-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IrEyqEj2vukRWADSqURugtcZT/hj3PmivkuHZZXL5gLIxk90vAQyA6T1gtFpWYfS KpfWhTiIMf6c8q1PwiKiuw== 0001003457-03-000002.txt : 20030626 0001003457-03-000002.hdr.sgml : 20030626 20030626170714 ACCESSION NUMBER: 0001003457-03-000002 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030430 FILED AS OF DATE: 20030626 EFFECTIVENESS DATE: 20030626 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANCOCK JOHN DECLARATION TRUST CENTRAL INDEX KEY: 0001003457 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-07437 FILM NUMBER: 03759121 BUSINESS ADDRESS: STREET 1: 101 HUNTINGTON AVE CITY: BOSTON STATE: MA ZIP: 02199-7603 BUSINESS PHONE: 6173751702 MAIL ADDRESS: STREET 1: 101 HUNTINGTON AVE CITY: BOSTON STATE: MA ZIP: 02199-7603 N-CSR 1 dectrust.txt JOHN HANCOCK DECLARATION TRUST - -------------------------------------------------------------------------------- FINAL REPORT John Hancock V.A. Financial Industries Fund April 30, 2003 - -------------------------------------------------------------------------------- John Hancock V.A. Financial Industries Fund Schedule of Investments 4-30-03 (unaudited) - -------------------------------------------------------------------------------- ISSUER SHARES VALUE COMMON STOCKS Banks - Midwest 5.58% Fifth Third Bancorp 62,342 $ 3,072,837 ----------- Banks - Money Center 14.83% Bank of America Corp. 57,500 4,257,875 Citigroup, Inc. 87,000 3,414,750 Wachovia Corp. 13,000 496,730 ----------- 8,169,355 ----------- Banks - Northeast 4.40% M&T Bank Corp. 1,500 126,705 State Street Corp. 65,500 2,294,465 ----------- 2,421,170 ----------- Banks - Southeast 5.02% BB&T Corp. 80,900 2,637,340 National Commerce Financial Corp. 3,000 61,020 SouthTrust Corp. 2,500 67,153 ----------- 2,765,513 ----------- Banks - Superregional 16.89% Bank of New York Co., Inc. (The) 68,000 1,798,600 Bank One Corp. 11,500 414,575 Charter One Financial, Inc. 2,100 61,005 Mellon Financial Corp. 46,500 1,229,925 PNC Financial Services Group 18,344 805,302 SunTrust Banks, Inc. 6,500 371,930 U.S. Bancorp 17,500 387,625 Washington Mutual, Inc. 10,000 395,000 Wells Fargo & Co. 79,500 3,836,670 ----------- 9,300,632 ----------- Banks - West 0.36% Zions Bancorp 4,000 197,080 ----------- Broker Services 12.81% Goldman Sachs Group, Inc. 34,700 2,633,730 Legg Mason, Inc. 47,000 2,552,100 Merrill Lynch & Co., Inc. 45,500 1,867,775 ----------- 7,053,605 ----------- Diversified Operations 3.50% General Electric Co. 65,500 1,928,975 ----------- Finance - Consumer Loans 3.28% MBNA Corp. 95,475 1,804,477 ----------- Finance - Investment Management 1.27% Amvescap Plc (United Kingdom) 129,000 700,997 ----------- Finance - Services Misc. 4.87% American Express Co. 70,900 2,684,274 ----------- Insurance - Brokers 5.67% Marsh & McLennan Cos., Inc. 59,600 2,841,728 Willis Group Holdings Ltd.* 8,975 279,930 ----------- 3,121,658 ----------- Insurance - Diversified 3.60% Berkshire Hathaway, Inc.* 850 1,982,200 ----------- Insurance - Property & Casualty 5.44% American International Group, Inc. 51,704 2,996,247 ----------- Mortgage & Real Estate Services 11.80% Fannie Mae 51,000 3,691,890 Freddie Mac 48,500 2,808,150 ----------- 6,500,040 ----------- TOTAL COMMON STOCKS 99.32% (Cost $59,978,965) 54,699,060 ----------- TOTAL INVESTMENTS 99.32% 54,699,060 ----------- OTHER ASSETS AND LIABILITIES, NET 0.68% 374,791 ----------- TOTAL NET ASSETS 100.00% $55,073,851 =========== * Non-income producing security. Parenthetical disclosure of a foreign country in the security description represents country of a foreign issuer. The percentage shown for each investment category is the total of that category as a percentage of the net assets of the the Fund. See notes to financial statements. 1
John Hancock V.A. Financial Industries Fund --------------------------------------------------------------------------------------------------- ASSETS AND ASSETS LIABILITIES --------------------------------------------------------------------------------------------------- Final report Investments at value (Cost $59,978,965) $54,699,060 4-30-03 * Cash 303,701 (unaudited) Dividends and interest receivable 110,645 Other assets 1,890 Total assets 55,115,296 --------------------------------------------------------------------------------------------------- LIABILITIES --------------------------------------------------------------------------------------------------- Payable to affiliates 36,223 Other payables and accrued expenses 5,222 Total liabilities 41,445 --------------------------------------------------------------------------------------------------- NET ASSETS --------------------------------------------------------------------------------------------------- Capital paid-in 73,440,622 Accumulated net realized loss on investments and foreign currency transactions (13,086,919) Net unrealized depreciation of investments and translation of assets and liabilities in foreign currencies (5,279,224) Distributions in excess of net investment income (628) Net assets $55,073,851 --------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE --------------------------------------------------------------------------------------------------- Based on 4,641,425 shares of beneficial interest outstanding - unlimited number of shares authorized with no par value $11.87
* The net assets of V.A.Financial Industries Fund (the "Fund") were merged into the Financial Industries Fund of the John Hancock Variable Series Trust I as of the close of business on April 30, 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. 2
John Hancock V.A. Financial Industries Fund -------------------------------------------------------------------------- OPERATIONS INVESTMENT INCOME Period -------------------------------------------------------------------------- 1-1-03 through Dividends (net of foreign withholding taxes of $1,462) $382,604 4-30-03 * Interest (includes securities lending income of $111) 2,422 (unaudited) Total investment income 385,026 -------------------------------------------------------------------------- EXPENSES -------------------------------------------------------------------------- Investment management fee 140,827 Accounting and legal services fee 5,281 Custodian fee 3,349 Trustees' fee 2,583 Interest expense 446 Legal fee 157 Total expenses 152,643 Net investment income 232,383 -------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -------------------------------------------------------------------------- Net realized gain (loss) on Investments (1,212,623) Foreign currency transactions 815 Change in unrealized appreciation (depreciation) of Investments 2,229,800 Translation of assets and liabilities in foreign currencies (383) Net realized and unrealized gain 1,017,609 Increase in net assets from operations $1,249,992
* The net assets of V.A.Financial Industries Fund (the "Fund") were merged into the Financial Industries Fund of the John Hancock Variable Series Trust I as of the close of business on April 30, 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. 3
John Hancock V.A. Financial Industries Fund Period from Year 1-1-03 to Ended 4-30-03 * 12-31-02 (unaudited) ------------------------------------------------------------------------------------------------- CHANGES IN INCREASE (DECREASE) IN NET ASSETS NET ASSETS ------------------------------------------------------------------------------------------------- From operations Net investment income $ 638,753 $ 232,383 Net realized loss (7,403,779) (1,211,808) Change in net unrealized appreciation (depreciation) (9,486,140) 2,229,417 Increase (decrease) in net assets resulting from operations (16,251,166) 1,249,992 Distributions to shareholders From net investment income (641,124) (233,198) From Fund share transactions (14,653,108) (3,317,813) ------------------------------------------------------------------------------------------------- NET ASSETS ------------------------------------------------------------------------------------------------- Beginning of period 88,920,268 57,374,870 End of period (1) $ 57,374,870 $ 55,073,851
* The net assets of V.A.Financial Industries Fund (the "Fund") were merged into the Financial Industries Fund of the John Hancock Variable Series Trust I as of the close of business on April 30, 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. (1) Includes distributions in excess of net investment income of $628 and $628, respectively. See notes to financial statements. 4 John Hancock V.A. Financial Industries Fund Financial Highlights
PERIOD ENDED 12-31-98 12-31-99 12-31-00 12-31-01 12-31-02 4-30-03(1) - --------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $13.44 $14.45 $14.46 $18.34 $14.56 $11.60 Net investment income (2) 0.18 0.11 0.06 0.11 0.12 0.05 Net realized and unrealized gain (loss) on investments 0.97 0.06 3.87 (3.33) (2.95) 0.27 Total from investment operations 1.15 0.17 3.93 (3.22) (2.83) 0.32 Less distributions From net investment income (0.14) (0.10) (0.05) (0.09) (0.13) (0.05) From net realized gain --(3) (0.05) -- (0.47) -- -- Tax return of capital -- (0.01) -- -- -- -- (0.14) (0.16) (0.05) (0.56) (0.13) (0.05) Net asset value, end of period $14.45 $14.46 $18.34 $14.56 $11.60 $11.87(4) Total return (5) (%) 8.55 1.23 27.16 (17.51) (19.46) 2.76(6) - --------------------------------------------------------------------------------------------------------------------------------- RATIOS AND SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in millions) $55 $49 $71 $89 $57 $55 Ratio of expenses to average net assets (%) 0.92 0.90 0.90 0.89 0.90 0.87(7) Ratio of net investment income to average net assets (%) 1.25 0.77 0.36 0.71 0.87 1.32(7) Portfolio turnover (%) 38 72 41 97(8) 2 0
(1) Period from 1-1-03 through 4-30-03. Unaudited. (2) Based on the average of the shares outstanding. (3) Less than $0.01 per share. (4) Net assets value per share before the merger of assets to the Financial Industries Fund of the John Hancock Variable Series Trust I and the termination of the Fund. See Note A to financial statements. (5) Assumes dividend reinvestment. (6) Not annualized. (7) Annualized. (8) Excludes merger activity See notes to financial statements. 5 NOTES TO FINANCIAL STATEMENTS UNAUDITED NOTE A Accounting policies John Hancock V.A. Financial Industries Fund (the "Fund") was a diversified series of John Hancock Declaration Trust ("the Trust"), an open-end management investment company registered under the Investment Company Act of 1940, organized as a Massachusetts business trust in 1995. The Trustees may have authorized the creation of additional series from time to time to satisfy various investment objectives. An insurance company issuing a Variable Contract that participated in the Trust would vote shares of the Fund held by the insurance company's separate accounts as required by law. In accordance with current law and interpretations thereof, participating insurance companies were required to request voting instructions from policy owners and voted shares of the Fund in proportion to the voting instructions received. The investment objective of the Fund was to seek capital appreciation. The Fund has one class of shares with equal rights as to voting, redemption, dividends and liquidation. On April 16, 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 Financial Industries Fund of the John Hancock Variable Series Trust I (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 April 30, 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. Investments in AIM Cash Investment Trust were valued at their net asset value each business day. 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. 6 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. Expenses The majority of the expenses were directly identifiable to an individual fund. Expenses which 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 Funds had no borrowing activity under the line of credit during the period ended April 30, 2003. Securities lending The Fund may have lent securities to certain qualified brokers who paid the Fund negotiated lender fees. These fees were included in interest income. The loans were collateralized at all times with cash or securities with a market value at least equal to the market value of the securities on loan. As with other extensions of credit, the Fund would have borne the risk of delay of the loaned securities in recovery or even loss of rights in the collateral, should the borrower of the securities have failed financially. There were no securities loaned as of April 30, 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 April 30, 2003, the Fund's final tax year. As of April 30, 2003, the Fund's final tax year, for federal income tax purposes, the Fund had $12,903,311 of a capital loss carryforward, expiring as follows: December 31, 2008 - $1,143,472, December 31, 2010 - $9,571,154 and April 30, 2011 - $2,188,685. The unused capital loss carryforward as of April 30, 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. 7 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. During the period ended April 30, 2003, the tax character of distributions paid by the Funds were as follows: ordinary income $233,198. As of April 30, 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 Funds. 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 at an annual rate of 0.80% of the Fund's average daily net asset value. The Adviser had agreed to limit the Fund's expenses, excluding the management fee, to 0.25% of Fund's average daily net assets. There was no expense reduction during the period ended April 30, 2003. 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 0.02% 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 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. 8 NOTE C Fund share transactions This listing illustrates the number of Fund shares sold, reinvested and repurchased during the last two periods, along with the corresponding dollar value.
Period from 1-1-03 to 4-30-03 Year Ended 12-31-02 (unaudited) Shares Amount Shares Amount Shares sold 672,740 $8,600,419 79,794 $919,822 Distributions reinvested 53,471 641,124 19,713 233,199 Repurchased (1,890,878) (23,894,651) (402,369) (4,470,834) - ------------------------------------------------------------------------------------------- Net decrease (1,164,667) ($14,653,108) (302,862) ($3,317,813) - -------------------------------------------------------------------------------------------
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 April 30, 2003, aggregated to none and $1,940,739, respectively. The cost of investments owned on April 30, 2003, including short-term investments, for federal income tax purposes was $60,162,574. Gross unrealized appreciation and depreciation of investments aggregated $3,179,952 and $8,643,466, respectively, resulting in net unrealized depreciation of $5,463,514. The difference between book basis and tax basis net unrealized depreciation of investments is attributable primarily to the tax deferral of losses on wash sales. NOTE E Shareholder meeting On April 16, 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. The number of votes cast for and against the Agreement and Plan of Reorganization and that abstained from voting were as follows: 4,259,338 FOR, 126,010 AGAINST and 361,423 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 April 30, 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. NOTE F Reclassification of accounts During the period ended April 30, 2003, the Fund reclassified amounts to reflect an increase in accumulated net realized loss on investments of $815 and a decrease in distributions in excess of net investment income of $815. This represents the amount necessary to report these balances on a tax basis, excluding certain temporary differences, as of April 30, 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 9 America. The calculation of net investment income (loss) per share in the financial highlights excludes these adjustments. TAX INFORMATION NOTICE For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable period ended April 30, 2003. With respect to the ordinary dividends paid by the Fund for the fiscal period ended April 30, 2003, 100% of the dividends qualify for the corporate dividends-received deduction. Shareholders will be mailed a 2003 U.S. Treasury Department Form 1099-DIV in January 2004. This will reflect the total of all distributions that are taxable for the calendar year 2003. 10 John Hancock Funds - V.A. Financial Industries 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. 529 Main Street Charlestown, MA 02129 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 11 - -------------------------------------------------------------------------------- FINAL REPORT John Hancock VA Relative Value Fund VA Sovereign Investors Fund VA Strategic Income Fund VA Technology Fund April 25, 2003 - -------------------------------------------------------------------------------- John Hancock V.A. Relative Value Fund Schedule of Investments April 25, 2003 (Unaudited)
ISSUER SHARES VALUE - ------------------------------------------------------------ ------ ----------- COMMON STOCKS Advertising (0.50%) Omnicom Group, Inc. 2,300 $ 142,922 ----------- Banks - United States (5.79%) Bank of America Corp. 10,500 762,090 State Street Corp. 8,350 287,407 Wells Fargo & Co. 13,000 616,460 ----------- 1,665,957 ----------- Beverages (2.55%) Anheuser-Busch Cos., Inc. 3,100 149,575 Coca-Cola Co. (The) 14,800 583,416 ----------- 732,991 ----------- Broker Services (1.69%) Goldman Sachs Group, Inc. (The) 6,400 485,568 ----------- Computers (13.40%) Cisco Systems, Inc.* 32,000 459,520 Dell Computer Corp.* 9,500 276,545 Electronic Data Systems Corp. 15,000 253,500 Hewlett-Packard Co. 17,000 269,450 International Business Machines Corp. 11,250 943,650 Lexmark International, Inc.* 4,400 300,696 Microsoft Corp. 53,700 1,354,314 ----------- 3,857,675 ----------- Cosmetics & Personal Care (4.99%) Avon Products, Inc. 3,500 200,095 Colgate-Palmolive Co. 4,000 226,720 Estee Lauder Cos., Inc. (The) (Class A) 4,700 142,410 Gillette Co. (The) 8,000 243,280 Procter & Gamble Co. (The) 7,000 623,980 ----------- 1,436,485 ----------- Diversified Operations (2.73%) 3M Co. 6,400 786,560 ----------- Electronics (9.63%) Applied Materials, Inc.* 21,000 297,990 General Electric Co. 52,500 1,528,275 Intel Corp. 23,500 429,345 KLA-Tencor Corp.* 4,000 155,760 Texas Instruments, Inc. 19,700 362,283 ----------- 2,773,653 -----------
See notes to financial statements. 1
ISSUER SHARES VALUE - ------------------------------------------------------------ ------ ----------- Finance (4.74%) American Express Co. 8,500 $ 311,865 Citigroup, Inc. 20,900 803,605 Merrill Lynch & Co., Inc. 6,200 250,108 ----------- 1,365,578 ----------- Food (1.05%) Kraft Foods, Inc. (Class A) 10,000 301,500 ----------- Household (2.46%) Newell Rubbermaid, Inc. 22,985 707,708 ----------- Insurance (6.61%) Ambac Financial Group, Inc. 4,000 224,000 American International Group, Inc. 6,500 355,875 CIGNA Corp. 12,100 591,085 Travelers Property Casualty Corp. (Class A) 45,594 730,872 ----------- 1,901,832 ----------- Leisure (1.19%) Mattel, Inc. 16,000 342,080 ----------- Media (6.15%) Clear Channel Communications, Inc.* 11,000 405,350 Comcast Corp. (Class A)* 22,300 707,356 Gannett Co., Inc. 4,000 298,680 New York Times Co. (The) (Class A) 3,300 149,325 Viacom, Inc. (Class B)* 5,000 209,500 ----------- 1,770,211 ----------- Medical (16.49%) Aetna, Inc. 10,250 496,305 Bard (C.R.), Inc. 4,100 255,963 Baxter International, Inc. 3,660 78,946 Biovail Corp. (Canada)* 5,000 215,900 Gilead Sciences, Inc.* 8,700 401,418 IDEC Pharmaceuticals Corp.* 5,000 161,000 Johnson & Johnson 8,900 500,269 Medtronic, Inc. 9,248 444,644 Merck & Co., Inc. 10,900 618,575 Novartis AG, American Depositary Receipt (ADR) (Switzerland) 15,000 586,200 Pfizer, Inc. 20,300 616,511 St. Jude Medical, Inc. 4,000 209,000 UnitedHealth Group, Inc. 1,803 163,532 ----------- 4,748,263 -----------
See notes to financial statements. 2
ISSUER SHARES VALUE - ------------------------------------------------------------ ------ ----------- Office (1.48%) Avery Dennison Corp. 8,000 $ 426,400 ----------- Oil & Gas (4.44%) Anadarko Petroleum Corp. 3,300 151,800 BJ Services Co.* 7,500 284,850 Exxon Mobil Corp. 24,200 841,918 ----------- 1,278,568 ----------- Retail (7.92%) Bed Bath & Beyond, Inc.* 15,000 568,800 Lowe's Cos., Inc. 7,500 333,150 McDonald's Corp. 21,000 332,010 Wal-Mart Stores, Inc. 19,000 1,045,000 ----------- 2,278,960 ----------- Telecommunications (4.50%) Nokia Corp., (ADR) (Finland) 41,800 668,800 SBC Communications, Inc. 5,500 121,660 Verizon Communications, Inc. 14,000 504,840 ----------- 1,295,300 ----------- TOTAL COMMON STOCKS (98.31%) (Cost $27,452,934) 28,298,211 ----------- TOTAL INVESTMENTS (98.31%) 28,298,211 ----------- OTHER ASSETS AND LIABILITIES, NET (1.69%) 487,439 ----------- TOTAL NET ASSETS (100.00%) $28,785,650 ===========
*Non-income producing security. Parenthetical disclosure of a foreign country in the security description represents country of a foreign issuer. The percentage shown for each investment category is the total of that category as a percentage of the net assets of the Fund. See notes to financial statements. 3 John Hancock V.A. Sovereign Investors Fund Schedule of Investments April 25, 2003 (Unaudited)
ISSUER SHARES VALUE - ---------------------------------------------------------- ------ ----------- COMMON STOCKS Advertising (1.81%) Omnicom Group, Inc. 11,000 $ 683,540 ----------- Banks - United States (10.31%) Bank of America Corp. 17,000 1,233,860 Bank of New York Co., Inc. (The) 19,000 482,980 Citigroup, Inc. 19,225 739,201 State Street Corp. 6,000 206,520 U.S. Bancorp 17,000 377,230 Wells Fargo & Co. 18,000 853,560 ----------- 3,893,351 ----------- Beverages (2.18%) Coca-Cola Co. (The) 9,000 354,780 PepsiCo, Inc. 11,000 469,150 ----------- 823,930 ----------- Business Services - Misc (0.31%) H&R Block, Inc. 3,100 118,110 ----------- Chemicals (3.32%) Air Products & Chemicals, Inc. 14,000 577,640 Praxair, Inc. 12,000 675,960 ----------- 1,253,600 ----------- Computers (10.70%) Cisco Systems, Inc.* 66,000 947,760 Hewlett-Packard Co. 40,000 634,000 International Business Machines Corp. 20,000 1,677,600 Microsoft Corp. 31,000 781,820 ----------- 4,041,180 ----------- Cosmetics & Personal Care (3.03%) Avon Products, Inc. 20,000 1,143,400 ----------- Diversified Operations (8.18%) 3M Co. 8,000 983,200 Emerson Electric Co. 11,937 593,985 General Electric Co. 38,000 1,106,180 Illinois Tool Works, Inc. 6,500 406,965 ----------- 3,090,330 ----------- Finance (2.89%) MBNA Corp. 27,191 504,393 Morgan Stanley Dean Witter & Co. 13,000 585,130 ----------- 1,089,523 -----------
See notes to financial statements. 4
ISSUER SHARES VALUE - ---------------------------------------------------------- ------ ----------- Food (1.28%) Kraft Foods, Inc. (Class A) 10,000 $ 301,500 Unilever NV (NY Reg Shares) (Netherlands) 3,000 183,660 ----------- 485,160 ----------- Insurance (6.63%) AFLAC, Inc. 17,000 527,340 American International Group, Inc. 17,093 935,842 Hartford Financial Services Group, Inc. (The) 8,000 318,880 Travelers Property Casualty Corp. (Class A) 44,933 720,276 ----------- 2,502,338 ----------- Media (0.89%) Viacom, Inc. (Class B)* 8,000 335,200 ----------- Medical (12.40%) Abbott Laboratories 21,000 829,290 Cardinal Health, Inc. 11,000 590,370 Johnson & Johnson 32,000 1,798,720 Medtronic, Inc. 10,000 480,800 Merck & Co., Inc. 5,000 283,750 Pfizer, Inc. 23,000 698,510 ----------- 4,681,440 ----------- Mortgage Banking (4.48%) Fannie Mae 13,000 935,610 Freddie Mac 13,000 755,300 ----------- 1,690,910 ----------- Office (1.48%) Avery Dennison Corp. 10,500 559,650 ----------- Oil & Gas (8.27%) Anadarko Petroleum Corp. 8,000 368,000 BP Plc American Depositary Receipts (ADR) (United Kingdom) 22,000 842,820 ChevronTexaco Corp. 11,000 697,400 Exxon Mobil Corp. 34,868 1,213,058 ----------- 3,121,278 ----------- Retail (4.63%) Family Dollar Stores, Inc. 10,000 331,700 Lowe's Cos., Inc. 11,000 488,620 SYSCO Corp. 9,000 248,670 Target Corp. 21,000 679,350 ----------- 1,748,340 ----------- Soap & Cleaning Products (3.82%) Colgate-Palmolive Co. 10,500 595,140 Procter & Gamble Co. (The) 9,500 846,830 ----------- 1,441,970 -----------
See notes to financial statements. 5
ISSUER SHARES VALUE - ---------------------------------------------------------- ------ ----------- Telecommunications (1.83%) Nokia Oyj (ADR) (Finland) 15,000 $ 240,000 Verizon Communications, Inc. 12,500 450,750 ----------- 690,750 ----------- Tobacco (1.40%) Altria Group, Inc. 17,000 527,170 ----------- Utilities (1.56%) SBC Communications, Inc. 26,703 590,670 ----------- TOTAL COMMON STOCKS (91.40%) (Cost $34,927,072) 34,511,840 ----------- TOTAL INVESTMENTS (91.40%) 34,511,840 ----------- OTHER ASSETS AND LIABILITIES, NET (8.60%) 3,248,397 ----------- TOTAL NET ASSETS (100.00%) $37,760,237 ===========
* Non-income producing security. Parenthetical disclosure of a foreign country in the security description represents country of a foreign issuer. 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. 6 John Hancock V.A. Strategic Income Fund Schedule of Investments April 25, 2003 (Unaudited)
INTEREST CREDIT PAR VALUE ISSUER, DESCRIPTION, MATURITY DATE RATE RATING * (000'S OMITTED) VALUE - --------------------------------------------------------- -------- -------- --------------- -------- BONDS Agricultural Operations (0.00%) Iowa Select Farms L.P./ISF Finance, Inc., Jr Sec Sub Note, Payment-In-Kind, 12-01-06 (R) 10.750% B- $ 6 $ 3,344 -------- Automobile / Trucks (0.02%) J.B. Poindexter & Co., Inc., Sr Note 05-15-04 12.500 B- 25 18,156 -------- Banks - United States (0.27%) Colonial Bank, Sub Note 06-01-11 9.375 BBB- 200 223,949 -------- Chemicals (0.24%) Nova Chemicals Corp., Sr Note (Canada) 05-15-06 7.000 BB+ 200 199,500 -------- Containers (0.85%) BWAY Corp., Sr Sub Note 10-15-10 (R) 10.000 B- 75 76,500 Kappa Beheer B.V., Gtd Sr Sub Note (Netherlands) 07-15-09 (E) 10.625 B 75 80,250 Owens-Brockway Glass Container, Inc., Sr Sec Note 02-15-09 8.875 BB 280 298,900 Vicap S.A. de C.V., Gtd Sr Note (Mexico) 05-15-07 11.375 B+ 300 250,500 -------- 706,150 -------- Cosmetics & Personal Care (0.01%) Global Health Sciences, Inc., Gtd Sr Note 05-01-08 (B) 11.000 D 75 7,500 -------- Energy (0.18%) Great Lakes Acquisition Corp., Sr Disc Deb, Step Coupon (13.125%, 05-15-03) 05-15-09 (A) Zero B- 200 98,000 Great Lakes Carbon Corp., Gtd Sr Sub Note 05-15-08 10.250 B- 59 48,380 -------- 146,380 -------- Food (0.37%) Dean Foods Co., Sr Note 08-01-07 8.150 BB- 200 216,500 Del Monte Corp., Sr Sub Note 12-15-12 (R) 8.625 B 63 67,725 RAB Holdings, Inc., Sr Note 05-01-08 (R) 13.000 Ca 120 21,600 -------- 305,825 --------
See notes to financial statements. 7
INTEREST CREDIT PAR VALUE ISSUER, DESCRIPTION, MATURITY DATE RATE RATING * (000'S OMITTED) VALUE - --------------------------------------------------------- -------- -------- --------------- ----------- Government - Foreign (9.99%) Chile, Republic of, Note (Chile) 01-11-12 7.125% A- $ 600 $ 682,860 Colombia, Republic of, Bond (Colombia) 02-25-20 11.750 BB 400 468,000 Note (Colombia) 04-09-11 9.750 BBB 673 741,792 Mexican, United States, Bond (Mexico) 09-15-16 11.375 BBB- 200 281,500 Note (Mexico) 01-14-11 8.375 BB+ 800 941,200 Note (Mexico) 08-15-31 8.300 BBB- 600 662,700 Panama, Republic of, Bond (Panama) 02-08-11 9.625 BB 700 791,000 Bond (Panama) 01-16-23 9.375 BB 150 160,500 Peru, Republic of, Note (Peru) 01-15-08 9.125 BB- 275 298,375 Russia, Federation of, Unsub Note (Russia) 07-24-18 11.000 BB 1,805 2,389,820 Unsub Note (Russia) 06-24-28 12.750 B 600 908,700 ----------- 8,326,447 ----------- Government - U.S. (59.08%) United States Treasury, Bond 08-15-05 6.500 AAA 400 443,375 Bond 08-15-05 10.750 AAA 400 481,484 Bond 02-15-16 9.250 AAA 615 912,362 Bond 08-15-19 8.125 AAA 3,265 4,558,502 Bond 02-15-31 5.375 AAA 9,000 9,760,779 Note 08-15-04 7.250 AAA 2,240 2,412,549 Note 03-31-05 1.625 AAA 9,000 9,017,226 Note 05-15-05 6.500 AAA 1,300 1,428,527 Note 08-15-07 6.125 AAA 940 1,073,436 Note 02-15-08 3.000 AAA 9,000 9,075,582 Note 08-15-11 5.000 AAA 1,000 1,092,617 Note 02-15-13 3.875 AAA 9,000 8,990,154 ----------- 49,246,593 ----------- Government - U.S. Agencies (1.57%) Government National Mortgage Assn., 30 Yr Pass Thru Ctf 05-01-32 6.000 AAA 1,250 1,305,469 ----------- Leisure (5.21%) Chukchansi Economic Development Authority, Sr Note 06-15-09 (R) 14.500 Caa1 275 286,000 Coast Hotels and Casinos, Inc., Sr Sub Deb 04-01-09 9.500 B 300 322,500 Fitzgeralds Gaming Corp., Gtd Sr Sec Note Ser B 12-15-04 (B) 12.250 D 50 1,500 Hockey Co. (The)/Sport Maska, Inc., Unit (Sr Sec Note & Sr Sec Note) (Canada) 04-15-09 11.250 B 410 446,900 Isle of Capri Casinos, Inc, Sr Sub Note 03-15-12 9.000 B 300 318,750 Jacobs Entertaiment, Inc., Sr Sec Note 02-01-09 11.875 B 300 313,500
See notes to financial statements. 8
INTEREST CREDIT PAR VALUE ISSUER, DESCRIPTION, MATURITY DATE RATE RATING * (000'S OMITTED) VALUE - ------------------------------------------------------------- -------- -------- --------------- ---------- Leisure - Cont Jupiters Ltd., Sr Note (Australia) 03-01-06 8.500% BB+ $ 300 $ 324,000 Majestic Investor Holding LLC/Majestic Investor Capital Co., Gtd Sr Sec Note 11-30-07 11.653 B 300 294,000 Mandalay Resort Group, Sr Sub Note 02-15-10 9.375 BB- 100 107,750 Mohegan Tribal Gaming Authority, Sr Sub Note 04-01-12 8.000 BB- 400 421,000 Penn National Gaming, Inc., Sr Sub Note 03-01-08 11.125 B- 225 248,063 Station Casinos, Inc., Sr Note 02-15-08 8.375 BB- 200 214,500 Sun International Hotels Ltd., Gtd Sr Sub Note (Bahamas) 08-15-11 8.875 B+ 65 68,575 Turning Stone Casino Resort Enterprise, Sr Note 12-15-10 (R) 9.125 B+ 200 210,500 Waterford Gaming LLC Sr Note 03-15-10 (R) 9.500 B+ 416 445,120 Wynn Las Vegas LLC, 2nd Mtg Note 11-01-10 12.000 CCC+ 300 321,000 ---------- 4,343,658 ---------- Linen Supply & Related (0.29%) Coinmach Corp., Sr Note 02-01-10 9.000 B 225 239,063 ---------- Media (4.13%) Allbritton Communications Co., Sr Sub Note 12-15-12 7.750 B- 200 208,000 Sr Sub Note 12-15-12 (R) 7.750 B- 150 156,000 CSC Holdings, Inc., Sr Sub Deb 05-15-16 10.500 B+ 200 224,500 Sr Sub Deb 04-01-23 9.875 B+ 100 105,250 Garden State Newspapers, Inc., Sr Sub Note Ser B 10-01-09 8.750 B+ 200 206,000 Sr Sub Note 07-01-11 8.625 B+ 335 345,887 Grupo Televisa SA, Note (Mexico) 09-13-11 8.000 BBB- 300 323,250 Sr Note (Mexico) 03-11-32 8.500 BBB- 350 346,500 Hollinger International Publishing, Inc., Sr Note 12-15-10 (R) 9.000 B 300 320,250 Innova S. de R.L., Sr Note (Mexico) 04-01-07 12.875 B- 600 585,000 Paxson Communications Corp., Gtd Sr Sub Note 07-15-08 10.750 B- 205 225,500 Sinclair Broadcast Group, Inc., Gtd Sr Sub Note 03-15-12 8.000 B 375 393,750 ---------- 3,439,887 ----------
See notes to financial statements. 9
INTEREST CREDIT PAR VALUE ISSUER, DESCRIPTION, MATURITY DATE RATE RATING * (000'S OMITTED) VALUE - ---------------------------------------------------------- -------- -------- --------------- ---------- Medical (0.38%) Advanced Medical Optics, Inc., Sr Sub Note 07-15-10 9.250% B $ 300 $ 317,250 ---------- Metal (0.00%) Golden Northwest Aluminum, Inc., 1st Mtg Note 12-15-06 12.000 CC 25 2,375 ---------- Oil & Gas (3.80%) Chesapeake Energy Corp., Gtd Sr Note 01-15-15 7.750 B+ 200 211,000 Sr Note 04-01-11 8.125 B+ 300 322,500 Comstock Resources, Inc., Gtd Sr Note 05-01-07 11.250 B- 350 374,500 Key Energy Services, Inc., Sr Sub Note Ser B 01-15-09 14.000 B+ 68 76,840 OAO Siberian Oil Co., Bond (Russia) 02-13-07 11.500 Ba3 335 381,900 Ocean Rig Norway A.S., Sr Sec Note (Norway) 06-01-08 10.250 CCC 255 229,500 Parker Drilling Co., Gtd Sr Note 11-15-09 10.125 B+ 300 318,000 Pemex Project Funding Master Trust, Bond (Mexico) 12-15-14 7.375 BBB- 225 241,594 Note (Mexico) 02-15-08 8.500 BBB- 400 460,000 Note (Mexico) 02-01-09 7.875 BBB- 350 394,975 Western Oil Sands, Inc., Sr Sec Note (Canada) 05-01-12 8.375 BB+ 150 160,500 ---------- 3,171,309 ---------- Paper & Paper Products (1.58%) APP China Group Ltd., Sr Disc Note (Indonesia) 03-15-10 (B) (R) 14.000 D 250 77,500 APP Finance (VII) Mauritius Ltd., Gtd Note (Indonesia) 04-30-03 (B) (R) 3.500 D 10 700 Corporacion Durango S.A. de C.V., Sr Note (Mexico) 08-01-06 (B) 13.125 CC 631 309,190 Longview Fibre Co., Sr Sub Note 01-15-09 10.000 B+ 250 270,000 MDP Acquisitions Plc, Sr Note (Ireland) 10-01-12 (R) 9.625 B 200 217,500 Stone Container Corp., Sr Note 02-01-11 9.750 B 200 223,000 Sr Note 07-01-12 8.375 B 200 216,500 ---------- 1,314,390 ---------- Steel (0.02%) Metallurg Holdings, Inc., Sr Disc Note, Step Coupon (12.75%, 07-15-03) 07-15-08 (A) Zero CCC 50 17,000 ----------
See notes to financial statements. 10
INTEREST CREDIT PAR VALUE ISSUER, DESCRIPTION, MATURITY DATE RATE RATING * (000'S OMITTED) VALUE - -------------------------------------------------------------- -------- -------- --------------- ---------- Telecommunications (1.63%) AT&T Broadband Corp., Gtd Note 03-15-13 8.375% BBB $ 260 $ 314,399 Grupo Iusacell S.A. de C.V., Sr Note (Mexico) 12-01-06 14.250 CCC- 300 81,000 Mobile Telesystems Finance S.A., Gtd Bond (Luxembourg) 12-21-04 10.950 B+ 250 266,875 PanAmSat Corp., Gtd Sr Note 02-01-12 8.500 B- 300 324,750 PTC International Finance B.V., Gtd Sr Sub Disc Note, Step Coupon (Netherlands) 07-01-07 10.750 B+ 90 94,500 TeleCorp PCS, Inc., Sr Sub Disc Note, Step Coupon (11.625%, 04-15-04) 04-15-09 (A) Zero BBB 118 118,590 Tritel PCS, Inc., Gtd Note, Step Coupon (12.75%, 05-15-04) 05-15-09 Zero BBB 52 52,260 VoiceStream Wireless Corp., Sr Note 09-15-09 11.500 BBB+ 100 107,000 ----------- 1,359,374 ----------- Transport (0.46%) Cenargo International Plc, 1st Mtg Note (United Kingdom) 06-15-08 9.750 B+ 20 8,440 North American Van Lines, Inc., Sr Sub Note 12-01-09 13.375 B- 350 367,500 Pacific & Atlantic Holdings, Inc., Sr Sec Note (Greece) 12-31-07 (B) (R) 10.500 CC 26 9,927 ----------- 385,867 ----------- Utilities (1.02%) Midland Funding Corp. II, Deb Ser A 07-23-05 11.750 BB- 200 213,000 Deb Ser B 07-23-06 13.250 BB- 150 168,750 Monterrey Power S.A. de C.V., Sr Sec Bond (Mexico) 11-15-09 (R) 9.625 BBB- 158 184,750 Niagara Mohawk Power Corp., Sec Fac Bond 01-01-18 8.770 A 141 146,876 Salton Sea Funding Corp., Gtd Sr Sec Note, Ser F, 11-30-18 7.475 BB 98 90,982 Sr Sec Note, Ser C, 05-30-10 7.840 BB 50 49,207 ----------- 853,565 ----------- Waste Disposal Service & Equip (0.56%) Allied Waste North America, Inc., Gtd Sr Sec Note 09-01-12 (R) 9.250 BB- 185 203,500 Gtd Sr Sub Note Ser B 08-01-09 10.000 B+ 250 265,000 ----------- 468,500 ----------- TOTAL BONDS (91.66%) (Cost $73,743,284) 76,401,551 -----------
See notes to financial statements. 11
ISSUER SHARES VALUE - ------------------------------------------------------ ------- ----------- PREFERRED STOCKS Machinery (0.00%) Glasstech, Inc., Ser A, * 1 $ 1,000 ----------- Media (0.25%) CSC Holdings, Inc., 11.75%, Ser H, 2,000 209,500 ----------- Paper & Paper Products (0.11%) Smurfit-Stone Container Corp., 7.00%, Ser A, 4,100 92,660 ----------- Telecommunications (0.00%) Metrocall Holdings, Inc., 15.00%, Ser A, 220 770 ----------- Transport (0.00%) Pacific & Atlantic Holdings, Inc., 7.50%, (Greece) ** 1,400 0 ----------- TOTAL PREFERRED STOCKS (0.36%) (Cost $507,223) 303,930 ----------- WARRANTS Leisure (0.00%) Sunterra Corp., ** 152 8 ----------- TOTAL WARRANTS (0.00%) (Cost $0) 8 ----------- TOTAL INVESTMENTS (92.02%) 76,705,489 ----------- OTHER ASSETS AND LIABILITIES, NET (7.98%) 6,652,413 ----------- TOTAL NET ASSETS (100.00%) $83,357,902 ===========
* Credit ratings are rated by Moody's Investors Service or John Hancock Advisers, LLC. where Standard & Poor's ratings are not available. ** Non-income producing security. (A) Cash interest will be paid on this obligation at the stated rate beginning on the stated date. (B) Non-income producing issuer, filed for protection under Federal Bankruptcy Code or is in default on interest payment. (E) Parenthetical disclosure of a foreign country in the security description represents country of foreign issuer; however, security is Euro denominated. (R) These securities are exempt from registration under rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. Rule 144A securities amounted to $2,280,916 or 2.74% of the fund's net assets as of April 25, 2003. Parenthetical disclosure of a foreign country in the security description represents country of foreign issuer, however, security is U. S. dollar denominated, unless stated otherwise. 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. 12 Portfolio Concentration 4/25/2003 (Unaudited) VALUE AS A PERCENTAGE OF FUND'S COUNTRY DIVERSIFICATION NET ASSETS - ----------------------------- ---------- Australia 0.39% Bahamas 0.08 Canada 0.97 Chile 0.82 Colombia 1.45 Greece 0.01 Indonesia 0.09 Ireland 0.26 Luxembourg 0.32 Mexico 6.07 Netherlands 0.21 Norway 0.28 Panama 1.14 Peru 0.36 Russia 4.42 United Kingdom 0.01 United States 75.14 ----- TOTAL INVESTMENTS 92.02% ===== VALUE AS A PERCENTAGE OF FUND'S QUALITY DISTRIBUTION NET ASSETS - ----------------------------- ---------- AAA 60.65% A 1.00 BBB 5.34 BB 9.72 B 13.32 CCC 1.12 CC 0.41 D 0.10 ----- TOTAL BONDS 91.66% ===== See notes to financial statements. 13 John Hancock V.A. Technology Fund Schedule of Investments April 25, 2003 (Unaudited) ISSUER SHARES VALUE - -------------------------------------------------- ------ ----------- COMMON STOCKS Computer- Internet Security (1.33%) Networks Associates, Inc.* 15,400 $ 166,320 ----------- Computer- Internet Services (6.62%) Amazon.com, Inc.* 12,100 350,779 Ariba, Inc.* 25,000 96,500 eBay, Inc* 2,900 271,150 First Data Corp. 1,600 60,176 Pinnacor, Inc.* 28,000 46,200 ----------- 824,805 ----------- Computer- Memory Devices (6.83%) EMC Corp.* 45,000 396,000 Emulex Corp.* 3,350 63,281 Western Digital Corp.* 42,350 391,737 ----------- 851,018 ----------- Computer- Micro/Macro (9.69%) Dell Computer Corp.* 22,950 668,075 Hewlett-Packard Co. 12,907 204,576 International Business Machines Corp. 4,000 335,520 ----------- 1,208,171 ----------- Computer- Networking (3.55%) Cisco Systems, Inc.* 28,700 412,132 Extreme Networks, Inc.* 8,000 30,880 ----------- 443,012 ----------- Computer- Services (4.01%) Affiliated Computer Services, Inc. (Class A)* 5,242 253,241 Unisys Corp.* 24,550 245,991 ----------- 499,232 ----------- See notes to financial statements. 14 ISSUER SHARES VALUE - -------------------------------------------------- ------ ----------- Computer- Software (18.78%) BEA Systems, Inc.* 36,200 $ 365,620 Borland Software Corp.* 21,750 180,525 Citrix Systems, Inc.* 24,150 431,802 i2 Technologies, Inc.* 5,750 4,226 Mercury Interactive Corp.* 13,350 449,895 Microsoft Corp.* 22,000 554,840 Parametric Technology Corp.* 25,150 74,947 SeeBeyond Technology Corp.* 12,000 28,200 Siebel Systems, Inc.* 18,250 155,308 Vignette Corp.* 52,150 95,435 ----------- 2,340,798 ----------- Electronics- Components Misc. (3.81%) Flextronics International Ltd.* (Singapore) 42,500 354,875 Solectron Corp.* 38,000 120,080 ----------- 474,955 ----------- Electronics- Semiconductor Components (22.92%) Advanced Micro Devices, Inc.* 22,700 171,158 Agere Systems, Inc. (Class A)* 36,013 56,901 Amkor Technology, Inc.* 36,000 221,760 Applied Materials, Inc.* 27,000 383,130 ASML Holding N.V.* (Netherlands) 10,000 77,900 Cray, Inc.* 3,150 23,688 Cypress Semiconductor Corp* 36,000 297,000 Integrated Device Technology, Inc.* 24,550 239,362 Intel Corp. 4,800 87,696 KLA-Tencor Corp.* 10,000 389,400 Micron Technology, Inc. 24,000 208,560 MKS Instruments, Inc.* 13,200 180,325 RF Micro Devices, Inc.* 20,000 99,000 Taiwan Semiconductor Manufacturing Co. Ltd.* American Depositary Receipt (ADR) (Taiwan) 40,556 307,414 Vitesse Semiconductor Corp.* 39,750 112,493 ----------- 2,855,787 ----------- Fiber Optics (2.50%) Aeroflex, Inc.* 33,000 158,070 Finisar Corp.* 35,900 28,361 JDS Uniphase Corp.* 40,000 124,800 ----------- 311,231 ----------- Media- Cable TV (2.35%) AOL Time Warner, Inc.* 22,000 293,040 ----------- See notes to financial statements. 15 ISSUER SHARES VALUE - -------------------------------------------------- ------ ----------- Telecom- Equipment (7.18%) Lucent Technologies, Inc. 18,032 $ 31,015 Nokia Corp. (ADR) (Finland) 26,000 416,000 QUALCOMM, Inc.* 11,000 342,210 UTStarcom, Inc.* 5,100 105,366 ----------- 894,591 ----------- Telecom- Services (4.46%) AT&T Wireless Services, Inc.* 40,202 267,343 Nextel Communications, Inc. (Class A)* 12,000 167,040 Primus Telecommunications Group, Inc. * 40,000 121,200 ----------- 555,583 ----------- TOTAL INVESTMENTS (94.03%) (Cost $19,799,721) 11,718,543 ----------- OTHER ASSETS AND LIABILITIES, NET (5.97%) 743,614 ----------- TOTAL NET ASSETS (100.00%) $12,462,157 =========== *Non-income producing security. Parenthetical disclosure of a foreign country in the security description represents country of a foreign issuer. 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. 16 Portfolio Concentration 4/25/2003 (Unaudited) VALUE AS A PERCENTAGE OF FUND'S COUNTRY DIVERSIFICATION NET ASSETS - ----------------------- ---------- Finland 3.34% Netherlands 0.62 Singapore 2.85 Taiwan 2.47 United States 84.75 ----- 94.03% ===== See notes to financial statements. 17 John Hancock Funds Statements of Assets and Liabilities
V.A. Relative V.A. Sovereign V.A. Strategic V.A. Technology Final Report - April 25, 2003* (Unaudited) Value Fund Investors Fund Income Fund Fund - ------------------------------------------------------------------ ------------- -------------- -------------- --------------- ASSETS Investments at value (cost - $27,452,934, $34,927,072, $74,250,507 and $19,799,721, respectively) $ 28,298,211 $ 34,511,840 $ 76,705,489 $ 11,718,543 Cash 491,959 3,237,021 6,899,101 769,494 Receivable for forward foreign currency exchange contracts -- -- 231,915 -- Receivable for investments sold -- -- 16,220 -- Dividends and interest receivable 13,586 35,494 976,979 -- Other assets 848 1,244 1,047 193 ------------- ------------- ------------- ------------- Total assets 28,804,604 37,785,599 84,830,751 12,488,230 ----------------------------------------------- ------------- ------------- ------------- ------------- LIABILITIES Payable for investments purchased -- -- 1,305,729 -- Payable for forward foreign currency exchange contracts -- -- 114,147 -- Payable to affiliates 12,272 16,227 35,120 6,772 Other payables and accrued expenses 6,682 9,135 17,853 19,301 ------------- ------------- ------------- ------------- Total liabilities 18,954 25,362 1,472,849 26,073 ----------------------------------------------- ------------- ------------- ------------- ------------- NET ASSETS Capital paid-in 63,472,052 51,128,882 89,259,452 36,064,626 Accumulated net realized loss on investments, futures and foreign currency transactions (35,531,275) (12,952,791) (8,352,191) (15,521,180) Net unrealized appreciation (depreciation) of investments, futures and translation of assets and liabilities in foreign currencies 845,277 (415,232) 2,572,750 (8,081,178) Distributions in excess of net investment income, accumulated net investment loss (404) (622) (122,109) (111) ------------- ------------- ------------- ------------- Net assets $ 28,785,650 $ 37,760,237 $ 83,357,902 $ 12,462,157 =============================================== ============= ============= ============= ============= NET ASSET VALUE PER SHARE Based on 5,035,600, 3,325,193, 9,543,324 and 5,306,783, shares, respectively, of beneficial interest outstanding - unlimited number of shares authorized with no par value $5.72 $11.36 $8.73 $2.35 ============= ============= ============= =============
* The net assets of V.A. Relative Value Fund, V.A. Sovereign Investors Fund, V.A. Strategic Income Fund and V.A. Technology Fund (each a "Fund," collectively, the "Funds") were merged into the Growth & Income Fund, Growth & Income Fund, Active Bond Fund and Large Cap Growth Fund (each a series of John Hancock Variable Series Trust I), respectively, as of the close of business on April 25, 2003, and the Funds were subsequently terminated. The Statements of Assets and Liabilities reflect the Funds' position prior to the transfer of net assets and the termination of the Funds. See Note A to financial statements. See notes to financial statements. 18 John Hancock Funds Statements of Operations
V.A. Relative V.A. Sovereign V.A. Strategic V.A. Technology Period from January 1, 2003 to April 25, 2003* (Unaudited) Value Fund Investors Fund Income Fund Fund - --------------------------------------------------------------- ------------- -------------- -------------- --------------- INVESTMENT INCOME Dividends (net of foreign withholding taxes of $2,327, $1,600, none, and $1,184, respectively) $ 126,796 $ 226,750 $ 7,953 $ 10,653 Interest (including securities lending income of $2,186, 1,573, none, 1,925 and net of foreign withholding taxes of none, none, $1,263 and none respectively.) 6,042 11,422 1,544,150 3,824 ------------- -------------- -------------- --------------- Total investment income 132,838 238,172 1,552,103 14,477 ----------------------------------------------- ------------- -------------- -------------- --------------- EXPENSES Investment management fee 54,745 72,000 147,234 30,190 Auditing fee 3,000 3,000 -- 3,000 Accounting and legal services fee 2,738 3,600 7,263 1,132 Custodian fee 2,403 6,355 21,776 4,611 Trustees' fee 1,534 1,822 3,378 650 Miscellaneous 322 983 2,439 136 Interest expense 129 -- -- -- Printing 40 2,971 1,298 27 Legal fees 11 111 61 56 ------------- -------------- -------------- --------------- Total expenses 64,922 90,842 183,449 39,802 Net investment income (loss) 67,916 147,330 1,368,654 (25,325) ----------------------------------------------- ------------- -------------- -------------- --------------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on Investments (3,398,905) (348,649) 487,332 (1,523,800) Foreign currency transactions -- -- (264,111) -- Futures contracts -- -- (250,718) -- Change in net unrealized appreciation (depreciation) of Investments 3,988,651 366,102 2,191,046 2,380,470 Translation of assets and liabilities in foreign currencies -- -- 336,597 -- Futures contracts -- -- 175,146 -- ------------- -------------- -------------- --------------- Net realized and unrealized gain 589,746 17,453 2,675,292 856,670 ----------------------------------------------- ------------- -------------- -------------- --------------- Increase in net assets from operations $ 657,662 $ 164,783 $ 4,043,946 $ 831,345 =============================================== ============= ============== ============== ===============
* The net assets of V.A. Relative Value Fund, V.A. Sovereign Investors Fund, V.A. Strategic Income Fund and V.A. Technology Fund (each a "Fund," collectively, the "Funds") were merged into the Growth & Income Fund, Growth & Income Fund, Active Bond Fund and Large Cap Growth Fund (each a series of John Hancock Variable Series Trust I), respectively, as of the close of business on April 25, 2003, and the Funds were subsequently terminated. The Statements of Operations reflect the Funds' position prior to the transfer of net assets and the termination of the Funds. See Note A to financial statements. See notes to financial statements. 19 John Hancock Funds
Statements of Changes in Net Assets V.A. Relative Value Fund V.A. Sovereign Investors Fund ----------------------------------- ----------------------------------- Period from Period from Year ended January 1, 2003 Year ended January 1, 2003 December 31, to April 25, 2003* December 31, to April 25, 2003* 2002 (Unaudited) 2002 (Unaudited) INCREASE (DECREASE) IN NET ASSETS From operations Net investment income (loss) $ 231,351 $ 67,916 $ 587,384 $ 147,330 Net realized loss (30,228,452) (3,398,905) (7,329,394) (348,649) Change in net unrealized appreciation (depreciation) 3,472,659 3,988,651 (6,254,784) 366,102 ----------------------------------- ----------------------------------- Increase (decrease) in net assets resulting from operations (26,524,442) 657,662 (12,996,794) 164,783 ----------------------------------- ----------------------------------- Distributions to shareholders From net investment income (241,442) (70,439) (586,103) (148,780) From net realized gain (91,252) -- -- -- ----------------------------------- ----------------------------------- Total distributions to shareholders (332,694) (70,439) (586,103) (148,780) ----------------------------------- ----------------------------------- From Fund share transactions Shares sold 6,871,313 494,645 1,666,677 554,892 Distributions reinvested 332,694 70,439 586,103 148,780 Shares repurchased (13,882,101) (2,897,429) (13,406,996) (2,677,099) ----------------------------------- ----------------------------------- Net increase (decrease) (6,678,094) (2,332,345) (11,154,216) (1,973,427) ----------------------------------- ----------------------------------- Net assets Beginning of period 64,066,002 30,530,772 64,454,774 39,717,661 End of period ** $ 30,530,772 $ 28,785,650 $ 39,717,661 $ 37,760,237 =================================== =================================== ANALYSIS OF FUND SHARE TRANSACTIONS Shares sold 890,182 88,285 134,022 48,695 Distributions reinvested 55,738 12,579 47,254 13,274 Shares repurchased (2,070,610) (530,640) (1,097,904) (242,433) ----------------------------------- ----------------------------------- Net increase (decrease) (1,124,690) (429,776) (916,628) (180,464) =================================== =================================== Statements of Changes in Net Assets V.A. Strategic Income Fund V.A. Technology Fund ----------------------------------- ---------------------------------- Period from Period from Year ended January 1, 2003 Year ended January 1, 2003 December 31, to April 25, 2003* December 31, to April 25, 2003* 2002 (Unaudited) 2002 (Unaudited) INCREASE (DECREASE) IN NET ASSETS From operations Net investment income (loss) $ 4,470,846 $ 1,368,654 ($ 112,536) ($ 25,325) Net realized loss (3,346,771) (27,497) (8,959,455) (1,523,800) Change in net unrealized appreciation (depreciation) 4,202,640 2,702,789 (1,481,498) 2,380,470 ----------------------------------- ---------------------------------- Increase (decrease) in net assets resulting from operations 5,326,715 4,043,946 (10,553,489) 831,345 ----------------------------------- ---------------------------------- Distributions to shareholders From net investment income (5,159,826) (3,562,151) -- -- From net realized gain -- -- -- -- ----------------------------------- ---------------------------------- Total distributions to shareholders (5,159,826) (3,562,151) -- -- ----------------------------------- ---------------------------------- From Fund share transactions Shares sold 12,603,802 10,217,466 9,245,936 2,489,153 Distributions reinvested 5,146,792 3,575,185 -- -- Shares repurchased (14,041,496) (3,686,929) (8,444,185) (3,035,938) ----------------------------------- ---------------------------------- Net increase (decrease) 3,709,098 10,105,722 801,751 (546,785) ----------------------------------- ---------------------------------- Net assets Beginning of period 68,894,398 72,770,385 21,929,335 12,177,597 End of period ** $ 72,770,385 $ 83,357,902 $ 12,177,597 $ 12,462,157 =================================== ================================== ANALYSIS OF FUND SHARE TRANSACTIONS Shares sold 1,492,861 1,154,790 3,610,219 1,082,133 Distributions reinvested 649,945 407,905 -- -- Shares repurchased (1,714,317) (417,489) (3,368,742) (1,364,967) ----------------------------------- ---------------------------------- Net increase (decrease) 428,489 1,145,206 241,477 (282,834) =================================== ==================================
* The net assets of V.A. Relative Value Fund, V.A. Sovereign Investors Fund, V.A. Strategic Income Fund and V.A. Technology Fund (each a "Fund," collectively, the "Funds") were merged into the Growth & Income Fund, Growth & Income Fund, Active Bond Fund and Large Cap Growth Fund (each a series of John Hancock Variable Series Trust I), respectively, as of the close of business on April 25, 2003, and the Funds were subsequently terminated. The Statements of Changes in Net Assets reflect the Funds' position prior to the transfer of net assets and the termination of the Funds. See Note A to financial statements. ** Includes undistributed (distributions in excess of) net investment income (accumulated net investment loss) of $2,119, ($404), $828, ($622), $224,075, ($122,109), ($111) and ($111), respectively. See notes to financial statements. 20 John Hancock V.A. Relative Value Fund Financial Highlights - --------------------------------------------------------------------------------
Period ended 12-31-98(1) 12-31-99 12-31-00 12-31-01 12-31-02 4-25-03(2) - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING PERFORMANCE - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $10.00 $12.03 $18.03 $10.64 $9.72 $5.59 Net investment income (3) 0.11 0.10 0.02 0.02 0.04 0.01 Net realized and unrealized gain (loss) on investments 2.02 6.65 (0.80) (0.32) (4.11) 0.13 Total from investment operations 2.13 6.75 (0.78) (0.30) (4.07) 0.14 Less distributions From net investment income (0.10) (0.10) (0.02) (0.02) (0.04) (0.01) From net realized gain -- (0.65) (6.59) (0.60) (0.02) -- (0.10) (0.75) (6.61) (0.62) (0.06) (0.01) Net asset value, end of period $12.03 $18.03 $10.64 $9.72 $5.59 $5.72(4) Total return (5) (%) 21.39(6,7) 56.65 (4.80) (2.81) (41.93) 2.58(6) - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS AND SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in millions) $17 $39 $39 $64 $31 $29 Ratio of expenses to average net assets (%) 0.85(8) 0.77 0.79 0.74 0.73 0.71(8) Ratio of adjusted expenses to average net assets (9) (%) 1.03(8) -- -- -- -- -- Ratio of net investment income to average net assets (%) 1.17(8) 0.66 0.13 0.23 0.53 0.74(8) Portfolio turnover (%) 242 166 164 59 136 63
(1) Began operations on 1-6-98. (2) Final period from 1-1-03 through 4-25-03. Unaudited. (3) Based on the average of the shares outstanding. (4) Net assets value per share before the merger of assets to the Growth & Income Fund of John Hancock Variable Series Trust I and the termination of the Fund. See Note A to financial statements. (5) Assumes dividend reinvestment. (6) Not annualized. (7) Total return would have been lower had certain expenses not been reduced during the period shown. (8) Annualized. (9) Does not take into consideration expense reductions during the period shown. See notes to financial statements. 21 John Hancock V.A. Sovereign Investors Fund Financial Highlights - --------------------------------------------------------------------------------
Period ended 12-31-98 12-31-99 12-31-00 12-31-01 12-31-02 4-25-03(1) - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING PERFORMANCE - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $13.59 $15.61 $15.96 $15.69 $14.57 $11.33 Net investment income (2) 0.27 0.24 0.21 0.24 0.15 0.04 Net realized and unrealized gain (loss) on investments 2.00 0.35 (0.27) (1.12) (3.24) 0.03 Total from investment operations 2.27 0.59 (0.06) (0.88) (3.09) 0.07 Less distributions From net investment income (0.25) (0.24) (0.21) (0.24) (0.15) (0.04) Tax return of capital -- --(3) -- -- -- -- (0.25) (0.24) (0.21) (0.24) (0.15) (0.04) Net asset value, end of period $15.61 $15.96 $15.69 $14.57 $11.33 $11.36(4) Total return (5) (%) 16.88 3.84 (0.33) (5.56) (21.29) 0.66(6) - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS AND SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in millions) $34 $50 $55 $64 $40 $38 Ratio of expenses to average net assets (%) 0.74 0.70 0.72 0.70 0.71 0.76(7) Ratio of net investment income to average net assets (%) 1.88 1.57 1.37 1.63 1.14 1.23(7) Portfolio turnover (%) 19 26 46 77 41 11
(1) Final period from 1-1-03 through 4-25-03. Unaudited. (2) Based on the average of the shares outstanding. (3) Less than $0.01 per share. (4) Net assets value per share before the merger of assets to the Growth & Income Fund of John Hancock Variable Series Trust I and the termination of the Fund. See Note A to financial statements. (5) Assumes dividend reinvestment. (6) Not annualized. (7) Annualized See notes to financial statements. 22 John Hancock VA Strategic Income Fund Financial Highlights - --------------------------------------------------------------------------------
Period ended 12-31-98 12-31-99 12-31-00 12-31-01(1) 12-31-02(1) 4-25-03(1,2) - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING PERFORMANCE - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $10.47 $10.10 $9.77 $8.97 $8.64 $8.67 Net investment income (3) 0.85 0.80 0.83 0.65 0.53 0.16 Net realized and unrealized gain (loss) on investments (0.35) (0.33) (0.71) (0.26) 0.11 0.29 Total from investment operations 0.50 0.47 0.12 0.39 0.64 0.45 Less distributions From net investment income (0.85) (0.80) (0.83) (0.72) (0.61) (0.39) From net realized gain (0.02) -- (0.09) -- -- -- (0.87) (0.80) (0.92) (0.72) (0.61) (0.39) Net asset value, end of period $10.10 $9.77 $8.97 $8.64 $8.67 $8.73(4) Total return (5) (%) 4.92(7) 4.82(7) 1.40 4.58 7.87 5.27(6) - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS AND SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in millions) $15 $22 $34 $69 $73 $83 Ratio of expenses to average net assets (%) 0.85 0.85 0.76 0.71 0.80 0.75(8) Ratio of adjusted expenses to average net assets (9) (%) 0.93 0.87 -- -- -- -- Ratio of net investment income to average net assets (%) 8.19 8.06 8.91 7.16 6.28 5.58(8) Portfolio turnover (%) 2 53(9) 53 101(10) 73 61
(1) As required, effective January 1, 2001, the Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies, as revised, relating to amortization of premiums and accretion of discounts on debt securities. The effect of this change on per share amounts for the year ended December 31, 2001 was to decrease net investment income per share by $0.07, decrease net realized and unrealized losses per share by $0.07, and, had the Fund not made these changes to amortization and accretion, the ratio of net investment income to average net assets would have been 8.00%. The effect of this change for the year ended December 31, 2002 was to decrease net investment income per share by $0.07, increase net realized and unrealized gains per share by $0.07 and had the Fund not made these changes to amortization and accretion, the ratio of net investment income to average net assets would have been 7.08%. The effect of this change for the final period ended April 25, 2003 was to decrease net investment income per share by $0.01, decrease net realized and unrealized gains per share by $0.01 and had the Fund not made these changes to amortization and accretion, the annualized ratio of net investment income to average net assets would have been 6.02%. Per share ratios and supplemental data for periods prior to January 1, 2001 have not been restated to reflect this change in presentation. (2) Final period from 1-1-03 through 4-25-03. Unaudited. (3) Based on the average of the shares outstanding. (4) Net assets value per share before the merger of assets to the Active Bond Fund of John Hancock Variable Series Trust I and the termination of the Fund. See Note A to financial statements. (5) Assumes dividend reinvestment. (6) Not annualized. (7) Total returns would have been lower had certain expenses not been reduced during the periods shown. (8) Annualized. (9) Does not take into consideration expense reductions during the periods shown. (10) Excludes merger activity. See notes to financial statements. 23 John Hancock V.A. Technology Fund Financial Highlights
Period Ended 12-31-00(1) 12-31-01 12-31-02 4-25-03(2) - ------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE - ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $10.00 $7.33 $4.10 $2.18 Net investment income (loss) (3) 0.03 (0.02) (0.02) -- Net realized and unrealized gain (loss) on investments (2.69) (3.21) (1.90) 0.17 Total from investment operations (2.66) (3.23) (1.92) 0.17 Less distributions From net investment income (0.01) --(4) -- -- Net asset value, end of period $7.33 $4.10 $2.18 $2.35(5) Total return (6) (%) (26.56)(7,8) (44.06)(8) (46.83) 7.80(7) - ------------------------------------------------------------------------------------------------------------------------- RATIOS AND SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in millions) $14 $22 $12 $12 Ratio of expenses to average net assets (%) 1.05(9) 1.05 1.04 1.05(9) Ratio of adjusted expenses to average net assets (10) (%) 1.99(9) 1.08 -- -- Ratio of net investment income (loss) to average net assets (%) 0.62(9) (0.45) (0.70) (0.67)(9) Portfolio turnover (%) 75 29 47 9
(1) Began operations on 5-1-00. (2) Final period from 1-1-03 through 4-25-03. Unaudited. (3) Based on the average of the shares outstanding. (4) Less than 0.01 per share. (5) Net assets value per share before the merger of assets to the Large Cap Growth Fund of John Hancock Variable Series Trust I and the termination of the Fund. See Note A to financial statements. (6) Assumes dividend reinvestment. (7) Not annualized. (8) Total returns would have been lower had certain expenses not been reduced during the periods shown. (9) Annualized. (10) Does not take into consideration expense reductions during the periods shown. See notes to financial statements. 24 31 NOTES TO FINANCIAL STATEMENTS UNAUDITED NOTE A Organization John Hancock V.A. Relative Value Fund ("V.A. Relative Value"), John Hancock V.A. Sovereign Investors Fund ("V.A. Sovereign Investors"), John Hancock V.A. Strategic Income Fund ("V.A. Strategic Income") and John Hancock V.A. Technology Fund ("V.A. Technology"), (each a "Fund," and collectively, the "Funds") were diversified series of John Hancock Declaration Trust (the "Trust"), an open-end management investment company registered under the Investment Company Act of 1940. The Trustees may have authorized the creation of additional series from time to time to satisfy various investment objectives. An insurance company issuing a Variable Contract that participated in the Trust would vote shares of the Funds held by the insurance company's separate accounts as required by law. In accordance with current law and interpretations thereof, participating insurance companies were required to request voting instructions from policy owners and voted shares of the Funds in proportion to the voting instructions received. The investment objective of the V.A. Relative Value Fund was to seek long-term capital appreciation. The investment objective of the V.A. Sovereign Investors Fund was to seek long-term growth of capital and income without assuming undue market risks. The investment objective of the V.A. Strategic Income Fund was to seek a high level of current income. The investment objective of the V.A. Technology Fund was to seek long-term growth of capital. On April 16, 2003 the shareholders of each Fund approved an Agreement and Plan of Reorganization, which provided for the transfer of substantially all of the assets and liabilities of each Fund to the corresponding Acquiring Fund in exchange solely for shares of beneficial interest of the Acquiring Fund as follows: ACQUIRED FUND ACQUIRING FUND* ------------- --------------- VA Relative Value Fund Growth & Income Fund VA Sovereign Investors Fund Growth & Income Fund VA Strategic Income Fund Active Bond Fund VA Technology Fund Large Cap Growth Fund * Each a series of John Hancock Variable Series Trust I After this transaction and as of the close of business on April 25, 2003, the Funds will be terminated. The financial statements presented herein reflect the position of the Funds prior to the exchange of net assets and termination of the Funds. Significant accounting policies of the Funds were as follows: Valuation of investments Securities in the Funds' portfolios 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. Investments in AIM Cash Investment Trust were valued at their net asset value each business day. 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, each 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 25 in one or more large repurchase agreements, whose underlying securities were obligations of the U.S. government and/or its agencies. The Funds' custodian bank received delivery of the underlying securities for the joint account on each 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 Funds. Transactions affecting statements of operations accounts and net realized gains (losses) on investments were translated at the rates prevailing at the dates of the transactions. The Funds 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 Funds' 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. Discount and premium on securities The Funds accreted discount and amortized premium from par value on securities from either the date of issue or the date of purchase over the life of the security. Expenses The majority of the expenses were directly identifiable to an individual fund. Expenses which 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 Funds were 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 Funds had entered into a syndicated line of credit agreement with various banks. This agreement enabled the Funds 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 Funds had no borrowing activity under the line of credit during the period ended April 25, 2003. Securities lending The Funds may have lent securities to certain qualified brokers who paid the Funds negotiated lender fees. These fees were included in interest income. The loans were collateralized at all times with cash or securities with a market value at least equal to the market value of the securities on loan. As with other extensions of credit, the Funds would have borne the risk of delay of the loaned securities in recovery or even loss of rights in the collateral, should the 26 borrower of the securities have failed financially. There were no securities loaned as of April 25, 2003. Financial futures contracts The Funds may have bought and sold financial futures contracts. Buying futures tends to increase the Funds' exposure to the underlying instruments. Selling futures tends to decrease Funds' exposure to the underlying instruments or hedge other Funds' instruments. At the time Funds entered into financial futures contracts, they were required to deposit with their custodian a specified amount of cash or U.S. government securities, known as "initial margin," equal to a certain percentage of the value of the financial futures contracts being traded. Each day, the futures contracts were valued at the official settlement price of the board of trade or U.S. commodities exchange on which they traded. Subsequent payments to and from the broker, known as "variation margin," were made on a daily basis as the market price of the financial futures contracts fluctuated. Daily variation margin adjustments, arising from this "mark to market," were recorded by the Funds as unrealized gains or losses. When the contracts were closed, the Funds recognized gains or losses. Risks of entering into futures contracts included the possibility that there may have been an illiquid market and/or that a change in the value of the contracts may have not correlated with changes in the value of the underlying securities. In addition, the Funds could have been prevented from opening or realizing the benefits of closing out futures positions because of position limits or limits on daily price fluctuation imposed by an exchange. For federal income tax purposes, the amount, character and timing of the Funds' gains and/or losses may have been affected as a result of futures contracts. The Funds had no open financial futures contracts on April 25, 2003. Forward foreign currency exchange contracts The Funds could 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 Funds' daily net assets. The Funds recorded realized gains and losses at the time the forward foreign currency exchange contracts were closed out. Risks could have arisen upon entering these contracts from the potential inability of counterparties to meet the terms of the contracts 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 Funds' Statements of Assets and Liabilities. The Funds may have also purchased and sold forward contracts to facilitate the settlement of foreign currency denominated portfolio transactions, under which they 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 VA Strategic Income Fund had the following open forward foreign currency exchange contracts on April 25, 2003: PRINCIPAL AMOUNT APPRECIATION CURRENCY COVERED BY CONTRACT EXPIRATION MONTH (DEPRECIATION) -------- ------------------- ---------------- -------------- BUYS Euro 2,600,000 April 03 $104,358 Euro 1,634,000 May 03 50,115 Pound Sterling 1,293,000 April 03 27,039 Pound Sterling 300,000 April 03 (73) $181,439 SELLS Euro 2,600,000 April 03 (62,880) Euro 1,634,000 May 03 (51,194) Pound Sterling 1,593,000 April 03 50,403 ($63,671) 27 Federal income taxes Each 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 April 25, 2003, the Funds' final tax year. As of April 25, 2003, the Funds' final tax year end, for federal income tax purposes, the Funds had the following capital loss carryforwards available:
TOTAL CAPITAL CAPITAL LOSS CAPITAL LOSS CAPITAL LOSS CAPITAL LOSS CAPITAL LOSS CAPITAL LOSS LOSS CARRY- CARRY-FORWARD CARRY-FORWARD CARRY-FORWARD CARRY-FORWARD CARRY-FORWARD CARRY-FORWARD FORWARD AS EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING FUND OF 4/25/2003 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 - ---- ------------ ---------- ---------- ---------- ---------- ---------- ---------- VA Relative Value $35,142,592 -- -- -- -- $31,801,591 $3,341,001 VA Sovereign Investors 12,902,962 $157,877 $101,159 $1,206,695 $3,153,775 7,849,188 434,268 VA Strategic Income 8,859,263 4,130 136,493 1,506,009 1,757,056 3,265,011 2,190,564 VA Technology 15,331,439 -- -- 14,000 3,708,037 9,184,799 2,424,603
The unused capital loss carryforwards as of April 25, 2003 were transferred to the Acquiring Funds and will be available, to the extent provided by regulations, to offset future net capital gains of the Acquiring Funds. Expired capital loss carryforwards will be reclassified to capital paid-in in the year of expiration. 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 Funds 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 Funds may have placed debt obligations on non-accrual status and reduced related interest income by ceasing current accruals and writing off interest receivables when the collection of interest had become doubtful. The Funds recorded distributions to shareholders from net investment income and realized gains on the ex-dividend date. During the period ended April 25, 2003, the tax character of distributions paid by the Funds was as follows: FUND ORDINARY INCOME - ---- --------------- VA Relative Value $70,439 VA Sovereign Investors 148,780 VA Strategic Income 3,562,151 As of April 25, 2003, the Funds 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 Funds. Actual results could differ from these estimates. 28 NOTE B Management fee and transactions with affiliates and others Each Fund had an investment management contract with the Adviser. Under the investment management contracts, each Fund paid a monthly management fee to the Adviser at the following annual rates: FUND RATE - ---- ---- VA Relative Value 0.60% of average daily net asset value VA Sovereign Investors 0.60% of average daily net asset value VA Strategic Income 0.60% of average daily net asset value VA Technology 0.80% of average daily net asset value V.A. Technology Fund and the Adviser had a subadvisory contract with American Fund Advisors, Inc. The Fund was not responsible for payment of the subadvisory fees. The Adviser had agreed to limit each Funds' expenses, excluding the management fee, to 0.25% of each Fund's average daily net assets. There were no expense reductions for the period ended April 25, 2003. The Funds had a distribution agreement with John Hancock Funds, LLC ("JH Funds"), a wholly owned subsidiary of the Adviser. During the period ended April 25, 2003, all sales of shares of beneficial interest were sold at net asset value. JH Funds paid all expenses of printing prospectuses and other sales literature, all fees and expenses in connection with qualification as a dealer in various states, and all other expenses in connection with the sale and offering for sale of the shares of the Funds which had not been herein specifically allocated to the Trust. The Funds had an agreement with the Adviser to perform necessary tax, accounting and legal services for the Funds. The compensation for the period was at an annual rate of approximately 0.03% of the average net assets of each Fund. Ms. Maureen R. Ford and Mr. John M. DeCiccio were directors and/or officers of the Adviser and its affiliates, as well as Trustees of the Funds. The compensation of unaffiliated Trustees was borne by the Funds. 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 Funds made investments into other John Hancock funds, as applicable, to cover their liability for the deferred compensation. Investments to cover the Funds' deferred compensation liability were recorded on the Funds' 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 Funds. NOTE C 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 April 25, 2003 were as follows: SALES or FUND PURCHASES MATURITIES - ---- --------- ---------- VA Relative Value $12,677,420 $13,104,901 VA Sovereign Investors 3,983,640 7,803,466 VA Strategic Income 46,149,285 44,524,183 VA Technology 1,068,328 1,872,046 Purchases and proceeds from maturities of obligations of U.S. government for VA Strategic Income Fund aggregated $36,495,352 and none, respectively, during the period ended April 25, 2003. 29 The cost of investments owned on April 25, 2003, including short-term investments, and gross unrealized appreciation and depreciation of investments for federal income tax purposes were as follows:
GROSS GROSS NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION FUND COST APPRECIATION DEPRECIATION (DEPRECIATION) - ---- ---- ------------ ------------ -------------- VA Relative Value $27,841,617 $1,523,447 ($1,066,853) $456,594 VA Sovereign Investors 34,976,901 3,392,735 (3,857,796) (465,061) VA Strategic Income 74,529,752 3,528,809 (1,353,072) 2,175,737 VA Technology 19,989,462 1,030,929 (9,301,848) (8,270,919)
The difference between book basis and tax basis net unrealized appreciation (depreciation) of investments was attributable primarily to the tax deferral of losses on wash sales. NOTE D Reclassification of accounts During the period ended April 25, 2003, the following reclassifications had been made in each Fund's capital balances to report these balances on a tax basis, excluding certain temporary differences as of April 25, 2003:
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT ACCUMULATED FUND CAPITAL PAID-IN INCOME (LOSS) NET REALIZED LOSS - ---- --------------- ------------- ----------------- VA Strategic Income $258,313 $1,847,313 ($2,105,626) VA Technology (25,325) 25,325 --
These reclassifications, which had no impact on the net asset value of the Funds, were primarily attributable to certain differences in the treatment of net operating losses, amortization of premiums and accretion of discounts on debt securities, foreign currency gains and losses and return of capital under federal tax rules versus accounting principles generally accepted in the United States of America. The calculation of net investment income (loss) per share in the Financial Highlights excludes these adjustments. NOTE E Change in accounting principle Effective January 1, 2001, the VA Strategic Income Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies, as revised, relating to the amortization of premiums and accretion of discounts on debt securities. The cumulative effect of this accounting change had no impact on the total net assets of the VA Strategic Income Fund, but resulted in a $230,438 reduction in the cost of investments and a corresponding decrease in net unrealized depreciation of investments, based on securities held as of December 31, 2000. The effect of this change for the year ended December 31, 2001 was to decrease net investment income by $417,884, increase unrealized depreciation of investments by $47,891 and decrease net realized loss on investments by $465,775. The effect of this change for the year ended December 31, 2002, was to decrease net investment income by $572,194, decrease unrealized depreciation of investments by $181,307 and decrease net realized loss on investments by $390,887. The effect of this change for the period ended April 25, 2003, was to decrease net investment income by $107,707, decrease unrealized appreciation of investments by $84,609 and increase net realized gain on investments by $192,316. The VA Strategic Income Fund's financial highlights for prior periods have not been restated to reflect this change in presentation. 30 NOTE F Shareholder meeting On April 16, 2003, at a Special Shareholder Meeting, the shareholders of the Funds approved the following Agreements and Plans of Reorganization between the Funds and the Acquiring Funds: ACQUIRED FUND ACQUIRING FUND* ------------- --------------- VA Relative Value Fund Growth & Income Fund VA Sovereign Investors Fund Growth & Income Fund VA Strategic Income Fund Active Bond Fund VA Technology Fund Large Cap Growth Fund * Each a series of John Hancock Variable Series Trust I With respect to each proposal to approve the Agreements and Plans of Reorganization, the number of votes cast for and against and that abstained from voting were as follows: FUND FOR AGAINST ABSTAINED - ---- --- ------- --------- VA Relative Value 4,677,758 108,519 108,519 VA Sovereign Investors 2,780,244 113,554 113,553 VA Strategic Income 7,655,031 231,364 231,364 VA Technology 4,561,836 274,833 410,223 Each Agreement and Plan of Reorganization provided for the transfer of substantially all of the assets and liabilities of each Fund to the corresponding Acquiring Fund in exchange solely for shares of beneficial interest of the Acquiring Fund. After these transactions and as of the close of business on April 25, 2003, the Funds were terminated. The financial statements presented herein reflect the position of the Funds prior to the exchange of net assets and termination of the Funds. NOTE G Tax information notice For federal income tax purposes, the following information is furnished with respect to the taxable distributions of the Funds for the period ended April 25, 2003. With respect to the ordinary dividends paid by the Funds for the period ended April 25, 2003, the percentage of the dividend distribution qualified for the dividends received deduction available to corporations are as follows: VA Relative Value Fund 100.00% VA Sovereign Investors Fund 100.00% VA Strategic Income Fund 0.22% VA Technology Fund 0.00% 31 John Hancock Funds - Declaration Trust 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. 529 Main Street Charlestown, MA 02129 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 Sub-Investment Adviser American Fund Advisors, Inc. 1415 Kellum Place Garden City, NY 11530 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 EX-99.CERT 3 certification.txt CERTIFICATION CERTIFICATION I, Maureen R. Ford, certify that 1. I have reviewed this report on Form N-CSR of the John Hancock Declaration Trust (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of trustees: a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: _____________ _________________________ Maureen R. Ford Chairman, President and Chief Executive Officer CERTIFICATION I, Richard A. Brown, certify that 1. I have reviewed this report on Form N-CSR of the John Hancock Declaration Trust (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of trustees: a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: _____________ _________________________ Richard A. Brown Senior Vice President and Chief Financial Officer EX-99.CERT 4 certificationsarox.txt CERTIFICATION Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the attached Report of John Hancock Declaration Trust (the "registrant") on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the registrant does hereby certify that, to the best of such officer's knowledge: 1. The Report fully complies with the requirements of 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant as of, and for, the periods presented in the Report. - ----------------------- Maureen R. Ford Chairman, President and Chief Executive Officer Dated: June 25, 2003 - ----------------------- Richard A. Brown Senior Vice President and Chief Financial Officer Dated: June 25, 2003 A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----