THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
TABLE OF CONTENTS
The Fund's Management 2
Letter to Shareholders 3
Report of the Investment Manager 4
Portfolio of Investments 10
Statement of Assets and Liabilities 16
Statement of Operations 17
Statement of Changes in Net Assets 18
Notes to Financial Statements 19
Financial Highlights 25
Report of Independent Accountants 26
Dividend Reinvestment Plan 27
Other Information 28
Annual Shareholders' Meeting 29
This report, including the financial statements herein, is sent to the
shareholders of The Greater China Fund, Inc. for their information. It is not a
prospectus, circular or representation intended for use in the purchase or sale
of shares of the Fund or any securities mentioned in this report.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that from time to time the Fund may purchase at
market prices shares of its common stock in the open market.
The Greater China Fund, Inc.
1285 Avenue of the Americas
New York, New York 10019
For information call (212) 713-2848
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
THE FUND'S MANAGMENT
Directors
Richard B. Bradley, Chairman
Jonathan J.K. Taylor, President
Edward Y. Baker
John A. Bult
Richard Graham
John A. Hawkins
Don G. Hoff
Tak Lung Tsim
Officers
Jonathan J.K.Taylor, President
Michael D. Clegg, Secretary
Julian F. Sluyters, Vice President
Thomas M. Walker, Vice President
C. William Maher, Treasurer and Assistant Secretary
Investment Manager
Baring International Investment (Far East) Limited
19th Floor
Edinburgh Tower
15 Queen's Road Central
Hong Kong
Administrator
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
Custodian
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
Shareholder Servicing Agent
PNC Bank, National Association
400 Bellevue Parkway
Wilmington, Delaware 19809
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
Legal Counsel
White & Case
1155 Avenue of the Americas
New York, New York 10036
2
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
Letter to Shareholders
January 31, 1996
Dear Shareholder,
The results for the year have been better than in 1994, with net assets per
share showing an increase of 3.4% on a dividend re-invested basis. The Fund's
Board of Directors declared dividends and distributions totalling US$0.258 per
share.
Although the Hong Kong stock market performed strongly in 1995, the results for
China-related shares were disappointing. Business conditions in China were
difficult, with a continuation of the severe austerity program, uncertainty over
tax and tariff policy and depressed corporate earnings. Valuations of Chinese
stocks suffered accordingly, with the Shanghai and Shenzen markets ending the
year at or near record lows and Hong Kong-listed Chinese companies faring little
better. Against this background, it is encouraging to report that the Fund
recorded a positive return, with the share price improving 16.5%.
Your Directors view the macro-economic developments in China with guarded
optimism. Inflation has been much reduced and should remain within acceptable
limits, so long as the government's apparent determination to resist early
reflation is not weakened. GDP growth has come back from its previously
overheated levels and a respectable growth rate of 8-9% is forecast for 1996
impressive by any standard and especially so when compared with the OECD
economies. The growth of the trade surplus and the level of foreign exchange
reserves have added to China's economic strength. These achievements have,
however, been at a real cost to corporate margins. The tight monetary policy,
which has been an important contributor to increased stability, is likely to be
maintained in 1996 and will tend to limit the recovery of corporate profits in
mainland China.
Much of the friction between China and Britain over the future of Hong Kong has
dissipated. While the resolution of some of the constitutional issues may not
appear to be in Hong Kong's favor, the business environment is relatively
unaffected by them. This is clearly demonstrated by the continuing strength of
private sector capital investment into Hong Kong. As the period remaining before
the transfer of sovereignty to China next year shortens, so the degree of
uncertainty should diminish. This is likely to lead to renewed confidence in the
prospects for companies operating in Hong Kong, where the majority of your
Fund's securities are listed.
Despite the adverse conditions experienced in China during the past year, your
Directors' positive view of the potential for long-term capital gains remains
unchanged. In particular, the fear of rampant inflation causing serious damage
to China's economy has receded, as has the degree of political apprehension in
Hong Kong.
I thank you for your support over the last year.
Richard B. Bradley
Chairman
3
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
REPORT OF THE INVESTMENT MANAGER
Overview
During 1995, the performance of the U.S. equity market excelled while
investments in other parts of the world were disappointing by comparison. The
year started with the Mexican currency devaluation which put a dampener on
emerging markets around the world. The trend towards lower interest rates
globally has been positive for equity markets, but emerging markets have
undoubtedly suffered reticence on the part of investors for whom the "tequila
effect" was all too fresh in the memory.
The NAV of The Greater China Fund (the "Fund") achieved a 3.4% return in 1995. A
solid recovery in the Hong Kong stock market commenced in January as interest
rate expectations reversed. However, the Fund's portfolio did not fully benefit
from this market move because the business environment in China itself remained
very difficult. Following the success of the authorities in slowing the Chinese
economy, the reform process is once again coming to the forefront. Several
deregulation packages, which are essential to China's long-term development,
have created considerable uncertainty for companies doing business in this
changing environment. So it is that the share price of many China-oriented
companies finished 1995 at near all-time low levels. For example, the `H' share
index closed at 757, down 29% for the year, and only slightly above its all time
low.
Politics has always been a primary concern for investors in China and this is
now particularly relevant in Hong Kong as the transfer of sovereignty in 1997
approaches. In 1995, the main influences on Taiwan and South Korea's stock
diplomacy", between Beijing and Taipei not only dampened Taiwan's stock market,
but caused genuine concern among the population of Taiwan. South Korea's
evolution towards western-style democracy involved changing established
practices. The revelations about former President Roh's political slush fund
have shaken the stock market but will probably have positive implications for
the cost of doing business in South Korea.
4
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
The table below shows the Fund's performance over the last three years compared
with relevant market indices:-
1993 1994 1995
The Greater China Fund +82.2% -39.3% +3.4%
China - MSCI +33.6% -47.0% -23.0%
Hong Kong - All Ordinary Index +106.4% -35.2% +21.7%
Performance of Net Asset Value Per Share
as of December 31, 1995 - on a Dividend Reinvested Basis
%
13.0
12
10
8
6
4
3.5
2 2.2
0
- -2 -2.0
- -4
Last 3 Last 6 Last 12 Since
Months Months Months Inception
Note: This information represents the historical performance of The Greater
China Fund, Inc. Past performance is not indicative of future returns.
5
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
REPORT OF THE INVESTMENT MANAGER
continued
Asset Allocation
During 1995, the weighting in companies listed in China was reduced from 18.0%
to 8.1%. These companies suffer not only from difficult economic conditions
within China, but also their shares have become increasingly illiquid as
activity on China's stock markets has dwindled. The `H' share market (shares of
Chinese companies listed in Hong Kong) is more liquid. The resulting increased
weighting to Hong Kong-listed companies has been principally allocated to the
real estate development and banking sectors.
The Fund has remained fully invested throughout the period under review. Please
find indicated below a comparison of the asset allocation at December 31, 1994
and 1995:
Asset Allocation December 31, 1994 December 31, 1995
China 28.0% 16.2%
Hong Kong 66.9% 75.9%
Korea 1.9% 3.1%
Singapore 0.4% 2.9%
Taiwan 2.5% 2.3%
Net Cash 0.3% (0.4%)
Note that holdings of `H' shares are included in China's allocation.
6
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
China
Market Review
Share prices of China stocks were weak during 1995. Sentiment was generally
negative as concerns over the political and economic prospects for China
persisted. Investment confidence was badly shaken in August as poor interim
results of `H' and `B' shares shocked the market. Uncertainties over policy
changes regarding interest rates, corporate taxes and import tariffs also cast a
shadow over the markets in the fourth quarter. As a result, China `H' and `B'
share indices ended the year just slightly above their all-time low levels.
The expansion of stock markets has slowed. The poor market conditions are the
primary reason, compounded by management and policy changes at the stock
exchanges and securities companies. During the year, only 14 new `B' and `H'
shares were listed.
Prospects
The Chinese economy continued its soft-landing at the macro level in 1995. The
GDP grew more slowly at 10.2%, compared with 11.8% during 1994. Inflation has
been kept under control and the nation-wide retail price index ("RPI") rose
14.6% in 1995, in line with the government's target of 15% and down from 21.7%
in 1994. Furthermore, the trend to lower inflation remains in place and
December's RPI increase was only 8.5% year-on-year. While the macro-environment
has improved, the authorities are expected to remain cautious towards credit
relaxation in 1996 in order to prevent any acceleration of inflation.
China's 1995 trade performance was impressive. For the full year, exports rose
22.9%, while imports increased 14.2%, resulting in a record trade surplus of US$
16.7 billion. However, the trade surplus is expected to decline in 1996 as the
country cuts import tariffs agressively and export growth decelerates following
a further reduction in the rebate of value added tax on exports.
This will be the first year of China's ninth Five Year Plan (1996-2000) for
economic development. A blueprint was endorsed by the Fifth Plenum of the
Chinese Communist Party held in Beijing during September. While `growth' is
still high on the agenda, `balance' is to be given strong emphasis.
Underdeveloped regions (the Central and Western parts of China) and sectors
(agriculture and infrastructure) top the policy priority list. This is
beneficial for the country's long-term economic development.
Political succession in China is becoming less of a concern as Jiang Zemin
further strengthened his power base during 1995, through a series of
anti-corruption measures and leadership reshuffles within the military and the
party. Nevertheless, China's relations with Taiwan and the United States have
worsened significantly since July when a U.S. visa was granted to Taiwan's
President Lee Teng-hui.
7
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
REPORT OF THE INVESTMENT MANAGER
continued
[FLAG]
Hong Kong
Market Review
The Hong Kong stock market performed well in 1995. The recovery of the market
dates back to the end of January and is closely correlated with the improvement
in the price of the U.S. long bond. From its low point during the year, the Hang
Seng Index has risen by over 40%, though, in contrast to Wall Street, it remains
well below its all-time high, established during the first few days of 1994.
Prospects
Having grown by 5.9% (year-on-year) in the first quarter of 1995, GDP growth in
the third quarter has been provisionally stated at 4.5%. Private consumption was
weak throughout the year, growing by 0.8% and 1.4% in the first and second
quarters of 1995, respectively. The Hong Kong government has revised its 1995
GDP growth estimate down from 5.5% to 5.0%, reducing forecast private
consumption growth from 3.5% to 1.5%, the lowest level since 1974. Unemployment
has now risen to 3.6%, an eleven-year high. In this slowing environment, the
inflation rate, which stood at 10.1% in January 1995, had fallen to 6.6% by
December.
Trade started the year very strongly but has since been slowing. In the first
eleven months of 1995, imports and exports rose by 9.7% and 15.1%
(year-on-year), respectively. Though the mounting trade deficit (U.S. $17.3
billion to the end of November) has caused some concern, it is expected to
improve in 1996.
Following the recent reduction in U.S. interest rates, Hong Kong's prime lending
rate has been reduced to 8.8%. Moreover, because of the sluggishness of the
local economy, banks have indicated their enthusiasm to increase their
residential mortgage loan books by reducing mortgage rates by up to 0.8% (to
9.8%). Residential real estate prices have fallen by about 30% from their April
1994 peak but now appear to have stabilized. The volume of transactions has also
picked up, particularly in the last two months of the year.
- --------------------------------------------------------------------------------
Other Markets
During 1995, the Korean and Taiwanese stock markets were both adversely affected
by domestic political uncertainties and economic concerns.
In Korea, share prices were volatile during 1995. The market was boosted
strongly in the third quarter by the changes in withholding tax and the increase
in the foreign ownership ceiling from 12% to 15%. However, the controversial
slush fund scandal surrounding former President Roh then sent the market lower
in the fourth quarter. Looking ahead, political uncertainties are expected to
prevail in the near term and the economy is likely to slow, as reflected by the
official GDP forecast of 7.4% in 1996, compared with 9.3% for 1995.
Nevertheless, the government's plan to raise the foreign ownership limit to 18%
should provide a boost to the market.
8
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
The Taiwan stock market fell 30.1% in U.S. dollar terms during 1995. Political
friction with China, arising from President Lee Teng-hui's visit to the United
States in July, depressed the market and overrode the stimulatory efforts of the
government which also raised the foreign investment ceiling. In the near term,
politics should continue to be a dominant factor in light of the Presidential
election in March 1996. The long-term prospects then depend on the government's
policy towards the vulnerable real estate and banking sectors.
- --------------------------------------------------------------------------------
Outlook
In last year's report we concluded that value was apparent but that there
remained a high degree of uncertainty. That value is still apparent as we enter
1996 and we believe that the level of uncertainty diminished as 1995 progressed.
Confirmation of the economic slowdown in China has occurred providing the "soft
landing" that the more optimistic analysts predicted. The U.S. interest rate
cycle has now turned and interest rates are expected to head lower in 1996. This
is important for the Hong Kong stock market, with its heavy preponderance of
real estate stocks. A recovery of residential property prices in 1996 may
provide the catalyst necessary to boost Hong Kong's sluggish domestic economy.
While there is still considerable apprehension regarding the form of government
after the transition of power to China in June 1997, Sino-British relations have
recently improved and it is increasingly recognized that it is in China's
interests to foster increased confidence in Hong Kong's future.
At the corporate level, the difficult operating environment is likely to
continue in China. Previous boom/bust cycles have taught the authorities in
Beijing to proceed with reflation very cautiously. As a result, any credit
relaxation is likely to be carefully targeted towards priority sectors such as
infrastructure and utilities. The worst of the credit squeeze is over and
corporate earnings probably bottomed in the second half of 1995.
There is considerable investment in Hong Kong's infrastructure at present and
the flow of funds into this area will continue for some years as Hong Kong's
economy is physically integrated with that of the mainland. A turnaround in Hong
Kong's economy is probably more imminent than in the mainland. Obtaining
exposure to China from the Hong Kong side of the border remains the more
attractive entry.
Baring International Investment (Far East) Limited
Hong Kong
January 31, 1996
9
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
December 31, 1995
Shares Description Value
(Note1)
Equities and Equity Equivalents - 100.0%
CHINA -- 16.2%
Building Materials -- 2.4%
2,237,560 China Southern Glass Co. "B" $ 607,679
6,782,000 Luoyang Glass Co. Ltd. "H" 1,745,384
1,200,000 Shanghai Yaohua Pilkington Glass "B" 1,056,000
-----------
3,409,063
-----------
Consumption -- 0.9%
2,900,000 Shanghai Narcissus Electric "B" 493,000
500,000 Shanghai Shangling Electrical Appliances "B"* 306,000
1,650,000 Zhuhai Lizhu Pharmaceuticals "B" 490,786
-----------
1,289,786
-----------
Manufacturing -- 7.3%
5,114,000 Chengdu Telecom Cable "H" 873,001
700,000 China International Marine Containers "B" 516,004
700,000 Erdos Cashmere Products Co. "B"* 261,800
9,000,000 Harbin Power Equipment "H" 1,350,145
4,500,000 Northeast Electric T&T Machine Manufacturing "H"* 733,269
4,050,000 Qingling Motor Cos. "H" 1,178,467
1,011,600 Shanghai Chlor-Alkali Chemical "B" 256,946
500,000 Shanghai Diesel Engine Co. Ltd. "B" 185,000
7,334,000 Shanghai Petrochemical Co. "H" 2,110,333
10,490,000 Yizheng Chemical Fibre Co. Ltd. "H" 2,360,504
1,730,000 Zhenhai Refining & Chemical Co. "H" 324,410
-----------
10,149,879
-----------
Real Estate Development -- 1.3%
1,622,900 Shanghai Jinqiao Export Processing Zone "B" 606,965
2,100,000 Shanghai Lujiazui Finance & Trading "B" 1,192,800
-----------
1,799,765
-----------
10
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
Shares Description Value
(Note1)
CHINA -- (continued)
Services -- 4.3%
2,737,680 China Merchant Shekou Port Service Co. Ltd. "B" $ 991,336
1,000,000 Chiwan Wharf Holdings Ltd. "B" 376,334
5,171,600 Shanghai Dazhong Taxi Co. Ltd. "B" 3,775,268
10,388,000 Shanghai Haixing Shipping "H" 698,579
228,155 Shanghai New Asia Group "B"* 120,466
-----------
5,961,983
-----------
Total China 22,610,476
-----------
HONG KONG -- 75.5%
Banking -- 8.7%
220,000 Dao Heng Bank 792,370
387,800 Hang Seng Bank 3,473,023
300,000 HSBC Holdings 4,539,282
6,325,435 The Ka Wah Bank Ltd. 1,861,024
3,600,000 Min Xin Holdings Ltd. 512,124
1,000,000 Union Bank of Hong Kong 944,067
-----------
12,121,890
-----------
Conglomerate -- 20.0%
3,100,000 China Resources Enterprise 1,603,621
1,455,000 Citic Pacific Ltd. 4,977,013
1,800,000 First Pacific Co. 1,990,301
10,044,000 Guangdong Investment Ltd. 6,040,039
800,000 Hutchison Whampoa Ltd. 4,862,593
550,000 Swire Pacific (A) 4,267,701
1,250,000 The Wharf Holdings Ltd. 4,162,625
-----------
27,903,893
-----------
Construction -- 0.2%
366,000 Kumagai Gumi (Hong Kong) Ltd. 265,063
-----------
11
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
continued
Shares Description Value
(Note1)
HONG KONG -- (continued)
Consumption -- 4.4%
2,570,000 China-HK Photo $ 1,454,090
1,688,000 Giordano International Ltd. 1,440,776
1,213,000 Goldlion Holdings Ltd. 886,317
4,162,000 Hualing Holdings Ltd. 500,570
400,000 Jardine International Motor Holdings 455,221
3,500,000 Lam Soon Food Industries Ltd. 398,319
2,100,000 NG Fung Hong Ltd.* 923,375
-----------
6,058,668
-----------
Industrial -- 0.5%
410,000 Varitronix International 760,879
-----------
Manufacturing -- 1.7%
4,000,000 Herald Holdings 204,332
1,852,000 Singamas Container 239,509
4,258,000 Sinocan Holdings Ltd. 1,514,323
3,044,160 World Houseware Holdings 452,736
-----------
2,410,900
-----------
Real Estate Development -- 22.4%
1,340,000 Cheung Kong Holdings 8,144,843
5,996,000 China Overseas Land & Investment Ltd. 1,062,337
500,000 Henderson Land Development 3,013,256
2,000,000 Hong Kong Resort International Ltd. 1,862,270
400,000 Hong Kong Resort International Ltd. Warrants,
expiring June 23, 2000* 130,617
2,200,000 New World Development Co. Ltd. 9,559,651
900,000 Sun Hung Kai Properties Ltd. 7,361,785
-----------
31,134,759
-----------
Real Estate Investment -- 1.4%
2,000,000 Amoy Properties 1,991,594
-----------
Services -- 1.7%
1,904,000 Shangri La Asia 2,314,594
-----------
Trading -- 1.3%
2,032,200 Li & Fung Ltd. 1,813,408
-----------
12
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
Shares Description Value
(Note1)
HONG KONG -- (continued)
Utilities -- 6.8%
900,000 China Light & Power Co. Ltd. $ 4,143,550
1,852,631 Consolidated Electric Power Asia 3,366,242
1,200,000 Hong Kong & China Gas 1,932,105
-----------
9,441,897
-----------
Miscellaneous -- 6.4%
7,710,000 China Merchant Hai Hong Holdings Co. Ltd. 2,068,962
2,194,000 Fairyoung Holdings Ltd. 1,007,268
438,800 Fairyoung Holdings Ltd. Warrants,
expiring June 30, 1996* 13,790
1,400,000 Florens Group Ltd. 914,323
314,974 New World Infrastructure 602,860
1,200,000 Television Broadcasting 4,275,461
-----------
8,882,664
-----------
Total Hong Kong 105,100,209
-----------
KOREA -- 3.1%
Building Materials -- 2.0%
34,043 Dong Ah Construction 1,189,256
9,048 Dong Ah Construction (New) 316,082
33,923 Dongkuk Steel Mill Co. (New) 804,619
7,930 Inchon Iron & Steel Co. Ltd. 300,537
2,290 Pohang Iron & Steel Co. 149,665
-----------
2,760,159
-----------
Manufacturing -- 1.1%
7,200 Samsung Electronics* 1,308,669
1,424 Samsung Electronics (New)* 256,990
106 Samsung Electronics (New 3)* 19,198
-----------
1,584,857
-----------
Total Korea 4,345,016
-----------
13
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
continued
Shares Description Value
(Note1)
SINGAPORE -- 2.9%
Conglomerate -- 2.1%
432,000 Jardine Matheson SGD$ 2,959,200
-----------
Manufacturing -- 0.8%
397,000 Elec & Eltek International Co. Ltd. 1,067,930
-----------
Total Singapore 4,027,130
-----------
TAIWAN -- 2.3%
Manufacturing -- 0.3%
30,000 Advanced Semiconductor Engineering GDR* 396,750
-----------
Miscellaneous -- 2.0%
18 Taipei Fund IDR* 1,296,000
71,250 The Taiwan Fund, Inc. 1,460,625
-----------
2,756,625
-----------
Total Taiwan 3,153,375
-----------
Total Equities and Equity Equivalents
(cost $127,730,966) 139,236,206
-----------
14
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
Principal
Shares Description Value
(Note1)
Fixed Income -- 0.4%
HONG KONG
Real Estate Development
HK$5,250,000 Hong Kong Resort International Ltd.,
6.00%, 6/26/2000
(cost $409,318) $ 571,169
-----------
Time Deposit -- 1.1%
US$1,525,000 Brown Brothers Harriman & Co.,
Grand Cayman, 4.75%**
(cost $1,525,000) 1,525,000
-----------
Total Investments -- 101.5%
(cost $129,665,284) 141,332,375
Liabilities in excess of other assets -- (1.5%) (2,086,433)
-----------
Net Assets -- 100.0% $139,245,942
-----------
* Non-income producing security.
** Variable rate account -- rates reset on a monthly basis;
amounts available upon 48 hours' notice.
GDR - Global Depositary Receipt.
IDR - International Depositary Receipt.
15
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1995
Assets
Investments, at value (cost $129,665,284) $ 141,332,375
Cash (including Hong Kong dollars of $18,540
with a cost of $18,546) 22,317
Dividends and interest receivable 263,047
Receivable for investments sold 129,294
Deferred organizational expenses and other assets 74,442
-----------
Total assets 141,821,475
-----------
Liabilities
Dividend payable 1,946,643
Investment management fee payable 148,038
Administration fee payable 24,960
Accrued expenses 455,892
-----------
Total liabilities 2,575,533
-----------
Net Assets $ 139,245,942
===========
Composition of Net Assets
Common stock, $0.001 par value; 9,589,377 shares
issued and outstanding (100,000,000 shares
authorized) $ 9,589
Paid-in capital in excess of par 135,222,485
Dividends in excess of net investment income (736)
Accumulated net realized loss on investments
and distributions in excess of net realized gain (7,652,559)
Net unrealized appreciation of investments and other
assets and liabilities denominated in foreign currencies
11,667,163
-----------
Net Assets $ 139,245,942
===========
Shares outstanding 9,589,377
-----------
Net Asset Value Per Share $14.52
======
See Notes to Financial Statements.
16
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
Investment Income
Dividends (net of foreign withholding taxes of $5,719) $ 5,028,091
Interest 78,721
----------
Total investment income 5,106,812
----------
Expenses
Investment management fees 1,703,414
Custodian and accounting fees 464,223
Administration fees 287,546
Directors' fees and expenses 227,314
Reports and notices to shareholders 205,132
Legal fees and expenses 175,063
Audit fees and expenses 54,434
Amortization of organizational expenses 24,546
Insurance expense 20,018
NYSE listing fee 15,535
Transfer agent's fees and expenses 11,853
Miscellaneous expenses 25,763
----------
Total expenses 3,214,841
----------
Net investment income 1,891,971
----------
Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency Transactions
Net realized loss on:
Investments (7,115,671)
Foreign currency transactions (15,784)
----------
(7,131,455)
----------
Net change in unrealized appreciation/depreciation of:
Investments 9,902,481
Other assets and liabilities denominated in
foreign currencies 530
----------
9,903,011
----------
Net realized and unrealized gain on investments
and foreign currency transactions 2,771,556
----------
Net Increase in Net Assets
From Investment Operations $ 4,663,527
==========
See Notes to Financial Statements.
17
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
For the Year For the Year
Ended Ended
December 31, 1995 December 31, 1994
----------------- -----------------
Income (Loss) from Investment
Operations:
Net investment income $ 1,891,971 $ 908,243
Net realized gain (loss) on investments
and foreign currency transactions (7,131,455) 524,949
Net change in unrealized appreciation/
depreciation of investments and
other assets and liabilities
denominated in foreign currencies 9,903,011 (65,824,056)
---------- ----------
Total from investment operations 4,663,527 (64,390,864)
---------- ----------
Dividends and Distributions
to Shareholders:
From net investment income (1,871,084) (897,561)
In excess of net investment income (736) --
From net realized gain on investments (65,351) (540,032)
In excess of net realized gain
on investments (536,888) --
---------- ----------
Total dividends and distributions
to shareholders (2,474,059) (1,437,593)
---------- ----------
Fund Share Transactions:
Proceeds from dividends reinvested 62,701 192,930
Proceeds from the sale of shares in
rights offering -- 42,456,337
Offering costs charged to paid-in
capital in excess of par -- (610,000)
---------- ----------
Total Fund share transactions 62,701 42,039,267
---------- ----------
Net increase (decrease) in net assets 2,252,169 (23,789,190)
Net Assets:
Beginning of year 136,993,773 160,782,963
----------- ------------
End of year $ 139,245,942 $136,993,773
=========== ============
See Notes to Financial Statements.
18
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
NOTE TO FINANCIAL STATEMENTS
Note 1 Organization and Significant Accounting Policies
The Greater China Fund, Inc. (the "Fund") was incorporated in Maryland on May
11, 1992, as a non-diversified, closed-end management investment company. The
Fund's investment objective is to seek long-term capital appreciation by
investing substantially all of its assets in listed equity securities of
companies which derive or are expected to derive a significant portion of their
revenues from goods produced or sold, investments made or services performed in
China. The Fund had no operations until July 7, 1992, when it sold 7,200 shares
of common stock for $100,440 to Baring International Investment (Far East)
Limited (the "Investment Manager"), an indirect fully owned subsidiary of ING
Groep N.V. Investment operations commenced on July 23, 1992. Organizational
costs of $123,000 have been deferred and are being amortized on a straight-line
basis over a 60-month period from the date the Fund commenced operations.
The preparation of financial statements in accordance with generally accepted
accounting principles requires Fund management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
Valuation of Investments
All securities for which market quotations are readily available are valued at
the last sales price on the day of valuation or, if there was no sale on such
day, the last bid price quoted on such day. Short-term debt securities which
mature in 60 days or less are valued at amortized cost, or by amortizing their
value on the 61st day prior to maturity if their term to maturity from the date
of purchase was greater than 60 days, unless the Fund's Board of Directors
determines that such values do not represent the fair value of such securities.
Securities and assets for which market quotations are not readily available
(including investments which are subject to limitations as to their sale) are
valued at fair value as determined in good faith by or under the direction of
the Board of Directors.
Investment Transactions and Investment Income
Investment transactions are recorded on the trade date (the date on which the
order to buy or sell is executed). Realized gains and losses on investments and
foreign currency transactions are calculated on the identified cost basis.
Interest income is recorded on the accrual basis. Dividend income and other
distributions are recorded on the ex-dividend date, except for certain dividends
which are recorded as soon after the ex-dividend date as the Fund becomes aware
of such dividends.
19
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
continued
Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Foreign
currency amounts are translated into U.S. dollars on the following basis: (i)
the foreign currency market value of investment securities and other assets and
liabilities stated in foreign currencies at the closing rate of exchange on the
valuation date; and (ii) purchases and sales of investment securities, income
and expenses at the rate of exchange prevailing on the respective dates of such
transactions.
The resulting foreign currency gains and losses are included in the Statement of
Operations.
The Fund does not generally isolate the effect of fluctuations in foreign
currency exchange rates from the effect of fluctuations in the market prices of
equity securities. Accordingly, realized and unrealized foreign currency gains
(losses) are included in net realized and unrealized gain (loss) on investments.
However, the Fund does isolate the effect of fluctuations in foreign currency
rates when determining the gain or loss upon the sale or maturity of foreign
currency denominated debt obligations pursuant to U.S. federal income tax
regulations; such amount is categorized as foreign currency exchange gain or
loss for both financial reporting and income tax reporting purposes.
Net foreign currency gains (losses) from valuing foreign currency denominated
assets and liabilities at period end exchange rates are reflected as a component
of net unrealized appreciation of investments and other assets and liabilities
denominated in foreign currencies.
Dividends and Distributions
The Fund will distribute to shareholders, at least annually, substantially all
of its net investment income and net realized capital gains, if any. Such
dividends and distributions are recorded on the ex-dividend date. The amount of
the dividends and distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax regulations,
which may differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income and distributions in excess of net
realized gains. To the extent they exceed net investment income and net realized
gains for tax purposes, they are reported as distributions of paid-in capital in
excess of par. Net realized foreign currency losses of $15,784 have been
reclassified to undistributed net investment income.
On December 19, 1995, the Fund's Board of Directors declared an ordinary income
dividend of $0.203 per share. The dividend was paid on January 12, 1996 to
shareholders of record as of December 29, 1995.
20
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
Tax Status
United States
The Fund intends to distribute all of its taxable income and to comply with the
other requirements of the U.S. Internal Revenue Code applicable to regulated
investment companies. Accordingly, no provision for U.S. federal income taxes is
required. In addition, by distributing during each calendar year substantially
all of its net investment income, realized capital gains and certain other
amounts, if any, the Fund intends not to be subject to a U.S. federal excise
tax.
China
Presently, as a result of a ruling issued in July 1993 (the "July Ruling"), The
People's Republic of China ("PRC") State Tax Bureau has determined that
dividends paid on "B" shares and dividends received from a PRC company, the
shares of which are listed on non-PRC securities exchanges, including dividends
paid with respect to "H" shares, will not for the time being be subject to PRC
withholding tax. However, there is no assurance that the July Ruling will remain
in effect for the entire period that such shares are held by the Fund, as it is
a temporary provision. Based on the July Ruling, capital gains from the sale of
"B" shares and shares of a PRC company listed on a non-PRC securities exchange,
including "H" shares, will not for the time being be subject to the 20%
withholding tax.
Capital gains with respect to debt securities of PRC companies are not covered
by the July Ruling and may be subject to the 20% withholding tax.
In the future, were the July Ruling to be reversed, dividends received and
capital gains derived with respect to investments in securities of PRC companies
would be subject to withholding tax at a maximum rate of 20%.
Hong Kong
Under current Hong Kong law, no income tax is charged on dividends or other
distributions received by any person with respect to investments in Hong Kong
securities. Additionally, there is no tax in Hong Kong on capital gains realized
from the disposal of such securities. However, income received and capital gains
realized by any person in the course of a trade, profession or business carried
on in Hong Kong may be subject to Hong Kong profits tax. It is the intention of
the Fund to conduct its affairs in such a manner that it will not be subject to
such profits tax. To the extent that the Fund were to derive any profit from
such a trade, profession or business, its profit from the trading of securities
(including interest, dividends and net capital gains) would be subject to
profits tax, which is currently a flat rate of 17.5% for corporations.
Other Foreign Countries
The Fund may be subject to certain taxes on dividends, capital gains and other
income imposed by the other foreign countries in which it invests.
21
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
continued
Note 2 Investment Management and
Administration Agreements
Effective March 14, 1995, the Investment Manager entered into a new investment
management agreement ("Investment Management Agreement") on terms which are not
different from those of the previous agreement with the Fund. In accordance with
the Investment Management Agreement, the Investment Manager manages the Fund's
investments in accordance with the Fund's investment objectives, policies and
restrictions, and makes investment decisions on behalf of the Fund, including
the selection of and the placing of orders with, brokers and dealers to execute
portfolio transactions on behalf of the Fund. As compensation for its services,
the Investment Manager receives a monthly fee at the annual rate of 1.25% of the
value of the Fund's average weekly net assets.
Mitchell Hutchins Asset Management Inc. (the "Administrator"), a wholly-owned
subsidiary of PaineWebber Inc. ("PaineWebber"), has an administration agreement
("Administration Agreement") with the Fund. Under the terms of the
Administration Agreement, the Administrator provides certain administrative
services to the Fund. As compensation for its services, the Administrator
receives a monthly fee at the annual rate of 0.22% of the value of the Fund's
average weekly net assets up to $75 million, and 0.20% of such net assets in
excess of $75 million, subject to a minimum annual fee of $150,000.
- --------------------------------------------------------------------------------
Note 3 Transactions with Affiliates
Of the 9,589,377 shares outstanding at December 31, 1995, the Investment Manager
owned 7,485 shares.
For the year ended December 31, 1995, the Fund paid $2,951 in brokerage
commissions to ING Barings Securities Limited, an affiliate of the Investment
Manager.
- --------------------------------------------------------------------------------
Note 4 Portfolio Securities
For U.S. federal income tax purposes, the cost of securities owned at December
31, 1995 was $130,157,399. Accordingly, net unrealized appreciation of
investments of $11,174,976 was composed of gross appreciation of $26,344,635 for
those securities having an excess of value over cost, and gross depreciation of
$15,169,659 for those securities having an excess of cost over value.
For the year ended December 31, 1995, aggregate purchases and sales of portfolio
securities, excluding short-term securities, were $43,719,945 and $43,319,909,
respectively.
At December 31, 1995, the Fund had a capital loss carryforward of $7,160,671
available as a reduction, to the extent provided in the
22
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
regulations, of any future net capital gains realized before the end of fiscal
year 2003. To the extent that these losses are used to offset future capital
gains, such gains will not be distributed.
- --------------------------------------------------------------------------------
Note 5 Capital Stock
Transactions in shares of common stock were as follows:
For the Year For the Year
Ended Ended
December 31, 1995 December 31, 1994
----------------- -----------------
Shares outstanding, beginning of year 9,584,377 6,757,200
----------- -----------
Shares issued resulting from
dividend reinvestment 5,000 8,616
Shares issued in connection with
rights offering -- 2,818,561
----------- -----------
Net increase in shares outstanding 5,000 2,827,177
----------- -----------
Shares outstanding, end of year 9,589,377 9,584,377
=========== ===========
- --------------------------------------------------------------------------------
Note 6 Concentration of Risk
The Fund may have elements of risk, not typically associated with investments in
the U.S., due to concentrated investments in specific industries or investments
in foreign issuers located in a specific country or region. Such concentrations
may subject the Fund to additional risks resulting from future political or
economic conditions in such country or region and the possible imposition of
adverse governmental laws of currency exchange restrictions affecting such
country or region.
- --------------------------------------------------------------------------------
Note 7 Rights Offering
During the year ended December 31, 1994, the Fund issued 2,818,561 shares in
connection with a rights offering of the Fund's shares. Shareholders of record
on May 20, 1994 were issued one non-transferable right for each share of common
stock owned, entitling shareholders the opportunity to acquire one newly issued
share of common stock for every three rights held at a subscription price of
$15.65 per share. Offering costs of $610,000 were charged to paid-in capital in
excess of par, including $100,000 paid to PaineWebber, an affiliate of the
Administrator, as partial reimbursement for its expenses. Dealer manager and
soliciting fees of $1,654,143 were netted against the proceeds of the
subscription. PaineWebber earned approximately $936,000 of the aforementioned
commissions with respect to its participation in the offering.
23
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
continued
Note 8 Quarterly Results of Operations (unaudited)
<TABLE><CAPTION>
Quarter ended Net investment Net realized Net increase Market price on
income (loss) and unrealized (decrease) NYSE
gain (loss) on in net assets
investments and from
foreign currency investment
transactions operations
Total Per Total Per Total Per
(000) Share (000) Share (000) Share High Low
<S> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1995 $ 359 $ 0.04 $ (3,363) $ (0.35) $ (3,004) $(0.31) $ 14.625 $ 13.125
September 30, 1995 (95) (0.01) 6,059 0.63 5,964 0.62 14.375 12.250
June 30, 1995 1,741 0.18 5,031 0.53 6,772 0.71 14.875 11.750
March 31, 1995 (113) (0.01) (4,955) (0.52) (5,068) (0.53) 13.375 11.375
Totals $ 1,892 $ 0.20 $ 2,772 $ 0.29 $ 4,664 $ 0.49
December 31, 1994 $ 300 $ 0.03 $ (30,903) $ (3.22) $ (30,603) $(3.19) $ 17.875 $ 11.750
September 30, 1994 (22) (0.00) 14,089 1.47 14,067 1.47 19.375 15.625
June 30, 1994 1,076 0.16 (3,382) (0.50) (2,306) (0.34) 20.750 16.375
March 31, 1994 (446) (0.07) (45,103) (6.67) (45,549) (6.74) 26.500 17.625
Totals $ 908 $ 0.12 $ (65,299) $ (8.92) $ (64,391) $(8.80)
</TABLE>
24
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE><CAPTION>
For the Period
For the Year Ended July 23, 1992+
December 31, through
-------------------------- December 31,
1995 1994 1993 1992
------ -------- ------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.29 $23.79 $13.40 $13.95++
------ -------- ------- --------
Income (Loss) from Investment Operations:
Net investment income (loss) 0.20 0.12* 0.02 (0.00)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 0.29 (8.92)* 11.00 (0.38)
------ -------- ------- --------
Total from investment operations 0.49 (8.80) 11.02 (0.38)
------ -------- ------- --------
Dividends and Distributions to Shareholders:
From net investment income (0.20) (0.09) (0.01) --
From net realized gain on investments (0.01) (0.06) (0.62) --
In excess of net realized gain on investments (0.05) -- -- --
------ -------- ------- --------
Total dividends and distributions
to shareholders (0.26) (0.15) (0.63) --
------ -------- ------- --------
Fund Share Transactions:
Dilutive effect of rights offering -- (0.46) -- --
Offering costs charged to paid-in
capital in excess of par -- (0.09) -- (0.17)
------ -------- ------- --------
Total Fund share transactions -- (0.55) -- (0.17)
------ -------- ------- --------
Net asset value, end of period $14.52 $14.29 $23.79 $13.40
====== ======== ======= ========
Market value, end of period $14.13 $12.13 $26.75 $12.38
====== ======== ======= ========
Total investment return (1) (2) 18.48% (52.01)% 122.01% (11.29)%
====== ======== ======= ========
Ratios/Supplemental data:
Net assets, end of period (000 omitted) $139,246 $136,994 $160,783 $90,543
Ratio of expenses to average net assets 2.36 %2.08% 2.22% 2.43%**
Ratio of net investment income (loss)
to average net assets 1.39% 0.63% 0.11% (0.04)%**
Portfolio turnover 32% 22% 31% 1%
</TABLE>
+ Commencement of investment operations.
++ Initial public offering price of $15.00 per share net of underwriting
discount of $1.05 per share.
* Based on average shares outstanding.
** Annualized.
(1) Total investment return is calculated assuming a purchase of common stock at
the current market price on the first day, the purchase of common stock
pursuant to any rights offering occurring in the period, and a sale at the
current market price on the last day of each period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to be
reinvested at prices obtained under the Fund's dividend reinvestment plan.
Total investment return does not reflect sales charges or brokerage
commissions.
(2) Total investment return for a period of less than one year is not
annualized.
25
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
The Greater China Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Greater China Fund, Inc. (the
"Fund") at December 31, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the three years in the
period then ended and for the period July 23, 1992 (commencement of investment
operations) through December 31, 1992, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1995 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York
February 5, 1996
26
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
Pursuant to the Fund's Dividend Reinvestment Plan (the "Plan"), each shareholder
will be deemed to have elected, unless PNC Bank, National Association (the "Plan
Agent") is otherwise instructed by the shareholder in writing, to have all
distributions, net of any applicable U.S. withholding tax, automatically
reinvested in additional shares of the Fund by the Plan Agent. Shareholders who
do not participate in the Plan will receive all dividends and distributions in
cash, net of any applicable U.S. withholding tax, paid in dollars by check
mailed directly to the shareholder by PNC Bank, National Association, as
dividend-paying agent. Shareholders who do not wish to have dividends and
distributions automatically reinvested should notify the Plan Agent. Dividends
and distributions with respect to shares registered in the name of a
broker-dealer or other nominee (in "street name") will be reinvested under the
Plan unless such service is not provided by the broker or nominee or the
shareholder elects to receive dividends and distributions in cash. A shareholder
whose shares are held by a broker or nominee that does not provide a dividend
reinvestment program may be required to have his shares registered in his own
name to participate in the Plan.
The Plan Agent serves as agent for the shareholders in administering the Plan.
If the Fund declares an income dividend or a capital gain distribution payable
either in the Fund's Common Stock or in cash, as shareholders may have elected,
non-participants in the Plan will receive cash and participants in the Plan will
receive Common Stock to be issued by the Fund. If the market price per share on
the valuation date equals or exceeds net asset value per share on that date, the
Fund will issue new shares to participants valued at net asset value, or if the
net asset value is less than 95% of the market price on the valuation date, then
valued at 95% of the market price. If net asset value per share on the valuation
date exceeds the market price per share on that date, the Plan Agent, as agent
for the participants, will buy shares of Common Stock on the open market.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the account, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Plan Agent in non-certificated form in
the name of the participant, and each shareholder's proxy will include those
shares purchased pursuant to the Plan.
27
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
continued
There is no charge to participants for reinvesting dividends or capital gain
distributions. The Plan Agent's fee for handling the reinvestment of dividends
and distributions will be paid by the Fund. There will be no brokerage charge
with respect to shares issued directly by the Fund as a result of dividends or
capital gain distributions payable either in shares or in cash. However, each
participant will pay a pro rata share of brokerage commissions incurred with
respect to the Plan Agent's open market purchases in connection with the
reinvestment of dividends and distributions. The automatic reinvestment of
dividends and distributions will not relieve participants of any U.S. income tax
that may be payable on such dividends or distributions.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund and the Plan Agent reserve the right to terminate the Plan as applied
to any dividend or distribution paid subsequent to notice of the termination
sent to the members of the Plan at least 30 days before the record date for
dividends or distributions. The Plan also may be amended by the Fund or the Plan
Agent, but (except when necessary or appropriate to comply with applicable law,
rules or policies of a regulatory authority) only by at least 30 days' written
notice to members of the Plan. All correspondence concerning the Plan should be
directed to the Plan Agent c/o PNC Bank, National Association, 400 Bellevue
Parkway, Wilmington, Delaware 19809.
- --------------------------------------------------------------------------------
Other Information
Since December 31, 1994, there have been (i) no material changes in the Fund's
investment objectives or policies, (ii) no changes to the Fund's charter or
by-laws, (iii) no material changes in the principal risk factors associated with
investment in the Fund, and (iv) no changes in persons who are primarily
responsible for the day-to-day management of the Fund's portfolio.
28
<PAGE>
THE GREATER CHINA FUND, INC.
----------------------------------------------------------------
ANNUAL SHAREHOLDER'S MEETING
The Fund's annual meeting of shareholders was held on June 7, 1995. Shareholders
voted to re-elect Edward Y. Baker, John A. Bult and Jonathan J.K. Taylor as
Directors, ratify the appointment of Price Waterhouse LLP as the Fund's
independent accountant, and approve a new investment management agreement with
the Fund's Investment Manager. The resulting vote count for each proposal is
listed below:
Withheld
For Authority
-------- ---------
1. Election of three Directors:
Edward Y. Baker 7,651,368 44,622
John A. Bult 7,652,912 43,078
Jonathan J.K. Taylor 7,652,811 43,179
In addition to the above re-elected Directors, Mr. Richard B. Bradley,
Mr. Richard Graham, Mr. John A. Hawkins, Mr. Don G. Hoff and Mr. Tak
Lung Tsim continue to serve as Directors of the Fund.
Withheld
For Against Authority
-------- ------- ---------
2. Ratification of Price Waterhouse
LLP as the Fund's independent
accountant 7,643,188 27,605 25,197
3. Approval of new investment
management agreement 7,429,246 78,580 188,164
29
