N-CSR 1 invment3.txt JH WORLD FUND - GLOBAL FUND - FINAL REPORT ITEM 1. REPORT TO STOCKHOLDERS. -------------------------------------------------------------------------------- FINAL REPORT Global Fund John Hancock Funds May 9, 2003 -------------------------------------------------------------------------------- John Hancock Global Fund Schedule of Investments May 9, 2003 (unaudited)
ISSUER SHARES VALUE ------ ------ ----- COMMON STOCKS (Cost $36,261,340) Australia (3.83%) Australia & New Zealand Banking Group Ltd. (Banks - Foreign) 68,400 $ 805,354 Foster's Group Ltd. (Beverages) 100,000 282,117 Publishing & Broadcasting Ltd. (Media) 50,000 287,913 Woolworths Ltd. (Retail) 37,900 311,490 ---------- 1,686,874 ---------- Belgium (0.52%) Interbrew SA (Beverages) 10,000 229,999 ---------- Brazil (2.01%) Aracruz Celulose SA, American Depositary Receipts (ADR) (Paper & Paper Products) 318,560 Companhia de Bebidas das Americas (ADR) (Beverages) 10,000 213,100 Tele Norte Leste Participacoes SA (ADR) (Telecommunications) 30,000 356,700 ---------- 888,360 ---------- Canada (6.29%) Biovail Corp.* (Medical) 7,800 320,892 Canadian National Railway Co. (Transport) 8,000 398,640 Cott Corp.* (Beverages) 18,200 364,364 EnCana Corp. (Oil & Gas) 18,300 626,958 Royal Bank of Canada (Banks - Foreign) 11,000 467,500 Telus Corp. (Telecommunications) 29,600 439,567 WestJet Airlines Ltd.* (Transport) 13,250 156,460 ---------- 2,774,381 ---------- China (0.81%) China Telecom Corp., Ltd.* (Telecommunications) 1,000,000 194,896 Jiangsu Expressway Co., Ltd. (Transport) 500,000 160,276 ---------- 355,172 ---------- Finland (2.14%) Nokia Oyj (ADR) (Telecommunications) 55,000 943,250 ---------- France (4.78%) Alcatel SA* (Telecommunications) 46,100 376,028 Axa SA (Insurance) 25,000 374,810 BNP Paribas SA (Banks - Foreign) 10,800 515,532 France Telecom SA (Telecommunications) 12,800 293,222 JC Decaux SA* (Advertising) 30,000 296,402 Vivendi Universal SA (Media) 15,800 252,309 ---------- 2,108,303 ---------- Germany (1.39%) BASF AG (Chemicals) 6,000 256,077 Muenchener Rueckversicherungs-Gesellschaft AG (Insurance) 3,500 355,855 ---------- 611,932 ---------- Hong Kong (1.32%) CLP Holdings Ltd. (Utilities) 60,000 251,569 CNOOC Ltd. (Oil & Gas) 250,000 330,168 ---------- 581,737 ---------- Ireland (2.16%) Bank of Ireland (Banks - Foreign) 39,600 506,351 Ryanair Holdings Plc* (ADR) (Transport) 10,800 448,200 ---------- 954,551 ----------
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ISSUER SHARES VALUE ------ ------ ----- Israel (1.51%) Teva Pharmaceutical Industries Ltd. (ADR) (Medical) 14,000 $ 667,380 ----------- Italy (1.17%) ENI SpA (Oil & Gas) 20,000 305,133 UniCredito Italiano SpA (Banks - Foreign) 46,000 211,387 ----------- 516,520 ----------- Japan (7.90%) Asahi Glass Co., Ltd. (Building) 50,000 264,471 Dai Nippon Printing Co., Ltd. (Printing - Commercial) 41,000 424,988 East Japan Railway Co. (Transport) 60 274,880 Fanuc Ltd. (Electronics) 10,000 420,595 Hoya Corp. (Electronics) 6,000 367,530 Japan Telecom Holdings Co., Ltd. (Telecommunications) 100 305,422 Kao Corp. (Cosmetics & Personal Care) 18,000 352,429 Keyence Corp. (Electronics) 2,000 332,722 Mitsubishi Tokyo Financial Group, Inc. (Banks - Foreign) 100 385,616 Shin-Etsu Chemical Co., Ltd. (Chemicals) 11,000 356,610 ----------- 3,485,263 ----------- Netherlands (1.08%) Aegon NV (Insurance) 1,872 18,539 ASML Holding NV (NY Reg Shares)* (Electronics) 20,000 185,400 ING Groep NV (Insurance) 16,300 271,155 ----------- 475,094 ----------- Russia (1.15%) YUKOS (ADR) (Oil & Gas) 3,000 506,250 ----------- South Korea (2.39%) LG Electronics, Inc. (Electronics) 10,000 357,886 Samsung Electronics Co., Ltd. (Electronics) 1,500 395,755 SK Telecom Co., Ltd. (Telecommunications) 2,000 299,625 ----------- 1,053,266 ----------- Spain (1.44%) Banco Popular Espanol SA (Banks - Foreign) 5,000 252,688 Telefonica SA* (Telecommunications) 35,000 384,001 ----------- 636,689 ----------- Sweden (0.52%) Hennes & Mauritz AB (B Shares) (Retail) 10,150 230,114 ----------- Switzerland (4.04%) Alcon, Inc.* (Medical) 1,900 81,814 Credit Suisse Group (Banks - Foreign) 6,000 146,336 Novartis AG (Medical) 12,000 487,939 Roche Holding AG (Medical) 3,600 234,595 UBS AG (Banks - Foreign) 16,800 830,365 ----------- 1,781,049 ----------- Taiwan (1.47%) Nanya Technology Corp.* (Electronics) 365,000 204,652 Taiwan Semiconductor Manufacturing Co. Ltd.* (ADR) (Electronics) 51,000 445,230 ----------- 649,882 ----------- United Kingdom (18.75%) Barclays Plc (Banks - Foreign) 60,000 393,219 Barclays Plc (ADR) (Banks - Foreign) 12,000 321,600 British Sky Broadcasting Group Plc* (Media) 55,900 604,610 GlaxoSmithKline Plc (Medical) 18,900 392,185 GlaxoSmithKline Plc (ADR) (Medical) 25,000 1,042,750 HBOS Plc (Banks - Foreign) 22,200 251,852 Imperial Tobacco Group Plc (Tobacco) 17,800 290,354 InterContinental Hotels Group Plc* (Leisure) 40,000 267,914 Lloyds TSB Group Plc (Banks - Foreign) 16,500 110,250 Lloyds TSB Group Plc (ADR) (Banks - Foreign) 25,000 680,750
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ISSUER SHARES VALUE ------ ------ ----- United Kingdom (continued) Man Group Plc (Finance) 22,700 $ 391,379 Royal Bank of Scotland Group Plc (Banks - Foreign) 24,905 652,874 Shell Transport & Trading Co. Plc (Oil & Gas) 32,600 209,078 Shell Transport & Trading Co. Plc (NY Reg Shares) (Oil & Gas) 25,000 973,750 Smith & Nephew Plc (Medical) 34,200 224,272 Vodafone Group Plc (Telecommunications) 400,000 772,337 Vodafone Group Plc (ADR) (Telecommunications) 35,500 690,475 ----------- 8,269,649 ----------- United States (19.60%) Adobe Systems, Inc. (Computers) 2,000 73,100 AdvancePCS* (Medical) 3,400 114,886 Affiliated Computer Services, Inc.* (Computers) 2,200 112,926 Allergan, Inc. (Medical) 1,100 78,782 Allstate Corp. (The) (Insurance) 2,400 87,168 Amdocs Ltd.* (Telecommunications) 34,300 600,250 Amgen, Inc.* (Medical) 2,000 122,500 Anadarko Petroleum Corp. (Oil & Gas) 1,400 64,064 Anheuser-Busch Cos., Inc. (Beverages) 2,400 121,464 Anthem, Inc.* (Medical) 1,800 127,260 Apache Corp. (Oil & Gas) 3,410 203,270 Apollo Group, Inc. (Class A)* (Schools / Education) 1,200 67,800 Applied Materials, Inc.* (Electronics) 5,600 84,448 AutoZone, Inc.* (Retail) 1,200 104,220 Bank of America Corp. (Banks - United States) 1,500 111,000 Barr Laboratories, Inc.* (Medical) 1,400 74,186 Comcast Corp. (Special Class A)* (Media) 3,200 94,336 Dell Computer Corp.* (Computers) 2,700 83,970 eBay, Inc.* (Diversified Operations) 600 56,790 EchoStar Communicaitons Corp. (Class A)* (Media) 2,100 69,867 EMC Corp.* (Computers) 8,000 75,920 Fannie Mae (Mortgage Banking) 2,100 152,145 General Electric Co. (Diversified Operations) 7,800 226,200 Gilead Sciences, Inc.* (Medical) 1,700 79,450 Intel Corp. (Electronics) 9,000 176,220 International Business Machines Corp. (Computers) 1,100 96,305 iShares MSCI Japan Index Fund (Finance) 225,000 1,521,000 iShares MSCI United Kingdom Index Fund (Finance) 175,000 2,164,750 Johnson & Johnson (Medical) 2,600 146,484 Lowe's Cos., Inc. (Retail) 2,400 108,696 Merck & Co., Inc. (Medical) 2,900 168,867 Microsoft Corp. (Computers) 8,300 218,788 Noble Corp.* (Oil & Gas) 4,700 158,907 Patterson-UTI Energy, Inc.* (Oil & Gas) 2,000 67,800 Pfizer, Inc. (Medical) 6,100 199,165 Procter & Gamble Co. (The) (Cosmetics & Personal Care) 1,700 152,150 Tribune Co. (Media) 1,700 82,110 Univision Communications, Inc. (Class A)* (Media) 2,100 61,824 VERITAS Software Corp.* (Computers) 4,100 100,778 Wal-Mart Stores, Inc. (Retail) 2,000 111,600 Williams Cos., Inc. (The) (Oil & Gas) 9,300 63,054 Zimmer Holdings, Inc.* (Medical) 1,300 60,476 ----------- 8,644,976 ----------- TOTAL COMMON STOCKS (86.27%) $38,050,691 ----------- ISSUER WARRANTS VALUE ------ -------- ----- WARRANTS (Cost $361,372) Taiwan (0.35%) Taiwan Semiconductor Manufacturing Co., Ltd.* (Electronics) 113,800 $ 156,228 ----------- United Kingdom (0.33%) United Microelectronics Corp.* (Electronics) 251,000 145,811 ----------- TOTAL WARRANTS (0.68%) 302,039 ----------- VALUE ----------- TOTAL INVESTMENTS (86.95%) $38,352,730 ----------- OTHER ASSETS AND LIABILITIES, NET (13.05%) 5,755,637 ----------- TOTAL NET ASSETS (100%) $44,108,367 ===========
* Non-income producing security. The percentage shown for each investment category is the total value of that category as a percentage of the net assets of the Fund. 3 Portfolio Concentration (unaudited) This table shows the percentages of the Fund's investments aggregated by various industries as of May 9, 2003. VALUE AS A PERCENTAGE INVESTMENT CATEGORIES OF NET ASSETS --------------------- --------------- Advertising 0.67% Banks - Foreign 14.81 Banks - United States 0.25 Beverages 2.75 Building 0.60 Chemicals 1.39 Computers 1.73 Cosmetics & Personal Care 1.14 Diversified Operations 0.64 Electronics 7.42 Finance 9.24 Insurance 2.51 Leisure 0.61 Media 3.30 Medical 10.48 Mortgage Banking 0.35 Oil & Gas 7.96 Paper & Paper Products 0.72 Printing - Commercial 0.96 Retail 1.96 School/Education 0.15 Telecommunications 12.82 Tobacco 0.66 Transport 3.26 Utilities 0.57 ----- Total Investments 86.95% ===== 4 John Hancock Global Fund ------------------- ------------------------------------------------------------------------------ ASSETS AND ASSETS LIABILITIES ------------------------------------------------------------------------------ ------------------- Investments at value (cost -$36,622,712) $38,352,730 Final report Cash 5,755,037 May 9, 2003 * Dividends and interest receivable 120,027 (unaudited) Other assets 18,132 Total assets 44,245,926 ------------------------------------------------------------------------------ LIABILITIES ------------------------------------------------------------------------------ Foreign currency due to custodian at value (cost $452) 452 Payable for shares repurchased 18,194 Payable to affiliates 69,434 Other payables and accrued expenses 49,479 Total liabilities 137,559 ------------------------------------------------------------------------------ NET ASSETS ------------------------------------------------------------------------------ Capital paid-in 95,806,778 Accumulated net realized loss on investments and foreign currency transactions (53,426,846) Net unrealized appreciation of investments and translation of assets and liabilities in foreign currencies 1,736,051 Accumulated net investment loss (7,616) Net assets $44,108,367 ------------------------------------------------------------------------------ NET ASSET VALUE PER SHARE ------------------------------------------------------------------------------ Based on net asset values and shares outstanding Class A ($34,316,962 / 5,312,861 shares) $6.46 Class B ( $9,149,332 / 1,592,262 shares) $5.75 Class C ( $642,073 / 111,714 shares) $5.75 ------------------------------------------------------------------------------ MAXIMUM OFFERING PRICE PER SHARE ------------------------------------------------------------------------------ Class A (1) ($6.46 / 95%) $6.80 Class C ($5.75 / 99%) $5.81
(1) On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced. * The net assets of the Fund were merged into John Hancock International Fund as of the close of business on May 9, 2003, and the Fund was subsequently terminated. The Statement of Assets and Liabilities reflects the Fund's position prior to the transfer of net assets and the termination of the Fund. See Note A to financial statements. See notes to financial statements. 5 John Hancock Global Fund ------------------- --------------------------------------------------------------------------------- OPERATIONS INVESTMENT INCOME ------------------- --------------------------------------------------------------------------------- Period from Dividends (net of foreign withholding taxes of $27,758) $ 340,705 November 1, 2002 to Interest 7,670 May 9, 2003 * Total investment income 348,375 (unaudited) --------------------------------------------------------------------------------- EXPENSES -------------------------------------------------------------------------------- Investment management fee 213,758 Class A distribution and service fee 55,263 Class B distribution and service fee 49,883 Class C distribution and service fee 3,415 Transfer agent fee 220,899 Custodian fee 16,763 Printing 14,531 Registration and filing fee 12,695 Accounting and legal services fee 10,108 Auditing fee 6,500 Trustees' fee 2,495 Miscellaneous 2,191 Interest expense 1,662 Legal fee 645 Total expenses 610,808 Net investment loss (262,433) --------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) --------------------------------------------------------------------------------- Net realized loss on Investments (2,462,278) Foreign currency transactions (73,468) Change in net unrealized appreciation (depreciation) of Investments 1,465,752 Translation of assets and liabilities in foreign currencies 6,671 Net realized and unrealized loss (1,063,323) Decrease in net assets from operations ($1,325,756)
* The net assets of the Fund were merged into John Hancock International Fund as of the close of business on May 9, 2003, and the Fund was subsequently terminated. The Statement Operations reflects the Fund's position prior to the transfer of net assets and the termination of the Fund. See Note A to financial statements. See notes to financial statements. 6 John Hancock Global Fund
PERIOD FROM 11-1-02 YEAR ENDED TO 5-9-03 * 10-31-02 (UNAUDITED) ------------------- --------------------------------------------------------------------------------------- CHANGES IN INCREASE (DECREASE) IN NET ASSETS NET ASSETS --------------------------------------------------------------------------------------- ------------------- From operations Net investment loss ($ 951,314) ($ 262,433) Net realized loss (10,161,375) (2,535,746) Change in net unrealized appreciation (depreciation) 2,769,567 1,472,423 Decrease in net assets resulting from operations (8,343,122) (1,325,756) From Fund share transactions (10,750,858) (4,961,872) --------------------------------------------------------------------------------------- NET ASSETS --------------------------------------------------------------------------------------- Beginning of period 69,489,975 50,395,995 End of period (1) $ 50,395,995 $44,108,367
(1) Includes accumulated net investment loss of $6,026 and $7,616, respectively. * The net assets of the Fund were merged into John Hancock International Fund as of the close of business on May 9, 2003, and the Fund was subsequently terminated. The Statement of Changes in Net Assets reflects the Fund's position prior to the transfer of net assets and the termination of the Fund. See Note A to financial statements. See notes to financial statements. 7 John Hancock Global Fund Financial Highlights CLASS A
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 5-9-03 (unaudited) --------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.94 $ 13.46 $ 15.24 $ 13.64 $ 7.71 $ 6.60 Net investment loss (1) (0.05) (0.03) (0.08) (0.11) (0.10) (0.03) Net realized and unrealized gain (loss) on investments 1.53 2.67 (0.91) (5.82) (1.01) (0.11) Total from investment operations 1.48 2.64 (0.99) (5.93) (1.11) (0.14) Less distributions From net realized gain (0.96) (0.86) (0.61) -- -- -- Net asset value, end of period $ 13.46 $ 15.24 $ 13.64 $ 7.71 $ 6.60 $ 6.46(2) Total return (3) (%) 11.88 20.90 (6.90) (43.48) (14.40) (2.12)(4) --------------------------------------------------------------------------------------------------------------------------------- RATIOS AND SUPPLEMENTAL DATA --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in millions) $ 121 $ 128 $ 105 $ 51 $ 39 $ 34 Ratio of expenses to average net assets (%) 1.82 1.78 1.87 2.14 2.35 2.41(5) Ratio of net investment loss to average net assets (%) (0.33) (0.23) (0.52) (1.01) (1.31) (0.95)(5) Portfolio turnover (%) 160 176 182 297 264 165
See notes to financial statements. 8 John Hancock Global Fund Financial Highlights CLASS B
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 5-9-03 (unaudited) --------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.39 $ 12.76 $ 14.30 $ 12.67 $ 6.93 $ 5.90 Net investment loss (1) (0.13) (0.11) (0.18) (0.17) (0.14) (0.05) Net realized and unrealized gain (loss) on investments 1.46 2.51 (0.84) (5.57) (0.89) (0.10) Total from investment operations 1.33 2.40 (1.02) (5.74) (1.03) (0.15) Less distributions From net realized gain (0.96) (0.86) (0.61) -- -- -- Net asset value, end of period $ 12.76 $ 14.30 $ 12.67 $ 6.93 $ 5.90 $ 5.75(2) Total return (3) (%) 11.15 20.12 (7.60) (45.30) (14.86) (2.54)(4) --------------------------------------------------------------------------------------------------------------------------------- RATIOS AND SUPPLEMENTAL DATA --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in millions) $ 55 $ 54 $ 41 $ 17 $ 11 $ 9 Ratio of expenses to average net assets (%) 2.46 2.37 2.57 2.84 3.05 3.11(5) Ratio of net investment loss to average net assets (%) (0.97) (0.82) (1.25) (1.72) (2.01) (1.65)(5) Portfolio turnover (%) 160 176 182 297 264 165
See notes to financial statements. 9 John Hancock Global Fund Financial Highlights CLASS C
PERIOD ENDED 10-31-99(6) 10-31-00 10-31-01 10-31-02 5-9-03 (unaudited) ------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.88 $ 14.30 $ 12.67 $ 6.93 $ 5.90 Net investment loss (1) (0.10) (0.15) (0.17) (0.14) (0.05) Net realized and unrealized gain (loss) on investments 1.52 (0.87) (5.57) (0.89) (0.10) Total from investment operations 1.42 (1.02) (5.74) (1.03) (0.15) Less distributions From net realized gain -- (0.61) -- -- -- Net asset value, end of period $ 14.30 $ 12.67 $ 6.93 $ 5.90 $ 5.75(2) Total return (3) (%) 11.02(4) (7.60) (45.30) (14.86) (2.54)(4) ------------------------------------------------------------------------------------------------------------------------- RATIOS AND SUPPLEMENTAL DATA ------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in millions) --(7) $ 1 $ 1 $ 1 $ 1 Ratio of expenses to average net assets (%) 2.48(5) 2.57 2.84 3.05 3.11(5) Ratio of net investment loss to average net assets (%) (1.01)(5) (1.06) (1.72) (2.01) (1.63)(5) Portfolio turnover (%) 176 182 297 264 165
(1) Based on the average of the shares outstanding. (2) Net assets value per share before the merger of assets to John Hancock International Fund and the termination of the Fund. See Note A to financial statements. (3) Assumes dividend reinvestment and does not reflect the effect of sales charges. (4) Not annualized. (5) Annualized. (6) Class C shares began operations on 3-1-99. (7) Less than $500,000. See notes to financial statements. 10 NOTES TO FINANCIAL STATEMENTS Unaudited NOTE A Accounting policies John Hancock Global Fund (the "Fund") was a diversified series of John Hancock Investment Trust III, an open-end management investment company registered under the Investment Company Act of 1940. The investment objective of the Fund was to achieve long-term growth of capital. The Trustees had authorized the issuance of multiple classes of shares of the Fund, designated as Class A, Class B and Class C shares. The shares of each class represented an interest in the same portfolio of investments of the Fund and had equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Trustees, may have been applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission and the Internal Revenue Service. Shareholders of a class that bore distribution and service expenses under the terms of a distribution plan had exclusive voting rights to that distribution plan. On May 7, 2003, the shareholders of the Fund approved an Agreement and Plan of Reorganization, which provided for the transfer of substantially all of the assets and liabilities of the Fund to the John Hancock International Fund (the "Acquiring Fund") in exchange solely for shares of beneficial interest of the Acquiring Fund. After this transaction and as of the close of business on May 9, 2003, the Fund will be terminated. The financial statements presented herein reflect the position of the Fund prior to the exchange of net assets and termination of the Fund. Significant accounting policies of the Fund were as follows: Valuation of investments Securities in the Fund's portfolio were valued on the basis of market quotations, valuations provided by independent pricing services or, if quotations were not readily available, or the value had been materially affected by events occurring after the closing of a foreign market, at fair value as determined in good faith in accordance with procedures approved by the Trustees. Short-term debt investments maturing within 60 days were valued at amortized cost, which approximated market value. All portfolio transactions initially expressed in terms of foreign currencies were translated into U.S. dollars as described in "Foreign currency translation" below. Joint repurchase agreement Pursuant to an exemptive order issued by the Securities and Exchange Commission, the Fund, along with other registered investment companies having a management contract with John Hancock Advisers, LLC (the "Adviser"), a wholly owned subsidiary of The Berkeley Financial Group, LLC, may have participated in a joint repurchase agreement transaction. Aggregate cash balances were invested in one or more large repurchase agreements, whose underlying securities were obligations of the U.S. government and/or its agencies. The Fund's custodian bank received delivery of the underlying securities for the joint account on the Fund's behalf. The Adviser was responsible for ensuring that the agreement was fully collateralized at all times. Foreign currency translation All assets or liabilities initially expressed in terms of foreign currencies were translated into U.S. dollars based on London currency exchange quotations as of 5:00 P.M., London time, on the date of any determination of the net asset value of the Fund. Transactions affecting statement of operations accounts and net realized gain (loss) on investments were translated at the rates prevailing at the dates of the transactions. 11 The Fund did not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations were included with the net realized and unrealized gain or loss from investments. Reported net realized foreign currency exchange gains or losses arose from sales of foreign currency, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arose from changes in the value of assets and liabilities other than investments in securities, resulting from changes in the exchange rates. Investment transactions Investment transactions were recorded as of the date of purchase, sale or maturity. Net realized gains and losses on sales of investments were determined on the identified cost basis. Capital gains realized on some foreign securities were subject to foreign taxes, which were accrued as applicable. Class allocations Income, common expenses and realized and unrealized gains (losses) were determined at the fund level and allocated daily to each class of shares based on the appropriate net assets of the respective classes. Distribution and service fees, if any, were calculated daily at the class level based on the appropriate net assets of each class and the specific expense rate(s) applicable to each class. Expenses The majority of the expenses were directly identifiable to an individual fund. Expenses that were not readily identifiable to a specific fund were directly allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative sizes of the funds. Bank borrowings The Fund was permitted to have bank borrowings for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Fund had entered into a syndicated line of credit agreement with various banks. This agreement enabled the Fund to participate with other funds managed by the Adviser in an unsecured line of credit with banks, which permitted borrowings of up to $250 million, collectively. Interest was charged to each fund, based on its borrowing. In addition, a commitment fee was charged to each fund based on the average daily unused portion of the line of credit and was allocated among the participating funds. The Fund had no borrowing activity under the line of credit during the period ended May 9, 2003. Forward foreign currency exchange contracts The Fund may have entered into forward foreign currency exchange contracts as a hedge against the effect of fluctuations in currency exchange rates. A forward foreign currency exchange contract involves an obligation to purchase or sell a specific currency at a future date at a set price. The aggregate principal amounts of the contracts were marked to market daily at the applicable foreign currency exchange rates. Any resulting unrealized gains and losses were included in the determination of the Fund's daily net assets. The Fund recorded realized gains and losses at the time the forward foreign currency exchange contracts were closed out. Risks may have arose upon entering these contracts from the potential inability of counterparties to meet the terms of the contract and from unanticipated movements in the value of foreign 12 currencies relative to the U.S. dollar. These contracts involved market or credit risk in excess of the unrealized gain or loss reflected in the Fund's Statement of Assets and Liabilities. The Fund may have also purchased and sold forward contracts to facilitate the settlement of foreign currency denominated portfolio transactions, under which it intended to take delivery of the foreign currency. Such contracts normally involved no market risk if they were offset by the currency amount of the underlying transactions. The Fund had no open forward foreign currency exchange contracts on May 9, 2003. Federal income taxes The Fund qualified as a "regulated investment company" by complying with the applicable provisions of the Internal Revenue Code and was not subject to federal income tax on taxable income that was distributed to shareholders. Therefore, no federal income tax provision was required as of May 9, 2003, the Fund's final tax year. As of May 9, 2003, for federal income tax purposes, the Fund had $53,228,878 of a capital loss carryforward expiring as follows: October 31, 2009 - $39,619,964, October 31, 2010 - $10,855,825 and May 9, 2011 - $2,753,089. The unused capital loss carryforward as of May 9, 2003 was transferred to the International Fund and will Dividends, interest and distributions Dividend income on investment securities was recorded on the ex-dividend date or, in the case of some foreign securities, on the date thereafter when the Fund identified the dividend. Interest income on investment securities was recorded on the accrual basis. Foreign income may have been subject to foreign withholding taxes which were accrued as applicable. The Fund recorded distributions to shareholders from net investment income and net realized gains on the ex-dividend date. Distributions paid by the Fund with respect to each class of shares were calculated in the same manner, at the same time and were in the same amount, except for the effect of expenses that may have been applied differently to each class. As of May 9, 2003, there were no distributable earnings on a tax basis. Such distributions and distributable earnings, on a tax basis, were determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, were reported in the Fund's financial statements as a return of capital. Use of estimates The preparation of these financial statements, in accordance with accounting principles generally accepted in the United States of America, incorporates estimates made by management in determining the reported amount of assets, liabilities, revenues and expenses of the Fund. Actual results could differ from these estimates. NOTE B Management fee and transactions with affiliates and others The Fund had an investment management contract with the Adviser. Under the investment management contract, the Fund paid a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.90% of the first $100,000,000 of the Fund's average daily net asset value, (b) 0.80% of the next $200,000,000, (c) 0.75% of the next $200,000,000 and (d) 0.625% of the Fund's average daily net asset value in excess of $500,000,000. The Adviser had a subadvisory agreement with Nicholas-Applegate Capital Management LP. The Fund was not responsible for the payment of the subadvisory fees. 13 The Fund had Distribution Plans with John Hancock Funds, LLC ("JH Funds"), a wholly owned subsidiary of the Adviser. The Fund had adopted Distribution Plans with respect to Class A, Class B and Class C pursuant to Rule 12b-1 under the Investment Company Act of 1940 to reimburse JH Funds for the services it provided as distributor of shares of the Fund. Accordingly, the Fund made monthly payments to JH Funds at an annual rate not to exceed 0.30% of Class A average daily net assets and 1.00% of Class B and Class C average daily net assets. A maximum of 0.25% of such payments may have been service fees as defined by the Conduct Rules of the National Association of Securities Dealers. Under the Conduct Rules, curtailment of a portion of the Fund's 12b-1 payments could have occurred under certain circumstances. Class A and Class C shares were assessed up-front sales charges. During the period ended May 9, 2003, JH Funds received net up-front sales charges of $15,179 with regard to sales of Class A shares. Of this amount, $1,518 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $7,336 was paid as sales commissions to unrelated broker-dealers and $6,325 was paid as sales commissions to sales personnel of Signator Investors, Inc. ("Signator Investors"), a related broker-dealer. The Adviser's indirect parent, John Hancock Life Insurance Company ("JHLICo"), is the indirect sole shareholder of Signator Investors. During the period ended May 9, 2003, JH Funds received net up-front sales charges of $1,480 with regard to sales of Class C shares. Of this amount, $1,440 was paid as sales commissions to unrelated broker-dealers and $40 was paid as sales commissions to sales personnel of Signator Investors. Class B shares that were redeemed within six years of purchase were subject to a contingent deferred sales charge ("CDSC") at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that were redeemed within one year of purchase were subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs were paid to JH Funds and were used in whole or in part to defray its expenses for providing distribution related services to the Fund in connection with the sale of Class B and Class C shares. During the period ended May 9, 2003, CDSCs received by JH Funds amounted to $15,808 for PER - Class B shares and $129 for Class C shares. The Fund had a transfer agent agreement with John Hancock Signature Services, Inc., an indirect subsidiary of JHLICo. The Fund paid a monthly transfer agent fee at an annual rate of 0.05% of the average daily net asset value, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. The Fund had an agreement with the Adviser to perform necessary tax, accounting and legal services for the Fund. The compensation for the period was at an annual rate of approximately 0.04% of the average net assets of the Fund. Ms. Maureen R. Ford and Mr. John M. DeCiccio were directors and/or officers of the Adviser and/or its affiliates, as well as Trustees of the Fund. The compensation of unaffiliated Trustees was borne by the Fund. The unaffiliated Trustees may have elected to defer for tax purposes their receipt of this compensation under the John Hancock Group of Funds Deferred Compensation Plan. The Fund made investments into other John Hancock funds, as applicable, to cover its liability for the deferred compensation. Investments to cover the Fund's deferred compensation liability were recorded on the Fund's books as an other asset. The deferred compensation liability and the related other asset were always equal and were marked to market on a periodic basis to reflect any income earned by the investments as well as any unrealized gains or losses. The Deferred Compensation Plan investments had no impact on the operations of the Fund. 14 NOTE C Fund share transactions This listing illustrates the number of Fund's shares sold and repurchased, along with the corresponding dollar value. The Fund had an unlimited number of shares authorized with no par value.
PERIOD FROM 11 1-02 TO 5-9-03 YEAR ENDED 10-31-02 (UNAUDITED) ---------------------------- -------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------ -------- ----------- CLASS A SHARES ----------------------------------------------------------------------------------------------- Sold 1,786,452 $13,544,533 57,240 $343,642 Repurchased (2,543,191) (19,528,993) (663,654) (4,119,225) Net decrease (756,739) ($5,984,460) (606,414) ($3,775,583) ----------------------------------------------------------------------------------------------- CLASS B SHARES ----------------------------------------------------------------------------------------------- Sold 311,157 $2,161,259 125,894 $705,521 Repurchased (1,010,948) (7,061,861) (335,763) (1,873,529) Net decrease (699,791) ($4,900,602) (209,869) ($1,168,008) ----------------------------------------------------------------------------------------------- CLASS C SHARES ----------------------------------------------------------------------------------------------- Sold 78,832 $540,982 37,907 $212,059 Repurchased (64,039) (406,778) (41,598) (230,340) Net increase (decrease) 14,793 $134,204 (3,691) ($18,281) ----------------------------------------------------------------------------------------------- NET DECREASE (1,441,737) ($10,750,858) (819,974) ($4,961,872) -----------------------------------------------------------------------------------------------
NOTE D Investment transactions Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the period ended May 9, 2003, aggregated $70,898,639 and $79,490,742, respectively The cost of investments owned on May 9, 2003, including short-term investments, for federal income tax purposes was $36,820,680. Gross unrealized appreciation and depreciation of investments aggregated $2,385,253 and $853,203, respectively, resulted in net unrealized appreciation of $1,532,050. The difference between book basis and tax basis net unrealized appreciation of investments was attributable primarily to the tax deferral of losses on wash sales. NOTE E Reclassification of accounts During the period ended May 9, 2003, the Fund reclassified amounts to reflect a decrease in accumulated net realized loss on investments of $73,468, a decrease in accumulated net investment loss of $260,843 and a decrease in capital paid-in of $334,311. This represented the amounts necessary to report these balances on a tax basis, excluding certain temporary differences, as of May 9, 2003. These reclassifications, which had no impact on the net asset value of the Fund, were primarily attributable to certain differences in the computation of distributable income and capital gains under federal tax rules versus accounting principles generally accepted in the United States of America, book and tax differences in accounting for net operating loss, foreign currency adjustment and the Fund's utilization of earnings and profits distributed to shareholders on redemption of shares as a part of the dividends paid deduction for 15 income tax purposes. The calculation of net investment income (loss) per share in the financial highlights excluded these adjustments. NOTE F Shareholder Meeting On April 16, 2003, at a Special Shareholder Meeting, the shareholders of the Fund approved the following Agreements and Plan of Reorganization between the Fund and the International Fund. The number of votes cast for and against the proposal and that abstained from voting was as follows: FOR 3,324,998, AGAINST 206,671 and ABSTAINING 267,637. Each Agreement and Plan of Reorganization provided for the transfer of substantially all of the assets and liabilities of the Fund to the International Fund in exchange solely for beneficial interest of the International Fund. After these transactions and as of the close of business on May 9, 2003, the Fund was terminated. The financial statements presented herein reflected the position of the Fund prior to the exchange of net assets and termination of the Fund. 16 John Hancock Global Fund Trustees Dennis S. Aronowitz Richard P. Chapman, Jr. William J. Cosgrove John M. DeCiccio Richard A. Farrell Maureen R. Ford William F. Glavin* Dr. John A. Moore* Patti McGill Peterson* John W. Pratt * Members of the Audit Committee Officers Maureen R. Ford Chairman, President and Chief Executive Officer William L. Braman Executive Vice President and Chief Investment Officer Richard A. Brown Senior Vice President and Chief Financial Officer Susan S. Newton Senior Vice President and Secretary William H. King Vice President and Treasurer Thomas H. Connors Vice President and Compliance Officer Investment Adviser John Hancock Advisers, LLC. 101 Huntington Avenue Boston, Massachusetts 02199-7603 Principal Distributor John Hancock Funds, LLC. 101 Huntington Avenue Boston, Massachusetts 02199-7603 Transfer Agent John Hancock Signature Services, Inc. 1 John Hancock Way, Suite 1000 Boston, Massachusetts 02217-1000 Legal Counsel Hale and Dorr 60 State Street Boston, Massachusetts 02109-1803 ITEM 2. CODE OF ETHICS. Not applicable at this time. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this time. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable at this time. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. ITEM 10. EXHIBITS. (a) Not applicable at this time. (b)(1) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as Ex99.CERT. (b)(2) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached as Ex99.CERT. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. By: ----------------------- Maureen R. Ford Chairman, President and Chief Executive Officer Date: June 24, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: ----------------------- Maureen R. Ford Chairman, President and Chief Executive Officer Date: June 24, 2003 By: ----------------------- Richard A. Brown Senior Vice President and Chief Financial Officer Date: June 24, 2003