-----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, KQYVP5Fpv4ZpZs1BRDbL6MyqqTqT49n7OFT4qAacdOOtYCt8krnGcdigkaER2hUd CjGzgwpsI6b9PJgqdd+cVw== 0000950135-95-002344.txt : 19951119 0000950135-95-002344.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950135-95-002344 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950915 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANCOCK JOHN TAX EXEMPT SERIES FUND CENTRAL INDEX KEY: 0000811921 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-05079 FILM NUMBER: 95589279 BUSINESS ADDRESS: STREET 1: 101 HUNTINGTON AVE CITY: BOSTON STATE: MA ZIP: 02199 BUSINESS PHONE: 6173751700 FORMER COMPANY: FORMER CONFORMED NAME: HANCOCK JOHN TAX EXEMPT SERIES TRUST DATE OF NAME CHANGE: 19901023 N-30B-2 1 JOHN HANCOCK TAX-EXEMPT SERIES FUND CALIFORNIA 1 John Hancock Funds JOHN HANCOCK TAX-EXEMPT SERIES FUND -CALIFORNIA PORTFOLIO FINAL REPORT September 15, 1995 2 John Hancock Funds - Tax-Exempt Series Fund - California Portfolio DIRECTORS Edward J. Boudreau, Jr. Dennis S. Aronowitz* Richard P. Chapman, Jr.* William J. Cosgrove* Gail D. Fosler* Bayard Henry* Richard S. Scipione Edward J. Spellman* * Members of the Audit Committee OFFICERS Edward J. Boudreau, Jr. Chairman and Chief Executive Officer Robert G. Freedman Vice Chairman and Chief Investment Officer Anne C. Hodsdon President Thomas H. Drohan Senior Vice President and Secretary James B. Little Senior Vice President and Chief Financial Officer John A. Morin Vice President Susan S. Newton Vice President, Assistant Secretary and Compliance Officer James J. Stokowski Vice President and Treasurer CUSTODIAN Investors Bank & Trust Company 89 South Street Boston, Massachusetts 02111 TRANSFER AGENT John Hancock Investor Services Corporation P.O. Box 9116 Boston, Massachusetts 02205-9116 INVESTMENT ADVISER John Hancock Advisers, Inc 101 Huntington Avenue Boston, Massachusetts 02199-7603 PRINCIPAL DISTRIBUTOR John Hancock Funds, Inc 101 Huntington Avenue Boston, Massachusetts 02199-7603 LEGAL COUNSEL Hale and Dorr 60 State Street Boston, Massachusetts 02109 3 John Hancock Funds - Tax-Exempt Series Fund - California Portfolio STATEMENT OF ASSETS AND LIABILITIES FINAL REPORT September 15, 1995* (Unaudited) - ---------------------------------------------- ------------------------------------ --------------- ASSETS: Investments at value - Note C: Tax-exempt long-term bonds (cost - $43,911,764) $46,165,176 Cash 1,056,148 Receivable for shares sold 998,260 Interest receivable 738,893 Receivable from John Hancock Advisers, Inc. - Note B 20,356 ----------- Total Assets 48,978,833 ---------------------------------------------------- LIABILITIES: Payable to John Hancock Advisers, Inc. and affiliates - Note B 39,298 Accounts payable and accrued expenses 65,898 ----------- Total Liabilities 105,196 ---------------------------------------------------- NET ASSETS: Capital paid-in 46,662,279 Accumulated net realized loss on investments and financial futures contracts (44,815) Net unrealized appreciation of investments 2,253,412 Undistributed net investment income 2,761 ----------- Net Assets $48,873,637 ==================================================== NET ASSET VALUE PER SHARE (Based on 4,164,370 shares of beneficial interest outstanding - unlimited number of shares authorized with no par value) $11.74 =================================================================================================== MAXIMUM OFFERING PRICE PER SHARE** $(11.74 x 104.71%) $12.29 =================================================================================================== * The net assets of the John Hancock Tax Exempt Series Fund - California Portfolio ("the Portfolio") were merged into the John Hancock California Tax-Free Income Fund as of the close of business on September 15, 1995 and the Portfolio was subsequently terminated. The Statement of Assets and Liabilities reflects the Portfolio's position prior to the transfer of net assets and the termination of the Portfolio. (See Note A to the Notes to Financial Statements). ** On single retail sales of less than $100,000. On sales of $100,000 or more and on group sales the offering price is reduced.
See notes to financial statements. 4 John Hancock Funds - Tax-Exempt Series Fund - California Portfolio STATEMENT OF OPERATIONS For the period September 1, 1995 to September 15, 1995* (Unaudited) - -------------------------------- ----------------------------- --------------------- INVESTMENT INCOME: Interest $111,915 -------- Expenses: Investment management fee - Note B 9,803 Distribution/service fee - Note B 5,882 Transfer agent fee - Note B 1,764 Registration and filing fees 980 -------- Total Expenses 18,429 Less Expense Reductions - Note B (4,693) -------- Net Expenses 13,736 -------- Net Investment Income 98,179 -------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments sold 839 Change in net unrealized appreciation/depreciation of investments 438,213 -------- Net Realized and Unrealized Gain on Investments 439,052 -------- Net Increase in Net Assets Resulting from Operations $537,231 ================================================ * The net assets of the John Hancock Tax Exempt Series Fund - California Portfolio ("the Portfolio") were merged into the John Hancock California Tax-Free Income Fund as of the close of business on September 15, 1995 and the Portfolio was subsequently terminated. The Statement of Operations reflects the Portfolio's position prior to the transfer of net assets and the termination of the Portfolio. (See Note A to the Notes to Financial Statements).
See notes to financial statements. 5 John Hancock Funds - Tax-Exempt Series Fund - California Portfolio Statement of Changes in Net Assets - -------------------- -------------------------------------- ---------------- ----------------- ------------------ ----------------
FOR THE PERIOD SEPTEMBER 1, 1995 TO YEAR ENDED SEPTEMBER 15, 1995 AUGUST 31, (UNAUDITED)** 1995 ----------------------------------- FROM OPERATIONS: Net investment income $ 98,179 $ 2,636,372 Net realized gain on investments sold 839 33,756 Change in net unrealized appreciation/depreciation of investments 438,213 991,445 ----------------------------------- Net Increase in Net Assets Resulting from Operations 537,231 3,661,573 ----------------------------------- DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income $(0.0256 and $0.6283 per share, respectively) (98,179) (2,636,372) ----------------------------------- FROM FUND SHARE TRANSACTIONS - NET* 885,777 (2,518,023) ----------------------------------- NET ASSETS: Beginning of period 47,548,808 49,041,630 ----------------------------------- End of period (including undistributed net investment income of $2,761 and $2,761, respectively) $48,873,637 $47,548,808 =================================== * ANALYSIS OF FUND SHARE TRANSACTIONS:
FOR THE PERIOD SEPTEMBER 1, 1995 TO YEAR ENDED SEPTEMBER 15, 1995 AUGUST 31, (UNAUDITED)** 1995 ---------------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ Shares sold 87,424 $1,027,278 414,708 $ 4,671,968 Shares issued to shareholders in reinvestment of distributions 5,605 65,864 155,996 1,753,168 ---------------------------------------------------------------- 93,029 1,093,142 570,704 6,425,136 Less shares repurchased (17,669) (207,365) (791,874) (8,943,159) ---------------------------------------------------------------- Net increase (decrease) 75,360 $ 885,777 (221,170) $(2,518,023) ================================================================ ** The net assets of the John Hancock Tax Exempt Series Fund - California Portfolio ("the Portfolio") were merged into the John Hancock California Tax-Free Income Fund as of the close of business on September 15, 1995 and the Portfolio was subsequently terminated. The Statement of Changes in Net Assets reflects the Portfolio's position prior to the transfer of net assets and the termination of the Portfolio. (See Note A to the Notes to Financial Statements).
See notes to financial statements. 6 John Hancock Funds - Tax-Exempt Series Fund - California Portfolio FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout the period indicated, investment returns, key ratios and supplemental data are as follows: - ---------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD SEPTEMBER 1, 1995 TO SEPTEMBER 15, 1995 YEAR ENDED AUGUST 31, ----------------------------------------------- (UNAUDITED) 1995 1994 1993 ----------- ---- ---- ---- PER SHARE OPERATING PERFORMANCE Net Asset Value, Beginning of Period $ 11.63 $ 11.38 $ 12.36 $ 11.68 ------- ------- ------- ------- Net Investment Income 0.03 0.63 0.62 0.67 Net Realized and Unrealized Gain (Loss) on Investments and Financial Futures Contracts 0.11 0.25 (0.76) 0.82 ------- ------- ------- ------- Total from Investment Operations 0.14 0.88 (0.14) 1.49 ------- ------- ------- ------- Less Distributions: Dividends from Net Investment Income (0.03) (0.63) (0.62) (0.67) Distributions from Net Realized Gain on Investments Sold -- -- (0.22) (0.14) ------- ------- ------- ------- Total Distributions (0.03) (0.63) (0.84) (0.81) ------- ------- ------- ------- Net Asset Value, End of Period $ 11.74 (c) $ 11.63 $ 11.38 $ 12.36 ======= ======= ======= ======= Total Investment Return at Net Asset Value 1.17% (b) 8.06% (1.13%) 13.36% Total Adjusted Investment Return at Net Asset Value (a) 0.93% (b) 7.61% (1.69%) 12.48% RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (000's omitted) $48,874 $47,549 $49,042 $47,624 Ratio of Expenses to Average Net Assets 0.70%* 0.70% 0.70% 0.67% Ratio of Adjusted Expenses to Average Net Assets (a) 0.94%* 1.15% 1.26% 1.55% Ratio of Net Investment Income to Average Net Assets 4.99%* 5.58% 5.27% 5.62% Ratio of Adjusted Net Investment Income to Average Net Assets (a) 4.75%* 5.13% 4.71% 4.74% Portfolio Turnover Rate 0% 35% 38% 93% Expense Reimbursement Per Share $0.00 $0.05 $0.07 $0.10 YEAR ENDED AUGUST 31, ---------------------- 1992 1991 ---- ---- PER SHARE OPERATING PERFORMANCE Net Asset Value, Beginning of Period $ 11.25 $ 10.72 ------- ------- Net Investment Income 0.70 0.70 Net Realized and Unrealized Gain (Loss) on Investments and Financial Futures Contracts 0.43 0.53 ------- ------- Total from Investment Operations 1.13 1.23 ------- ------- Less Distributions: Dividends from Net Investment Income (0.70) (0.70) Distributions from Net Realized Gain on Investments Sold -- -- ------- ------- Total Distributions (0.70) (0.70) ------- ------- Net Asset Value, End of Period $ 11.68 $ 11.25 ======= ======= Total Investment Return at Net Asset Value 10.34% 11.83% Total Adjusted Investment Return at Net Asset Value (a) 9.30% 10.71% RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (000's omitted) $33,896 $25,914 Ratio of Expenses to Average Net Assets 0.60% 0.60% Ratio of Adjusted Expenses to Average Net Assets (a) 1.64% 1.72% Ratio of Net Investment Income to Average Net Assets 6.09% 6.35% Ratio of Adjusted Net Investment Income to Average Net Assets (a) 5.05% 5.23% Portfolio Turnover Rate 50% 7% Expense Reimbursement Per Share $0.12 $0.12 * On an annualized basis. (a) On an unreimbursed basis without expense reduction. (b) Not annualized. (c) Net asset value per share, before the merger of assets to the John Hancock California Tax-Free Income Fund, and the termination of the Portfolio. (See Note A to the Notes to Financial Statements).
See notes to financial statements. 7 JOHN HANCOCK FUNDS - TAX EXEMPT SERIES FUND - CALIFORNIA PORTFOLIO SCHEDULE OF INVESTMENTS
September 15, 1995 (Unaudited) Par Value Yield Interest Maturity S+P (000's Market at State - Issuer - Description Rate Date Rating*** Omitted) Value Market + - ---------------------------- ---- ---- --------- -------- ----- -------- TAX-EXEMPT LONG-TERM BONDS CALIFORNIA (93.41%) Alameda, County of, Cert of Part 1992 Cap Proj 6.750% 06-01-16 A+ $ 500 $ 520,275 6.40% California Educational Facilities Auth, Rev 1993 Ser B Pooled College & Univ Proj 6.125 06-01-09 Baa** 1,000 1,006,060 6.00 California Health Facilities Financing Auth, Hosp Rev 1991 Ser A San Diego Hosp Assoc 6.950 10-01-21 A 250 263,827 6.50 Ins Hosp Rev Ser 1990 Children's Hosp San Diego 6.500 07-01-20 AAA 500 520,220 6.20 Rev 1990 Ser A Kaiser Permanente 7.000 12-01-10 AA 600 648,984 6.40 Rev Ser 1994A Scripps Research Institute 6.300 07-01-09 A** 500 518,575 6.00 Sec Rev 1991 Ser Hosp of the Good Samaritan 7.000 09-01-21 A 250 259,388 6.70 California Housing Finance Agency, Home Mtg Rev 1986 Ser A 8.100 08-01-16 AA- 75 78,215 7.70 Home Mtg Rev 1988 Ser B 8.600 08-01-19 AA- 40 42,477 8.10 Home Mtg Rev 1988 Ser D 8.000 08-01-19 AA- 90 96,353 7.40 Home Mtg Rev 1989 Ser A 7.625 08-01-09 AA- 35 36,925 7.20 Home Mtg Rev 1989 Ser B 8.000 08-01-29 AA- 100 106,940 7.40 Home Mtg Rev 1989 Ser D 7.500 08-01-29 AA- 150 157,976 7.10 Home Mtg Rev 1990 Ser D 7.875 08-01-31 AA- 15 15,714 7.50 Home Mtg Rev 1991 Ser A 7.375 08-01-17 AA- 155 166,175 6.80 Home Mtg Rev 1991 Ser C 7.450 08-01-11 AA- 65 69,555 6.90 Home Mtg Rev 1994 Ser C 6.650 08-01-14 AA- 1,000 1,036,730 6.40 Hsg Rev 1991 Ser E 7.000 08-01-26 AAA 525 552,431 6.60 California Pollution Control Financing Auth, Poll Control Rev 1991 Ser Southern Calif Edison Co 6.900 12-01-17 A+ 500 526,790 6.50 Poll Control Rev 1992 Ser A Pacific Gas & Elec Co 6.625 06-01-09 A 500 521,585 6.30 California State Public Works Board, Lease Rev 1994 Ser A Depart of Corrections Calif State Prison-Monterey County (Soledad II) 6.875 11-01-14 A- * 500 534,680 6.40 Lease Rev Ref Ser A Various Univ Proj 5.500 06-01-21 A- * 1,250 1,135,112 6.00 Campbell, City of, 1991 Cert of Part Civic Center Proj 6.750 10-01-17 A- 155 177,239 5.90 1991 Cert of Part Civic Center Proj 6.750 10-01-17 A- 1,565 1,618,805 6.50 Carson Redevelopment Agency, Tax Alloc Ser 1992 Area No. 1 Redevel Proj 6.375 10-01-12 BBB+ 500 503,215 6.30 Tax Alloc Ser 1993B Area No. 1 Redevel Proj 6.000 10-01-16 BBB+ 500 471,520 6.30 Castaic Lake Water Agency, Cert of Part Ser 1990 Wtr Sys Imp Proj 7.350 08-01-20 A 200 228,582 6.40 Central California Joint Powers Health Financing Auth, Cert of Part Ser 1993 Community Hosp of Central Calif Proj 5.250 02-01-13 A** 750 678,495 5.80 Central Coast Water Auth, Rev State Wtr Proj Regional Facil Ser 1992 6.600 10-01-22 AAA 500 532,160 6.20 Central Valley Financing Auth, Cogeneration Proj Rev Carson Ice-Gen Proj 1993 Ser 6.100 07-01-13 BBB- 2,300 2,248,503 6.20 Cogeneration Proj Rev Carson Ice-Gen Proj 1993 Ser 6.200 07-01-20 BBB- 1,000 965,550 6.40
See notes to financial statements. 8 JOHN HANCOCK FUNDS - TAX EXEMPT SERIES FUND - CALIFORNIA PORTFOLIO SCHEDULE OF INVESTMENTS
September 15, 1995 (Unaudited) Par Value Yield Interest Maturity S+P (000's Market at State - Issuer - Description Rate Date Rating*** Omitted) Value Market + - ---------------------------- ---- ---- --------- -------- ----- -------- CALIFORNIA (CONTINUED) Contra Costa Water District, Wtr Treatment Rev Ser E 6.250 10-01-12 AAA 1,000 1,083,390 5.70 Costa Mesa Public Financing Auth, 1991 Local Agency Rev Ser A 7.100 08-01-21 NR 220 221,419 7.00 Desert Hospital District, Hosp Rev Cert of Part Ser 1990 Desert Hosp Corp Proj 8.000 07-01-10 AAA 300 353,208 6.70 Fairfield Public Financing Auth, 1995 Rev Ser A Pennsylvania Ave Storm Drainage Proj 6.500 08-01-21 A- * 1,085 1,070,179 6.50 Fontana Public Financing Auth, Sub Lien Tax Alloc Rev 1991 Ser A North Fontana Redevel Proj 7.750 12-01-20 BBB 195 232,220 6.50 Tax Alloc Rev Ser 1990 Ser A North Fontana Redevel Proj 7.250 09-01-20 A 325 344,740 6.80 Foothill/Eastern Transportation Corridor Agency, Toll Rd Rev Fixed Rate Current Int Ser 1995A 6.500 01-01-32 BBB- * 1,490 1,495,722 6.40 Toll Rd Rev Fixed Rate Current Int-Ser 1995A 6.000 01-01-34 BBB- * 1,000 942,980 6.30 Fresno, City of, Hlth Facil Rev Ser 1991 Saint Agnes Medical Center 6.625 06-01-21 AA- 250 259,592 6.30 Los Angeles City Department of Water and Power, Elec Plant Ref Rev Second Iss of 1993 5.400 11-15-12 AA- 1,000 950,530 5.60 Los Angeles County Health Facilities Auth, Lease Rev Ref Olive View Medical Center Proj 7.500 03-01-08 NR 450 492,935 6.80 Metropolitan Water District, Waterworks Ref Rev Iss of 1986 6.750 06-01-22 AA+ 155 160,135 6.50 Wtr Rev Iss of 1991 6.625 07-01-12 AA 750 799,882 6.20 Moreno Valley, City of, Cert of Part Ser 1995 City Hall Proj 6.500 11-01-16 Baa1** * 1,500 1,510,095 6.40 Mount Diablo Hospital District, Hosp Rev Ser A 6.000 12-01-05 AAA 1,640 1,776,579 5.50 Mountain View City Capital Improvements Financing Auth, 1992 Rev City Hall/Community Theatre Complex & Shoreline Regional Park Community Tax Alloc Refinancing 6.500 08-01-16 AAA 600 629,292 6.20 Northern California Transmission Agency, Rev 1990 Ser A Calif-Oregon Transm Proj 7.000 05-01-13 AAA 100 116,287 6.00 Rev 1992 Ser A Calif-Oregon Transm Proj 6.500 05-01-16 AAA 1,000 1,055,220 6.10 Oakland, Port of, Port Rev Ser E 6.400 11-01-07 AAA 1,000 1,083,260 5.90 Spec Facil Rev 1992 Ser A Mitsui O.S.K. Lines Ltd Proj 6.800 01-01-19 A+ 500 512,890 6.60 Orange, County of, Ser A of 1990 Spec Tax of Community Facil Dist No. 87-3 Mission Viejo 7.800 08-15-15 A** 350 407,222 6.70 Ser A of 1992 Spec Tax of Community Facil Dist No. 88-1 Aliso Viejo 7.350 08-15-18 NR 1,000 1,188,360 6.10 Pasadena, City of, 1993 Ref Cert of Part Old Pasadena Parking Facil Proj 6.250 01-01-18 A+ 1,000 1,048,070 5.90 Rancho Mirage, City of, Joint Powers Financing Auth, Civic Center Rev Ref Ser 1991A 7.500 04-01-17 BBB 195 226,779 6.40 Civic Center Rev Unref Ser 1991A 7.500 04-01-17 BBB 55 58,337 7.00 Riverside County Asset Leasing Corp, Leasehold Rev 1993 Ser A County of Riverside Hosp Proj 6.500 06-01-12 A 1,000 1,038,220 6.20 Sacramento City Financing Auth, Lease Rev Ref Ser A 5.375 11-01-14 AAA 500 484,010 5.50
See notes to financial statements. 9 JOHN HANCOCK FUNDS - TAX EXEMPT SERIES FUND - CALIFORNIA PORTFOLIO SCHEDULE OF INVESTMENTS
September 15, 1995 (Unaudited) Par Value Yield Interest Maturity S+P (000's Market at State - Issuer - Description Rate Date Rating*** Omitted) Value Market + - ---------------------------- ---- ---- --------- -------- ----- -------- CALIFORNIA (CONTINUED) San Bernardino, County of, Cert of Part Medical Center Fin Proj 5.500 08-01-17 A- * 1,000 882,960 6.20 Cert of Part Ser B Cap Facil Proj 6.875 08-01-24 AAA 350 414,050 5.80 Trans Auth Sales Tax Rev Ser A 5.400 03-01-10 AAA 1,000 989,100 5.40 San Diego County Regional Transportation Commission, Sales Tax Rev 1991 Ser A 7.000 04-01-06 AA- 90 98,133 6.40 San Diego County Water Auth, Wtr Rev Cert of Part Reg Fixed 5.681 04-22-09 AAA * 800 816,688 5.50 San Diego, City of, Ind'l Dev Rev 1986 Ser A San Diego Gas & Elec Co 7.625 07-01-21 A+ 300 312,486 7.30 San Francisco State Building Auth, Lease Ref Rev 1993 Ser A Dept of Gen Serv 5.000 10-01-13 A- 2,245 2,001,799 5.60 San Jose Financing Auth, Reassessment Rev 1994 Ser C 6.750 09-02-11 NR 960 981,466 6.60 San Jose, City of, 1986 Cert of Part Convention Center Proj 7.875 09-01-10 A+ 300 317,091 7.40 San Mateo County Joint Powers Financing Auth, Lease Rev 1994 Ser A San Mateo County Hlth Center 6.125 07-15-14 AAA 250 254,830 6.00 Santa Barbara, County of, 1990 Cert of Part 7.500 02-01-11 A+ 250 283,138 6.60 1991 Cert of Part 6.400 02-01-11 A+ 250 256,915 6.20 Santa Rosa, City of, Wastewater Rev 1992 Ser A Subregional Wastewater Proj 6.500 09-01-22 AAA 500 528,655 6.10 Southern California Home Financing Auth, Single Family Mtg Rev 1990 Iss B 7.750 03-01-24 AAA 45 47,761 7.30 Southern California Public Power Auth, Pwr Proj Rev 1987 Ref Ser A Palo Verde Proj 6.875 07-01-15 AA- 215 221,990 6.60 Torrance City Redevelopment Agency, Tax Alloc Ref Ser 1992 Downtown Redevel Proj 7.125 09-01-21 BBB 500 517,275 6.80 University of California, The Regents of, 1993 Ref Cert of Part UCLA Central Chiller/Cogeneration Facil 5.400 11-01-11 Aa** * 1,000 947,350 5.70 ---------- 45,652,296 ---------- GUAM (1.05%) Guam Airport Auth, Gen Rev 1993 Ser B 6.600 10-01-10 BBB 500 512,880 6.40 TOTAL TAX-EXEMPT LONG TERM BONDS (Cost $ 43,911,764) 94.46% 46,165,176 ===== ========== *Securities, other than short term investments, newly added to the portfolio during the period ended September 15, 1995. **Rated by Moody's Investors Services, Fitch or John Hancock Adviser's, Inc. where Standard & Poors ratings are not available. NR not rated. ***Credit Ratings are unaudited. +The yield is unaudited and not calculated in accordance with guidelines established by the U.S. Securities and Exchange Commissions. The percentage shown for each category is the total value of that category as a percetnage of the net assets of the Portfolio.
See notes to financial statements. 10 NOTES TO FINANCIAL STATEMENTS JOHN HANCOCK FUNDS - JOHN HANCOCK TAX-EXEMPT SERIES FUND - CALIFORNIA PORTFOLIO (UNAUDITED) NOTE A -- ACCOUNTING POLICIES John Hancock Tax-Exempt Series Fund (the "Fund") is an open-end non-diversified investment management company, registered under the Investment Company Act of 1940. The Fund is organized as a Massachusetts business trust under the laws of The Commonwealth of Massachusetts. Prior to September 15, 1995, the Fund consisted of three separate portfolios: the California Portfolio (the "Portfolio"), the Massachusetts Portfolio, and the New York Portfolio. The Trustees may authorize the creation of additional portfolios from time to time to satisfy various investment objectives. On September 8, 1995, the shareholders of the California Portfolio approved a plan of reorganization between the Portfolio and John Hancock California Tax-Free Income Fund ("California Tax-Free Income Fund") providing for the transfer of substantially all of the assets and liabilities of the Portfolio to California Tax-Free Income Fund in exchange solely for shares of beneficial interest of California Tax-Free Income Fund. After this transaction and as of the close of business on September 15, 1995, the Portfolio was terminated. The financial statements presented herein reflect the position of the Portfolio prior to the exchange of net assets and termination of the Portfolio. Significant accounting policies of the Portfolio were as follows: VALUATION OF INVESTMENTS Securities in the Portfolio were valued on the basis of market quotations, valuations provided by independent pricing services or, 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 approximates market value. JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the Securities and Exchange Commission, the Portfolio, along with other registered investment companies having a management contract with John Hancock Advisers, Inc. (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial Group, may participate in a joint repurchase agreement transaction. Aggregate cash balances were invested in one or more repurchase agreements, whose underlying securities were obligations of the U.S. government and/or its agencies. The Portfolio's custodian bank received delivery of the underlying securities for the joint account on the Portfolio's behalf. The Adviser was responsible for ensuring that the agreement was fully collateralized at all times. 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. FEDERAL INCOME TAXES The Portfolio's policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies. It will not be subject to Federal income tax on taxable earnings which are distributed to shareholders. As of September 15, 1995, the Portfolio's final tax year end, for Federal income tax purposes, the Portfolio had $34,998 of capital loss carryforward available, expiring in 2003. To the extent that such carryforward was used by the Portfolio, no capital gains distributions were made. The unused capital loss carryforward as of September 15, 1995 was transferred to the John Hancock California Tax-Free Income Fund. This capital loss carryforward will be available, to the extent provided by regulations, to offset future net capital gains of the John Hancock California Tax-Free Income Fund. Expired capital loss carryforward is reclassified to capital paid-in, in the year of expiration DIVIDENDS, DISTRIBUTIONS AND INTEREST Interest income on investment securities was recorded on the accrual basis. The Portfolio recorded all distributions to shareholders from net investment income and realized gains on the ex-dividend date. The Portfolio recorded dividends from net investment income daily and distributed monthly. EXPENSES The majority of the expenses of the Fund were directly identifiable to an individual Portfolio. Expenses which were not identifiable to a specific Portfolio 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 Portfolios. 11 NOTES TO FINANCIAL STATEMENTS JOHN HANCOCK FUNDS - JOHN HANCOCK TAX-EXEMPT SERIES FUND - CALIFORNIA PORTFOLIO PREMIUM AND DISCOUNT For tax-exempt issues, the Portfolio amortized the amount paid in excess of par value on securities purchased from either the date of purchase or date of issue to date of sale, maturity or to next call date, if applicable. The Portfolio accreted original issue discount from par value on securities purchased from either the date of issue or the date of purchase over the life of the security, as required by the Internal Revenue Code. The Portfolio recorded market discount on bonds purchased after April 30, 1993 at the time of disposition. FINANCIAL FUTURES CONTRACTS The Portfolio may have bought and sold financial futures contracts for speculative purposes and/or to hedge against the effects of fluctuations in interest rates and other market conditions. At the time the Portfolio entered into a financial futures contract, it was required to deposit with its 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 contract being traded. Each day, the futures contract was valued at the official settlement price of the board of trade or U.S. commodities exchange. Subsequent payments, known as "variation margin", to and from the broker were made on a daily basis as the market price of the financial futures contract fluctuates. Daily variation margin adjustments, arising from this "mark to market", were recorded by the Portfolio as unrealized gains or losses. When the contracts were closed, the Portfolio recognized a gain or loss. 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 contract may not have correlated with changes in the value of the underlying securities. In addition, the Portfolio could have been prevented from opening or realizing the benefits of closing out futures positions because of position limits or limits on daily price fluctuations imposed by an exchange. For federal income tax purposes, the amount, character and timing of the Portfolio's gains and/or losses could have been affected as a result of futures transactions. At September 15, 1995 there were no open positions in financial futures contracts. NOTE B -- MANAGEMENT FEE, ADMINISTRATIVE SERVICES AND TRANSACTIONS WITH AFFILIATES AND OTHERS Under the investment management contract, the Portfolio paid a monthly management fee to the Adviser for a continuous investment program equivalent, on an annual basis, to the sum of (a) 0.500% of the first $250,000,000 of the Portfolio's average daily net asset value, (b) 0.450% of the next $250,000,000, (c) 0.425% of the next $500,000,000, (d) 0.400% of the next $250,000,000 and (e) 0.300% of the Portfolio's average daily net asset value in excess of $1,250,000,000. In the event normal operating expenses of the Portfolio, exclusive of certain expenses prescribed by state law, were in excess of the most restrictive state limit where the Portfolio was registered to sell shares of beneficial interest, the fee payable to the Adviser was reduced to the extent of such excess and the Adviser made additional arrangements necessary to eliminate any remaining excess expenses. The limits were 2.5% of the first $30,000,000 of the Portfolio's average daily net asset value, 2.0% of the next $70,000,000 and 1.5% of the remaining average daily net asset value. The Adviser agreed to limit the Portfolio's expenses further to the extent required to prevent expenses from exceeding 0.70% of the Portfolio's average daily net asset value, exclusive of certain expenses prescribed by state law. Accordingly, for the period ended September 15, 1995, the reduction in the Adviser's fee collectively with any additional amounts not borne by the Portfolio by virtue of the expense limit for the Portfolio amounted to $4,693. 12 NOTES TO FINANCIAL STATEMENTS JOHN HANCOCK FUNDS - JOHN HANCOCK TAX-EXEMPT SERIES FUND - CALIFORNIA PORTFOLIO The Portfolio had a distribution agreement with John Hancock Funds, Inc. ("JH Funds"), a wholly-owned subsidiary of the Adviser. For the period ended September 15, 1995, JH Funds received net sales charges of $104,518 with regard to sales of shares. Out of this amount, $12,994 was retained and used for printing prospectuses, advertising, sales literature and other purposes, and $50,249 was paid as sales commissions to unrelated broker-dealers and $41,275 was paid as sales commissions to sales personnel of John Hancock Distributors, Inc. ("Distributors"), Tucker Anthony Incorporated ("Tucker Anthony") and Sutro & Co., Inc. ("Sutro"), all of which are broker dealers. The Adviser's indirect parent, John Hancock Mutual Life Insurance Company, is the indirect sole shareholder of Distributors and John Hancock Freedom Securities Corporation and its subsidiaries which include Tucker Anthony and Sutro, all of which are broker-dealers. In addition, to reimburse JH Funds for the services it provides as distributor of shares of the Portfolio, the Portfolio had adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company Act of 1940. Accordingly, the Portfolio made payments to JH Funds for distribution and service expenses at an annual rate not to exceed 0.30% of the Portfolio's average daily net assets to reimburse JH Funds for their distribution/service costs. Up to a maximum of 0.25% of such payments may have been service fees as defined by the amended Rules of Fair Practice of the National Association of Securities Dealers. Under the amended Rules of Fair Practice, curtailment of a portion of the Fund's 12b-1 payments could have occurred under certain circumstances. The Portfolio had a transfer agent agreement with John Hancock Investor Services Corporation ("Investor Services"), a wholly- owned subsidiary of The Berkeley Financial Group. The Portfolio paid transfer agent fees based on the number of shareholder accounts and certain out-of-pocket expenses. Messrs. Edward J. Boudreau, Jr. and Richard S. Scipione are directors and/or officers of the Adviser, and/or its affiliates. The compensation of unaffiliated Trustees was borne by the Portfolio. Effective with the fees paid for 1995, the unaffiliated Trustees may elect to defer for tax purposes their receipt of this compensation under the John Hancock Group of Funds Deferred Compensation Plan. The Portfolio made investments into other John Hancock Funds, as applicable, to cover its liability with regard to the deferred compensation. Investments to cover the Portfolio's deferred compensation liability were recorded on each Portfolio's books as an other asset. NOTE C -- INVESTMENT TRANSACTIONS Purchases and proceeds from sales of securities, other than obligations of the U.S. government and its agencies and short-term securities, during the period ended September 15, 1995, aggregated none and $20,400, respectively. There were no purchases or sales of obligations of the U.S. government and its agencies during the period ended September 15, 1995. The cost of investments owned at September 15, 1995 for Federal income tax purposes was $43,911,764. Gross unrealized appreciation and depreciation of investments aggregated $2,275,174 and $21,762, respectively, resulting in net unrealized appreciation of $2,253,412. NOTE D -- RECLASSIFICATION OF CAPITAL ACCOUNTS During the fiscal period ended September 15, 1995, the Portfolio has reclassified amounts to reflect an increase in undistributed net investment income of $42,500 and a decrease in capital paid-in of $42,500. This represents the amount necessary to report these balances on a tax basis, excluding certain temporary differences, as of September 15, 1995. These reclassifications, which have no impact on the net asset value of the Fund, are primarily attributable to certain differences in the computation of distributable income and capital gains under federal tax rules versus generally accepted accounting principles. -----END PRIVACY-ENHANCED MESSAGE-----