VA Financial Industries
NOTE G
Reorganization
On December 5, 2001, the shareholders of John Hancock V.A. Regional Bank Fund
("V.A. Regional Bank Fund") approved a plan of reorganization between V.A.
Regional Bank Fund and the Fund providing for the transfer of substantially all
of the assets and liabilities of the V.A. Regional Bank Fund to the Fund in
exchange solely for shares of beneficial interest in the fund. The acquisition
of the V.A. Regional Bank Fund was accounted for as a tax-free exchange of
675,457 shares of the Fund for the net assets of V.A. Regional Bank Fund, which
amounted to $9,888,426, including $523,082 of unrealized appreciation, after the
close of business on December 14, 2001.

VA Strategic Income
NOTE G
Reorganization
On December 5, 2001, the shareholders of the John Hancock V.A. High Yield Bond
Fund ("V.A. High Yield Bond Fund") approved a plan of reorganization between
V.A. High Yield Bond Fund and the Fund providing for the transfer of
substantially all of the assets and liabilities of the V.A. High Yield Bond fund
to the Fund in exchange solely for the shares of beneficial interest in the
Fund. The acquisition was accounted for as a tax-free exchange of 402,919 shares
of the Fund for the net assets of V.A. High Yield Bond Fund, which amounted to
$3,482,022, including $2,437,674 of unrealized depreciation of investments,
after the close of business on December 14, 2001.