ITEM 1. REPORT TO STOCKHOLDERS.
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FINAL REPORT
John Hancock Pacific Basin Equities Fund
September 26, 2003
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John Hancock Pacific Basin Equities Fund
Schedule of Investments
September 26, 2003
(unaudited)
ISSUER SHARES VALUE
- ------ ------ -----
COMMON STOCKS
(Cost $15,657,925)
Australia (4.99%)
BHP Billiton Ltd. (Diversified Operations) 59,800 $ 425,044
Commonwealth Bank of Australia (Banks - Foreign) 13,800 261,752
Rio Tinto Ltd. (Metal) 18,900 420,998
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1,107,794
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China (3.19%)
BYD Co., Ltd. (Electronics) 120,000 308,708
Shangri-La Asia Ltd. (Leisure) 348,000 314,124
Sinopec Shanghai Petrochemical Co., Ltd.* (Chemicals) 401,000 84,803
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707,635
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Hong Kong (9.84%)
China Resources Cement Holding Ltd.* (Building) 2,200 624
China Resources Enterprise Ltd. (Diversified Operations) 22,000 24,397
CLP Holdings Ltd. (Utilities) 20,300 88,740
Dickson Concepts International Ltd. (Retail) 574,500 351,890
Henderson Land Development Co., Ltd. (Real Estate Operations) 127,000 540,432
Hutchison Whampoa Ltd. (Diversified Operations) 57,000 426,311
Sino Land Co., Ltd. (Real Estate Operations) 952,000 491,044
TCL International Holdings Ltd. (Electronics) 817,000 242,311
Tingyi Holding Corp. (Food) 78,000 17,099
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2,182,848
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Indonesia (3.60%)
PT Bank Pan Indonesia Tbk (Banks - Foreign) 4,625,000 175,407
PT Bentoel Internasional Investama Tbk* (Tobacco) 5,255,500 59,173
PT Perusahaan Perkebunan London Sumatra Indonesia Tbk* (Agricultural Operations) 3,030,500 287,336
PT Telekomunikasi Indonesia (Telecommunications) 413,000 276,557
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798,473
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Japan (30.79%)
Advantest Corp. (Electronics) 4,000 263,607
Asahi Glass Co., Ltd. (Building) 26,000 178,542
Bank of Yokohama, Ltd., The (Banks - Foreign) 143,000 535,045
Capcom Co., Ltd. (Computers) 19,300 246,625
East Japan Railway Co. (Transportation) 49 236,282
Fanuc Ltd. (Electronics) 1,800 109,943
Funai Electric Co., Ltd. (Electronics) 1,700 239,398
Hogy Medical Co., Inc. (Medical) 5,500 217,574
Honda Motor Co., Ltd. (Automobiles/Trucks) 5,500 229,852
Hoya Corp. (Electronics) 5,000 377,283
Kyocera Corp. (Electronics) 3,600 220,530
Matsui Securities Co., Ltd. (Broker Services) 31,800 485,299
Matsushita Electric Industrial Co., Ltd. (Electronics) 26,000 314,828
Millea Holdings, Inc.* (Insurance) 5 56,258
Mitsubishi Tokyo Financial Group, Inc. (Banks - Foreign) 113 671,027
Murata Manufacturing Co., Ltd. (Electronics) 4,500 238,693
Nissan Motor Co., Ltd. (Automobiles/Trucks) 4,800 52,336
NTT DoCoMo, Inc. (Telecommunications) 17 42,202
Sega Corp.* (Leisure) 38,000 379,033
Shin-Etsu Chemical Co., Ltd. (Chemicals) 600 23,360
SMC Corp. (Machinery) 800 82,582
Sumitomo Trust & Banking Co., Ltd. (Banks - Foreign) 113,000 529,758
THK Co., Ltd. (Machinery) 12,600 213,779
Toyota Motor Corp. (Automobiles/Trucks) 12,700 384,453
See notes to financial
statements.
1
ISSUER SHARES VALUE
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Japan (Continued)
UFJ Holdings, Inc. (Banks - Foreign) 47 $ 180,471
UMC Japan* (Electronics) 275 321,695
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6,830,455
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Malaysia (3.42%)
New Straits Times Press (M) Berhad, The (Media) 172,700 179,063
Perusahaan Otomobil Nasional Berhad (Automobiles/Trucks) 55,000 102,763
Resorts World Berhad (Leisure) 50,600 128,497
Road Builder (M) Holdings Berhad (Building) 187,000 184,047
Telekom Malaysia Berhad (Telecommunications) 83,100 164,013
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758,383
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Philippine Islands (2.24%)
Ayala Corp. (Diversified Operations) 2,409,000 214,493
Ayala Land, Inc. (Real Estate Operations) 779,000 94,840
Manila Electric Co.* (Utilities) 305,900 130,626
Philippine Long Distance Telephone Co.* (Telecommunications) 4,700 56,794
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496,753
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Singapore (3.85%)
Chartered Semiconductor Manufacturing Ltd.* (Electronics) 171,000 145,062
City Developments, Ltd. (Real Estate Operations) 75,000 218,571
Singapore Exchange Ltd. (Finance) 299,000 307,136
Singapore Press Holdings Ltd. (Media) 17,400 183,755
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854,524
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South Korea (7.32%)
Hana Bank (Banks - Foreign) 22,900 326,432
Hyundai Department Store Co., Ltd. (Retail) 4,440 108,057
Korean Air Co. Ltd. (Transportation) 16,260 193,622
LG Chem Ltd. (Chemicals) 4,470 172,894
LG Household & Health Care Ltd. (Soap & Cleaning Preparations) 9,780 143,236
Shinhan Financial Group Co., Ltd. (Finance) 16,150 221,089
Shinsegae Co., Ltd. (Retail) 780 138,983
SK Telecom Co., Ltd. American Depositary Receipts, (ADR) (Telecommunications) 6,900 122,475
Ssangyong Motor Co.* (Automobiles/Trucks) 33,020 196,599
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1,623,387
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Taiwan (14.92%)
Acer, Inc. Global Depositary Receipts (Computers) 3,274 22,100
Advanced Semiconductor Engineering, Inc.* (Electronics) 481,800 370,670
Asustek Computer, Inc. (Computers) 9,250 23,402
Cheng Loong Corp. (Paper & Paper Products) 725,000 223,110
Eva Airways Corp.* (Transportation) 890,000 342,358
Fubon Financial Holding Co., Ltd. (Diversified Operations) 207,000 205,193
Giant Manufacturing Co., Ltd. (Manufacturing) 184,000 219,417
Largan Precision Co., Ltd. (Leisure) 14,100 141,855
Nanya Technology Corp.* (Electronics) 810 652
Nanya Technology Corp.* (ADR) (Electronics) (R) 27,900 221,805
Phihong Technology Co., Ltd. (Utilities) 399,000 214,878
Phoenix Precision Technology Corp.* (Electronics) 348,000 217,275
Taiwan Semiconductor Manufacturing Co. Ltd.* (Electronics) 169,280 330,596
Taiwan Styrene Monomer Corp. (Chemicals) 267,000 222,006
United Microelectronics Corp.* (ADR) (Electronics) 73,600 337,088
Yuanta Core Pacific Securiteis Co. (Finance) 392,000 216,908
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3,309,313
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See notes to financial
statements.
2
ISSUER SHARES VALUE
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Thailand (2.47%)
Bangkok Expressway Pcl (Building) 104,000 $ 56,525
Thai Union Frozen Products Pcl (Food) 261,700 176,163
United Securities Pcl * (Broker Services) 648,000 316,649
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549,337
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TOTAL COMMON STOCKS (86.63%) 19,218,902
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PREFERRED STOCKS
(Cost $290,734)
South Korea (2.08%)
Samsung Electronics Co., Ltd. (Electronics) 2,870 461,495
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TOTAL PREFERRED STOCKS (2.08%) 461,495
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ISSUER WARRANTS VALUE
- ------ -------- -----
WARRANTS
(Cost $528,148)
India (3.40%)
Hindustan Lever Ltd.* (Soap & Cleaning Preparations) 100,095 399,110
Hindustan Lever Ltd.* (Soap & Cleaning Preparations) 115,000 16,022
Infosys Technologies Ltd.* (Computers) 3,400 338,059
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TOTAL WARRANTS (3.40%) 753,191
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TOTAL INVESTMENTS (92.11%) $ 20,433,588
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OTHER ASSETS AND LIABILITIES, NET (7.89%) $ 1,751,162
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TOTAL NET ASSETS (100.00%) $ 22,184,750
=============
* Non-income producing security.
(R) This security is exempt from registration under rule 144A of the Securities
Act of 1933. Such security may be resold, normally to qualified institutional
buyers, in transactions exempt from registration. Rule 144A securities amounted
to $221,805 or 1.00% of net assets as of September 26, 2003.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
See notes to financial statements.
3
Portfolio Concentration
(unaudited)
This table shows the percentages of the Fund's investments aggregated by various
industries.
VALUE
AS A PERCENTAGE
INVESTMENT CATEGORIES OF NET ASSETS
- --------------------- -------------
Agricultural Operations 1.30 %
Automobiles/Trucks 4.35
Banks - Foreign 12.08
Broker Services 3.61
Building 1.89
Chemicals 2.27
Computers 2.84
Diversified Operations 5.84
Electronics 21.28
Finance 3.36
Food 0.87
Insurance 0.25
Leisure 4.34
Machinery 1.34
Manufacturing 0.99
Media 1.64
Medical 0.98
Metal 1.90
Paper & Paper Products 1.01
Real Estate Operations 6.06
Retail 2.70
Soap & Cleaning Preparations 2.52
Telecommunications 2.98
Tobacco 0.27
Transportation 3.48
Utilities 1.96
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Total investments 92.11 %
===============
See notes to financial statements.
4
ASSETS AND
LIABILITIES
Final report
9-26-03*
(unaudited)
John Hancock Pacific Basin Equities Fund
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ASSETS
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Investments at value (cost $16,476,807) $20,433,588
Cash 1,782,153
Foreign Cash at Value (cost $5,285) 5,271
Dividends receivable 28,678
Other assets 3,410
Total assets 22,253,100
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LIABILITIES
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Payable for shares repurchased 279
Payable to affiliates
Other 25,699
Other payables and accrued expenses 42,372
Total liabilities 68,350
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NET ASSETS
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Capital paid-in 32,026,229 Accumulated net realized loss on investments and
foreign currency transactions (13,795,580) Net unrealized appreciation of
investments and translation of assets and liabilities in
foreign currencies 3,957,218
Accumulated net investment loss (3,117)
Net assets $22,184,750
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NET ASSET VALUE PER SHARE
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Based on net asset values and shares outstanding
Class A $12,286,754 / 1,061,283 shares) $11.58
Class B $9,172,852 / 844,536 shares) $10.86
Class C $725,144 / 66,751 shares) $10.86
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MAXIMUM OFFERING PRICE PER SHARE
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Class A 1 ($11.58 / 95%) $12.19
Class C ($10.86 / 99%) $10.97
1 On single retail sales of less than $50,000. On sales of $50,000 or more and
on group sales the offering price was reduced.
* The net assets of the Fund were merged into the John Hancock International
Fund as of the close of business on September 26, 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
OPERATIONS
Period from
11-01-02 through
9-26-03*
(unaudited)
John Hancock Pacific Basin Equities Fund
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INVESTMENT INCOME
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Dividends (net of foreign withholding taxes of $51,042) $368,860
Interest 6,044
Total investment income 374,904
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EXPENSES
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Investment management fee 147,641
Class A distribution and service fee 28,859
Class B distribution and service fee 81,119
Class C distribution and service fee 7,237
Transfer agent fee 155,889
Custodian fee 57,438
Registration and filing fee 29,197
Printing 11,061
Accounting and legal services fee 6,858
Auditing fee 5,231
Interest expense 2,627
Miscellaneous 2,224
Trustees' fee 1,365
Legal fee 323
Total expenses 537,069
Net investment loss (162,165)
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REALIZED AND UNREALIZED GAIN (LOSS)
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Net realized loss on
Investments (221,927)
Foreign currency transactions (179,916)
Change in unrealized appreciation (depreciation) of
Investments 5,208,352
Translation of assets and liabilities in foreign currencies (3,005)
Net realized and unrealized gain 4,803,504
Increase in net assets from operations $4,641,339
* The net assets of the Fund were merged into the John Hancock International
Fund as of the close of business on September 26, 2003 and the Fund was
subsequently terminated. The Statement of 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
CHANGES IN
NET ASSETS
John Hancock Pacific Basin Equities Fund PERIOD FROM
YEAR 11-01-02 to
ENDED 9-26-03*
10-31-02 (UNAUDITED)
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INCREASE (DECREASE) IN NET ASSETS
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From operations
Net investment loss ($368,514) ($162,165)
Net realized gain (loss) 476,358 (401,843)
Change in net unrealized appreciation (depreciation) (1,094,526) 5,205,347
Increase (decrease) in net assets resulting from operations (986,682) 4,641,339
From Fund share transactions (2,622,422) (4,633,511)
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NET ASSETS
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Beginning of period 25,786,026 22,176,922
End of period 1 $22,176,922 $22,184,750
1 Includes accumulated net investment loss of $3,088 and $3,117, respectively.
* The net assets of the Fund were merged into the John Hancock International
Fund as of the close of business on September 26, 2003 and the Fund was
subsequently terminated. The Statements of Changes in Net Assets reflect 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 Pacific Basin Equities Fund
Financial Highlights
CLASS A SHARES
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 9-26-03 1
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PER SHARE OPERATING PERFORMANCE
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Net asset value, beginning of period $11.63 $8.76 $14.46 $14.02 $9.62 $9.23
Net investment income (loss) 2 0.02 (0.09) (0.14) (0.08) (0.10) (0.05)
Net realized and unrealized gain (loss) on investments (2.89) 5.79 0.08 (4.32) (0.29) 2.40
Total from investment operations (2.87) 5.70 (0.06) (4.40) (0.39) 2.35
Less distributions
From net investment income -- -- (0.37) -- -- --
In excess of net investment income -- -- (0.01) -- -- --
-- -- (0.38) -- -- --
Net asset value, end of period $8.76 $14.46 $14.02 $9.62 $9.23 $11.58 3
Total return 4 (%) (24.68) 65.07 (0.57) (31.38) (4.05) 25.46 5
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RATIOS AND SUPPLEMENTAL DATA
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Net assets, end of period (in millions) $15 $33 $23 $12 $11 $12
Ratio of expenses to average net assets (%) 2.46 2.37 2.06 2.67 2.57 2.56 6
Ratio of net investment income (loss) to average net assets (%) 0.22 (0.77) (0.81) (0.64) (0.99) (0.53) 6
Portfolio turnover (%) 230 174 258 448 293 235
See notes to financial
statements.
8
John Hancock Pacific Basin Equities Fund
Financial Highlights
CLASS B SHARES
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 9-26-03 1
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $11.32 $8.47 $13.89 $13.43 $9.15 $8.72
Net investment loss 2 (0.04) (0.17) (0.25) (0.15) (0.17) (0.10)
Net realized and unrealized gain (loss) on investments (2.81) 5.59 0.09 (4.13) (0.26) 2.24
Total from investment operations (2.85) 5.42 (0.16) (4.28) (0.43) 2.14
Less distributions
From net investment income -- -- (0.29) -- -- --
In excess of net investment income -- -- (0.01) -- -- --
-- -- (0.30) -- -- --
Net asset value, end of period $8.47 $13.89 $13.43 $9.15 $8.72 $10.86 3
Total return 4 (%) (25.18) 63.99 (1.30) (31.87) (4.70) 24.54 5
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RATIOS AND SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in millions) $13 $37 $29 $14 $10 $9
Ratio of expenses to average net assets (%) 3.16 3.07 2.77 3.37 3.27 3.29 6
Ratio of net investment loss to average net assets (%) (0.48) (1.47) (1.51) (1.36) (1.69) (1.25) 6
Portfolio turnover (%) 230 174 258 448 293 235
See notes to financial
statements.
9
John Hancock Pacific Basin Equities Fund
Financial Highlights
CLASS C SHARES
PERIOD ENDED 10-31-99 7 10-31-00 10-31-01 10-31-02 9-26-03 1
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $9.09 $13.89 $13.43 $9.15 $8.72
Net investment loss 2 (0.13) (0.24) (0.17) (0.17) (0.10)
Net realized and unrealized gain (loss) on investments 4.93 0.08 (4.11) (0.26) 2.24
Total from investment operations 4.80 (0.16) (4.28) (0.43) 2.14
Less distributions
From net investment income -- (0.29) -- -- --
In excess of net investment income -- (0.01) -- -- --
-- (0.30) -- -- --
Net asset value, end of period $13.89 $13.43 $9.15 $8.72 $10.86 3
Total return 4 (%) 52.81 5 (1.30) (31.87) (4.70) 24.54 5
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RATIOS AND SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in millions) $1 $1 --8 $1 $1
Ratio of expenses to average net assets (%) 3.14 6 2.77 3.37 3.27 3.33 6
Ratio of net investment loss to average net assets (%) (1.76) 6 (1.48) (1.48) (1.69) (1.31) 6
Portfolio turnover (%) 174 258 448 293 235
1 Final period from 11-1-02 through 9-26-03. Unaudited.
2 Based on the average of the shares outstanding.
3 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.
4 Assumes dividend reinvestment and does not reflect the effect of sales
charges.
5 Not annualized.
6 Annualized.
7 Class C shares began operations on 3-1-99.
8 Less than $500,000.
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
NOTE A
Accounting policies
John Hancock Pacific Basin Equities Fund (the "Fund") was a diversified series
of John Hancock World Fund, an open-end management investment company registered
under the Investment Company Act of 1940. The investment objective of the Fund
was to seek long term capital appreciation.
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 September 24, 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 September 26, 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 Funds 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 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 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 September 26, 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 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.
12
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 September 26, 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 a subject to
federal income tax on taxable income that was distributed to shareholders.
Therefore, no federal income tax provision was required as of September 26,
2003, the Fund's final tax year. As of September 26, 2003, for federal income
tax purposes, the Fund had $13,634,925 of a capital loss carryforward, expiring
as follows: October 31, 2007 - $13,280,111, and September 26, 2011 - $354,814.
The unused capital loss carryforward as of September 26, 2003, was transferred
to the Acquiring Fund and will be available, to the extent provided by
regulations, to offset future net capital gains of the Acquiring Fund.
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
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 be
applied differently to each class.
As of September 26, 2003, the Fund had 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 quarterly management fee to the
Adviser equivalent, on an annual basis, to the sum of: (a) 0.80% of the first
$200,000,000 of the Fund's average daily net asset value and (b) 0.70% of the
Fund's average daily net asset value in excess of $200,000,000. The Adviser had
a subadvisory agreement with Nicholas-Applegate Capital Management LP. The Fund
was not responsible for the payment of the subadvisory fees.
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
13
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 September 26, 2003, JH Funds received net up-front sales charges of
$6,595 with regard to sales of Class A shares. Of this amount, $948 was retained
and used for printing prospectuses, advertising, sales literature and other
purposes, $3,576 was paid as sales commissions to unrelated broker-dealers and
$2,071 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 September 26, 2003,
JH Funds received net up-front sales charges of $2,798 with regard to sales of
Class C shares. Of this amount, $2,720 was paid as sales commissions to
unrelated broker-dealers and $78 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 September 26, 2003,
CDSCs received by JH Funds amounted to $26,861 for Class B shares and $793 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 Ford Goldfarb and Mr. John M. DeCiccio were directors and/or
officers of the Adviser and its affiliates, as well as Trustees of the Fund. The
compensation of unaffiliated Trustees was borne by the Fund. The unaffiliated
Trustees could elect 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 other
assets. The deferred compensation liability and the related other assets 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 shares sold and repurchased during
the last two periods, 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 9-26-03
YEAR ENDED 10-31-02 (UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Sold 1,121,272 $11,813,825 1,171,550 $10,788,257
Repurchased (1,180,930) (12,396,555) (1,276,181) (11,933,825)
Net decrease (59,658) ($582,730) (104,631) ($1,145,568)
CLASS B SHARES
Sold 508,893 $5,177,571 54,240 $472,701
Repurchased (794,841) (7,929,140) (408,377) (3,549,598)
Net decrease (285,948) ($2,751,569) (354,137) ($3,076,897)
CLASS C SHARES
Sold 369,684 $3,661,327 203,124 $1,867,864
Repurchased (304,259) (2,949,450) (246,194) (2,278,910)
Net increase (decrease) 65,425 $711,877 (43,070) ($411,046)
NET DECREASE (280,181) ($2,622,422) (501,838) ($4,633,511)
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 September 26, 2003, aggregated to $46,070,659 and $51,827,173,
respectively.
The cost of investments owned on September 26, 2003, including short-term
investments, for federal income tax purposes was $16,637,462. Gross unrealized
appreciation and depreciation of investments aggregated $4,060,393 and $264,267,
respectively, resulting in net unrealized appreciation of $3,796,126. The
difference between book basis and tax basis net unrealized appreciation of
investments is attributable primarily to the tax deferral of losses on wash
sales.
NOTE E
Reclassification of accounts
During the period ended September 26, 2003, the Fund reclassified amounts to
reflect a decrease in accumulated net realized loss on investments of $179,939,
a decrease in accumulated net investment loss of $162,136 and a decrease in
capital paid-in of $342,075. This represented the amounts necessary to report
these balances on a tax basis, excluding certain temporary differences, as of
September 26, 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 deferred compensation and
foreign currency adjustments. The calculation of net investment income (loss)
per share in the Fund's Financial Highlights excluded these adjustments.
15
NOTE F
Shareholder meeting
On September 24, 2003, at a Special Shareholder Meeting, the shareholders of the
Fund approved an Agreement and Plan of Reorganization between the Fund and the
Acquiring Fund.
Proxies covering 1,083,854 shares of beneficial interest were voted at the
meeting. The number of votes cast for and against the Agreement and Plan of
Reorganization and that abstained from voting were as follows: 907,637 FOR,
99,951 AGAINST and 76,266 ABSTAINED.
The Agreement and Plan of Reorganization provided for the transfer of
substantially all of the assets and liabilities of the Fund to 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 September 26, 2003,
the Fund was terminated. The financial statements presented herein reflect the
position of the Fund prior to the exchange of net assets and the termination of
the Fund.
16
John Hancock Pacific Basin Equities 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 Ford Goldfarb
Chairman, President and Chief Executive 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
Sub Adviser
Nicholas-Applegate Capital
Management LP
600 West Broadway
San Diego, California 92101
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
Custodian
The Bank of New York
One Wall Street
New York, New York 10286
ITEM 2. CODE OF ETHICS.
As of the end of the period, September 30, 2003, the registrant has adopted a
code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief
Executive Officer, Chief Financial Officer and Treasurer (respectively, the
principal executive officer, the principal financial officer and the principal
accounting officer, the "Senior Financial Officers"). A copy of the code of
ethics is filed as an exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Charles L. Ladner is the audit committee financial expert and is "independent",
pursuant to general instructions on Form N-CSR Item 3.
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 changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
have materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 10. EXHIBITS.
(a)(1) Code of Ethics for Senior Financial Officers is attached.
(a)(2) 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.
(b)(1) 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. 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.
(c)(1) Contact person at the registrant
November 19, 2003
EDGAR
United States Securities and
Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Form N-CSR
John Hancock World Fund
John Hancock Pacific Basin Equities Fund
File Nos. 33-10722; 811-4932
Gentlemen:
Enclosed herewith for filing pursuant to the Investment Company Act of 1940 is
Form N-CSR ("certified shareholder report"). Please note this is the final
report for the John Hancock Pacific Basin Equities Fund.
If you have any questions or comments regarding this filing, please contact the
undersigned at (617) 375-1513.
Sincerely,
/s/Alfred Ouellette
Alfred Ouellette
Senior Attorney and Assistant Secretary
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 Ford Goldfarb
Chairman, President and Chief Executive Officer
Date: November 19, 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 Ford Goldfarb
Chairman, President and Chief Executive Officer
Date: November 19, 2003
By:
- -----------------------
Richard A. Brown
Senior Vice President and Chief Financial Officer
Date: November 19, 2003