CVO GREATER CHINA FUND, INC.
SEMI-ANNUAL REPORT
APRIL 30, 1997
<PAGE>
CVO GREATER CHINA FUND, INC.
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1997
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Equity Securities (81 49%)
Automotive (1 60%)
Hong Kong
Qingling Motors Co ................................... 240,000 (a) $131,672
--------
Banking & Financial Services (6 68%)
Hong Kong
Dao Heng Bank Group Ltd .............................. 26,000 (a) 123,514
JCG Holdings Ltd ..................................... 128,000 (a) 102,446
Manhattan Card Company, Ltd .......................... 244,000 (a) 75,595
Singapore
Oversea Chinese Banking Corp ......................... 11,000 (b) 128,533
Overseas Union Bank Ltd .............................. 18,000 (b) 118,231
--------
548,319
--------
Building Materials (1 68%)
Taiwan
Pacific Construction Co .............................. 130,000 (c) 137,708
--------
Commercial Services (1 16%)
Hong Kong
Cosco Pacific Ltd .................................... 68,000 (a) 95,243
--------
Computers (9 47%)
Hong Kong
ASM Pacific Technology Ltd ........................... 144,000 (a) 102,240
Founder Hong Kong Ltd ................................ 296,000 (a) 189,143
Singapore
Acer Computer International Ltd ...................... 70,000 120,400
CSA Holding Ltd ...................................... 168,000 (b) 160,296
Elec & Eltek International Company, Ltd .............. 36,000 205,200
--------
777,279
--------
Containers & Packing (2 67%)
Hong Kong
Sinocan Holdings Ltd ................................. 552,000 (a) 219,118
--------
Distribution (5 18%)
Hong Kong
China Hong Kong Photo Products Holdings, Ltd ......... 320,000 (a) 100,174
Guangnan Holdings Ltd ................................ 124,000 (a) 178,480
Guangnan Holdings Ltd - Warrant (expiration 08/31/98) 17,714 (a) 9,833
Li & Fung Ltd ........................................ 136,000 (a) 136,939
--------
425,426
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
CVO GREATER CHINA FUND, INC.
- ------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
APRIL 30, 1997
<TABLE>
<CAPTION>
Market
Shares Value
- ----------------------------------------------------------------------------------
<S> <C> <C>
Equity Securities (continued)
Diversified (12 65%)
Hong Kong
Cheung Kong (Holdings) Ltd ....................... 12,000 (a) $105,338
China Resources Enterprises Ltd .................. 60,000 (a) 165,752
Citic Pacific Ltd ................................ 20,000 (a) 108,178
First Pacific Company Ltd ........................ 133,000 (a) 158,813
Guangdong Investment Co .......................... 170,000 (a) 159,104
Hutchison Whampoa Ltd ............................ 15,000 (a) 111,340
Jardine Matheson Holdings Ltd .................... 18,000 99,000
Swire Pacific Ltd ................................ 17,000 (a) 131,123
----------
1,038,648
----------
Electrical Equipment (3 47%)
Singapore
Clipsal Industries Ltd ........................... 41,000 160,720
GP Batteries International Ltd ................... 42,000 123,900
----------
284,620
----------
Electronics (4 57%)
Hong Kong
Varitronix International Ltd ..................... 68,000 (a) 94,804
VTech Holdings Ltd ............................... 75,000 (a) 125,863
Singapore
Thakral Corporation Ltd .......................... 165,000 154,275
----------
374,942
----------
Food (6 25%)
Hong Kong
Tingyi (Cayman Islands) Holdings Co .............. 720,000 (a) 175,666
Singapore
Delifrance Asia Ltd .............................. 164,000 (b)(3) 170,087
Want Want Holdings Ltd ........................... 50,000 (3) 167,000
----------
512,753
----------
Gas (2 00%)
Hong Kong
Hong Kong & China Gas Company Ltd ................ 103,400 (a) 164,180
----------
Home Furnishings (1 38%)
Singapore
Roly International Holdings Ltd .................. 261,000 113,535
----------
Iron/Steel (1 96%)
Taiwan
China Steel ADS (144A) ........................... 7,000 (1)(2) 161,000
----------
Medical Supplies (0 69%)
Hong Kong
China Pharmaceutical Enterprises & Investment Corp 291,000 (a) 56,348
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
CVO GREATER CHINA FUND, INC.
- ------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
APRIL 30, 1997
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Securities (continued)
Paper Products (1 46%)
Hong Kong
Climax International Co ............................................... 900,000 (a) $ 119,667
----------
Plastics (1 62%)
Taiwan
China Synthetic Rubber Co ............................................. 75,000 (c) 132,863
----------
Power Electric & Utilities (1 96%)
USA
Shandong Huaneng Power Co , Ltd ADS .................................. 14,000 (2) 161,000
----------
Real Estate (1 60%)
Singapore
Keppel Land Ltd ....................................................... 51,000 (b)(3) 131,174
----------
Retail (7 67%)
Hong Kong
Esprit Asia Holdings Ltd .............................................. 330,000 (a) 151,229
Giordano International Ltd ............................................ 132,000 (a) 71,568
Glorious Sun Enterprises .............................................. 300,000 (a)(3) 149,099
Goldlion Holdings Ltd ................................................. 192,000 (a) 113,393
Jusco Stores (HK) Co .................................................. 580,000 (a) 144,504
----------
629,793
Transportation (5 77%)
Hong Kong
Guangshen Railway Co , Ltd ............................................ 338,000 (a) 161,440
New World Infrastructure Ltd .......................................... 63,000 (a)(3) 178,106
Shenzhen Expressway Co ................................................ 406,000 (a)(3) 133,647
----------
473,193
----------
Total Equity Securities ..................................................... 6,688,481
----------
Corporate Bonds (4 43%)
Industrial Goods & Services (3 05%)
Taiwan
Compal Electronics Convertible Bonds 1 00%, 11/21/03 (144A) ........... $100,000 (1) 140,500
Formosa Chemical & Fibre Corp Convertible Bonds 1 75%, 07/19/01 (144A) 100,000 (1) 109,500
----------
250,000
----------
Transportation (1 38%)
Taiwan
Yang Ming Marine Transport Convertible Bonds 2 00%, 10/06/01 (144A) ... 100,000 (1) 113,250
----------
Total Corporate Bonds ....................................................... 363,250
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
CVO GREATER CHINA FUND, INC.
- ------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
APRIL 30, 1997
<TABLE>
<CAPTION>
Principal Market
Amount Value
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Short Term Obligations (10 83%)
Investors Bank & Trust Co Repurchase Agreement, 4 93%, 05/01/97 (dated 04/30/97,
proceeds $889,194, collateralized by $931,049 Federal Home Loan Mortgage Corp
Pool# C00209, 7 50%, due 02/01/23, valued at $933,760)....................... $889,072 $ 889,072
----------
Total Investments ($7,859,586) (96 75%).......................................... 7,940,803
Cash and Other Assets in excess of Liabilities (3.25%)........................... 266,886
----------
Total Net Assets (100.00%)....................................................... $8,207,689
==========
</TABLE>
- ------------------------
Principal denominated in the following currencies:
(a) Hong Kong Dollar (b) Singapore Dollar (c) Taiwan Dollar
(1) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(2) American Depository Shares.
(3) Non-Income Producing.
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
CVO GREATER CHINA FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets:
<S> <C> <C>
Investments, at market value (cost $7,859,586) (Note 1a) ....................... $ 7,940,803
Cash ........................................................................... 257,668
Receivable from Adviser (Note 2) ............................................... 51,652
Dividend and interest receivable ............................................... 16,624
Deferred organization expense .................................................. 158,209
Prepaid insurance expense ...................................................... 7,333
----------
Total Assets ................................................................ $ 8,432,289
Liabilities:
Organization expense payable ................................................... 173,715
Other payables and accrued expenses ............................................ 50,885
----------
Total Liabilities .............................................................. 224,600
----------
Net Assets ....................................................................... $8,207,689
==========
Net Assets consist of:
Shares of capital stock, $0 001 par value per share, 810,569
issued and outstanding (Note 4) ............................................. $ 811
Additional paid-in capital ..................................................... 8,128,830
Accumulated net investment loss ................................................ (3,846)
Undistributed net realized gain on investments and foreign currency transactions 677
Net unrealized appreciation on investments ..................................... 81,217
----------
Net Assets ....................................................................... $8,207,689
==========
Class I Shares:
Net Assets .................................................................. $8,157,111
==========
Shares of capital stock outstanding ......................................... 805,569
==========
Net Asset Value Per Share $ 10.13
==========
Class II Shares:
Net Assets .................................................................. $ 50,578
==========
Shares of capital stock outstanding ......................................... 5,000
==========
Net Asset Value Per Share ................................................... $ 10.12
==========
</TABLE>
The accompanying notes are an integral part of the financial statements
5
<PAGE>
CVO GREATER CHINA FUND, INC.
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD FROM NOVEMBER 19, 1996* THROUGH APRIL 30, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment Income:
<S> <C> <C>
Interest income .................................................................... $ 25,350
Dividend income (net of foreign tax withholding of $1,282) ......................... 24,726
--------
Total income ......................................................................... $ 50,076
Expenses:
Advisory (Note 2) .................................................................... 33,196
Custodian ............................................................................ 22,174
Registration ......................................................................... 18,290
Amortization of organization expenses ................................................ 15,506
Fund accounting (Note 2) ............................................................. 15,335
Professional ......................................................................... 12,000
Directors ............................................................................ 8,060
Insurance ............................................................................ 5,917
Administrative services (Note 2) ..................................................... 4,010
Printing ............................................................................. 3,235
Transfer and shareholder servicing agent (Note 2) .................................... 2,817
Miscellaneous ........................................................................ 2,240
--------
Total expenses before waivers/reimbursements .................................... 142,780
Less expenses waived/reimbursed (Note 2) ........................................ (88,858)
----------
Net expenses .................................................................... 53,922
----------
Net Investment Loss .................................................................. (3,846)
----------
Realized and Unrealized Gain:
Net realized gain on investments ................................................... 823
Net realized loss on foreign currency transactions ................................. (146)
Net unrealized appreciation on investments ......................................... 81,217
--------
Net realized and unrealized gain on investments and foreign currency transactions 81,894
----------
Net increase in net assets resulting from operations ................................. $ 78,048
=========
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
CVO GREATER CHINA FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIOD FROM NOVEMBER 19, 1996* THROUGH APRIL 30, 1997
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Increase in Net Assets from:
Operations
<S> <C>
Net investment loss .............................................. $(3,846)
Net realized gain on investments and foreign currency transactions 677
Net unrealized appreciation on investments ....................... 81,217
-----------
Net increase in net assets resulting from operations ............. 78,048
-----------
Capital Share Transactions (Note 4)
Net increase in net assets from capital share transactions ....... 8,029,611
-----------
Total increase in net assets ..................................... 8,107,659
Net Assets
Beginning of period .............................................. 100,030
-----------
End of period .................................................... $8,207,689
===========
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
CVO GREATER CHINA FUND, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
FOR THE PERIOD FROM NOVEMBER 19, 1996* THROUGH APRIL 30, 1997
Selected ratios and data for a share of capital stock outstanding through the
period:
- -------------------------------------------------------------------------------
Class I Shares:
Per Share Operating Performance:
Net asset value, beginning of period ..... $10.00
----------
Net investment income .................. 0.00
Net realized and unrealized gains ...... 0.13
----------
Total from investment operations ....... 0.13
----------
Net asset value, end of period ........... $10.13
==========
Total Investment Return** ................ 1.30%
Ratios/ Supplemental Data:
Net assets, end of period (in thousands) $8,157
Ratios to average net assets:
Expenses ............................... 2.00%(1)(2)
Net investment income .................. (0.14)%(1)
Portfolio turnover rate .................. 0.04%
Average commission rate + ................ $0.004
Class II Shares:
Per Share Operating Performance:
Net asset value, beginning of period ..... $10.00
----------
Net investment income .................. 0.00
Net realized and unrealized gains ...... 0.12
----------
Total from investment operations ....... 0.12
----------
Net asset value, end of period ........... $10.12
==========
Total Investment Return** ................ 1.30%
Ratios/ Supplemental Data:
Net assets, end of period (in thousands) $51
Ratios to average net assets:
Expenses ............................... 2.00%(1)(2)
Net investment income .................. (0.14)%(1)
Portfolio turnover rate .................. 0.04%
Average commission rate + ................ $0.004
- -----------------
* Commencement of operations
** Not annualized Total return is based on the change in net asset value
during the period and assumes reinvestment of all dividends and
distributions
(1) Annualized
(2) If the Fund had borne all expenses that were assumed or waived by the
Adviser and Administrator, the above expense ratio would have been 5.33%
(annualized)
+ A fund is required to disclose its average commission rate per share for
security trades on which commissions are charged.
This amount may vary from period to period and fund to fund depending on
the mix of trades executed in various markets where trading practices and
commission rate structures may differ
The accompanying notes are an integral part of the financial statements
8
<PAGE>
CVO GREATER CHINA FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- -------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES. CVO Greater China Fund, Inc. (the "Fund")
was incorporated in Maryland on September 2, 1994. The Fund is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund
operates as a non-diversified, no-load, open-end, management investment company
and offers two classes of shares: Class I Shares, which are offered to
institutional investors, and Class II Shares, which are offered to
non-institutional investors. Each class of shares outstanding bears the same
voting, dividend, liquidation and other rights and conditions, except that Class
II Shares are expected to bear additional shareholder servicing expenses.
The following are significant accounting policies followed by the Fund in the
preparation of its financial statements:
A. VALUATION OF SECURITIES. Equity securities for which the primary market is
outside the U.S. are valued using the closing price or the last sale price.
Equity securities for which the primary market is the U.S. are valued at the
last sale price. Short-term obligations having maturities of 60 days or less are
valued at amortized cost as reflecting fair value, and if applicable, adjusted
for foreign exchange translation. Securities for which market quotations are not
readily available are valued at fair value determined in good faith by or under
the direction of the Fund's Board of Directors. Securities quoted in foreign
currencies initially are valued in the currency in which they are denominated
and then are translated into U.S. dollars at the prevailing foreign exchange
rate. Securities may be valued by independent pricing services which use prices
provided by market-makers or estimates of market values obtained from yield data
relating to instruments or securities with similar characteristics.
B. FOREIGN EXCHANGE TRANSACTIONS. The books and records of the Fund are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies are translated as follows:
i. market value of investment securities and other assets and liabilities
- at the exchange rate on the valuation date;
ii. purchases and sales of investment securities, income and expenses - at
the exchange rate prevailing on the respective date of such
transactions.
The resultant foreign exchange gains and losses are included in the Statement of
Operations. The Fund does not isolate the effect of fluctuations in foreign
exchange rates from the effect of fluctuations in the market price of
securities.
C. ORGANIZATIONAL EXPENSES. Costs incurred in connection with the organization
and initial registration of the Fund have been deferred and are being amortized
over a sixty-month period, beginning with the Fund's commencement of operations.
D. DETERMINATION OF NET ASSET VALUE AND ALLOCATION OF EXPENSES. In calculating
net asset value per share of each class, investment income, realized and
unrealized gains and losses and expenses other than class specific expenses, are
allocated daily to each class of shares based upon the proportion of net assets
of each class at the beginning of each day. Shareholder servicing fees are
solely borne by Class II Shares.
E. SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded on a trade date basis. Realized gains and losses from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex dividend date and interest income, including, where
applicable, amortization of premium and accretion of discount on investments, is
accrued daily.
F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends from net investment
income and distributions of net realized gains are declared and paid at least
annually by the Fund. The Fund records dividends and distributions to
shareholders on the ex dividend date.
9
<PAGE>
CVO GREATER CHINA FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
- -------------------------------------------------------------------------------
The amount of 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 temporary or permanent in nature, and to
the extent such differences are permanent in nature, these amounts are
reclassified within the capital acounts based on their federal tax-basis
treatment; temporary differences do not require a 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 or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in capital.
G. FEDERAL INCOME TAXES. The Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code and distributes all of
its taxable income to its shareholders. Therefore, no federal income tax
provision is required.
H. USE OF ESTIMATES. Estimates and assumptions are required to be made regarding
assets, liabilities, and changes in net assets resulting from operations when
financial statements are prepared in accordance with generally accepted
accounting principles. Actual results could differ from these amounts.
2. INVESTMENT ADVISORY, ADMINISTRATION AND DISTRIBUTION AGREEMENTS. The Fund has
entered into an investment advisory agreement (the "Investment Advisory
Agreement") with CVO Greater China Partners, L.P. (the "Adviser"). The
Investment Advisory Agreement provides that the Fund pays the Adviser an
investment advisory fee that is calculated daily and paid monthly on the average
daily net assets of the Fund at the annual rate of 1.25%. The Adviser provides
portfolio management and certain administrative, clerical and bookkeeping
services for the Fund. For the period ended April 30, 1997, the Adviser earned
and waived fees of $33,196.
Prior to January 1, 1997, Furman Selz LLC ("Furman Selz") provided the Fund with
administrative, fund accounting, shareholder servicing, dividend disbursing and
transfer agency services pursuant to an administration agreement (the
"Administration Agreement"). The services under the Administration Agreement
were subject to the supervision of the Fund's Board of Directors and officers
and included the day-to-day administration of matters related to the corporate
existence of the Fund, maintenance of its records, preparation of reports,
supervision of the Fund's arrangements with its custodian and assistance in the
preparation of the Fund's registration statements under federal and state laws.
Pursuant to the Administration Agreement, the Fund paid Furman Selz a monthly
fee for its services which on an annualized basis did not exceed 0.15% of the
average daily net assets of the Fund. From November 19, 1996 to December 31,
1996, Furman Selz earned and waived fees of $798.
As Administrator, Furman Selz provided the Fund with fund accounting and related
services. For these services Furman Selz was paid a fee of $2,500 per month.
From November 19, 1996 to December 31, 1996, Furman Selz earned fees, including
reimbursement of out of pocket expenses, of $3,939.
Furman Selz served as Shareholder Servicing Agent for the Fund. The fees paid to
Furman Selz were based on the Fund's net assets attributable to the Class II
Shares, reflecting the higher cost of servicing the holders of said shares.
Furman Selz received a monthly shareholder servicing fee computed at an annual
rate of 0.25% of the average daily net assets of the Fund attributable to the
Class II Shares. This fee was allocated to Class II Shares only, as payment for
answering inquiries and requests for Fund information by Class II shareholders.
From November 19, 1996 to December 31, 1996, no shareholder servicing fees were
incurred.
Furman Selz acted as Transfer Agent for the Fund and received reimbursement of
certain expenses plus a per account fee of $15 per year. From November 19, 1996
to December 31, 1996, Furman Selz earned fees of $2,146.
10
<PAGE>
CVO GREATER CHINA FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
- -------------------------------------------------------------------------------
The Fund has entered into a distribution agreement (the "Distribution
Agreement") with OFFIT Funds Distributor, Inc. Under the Distribution Agreement,
the Distributor, as agent of the Fund, agrees to use its best efforts as sole
distributor of the Fund's shares. Under the Plan of Distribution, the Fund is
authorized to spend up to 0.25% of its average daily net assets of the Fund
solely attributable to Class II Shares for the purpose of compensating the
Distributor for activities primarily intended to result in the sales of Class II
Shares. The Distribution Agreement provides that the Fund will bear the costs of
the registration of its shares with the Commission and various states and the
printing of its prospectuses, statements of additional information and reports
to shareholders. For the period ended April 30, 1997, no distribution costs were
incurred.
On October 1, 1996, the Fund entered into agreements with BISYS Fund Services
("BISYS") pursuant to which BISYS performs the administrative, accounting,
shareholder servicing and transfer agency services described above on
substantially similar terms. BISYS also acquired from Furman Selz its interest
in OFFIT Funds Distributor, Inc. The agreements became effective on January 1,
1997.
From January 1, 1997 to April 30, 1997, BISYS earned administrative services
fees, fund accounting fees and transfer agent fees, amounting to $3,212, $11,396
and $671, respectively. During the same period, BISYS waived the administrative
services fees for the Fund. No shareholder servicing fees were incurred.
The Adviser has voluntarily agreed to limit the expense ratio for the Fund at
2.00%. In order to maintain this ratio, the Adviser has waived its advisory fee
and has agreed to reimburse the Fund $51,652.
3. INVESTMENTS. Purchases and sales of securities for the period ended April 30,
1997, other than short-term securities, amounted to $6,970,606 and $1,715,
respectively for the Fund. The cost of securities is substantially the same for
Federal income tax purposes as it is for financial reporting purposes.
<TABLE>
<CAPTION>
<S> <C>
FUND
------------------------------
Aggregate cost................................................. $7,859,586
==============================
Gross unrealized appreciation......................... $593,464
Gross unrealized depreciation.......................... (512,247)
------------------------------
Net unrealized appreciation ............................ $81,217
==============================
</TABLE>
The Fund may purchase instruments from financial institutions, such as banks and
broker-dealers, subject to the seller's agreement to repurchase them at an
agreed upon time and price ("repurchase agreements"). The seller under a
repurchase agreement is required to maintain the value of the securities subject
to the agreement at not less than the repurchase price. Default by the seller
would, however, expose the relevant Fund to possible loss because of adverse
market action or delay in connection with the disposition of the underlying
obligations.
11
<PAGE>
CVO GREATER CHINA FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
- -------------------------------------------------------------------------------
4. CAPITAL STOCK TRANSACTIONS. The Fund's Articles of Incorporation permit the
Fund to issue ten billion shares (par value $0.001). Transactions in shares of
common stock for the period ended April 30, 1997, were as follows:
<TABLE>
<CAPTION>
CLASS I SHARES
-----------------------------------------------------
SHARES AMOUNT
----------------------- ------------------------
<S> <C> <C>
Shares sold................. 800,837 $8,032,337
Shares issued in
reinvestment of dividends
and distributions......... 0 0
Shares redeemed............. (271) (2,726)
----------------------- ------------------------
Net increase................ 800,566 $8,029,611
===================== =======================
</TABLE>
5. OTHER MATTERS. The Fund invests primarily in the Greater China Region which
consists of the People's Republic of China, Hong Kong, Taiwan and Singapore.
Investments are made in obligations of foreign entities and securities
denominated in foreign currencies involve risk not typically involved in
domestic investments. Such risks include fluctuations in the foreign exchange
rates, ability to convert proceeds into U.S. dollars, application of foreign tax
laws, foreign investments restrictions, less publically available information
about foreign financial instruments, less liquidity resulting from substantially
less trading volume, more volatile prices and generally less government
supervision of foreign markets and issuers.
12
<PAGE>
CVO GREATER CHINA FUND, INC.
- -------------------------------------------------------------------------------
DIRECTORS AND OFFICERS INVESTMENT ADVISER
CVO Greater China Partners, L.P.
Morris W. Offit 520 Madison Avenue
President and Director New York, New York 10022-4213
John W. Glynn, Jr. DISTRIBUTOR
Director OFFIT Funds Distributor, Inc.
3435 Stelzer Road
Edward J. Landau Columbus, Ohio 43219
Director
ADMINISTRATOR
The Very Reverend BISYS Fund Services Limited Partnership
James Parks Morton 125 West 55th Street
Director New York, New York 10019
Robert A. Theleen TRANSFER AND DIVIDEND DISBURSING AGENT
Director BISYS Fund Services, Inc.
3435 Stelzer Road
Dr. Wallace Mathai-Davis Columbus, Ohio 43219
Secretary and Treasurer
CUSTODIAN
Kristine Kelly Investors Bank & Trust Company
Assistant Secretary 200 Clarendon Street
Boston, Massachusetts 02117
Alaina V. Metz
Assistant Secretary LEGAL COUNSEL
McCutchen, Doyle, Brown & Enersen
Bruce Treff 3 Embarcadero Center
Assistant Secretary San Francisco, California 94111
Vincent M. Rella
Assistant Treasurer
Michael Sakala
Assistant Treasurer
Stephen Brent Wells
Assistant Treasurer
<PAGE>
This report is submitted for the information of the shareholders of the CVO
Greater China Fund, Inc. It is not authorized for distribution to prospective
investors in the Fund unless preceded or accompanied by an effective prospectus
which includes information regarding the Fund's objectives and policies,
charges, expenses and other data. Please read the prospectus carefully before
you invest or send money.
CVO GREATER CHINA FUND, INC.
125 WEST 55TH STREET, NEW YORK, NY 10019
(212) 758 - 9600
