provided and Profitability

The directors reviewed a schedule of the revenues, expenses and related notes indicating the profitability of the Fund to the Adviser for calendar years 2009 and 2010 that had been prepared with an expense allocation methodology arrived at in consultation with an independent consultant retained by the Fund’s Senior Officer. The directors reviewed the assumptions and methods of allocation used by the Adviser in preparing fund-specific profitability data and noted that there are a number of potentially acceptable allocation methodologies for information of this type. The directors noted that the profitability information reflected all revenues and expenses of the Adviser’s relationship with the Fund, including those relating to its subsidiaries which provide transfer agency, distribution and brokerage services to the Fund. The directors recognized that it is difficult to make comparisons of profitability between fund advisory contracts because comparative information is not generally publicly available and is affected by numerous factors. The directors focused on the profitability of the Adviser’s relationship with the Fund before taxes and distribution expenses. The directors concluded that they were satisfied that the Adviser’s level of profitability from its relationship with the Fund was not unreasonable.

Fall-Out Benefits

The directors considered the benefits to the Adviser and its affiliates from their relationships with the Fund other than the fees and expense reimbursements payable under the Advisory Agreement, including but not limited to benefits relating to soft dollar arrangements (whereby the Adviser receives brokerage and research services from many of the brokers that execute purchases and sales of securities on behalf of its clients on an agency basis), 12b-1 fees and sales charges received by the Fund’s principal underwriter (which is a wholly owned subsidiary

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       43   


 

of the Adviser) in respect of certain classes of the Fund’s shares, transfer agency fees paid by the Fund to a wholly owned subsidiary of the Adviser, and brokerage commissions paid by the Fund to brokers affiliated with the Adviser. The directors recognized that the Adviser’s profitability would be somewhat lower without these benefits. The directors understood that the Adviser also might derive reputational and other benefits from its association with the Fund.

Investment Results

In addition to the information reviewed by the directors in connection with the meeting, the directors receive detailed performance information for the Fund at each regular Board meeting during the year. At the May 2011 meeting, the directors reviewed information prepared by Lipper showing the performance of the Class A Shares of the Fund as compared with that of a group of similar funds selected by Lipper (the “Performance Group”) and as compared with that of a broader array of funds selected by Lipper (the “Performance Universe”) for the 1-, 3-, 5- and 10-year periods ended February 28, 2011, and information prepared by the Adviser showing performance of the Class A Shares as compared with the Morgan Stanley Capital International Golden Dragon Index (Net) (the “Index”) for the 1-, 3-, 5- and 10-year periods. The directors noted that the Fund was in the 4th quintile of the Performance Group and the Performance Universe for the 1-year period, in the 5th quintile of the Performance Group and the Performance Universe for the 3- and 5-year periods, and 2nd out of 3 of the Performance Group and 3rd out of 4 of the Performance Universe for the 10-year period. The directors noted the small number of other funds in the Performance Group. The Fund lagged the Index in the 1- and 3-year periods but outperformed the Index in the 5- and 10-year periods. The directors also reviewed performance information for periods ended March 31, 2011 (for which the data was not limited to Class A Shares), and noted that in the 3-month period the Fund lagged the Lipper China Region Funds Average and the Index (all the returns were negative). The directors also took into account the Adviser’s recently implemented organizational and investment process changes that are intended to improve the investment performance of its equity services. Based on their review and their discussion with the Adviser of the reasons for the Fund’s performance, the directors retained confidence in the Adviser’s ability to advise the Fund.

Advisory Fees and Other Expenses

The directors considered the advisory fee rate paid by the Fund to the Adviser and information prepared by Lipper concerning advisory fee rates paid by other funds in the same Lipper category as the Fund at a common asset level. The directors recognized that it is difficult to make comparisons of advisory fees because there are variations in the services that are included in the fees paid by other funds.

 

44     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND


 

The directors also considered the fees the Adviser charges other clients pursuing an investment style substantially similar to that of the Fund. For this purpose, they reviewed the relevant fee information from the Adviser’s Form ADV and the evaluation from the Fund’s Senior Officer disclosing the institutional fee schedule for institutional products managed by the Adviser that have an investment style substantially similar to that of the Fund. The directors noted that the institutional fee schedule had breakpoints at lower asset levels than those in the fee schedule applicable to the Fund, although the initial rates in the institutional fee schedule were higher, and that the application of the institutional fee schedule to the level of assets of the Fund would result in a fee rate higher than that in the Fund’s Advisory Agreement (including the impact of the expense reimbursement to the Adviser pursuant to the Advisory Agreement). The directors noted that the Adviser may, in some cases, agree to fee rates with large institutional clients that are lower than those reviewed by the directors and that they had previously discussed with the Adviser its policies in respect of such arrangements.

The Adviser reviewed with the directors the significantly greater scope of the services it provides to the Fund relative to institutional clients. The Adviser also noted that because mutual funds are constantly issuing and redeeming shares, they are more difficult to manage than an institutional account, where the assets tend to be relatively stable. In light of the substantial differences in services rendered by the Adviser to institutional clients as compared to funds such as the Fund, the directors considered these fee comparisons inapt and did not place significant weight on them in their deliberations.

The directors also considered the total expense ratio of the Class A shares of the Fund in comparison to the fees and expenses of funds within two comparison groups created by Lipper: an Expense Group and an Expense Universe. Lipper described an Expense Group as a representative sample of funds similar to the Fund and an Expense Universe as a broader group, consisting of all funds in the Fund’s investment classification/objective with a similar load type as the Fund. The Class A expense ratio of the Fund was based on the Fund’s latest fiscal year. The directors noted that it was likely that the expense ratios of some of the other funds in the Fund’s Lipper category were lowered by waivers or reimbursements by those funds’ investment advisers, which in some cases might be voluntary or temporary. The directors view the expense ratio information as relevant to their evaluation of the Adviser’s services because the Adviser is responsible for coordinating services provided to the Fund by others.

The directors noted that, at the Fund’s current size, its contractual effective advisory fee rate of 75 basis points, plus the 13 basis point impact of the administrative expense reimbursement in the latest fiscal year, was lower than the Expense Group median. The directors noted that the Fund’s total expense ratio, which had been capped by the Adviser (although the expense ratio was currently

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       45   


 

lower than the cap), was essentially the same as the Expense Group and the Expense Universe medians. The directors concluded that the Fund’s expense ratio was satisfactory.

Economies of Scale

The directors noted that the advisory fee schedule for the Fund contains breakpoints that reduce the fee rates on assets above specified levels. The directors took into consideration prior presentations by an independent consultant on economies of scale in the mutual fund industry and for the AllianceBernstein Funds, and by the Adviser concerning certain of its views on economies of scale. The directors also had requested and received from the Adviser certain updates on economies of scale at the May 2011 meetings. The directors believe that economies of scale may be realized (if at all) by the Adviser across a variety of products and services, and not only in respect of a single fund. The directors noted that there is no established methodology for establishing breakpoints that give effect to the fund-specific services provided by a fund’s adviser and to the economies of scale that an adviser may realize in its overall mutual fund business or those components of it which directly or indirectly affect a fund’s operations. The directors observed that in the mutual fund industry as a whole, as well as among funds similar to the Fund, there is no uniformity or pattern in the fees and asset levels at which breakpoints (if any) apply. The directors also noted that the advisory agreements for many funds do not have breakpoints at all. Having taken these factors into account, the directors concluded that the Fund’s breakpoint arrangements would result in a sharing of economies of scale in the event the Fund’s net assets exceed a breakpoint in the future.

 

46     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND


 

THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS

SUMMARY OF SENIOR OFFICER’S EVALUATION OF INVESTMENT ADVISORY AGREEMENT1

The following is a summary of the evaluation of the Investment Advisory Agreement between AllianceBernstein L.P. (the “Adviser”) and AllianceBernstein Greater China ‘97 Fund, Inc. (the “Fund”).2 The evaluation of the Investment Advisory Agreement was prepared by Philip L. Kirstein, the Senior Officer of the Fund, for the Trustees of the Fund, as required by a September 2004 agreement between the Adviser and the New York State Attorney General (the “NYAG”). The Senior Officer’s evaluation of the Investment Advisory Agreement is not meant to diminish the responsibility or authority of the Board of Directors of the Fund to perform its duties pursuant to Section 15 of the Investment Company Act of 1940 (the “40 Act”) and applicable state law. The purpose of the summary is to provide shareholders with a synopsis of the independent evaluation of the reasonableness of the advisory fees proposed to be paid by the Fund which was provided to the Directors in connection with their review of the proposed approval of the continuance of the Investment Advisory Agreement. The Senior Officer’s evaluation considered the following factors:

 

  1. Advisory fees charged to institutional and other clients of the Adviser for like services;

 

  2. Advisory fees charged by other mutual fund companies for like services;

 

  3. Costs to the Adviser and its affiliates of supplying services pursuant to the advisory agreement, excluding any intra-corporate profit;

 

  4. Profit margins of the Adviser and its affiliates from supplying such services;

 

  5. Possible economies of scale as the Fund grows larger; and

 

  6. Nature and quality of the Adviser’s services including the performance of the Fund.

These factors, with the exception of the first factor, are generally referred to as the “Gartenberg factors,” which were articulated by the United States Court of Appeals for the Second Circuit in 1982. Gartenberg v. Merrill Lynch Asset Management, Inc., 694 F. 2d 923 (2d Cir. 1982). On March 30, 2010, the Supreme Court held the Gartenberg decision was correct in its basic formulation of what §36(b) requires: to face liability under §36(b), “an investment adviser must charge a fee that is so disproportionately large that it

 

1   It should be noted that the information in the fee summary was completed on April 21, 2011 and discussed with the Board of Directors on May 3-5, 2011.

 

2   Future references to the Fund do not include “AllianceBernstein.” References in the fee summary pertaining to performance and expense ratio rankings refer to the Class A shares of the Fund.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       47   


 

bears no reasonable relationship to the services rendered and could not have been the product of arms length bargaining.” Jones v. Harris Associates L.P., (No. 08-586), 130 U.S. 1418 (2010). In the Jones decision, the Court stated the Gartenberg approach fully incorporates the correct understanding of fiduciary duty within the context of section 36(b) and noted with approval that “Gartenberg insists that all relevant circumstances be taken into account” and “uses the range of fees that might result from arms-length bargaining as the benchmark for reviewing challenged fees.”

FUND ADVISORY FEES, NET ASSETS, EXPENSE CAPS & RATIOS

The Adviser proposed that the Fund pay the advisory fee set forth in the table below for receiving the services to be provided pursuant to the Investment Advisory Agreement. The fee schedule below, implemented in January 2004 in consideration of the Adviser’s settlement with the NYAG in December 2003, is based on a master schedule that contemplates eight categories of funds with almost all funds in each category having the same advisory fee schedule.3

 

Category    Advisory Fee Based on % of
Average Daily Net Assets
  

Net Assets

03/31/11

($MIL)

     Fund
Specialty   

75 bp on 1st $2.5 billion

65 bp on next $2.5 billion

60 bp on the balance

   $ 60.4       Greater China ‘97 Fund, Inc.

The Adviser is reimbursed as specified in the Investment Advisory Agreement for certain clerical, legal, accounting, administrative and other services provided to the Fund. During the Fund’s most recently completed fiscal year, the Adviser received $92,921 (0.13% of the Fund’s average daily net assets) for such services.

The Adviser has agreed to waive that portion of its management fees and/or reimburse the Fund for that portion of its total operating expenses to the degree necessary to limit the Fund’s expense ratio to the amount set forth below for the Fund’s fiscal year. The waiver is terminable by the Adviser at the end of the Fund’s fiscal year upon at least 60 days written notice prior to the termination date of the undertaking. It should be noted that the Fund was operating below its expense cap as of its most recently completed semi-annual period; accordingly, the expense limitation undertaking of the Fund was of no effect. Also shown are the Fund’s gross expense ratios for the most recent semi-annual period:4

 

3   Most of the AllianceBernstein Mutual Funds, which the Adviser manages, were affected by the Adviser’s settlement with the NYAG.

 

4   Semi-annual total expense ratios are unaudited.

 

48     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND


 

 

Fund   Expense Cap Pursuant to
Expense Limitation
Undertaking
    

Gross
Expense

Ratio
(as of 01/31/11)5

  Fiscal
Year End
Greater China ‘97 Fund, Inc.  

Advisor

Class A

Class B

Class C

   

 

 

 

2.20

2.50

3.20

3.20


   1.67%

1.96%

2.71%

2.68%

  July 31

 

I. ADVISORY FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS

The advisory fees charged to investment companies which the Adviser manages and sponsors are normally higher than those charged to similar sized institutional accounts, including pension plans and sub-advised investment companies. The fee differential reflects, among other things, different services provided to such clients, and different liabilities assumed. Services provided by the Adviser to the Fund that are not provided to non-investment company clients and sub-advised investment companies include providing office space and personnel to serve as Fund Officers, who among other responsibilities make the certifications required under the Sarbanes-Oxley Act of 2002, and coordinating with and monitoring the Fund’s third party service providers such as Fund counsel, auditors, custodians, transfer agents and pricing services. The accounting, administrative, legal and compliance requirements for the Fund are more costly than those for institutional assets due to the greater complexities and time required for investment companies, although as previously noted, the Adviser is reimbursed for providing such services. Also, retail mutual funds managed by the Adviser are widely held. Servicing the Fund’s investors is more time consuming and labor intensive compared to institutional clients since the Adviser needs to communicate with a more extensive network of financial intermediaries and shareholders. The Adviser also believes that it incurs substantial entrepreneurial risk when offering a new mutual fund since establishing a new mutual fund requires a large upfront investment and it may take a long time for the fund to achieve profitability since the fund must be priced to scale from inception in order to be competitive and assets are acquired one account at a time. In addition, managing the cash flow of an investment company may be more difficult than managing that of a stable pool of assets, such as an institutional account with little cash movement in either direction, particularly, if a fund is in net redemption and the Adviser is frequently forced to sell securities to raise cash for redemptions. However, managing a fund with positive cash flow may be easier at times than managing a stable pool of assets. Finally, in recent years, investment advisers have been sued by institutional clients and have suffered reputational damage both by the attendant publicity and outcomes other than complete victories. Accordingly, the legal and reputational risks associated with institutional accounts are greater than previously thought, although still not equal to those related to the mutual fund industry.

 

 

5   Annualized.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       49   


 

Notwithstanding the Adviser’s view that managing an investment company is not comparable to managing other institutional accounts because the services provided are different, the Supreme Court has indicated consideration should be given to the advisory fees charged to institutional accounts with a similar investment style as the Fund.6 In addition to the AllianceBernstein Institutional fee schedule, set forth below is what would have been the effective advisory fee of the Fund had the AllianceBernstein Institutional fee schedule been applicable to the Fund versus the Fund’s advisory fee based on March 31, 2011 net assets:7

 

Fund  

Net Assets

03/31/11

($MIL)

   

AllianceBernstein (“AB”)
Institutional (“Inst.”)

Fee Schedule

  Effective
AB Inst.
Adv. Fee
   

Fund

Advisory
Fee

Greater China ‘97 Fund, Inc.     $60.4     

Greater China Growth

100 bp on 1st $25 million

90 bp on next $25 million

75 bp on the balance

Minimum Account Size: $25m

    0.916%      0.750%

The Adviser also manages and sponsors retail mutual funds, which are organized in jurisdictions outside the United States, generally Luxembourg and Japan, and sold to non-United States resident investors. The Adviser charges the fees set forth below for Greater China Portfolio, which is a Luxembourg fund that has a somewhat similar investment style as the Fund:

 

Fund   Fee8
Greater China Portfolio  

Class A

 

2.00% on the first $300 million

1.75% on the balance

Class I (Institutional)

 

1.20% on the first $300 million

0.95% on the balance

The Adviser represented that it does not sub-advise any registered investment company with a substantially similar investment style as the Fund.

 

6   It should be noted that the Supreme Court stated that “courts may give such comparisons the weight that they merit in light of the similarities and differences between the services that the clients in question require, but the courts must be wary of inapt comparisons.” Among the significant differences the Supreme Court noted that may exist between services provided to mutual funds and institutional accounts are “higher marketing costs.” Jones v. Harris at 1428.

 

7   The Adviser has indicated that with respect to institutional accounts with assets greater than $300 million, it will negotiate a fee schedule. Discounts that are negotiated vary based upon each client relationship.

 

8   It should be noted that Class A shares of the funds are charged an “all-in” fee, which covers investment advisory services and distribution related services, unlike Class I shares, whose fee is for investment advisory services only.

 

50     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND


 

 

II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES.

Lipper, Inc. (“Lipper”), an analytical service that is not affiliated with the Adviser, compared the fees charged to the Fund with fees charged to other investment companies for similar services offered by other investment advisers.9 Lipper’s analysis included the Fund’s ranking with respect to the contractual management fee relative to the median of the Fund’s Lipper Expense Group (“EG”)10 at the approximate current asset level of the Fund.11

Lipper describes an EG as a representative sample of comparable funds. Lipper’s standard methodology for screening funds to be included in an EG entails the consideration of several fund criteria, including fund type, investment classification/objective, load type and similar 12b-1/non-12b-1 service fees, asset (size) comparability, expense components and attributes. An EG will typically consist of seven to twenty funds.

 

Fund   Contractual
Management
Fee12
   

Lipper Exp.

Group

Median (%)

    Rank
Greater China ‘97 Fund, Inc.     0.750        1.250      1/9

Lipper also analyzed the Fund’s most recently completed fiscal year total expense ratio in comparison to the Fund’s EG and Lipper Expense Universe (“EU”). The EU13 is a broader group compared to the EG, consisting of all funds that have the same investment classification/objective and load type as the subject Fund.

 

9   It should be noted that the Supreme Court cautioned against accepting mutual fund fee comparisons without careful scrutiny since “these comparisons are problematic because these fees, like those challenged, may not be the product of the negotiations conducted at arms length.” Jones v. Harris at 1429.

 

10   It should be noted that Lipper does not consider average account size when constructing EGs. Funds with relatively small average account sizes tend to have higher transfer agent expense ratio than comparable sized funds that have relatively large average account sizes. Note that there are limitations on Lipper expense category data because different funds categorize expenses differently.

 

11   The contractual management fee is calculated by Lipper using the Fund’s contractual management fee rate at a hypothetical asset level. The hypothetical asset level is based on the combined net assets of all classes of the Fund, rounded up to the next $25 million. Lipper’s total expense ratio information is based on the most recent annual report except as otherwise noted. A ranking of “1” would mean that the Fund had the lowest effective fee rate in the Lipper peer group.

 

12   The contractual management fee would not reflect any expense reimbursements made by the Fund to the Adviser for certain clerical, legal, accounting, administrative and other services. In addition, the contractual management fee does not reflect any advisory fee waivers for expanse caps that would effectively reduce the actual effective management fee.

 

13  

Except for asset (size) comparability, Lipper uses the same criteria for selecting an EG when selecting an EU. Unlike the EG, the EU allows for the same adviser to be represented by more than just one fund.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       51   


 

Fund  

Expense

Ratio
(%)14

   

Lipper Exp.

Group

Median (%)

   

Lipper

Group

Rank

 

Lipper Exp.

Universe

Median (%)

   

Lipper
Universe

Rank

Greater China ‘97 Fund, Inc.     1.878        1.870      6/9     1.874      8/14

Based on this analysis, the Fund has a more favorable ranking on a management fee basis than on a total expense ratio basis.

 

III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO THE ADVISORY FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.

The Adviser utilizes two profitability reporting systems, which operate independently but are aligned with each other, to estimate the Adviser’s profitability in connection with investment advisory services provided to the Fund. The Senior Officer has retained a consultant to provide independent advice regarding the alignment of the two profitability systems as well as the methodologies and allocations utilized by both profitability systems. See Section IV for additional discussion.

 

IV. PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH SERVICES.

The Fund’s profitability information, prepared by the Adviser for the Board of Directors, was reviewed by the Senior Officer and the consultant. The Adviser’s profitability from providing investment advisory services to the Fund decreased during calendar year 2010, relative to 2009.

In addition to the Adviser’s direct profits from managing the Fund, certain of the Adviser’s affiliates have business relationships with the Fund and may earn a profit from providing other services to the Fund. The courts have referred to this type of business opportunity as “fall-out benefits” to the Adviser and indicated that such benefits should be factored into the evaluation of the total relationship between the Fund and the Adviser. Neither case law nor common business practice precludes the Adviser’s affiliates from earning a reasonable profit on this type of relationship provided the affiliates’ charges and services are competitive and the relationship otherwise complies with the 40 Act restrictions. These affiliates provide transfer agent, distribution and brokerage related services to the Fund and receive transfer agent fees, Rule 12b-1 payments, front-end sales loads, contingent deferred sales charges (“CDSC”) and brokerage commissions. In addition, the Adviser benefits from soft dollar arrangements which offset expenses the Adviser would otherwise incur.

AllianceBernstein Investments, Inc. (“ABI”), an affiliate of the Adviser, is the Fund’s principal underwriter. ABI and the Adviser have disclosed in the Fund’s prospectus that they may make revenue sharing payments from their own

 

14  

Most recently completed fiscal year end Class A total expense ratio.

 

52     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND


 

resources, in addition to resources derived from sales loads and Rule 12b-1 fees, to firms that sell shares of the Fund. In 2010, ABI paid approximately 0.04% of the average monthly assets of the AllianceBernstein Mutual Funds or approximately $13.8 million for distribution services and educational support (revenue sharing payments).

During the Fund’s most recently completed fiscal year, ABI received from the Fund $3,687, $386,498 and $25,813 in front-end sales charges, Rule 12b-1 and CDSC fees, respectively.

Fees and reimbursements for out of pocket expenses charged by AllianceBernstein Investor Services, Inc. (“ABIS”), the affiliated transfer agent for the Fund, are charged on a per account basis, based on the level of service provided and the class of share held by the account. ABIS also receives a fee per shareholder sub-account for each account maintained by an intermediary on an omnibus basis. During the Fund’s most recently completed fiscal year, ABIS received $91,863 in fees from the Fund.15

The Fund effected brokerage transactions through the Adviser’s affiliate, Sanford C. Bernstein & Co., LLC (“SCB & Co.”) and/or its U.K. affiliate, Sanford C. Bernstein Limited (“SCB Ltd.”), collectively “SCB,” and paid commissions for such transactions during the Fund’s most recently completed fiscal year. The Adviser represented that SCB’s profitability from any business conducted in the future with the Fund would be comparable to the profitability of SCB’s dealings with other similar third party clients. In the ordinary course of business, SCB receives and pays liquidity rebates from electronic communications networks (“ECNs”) derived from trading for its clients. These credits and charges are not being passed onto any SCB client. The Adviser also receives certain soft dollar benefits from brokers that execute agency trades for its clients. These soft dollar benefits reduce the Adviser’s cost of doing business and increase its profitability.

 

V. POSSIBLE ECONOMIES OF SCALE

The Adviser has indicated that economies of scale are being shared with shareholders through fee structures,16 subsidies and enhancement to services. Based on some of the professional literature that has considered economies of scale in the mutual fund industry, it is thought that to the extent economies of scale exist, they may more often exist across a fund family as opposed to a specific fund. This is because the costs incurred by the Adviser, such as investment research or technology for trading or compliance systems can be spread across a

 

15   The fees disclosed are net of any expense offsets with ABIS. An expense offset is created by the interest earned on the positive cash balance that occurs within the transfer agent account as there is a one day lag with regards to money movement from the shareholder’s account to the transfer agent’s account and then the transfer agent’s account to the Fund’s account. During the Fund’s most recently completed fiscal year, there were no fees paid by the Fund to ABIS under the offset agreement between the Fund and ABIS.

 

16   Fee structures include fee reductions, pricing at scale and breakpoints in advisory fee schedules.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       53   


 

greater asset base as the fund family increases in size. It is also possible that as the level of services required to operate a successful investment company has increased over time, and advisory firms make such investments in their business to provide services, there may be a sharing of economies of scale without a reduction in advisory fees.

In February 2008, an independent consultant, retained by the Senior Officer, provided the Board of Directors an update of the Deli17 study on advisory fees and various fund characteristics.18 The independent consultant first reiterated the results of his previous two dimensional comparison analysis (fund size and family size) with the Board of Directors.19 The independent consultant then discussed the results of the regression model that was utilized to study the effects of various factors on advisory fees. The regression model output indicated that the bulk of the variation in fees predicted were explained by various factors, but substantially by fund AUM, family AUM, index fund indicator and investment style. The independent consultant also compared the advisory fees of the AllianceBernstein Mutual Funds to similar funds managed by 19 other large asset managers, regardless of the fund size and each Adviser’s proportion of mutual fund assets to non-mutual fund assets.

 

VI. NATURE AND QUALITY OF THE ADVISER’S SERVICES, INCLUDING THE PERFORMANCE OF THE FUND

With assets under management of approximately $477 billion as of March 31, 2011, the Adviser has the investment experience to manage and provide non-investment services (described in Section I) to the Fund.

The information prepared by Lipper shows the 1, 3, 5 and 10 year performance rankings of the Fund20 relative to its Lipper Performance Group (“PG”) and Lipper Performance Universe (“PU”)21 for the periods ended February 28, 2011.22

 

17   The Deli study was originally published in 2002 based on 1997 data.

 

18   As mentioned previously, the Supreme Court cautioned against accepting mutual fund fee comparisons without careful scrutiny since the fees may not be the product of negotiations conducted at arms length. See Jones V. Harris at 1429.

 

19   The two dimensional analysis showed patterns of lower advisory fees for funds with larger asset sizes and funds from larger family sizes compared to funds with smaller asset sizes and funds from smaller family sizes, which according to the independent consultant is indicative of a sharing of economies of scale and scope. However, in less liquid and active markets, such is not the case, as the empirical analysis showed potential for diseconomies of scale in those markets. The empirical analysis also showed diminishing economies of scale and scope as funds surpassed a certain high level of assets.

 

20   The performance rankings are for the Class A shares of the Fund. It should be noted that the performance returns of the Fund shown were provided by Lipper.

 

21   The Fund’s PG is identical to the Fund’s EG. The Fund’s PU is not identical to the Fund’s EU as the criteria for including/excluding a fund in a PU is somewhat different from that of an EU.

 

22   Note that the current Lipper investment classification/objective dictates the PG and PU throughout the life of the fund even if a fund had a different investment classification/objective at a different point in time.

 

54     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND


 

 

     Fund
Return (%)
    PG
Median (%)
    PU
Median (%)
    PG Rank   PU Rank

1 year

    15.97        16.54        18.74      6/9   12/16

3 year

    -3.54        1.22        1.22      8/8   11/12

5 year

    10.64        13.25        13.78      7/7   9/10

10 year

    10.53        10.53        11.90      2/3   3/4

Set forth below are the 1, 3, 5 and 10 year and since inception performance returns of the Fund (in bold)23 versus its benchmark.24 Fund and benchmark volatility and reward-to-variability ratio (“Sharpe Ratio”) information is also shown.25

 

     Periods Ending February 28, 2011
Annualized Performance
 
   

1

Year
(%)

   

3

Year
(%)

   

5

Year
(%)

   

10
Year

(%)

    Since
Inception
(%)
    Annualized     Risk
Period
(Year)
 
               Volatility
(%)
    Sharpe
(%)
   
Greater China ‘97 Fund, Inc.     15.97        -3.54        10.64        10.53        7.19        24.14        0.44        10   
MSCI Golden Dragon Index (Net)     17.66        2.96        10.49        8.13        N/A        23.73        0.35        10   
Inception Date: September 3, 1997   

CONCLUSION:

Based on the factors discussed above the Senior Officer’s conclusion is that the proposed advisory fee for the Fund is reasonable and within the range of what would have been negotiated at arm’s-length in light of all the surrounding circumstances. This conclusion in respect of the Fund is based on an evaluation of all of these factors and no single factor was dispositive.

Dated: May 24, 2011

 

23   The performance returns and risk measures shown in the table are for the Class A shares of the Fund.

 

24   The Adviser provided Fund and benchmark performance return information for periods through February 28, 2011.

 

25   Fund and benchmark volatility and Sharpe Ratio information was obtained through Lipper LANA, a database maintained by Lipper. Volatility is a statistical measure of the tendency of a market price or yield to vary over time. A Sharpe Ratio is a risk adjusted measure of return that divides a fund’s return in excess of the riskless return by the fund’s standard deviation. A fund with a greater volatility would be regarded as more risky than a fund with equivalent performance but lower volatility; for that reason, a greater return would be demanded for the more risky fund. A fund with a higher Sharpe Ratio would be regarded as better performing than a fund with a lower Sharpe Ratio.

 

ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND       55   


THIS PAGE IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS

ALLIANCEBERNSTEIN FAMILY OF FUNDS

 

Wealth Strategies Funds

Balanced Wealth Strategy

Wealth Appreciation Strategy

Conservative Wealth Strategy

Tax-Managed Balanced Wealth Strategy

Tax-Managed Wealth Appreciation Strategy

Tax-Managed Conservative Wealth Strategy

Blended Style Funds

U.S. Large Cap Portfolio

International Portfolio

Tax-Managed International Portfolio

Growth Funds

Domestic

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

Small/Mid Cap Growth Fund

U.S. Strategic Research Portfolio

Global & International

Global Growth Fund

Global Thematic Growth Fund

Greater China ‘97 Fund

International Discovery Equity Portfolio

International Growth Fund

Value Funds

Domestic

Core Opportunities Fund*

Growth & Income Fund

Small/Mid Cap Value Fund

Equity Income Fund*

Value Fund

Global & International

Global Real Estate Investment Fund

Global Value Fund

International Value Fund

Taxable Bond Funds

Bond Inflation Strategy

Unconstrained Bond Fund*

Global Bond Fund

High Income Fund

Intermediate Bond Portfolio

Short Duration Portfolio

Municipal Bond Funds

 

Arizona

Municipal Bond

   Inflation Strategy

California

High Income

Massachusetts

Michigan

  

Minnesota

National

New Jersey

New York

Ohio

Pennsylvania

Virginia

Intermediate Municipal Bond Funds

Intermediate California

Intermediate Diversified

Intermediate New York

Closed-End Funds

AllianceBernstein Global High Income Fund

AllianceBernstein Income Fund

AllianceBernstein National Municipal Income Fund

Alliance California Municipal Income Fund

Alliance New York Municipal Income Fund

Alternatives

Real-Asset Strategy

Market Neutral Strategy-Global

Market Neutral Strategy-U.S

Balanced

Balanced Shares

 

Retirement Strategies Funds

 

2000 Retirement Strategy

 

2020 Retirement Strategy

 

2040 Retirement Strategy

2005 Retirement Strategy

 

2025 Retirement Strategy

 

2045 Retirement Strategy

2010 Retirement Strategy

 

2030 Retirement Strategy

 

2050 Retirement Strategy

2015 Retirement Strategy

 

2035 Retirement Strategy

 

2055 Retirement Strategy

We also offer Exchange Reserves,** which serves as the money market fund exchange vehicle for the AllianceBernstein mutual funds.

You should consider the investment objectives, risks, charges and expenses of any AllianceBernstein fund/portfolio carefully before investing. For free copies of our prospectuses, which contain this and other information, visit us online at www.alliancebernstein.com or contact your financial advisor. Please read the prospectus carefully before investing.

 

*   Prior to February 3, 2011, Unconstrained Bond Fund was named Diversified Yield 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.

 

56     ALLIANCEBERNSTEIN GREATER  CHINA ’97 FUND

AllianceBernstein Family of Funds


NOTES

 

 

ALLIANCEBERNSTEIN GREATER CHINA ‘97 FUND       57   


NOTES

 

 

58     ALLIANCEBERNSTEIN GREATER  CHINA ‘97 FUND


NOTES

 

 

ALLIANCEBERNSTEIN GREATER CHINA ‘97 FUND       59   


NOTES

 

 

60     ALLIANCEBERNSTEIN GREATER  CHINA ‘97 FUND


ALLIANCEBERNSTEIN GREATER CHINA ’97 FUND

1345 Avenue of the Americas

New York, NY 10105

800.221.5672

LOGO

 

 

GC-0151-0711   LOGO


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 12(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 William H. Foulk, Jr. and Garry L. Moody qualify as audit committee financial experts.

 

ITEM 4.    PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) - (c) The following table sets forth the aggregate fees billed by the independent registered public accounting firm 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 advice and education related to accounting and auditing issues and quarterly press release review (for those Funds which issue press releases), and preferred stock maintenance testing (for those Funds that issue preferred stock); and (iii) tax compliance, tax advice and tax return preparation.

 

           Audit - Related  
            Audit Fees     

Fees

  Tax Fees  

AB Greater China

     2010      $ 29,000       $—     $ 12,877   
     2011      $ 29,000       $—     $ 14,544   

(d) Not applicable.

(e) (1) 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 registered public accounting firm. 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 the Fund.


(e) (2) All of the amounts for Audit Fees, Audit-Related Fees and Tax Fees in the table under Item 4 (a) – (c) are for services pre-approved by the Fund’s Audit Committee.

(f) Not applicable.

(g) The following table sets forth the 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, which include preparing an annual internal control report pursuant to Statement on Auditing Standards No. 70 (“Service Affiliates”):

 

            All Fees for
Non-Audit Services
Provided to the
Portfolio, the Adviser
and Service Affiliates
     Pre-approved by the
Audit Committee
(Portion Comprised of
Audit Related Fees)
(Portion Comprised of
Tax Fees)
 

AB Greater China

     2010       $ 605,824       $ 140,592   
         $ (127,715
         $ (12,877
     2011       $ 892,280       $ 14,544   
         $ —     
         $ (14,544

(h) 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 registered public accounting firm 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.    PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the registrant.

ITEM 9.    PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable to the registrant.

ITEM 10. 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 11.    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 changes in the registrant’s internal controls over financial reporting that occurred during the second fiscal quarter of the period that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.


ITEM 12. EXHIBITS.

The following exhibits are attached to this Form N-CSR:

 

EXHIBIT NO.

  

DESCRIPTION OF EXHIBIT

12 (a) (1)    Code of Ethics that is subject to the disclosure of Item 2 hereof
12 (b) (1)    Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12 (b) (2)    Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12 (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/ Robert M. Keith

  Robert M. Keith
  President
Date:   September 23, 2011

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/ Robert M. Keith

 

Robert M. Keith

President

Date:   September 23, 2011

 

By:  

/s/ Joseph J. Mantineo

 

Joseph J. Mantineo

Treasurer and Chief Financial Officer

Date:   September 23, 2011