0000928816-12-000197.txt : 20120202 0000928816-12-000197.hdr.sgml : 20120202 20120202120039 ACCESSION NUMBER: 0000928816-12-000197 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20111130 FILED AS OF DATE: 20120202 DATE AS OF CHANGE: 20120202 EFFECTIVENESS DATE: 20120202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND CENTRAL INDEX KEY: 0000856671 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05979 FILM NUMBER: 12565024 BUSINESS ADDRESS: STREET 1: 601 CONGRESS STREET CITY: BOSTON STATE: MA ZIP: 02210 BUSINESS PHONE: 617-663-3000 MAIL ADDRESS: STREET 1: C/O JOHN HANCOCK FUNDS STREET 2: 601 CONGRESS STREET CITY: BOSTON STATE: MA ZIP: 02210 FORMER COMPANY: FORMER CONFORMED NAME: JOHN HANCOCK CALIFORNIA TAX FREE INCOME FUND DATE OF NAME CHANGE: 20110214 FORMER COMPANY: FORMER CONFORMED NAME: HANCOCK JOHN CALIFORNIA TAX FREE INCOME FUND DATE OF NAME CHANGE: 19941227 FORMER COMPANY: FORMER CONFORMED NAME: TRANSAMERICA CALIFORNIA TAX FREE INCOME FUND DATE OF NAME CHANGE: 19920703 0000856671 S000000616 HANCOCK JOHN CALIFORNIA TAX FREE INCOME FUND C000001742 Class A TACAX C000001743 Class B TSCAX C000001744 Class C TCCAX N-CSRS 1 a_cataxfreeincome.htm JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND a_cataxfreeincome.htm
UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
 
FORM N-CSR 
 
CERTIFIED SHAREHOLDER REPORT OF REGISTERED 
 
MANAGEMENT INVESTMENT COMPANIES 
 
Investment Company Act file number 811-5979 
 
John Hancock California Tax-Free Income Fund 
(Exact name of registrant as specified in charter) 
 
601 Congress Street, Boston, Massachusetts 02210 
(Address of principal executive offices) (Zip code) 
 
Salvatore Schiavone
Treasurer
 
601 Congress Street 
 
Boston, Massachusetts 02210 
 
(Name and address of agent for service) 
 
Registrant's telephone number, including area code: 617-663-4497 
 
Date of fiscal year end:  May 31 
 
Date of reporting period:  November 30, 2011 

 

Item 1. Schedule of Investments.





A look at performance

Total returns for the period ended November 30, 2011

                  SEC 30-day 
  Average annual total returns (%)  Cumulative total returns (%)    SEC 30-day  yield (%) 
  with maximum sales charge  with maximum sales charge    yield (%)  unsubsidized1 

                as of  as of 
  1-year  5-year  10-year  6-months  1-year  5-year  10-year  11-30-11  11-30-11 

Class A  2.32  2.63  3.78  1.07  2.32  13.88  44.95  3.85  3.85 

Class B  1.27  2.37  3.56  0.37  1.27  12.44  41.89  3.28  3.18 

Class C  5.27  2.71  3.39  4.37  5.27  14.32  39.54  3.28  3.18 

 

Performance figures assume all distributions are reinvested. Figures reflect maximum sales charges on Class A shares of 4.5% and the applicable contingent deferred sales charge (CDSC) on Class B shares and Class C shares. The returns for Class C shares have been adjusted to reflect the elimination of the front-end sales charge effective 7-15-04. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule: 5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectus for the Fund and may differ from those disclosed in the Financial highlights tables in this report. The fee waivers and expense limitations are contractual at least until 9-30-12 for Class B and Class C shares. Had the fee waivers and expense limitations not been in place gross expenses would apply. For all other classes the net expenses equal the gross expenses. The expense ratios are as follows:

  Class A  Class B  Class C 
Net (%)  0.86  1.61  1.61 
Gross (%)  0.86  1.71  1.71 

 

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund’s current performance may be higher or lower than the performance shown. For current to the most recent month end performance data, please call 1–800–225–5291 or visit the Fund’s Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares. Please note that a portion of the Fund’s income may be subject to taxes, and some investors may be subject to the Alternative Minimum Tax (AMT). Also note that capital gains are taxable. The Fund’s performance results reflect any applicable fee waivers or expense reductions, without which the expenses would increase and results would have been less favorable.

6  California Tax-Free Income Fund | Semiannual report 

 



    Without  With maximum   
  Start date  sales charge  sales charge  Index 

Class B2  11-30-01  $14,189  $14,189  $16,411 

Class C2  11-30-01  13,954  13,954  16,411 

 

Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

The Class C shares investment with maximum sales charge has been adjusted to reflect the elimination of the front-end sales charge effective 7-15-04.

Barclays Capital Municipal Bond Index is an unmanaged index representative of the tax-exempt bond market.

It is not possible to invest directly in an index. Index figures do not reflect sales charges or direct expenses, which would have resulted in lower values if they did.

1 Unsubsidized yield reflects what the yield would have been without the effect of reimbursements and waivers.

2 No contingent deferred sales charge is applicable.

Semiannual report | California Tax-Free Income Fund  7 

 



Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about the Fund’s actual ongoing operating expenses, and is based on the Fund’s actual return. It assumes an account value of $1,000.00 on June 1, 2011 with the same investment held until November 30, 2011.

  Account value  Ending value  Expenses paid during 
  on 6-1-11  on 11-30-11  period ended 11-30-111 

Class A  $1,000.00  $1,057.80  $4.37 

Class B  1,000.00  1,053.70  8.37 

Class C  1,000.00  1,053.70  8.37 

 

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at November 30, 2011, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

8  California Tax-Free Income Fund | Semiannual report 

 



Hypothetical example for comparison purposes

This table allows you to compare the Fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not the Fund’s actual return). It assumes an account value of $1,000.00 on June 1, 2011, with the same investment held until November 30, 2011. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

  Account value  Ending value  Expenses paid during 
  on 6-1-11  on 11-30-11  period ended 11-30-111 

Class A  $1,000.00  $1,020.80  $4.29 

Class B  1,000.00  1,016.90  8.22 

Class C  1,000.00  1,016.90  8.22 

 

Remember, these examples do not include any transaction costs, therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

1 Expenses are equal to the Fund’s annualized expense ratio of 0.85%, 1.63% and 1.63% for Class A, Class B and Class C shares, respectively, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).

Semiannual report | California Tax-Free Income Fund  9 

 



Portfolio summary

Top 10 Holdings (28.0% of Net Assets on 11-30-11)1,2  

Golden State Tobacco Securitization Corp., 5.000%, 6-1-35  4.9% 

Santa Ana Financing Authority, 6.250%, 7-1-24 4.2% 

New Haven Unified School District, Zero Coupon, 8-1-22  3.1% 

San Bernardino County, 5.500%, 8-1-17 2.8% 

Commonwealth of Puerto Rico, 6.500%, 7-1-15 2.6% 

State of California, 6.500%, 4-1-33 2.2% 

Foothill Eastern Transportation Corridor Agency, Zero Coupon, 1-15-36  2.2% 

California State Public Works Board, 5.000%, 12-1-19  2.0% 

Inglewood Unified School District, 5.250%, 10-15-26  2.0% 

California State Public Works Board, 5.500%, 6-1-18  2.0% 

 
Sector Composition1,3       

General Obligation Bonds  19.9%  Housing  1.5% 

 
Revenue Bonds    Utilities  1.3% 

 
Facilities  19.6%  Water & Sewer  1.2% 

 
Tobacco  11.6%  Pollution  0.8% 

 
Transportation  11.5%  Other Revenue  17.1% 

 
Education  7.3%  Short-Term Investments & Other  3.2% 

 
Health Care  5.0%     

     

 

Quality Composition1,4   

AAA  4.6% 

AA  19.3% 

A  30.2% 

BBB  25.4% 

BB  4.0% 

B  3.7% 

Not Rated  9.6% 

Short-Term Investments & Other  3.2% 

 


1 As a percentage of net assets on 11-30-11.

2 Cash and cash equivalents not included.

3 Investments focused on one sector may fluctuate more widely than investments diversified across sectors. Because the Fund may focus on particular sectors, its performance may depend on the performance of those sectors.

4 Ratings are from Moody’s Investors Service, Inc. If not available, we have used Standard & Poor’s Corporation ratings. In the absence of ratings from these agencies, we have used Fitch, Inc. ratings. “Not Rated” securities are those with no ratings available from these agencies. All ratings are as of 11-30-11 and do not reflect subsequent downgrades or upgrades, if any.

10  California Tax-Free Income Fund | Semiannual report 

 



Fund’s investments

As of 11-30-11 (unaudited)

    Maturity     
  Rate (%)  date  Par value  Value 
Municipal Bonds 96.85%        $252,270,579 

(Cost $244,643,541)         
 
California 88.42%        230,326,776 

ABAG Finance Authority for Nonprofit Corps.         
Institute on Aging (D)  5.650  08-15-38  $1,000,000  998,536 

ABAG Finance Authority for Nonprofit Corps.         
Sharp Healthcare  6.250  08-01-39  1,000,000  1,072,810 

Anaheim Certificates of Participation         
Convention Center (D)(P)  11.508  07-16-23  2,000,000  2,016,280 

Anaheim Public Financing Authority         
Public Improvement Project, Series C (D)(Z)  Zero  09-01-18  3,000,000  2,242,410 

Antioch Public Financing Authority, Series B  5.850  09-02-15  1,130,000  1,131,842 

Belmont Community Facilities         
Library Project, Series A (D)  5.750  08-01-24  1,000,000  1,154,860 

California County Tobacco         
Securitization Agency         
Fresno County Funding Corp.  6.000  06-01-35  1,765,000  1,388,931 

California County Tobacco         
Securitization Agency         
Kern County Corp., Series A  6.125  06-01-43  5,000,000  3,862,500 

California County Tobacco         
Securitization Agency         
Public Improvements  5.250  06-01-21  4,590,000  4,224,636 

California County Tobacco         
Securitization Agency         
Stanislaus Funding, Series A  5.500  06-01-33  850,000  715,216 

California Educational Facilities Authority         
College and University Financing Project  5.000  02-01-26  4,525,000  4,045,033 

California Educational Facilities Authority         
Woodbury University  5.000  01-01-25  1,800,000  1,626,174 

California Educational Facilities Authority         
Woodbury University  5.000  01-01-30  2,000,000  1,711,960 

California Health Facilities Financing         
Kaiser Permanente, Series A  5.250  04-01-39  2,500,000  2,506,525 

California Health Facilities Financing Authority         
Catholic Healthcare West, Series G  5.250  07-01-23  1,000,000  1,055,990 

California Health Facilities Financing Authority         
Providence Health and Services, Series C  6.500  10-01-33  1,000,000  1,138,560 

California Health Facilities Financing Authority         
Scripps Health, Series A  5.000  11-15-36  1,000,000  1,006,500 

 

See notes to financial statements  Semiannual report | California Tax-Free Income Fund  11 

 



    Maturity     
  Rate (%)  date  Par value  Value 
California (continued)         

California Infrastructure & Economic         
Development Bank California Independent         
System Operator, Series A  6.250  02-01-39  $2,000,000  $2,140,580 

California Infrastructure & Economic         
Development Bank Performing Arts Center  5.000  12-01-27  500,000  515,145 

California Pollution Control Financing Authority         
Waste Management Inc., Series C, AMT (P)  5.125  11-01-23  2,000,000  2,051,200 

California State Public Works Board         
Department of Corrections, Series A (D)  5.000  12-01-19  5,000,000  5,428,450 

California State Public Works Board         
Department of Corrections, Series C  5.500  06-01-18  5,000,000  5,273,450 

California State Public Works Board         
Trustees California State University, Series D  6.250  04-01-34  2,000,000  2,144,180 

California State University Revenue         
College and University Revenue, Series A  5.250  11-01-34  1,000,000  1,045,540 

California Statewide Communities         
Development Authority American Baptist         
Homes West  6.250  10-01-39  2,000,000  2,007,160 

California Statewide Communities         
Development Authority Senior Living of         
Southern California  7.250  11-15-41  1,700,000  1,819,544 

California Statewide Communities         
Development Authority Thomas Jefferson         
School of Law, Series A (S)  7.250  10-01-38  2,000,000  2,024,900 

California Statewide Communities         
Development Authority University         
of California — Irvine  5.750  05-15-32  1,230,000  1,232,583 

California Statewide Financing Authority         
Tobacco Settlement, Series A  6.000  05-01-37  2,500,000  1,939,975 

California Statewide Financing Authority         
Tobacco Settlement, Series B  6.000  05-01-37  4,000,000  3,103,960 

Capistrano Unified School District         
No. 90-2 Talega  5.875  09-01-23  500,000  507,880 

Capistrano Unified School District         
No. 90-2 Talega  6.000  09-01-33  750,000  753,375 

Center Unified School District, Series C (D)(Z)  Zero  09-01-16  2,145,000  1,829,385 

Cloverdale Community Development Agency  5.500  09-01-38  3,000,000  2,425,110 

Contra Costa County Public Financing         
Authority, Series A (D)  5.000  06-01-28  1,230,000  1,230,160 

Corona Community Facilities District No. 97-2  5.875  09-01-23  1,035,000  1,036,490 

East Side Union High School District-Santa         
Clara County (D)  5.250  09-01-24  2,500,000  2,894,550 

Folsom Public Financing Authority, Series B  5.125  09-01-26  1,000,000  932,660 

Foothill Eastern Transportation Corridor Agency         
Highway Revenue Tolls (Z)  Zero  01-15-25  6,615,000  2,845,442 

Foothill Eastern Transportation Corridor Agency         
Highway Revenue Tolls (Z)  Zero  01-15-36  30,000,000  5,778,600 

Fresno Sewer Revenue, Series A–1 (D)  5.250  09-01-19  1,000,000  1,129,420 

Fullerton Community Facilities District No: 1  6.200  09-01-32  1,000,000  1,011,840 

Golden State Tobacco Securitization Corp.         
Escrowed to Maturity, Series 2003 A–1  6.250  06-01-33  1,850,000  1,983,996 

Golden State Tobacco Securitization Corp.         
Series A (D)  5.000  06-01-35  13,750,000  12,866,425 

 

12  California Tax-Free Income Fund | Semiannual report  See notes to financial statements 

 



    Maturity     
  Rate (%)  date  Par value  Value 
California (continued)         

Inglewood Unified School District         
School District (D)  5.250  10-15-26  $5,000,000  $5,284,350 

Irvine Mobile Home Park Revenue         
Meadow Mobile Home Park, Series A  5.700  03-01-28  3,975,000  3,831,900 

Kern County, Capital Improvements Project,         
Series A (D)  5.750  08-01-35  1,000,000  1,063,840 

Laguna-Salada Union School District,         
Series C (D)(Z)  Zero  08-01-26  1,000,000  457,650 

Lancaster School District         
School Improvements (D)(Z)  Zero  04-01-19  1,730,000  1,319,454 

Lancaster School District         
School Improvements (D)(Z)  Zero  04-01-22  1,380,000  836,542 

Lee Lake Water District Community Facilities         
District No: 2 Montecito Ranch  6.125  09-01-27  1,200,000  1,204,452 

Long Beach Harbor Revenue, Series A, AMT (D)  6.000  05-15-18  2,660,000  3,219,265 

Long Beach Special Tax Community         
Community Facilities, District 6  6.250  10-01-26  2,500,000  2,499,925 

Los Angeles Community College District         
2008 Election, Series A  6.000  08-01-33  4,000,000  4,532,120 

Los Angeles Community Facilities District No: 3         
No. 3 Cascades Business Park  6.400  09-01-22  655,000  657,024 

M-S-R Energy Authority         
Natural Gas Revenue, Series B  6.500  11-01-39  2,500,000  2,740,425 

Modesto Community Facilities District No: 4-1  5.100  09-01-26  3,000,000  2,716,020 

New Haven Unified School District, Series B (D)(Z)  Zero  08-01-22  14,200,000  8,119,844 

Northern California Power Agency         
California — Oregon Transportation Project,         
Series A (D)  7.000  05-01-13  70,000  73,492 

Orange County Improvement Bond Act 1915,         
Series B  5.750  09-02-33  1,365,000  1,367,798 

Oxnard Community Facilities District: No. 3         
Seabridge  5.000  09-01-35  1,490,000  1,346,081 

Paramount Unified School District, Series B (D)(Z)  Zero  09-01-25  4,735,000  2,203,527 

Pasadena California Certificates Participation         
Refunding Old Pasadena Parking         
Facility Project  6.250  01-01-18  700,000  785,218 

Ripon Redevelopment Agency         
Ripon Community Redevelopment Project (D)  4.750  11-01-36  1,550,000  1,266,583 

Riverside County Asset Leasing Corp.         
Health, Hospital & Nursing Home         
Improvements, Series A  6.500  06-01-12  355,000  361,035 

San Bernardino County         
Capital Facilities Project, Escrowed to         
Maturity, Series B  6.875  08-01-24  350,000  474,359 

San Bernardino County         
Medical Center Financial Project, Series B (D)  5.500  08-01-17  6,910,000  7,195,038 

San Bruno Park School District         
School Improvements, Series B (D)(Z)  Zero  08-01-21  1,015,000  665,708 

San Diego Public Facilities Financing Authority         
Lease Revenue  5.250  03-01-40  1,000,000  989,740 

San Diego Redevelopment Agency         
City Heights, Series A  5.750  09-01-23  1,000,000  999,940 

 

See notes to financial statements  Semiannual report | California Tax-Free Income Fund  13 

 



    Maturity     
  Rate (%)  date  Par value  Value 
California (continued)         

San Diego Redevelopment Agency         
City Heights, Series A  5.800  09-01-28  $1,395,000  $1,347,054 

San Diego Redevelopment Agency         
Public Improvements, Series B (Z)  Zero  09-01-17  1,600,000  1,187,536 

San Diego Redevelopment Agency         
Public Improvements, Series B (Z)  Zero  09-01-18  1,700,000  1,167,322 

San Diego Unified School District, Election         
of 1998, Series A (D)(Z)  Zero  07-01-21  2,500,000  1,647,200 

San Francisco City & County Redevelopment         
Agency Community Facilities, District No. 6,         
Series A  6.000  08-01-25  2,500,000  2,501,300 

San Francisco City & County Redevelopment         
Agency Department of General Services         
Lease, No. 6, Mission Bay South, Series A  5.150  08-01-35  1,250,000  1,064,750 

San Francisco City & County Redevelopment         
Agency Mission Bay South Redevelopment,         
Series D  7.000  08-01-41  1,000,000  1,052,340 

San Francisco City & County Redevelopment         
Financing Authority Mission Bay South         
Redevelopment, Series D  6.625  08-01-39  1,000,000  1,022,090 

San Francisco City & County Redevelopment         
Financing Authority San Francisco         
Redevelopment Projects, Series B  6.625  08-01-39  700,000  745,066 

San Francisco State Building Authority, Series A  5.000  10-01-13  925,000  952,972 

San Joaquin County         
County Administration Building (D)  5.000  11-15-29  2,965,000  2,987,712 

San Joaquin Hills Transportation Corridor         
Agency Highway Revenue Tolls, Escrowed         
to Maturity (Z)  Zero  01-01-14  5,000,000  4,922,500 

San Joaquin Hills Transportation Corridor         
Agency Highway Revenue Tolls, Escrowed         
to Maturity (Z)  Zero  01-01-22  6,500,000  4,989,205 

San Joaquin Hills Transportation Corridor         
Agency Highway Revenue Tolls, Series A  5.750  01-15-21  5,000,000  4,570,650 

San Mateo County Joint Power Authority (D)  5.000  07-01-21  1,815,000  1,987,026 

Santa Ana Financing Authority         
Police Administration & Holdings Facility,         
Series A (D)  6.250  07-01-19  1,790,000  1,982,085 

Santa Ana Financing Authority         
Police Administration & Holdings Facility,         
Series A (D)  6.250  07-01-24  10,000,000  10,960,600 

Santa Fe Springs Community Development         
Commission Construction Redevelopment         
Project, Series A (D)(Z)  Zero  09-01-20  1,275,000  807,024 

Santaluz Community Facilities District No: 2         
Improvement Area No. 1  6.375  09-01-30  1,485,000  1,487,465 

Southern California Public Power Authority         
Natural Gas Revenue, Series A  5.250  11-01-26  2,000,000  1,949,460 

State of California (D)  4.750  04-01-29  2,920,000  2,920,380 

State of California  5.000  09-01-41  1,500,000  1,490,685 

State of California  5.000  10-01-41  2,000,000  1,987,580 

State of California Public Improvements  5.125  04-01-23  2,000,000  2,108,320 

 

14  California Tax-Free Income Fund | Semiannual report  See notes to financial statements 

 



    Maturity     
  Rate (%)  date  Par value  Value 
California (continued)         

State of California Recreation Facilities         
and School Improvements  6.500  04-01-33  $5,000,000  $5,825,600 

State of California Water, Utility         
and Highway Improvements  5.250  03-01-30  2,000,000  2,106,540 

Torrance Hospital Revenue Torrance Memorial         
Medical Center, Series A  5.500  06-01-31  2,000,000  2,003,820 

Tuolumne Wind Project Authority         
Tuolumne County Project, Series A  5.625  01-01-29  1,000,000  1,091,640 

Vallejo Sanitation & Flood Control District (D)  5.000  07-01-19  1,945,000  1,990,941 

West Covina Redevelopment Agency         
Fashion Plaza  6.000  09-01-22  3,000,000  3,407,820 
 
Puerto Rico 8.43%        21,943,803 

Commonwealth of Puerto Rico  6.500  07-01-15  6,000,000  6,710,040 

Commonwealth of Puerto Rico         
Public Improvement, Series A  5.750  07-01-41  5,000,000  5,136,900 

Commonwealth of Puerto Rico, Series A  5.375  07-01-33  1,250,000  1,256,475 

Puerto Rico Aqueduct & Sewer Authority         
Water Revenue, Series A  6.125  07-01-24  1,750,000  1,931,580 

Puerto Rico Highway & Transportation         
Authority Fuel Sales Tax Revenue, Series A (D)  5.000  07-01-38  80,000  75,723 

Puerto Rico Highway & Transportation         
Authority Prerefunded, Series Z (D)  6.250  07-01-14  3,250,000  3,617,630 

Puerto Rico Industrial Tourist Education         
Medical & Environment, Authority,         
Hospital de la Concepcion  6.500  11-15-20  500,000  501,865 

Puerto Rico Sales Tax Financing Corp.         
Sales Tax Revenue, Series A (Zero coupon         
steps up to 6.750% on 8-1-16) (Z)  Zero  08-01-32  3,000,000  2,713,590 
 
      Shares  Value 
Short-Term Investments 1.98%        $5,165,000 

(Cost $5,165,000)         
 
Repurchase Agreement 1.98%         

Repurchase Agreement with State Street Corp.         
dated 11-30-11 at 0.010% to be repurchased         
at $5,165,001 on 12-1-11, collateralized by         
$5,265,000 Federal Home Loan Mortgage         
Corp., 0.500% due 8-23-13 (valued at         
$5,271,581, including interest)      5,165,000  5,165,000 
 
Total investments (Cost $251,587,275)98.83%      $257,435,579 

 
Other assets and liabilities, net 1.17%      $3,043,750 

 
Total net assets 100.00%        $260,479,329 

 

 

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  Semiannual report | California Tax-Free Income Fund  15 

 



Notes to Schedule of Investments

AMT Interest earned from these securities may be considered a tax preference item for purpose of the Federal Alternative Minimum Tax.

(D) Bond is insured by one of these companies:

Insurance coverage  As a percentage of total investments 

Ambac Financial Group, Inc.  3.00% 
Assured Guarantee Corp.  0.41% 
Assured Guaranty Municipal Corp.  6.88% 
California Mortgage Insurance  0.39% 
Financial Guaranty Insurance Corp.  5.00% 
National Public Finance Guarantee Corp.  20.25% 

 

(P) Variable rate obligation. The coupon rate shown represents the rate at period end.

(S) 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.

(Z) Zero coupon bonds are issued at a discount from their principal amount in lieu of paying interest periodically.

† At 11-30-11, the aggregate cost of investment securities for federal income tax purposes was $249,808,541. Net unrealized appreciation aggregated $7,627,038, of which $15,451,904 related to appreciated investment securities and $7,824,866 related to depreciated investment securities.

The Fund has the following sector composition as a percentage to total net assets on 11-30-11.

General Obligation Bonds  19.9% 
Revenue Bonds   
Facilities  19.6% 
Tobacco  11.6% 
Transportation  11.5% 
Education  7.3% 
Health Care  5.0% 
Housing  1.5% 
Utilities  1.3% 
Water & Sewer  1.2% 
Pollution  0.8% 
Other Revenue  17.1% 
Short-Term Investments & Other  3.2% 

 

16  California Tax-Free Income Fund | Semiannual report  See notes to financial statements 

 



F I N A N C I A L   S T A T E M E N T S

Financial statements

Statement of assets and liabilities 11-30-11 (unaudited)

This Statement of assets and liabilities is the Fund’s balance sheet. It shows the value of what the Fund owns, is due and owes. You’ll also find the net asset value and the maximum offering price per share.

Assets   

Investments, at value (Cost $251,587,275)  $257,435,579 
Cash  418 
Receivable for fund shares sold  291,199 
Interest receivable  3,591,589 
Other receivables and prepaid expenses  35,905 
 
Total assets  261,354,690 
Liabilities   

Payable for fund shares repurchased  324,635 
Distributions payable  307,200 
Payable to affiliates   
Accounting and legal services fees  4,854 
Transfer agent fees  14,561 
Distribution and service fees  28,283 
Trustees’ fees  25,556 
Management fees  117,202 
Other liabilities and accrued expenses  53,070 
 
Total liabilities  875,361 
 
Net assets   

Paid-in capital  $254,750,403 
Undistributed net investment income  272,899 
Accumulated net realized loss on investments  (392,277) 
Net unrealized appreciation (depreciation) on investments  5,848,304 
 
Net assets  $260,479,329 
 
Net asset value per share   

Based on net asset values and shares outstanding — the Fund has an   
unlimited number of shares authorized with no par value   
Class A ($230,240,647 ÷ 22,115,063 shares)  $10.41 
Class B ($2,268,795 ÷ 217,882 shares)1  $10.41 
Class C ($27,969,887 ÷ 2,686,597 shares)1  $10.41 
 
Maximum offering price per share   

Class A (net asset value per share ÷ 95.5%)2  $10.90 

 

1 Redemption price is equal to net asset value less any applicable contingent deferred sales charge.

2 On a 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  Semiannual report | California Tax-Free Income Fund  17 

 



F I N A N C I A L   S T A T E M E N T S

Statement of operations For the six-month period ended 11-30-11
(unaudited)

This Statement of operations summarizes the Fund’s investment income earned and expenses incurred in operating the Fund. It also shows net gains (losses) for the period stated.

Investment income   

Interest  $7,136,463 
 
Expenses   

Investment management fees (Note 4)  707,563 
Distribution and service fees (Note 4)  316,371 
Accounting and legal services fees (Note 4)  16,998 
Transfer agent fees (Note 4)  86,397 
Trustees’ fees (Note 4)  10,051 
State registration fees  7,228 
Printing and postage  8,140 
Professional fees  28,290 
Custodian fees  17,733 
Registration and filing fees  12,623 
Other  7,188 
 
Total expenses  1,218,582 
Less expense reductions (Note 4)  (9,797) 
 
Net expenses  1,208,785 
 
Net investment income  5,927,678 

 
Realized and unrealized gain (loss)   
Net realized gain on Investments  295,752 
Change in net unrealized appreciation (depreciation) of Investments  8,271,527 
 
Net realized and unrealized gain  8,567,279 
 
Increase in net assets from operations  $14,494,957 

 

18  California Tax-Free Income Fund | Semiannual report  See notes to financial statements 

 



F I N A N C I A L   S T A T E M E N T S

Statements of changes in net assets

These Statements of changes in net assets show how the value of the Fund’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.

  Six months   
  ended  Year 
  11-30-11  ended 
  (Unaudited)  5-31-11 
Increase (decrease) in net assets     

 
From operations     
Net investment income  $5,927,678  $12,617,886 
Net realized gain (loss)  295,752  (433,348) 
Change in net unrealized appreciation (depreciation)  8,271,527  (7,360,374) 
 
Increase in net assets resulting from operations  14,494,957  4,824,164 
 
Distributions to shareholders     
From net investment income     
Class A  (5,270,139)  (11,303,196) 
Class B  (42,750)  (116,974) 
Class C  (513,573)  (996,182) 
 
Total distributions  (5,826,462)  (12,416,352) 
 
From Fund share transactions (Note 5)  (192,485)  (18,961,638) 
 
Total increase (decrease)  8,476,010  (26,553,826) 
 
Net assets     

Beginning of period  252,003,319  278,557,145 
 
End of period  $260,479,329  $252,003,319 
 
Undistributed net investment income  $272,899  $171,683 

 

See notes to financial statements  Semiannual report | California Tax-Free Income Fund  19 

 



Financial highlights

The Financial highlights show how the Fund’s net asset value for a share has changed since the end of the previous period.

CLASS A SHARES Period ended  11-30-111  5-31-11  5-31-10  5-31-092  8-31-08  8-31-07  8-31-06 
 
Per share operating performance               

Net asset value, beginning               
of period  $10.07  $10.32  $9.70  $10.36  $10.61  $10.93  $11.08 
Net investment income3  0.24  0.49  0.50  0.36  0.47  0.47  0.49 
Net realized and unrealized gain               
(loss) on investments  0.34  (0.26)  0.61  (0.65)  (0.25)  (0.32)  (0.15) 
Total from investment operations  0.58  0.23  1.11  (0.29)  0.22  0.15  0.34 
Less distributions               
From net investment income  (0.24)  (0.48)  (0.49)  (0.36)  (0.46)  (0.47)  (0.49) 
From net realized gain        (0.01)  (0.01)     
Total distributions  (0.24)  (0.48)  (0.49)  (0.37)  (0.47)  (0.47)  (0.49) 
Net asset value, end of period  $10.41  $10.07  $10.32  $9.70  $10.36  $10.61  $10.93 
Total return (%)4  5.785  2.29  11.696  (2.63)5,6  2.186  1.346  3.196 
 
Ratios and supplemental data               

Net assets, end of period               
(in millions)  $230  $224  $250  $248  $294  $304  $296 
Ratios (as a percentage of average               
net assets):               
Expenses before reductions  0.857  0.86  0.85  0.917,8  0.81  0.81  0.82 
Expenses net of fee waivers  0.857  0.86  0.85  0.917,8  0.81  0.81  0.82 
Net investment income  4.707  4.79  4.97  5.107  4.45  4.33  4.53 
Portfolio turnover (%)  6  2  9  26  22  41  33 

 

1 Semiannual period from 6-1-11 to 11-30-11. Unaudited.
2 For the nine-month period ended 5-31-09. The Fund changed its fiscal year end from August 31 to May 31.
3 Based on the average daily shares outstanding.
4 Does not reflect the effect of sales charges, if any.
5 Not annualized.
6 Total returns would have been lower had certain expenses not been reduced during the periods shown.
7 Annualized.
8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

 

20  California Tax-Free Income Fund | Semiannual report  See notes to financial statements 

 



CLASS B SHARES Period ended  11-30-111  5-31-11  5-31-10  5-31-092  8-31-08  8-31-07  8-31-06 
 
Per share operating performance               

Net asset value, beginning               
of period  $10.07  $10.32  $9.70  $10.36  $10.61  $10.93  $11.08 
Net investment income3  0.20  0.40  0.41  0.30  0.38  0.38  0.40 
Net realized and unrealized gain               
(loss) on investments  0.34  (0.26)  0.61  (0.65)  (0.25)  (0.32)  (0.15) 
Total from investment operations  0.54  0.14  1.02  (0.35)  0.13  0.06  0.25 
Less distributions               
From net investment income  (0.20)  (0.39)  (0.40)  (0.30)  (0.37)  (0.38)  (0.40) 
From net realized gain        (0.01)  (0.01)     
Total distributions  (0.20)  (0.39)  (0.40)  (0.31)  (0.38)  (0.38)  (0.40) 
Net asset value, end of period  $10.41  $10.07  $10.32  $9.70  $10.36  $10.61  $10.93 
Total return (%)4  5.375,6  1.43  10.755  (3.25)5,6  1.315  0.485  2.325 
 
Ratios and supplemental data               

Net assets, end of period               
(in millions)  $2  $2  $4  $7  $10  $15  $24 
Ratios (as a percentage of average               
net assets):               
Expenses before reductions  1.707  1.71  1.70  1.767,8  1.66  1.66  1.67 
Expenses net of fee waivers  1.637  1.71  1.70  1.767,8  1.66  1.66  1.67 
Net investment income  3.917  3.92  4.12  4.257  3.59  3.47  3.68 
Portfolio turnover (%)  6  2  9  26  22  41  33 

 

1 Semiannual period from 6-1-11 to 11-30-11. Unaudited.
2 For the nine-month period ended 5-31-09. The Fund changed its fiscal year end from August 31 to May 31.
3 Based on the average daily shares outstanding.
4 Does not reflect the effect of sales charges, if any.
5 Total returns would have been lower had certain expenses not been reduced during the periods shown.
6 Not annualized.
7 Annualized.
8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

 

See notes to financial statements  Semiannual report | California Tax-Free Income Fund  21 

 



CLASS C SHARES Period ended  11-30-111  5-31-11  5-31-10  5-31-092  8-31-08  8-31-07  8-31-06 
 
Per share operating performance               

Net asset value, beginning               
of period  $10.07  $10.32  $9.70  $10.36  $10.61  $10.93  $11.08 
Net investment income3  0.20  0.40  0.41  0.30  0.38  0.37  0.40 
Net realized and unrealized gain               
(loss) on investments  0.34  (0.26)  0.61  (0.65)  (0.25)  (0.31)  (0.15) 
Total from investment operations  0.54  0.14  1.02  (0.35)  0.13  0.06  0.25 
Less distributions               
From net investment income  (0.20)  (0.39)  (0.40)  (0.30)  (0.37)  (0.38)  (0.40) 
From net realized gain        (0.01)  (0.01)     
Total distributions  (0.20)  (0.39)  (0.40)  (0.31)  (0.38)  (0.38)  (0.40) 
Net asset value, end of period  $10.41  $10.07  $10.32  $9.70  $10.36  $10.61  $10.93 
Total return (%)4  5.375,6  1.43  10.765  (3.25)5,6  1.315  0.485  2.325 
 
Ratios and supplemental data               

Net assets, end of period               
(in millions)  $28  $26  $25  $17  $14  $10  $8 
Ratios (as a percentage of average               
net assets):               
Expenses before reductions  1.707  1.71  1.70  1.767,8  1.66  1.66  1.67 
Expenses net of fee waivers  1.637  1.71  1.70  1.767,8  1.66  1.66  1.67 
Net investment income  3.917  3.95  4.11  4.227  3.60  3.47  3.68 
Portfolio turnover (%)  6  2  9  26  22  41  33 

 

1 Semiannual period from 6-1-11 to 11-30-11. Unaudited.
2 For the nine-month period ended 5-31-09. The Fund changed its fiscal year end from August 31 to May 31.
3 Based on the average daily shares outstanding.
4 Does not reflect the effect of sales charges, if any.
5 Total returns would have been lower had certain expenses not been reduced during the periods shown.
6 Not annualized.
7 Annualized.
8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

 

22  California Tax-Free Income Fund | Semiannual report  See notes to financial statements 

 



Notes to financial statements
(unaudited)

Note 1 — Organization

John Hancock California Tax-Free Income Fund (the Fund) is a non-diversified open-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the 1940 Act). The investment objective of the Fund is to seek a high level of current income, consistent with preservation of capital, that is exempt from federal and California personal income taxes.

The Fund may offer multiple classes of shares. The shares currently offered are detailed in the Statement of assets and liabilities. Class A, Class B and Class C shares are offered to all investors. Shareholders of each class have exclusive voting rights to matters that affect that class. The distribution and service fees, if any, and transfer agent fees for each class may differ. Class B shares convert to Class A shares eight years after purchase.

Note 2 — Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Events or transactions occurring after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:

Security valuation. Investments are stated at value as of the close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. The Fund uses a three-tier hierarchy to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities. Level 2 includes securities valued using significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities valued using significant unobservable inputs when market prices are not readily available or reliable, including the Fund’s own assumptions in determining the fair value of investments. Factors used in determining value may include market or issuer specific events, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities.

As of November 30, 2011, all investments are categorized as Level 2 under the hierarchy described above. Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. During the six months ended November 30, 2011, there were no significant transfers into or out of Level 1, Level 2 or Level 3 assets.

In order to value the securities, the Fund uses the following valuation techniques. Debt obligations are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, taking into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data. Certain securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Certain short-term securities are valued at amortized cost. Other portfolio

Semiannual report | California Tax-Free Income Fund  23 

 



securities and assets, where market quotations are not readily available, are valued at fair value, as determined in good faith by the Fund’s Pricing Committee, following procedures established by the Board of Trustees.

Repurchase agreements. The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement, it receives collateral which is held in a segregated account by the Fund’s custodian. The collateral amount is marked-to-market and monitored on a daily basis to ensure that the collateral held is in an amount not less than the principal amount of the repurchase agreement plus any accrued interest. In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the collateral value may decline.

Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Interest income includes coupon interest and amortization/accretion of premiums/discounts on debt securities. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by stopping current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds from litigation.

Line of credit. The Fund may borrow from banks for temporary or emergency purposes, including meeting redemption requests that otherwise might require the untimely sale of securities. Pursuant to the custodian agreement, the custodian may loan money to the Fund to make properly authorized payments. The Fund is obligated to repay the custodian for any overdraft, including any related costs or expenses. The custodian has a lien, security interest or security entitlement in any Fund property that is not segregated, to the maximum extent permitted by law for any overdraft.

In addition, the Fund and other affiliated funds have entered into an agreement with Citibank N.A. which enables them to participate in a $100 million unsecured committed line of credit. A commitment fee, payable at the end of each calendar quarter, based on the average daily unused portion of the line of credit, is charged to each participating fund on a pro rata basis and is reflected in other expenses on the Statement of operations. For the six months ended November 30, 2011, the Fund had no borrowings under the line of credit.

Expenses. The majority of expenses are directly attributable to an individual fund. Expenses that are not readily attributable to a specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund’s relative assets. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Class allocations. Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the net assets of the class. Class-specific expenses, such as distribution and service fees, if any, and transfer agent fees, are calculated daily for each class, based on the net asset value of the class and the applicable specific expense rates.

Federal income taxes. The Fund intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.

24  California Tax-Free Income Fund | Semiannual report 

 



For federal income tax purposes, the Fund has a capital loss carryforward of $1,774,965 available to offset future net realized capital gains as of May 31, 2011. The loss carryforward expires as follows: May 31, 2017 — $1,568,548 and May 31, 2018 — $206,417.

Under the Regulated Investment Company Modernization Act of 2010, the Fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of May 31, 2011, the Fund had no uncertain tax positions that would require financial statement recognition, derecognition or disclosure. The Fund’s federal tax returns are subject to examination by the Internal Revenue Service for a period of three years.

Distribution of income and gains. Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The Fund generally declares dividends daily and pays them monthly. Capital gain distributions, if any, are distributed annually.

Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and in the same amount, except for the effect of class level expenses that may be applied differently to each class.

Such distributions, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any, will reverse in a subsequent period. Book-tax differences are primarily attributable to accretion on debt securities and distributions payable.

New accounting pronouncement. In May 2011, Accounting Standards Update 2011-04 (ASU 2011-04), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, was issued and is effective during interim and annual periods beginning after December 15, 2011. ASU 2011-04 amends Financial Accounting Standards Board (FASB) Topic 820, Fair Value Measurement. The amendments are the result of the work by the FASB and the International Accounting Standards Board to develop common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. Management is currently evaluating the application of ASU 2011-04 and its impact, if any, on the Fund’s financial statement disclosure.

Note 3 — Guarantees and indemnifications

Under the Fund’s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote.

Semiannual report | California Tax-Free Income Fund  25 

 



Note 4 — Fees and transactions with affiliates

John Hancock Advisers, LLC (the Adviser) serves as investment adviser for the Fund. John Hancock Funds, LLC (the Distributor), an affiliate of the Adviser, serves as principal underwriter of the Fund. The Adviser and the Distributor are indirect, wholly owned subsidiaries of Manulife Financial Corporation (MFC).

Management fee. The Fund has an investment management agreement with the Adviser under which the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.550% of the first $500,000,000 of the Fund’s average daily net assets, (b) 0.500% of the next $500,000,000, (c) 0.475% of the next $1,000,000,000 and (d) 0.450% of the Fund’s average daily net assets in excess of $2,000,000,000. The Adviser has a subadvisory agreement with John Hancock Asset Management a division of Manulife Asset Management (US) LLC, an indirectly owned subsidiary of MFC and an affiliate of the Adviser. The Fund is not responsible for payment of the subadvisory fees.

The investment management fees incurred for the six months ended November 30, 2011 were equivalent to an annual effective rate of 0.55% of the Fund’s average daily net assets.

Accounting and legal services. Pursuant to the Accounting and Legal Services Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services to the Fund, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. These expenses are allocated to each share class based on its relative net assets at the time the expense was incurred. These accounting and legal services fees incurred for the six months ended November 30, 2011 amounted to an annual rate of 0.01% of the Fund’s average daily net assets.

Distribution and service plans. The Fund has a distribution agreement with the Distributor. The Fund has adopted distribution and service plans with respect to Class A, Class B and Class C shares pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for services provided as the distributor of shares of the Fund. The Fund may pay up to the following contractual rates of distribution and service fees under these arrangements, expressed as an annual percentage of average daily net assets for each class of the Fund’s shares.

CLASS  12b–1 FEE 

Class A  0.15% 
Class B  1.00% 
Class C  1.00% 

 

Effective August 1, 2011, the Distributor has contractually agreed to limit the distribution and service fees on Class B and Class C shares to 0.90% of the average daily net assets of each class of shares, until at least September 30, 2012.

Accordingly, these fee limitations amounted to $740 and $9,057 for Class B and Class C shares, respectively, for the six months ended November 30, 2011.

Sales charges. Class A shares are assessed up-front sales charges, which resulted in payments to the Distributor amounting to $75,817 for the six months ended November 30, 2011. Of this amount, $486 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $72,170 was paid as sales commissions to broker-dealers and $3,161 was paid as sales commissions to sales personnel of Signator Investors, Inc. a broker-dealer affiliate of the Adviser.

26  California Tax-Free Income Fund | Semiannual report 

 



Class B and Class C shares are subject to contingent deferred sales charges (CDSCs). Class B shares that are redeemed within six years of purchase are subject to CDSCs, 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 are redeemed within one year of purchase are subject to a 1.00% CDSC on the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from CDSCs are used to compensate the Distributor for providing distribution-related services in connection with the sale of these shares. During the six months ended November 30, 2011, CDSCs received by the Distributor amounted to $2,442 and $783 for Class B and Class C shares, respectively.

Transfer agent fees. The Fund has a transfer agent agreement with John Hancock Signature Services, Inc. (Signature Services), an affiliate of the Adviser. The transfer agent fees paid to Signature Services are determined based on the cost to Signature Services (Signature Services Cost) of providing recordkeeping services. The Signature Services Cost includes a component of allocated John Hancock corporate overhead for providing transfer agent services to the Fund and to all other John Hancock affiliated funds. It also includes out-of-pocket expenses that are comprised of payments made to third-parties for recordkeeping services provided to their clients who invest in one or more John Hancock funds. In addition, Signature Services Cost may be reduced by certain fees that Signature Services receives in connection with retirement and small accounts. Signature Services Cost is calculated monthly and allocated, as applicable, to four categories of share classes: Institutional Share Classes, Retirement Share Classes, Municipal Bond Classes and all other Retail Share Classes. Within each of these categories, the applicable costs are allocated to the affected John Hancock affiliated funds and/or classes, based on the relative average daily net assets.

Class level expenses. Class level expenses for the six months ended November 30, 2011 were:

  DISTRIBUTION AND  TRANSFER 
CLASS  SERVICE FEES  AGENT FEES 

Class A  $171,196  $76,642 
Class B  11,160  749 
Class C  134,015  9,006 
Total  $316,371  $86,397 

 

Trustee expenses. The Fund compensates each Trustee who is not an employee of the Adviser or its affiliates. These Trustees may, for tax purposes, elect to defer receipt of this compensation under the John Hancock Group of Funds Deferred Compensation Plan (the Plan). Deferred amounts are invested in various John Hancock funds and remain in the fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting liability are included within Other receivables and prepaid expenses and Payable to affiliates — Trustees’ fees, respectively, in the accompanying Statement of assets and liabilities.

 

Semiannual report | California Tax-Free Income Fund  27 

 



Note 5 — Fund share transactions

Transactions in Fund shares for the six months ended November 30, 2011 and for the year ended May 31, 2011 were as follows:

  Six months ended 11-30-11  Year ended 5-31-11 
  Shares  Amount  Shares  Amount 
Class A shares         

Sold  979,487  $10,054,328  2,511,173  $25,711,750 
Distributions reinvested  338,685  3,496,357  622,083  6,293,174 
Repurchased  (1,457,863)  (15,033,506)  (5,113,325)  (51,259,750) 
 
Net decrease  (139,691)  ($1,482,821)  (1,980,069)  ($19,254,826) 
 
Class B shares         

Sold  39,365  $407,161  45,006  $465,460 
Distributions reinvested  2,469  25,485  6,262  63,492 
Repurchased  (48,523)  (499,203)  (205,460)  (2,089,449) 
 
Net decrease  (6,689)  ($66,557)  (154,192)  ($1,560,497) 
 
Class C shares         

Sold  252,836  $2,610,933  613,432  $6,278,004 
Distributions reinvested  23,892  246,676  43,816  443,179 
Repurchased  (145,692)  (1,500,716)  (482,454)  (4,867,498) 
 
Net increase  131,036  $1,356,893  174,794  $1,853,685 
 
Net decrease  (15,344)  ($192,485)  (1,959,467)  ($18,961,638) 

 

Note 6 — Purchase and sale of securities

Purchases and sales of securities, other than short-term securities, aggregated $15,311,362 and $19,554,487, respectively, for the six months ended November 30, 2011.

28  California Tax-Free Income Fund | Semiannual report 

 



Board Consideration of and Continuation of Investment Advisory Agreement and Subadvisory Agreement

The Board of Trustees (the Board, the members of which are referred to as Trustees) of John Hancock California Tax-Free Income Fund (the Fund), the sole series of John Hancock California Tax-Free Income Fund (the Trust), met in-person on May 1–3 and June 5–7, 2011 to consider the approval of the Fund’s investment advisory agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Adviser), the Fund’s investment adviser. The Board also considered the approval of the investment subadvisory agreement (the Subadvisory Agreement) among the Adviser, Manulife Asset Management (US) LLC (the Subadviser) and the Trust on behalf of the Fund. The Advisory Agreement and the Subadvisory Agreement are referred to as the Agreements.

Activities and composition of the Board

The Board consists of eleven individuals, nine of whom are Independent Trustees. Independent Trustees are generally those individuals who are not employed by or have any significant business or professional relationship with the Adviser or the Subadviser. The Trustees are responsible for the oversight of operations of the Fund and perform various duties required of directors of investment companies by the Investment Company Act of 1940, as amended (the 1940 Act). The Independent Trustees have hired independent legal counsel to assist them in connection with their duties. The Board has appointed an Independent Trustee as Chairperson. The Board has established four standing committees that are composed entirely of Independent Trustees: the Audit Committee; the Compliance Committee; the Nominating, Governance and Administration Committee; and the Contracts/Operations Committee. Additionally, Investment Performance Committee A is a standing committee of the Board that is composed of Independent Trustees and one Trustee who is affiliated with the Adviser. Investment Performance Committee A oversees and monitors matters relating to the investment performance of the Fund. The Board has also designated an Independent Trustee as Vice Chairperson to serve in the absence of the Chairperson. The Board also designates working groups or ad hoc committees as it deems appropriate.

The approval process

Under the 1940 Act, the Board is required to consider the continuation of the Agreements each year. Throughout the year, the Board, acting directly and through its committees, regularly reviews and assesses the quality of the services that the Fund receives under these Agreements. The Board reviews reports of the Adviser at least quarterly, which include Fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year. The Board considers at each of its meetings factors that are relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by the Adviser and Subadviser to the Fund and its shareholders.

Prior to the May 1–3, 2011 meeting, the Board requested and received materials specifically relating to the Agreements. The materials provided in connection with the May meeting included information compiled and prepared by Morningstar, Inc. (Morningstar) on Fund fees and expenses, and the investment performance of the Fund. This Fund information is assembled in a format that permits comparison with similar information from a Category and a subset of the Category referred to as the Peer Group, each as determined by Morningstar, and with the Fund’s benchmark index. The Category includes all funds that invest similarly to the way the Fund invests. The Peer Group represents funds of similar size, excluding passively managed funds and funds-of-funds. The Fund’s benchmark index is an unmanaged index of securities that is provided as a basis for comparison with the Fund’s performance. Other material provided for the Fund review included (a) information on the profitability of the Agreements to the Adviser and a discussion of any additional benefits to the Adviser or Subadviser or their affiliates that result from being the Adviser or Subadviser to the Fund; (b) a general analysis provided by the Adviser and the Subadviser concerning investment advisory fees charged to other clients, such as institutional clients and other investment companies,

Semiannual report | California Tax-Free Income Fund  29 

 



having similar investment mandates, as well as the performance of those other clients and a comparison of the services provided to those other clients and the services provided to the Fund; (c) the impact of economies of scale; (d) a summary of aggregate amounts paid by the Fund to the Adviser; and (e) sales and redemption data regarding the Fund’s shares.

At an in-person meeting held on May 1–3, 2011, the Board reviewed materials relevant to its consideration of the Agreements. As a result of the discussions that occurred during the May 1–3, 2011 meeting, the Board asked the Adviser for additional information on certain matters. The Adviser provided the additional information and the Board also considered this information as part of its consideration of the Agreements.

At an in-person meeting held on June 5–7, 2011, the Board, including the Independent Trustees, formally considered the continuation of the Advisory Agreement between the Adviser and the Fund and the Subadvisory Agreement among the Fund, the Adviser and the Subadviser, each for an additional one-year term. The Board considered what it believed were key relevant factors that are described under separate headings presented below.

The Board also considered other matters important to the approval process, such as payments made to and by the Adviser or its affiliates relating to the distribution of Fund shares and other services. The Board reviewed services related to the valuation and pricing of Fund portfolio holdings. Other important matters considered by the Board were the direct and indirect benefits to the Adviser, the Subadviser and their affiliates from their relationship with the Fund and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review.

Nature, extent and quality of services

The Board reviewed the nature, extent and quality of services provided by the Adviser and the Subadviser, including the investment advisory services and the resulting performance of the Fund.

The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. It considered the background and experience of senior management and investment professionals responsible for managing the Fund. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser and the Subadviser responsible for the daily investment activities of the Fund, including, among other things, portfolio trading capabilities, use of technology, commitment to compliance and approach to training and retaining portfolio managers and other research, advisory and management personnel.

The Board considered the Subadviser’s history and experience providing investment services to the Fund. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs, record of compliance with applicable laws and regulation, with the Fund’s investment policies and restrictions and with the applicable Code of Ethics, and the responsibilities of the Adviser’s and Subadviser’s compliance departments.

In addition to advisory services, the Board considered the quality of the administrative and non-investment advisory services provided to the Fund by the Adviser under separate agreements. The Board noted that the Adviser and its affiliates provide the Fund with certain administrative, transfer agency, shareholder and other services (in addition to any such services provided to the Fund by third parties) and officers and other personnel as are necessary for the operations of the Fund. The Board reviewed the structure and duties of the Adviser’s administration, accounting, legal and compliance departments and its affiliate’s transfer agency operations and considered the Adviser’s and its affiliate’s policies and procedures for assuring compliance with applicable laws and regulations.

30  California Tax-Free Income Fund | Semiannual report 

 



The Board also received information about the nature, extent and quality of services provided by and fee rates charged by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board reviewed a general analysis provided by the Adviser and the Subadviser concerning investment advisory fees charged to other clients having similar investment mandates, the services provided to those other clients as compared to the services provided to the Fund, the performance of those other clients as compared to the performance by the Fund and other factors relating to those other clients. The Board considered the significant differences between the Adviser’s and Subadviser’s services to the Fund and the services they provide to other clients. For other clients that are not mutual funds, the differences in services relate to the greater share purchase and redemption activity in a mutual fund, the generally higher turnover of mutual fund portfolio holdings, the more burdensome regulatory and legal obligations of mutual funds and the higher marketing costs for mutual funds. When compared to all clients including mutual funds, the Adviser has greater oversight and supervisory responsibility for the Fund and undertakes greater entrepreneurial risk as the sponsor of the Fund.

Fund performance

The Board was provided with reports, independently prepared by Morningstar, which included a comprehensive analysis of the Fund’s performance. The Board also examined materials provided by the Fund’s portfolio management team discussing Fund performance and the Fund’s investment objective, strategies and outlook. The Board also reviewed a narrative and statistical analysis of the Morningstar data that was prepared by the Adviser, which analyzed various factors that may affect the Morningstar rankings. The Board reviewed information regarding the investment performance of the Fund as compared to its Morningstar Category as well as its benchmark index (see chart below). The Board was provided with a description of the methodology used by Morningstar to select the funds in the Category. The Board also considered updated performance information provided by the Adviser at its May and June 2011 meetings. The Board regularly reviews the performance of the Fund throughout the year and attaches more importance to performance over relatively longer periods of time, typically three to five years.

Set forth below is the performance of the Fund over certain time periods ended December 31, 2010 and that of its Category average and benchmark index over the same periods:

  1 YEAR  3 YEAR  5 YEAR  10 YEAR 

California Tax-Free Income Fund Class A  3.23%  2.43%  2.73%  3.79% 
Muni CA Long Category Average  2.15%  2.35%  2.69%  3.89% 
BarCap Municipal TR Index  2.38%  4.08%  4.09%  4.83% 

 

The Board noted that the Fund’s performance compared favorably to its Category’s average performance over multiple periods shown. The Board also noted that, although the Fund had underperformed its benchmark index’s performance over the three longer comparison periods, the index was not specifically for California tax-exempt securities. The Board concluded that the Adviser and Subadviser were taking steps to address the underperformance which the Board would continue to monitor.

Expenses and fees

The Board, including the Independent Trustees, reviewed the Fund’s contractual advisory fee rate payable by the Fund to the Adviser as compared with the other funds in its Peer Group. The Board also received information about the investment subadvisory fee rate payable by the Adviser to the Subadviser for investment subadvisory services. The Board considered the services provided and the fees charged by the Adviser and the Subadviser to other clients with similar investment mandates, including separately managed institutional accounts.

In addition, the Board considered the cost of the services provided to the Fund by the Adviser. The Board received and considered expense information regarding the Fund’s various components,

Semiannual report | California Tax-Free Income Fund  31 

 



including advisory fees, distribution fees and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, administration fees and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also considered expense information regarding the Fund’s total operating expense ratio (Gross Expense Ratio). The Board considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the Peer Group median. As part of its analysis, the Board reviewed the Adviser’s methodology in allocating its costs to the management of the Fund and the Fund complex.

The Board noted that the Fund’s advisory fee ratio was seven basis points above the Peer Group median advisory fee ratio. The Board noted the following information about the Fund’s Gross and Net Expense Ratios for Class A shares contained in the Fund’s financial statements in relation with the Fund’s Peer Group median provided by Morningstar in April 2011:

  FUND (CLASS A)  PEER GROUP MEDIAN 

Advisory Fee Ratio  0.55%  0.48% 
Gross Expense Ratio  0.86%  0.87% 
Net Expense Ratio  0.86%  0.82% 

 

The Board also received and considered information relating to the Fund’s Gross Expense Ratio and Net Expense Ratio that reflected the new methodology for calculating transfer agent fees that was approved by the Trustees at the June 2010 meeting.

The Board received and reviewed statements relating to the Adviser’s financial condition and was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by the Adviser for services under the Advisory Agreement, as well as from other relationships between the Fund and the Adviser and its affiliates. The Board reviewed the Adviser’s profitability with respect to the Fund and other funds the Board currently oversees for the year ended December 31, 2010 compared to available aggregate profitability data provided for the year ended December 31, 2009. The Board reviewed the Adviser’s profitability with respect to other fund complexes managed by the Adviser and/or its affiliates. The Board reviewed the Adviser’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products.

The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Adviser, the types of funds managed, expense allocations and business mix, and therefore comparability of profitability is somewhat limited.

The Board considered the profitability information with respect to the Subadviser, which is affiliated with the Adviser. In addition, as noted above, the Board considered the assumptions and methodology for allocating expenses in the Subadviser’s profitability analysis.

Economies of scale

The Board, including the Independent Trustees, considered the extent to which economies of scale might be realized as the assets of the Fund increase. Possible changes in the advisory fee rate or structure in order to enable the Fund to participate in these economies of scale (e.g., through the use of breakpoints in the advisory fee at higher asset levels) are periodically discussed. The Board also considered the Adviser’s overall operations and its ongoing investment in its business in order to expand the scale of, and improve the quality of, its operations that benefit the Fund.

32  California Tax-Free Income Fund | Semiannual report 

 



The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual funds, but rather are incurred across a variety of products and services. To ensure that any economies are reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the contractual advisory fee rate.

Other benefits to the Adviser and the Subadviser

The Board understands that the Adviser, the Subadviser or their affiliates may derive other ancillary benefits from their relationship with the Fund, both tangible and intangible, such as their ability to leverage investment professionals who manage other portfolios, an increase in their profile in the investment advisory community and the engagement of their affiliates and/or significant shareholders as service providers to the Fund, including for administrative, transfer agency and distribution services. The Board believes that certain of these benefits are difficult to quantify. The Board also was informed that the Subadviser may use third-party research obtained by soft dollars generated by certain mutual fund transactions to assist itself in managing all or a number of its other client accounts.

Board determination

The Board unanimously approved the continuation of the Advisory Agreement between the Adviser and the Fund for an additional one-year term. The Subadvisory Agreement among the Fund, the Adviser and the Subadviser was also approved for an additional one-year term. Based upon its evaluation of relevant factors in their totality, the Board was satisfied that the terms of the Agreements, including the advisory and subadvisory fee rates, were fair and reasonable and in the best interest of the Fund and its shareholders. In arriving at its decision to approve the Agreements, the Board did not identify any single factor or any group of factors as all-important or controlling, but considered all factors together. Different Trustees may have attributed different weights to the various factors considered. The Independent Trustees were also assisted by independent legal counsel in making this determination. The Trustees’ conclusions may be based in part on their consideration of these arrangements in prior years and on their ongoing regular review of Fund performance and operations throughout the year.

Semiannual report | California Tax-Free Income Fund  33 

 



More information

Trustees  Investment adviser 
Steven R. Pruchansky, Chairman  John Hancock Advisers, LLC 
James F. Carlin*   
William H. Cunningham  Subadviser 
Deborah C. Jackson  John Hancock Asset Management a division of 
Charles L. Ladner,* Vice Chairman#  Manulife Asset Management (US) LLC 
Stanley Martin* 
Hugh McHaffie  Principal distributor 
Dr. John A. Moore,* Vice Chairman^  John Hancock Funds, LLC 
Patti McGill Peterson* 
Gregory A. Russo  Custodian 
John G. Vrysen  State Street Bank and Trust Company 
   
Officers  Transfer agent 
Keith F. Hartstein  John Hancock Signature Services, Inc. 
President and Chief Executive Officer 
  Legal counsel 
Andrew G. Arnott  K&L Gates LLP 
Senior Vice President and Chief Operating Officer 
 
Thomas M. Kinzler   
Secretary and Chief Legal Officer   
 
Francis V. Knox, Jr.   
Chief Compliance Officer   
 
Charles A. Rizzo   
Chief Financial Officer   
 
Salvatore Schiavone   
Treasurer   
 
*Member of the Audit Committee   
†Non-Independent Trustee   
#Retired, effective 12-31-11   
^Effective 1-1-12   

 

34  California Tax-Free Income Fund | Semiannual report 

 




1-800-225-5291
1-800-554-6713 TDD
1-800-338-8080 EASI-Line
www.jhfunds.com

Now available: electronic delivery
www.jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock California Tax-Free Income Fund.  530SA 11/11 
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.  1/12 

 


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. SCHEDULE OF INVESTMENTS.

(a) Not applicable.
(b) Not applicable.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 11. CONTROLS AND PROCEDURES.

(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

ITEM 12. EXHIBITS.



(a) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.

(b) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.

(c)(1) Contact person at the registrant.



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.

John Hancock California Tax-Free Income Fund 
 
 
 
By:  /s/ Keith F. Hartstein 
  Keith F. Hartstein 
  President and Chief Executive Officer 
 
 
Date:  January 23, 2012 

 

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:  /s/ Keith F. Hartstein 
  Keith F. Hartstein 
  President and Chief Executive Officer 
 
 
Date:  January 23, 2012 
 
 
By:  /s/ Charles A. Rizzo 
  Charles A. Rizzo 
  Chief Financial Officer 
 
 
Date:  January 23, 2012 

 

EX-99.CERT 2 b_cataxfreeincomecert.htm CERTIFICATION b_cataxfreeincomecert.htm

CERTIFICATION

I, Keith F. Hartstein, certify that:

1. I have reviewed this report on Form N-CSR of the John Hancock California Tax-Free Income Fund (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-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 23, 2012  /s/ Keith F. Hartstein 
  Keith F. Hartstein 
  President and Chief Executive Officer 

 



CERTIFICATION

I, Charles A. Rizzo, certify that:

1. I have reviewed this report on Form N-CSR of the John Hancock California Tax-Free Income Fund (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-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 23, 2012  /s/ Charles A. Rizzo 
  Charles A. Rizzo 
  Chief Financial Officer 

 

EX-99.906 CERT 3 c_cataxfreeincomecertnos.htm CERTIFICATION 906 c_cataxfreeincomecertnos.htm
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 California Tax-Free Income Fund (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 Section 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.

/s/ Keith F. Hartstein
Keith F. Hartstein
President and Chief Executive Officer

Dated: January 23, 2012

/s/ Charles A. Rizzo
Charles A. Rizzo
Chief Financial Officer

Dated: January 23, 2012

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.

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