ITEM 1. REPORT TO STOCKHOLDERS
John Hancock
Patriot
Select
Divend Trust
ANNUAL
REPORT
6.30.03
[A 2" x 1" John Hancock (Signature)/John Hancock Funds logo in lower,
center middle of page. A tag line below reads "JOHN HANCOCK FUNDS."]
[A photo of Maureen R. Ford, Chairman and Chief Executive Officer, flush
left next to first paragraph.]
WELCOME
Table of contents
Your fund at a glance
page 1
Managers' report
page 2
Fund's investments
page 6
Financial statements
page 9
Trustees & officers
page 23
For your information
page 29
Dear Fellow Shareholders,
The stock market made a strong recovery in the first half of 2003.
Historically low interest rates, improving corporate earnings and
government stimulus in the form of tax cuts gave investors hope that the
economy would soon begin to strengthen. Most of the market's move up
occurred in the second quarter, and the breadth of the rally was
enormous. As a result, the major indexes were able to wipe out their
first-quarter losses and post solid gains for the first six months of
the year. With technology leading the way, the tech-heavy Nasdaq
Composite Index rose 21.51% through June, the Dow Jones Industrial
Average was up 9.02% and the Standard & Poor's 500 Index returned
11.75%. With falling interest rates, bonds also did well, continuing
their upward trend for a fourth consecutive year. High yield bonds led
the pack, returning 18.49% in the first half as measured by the Lehman
High Yield Index.
After the jarring stock-market losses of the last three years, it's a
welcome relief for investors to be reminded that the market is indeed
cyclical, and does move up -- not just down. And mutual fund investors
will finally like what they see in their second-quarter statements:
positive results. With the exception of bear funds, which bet on the
market going down, every fund category tracked by Morningstar, Inc. and
Lipper, Inc. posted double-digit gains in the quarter.
Whether this rally can be sustained depends in large part on whether the
economy actually does rebound, and by how much, and how corporate
earnings fare. It will also depend on how soon a lot of the investors
still sitting on the sidelines decide to get back into the stock market.
No matter what happens next, the dramatic reversal in the stock market's
fortunes, and other economic improvements, could be signals that it's
time for investors to review their portfolios with their investment
professionals to make sure they are well-positioned to meet their
long-term investment objectives.
Sincerely,
/S/ MAUREEN R. FORD
Maureen R. Ford,
Chairman and Chief Executive Officer
This commentary reflects the chairman's views as of June 30, 2003. They
are subject to change at any time.
YOUR FUND
AT A GLANCE
The Fund seeks
to provide high
current income,
consistent with
modest growth of
capital, by invest-
ing in a diversified
portfolio of
dividend-paying
securities. The
Fund will normally
invest more than
65% of its total
assets in securities
of companies in
the utilities
industry.
Over the last twelve months
* Preferred stocks performed well as interest rates fell and a
dividend-tax cut loomed.
* Utility common stocks staged a second-half rally as demand strengthened.
* The Fund benefited from good security selection.
[Bar chart with heading "John Hancock Patriot Select Dividend
Trust. "Under the heading is a note that reads "Fund performance for the
year ended June 30, 2003." The chart is scaled in increments of 3% with
0% at the bottom and 9% at the top. The first bar represents the 8.33%
total return for John Hancock Patriot Select Dividend Trust. A note
below the chart reads "The total return for the Fund is at net asset
value with all distributions reinvested."]
Top 10 issuers
4.5% Puget Energy, Inc.
4.3% Energy East Corp.
4.3% NSTAR
3.6% Lehman Brothers
3.6% El Paso Tennessee Pipeline Co.
3.6% Citigroup, Inc.
3.5% Bear Stearns Companies, Inc.
3.3% TDS Capital Trust
3.2% TXU US Holdings Co.
3.0% CH Energy Group, Inc.
As a percentage of net assets plus value of preferred shares on June 30, 2003.
MANAGERS'
REPORT
BY GREGORY K. PHELPS AND MARK T. MALONEY, FOR THE PORTFOLIO MANAGEMENT TEAM
John Hancock
Patriot Select Dividend Trust
During the 12 months ended June 30, 2003, preferred stocks -- which make
up the bulk of John Hancock Patriot Select Dividend Trust -- performed
quite well amid increasingly favorable conditions for the group. Much of
the fuel behind the preferred- stock rally was action by the Federal
Reserve Board, which lowered interest rates by a half-percentage-point
in November 2002, and by a quarter-point in June 2003. Falling interest
rates tend to help preferreds because preferred stocks pay dividends at
a fixed rate like the interest on a bond. As a result, they tend to
rally when interest rates drop, just as bonds do. Also boosting
preferred stocks was demand from income-seeking individual investors and
income-oriented mutual funds looking for significantly higher yields
than what companies paid on their bonds and common stocks. The yields on
many preferred stocks, which generally ranged from 6% to 7.5%, continued
to outstrip by a fairly wide margin the yields available on Treasury and
corporate bonds, as well as the dividends paid on common stocks. Demand
also strengthened in response to President Bush's proposed dividend
tax-cut package, which was passed in June.
"...preferred stocks...
performed quite
well amid increasingly
favorable conditions
for the group."
UTILITIES IMPROVE
The performance of utility common stocks, which made up about one-third
of the Fund's investments at the end of the period, steadily improved
during the year. When the period began, utility stocks remained under
pressure, mired in the remnants of the Enron debacle. But by early 2003,
utility stocks began an encouraging rally that extended through the end
of the period. A return of investor confidence in utilities was set off
by a growing sense that the sector had become undervalued relative to
the market as a whole and relative to its historic value. Dividend tax
relief also helped. Utilities historically have offered consistently
high dividends, positioning them to benefit once the tax relief was
enacted. Furthermore, investors liked the fact that many utility
companies had begun cleaning up their balance sheets, renewing or
extending financing and ridding themselves of money-losing unregulated
subsidiaries -- such as energy trading -- that caused them pain in the
post-Enron environment.
[Photos of Greg Phelps and Mark Maloney flush right next to first
paragraph.]
FUND PERFORMANCE
For the 12 months ended June 30, 2003, John Hancock Patriot Select
Dividend Trust returned 8.33% at net asset value. By comparison, the
average income and preferred stock closed-end fund returned 12.75%,
according to Lipper, Inc. In the same 12-month period, the Dow Jones
Utility Average, which tracks the performance of 15 electric and natural
gas utilities, returned -3.92%, and the broader stock market, as
measured by the Standard & Poor's 500 Index, returned 0.25%.
FINANCIALS, UTILITIES PERFORM
Some of the Fund's best performers were preferred stocks issued by
financial services companies, which benefited from a combination of
positive trends. Banks and other lenders, such as student loan giant SLM
Corp., were helped by attractive lending spreads, meaning they could
borrow money at relatively low rates and lend it out at higher rates.
Brokers, such as Bear Stearns, got a mild boost from the improved equity
market, which, in turn, fostered more trading revenues. Bear Stearns
also was helped by the fact that it posted better financial results than
many of its other broker competitors and by speculation that it is a
takeover candidate.
"Some of the Fund's best
performers were preferred
stocks issued by financial
services companies..."
[Table at top left-hand side of page entitled "Top five industry groups
1." The first listing is Utilities 68%, the second is Broker services
8%, the third Finance 6%, the fourth Oil & gas 6%, and the fifth
Banks -- United States 5%.]
Among utility stocks, we saw winners in both the preferred and common
stock categories. Our holdings in the preferred stock of Alabama Power,
a wholly owned subsidiary of Southern Company, posted strong gains in
response to investors' enthusiasm over the company's "back-to-basics"
approach. Likewise, investors cheered Alliant Energy Corp.'s moves to
sell some of its non-utility businesses as part of a plan to pay down
debt, helping boost our common-stock holdings in that company. The
common stock of Chicago-based gas utility Peoples Energy also was among
our list of top performers, due in part to strong pricing of oil and
gas.
[Pie chart in middle of page with heading "Portfolio diversification 1"
The chart is divided into two sections (from top to left): Preferred
stocks 73% and Common stocks 27%.]
In contrast, AMERCO, the parent company of truck-rental company U-Haul,
was a disappointment. The company struggled during the year, in part due
to credit-rating downgrades, which in turn led to questions about its
management's strategies. Despite these problems, we continued to hold
onto our stake in AMERCO because we believe that this well-known
franchise is on course to reduce its debt and strengthen its balance
sheet -- moves that, if successful, potentially could put the company on
firmer footing.
[Table at top of page entitled "SCORECARD."The header for the left
column is "INVESTMENT" and the header for the right column is "PERIOD'S
PERFORMANCE...AND WHAT'S BEHIND THE NUMBERS." The first listing is SLM
Corp. followed by an up arrow with the phrase "Student loan provider
benefits from falling interest rates." The second listing is Alabama
Power followed by an up arrow with the phrase "Renewed focus on electric
business boosts investor confidence." The third listing is AMERCO
followed by a down arrow with the phrase "Credit-rating downgrade
fosters speculation about company's future."]
OUTLOOK
For the remainder of 2003, we're fairly optimistic about the outlook for
preferred and utility common stocks. Much of our optimism stems from our
macroeconomic outlook, which calls for a continually sluggish economy
coupled with sustained low interest rates. This could continue to prompt
strong demand for relatively high-yielding preferred and utility common
stocks. The dividend tax relief enacted in June -- which cut the dividend
tax rate from a maximum of 38.6% to 15% -- also could help boost demand for
many stocks that pay high dividends. Utility common stocks have other
factors going for them as well, including the potential for more stable
credit ratings, attractive valuations and the possible elimination of an
anachronistic law limiting utility mergers.
"...we're fairly optimistic
about the outlook for
preferred and utility
common stocks."
This commentary reflects the views of the portfolio management team
through the end of the Fund's period discussed in this report. The
team's statements reflect their own opinions. As such, they are in no
way guarantees of future events, and are not intended to be used as
investment advice or a recommendation regarding any specific security.
They are also subject to change at any time as market and other
conditions warrant.
The Fund normally will invest more than 65% of its managed assets in
securities of companies in the utilities industry. Such an investment
concentration makes the Fund more susceptible to factors adversely
affecting the utilities industry than a broader diversified fund. Sector
investing is subject to greater risks than the market as a whole.
1 As a percentage of the Fund's portfolio on June 30, 2003.
FINANCIAL STATEMENTS
FUND'S
INVESTMENTS
Securities owned
by the Fund on
June 30, 2003
This schedule is divided into two main categories: preferred stocks and
common stocks. Preferred and common stocks are further broken down by
industry group.
SHARES ISSUER, DESCRIPTION VALUE
PREFERRED STOCKS 109.70% $149,836,667
(Cost $147,533,889)
Agricultural Operations 2.72% 3,720,000
40,000 Ocean Spray Cranberries, Inc., 6.25%, Ser A (R) 3,720,000
Banks -- United States 8.29% 11,322,000
99,000 FleetBoston Financial Corp., 6.75%,
Depositary Shares, Ser VI 5,544,000
108,000 HSBC USA, Inc., $2.8575 5,778,000
Broker Services 12.43% 16,972,025
116,400 Bear Stearns Companies, Inc., 5.49%, Ser G 6,046,980
23,000 Bear Stearns Companies, Inc., 6.15%, Ser E 1,229,580
129,689 Lehman Brothers Holdings, Inc., 5.67%,
Depositary Shares, Ser D 6,841,095
13,000 Lehman Brothers Holdings, Inc., 5.94%, Ser C 682,500
77,650 Merrill Lynch & Co., Inc., 9.00%, Depositary Shares, Ser A 2,171,870
Diversified Operations 0.61% 839,052
30,600 Grand Metropolitan Delaware, L.P., 9.42%, Gtd Ser A 839,052
Finance 9.40% 12,835,780
44,000 Citigroup, Inc., 6.213%, Ser G 2,367,200
92,400 Citigroup, Inc., 6.231%, Depositary Shares, Ser H 5,077,380
92,000 SLM Corp., 6.97%, Ser A 5,391,200
Leasing Companies 1.25% 1,711,500
105,000 AMERCO, 8.50%, Ser A 1,711,500
Media 3.07% 4,188,375
67,500 Shaw Communications, Inc., 8.45%, Ser A (Canada) 1,649,025
102,600 Shaw Communications, Inc., 8.50% (Canada) 2,539,350
Oil & Gas 9.20% 12,565,364
25,900 Anadarko Petroleum Corp., 5.46%, Depositary Shares 2,654,750
40,174 Apache Corp., 5.68%, Depositary Shares, Ser B 4,239,614
53,500 Devon Energy Corp., 6.49%, Ser A 5,671,000
Telecommunications 1.22% 1,666,500
50,500 Touch America Holdings, Inc., $6.875 1,666,500
Utilities 61.51% 84,016,071
225,000 Alabama Power Co., 5.20% 5,928,750
40,000 Baltimore Gas & Electric Co., 6.99%, Ser 1995 4,180,000
55,315 Boston Edison Co., 4.25% 4,701,775
78,300 Coastal Finance I, 8.375% 1,706,157
183,500 El Paso Tennessee Pipeline Co., 8.25%, Ser A 7,523,500
147,000 Energy East Capital Trust I, 8.25% 4,064,550
87,100 Entergy Gulf States Capital 1, 8.75%, Ser A 2,212,340
25,000 Florida Power & Light Co., 6.75%, Ser U 2,605,000
50,000 Hawaiian Electric Industries Capital Trust I, 8.36% 1,323,500
13,500 Massachusetts Electric Co., 6.99% 1,410,750
50,000 Monongahela Power Co., 7.73%, Ser L 4,650,000
16,400 Potomac Electric Power Co., $2.28 Ser 1965 688,288
30,000 PSEG Funding Trust II, 8.75% 831,300
48,000 PSI Energy, Inc., 6.875% 5,040,000
26,375 Public Service Electric & Gas Co., 6.92% 2,710,031
205,140 Puget Sound Energy, Inc., 7.45%, Ser II 5,251,584
9,264 Rochester Gas & Electric Co., 4.10%, Ser H 583,632
11,392 Rochester Gas & Electric Corp., 4.75%, Ser I 977,933
205,600 Sierra Pacific Power Co., 7.80%, Ser 1 (Class A) 4,214,800
55,000 South Carolina Electric & Gas Co., 6.52% 5,747,500
59,000 Southern Union Financing I, 9.48% 1,524,560
196,700 TDS Capital Trust I, 8.50% 4,974,543
70,500 TDS Capital Trust II, 8.04% 1,769,550
106,000 TXU US Holdings Co., $1.875, Depositary Shares, Ser A 2,650,000
36,000 TXU US Holdings Co., $1.805, Depositary Shares, Ser B 898,920
29,200 TXU US Holdings Co., $7.98 3,036,508
10,500 Virginia Electric & Power Co., $6.98 1,092,000
10,000 Virginia Electric & Power Co., $7.05 1,040,000
6,500 Wisconsin Public Service Corp., 6.76% 678,600
COMMON STOCKS 41.27% 56,365,213
(Cost $66,378,073)
Telecommunications 0.01% 11,808
196,800 Touch America Holdings, Inc.* 11,808
Utilities 41.26% 56,353,405
158,000 Alliant Energy Corp. 3,006,740
190,000 Aquila, Inc. 490,200
139,800 CH Energy Group, Inc. 6,291,000
46,000 Dominion Resources, Inc. 2,956,420
99,000 DPL, Inc. 1,578,060
133,900 DTE Energy Co. 5,173,896
70,000 Duke Energy Corp. 1,396,500
232,000 Energy East Corp. 4,816,320
129,000 KeySpan Corp. 4,573,050
34,000 NiSource, Inc. 646,000
207,000 Northeast Utilities 3,465,180
91,000 NSTAR 4,145,050
93,092 OGE Energy Corp. 1,989,376
27,500 Peoples Energy Corp. 1,179,475
54,000 Progress Energy, Inc. 2,370,600
20,000 Progress Energy, Inc.* (Contingent Value Obligation) 2,400
170,500 Puget Energy, Inc. 4,069,835
271,500 Sierra Pacific Resources* 1,612,710
176,750 TECO Energy, Inc. 2,119,233
48,000 WPS Resources Corp. 1,929,600
169,000 Xcel Energy, Inc. 2,541,760
TOTAL INVESTMENTS 150.97% $206,201,880
OTHER ASSETS AND LIABILITIES, NET (50.97%) ($69,618,814)
TOTAL NET ASSETS 100.00% $136,583,066
* Non-income-producing security
(R) These securities are exempt from registration under rule 144A of the
Securities Act of 1933. Such securities may be resold, normally to
qualified institutional buyers, in transactions exempt from
registration. Rule 144A securities amounted to $3,720,000 or 2.72% of
net assets as of June 30, 2003.
Parenthetical disclosure of a foreign country in the security
description represents country of a foreign issuer.
The percentage shown for each investment category is the total value of
that category as a percentage of the net assets of the Fund.
See notes to
financial statements.
ASSETS AND
LIABILITIES
June 30, 2003
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 for each
common share.
ASSETS
Investments at value (cost $213,911,962) $206,201,880
Dividends receivable 735,991
Other assets 42,202
Total assets 206,980,073
LIABILITIES
Due to custodian 124,021
Payable to affiliates
Management fee 145,738
Administration fee 24,867
Other payables and accrued expenses 90,827
Total liabilities 385,453
Auction Market Preferred Shares (AMPS), at value, unlimited
number of shares of beneficial interest authorized with no
par value, 700 shares issued, liquidation preference of
$100,000 per share 70,011,554
NET ASSETS
Common shares capital paid-in 142,306,741
Accumulated net realized loss on investments (414,358)
Net unrealized depreciation of investments (7,710,082)
Accumulated net investment income 2,400,765
Net assets applicable to common shares $136,583,066
NET ASSET VALUE PER COMMON SHARE
Based on 9,945,720 shares of beneficial interest
outstanding -- unlimited number of shares authorized
with no par value $13.73
See notes to
financial statements.
OPERATIONS
For the year ended
June 30, 2003
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
Dividends $13,064,499
Interest 27,740
Total investment income 13,092,239
EXPENSES
Investment management fee 1,555,845
Administration fee 291,721
AMPS auction fee 184,931
Federal excise tax 89,890
Auditing fee 52,800
Custodian fee 45,837
Printing 43,930
Transfer agent fee 40,998
Registration and filing fee 40,725
Trustees' fee 13,042
Legal fee 3,578
Interest expense 368
Total expenses 2,363,665
Net investment income 10,728,574
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss on investments (153,364)
Change in net unrealized appreciation (depreciation)
of investments 856,632
Net realized and unrealized gain 703,268
Distributions to AMPS (1,013,193)
Increase in net assets from operations $10,418,649
See notes to
financial statements.
CHANGES IN
NET ASSETS
This Statement
of Changes in
Net Assets
shows how the
value of the
Fund's net assets
has changed
since the end of
the previous
period. The dif-
ference reflects
earnings less
expenses, any
investment gains
and losses,
distributions
paid to share-
holders, if any,
and any increase
due to the sale of
common shares.
YEAR YEAR
ENDED ENDED
6-30-02 6-30-03
INCREASE IN NET ASSETS
From operations
Net investment income $11,662,019 $10,728,574
Net realized loss (211,634) (153,364)
Change in net unrealized
appreciation (depreciation) (15,801,539) 856,632
Distributions to AMPS (1,449,527) (1,013,193)
Increase (decrease) in net assets
resulting from operations (5,800,681) 10,418,649
Distributions to common shareholder
From net investment income (10,678,061) (10,716,598)
From Fund share transactions 212,653 594,672
NET ASSETS APPLICABLE TO COMMON SHARES
Beginning of period 152,552,432 136,286,343
End of period 1 $136,286,343 $136,583,066
1 Includes accumulated net investment income of $3,310,964 and
$2,400,765, respectively.
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
COMMON SHARES
The Financial Highlights show how the Fund's net asset value for a share
has changed since the end of the previous period.
PERIOD ENDED 6-30-99 6-30-00 6-30-01 6-30-02 6-30-03
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $17.07 $16.00 $13.97 $15.43 $13.77
Net investment income 1 1.26 1.27 1.34 1.18 1.08
Net realized and unrealized
gain (loss) on investments (0.80) (1.91) 1.52 (1.61) 0.06
Distributions to AMPS (0.29) (0.31) (0.32) (0.15) (0.10)
Total from
investment operations 0.17 (0.95) 2.54 (0.58) 1.04
Less distributions to
common shareholders
From net investment income (1.24) (1.08) (1.08) (1.08) (1.08)
Net asset value, end of period $16.00 $13.97 $15.43 $13.77 $13.73
Per share market value,
end of period $13.81 $12.38 $14.80 $13.69 $14.72
Total return at market value 2 (%) (3.56) (2.46) 29.40 (0.45) 16.82
RATIOS AND SUPPLEMENTAL DATA
Net assets applicable to common shares,
end of period (in millions) $159 $138 $153 $136 $137
Ratio of expenses to average
net assets 3 (%) 1.72 1.74 1.77 1.77 1.90
Ratio of net investment income
to average net assets 4 (%) 7.51 8.57 8.22 7.99 8.62
Portfolio turnover (%) 30 20 13 15 2
SENIOR SECURITIES
Total value of AMPS outstanding
(in millions) $70 $70 $70 $70 $70
Involuntary liquidation
preference per unit (in thousands) $100 $100 $100 $100 $100
Approximate market value per unit
(in thousands) $100 $100 $100 $100 $100
Asset coverage per unit 5 $329,508 $299,106 $316,086 $290,311 $294,629
1 Based on the average of the shares outstanding.
2 Assumes dividend reinvestment.
3 Ratios calculated on the basis of expenses applicable to common shares
relative to the average net assets of common shares. Without the
exclusion of preferred shares, the ratio of expenses would have been
1.21%, 1.18%, 1.21%, 1.20% and 1.22%, respectively.
4 Ratios calculated on the basis of net investment income applicable to
common shares relative to the average net assets of common shares.
Without the exclusion of preferred shares, the ratio of net investment
income would have been 5.28%, 5.79%, 5.61%, 5.40% and 5.52%,
respectively.
5 Calculated by subtracting the Fund's total liabilities from the Fund's
total assets and dividing such amount by the number of AMPS outstanding
as of the applicable 1940 Act Evaluation Date, which may differ from the
financial reporting date.
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
NOTES TO
STATEMENTS
NOTE A
Accounting policies
John Hancock Patriot Select Dividend Trust (the "Fund") is a diversified
closed-end management investment company registered under the Investment
Company Act of 1940.
Significant accounting policies of the Fund are as follows:
Valuation of investments
Securities in the Fund's portfolio are 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 are valued at amortized cost, which approximates market value. The
Fund determines the net asset value of the common shares each business
day.
Investment transactions
Investment transactions are recorded as of the date of purchase, sale or
maturity. Net realized gains and losses on sales of investments are
determined on the identified cost basis.
Federal income taxes
The Fund qualifies 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.
For federal income tax purposes, the Fund has $386,472 of a capital loss
carryforward available, to the extent provided by regulations, to offset
future net realized capital gains. To the extent that such carryforward
is used by the Fund, no capital gain distributions will be made. The
loss carryforward expires as follows: June 30, 2010 -- $116, 663 and
June 30, 2011 -- $269, 809.
Expenses
The majority of the expenses are directly identifiable to an individual
fund. Expenses that are not readily identifiable to a specific fund will be
allocated in such a manner as deemed equitable, taking into consideration,
among other things, the nature and type of expense and the relative sizes of
the funds.
Dividends, interest and distributions
Dividend income on investment securities is recorded on the ex-dividend date
or, in the case of some foreign securities, on the date thereafter when the
Fund identifies the dividend. Interest income on investment securities is
recorded on the accrual basis. Foreign income may be subject to foreign
withholding taxes, which are accrued as applicable.
The Fund records distributions to common and preferred shareholders from net
investment income and net realized gains on the ex-dividend date. During the
year ended June 30, 2003, the tax character of distributions paid was as
follows: ordinary income $11,729,791.
As of June 30, 2003, the components of distributable earnings on a tax basis
included $2,406,537 of undistributed ordinary income. Such distributions and
distributable earnings, 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. Distributions in excess
of tax basis earnings and profits, if any, are reported in the Fund's
financial statements as a return of capital.
Use of estimates
The preparation of these financial statements, in accordance with
accounting principles generally accepted in the United States of
America, incorporates estimates made by management in determining the
reported amount of assets, liabilities, revenues and expenses of the
Fund. Actual results could differ from these estimates.
NOTE B
Management fee and transactions with affiliates and others
The Fund has an investment management contract with John Hancock Advisers,
LLC (the "Adviser"), a wholly owned subsidiary of The Berkeley Financial
Group, LLC. Under the investment management contract, the Fund pays a
monthly management fee to the Adviser at an annual rate of 0.80% of the
Fund's average weekly net assets plus the value attributable to the AMPS.
The Fund has an administrative agreement with the Adviser under which
the Adviser oversees the custodial, auditing, valuation, accounting,
legal, stock transfer and dividend disbursing services and maintains
Fund communications with shareholders. The Fund pays the Adviser a
monthly administration fee at an annual rate of 0.15% of the Fund's
average weekly net assets plus the value attributable to the AMPS.
Ms. Maureen R. Ford and Mr. John M. DeCiccio are directors and/or
officers of the Adviser and/or its affiliates, as well as Trustees of
the Fund. The compensation of unaffiliated Trustees is borne by the
Fund. 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 Fund makes investments into other John
Hancock funds, as applicable, to cover its liability for the deferred
compensation. Investments to cover the Fund's deferred compensation
liability are recorded on the Fund's books as an other asset. The
deferred compensation liability and the related other asset are always
equal and are marked to market on a periodic basis to reflect any income
earned by the investment as well as any unrealized gains or losses. The
Deferred Compensation Plan investments had no impact on the operations
of the Fund.
NOTE C
Fund share transactions
Common shares
This listing illustrates the Fund's common shares dividend
reinvestments, reclassification of the Fund's capital accounts and the
number of common shares outstanding at the beginning and end of the last
two periods, along with the corresponding dollar value.
YEAR ENDED 6-30-02 YEAR ENDED 6-30-03
SHARES AMOUNT SHARES AMOUNT
Beginning of period 9,885,027 $141,701,513 9,899,636 $141,805,115
Distributions reinvested 14,609 212,653 46,084 594,672
Reclassification of
capital accounts -- (109,051) -- (93,046)
End of period 9,899,636 $141,805,115 9,945,720 $142,306,741
Auction Market Preferred
Shares Series A
The Fund issued 700 shares of Dutch Auction Market Preferred Shares Series A
("AMPS") on August 30, 1990, in a public offering. The underwriting discount
was recorded as a reduction of the capital of common shares.
Dividends on the AMPS, which accrue daily, are cumulative at a rate that
was established at the offering of the AMPS and has been reset every 49
days thereafter by an auction. Dividend rates on AMPS ranged from 0.99%
to 1.65% during the year ended June 30, 2003. Accrued dividends on AMPS
are included in the value of AMPS on the Fund's Statement of Assets and
Liabilities.
The AMPS are redeemable at the option of the Fund, at a redemption price
equal to $100,000 per share, plus accumulated and unpaid dividends on
any dividend payment date. The AMPS are also subject to mandatory
redemption at a redemption price equal to $100,000 per share, plus
accumulated and unpaid dividends, if the Fund is in default on its asset
coverage requirements with respect to the AMPS, as defined in the Fund's
by-laws. If the dividends on the AMPS shall remain unpaid in an amount
equal to two full years' dividends, the holders of the AMPS, as a class,
have the right to elect a majority of the Board of Trustees. In general,
the holders of the AMPS and the common shareholders have equal voting
rights of one vote per share, except that the holders of the AMPS, as a
class, vote to elect two members of the Board of Trustees, and separate
class votes are required on certain matters that affect the respective
interests of the AMPS and common shares.
NOTE D
Investment transactions
Purchases and proceeds from sales of securities, other than short-term
securities and obligations of the U.S. government, during the year ended
June 30, 2003, aggregated $6,864,445 and $4,297,905, respectively.
The cost of investments owned on June 30, 2003, including short-term
investments, for federal income tax purposes was $213,939,848. Gross
unrealized appreciation and depreciation of investments aggregated
$15,909,732 and $23,647,700, respectively, resulting in net unrealized
depreciation of $7,737,968. The difference between book basis and tax
basis net unrealized depreciation of investments is attributable
primarily to the tax deferral of losses on wash sales.
NOTE E
Reclassification of accounts
During the year ended June 30, 2003, the Fund reclassified amounts to
reflect a decrease in accumulated net realized loss on investments of
$2,028, an increase in accumulated net investment income of $91,018 and
a decrease in capital paid-in of $93,046. This represents the amount
necessary to report these balances on a tax basis, excluding certain
temporary differences as of June 30, 2003. Additional adjustments may be
needed in subsequent reporting periods. 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 accounting
principles generally accepted in the United States of America, and book
and tax differences in accounting for deferred compensation and federal
excise tax. The calculation of net investment income per share in the
Financial Highlights excludes these adjustments.
AUDITORS'
REPORT
Report of
Deloitte & Touche
LLP, Independent
Auditors
To The Board of Trustees and Shareholders
of John Hancock Patriot Select Dividend Trust,
We have audited the accompanying statement of assets and liabilities of John
Hancock Patriot Select Dividend Trust (the "Fund") including the schedule of
investments, as of June 30, 2003, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of
the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United State of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at June 30, 2003,
by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of the John Hancock Patriot Select Dividend Trust as
of June 30, 2003, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with accounting principles
generally accepted in the United States of America.
/S/ DELOITTE & TOUCHE LLP
Boston, Massachusetts
August 7, 2003
TAX
INFORMATION
Unaudited
For federal income tax purposes, the following information is furnished
with respect to the distributions of the Fund paid during its taxable
year ended June 30, 2003.
With respect to the ordinary dividends paid by the Fund for the fiscal
year ended June 30, 2003, 100% of the dividends qualify for the
corporate dividends-received deduction.
The Fund hereby designates the maximum amount allowable of its net
taxable income as qualified dividend income as provided in the Jobs and
Growth Tax Relief Reconciliation Act of 2003. This amount will be
reflected on Form 1099-DIV for the calendar year 2003.
If the Fund paid dividends during the fiscal year end, shareholders will
be mailed a 2003 U.S. Treasury Department Form 1099-DIV in January 2004.
This will reflect the total of all distributions that are taxable for
calendar year 2003.
INVESTMENT OBJECTIVE AND POLICY
The Fund's investment objective is to provide a high current income,
consistent with modest growth of capital. The Fund seeks to achieve its
investment objective by investing in preferred stocks that, in the
opinion of the Adviser, may be undervalued relative to similar
securities in the marketplace.
The Fund's non-fundamental investment policy, with respect to the
quality of ratings of its portfolio investments, was changed by a vote
of the Fund's Trustees on September 13, 1994. The new policy, which
became effective October 15, 1994, stipulates that preferred stocks and
debt obligations in which the Fund will invest will be rated investment
grade (at least "BBB" by S&P or "Baa" by Moody's) at the time of
investment or will be preferred stocks of issuers of investment grade
senior debt, some of which may have speculative characteristics, or, if
not rated, will be of comparable quality as determined by the Adviser.
The Fund will invest in common stocks of issuers whose senior debt is
rated investment grade or, in the case of issuers that have no rated
senior debt outstanding, whose senior debt is considered by the Adviser
to be of comparable quality.
On November 20, 2001, the Fund's Trustees approved the following
investment policy investment restriction change, effective December 15,
2001. Under normal circumstances, the Fund will invest at least 80% of
its assets in dividend-paying securities. The "Assets" are defined as
net assets including the liquidation preference amount of the AMPS plus
borrowings for investment purposes. The Fund will notify shareholders at
least 60 days prior to any change in this 80% investment policy.
DIVIDEND REINVESTMENT PLAN
The Fund offers its shareholders a Dividend Reinvestment Plan (the
"Plan"), which offers the opportunity to earn compounded yields. Each
holder of common shares will automatically have all distributions of
dividends and capital gains reinvested by Mellon Investor Services, as
Plan Agent for the common shareholders (the "Plan Agent"), unless an
election is made to receive cash. Holders of common shares who elect not
to participate in the Plan will receive all distributions in cash, paid
by check mailed directly to the shareholder of record (or, if the common
shares are held in street or other nominee name, then to the nominee) by
the Plan Agent, as dividend disbursing agent. Shareholders whose shares
are held in the name of a broker or a nominee should contact the broker
or nominee to determine whether and how they may participate in the
Plan.
If the Fund declares a dividend payable either in common shares or in
cash, non-participants will receive cash and participants in the Plan
will receive the equivalent in common shares. If the market price of the
common shares on the payment date of the dividend is equal to or exceeds
their net asset value as determined on the payment date, participants
will be issued common shares (out of authorized but unissued shares) at
a value equal to the higher of net asset value or 95% of the market
price. If the net asset value exceeds the market price of the common
shares at such time, or if the Board of Trustees declares a dividend
payable only in cash, the Plan Agent will, as agent for Plan
participants, buy shares in the open market, on the New York Stock
Exchange or elsewhere, for the participant's accounts. Such purchases
will be made promptly after the payable date for such dividend and, in
any event, prior to the next ex-dividend date after such date, except
where necessary to comply with federal securities laws. If, before the
Plan Agent has completed its purchases, the market price exceeds the net
asset value of the common shares, the average per share purchase price
paid by the Plan Agent may exceed the net asset value of the common
shares, resulting in the acquisition of fewer shares than if the
dividend had been paid in shares issued by the Fund.
Each participant will pay a pro rata share of brokerage commissions
incurred with respect to the Plan Agent's open market purchases in
connection with the reinvestment of dividends and distributions. The
cost per share of the shares purchased for each participant's account
will be the average cost, including brokerage commissions, of any shares
purchased on the open market plus the cost of any shares issued by the
Fund. There will be no brokerage charges with respect to common shares
issued directly by the Fund. There are no other charges to participants
for reinvesting dividends or capital gain distributions.
Participants in the Plan may withdraw from the Plan at any time by
contacting the Plan Agent by telephone, in writing or by visiting the
Plan Agent's Web site at www.melloninvestor.com. Such withdrawal will be
effective immediately if received not less than ten days prior to a
dividend record date; otherwise, it will be effective for all subsequent
dividend record dates. When a participant withdraws from the Plan or
upon termination of the Plan, as provided below, certificates for whole
common shares credited to his or her account under the Plan will be
issued and a cash payment will be made for any fraction of a share
credited to such account.
The Plan Agent maintains each shareholder's account in the Plan and
furnishes monthly written confirmations of all transactions in the
accounts, including information needed by the shareholders for personal
and tax records. The Plan Agent will hold common shares in the account
of each Plan participant in non- certificated form in the name of the
participant. Proxy material relating to the shareholders' meetings of
the Fund will include those shares purchased as well as shares held
pursuant to the Plan.
The reinvestment of dividends and distributions will not relieve
participants of any federal income tax that may be payable or required
to be withheld on such dividends or distributions. Participants under
the Plan will receive tax information annually. The amount of dividend
to be reported on 1099-DIV should be (1) in the case of shares issued by
the Fund, the fair market value of such shares on the dividend payment
date and (2) in the case of shares purchased by the Plan Agent in the
open market, the amount of cash used by the Plan Agent to purchase
shares in the open market, including the amount of cash allocated to
brokerage commissions paid on such purchases.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan
as applied to any dividend or distribution paid subsequent to written
notice of the change sent to all shareholders of the Fund at least 90
days before the record date for the dividend or distribution. The Plan
may be amended or terminated by the Plan Agent after at least 90 days'
written notice to all shareholders of the Fund. All correspondence or
additional information concerning the Plan should be directed to the
Plan Agent, Mellon Bank, N.A., c/o Mellon Investor Services, P.O. Box
3338, South Hackensack, NJ 07606-1938 (telephone 1-800-852-0218).
SHAREHOLDER COMMUNICATION AND ASSISTANCE
If you have any questions concerning the Fund, we will be pleased to
assist you. If you hold shares in your own name and not with a brokerage
firm, please address all notices, correspondence, questions or other
communications regarding the Fund to the transfer agent at:
Mellon Investor Services
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
Telephone 1-800-852-0218
If your shares are held with a brokerage firm, you should contact that
firm, bank or other nominee for assistance.
SHAREHOLDER MEETINGS
In November 2002, the Board of Trustees adopted several amendments to
the Fund's by-laws, including provisions relating to the calling of a
special meeting and requiring advance notice of shareholder proposals or
nominees for Trustee. The advance notice provisions in the by-laws
require shareholders to notify the Fund in writing of any proposal which
they intend to present at an annual meeting of shareholders, including
any nominations for Trustee, between 90 and 120 days prior to the first
anniversary of the mailing date of the notice from the prior year's
annual meeting of shareholders. The notification must be in the form
prescribed by the by-laws. The advance notice provisions provide the
Fund and its Trustees with the opportunity to thoughtfully consider and
address the matters proposed before the Fund prepares and mails its
proxy statement to shareholders. Other amendments set forth the
procedures, which must be followed in order for a shareholder to call a
special meeting of shareholders. Please contact the Secretary of the
Fund for additional information about the advance notice requirements or
the other amendments to the by-laws.
On March 20, 2003, the Annual Meeting of the Fund was held to elect four
Trustees and to ratify the actions of the Trustees in selecting
independent auditors for the Fund.
Proxies covering 9,467,798 shares of beneficial interest were voted at
the meeting. The common shareholders elected the following Trustees to
serve until their respective successors are duly elected and qualified,
with the votes tabulated as follows:
WITHHELD
FOR AUTHORITY
-----------------------------------------------------------------------
Maureen R. Ford 9,358,779 109,019
Charles L. Ladner 9,356,887 110,911
Dr. John Moore 9,355,389 112,409
The preferred shareholders elected Ronald R. Dion to serve until his
successor is duly elected and qualified, with the votes tabulated as
follows: 402 FOR and 0 WITHHELD AUTHORITY.
The shareholders also ratified the Trustees' selection of Deloitte &
Touche LLP as the Fund's independent Auditors for the fiscal year ending
June 30, 2003, with the votes tabulated as follows: 9,339,584 FOR,
64,994 AGAINST and 63,622 ABSTAINING.
TRUSTEES
& OFFICERS
Unaudited
This chart provides information about the Trustees and Officers who
oversee your John Hancock fund. Officers elected by the Trustees manage
the day-to-day operations of the Fund and execute policies formulated by
the Trustees.
INDEPENDENT TRUSTEES
NUMBER OF
NAME, AGE TRUSTEE JOHN HANCOCK
PRINCIPAL OCCUPATION(S) AND OTHER OF FUND FUNDS OVERSEEN
DIRECTORSHIPS DURING PAST 5 YEARS SINCE 1 BY TRUSTEE
James F. Carlin, Born: 1940 1990 31
Director and Treasurer, Alpha Analytical Inc. (analytical laboratory) (since
1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since
1995); Part Owner and Vice President, Mone Lawrence Carlin Insurance
Agency, Inc. (since 1996); Director and Treasurer, Rizzo Associates (until 2000);
Chairman and CEO, Carlin Consolidated, Inc. (management/investments)
(since 1987); Director and Partner, Proctor Carlin & Co., Inc. (until 1999); Trustee,
Massachusetts Health and Education Tax Exempt Trust (since 1993), Director
of the following: Uno Restaurant Corp. (until 2001), Arbella Mutual (insurance)
(until 2000), HealthPlan Services, Inc. (until 1999), Flagship Healthcare, Inc.
(until 1999), Carlin Insurance Agency, Inc. (until 1999); Chairman,
Massachusetts Board of Higher Education (until 1999).
William H. Cunningham, Born: 1944 1995 31
Former Chancellor, University of Texas System and former President of the
University of Texas, Austin, Texas; Chairman and CEO, IBT Technologies
(until 2001); Director of the following: The University of Texas Investment
Management Company (until 2000), Hire.com (since 2000), STC Broadcasting,
Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc. (since 2001), Adorno/
Rogers Technology, Inc. (since 2001), Pinnacle Foods Corporation (since 2001),
rateGenius (since 2001), LaQuinta Motor Inns, Inc. (hotel management company)
(until 1998), Jefferson-Pilot Corporation (diversified life insurance company)
(since 1985), New Century Equity Holdings (formerly Billing Concepts) (until 2001),
eCertain (until 2001), ClassMap.com (until 2001), Agile Ventures (until 2001),
LBJ Foundation (until 2000), Golfsmith International, Inc. (until 2000), Metamor
Worldwide (until 2000), AskRed.com (until 2001), Southwest Airlines (since 2000)
and Introgen (since 2000); Advisory Director, Q Investments (since 2000); Advisory
Director, Chase Bank (formerly Texas Commerce Bank -- Austin) (since 1988),
LIN Television (since 2002) and WilTel Communications (since 2002).
Ronald R. Dion, Born: 1946 1998 31
Chairman and Chief Executive Officer, R.M. Bradley & Co., Inc.; Director,
The New England Council and Massachusetts Roundtable; Trustee, North
Shore Medical Center; Director, BJ's Wholesale Club, Inc. and a corporator
of the Eastern Bank; Trustee, Emmanuel College.
Charles L. Ladner 2, Born: 1938 1992 31
Chairman and Trustee, Dunwoody Village, Inc. (retirement services);
Senior Vice President and Chief Financial Officer, UGI Corporation
(Public Utility Holding Company) (retired 1998); Vice President and
Director for AmeriGas, Inc. (retired 1998); Director of AmeriGas
Partners, L.P. (until 1997) (gas distribution); Director, EnergyNorth, Inc.
(until 1995); Director, Parks and History Association (since 2001).
Patti McGill Peterson 2, Born: 1943 2002 29
Executive Director, Council for International Exchange of Scholars (since
1998); Vice President, Institute of International Education (since 1998);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University (until
1997); President Emerita of Wells College and St. Lawrence University;
Director, Niagara Mohawk Power Corporation (electric utility).
John A. Moore 2, Born: 1939 2002 29
President and Chief Executive Officer, Institute for Evaluating Health
Risks, (nonprofit institution) (until 2001); Senior Scientist, Sciences
International (health research) (since 1998); Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT (nonprofit research) (since 2002).
Steven Pruchansky, Born: 1944 1992 31
Chairman and Chief Executive Officer, Mast Holdings, Inc. (since 2000);
Director and President, Mast Holdings, Inc. (until 2000); Managing
Director, JonJames, LLC (real estate) (since 2001); Director, First Signature
Bank & Trust Company (until 1991); Director, Mast Realty Trust (until
1994); President, Maxwell Building Corp. (until 1991).
Norman H. Smith, Born: 1933 1992 31
Lieutenant General, United States Marine Corps; Deputy Chief of Staff for
Manpower and Reserve Affairs, Headquarters Marine Corps; Commanding
General III Marine Expeditionary Force/3rd Marine Division (retired 1991).
John P. Toolan 2, Born: 1930 1993 31
Director, The Smith Barney Muni Bond Funds, The Smith Barney Tax-Free
Money Funds, Inc., Vantage Money Market Funds (mutual funds), The
Inefficient-Market Fund, Inc. (closed-end investment company); Chairman,
Smith Barney Trust Company of Florida (retired 1991); Director, Smith
Barney, Inc., Mutual Management Company and Smith Barney Advisers, Inc.
(investment advisers) (retired 1991); Senior Executive Vice President, Director
and member of the Executive Committee, Smith Barney, Harris Upham & Co.,
Incorporated (investment bankers) (until 1991).
INTERESTED TRUSTEES 3
NAME, AGE NUMBER OF
POSITION(S) HELD WITH FUND TRUSTEE JOHN HANCOCK
PRINCIPAL OCCUPATION(S) AND OTHER OF FUND FUNDS OVERSEEN
DIRECTORSHIPS DURING PAST 5 YEARS SINCE 1 BY TRUSTEE
John M. DeCiccio, Born: 1948 2001 52
Trustee
Executive Vice President and Chief Investment Officer, John Hancock
Financial Services, Inc.; Director, Executive Vice President and Chief
Investment Officer, John Hancock Life Insurance Company; Chairman of
the Committee of Finance of John Hancock Life Insurance Company;
Director, John Hancock Subsidiaries LLC (Subsidiaries, LLC), Hancock
Natural Resource Group, Independence Investment LLC, Declaration
Management & Research LLC, John Hancock Advisers, LLC (the "Adviser"),
The Berkeley Financial Group, LLC ("The Berkeley Group"), John Hancock
Funds, LLC ("John Hancock Funds") and Massachusetts Business Develop-
ment Corporation; Director, John Hancock Insurance Agency, Inc. ("Insurance
Agency, Inc.") (until 1999).
Maureen R. Ford, Born: 1955 2000 52
Trustee, Chairman, President and Chief Executive Officer
Executive Vice President, John Hancock Financial Services, Inc., John
Hancock Life Insurance Company; Chairman, Director, President and
Chief Executive Officer, the Adviser and The Berkeley Group; Chairman,
Director, President and Chief Executive Officer, John Hancock Funds;
Chairman, Director and Chief Executive Officer, Sovereign Asset
Management Corporation ("SAMCorp."); Director, Independence
Investment LLC, Subsidiaries LLC and John Hancock Signature Services,
Inc.; Senior Vice President, MassMutual Insurance Co. (until 1999).
PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES
NAME, AGE
POSITION(S) HELD WITH FUND OFFICER
PRINCIPAL OCCUPATION(S) AND OF FUND
DIRECTORSHIPS DURING PAST 5 YEARS SINCE
William L. Braman, Born: 1953 2000
Executive Vice President and Chief Investment Officer
Executive Vice President and Chief Investment Officer, the Adviser and each of the John
Hancock funds; Director, SAMCorp.; Executive Vice President and Chief Investment
Officer, Baring Asset Management, London U.K. (until 2000).
Richard A. Brown, Born: 1949 2000
Senior Vice President and Chief Financial Officer
Senior Vice President, Chief Financial Officer and Treasurer, the Adviser, John Hancock
Funds, and The Berkeley Group; Second Vice President and Senior Associate Controller,
Corporate Tax Department, John Hancock Financial Services, Inc. (until 2001).
Thomas H. Connors, Born: 1959 1992
Vice President and Compliance Officer
Vice President and Compliance Officer, the Adviser and each of the John Hancock funds;
Vice President, John Hancock Funds.
William H. King, Born: 1952 1992
Vice President and Treasurer
Vice President and Assistant Treasurer, the Adviser; Vice President and Treasurer of each
of the John Hancock funds; Assistant Treasurer of each of the John Hancock funds (until 2001).
Susan S. Newton, Born: 1950 1992
Senior Vice President, Secretary and Chief Legal Officer
Senior Vice President, Secretary and Chief Legal Officer, SAMCorp., the Adviser and each
of the John Hancock funds, John Hancock Funds and The Berkeley Group; Vice President,
Signature Services (until 2000); Director, Senior Vice President and Secretary, NM Capital.
The business address for all Trustees and Officers is 101 Huntington
Avenue, Boston, Massachusetts 02199.
The Statement of Additional Information of the Fund includes additional
information about members of the Board of Trustees of the Fund and is
available, without charge, upon request, by calling 1-800-225-5291.
1 Each Trustee serves until resignation, retirement age or until his or
her successor is elected.
2 Member of Audit Committee.
3 Interested Trustees hold positions with the Fund's investment adviser,
underwriter and certain other affiliates.
FOR YOUR
INFORMATION
INVESTMENT ADVISER
John Hancock Advisers, LLC
101 Huntington Avenue
Boston, Massachusetts 02199-7603
CUSTODIAN
The Bank of New York
1 Wall Street
New York, New York 10286
TRANSFER AGENT FOR
COMMON SHAREHOLDERS
Mellon Investor Services
85 Challenger Road
Overpeck Centre
Ridgefield Park, New Jersey 07660
TRANSFER AGENT
FOR AMPS
Deutsche Bank Trust Company Americas
280 Park Avenue
New York, New York 10017
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109-1803
INDEPENDENT AUDITORS
Deloitte & Touche LLP
200 Berkeley Street
Boston, Massachusetts 02116-5022
STOCK SYMBOL
Listed New York Stock Exchange:
DIV
For shareholder assistance refer to page 21
HOW TO
CONTACT US
On the Internet www.jhfunds.com
By regular mail Mellon Investor Services
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
Customer service representatives 1-800-852-0218
Portfolio commentary 1-800-344-7054
24-hour automated information 1-800-843-0090
TDD Line 1-800-231-5469
The Fund's voting policies and procedures are available without charge,
upon request:
By phone 1-800-225-5291
On the Fund's Web site www.jhfunds.com/proxy
On the SEC's Web site http://www.sec.gov
PRESORTED
STANDARD
U. S. POSTAGE
PAID
MIS
[A 1 1/2" x 1/2" John Hancock (Signature) logo in upper left hand corner.
A tag line below reads "JOHN HANCOCK FUNDS."]
1-800-852-0218
1-800-843-0090 EASI-Line
1-800-231-5469 (TDD)
www.jhfunds.com
P300A 6/03
8/03
ITEM 2. CODE OF ETHICS.
Not applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
See attached Exhibit "Proxy Voting Policies and Procedures".
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-CSR,
the registrant's principal executive officer and principal financial officer
have concluded that those disclosure controls and procedures provide reasonable
assurance that the material information required to be disclosed by the
registrant on this report is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.
(b) There were no 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 10. EXHIBITS.
(a) Not applicable at this time.
(b)(1) Separate certifications for the registrant's principal executive officer
and principal financial officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of
1940, are attached.
(b)(2) Separate certifications for the registrant's principal executive officer
and principal financial officer, as required by 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule
30a-2(b) under the Investment Company Act of 1940, are attached. 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) Proxy Voting Policies and Procedures
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
By:
-----------------------
Maureen R. Ford
Chairman, President and Chief Executive Officer
Date: August 27, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:
-----------------------
Maureen R. Ford
Chairman, President and Chief Executive Officer
Date: August 27, 2003
By:
-----------------------
Richard A. Brown
Senior Vice President and Chief Financial Officer
Date: August 27, 2003