ITEM 1. REPORT TO STOCKHOLDERS.
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FINAL REPORT
Global Fund
John Hancock Funds
May 9, 2003
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John Hancock Global Fund
Schedule of Investments
May 9, 2003
(unaudited)
ISSUER SHARES VALUE
- ------ ------ -----
COMMON STOCKS
(Cost $36,261,340)
Australia (3.83%)
Australia & New Zealand Banking Group Ltd. (Banks - Foreign) 68,400 $ 805,354
Foster's Group Ltd. (Beverages) 100,000 282,117
Publishing & Broadcasting Ltd. (Media) 50,000 287,913
Woolworths Ltd. (Retail) 37,900 311,490
----------
1,686,874
----------
Belgium (0.52%)
Interbrew SA (Beverages) 10,000 229,999
----------
Brazil (2.01%)
Aracruz Celulose SA, American Depositary Receipts (ADR) (Paper & Paper Products) 318,560
Companhia de Bebidas das Americas (ADR) (Beverages) 10,000 213,100
Tele Norte Leste Participacoes SA (ADR) (Telecommunications) 30,000 356,700
----------
888,360
----------
Canada (6.29%)
Biovail Corp.* (Medical) 7,800 320,892
Canadian National Railway Co. (Transport) 8,000 398,640
Cott Corp.* (Beverages) 18,200 364,364
EnCana Corp. (Oil & Gas) 18,300 626,958
Royal Bank of Canada (Banks - Foreign) 11,000 467,500
Telus Corp. (Telecommunications) 29,600 439,567
WestJet Airlines Ltd.* (Transport) 13,250 156,460
----------
2,774,381
----------
China (0.81%)
China Telecom Corp., Ltd.* (Telecommunications) 1,000,000 194,896
Jiangsu Expressway Co., Ltd. (Transport) 500,000 160,276
----------
355,172
----------
Finland (2.14%)
Nokia Oyj (ADR) (Telecommunications) 55,000 943,250
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France (4.78%)
Alcatel SA* (Telecommunications) 46,100 376,028
Axa SA (Insurance) 25,000 374,810
BNP Paribas SA (Banks - Foreign) 10,800 515,532
France Telecom SA (Telecommunications) 12,800 293,222
JC Decaux SA* (Advertising) 30,000 296,402
Vivendi Universal SA (Media) 15,800 252,309
----------
2,108,303
----------
Germany (1.39%)
BASF AG (Chemicals) 6,000 256,077
Muenchener Rueckversicherungs-Gesellschaft AG (Insurance) 3,500 355,855
----------
611,932
----------
Hong Kong (1.32%)
CLP Holdings Ltd. (Utilities) 60,000 251,569
CNOOC Ltd. (Oil & Gas) 250,000 330,168
----------
581,737
----------
Ireland (2.16%)
Bank of Ireland (Banks - Foreign) 39,600 506,351
Ryanair Holdings Plc* (ADR) (Transport) 10,800 448,200
----------
954,551
----------
1
ISSUER SHARES VALUE
- ------ ------ -----
Israel (1.51%)
Teva Pharmaceutical Industries Ltd. (ADR) (Medical) 14,000 $ 667,380
-----------
Italy (1.17%)
ENI SpA (Oil & Gas) 20,000 305,133
UniCredito Italiano SpA (Banks - Foreign) 46,000 211,387
-----------
516,520
-----------
Japan (7.90%)
Asahi Glass Co., Ltd. (Building) 50,000 264,471
Dai Nippon Printing Co., Ltd. (Printing - Commercial) 41,000 424,988
East Japan Railway Co. (Transport) 60 274,880
Fanuc Ltd. (Electronics) 10,000 420,595
Hoya Corp. (Electronics) 6,000 367,530
Japan Telecom Holdings Co., Ltd. (Telecommunications) 100 305,422
Kao Corp. (Cosmetics & Personal Care) 18,000 352,429
Keyence Corp. (Electronics) 2,000 332,722
Mitsubishi Tokyo Financial Group, Inc. (Banks - Foreign) 100 385,616
Shin-Etsu Chemical Co., Ltd. (Chemicals) 11,000 356,610
-----------
3,485,263
-----------
Netherlands (1.08%)
Aegon NV (Insurance) 1,872 18,539
ASML Holding NV (NY Reg Shares)* (Electronics) 20,000 185,400
ING Groep NV (Insurance) 16,300 271,155
-----------
475,094
-----------
Russia (1.15%)
YUKOS (ADR) (Oil & Gas) 3,000 506,250
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South Korea (2.39%)
LG Electronics, Inc. (Electronics) 10,000 357,886
Samsung Electronics Co., Ltd. (Electronics) 1,500 395,755
SK Telecom Co., Ltd. (Telecommunications) 2,000 299,625
-----------
1,053,266
-----------
Spain (1.44%)
Banco Popular Espanol SA (Banks - Foreign) 5,000 252,688
Telefonica SA* (Telecommunications) 35,000 384,001
-----------
636,689
-----------
Sweden (0.52%)
Hennes & Mauritz AB (B Shares) (Retail) 10,150 230,114
-----------
Switzerland (4.04%)
Alcon, Inc.* (Medical) 1,900 81,814
Credit Suisse Group (Banks - Foreign) 6,000 146,336
Novartis AG (Medical) 12,000 487,939
Roche Holding AG (Medical) 3,600 234,595
UBS AG (Banks - Foreign) 16,800 830,365
-----------
1,781,049
-----------
Taiwan (1.47%)
Nanya Technology Corp.* (Electronics) 365,000 204,652
Taiwan Semiconductor Manufacturing Co. Ltd.* (ADR) (Electronics) 51,000 445,230
-----------
649,882
-----------
United Kingdom (18.75%)
Barclays Plc (Banks - Foreign) 60,000 393,219
Barclays Plc (ADR) (Banks - Foreign) 12,000 321,600
British Sky Broadcasting Group Plc* (Media) 55,900 604,610
GlaxoSmithKline Plc (Medical) 18,900 392,185
GlaxoSmithKline Plc (ADR) (Medical) 25,000 1,042,750
HBOS Plc (Banks - Foreign) 22,200 251,852
Imperial Tobacco Group Plc (Tobacco) 17,800 290,354
InterContinental Hotels Group Plc* (Leisure) 40,000 267,914
Lloyds TSB Group Plc (Banks - Foreign) 16,500 110,250
Lloyds TSB Group Plc (ADR) (Banks - Foreign) 25,000 680,750
2
ISSUER SHARES VALUE
- ------ ------ -----
United Kingdom (continued)
Man Group Plc (Finance) 22,700 $ 391,379
Royal Bank of Scotland Group Plc (Banks - Foreign) 24,905 652,874
Shell Transport & Trading Co. Plc (Oil & Gas) 32,600 209,078
Shell Transport & Trading Co. Plc (NY Reg Shares) (Oil & Gas) 25,000 973,750
Smith & Nephew Plc (Medical) 34,200 224,272
Vodafone Group Plc (Telecommunications) 400,000 772,337
Vodafone Group Plc (ADR) (Telecommunications) 35,500 690,475
-----------
8,269,649
-----------
United States (19.60%)
Adobe Systems, Inc. (Computers) 2,000 73,100
AdvancePCS* (Medical) 3,400 114,886
Affiliated Computer Services, Inc.* (Computers) 2,200 112,926
Allergan, Inc. (Medical) 1,100 78,782
Allstate Corp. (The) (Insurance) 2,400 87,168
Amdocs Ltd.* (Telecommunications) 34,300 600,250
Amgen, Inc.* (Medical) 2,000 122,500
Anadarko Petroleum Corp. (Oil & Gas) 1,400 64,064
Anheuser-Busch Cos., Inc. (Beverages) 2,400 121,464
Anthem, Inc.* (Medical) 1,800 127,260
Apache Corp. (Oil & Gas) 3,410 203,270
Apollo Group, Inc. (Class A)* (Schools / Education) 1,200 67,800
Applied Materials, Inc.* (Electronics) 5,600 84,448
AutoZone, Inc.* (Retail) 1,200 104,220
Bank of America Corp. (Banks - United States) 1,500 111,000
Barr Laboratories, Inc.* (Medical) 1,400 74,186
Comcast Corp. (Special Class A)* (Media) 3,200 94,336
Dell Computer Corp.* (Computers) 2,700 83,970
eBay, Inc.* (Diversified Operations) 600 56,790
EchoStar Communicaitons Corp. (Class A)* (Media) 2,100 69,867
EMC Corp.* (Computers) 8,000 75,920
Fannie Mae (Mortgage Banking) 2,100 152,145
General Electric Co. (Diversified Operations) 7,800 226,200
Gilead Sciences, Inc.* (Medical) 1,700 79,450
Intel Corp. (Electronics) 9,000 176,220
International Business Machines Corp. (Computers) 1,100 96,305
iShares MSCI Japan Index Fund (Finance) 225,000 1,521,000
iShares MSCI United Kingdom Index Fund (Finance) 175,000 2,164,750
Johnson & Johnson (Medical) 2,600 146,484
Lowe's Cos., Inc. (Retail) 2,400 108,696
Merck & Co., Inc. (Medical) 2,900 168,867
Microsoft Corp. (Computers) 8,300 218,788
Noble Corp.* (Oil & Gas) 4,700 158,907
Patterson-UTI Energy, Inc.* (Oil & Gas) 2,000 67,800
Pfizer, Inc. (Medical) 6,100 199,165
Procter & Gamble Co. (The) (Cosmetics & Personal Care) 1,700 152,150
Tribune Co. (Media) 1,700 82,110
Univision Communications, Inc. (Class A)* (Media) 2,100 61,824
VERITAS Software Corp.* (Computers) 4,100 100,778
Wal-Mart Stores, Inc. (Retail) 2,000 111,600
Williams Cos., Inc. (The) (Oil & Gas) 9,300 63,054
Zimmer Holdings, Inc.* (Medical) 1,300 60,476
-----------
8,644,976
-----------
TOTAL COMMON STOCKS (86.27%) $38,050,691
-----------
ISSUER WARRANTS VALUE
- ------ -------- -----
WARRANTS
(Cost $361,372)
Taiwan (0.35%)
Taiwan Semiconductor Manufacturing Co., Ltd.* (Electronics) 113,800 $ 156,228
-----------
United Kingdom (0.33%)
United Microelectronics Corp.* (Electronics) 251,000 145,811
-----------
TOTAL WARRANTS (0.68%) 302,039
-----------
VALUE
-----------
TOTAL INVESTMENTS (86.95%) $38,352,730
-----------
OTHER ASSETS AND LIABILITIES, NET (13.05%) 5,755,637
-----------
TOTAL NET ASSETS (100%) $44,108,367
===========
* Non-income producing security.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
3
Portfolio Concentration
(unaudited)
This table shows the percentages of the Fund's investments aggregated by various
industries as of May 9, 2003.
VALUE
AS A PERCENTAGE
INVESTMENT CATEGORIES OF NET ASSETS
- --------------------- ---------------
Advertising 0.67%
Banks - Foreign 14.81
Banks - United States 0.25
Beverages 2.75
Building 0.60
Chemicals 1.39
Computers 1.73
Cosmetics & Personal Care 1.14
Diversified Operations 0.64
Electronics 7.42
Finance 9.24
Insurance 2.51
Leisure 0.61
Media 3.30
Medical 10.48
Mortgage Banking 0.35
Oil & Gas 7.96
Paper & Paper Products 0.72
Printing - Commercial 0.96
Retail 1.96
School/Education 0.15
Telecommunications 12.82
Tobacco 0.66
Transport 3.26
Utilities 0.57
-----
Total Investments 86.95%
=====
4
John Hancock Global Fund
- ------------------- ------------------------------------------------------------------------------
ASSETS AND ASSETS
LIABILITIES ------------------------------------------------------------------------------
- ------------------- Investments at value (cost -$36,622,712) $38,352,730
Final report Cash 5,755,037
May 9, 2003 * Dividends and interest receivable 120,027
(unaudited) Other assets 18,132
Total assets 44,245,926
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LIABILITIES
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Foreign currency due to custodian at value (cost $452) 452
Payable for shares repurchased 18,194
Payable to affiliates 69,434
Other payables and accrued expenses 49,479
Total liabilities 137,559
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NET ASSETS
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Capital paid-in 95,806,778
Accumulated net realized loss on investments and
foreign currency transactions (53,426,846)
Net unrealized appreciation of investments and
translation of assets and liabilities in foreign currencies 1,736,051
Accumulated net investment loss (7,616)
Net assets $44,108,367
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NET ASSET VALUE PER SHARE
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Based on net asset values and shares outstanding
Class A ($34,316,962 / 5,312,861 shares) $6.46
Class B ( $9,149,332 / 1,592,262 shares) $5.75
Class C ( $642,073 / 111,714 shares) $5.75
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MAXIMUM OFFERING PRICE PER SHARE
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Class A (1) ($6.46 / 95%) $6.80
Class C ($5.75 / 99%) $5.81
(1) On single retail sales of less than $50,000. On sales of $50,000 or more
and on group sales the offering price is reduced.
* The net assets of the Fund were merged into John Hancock International
Fund as of the close of business on May 9, 2003, and the Fund was
subsequently terminated. The Statement of Assets and Liabilities reflects
the Fund's position prior to the transfer of net assets and the
termination of the Fund. See Note A to financial statements.
See notes to financial statements.
5
John Hancock Global Fund
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OPERATIONS INVESTMENT INCOME
- ------------------- ---------------------------------------------------------------------------------
Period from Dividends (net of foreign withholding taxes of $27,758) $ 340,705
November 1, 2002 to Interest 7,670
May 9, 2003 * Total investment income 348,375
(unaudited)
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EXPENSES
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Investment management fee 213,758
Class A distribution and service fee 55,263
Class B distribution and service fee 49,883
Class C distribution and service fee 3,415
Transfer agent fee 220,899
Custodian fee 16,763
Printing 14,531
Registration and filing fee 12,695
Accounting and legal services fee 10,108
Auditing fee 6,500
Trustees' fee 2,495
Miscellaneous 2,191
Interest expense 1,662
Legal fee 645
Total expenses 610,808
Net investment loss (262,433)
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REALIZED AND UNREALIZED GAIN (LOSS)
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Net realized loss on
Investments (2,462,278)
Foreign currency transactions (73,468)
Change in net unrealized appreciation (depreciation) of
Investments 1,465,752
Translation of assets and liabilities in foreign currencies 6,671
Net realized and unrealized loss (1,063,323)
Decrease in net assets from operations ($1,325,756)
* The net assets of the Fund were merged into John Hancock International
Fund as of the close of business on May 9, 2003, and the Fund was
subsequently terminated. The Statement Operations reflects the Fund's
position prior to the transfer of net assets and the termination of the
Fund. See Note A to financial statements.
See notes to financial statements.
6
John Hancock Global Fund
PERIOD
FROM 11-1-02
YEAR ENDED TO 5-9-03 *
10-31-02 (UNAUDITED)
- ------------------- ---------------------------------------------------------------------------------------
CHANGES IN INCREASE (DECREASE) IN NET ASSETS
NET ASSETS ---------------------------------------------------------------------------------------
- ------------------- From operations
Net investment loss ($ 951,314) ($ 262,433)
Net realized loss (10,161,375) (2,535,746)
Change in net unrealized appreciation (depreciation) 2,769,567 1,472,423
Decrease in net assets resulting from operations (8,343,122) (1,325,756)
From Fund share transactions (10,750,858) (4,961,872)
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NET ASSETS
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Beginning of period 69,489,975 50,395,995
End of period (1) $ 50,395,995 $44,108,367
(1) Includes accumulated net investment loss of $6,026 and $7,616,
respectively.
* The net assets of the Fund were merged into John Hancock International
Fund as of the close of business on May 9, 2003, and the Fund was
subsequently terminated. The Statement of Changes in Net Assets reflects
the Fund's position prior to the transfer of net assets and the
termination of the Fund. See Note A to financial statements.
See notes to financial statements.
7
John Hancock Global Fund
Financial Highlights
CLASS A
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 5-9-03
(unaudited)
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PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.94 $ 13.46 $ 15.24 $ 13.64 $ 7.71 $ 6.60
Net investment loss (1) (0.05) (0.03) (0.08) (0.11) (0.10) (0.03)
Net realized and unrealized gain (loss) on investments 1.53 2.67 (0.91) (5.82) (1.01) (0.11)
Total from investment operations 1.48 2.64 (0.99) (5.93) (1.11) (0.14)
Less distributions
From net realized gain (0.96) (0.86) (0.61) -- -- --
Net asset value, end of period $ 13.46 $ 15.24 $ 13.64 $ 7.71 $ 6.60 $ 6.46(2)
Total return (3) (%) 11.88 20.90 (6.90) (43.48) (14.40) (2.12)(4)
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RATIOS AND SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in millions) $ 121 $ 128 $ 105 $ 51 $ 39 $ 34
Ratio of expenses to average net assets (%) 1.82 1.78 1.87 2.14 2.35 2.41(5)
Ratio of net investment loss to average net assets (%) (0.33) (0.23) (0.52) (1.01) (1.31) (0.95)(5)
Portfolio turnover (%) 160 176 182 297 264 165
See notes to financial statements.
8
John Hancock Global Fund
Financial Highlights
CLASS B
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 5-9-03
(unaudited)
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.39 $ 12.76 $ 14.30 $ 12.67 $ 6.93 $ 5.90
Net investment loss (1) (0.13) (0.11) (0.18) (0.17) (0.14) (0.05)
Net realized and unrealized gain (loss) on investments 1.46 2.51 (0.84) (5.57) (0.89) (0.10)
Total from investment operations 1.33 2.40 (1.02) (5.74) (1.03) (0.15)
Less distributions
From net realized gain (0.96) (0.86) (0.61) -- -- --
Net asset value, end of period $ 12.76 $ 14.30 $ 12.67 $ 6.93 $ 5.90 $ 5.75(2)
Total return (3) (%) 11.15 20.12 (7.60) (45.30) (14.86) (2.54)(4)
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in millions) $ 55 $ 54 $ 41 $ 17 $ 11 $ 9
Ratio of expenses to average net assets (%) 2.46 2.37 2.57 2.84 3.05 3.11(5)
Ratio of net investment loss to average net assets (%) (0.97) (0.82) (1.25) (1.72) (2.01) (1.65)(5)
Portfolio turnover (%) 160 176 182 297 264 165
See notes to financial statements.
9
John Hancock Global Fund
Financial Highlights
CLASS C
PERIOD ENDED 10-31-99(6) 10-31-00 10-31-01 10-31-02 5-9-03
(unaudited)
- -------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.88 $ 14.30 $ 12.67 $ 6.93 $ 5.90
Net investment loss (1) (0.10) (0.15) (0.17) (0.14) (0.05)
Net realized and unrealized gain (loss) on investments 1.52 (0.87) (5.57) (0.89) (0.10)
Total from investment operations 1.42 (1.02) (5.74) (1.03) (0.15)
Less distributions
From net realized gain -- (0.61) -- -- --
Net asset value, end of period $ 14.30 $ 12.67 $ 6.93 $ 5.90 $ 5.75(2)
Total return (3) (%) 11.02(4) (7.60) (45.30) (14.86) (2.54)(4)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in millions) --(7) $ 1 $ 1 $ 1 $ 1
Ratio of expenses to average net assets (%) 2.48(5) 2.57 2.84 3.05 3.11(5)
Ratio of net investment loss to average net assets (%) (1.01)(5) (1.06) (1.72) (2.01) (1.63)(5)
Portfolio turnover (%) 176 182 297 264 165
(1) Based on the average of the shares outstanding.
(2) Net assets value per share before the merger of assets to John Hancock
International Fund and the termination of the Fund. See Note A to
financial statements.
(3) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(4) Not annualized.
(5) Annualized.
(6) Class C shares began operations on 3-1-99.
(7) Less than $500,000.
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
Unaudited
NOTE A
Accounting policies
John Hancock Global Fund (the "Fund") was a diversified series of John Hancock
Investment Trust III, an open-end management investment company registered under
the Investment Company Act of 1940. The investment objective of the Fund was to
achieve long-term growth of capital.
The Trustees had authorized the issuance of multiple classes of shares of the
Fund, designated as Class A, Class B and Class C shares. The shares of each
class represented an interest in the same portfolio of investments of the Fund
and had equal rights as to voting, redemptions, dividends and liquidation,
except that certain expenses, subject to the approval of the Trustees, may have
been applied differently to each class of shares in accordance with current
regulations of the Securities and Exchange Commission and the Internal Revenue
Service. Shareholders of a class that bore distribution and service expenses
under the terms of a distribution plan had exclusive voting rights to that
distribution plan.
On May 7, 2003, the shareholders of the Fund approved an Agreement and Plan of
Reorganization, which provided for the transfer of substantially all of the
assets and liabilities of the Fund to the John Hancock International Fund (the
"Acquiring Fund") in exchange solely for shares of beneficial interest of the
Acquiring Fund.
After this transaction and as of the close of business on May 9, 2003, the Fund
will be terminated. The financial statements presented herein reflect the
position of the Fund prior to the exchange of net assets and termination of the
Fund.
Significant accounting policies of the Fund were as follows:
Valuation of investments
Securities in the Fund's portfolio were valued on the basis of market
quotations, valuations provided by independent pricing services or, if
quotations were not readily available, or the value had been materially affected
by events occurring after the closing of a foreign market, at fair value as
determined in good faith in accordance with procedures approved by the Trustees.
Short-term debt investments maturing within 60 days were valued at amortized
cost, which approximated market value. All portfolio transactions initially
expressed in terms of foreign currencies were translated into U.S. dollars as
described in "Foreign currency translation" below.
Joint repurchase agreement
Pursuant to an exemptive order issued by the Securities and Exchange Commission,
the Fund, along with other registered investment companies having a management
contract with John Hancock Advisers, LLC (the "Adviser"), a wholly owned
subsidiary of The Berkeley Financial Group, LLC, may have participated in a
joint repurchase agreement transaction. Aggregate cash balances were invested in
one or more large repurchase agreements, whose underlying securities were
obligations of the U.S. government and/or its agencies. The Fund's custodian
bank received delivery of the underlying securities for the joint account on the
Fund's behalf. The Adviser was responsible for ensuring that the agreement was
fully collateralized at all times.
Foreign currency translation
All assets or liabilities initially expressed in terms of foreign currencies
were translated into U.S. dollars based on London currency exchange quotations
as of 5:00 P.M., London time, on the date of any determination of the net asset
value of the Fund. Transactions affecting statement of operations accounts and
net realized gain (loss) on investments were translated at the rates prevailing
at the dates of the transactions.
11
The Fund did not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations were
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign currency exchange gains or losses arose from sales
of foreign currency, currency gains or losses realized between the trade and
settlement dates on securities 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 of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arose from changes in the
value of assets and liabilities other than investments in securities, resulting
from changes in the exchange rates.
Investment transactions
Investment transactions were recorded as of the date of purchase, sale or
maturity. Net realized gains and losses on sales of investments were determined
on the identified cost basis. Capital gains realized on some foreign securities
were subject to foreign taxes, which were accrued as applicable.
Class allocations
Income, common expenses and realized and unrealized gains (losses) were
determined at the fund level and allocated daily to each class of shares based
on the appropriate net assets of the respective classes. Distribution and
service fees, if any, were calculated daily at the class level based on the
appropriate net assets of each class and the specific expense rate(s) applicable
to each class.
Expenses
The majority of the expenses were directly identifiable to an individual fund.
Expenses that were not readily identifiable to a specific fund were directly
allocated in such a manner as deemed equitable, taking into consideration, among
other things, the nature and type of expense and the relative sizes of the
funds.
Bank borrowings
The Fund was permitted to have bank borrowings for temporary or emergency
purposes, including the meeting of redemption requests that otherwise might
require the untimely disposition of securities. The Fund had entered into a
syndicated line of credit agreement with various banks. This agreement enabled
the Fund to participate with other funds managed by the Adviser in an unsecured
line of credit with banks, which permitted borrowings of up to $250 million,
collectively. Interest was charged to each fund, based on its borrowing. In
addition, a commitment fee was charged to each fund based on the average daily
unused portion of the line of credit and was allocated among the participating
funds. The Fund had no borrowing activity under the line of credit during the
period ended May 9, 2003.
Forward foreign currency exchange contracts
The Fund may have entered into forward foreign currency exchange contracts as a
hedge against the effect of fluctuations in currency exchange rates. A forward
foreign currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date at a set price. The aggregate principal
amounts of the contracts were marked to market daily at the applicable foreign
currency exchange rates. Any resulting unrealized gains and losses were included
in the determination of the Fund's daily net assets. The Fund recorded realized
gains and losses at the time the forward foreign currency exchange contracts
were closed out. Risks may have arose upon entering these contracts from the
potential inability of counterparties to meet the terms of the contract and from
unanticipated movements in the value of foreign
12
currencies relative to the U.S. dollar. These contracts involved market or
credit risk in excess of the unrealized gain or loss reflected in the Fund's
Statement of Assets and Liabilities.
The Fund may have also purchased and sold forward contracts to facilitate the
settlement of foreign currency denominated portfolio transactions, under which
it intended to take delivery of the foreign currency. Such contracts normally
involved no market risk if they were offset by the currency amount of the
underlying transactions. The Fund had no open forward foreign currency exchange
contracts on May 9, 2003.
Federal income taxes
The Fund qualified as a "regulated investment company" by complying with the
applicable provisions of the Internal Revenue Code and was not subject to
federal income tax on taxable income that was distributed to shareholders.
Therefore, no federal income tax provision was required as of May 9, 2003, the
Fund's final tax year. As of May 9, 2003, for federal income tax purposes, the
Fund had $53,228,878 of a capital loss carryforward expiring as follows: October
31, 2009 - $39,619,964, October 31, 2010 - $10,855,825 and May 9, 2011 -
$2,753,089. The unused capital loss carryforward as of May 9, 2003 was
transferred to the International Fund and will
Dividends, interest and distributions
Dividend income on investment securities was recorded on the ex-dividend date
or, in the case of some foreign securities, on the date thereafter when the Fund
identified the dividend. Interest income on investment securities was recorded
on the accrual basis. Foreign income may have been subject to foreign
withholding taxes which were accrued as applicable.
The Fund recorded distributions to shareholders from net investment income and
net realized gains on the ex-dividend date. Distributions paid by the Fund with
respect to each class of shares were calculated in the same manner, at the same
time and were in the same amount, except for the effect of expenses that may
have been applied differently to each class.
As of May 9, 2003, there were no distributable earnings on a tax basis.
Such distributions and distributable earnings, on a tax basis, were determined
in conformity with income tax regulations, which may differ from accounting
principles generally accepted in the United States of America. Distributions in
excess of tax basis earnings and profits, if any, were reported in the Fund's
financial statements as a return of capital.
Use of estimates
The preparation of these financial statements, in accordance with accounting
principles generally accepted in the United States of America, incorporates
estimates made by management in determining the reported amount of assets,
liabilities, revenues and expenses of the Fund. Actual results could differ from
these estimates.
NOTE B
Management fee and transactions with affiliates and others
The Fund had an investment management contract with the Adviser. Under the
investment management contract, the Fund paid a monthly management fee to the
Adviser equivalent, on an annual basis, to the sum of: (a) 0.90% of the first
$100,000,000 of the Fund's average daily net asset value, (b) 0.80% of the next
$200,000,000, (c) 0.75% of the next $200,000,000 and (d) 0.625% of the Fund's
average daily net asset value in excess of $500,000,000. The Adviser had a
subadvisory agreement with Nicholas-Applegate Capital Management LP. The Fund
was not responsible for the payment of the subadvisory fees.
13
The Fund had Distribution Plans with John Hancock Funds, LLC ("JH Funds"), a
wholly owned subsidiary of the Adviser. The Fund had adopted Distribution Plans
with respect to Class A, Class B and Class C pursuant to Rule 12b-1 under the
Investment Company Act of 1940 to reimburse JH Funds for the services it
provided as distributor of shares of the Fund. Accordingly, the Fund made
monthly payments to JH Funds at an annual rate not to exceed 0.30% of Class A
average daily net assets and 1.00% of Class B and Class C average daily net
assets. A maximum of 0.25% of such payments may have been service fees as
defined by the Conduct Rules of the National Association of Securities Dealers.
Under the Conduct Rules, curtailment of a portion of the Fund's 12b-1 payments
could have occurred under certain circumstances.
Class A and Class C shares were assessed up-front sales charges. During the
period ended May 9, 2003, JH Funds received net up-front sales charges of
$15,179 with regard to sales of Class A shares. Of this amount, $1,518 was
retained and used for printing prospectuses, advertising, sales literature and
other purposes, $7,336 was paid as sales commissions to unrelated broker-dealers
and $6,325 was paid as sales commissions to sales personnel of Signator
Investors, Inc. ("Signator Investors"), a related broker-dealer. The Adviser's
indirect parent, John Hancock Life Insurance Company ("JHLICo"), is the indirect
sole shareholder of Signator Investors. During the period ended May 9, 2003, JH
Funds received net up-front sales charges of $1,480 with regard to sales of
Class C shares. Of this amount, $1,440 was paid as sales commissions to
unrelated broker-dealers and $40 was paid as sales commissions to sales
personnel of Signator Investors.
Class B shares that were redeemed within six years of purchase were subject to a
contingent deferred sales charge ("CDSC") at declining rates, beginning at 5.00%
of the lesser of the current market value at the time of redemption or the
original purchase cost of the shares being redeemed. Class C shares that were
redeemed within one year of purchase were subject to a CDSC at a rate of 1.00%
of the lesser of the current market value at the time of redemption or the
original purchase cost of the shares being redeemed. Proceeds from the CDSCs
were paid to JH Funds and were used in whole or in part to defray its expenses
for providing distribution related services to the Fund in connection with the
sale of Class B and Class C shares. During the period ended May 9, 2003, CDSCs
received by JH Funds amounted to $15,808 for PER - Class B shares and $129 for
Class C shares.
The Fund had a transfer agent agreement with John Hancock Signature Services,
Inc., an indirect subsidiary of JHLICo. The Fund paid a monthly transfer agent
fee at an annual rate of 0.05% of the average daily net asset value, plus a fee
based on the number of shareholder accounts and reimbursement for certain
out-of-pocket expenses.
The Fund had an agreement with the Adviser to perform necessary tax, accounting
and legal services for the Fund. The compensation for the period was at an
annual rate of approximately 0.04% of the average net assets of the Fund.
Ms. Maureen R. Ford and Mr. John M. DeCiccio were directors and/or officers of
the Adviser and/or its affiliates, as well as Trustees of the Fund. The
compensation of unaffiliated Trustees was borne by the Fund. The unaffiliated
Trustees may have elected to defer for tax purposes their receipt of this
compensation under the John Hancock Group of Funds Deferred Compensation Plan.
The Fund made investments into other John Hancock funds, as applicable, to cover
its liability for the deferred compensation. Investments to cover the Fund's
deferred compensation liability were recorded on the Fund's books as an other
asset. The deferred compensation liability and the related other asset were
always equal and were marked to market on a periodic basis to reflect any income
earned by the investments as well as any unrealized gains or losses. The
Deferred Compensation Plan investments had no impact on the operations of the
Fund.
14
NOTE C
Fund share transactions
This listing illustrates the number of Fund's shares sold and repurchased, along
with the corresponding dollar value. The Fund had an unlimited number of shares
authorized with no par value.
PERIOD FROM 11 1-02
TO 5-9-03
YEAR ENDED 10-31-02 (UNAUDITED)
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ -------- -----------
CLASS A SHARES
- -----------------------------------------------------------------------------------------------
Sold 1,786,452 $13,544,533 57,240 $343,642
Repurchased (2,543,191) (19,528,993) (663,654) (4,119,225)
Net decrease (756,739) ($5,984,460) (606,414) ($3,775,583)
- -----------------------------------------------------------------------------------------------
CLASS B SHARES
- -----------------------------------------------------------------------------------------------
Sold 311,157 $2,161,259 125,894 $705,521
Repurchased (1,010,948) (7,061,861) (335,763) (1,873,529)
Net decrease (699,791) ($4,900,602) (209,869) ($1,168,008)
- -----------------------------------------------------------------------------------------------
CLASS C SHARES
- -----------------------------------------------------------------------------------------------
Sold 78,832 $540,982 37,907 $212,059
Repurchased (64,039) (406,778) (41,598) (230,340)
Net increase (decrease) 14,793 $134,204 (3,691) ($18,281)
- -----------------------------------------------------------------------------------------------
NET DECREASE (1,441,737) ($10,750,858) (819,974) ($4,961,872)
- -----------------------------------------------------------------------------------------------
NOTE D
Investment transactions
Purchases and proceeds from sales or maturities of securities, other than
short-term securities and obligations of the U.S. government, during the period
ended May 9, 2003, aggregated $70,898,639 and $79,490,742, respectively
The cost of investments owned on May 9, 2003, including short-term investments,
for federal income tax purposes was $36,820,680. Gross unrealized appreciation
and depreciation of investments aggregated $2,385,253 and $853,203,
respectively, resulted in net unrealized appreciation of $1,532,050. The
difference between book basis and tax basis net unrealized appreciation of
investments was attributable primarily to the tax deferral of losses on wash
sales.
NOTE E
Reclassification of accounts
During the period ended May 9, 2003, the Fund reclassified amounts to reflect a
decrease in accumulated net realized loss on investments of $73,468, a decrease
in accumulated net investment loss of $260,843 and a decrease in capital paid-in
of $334,311. This represented the amounts necessary to report these balances on
a tax basis, excluding certain temporary differences, as of May 9, 2003. These
reclassifications, which had no impact on the net asset value of the Fund, were
primarily attributable to certain differences in the computation of
distributable income and capital gains under federal tax rules versus accounting
principles generally accepted in the United States of America, book and tax
differences in accounting for net operating loss, foreign currency adjustment
and the Fund's utilization of earnings and profits distributed to shareholders
on redemption of shares as a part of the dividends paid deduction for
15
income tax purposes. The calculation of net investment income (loss) per share
in the financial highlights excluded these adjustments.
NOTE F
Shareholder Meeting
On April 16, 2003, at a Special Shareholder Meeting, the shareholders of the
Fund approved the following Agreements and Plan of Reorganization between the
Fund and the International Fund. The number of votes cast for and against the
proposal and that abstained from voting was as follows: FOR 3,324,998, AGAINST
206,671 and ABSTAINING 267,637.
Each Agreement and Plan of Reorganization provided for the transfer of
substantially all of the assets and liabilities of the Fund to the International
Fund in exchange solely for beneficial interest of the International Fund. After
these transactions and as of the close of business on May 9, 2003, the Fund was
terminated. The financial statements presented herein reflected the position of
the Fund prior to the exchange of net assets and termination of the Fund.
16
John Hancock Global Fund
Trustees
Dennis S. Aronowitz
Richard P. Chapman, Jr.
William J. Cosgrove
John M. DeCiccio
Richard A. Farrell
Maureen R. Ford
William F. Glavin*
Dr. John A. Moore*
Patti McGill Peterson*
John W. Pratt
* Members of the Audit Committee
Officers
Maureen R. Ford
Chairman, President and Chief Executive Officer
William L. Braman
Executive Vice President and
Chief Investment Officer
Richard A. Brown
Senior Vice President and
Chief Financial Officer
Susan S. Newton
Senior Vice President and Secretary
William H. King
Vice President and Treasurer
Thomas H. Connors
Vice President and
Compliance Officer
Investment Adviser
John Hancock Advisers, LLC.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
Principal Distributor
John Hancock Funds, LLC.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
Transfer Agent
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, Massachusetts 02217-1000
Legal Counsel
Hale and Dorr
60 State Street
Boston, Massachusetts 02109-1803
ITEM 2. CODE OF ETHICS.
Not applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-CSR,
the registrant's principal executive officer and principal financial officer
have concluded that those disclosure controls and procedures provide reasonable
assurance that the material information required to be disclosed by the
registrant on this report is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.
(b) There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation.
ITEM 10. EXHIBITS.
(a) Not applicable at this time.
(b)(1) Separate certifications for the registrant's principal executive officer
and principal financial officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of
1940, are attached as Ex99.CERT.
(b)(2) Separate certifications for the registrant's principal executive officer
and principal financial officer, as required by 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule
30a-2(b) under the Investment Company Act of 1940, are attached as Ex99.CERT.
The certifications furnished pursuant to this paragraph are not deemed to be
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or
otherwise subject to the liability of that section. Such certifications are not
deemed to be incorporated by reference into any filing under the Securities Act
of 1933 or the Securities Exchange Act of 1934, except to the extent that the
Registrant specifically incorporates them by reference.
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.
By:
-----------------------
Maureen R. Ford
Chairman, President and Chief Executive Officer
Date: June 24, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:
-----------------------
Maureen R. Ford
Chairman, President and Chief Executive Officer
Date: June 24, 2003
By:
-----------------------
Richard A. Brown
Senior Vice President and Chief Financial Officer
Date: June 24, 2003