N-CSRS 1 a_municipalsectrust.htm JOHN HANCOCK MUNICIPAL SECURITIES TRUST
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- 5968 
 
John Hancock Municipal Securities Trust 
(Exact name of registrant as specified in charter) 
 
601 Congress Street, Boston, Massachusetts 02210 
(Address of principal executive offices) (Zip code) 
 
Gordon M. Shone
Treasurer
 
601 Congress Street 
 
Boston, Massachusetts 02210 
 
(Name and address of agent for service) 
 
Registrant's telephone number, including area code: 617-663-2168 
 
Date of fiscal year end:  August 31 
 
 
Date of reporting period:  February 28, 2009 

ITEM 1. REPORT TO SHAREHOLDERS.


A look at performance

For the period ended February 28, 2009

    Average annual returns (%)  Cumulative total returns (%)   

SEC 30-

day yield

(%) as of

2-28-09 

    with maximum sales charge (POP)  with maximum sales charge (POP)   
  Inception        Since  Six        Since 
Class  date  1-year  5-year  10-year  inception  months  1-year  5-year  10-year  inception 
A  1-5-90  –2.87  1.37  2.94  —  –7.10  –2.87  7.06  33.61  —         4.33 
B  12-31-91  –3.94  1.21  2.79  —  –7.86  –3.94  6.17  31.73  —         3.77 
C  4-1-99  –0.06  1.54  —  2.64  –4.06  –0.06  7.95  —  29.48         3.76 

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges on Class A shares of 4.5% and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The returns for Class C shares have been adjusted to reflect the elimination of the front-end sales charge effective July 15, 2004. 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 the expense ratios disclosed in the Financial Highlights tables in this report. The net expenses equal the gross expenses and are as follows: Class A — 1.02%, Class B — 1.77% and Class C — 1.77%. The Fund’s expenses for the current fiscal year may be higher than the expenses listed above, for some of the following reasons: i) a significant decrease in average net assets may result in a higher advisory fee rate; ii) a significant decrease in average net assets may result in an increase in the expense ratio; and iii) the termination or expiration of expense cap reimbursements.

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 would pay on fund distributions or 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 expense reductions, without which the expenses would increase and results would have been less favorable.

6  Tax-Free Bond Fund | Semiannual report 

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in Tax-Free Bond Fund Class A shares for the period indicated. For comparison, we’ve shown the same investment in the Barclays Capital Municipal Bond Index.



      With maximum   
Class  Period beginning  Without sales charge  sales charge  Index 
B2  2-28-99  $13,173  $13,173  $15,692 
C2  4-1-99  12,948  12,948  15,671 

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B and Class C shares, respectively, as of February 28, 2009. The Class C shares investment with maximum sales charge has been adjusted to reflect the elimination of the front-end sales charge effective July 15, 2004. 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.

Barclays Capital Municipal Bond Index is an unmanaged index that includes municipal bonds and is commonly used as a measure of bond performance.

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

1 NAV represents net asset value and POP represents public offering price.

2 No contingent deferred sales charge applicable.

3 Formerly named Lehman Brothers Municipal Bond Index.

Semiannual report | Tax-Free Bond 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 your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2008 with the same investment held until February 28, 2009.

  Account value  Ending value  Expenses paid during 
  on 9-1-08  on 2-28-09  period ended 2-28-091 
Class A  $1,000.00  $972.50  $4.84 
Class B  1,000.00  968.90  8.49 
Class C  1,000.00  968.90  8.49 

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 February 28, 2009, 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  Tax-Free Bond Fund | Semiannual report 

Hypothetical example for comparison purposes

This table allows you to compare your 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 your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2008, with the same investment held until February 28, 2009. 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 9-1-08  on 2-28-09  period ended 2-28-091 
Class A  $1,000.00  $1,019.90  $4.96 
Class B  1,000.00  1,016.20  8.70 
Class C  1,000.00  1,016.20  8.70 

Remember, these examples do not include any transaction costs, such as sales charges; 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 0.99%, 1.74% and 1.74% for Class A, Class B and Class C, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Semiannual report | Tax-Free Bond Fund  9 

Portfolio summary

Top 10 holdings1       
Foothill/Eastern Transportation Corridor Agency, 1-1-19, Zero  4.8% 
Foothill/Eastern Transportation Corridor Agency, 1-1-16, 6.000%  4.2% 
Puerto Rico, Commonwealth of, 7-1-11, 7.72%    3.4% 
Madera, County of, 3-15-15, 6.500%      3.4% 
Alabama Pub. Sch. & College Auth., 12-1-15, 9.369%  2.5% 
San Bernardino, County of, 8-1-17, 5.500%    2.2% 
Massachusetts, Commonwealth of, 12-1-24, 5.500%  2.1% 
Triborough Bridge & Tunnel Auth., 11-15-33, 5.000%  2.0% 
San Joaquin Hills Transportation Corridor Agency, 1-15-17, 5.650%  1.9% 
Puerto Rico Aqueduct & Sewer Auth., 7-1-11, 7.470%  1.8% 
 
Sector distribution2,3       
General obligation bonds  6%  Tobacco  5% 
Revenue bonds    Industrial development  3% 
Other revenue  28%  Water and sewer  3% 
Transportation  18%  Economic development  2% 
Health  10%  Special tax  2% 
Electric  9%  Other  6% 
Education  8%     


Quality distribution3   
AAA  27% 
AA  42% 
A  9% 
BBB  13% 
BB  5% 
B  1% 
Other  3% 

1 As a percentage of net assets on February 28, 2009, excluding cash and cash equivalents.

2 Sector investing is subject to greater risks than the market as a whole. Because the Fund may focus on particular sectors of the economy, its performance may depend on the performance of those sectors.

3 As a percentage of net assets on February 28, 2009.

10  Tax-Free Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

Fund’s investments

Securities owned by the Fund on 2-28-09 (unaudited)

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
Tax-exempt long-term bonds 98.66%        $427,738,171 
(Cost $417,797,829)           
 
Alabama 2.49%          10,777,800 
Alabama Pub. Sch. & College Auth. Rev,           
 Drivers Ser. 2403 (P)   9.369%  12-01-15  AA  $10,000  10,777,800 
 
Arizona 2.94%          12,729,880 
Arizona Health Facilities Auth,           
 Rev Ref Phoenix Memorial Hosp (G)(H)  8.200  06-01-21  D  2,150  2,150 
Phoenix Civic Improvement Corp District,           
 Rev Conv Cap Apprec Civic Plaza           
 Ser 2005B (Zero to 07-01-13 then           
 5.50%) (D)  Zero  07-01-28  AA  1,000  801,440 
Salt River Project,           
 Agriculture Impt & Pwr Dist Elec Sys           
 Rev, Ser A  5.000  01-01-33  AA  7,000  6,980,190 
 Agriculture Impt & Pwr Dist Elec Sys           
 Rev, Ser A  5.000  01-01-39  AA  5,000  4,946,100 
 
California 23.32%          101,100,567 
Foothill Eastern Transportation           
 Corridor Agency,           
 Rev Ref Toll Rd Cap Apprec  Zero  01-15-25  BBB–  5,000  1,292,800 
 Rev Toll Rd Cap Apprec Sr Lien           
 Ser 1995A  Zero  01-01-19  AAA  30,000  20,951,700 
 Rev Toll Rd Sr Lien Ser 1995A  6.000  01-01-16  AAA  17,500  18,286,975 
Madera, County of,           
 Rev Cert of Part Valley Children’s           
 Hosp (D)  6.500  03-15-15  AA–  13,185  14,674,114 
Millbrae, City of,           
 Rev Magnolia of Millbrae Proj Ser           
 1997A (G)  7.375  09-01-27  BB  1,750  1,431,343 
Sacramento City Financing Auth,           
 Rev Convention Ctr Hotel Sr Ser           
 1999A (G)  6.250  01-01-30  AA  4,000  4,153,400 
San Bernardino, County of,           
 Rev Ref Cert of Part Med Ctr Fin           
 Proj (D)  5.500  08-01-17  AA  9,130  9,561,940 
 Rev Ref Cert of Part Med Ctr Fin Proj  5.500  08-01-22  A+  2,500  2,370,275 
San Diego Redevelopment Agency,           
 Rev Tax Alloc City Heights Proj Ser           
 1999A (G)  5.750  09-01-23  BB  25  20,203 

See notes to financial statements

Semiannual report | Tax-Free Bond Fund  11 

FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
California (continued)           
San Joaquin Hills Transportation           
 Corridor Agency,           
 Rev Toll Rd Conv Cap Apprec           
 Ser 1997A   5.650%  01-15-17  BB–  $10,000  $8,368,300 
 Rev Toll Rd Jr Lien  Zero  01-01-10  AAA  6,250  6,191,312 
 Rev Toll Rd Sr Lien  Zero  01-01-14  AAA  5,000  4,411,850 
 Rev Toll Rd Sr Lien  Zero  01-01-17  AAA  4,900  3,808,035 
 Rev Toll Rd Sr Lien  Zero  01-01-20  AAA  2,000  1,314,200 
Santa Ana Financing Auth.,           
 Rev Lease Police Admin & Hldg Facil Ser           
 1994A (D)  6.250  07-01-19  AA–  2,000  2,273,480 
Southern California Metropolitan           
 Wtr Dist,           
 Rev Wtrwks Auth Ser A  5.000  01-01-39  AAA  2,000  1,990,640 
Colorado 2.65%          11,490,050 
Colorado Springs, City of,           
 Rev Util Sys Imp Ser C  5.250  11-15-42  AA  2,825  2,729,543 
E-470 Public Highway Auth,           
 Rev Cap Apprec Sr Ser 2000B  Zero  09-01-34  BBB–  7,000  1,122,380 
 Rev Cap Apprec Ser B1 (D)  5.500  09-01-24  AA  2,000  1,672,260 
Northwest Parkway Public Highway Auth,           
 Rev 1st Tier Sub Ser 2001D (G)  7.125  06-15-41  AA  2,900  3,098,737 
Public Auth for Colorado Energy           
 Gas, Rev  6.250  11-15-28  A+  3,500  2,867,130 
 
Connecticut 0.70%          3,042,630 
Connecticut State Health & Educational           
 Facility Authority Rev,           
 Yale University  5.050  07-01-42  AAA  3,000  3,042,630 
 
Delaware 0.70%          3,042,450 
Charter MAC Equity Issuer Trust,           
 Preferred Tax Exempt Shares Ser           
 A–4-1 (S)  5.750  04-30-15  Aaa  3,000  3,042,450 
 
District Of Columbia 0.69%          2,970,630 
District of Columbia University Rev,           
 Georgetown University  5.500  04-01-36  A–  3,000  2,970,630 
 
Florida 6.12%          26,520,043 
Bonnet Creek Resort Community           
 Development District,           
 Rev Spec Assessment (G)  7.375  05-01-34  BB+  1,500  1,133,160 
 Rev Spec Assessment (G)  7.250  05-01-18  BB+  1,000  847,200 
Capital Projects Finance Auth,           
 Rev Student Hsg Cap Projs Ln Prog Ser           
 2000A (G)  7.850  08-15-31  AA  3,500  3,929,940 
 Rev Student Hsg Cap Projs Ln Prog Ser           
 2001G (G)  9.125  10-01-11  BBB  900  912,096 
Capital Trust Agency,           
 Rev Seminole Tribe Convention Ser           
 2003A (S)  8.950  10-01-33  AAA  3,000  3,777,960 
Crossings at Fleming Island Community           
 Development District,           
 Rev Ref Spec Assessment Ser           
 2000C (G)  7.100  05-01-30  BBB–  1,000  791,630 

See notes to financial statements

12  Tax-Free Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
 
Florida (continued)           
Florida Municipal Power Agency Rev,           
 All Requirements Pwr Ser A   5.000%  10-01-28  A1  $2,500  $2,472,175 
 All Requirements Pwr Ser A  5.000  10-01-31  A1  2,000  1,921,420 
Henando, County of,           
 Rev Criminal Justice Complex (D)(G)  7.650  07-01-16  A  500  615,295 
Orange County School Board,           
 Rev Ref Cert of Part Ser 1997A (D)  Zero  08-01-13  A1  5,000  4,361,400 
Orlando Urban Community           
 Development District,           
 Rev Spec Assessment Cap Imp Ser           
 2001A (G)  6.950  05-01-33  AA  2,500  2,774,025 
Orlando Utilities Commission,           
 Rev Ref Wtr & Elec Sys Sub Ser 1989D  6.750  10-01-17  AA  2,200  2,651,704 
Stoneybrook West Community           
 Development Dist,           
 Rev Spec Assessment Ser 2000A (G)  7.000  05-01-32  BBB  310  332,038 
 
Georgia 5.27%          22,856,058 
Atlanta, City of,           
 Rev Tax Alloc Eastside Proj Ser           
 2005B (G)  5.600  01-01-30  BB+  1,000  671,990 
Georgia Municipal Electric Authority,           
 Refunded Ser Y MBIA IBC BNY (D)  6.500  01-01-17  AA  145  172,325 
 Rev Preref Ser 1993Z (D)  5.500  01-01-20  A+  150  170,058 
 Rev Preref Ser 1998Y (D)  6.500  01-01-17  AA  60  72,221 
 Rev Ref Pwr Ser 1993BB  5.700  01-01-19  A+  1,000  1,112,190 
 Rev Ref Pwr Ser 1993C (D)  5.700  01-01-19  A+  5,000  5,560,950 
 Rev Ref Pwr Ser 1994EE (D)  7.250  01-01-24  A  2,000  2,446,060 
 Rev Ref Pwr Ser 1998Y (D)  6.500  01-01-17  AA  4,635  5,362,278 
 Rev Unref Bal Ser 1993Z (D)  5.500  01-01-20  A+  5,690  6,188,956 
Monroe County Development Auth,           
 Rev Ref Poll Control Oglethorpe Pwr           
 Corp Scherer Ser 1992A  6.800  01-01-12  A  1,000  1,099,030 
 
Illinois 6.68%          28,948,294 
Chicago Board of Education,           
 GO Unltd Cap App City Colleges (D)  Zero  01-01-16  AA  2,850  2,252,070 
 GO Unltd Cap App School Reform Ser           
 1999A (D)  Zero  12-01-18  AA  5,440  3,512,880 
 GO Unltd Ref Ser A (D)  5.500  12-01-30  AA–  3,650  3,915,318 
Chicago, City of,           
 GO Tax Alloc Jr Pilsen Redev Ser           
 2004B (G)  6.750  06-01-22  BBB+  3,000  2,684,010 
Illinois Finance Auth,           
 Rev Ref Commonwealth Edison Co Proj           
 (D)  5.850  01-15-14  AA–  3,000  3,191,550 
 Rev Rush Univ Med Ctr Oblig Grp-A  7.250  11-01-38  A–  1,500  1,514,295 
Kane County Community Unit School           
 District No 304,           
 GO Unltd Cap Apprec Ser A (D)  Zero  01-01-17  AA  4,705  3,388,071 
Lake County Community Unit School           
 District No 24,           
 GO Unltd Cap Apprec Millburn (D)  Zero  01-01-22  AA  2,440  1,224,587 

See notes to financial statements

Semiannual report | Tax-Free Bond Fund  13 

FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
 
Illinois (continued)           
Round Lake Beach, Village of,           
 Rev Spec Tax Lakewood Grove Spec           
 Serv Area No 1   6.700%  03-01-33  AA  $1,000  $1,170,170 
Will County Community Unit School           
 District No 365,           
 GO Cap Apprec Ser 1997B (D)  Zero  11-01-14  AAA  3,510  2,903,858 
 GO Unltd Ref (D)  Zero  11-01-21  AAA  5,780  3,191,485 
 
Kansas 0.23%          1,016,640 
Burlington Environmental Auth,           
 Rev Ref Kansas City Power & Light (D)  5.375  09-01-35  A  1,000  1,016,640 
 
Kentucky 2.19%          9,516,504 
Kentucky Economic Development           
 Finance Auth,           
 Arena Rev Louisville Arena (D)  6.000  12-01-33  AAA  1,000  1,021,250 
 Rev Prefer Norton Health Care Ser           
 2000C (D)  6.100  10-01-21  AA  1,770  2,083,502 
 Rev Unref Bond Balance Norton Ser           
 2000C (D)  6.100  10-01-21  AA–  3,230  3,109,069 
Kentucky State Property &           
 Buildings Commission,           
 Rev Ref Proj No 93 (D)  5.250  02-01-29  AAA  3,250  3,302,683 
 
Louisiana 0.49%          2,141,664 
Jefferson Parish Home Mortgage Auth,           
 Rev Ref Single Family Mtg Ser 1999B  6.750  06-01-30  Aaa  490  494,439 
Louisiana Local           
 Government Environmental,           
 Rev Westlake Chemical Corp  6.750  11-01-32  BB+  2,500  1,647,225 
 
Maryland 0.65%          2,799,920 
Municipal Mortgage & Equity, LLC,           
 Bond (S)  6.875  06-30-49  A3  4,000  2,799,920 
 
Massachusetts 4.37%          18,957,581 
Massachusetts Bay           
 Transportation Authority,           
 Rev Ref Cap Appr Ser 2007A–2  Zero  07-01-26  AAA  13,595  5,251,477 
Massachusetts Health & Educational           
 Facilities Auth,           
 Rev Civic Investments, Inc.           
 Ser 2002B (G)  9.200  12-15-31  AA  3,500  4,454,590 
 Rev Ref Partners Health Care           
 Ser 2001C  5.750  07-01-32  AA  85  84,992 
Massachusetts Wtr Pollution           
 Abatement Trust,           
 Rev Unref Bal Ser 1994A  6.375  02-01-15  AAA  75  75,322 
Massachusetts, Commonwealth of,           
 GO Unltd Ref Ser 2004C (D)  5.500  12-01-24  AA  8,000  9,091,200 
 
Missouri 0.25%          1,089,426 
Fenton, City of,           
 Rev Ref Tax Increment Imp Gravois           
 Bluffs (F)  7.000  10-01-21  AAA  955  1,089,426 
 
Nebraska 0.33%          1,434,024 
Omaha Public Power District,           
 Rev Ref Elec Imp Ser 1992B (G)  6.200  02-01-17  AA  1,200  1,434,024 

See notes to financial statements

14  Tax-Free Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
 
Nevada 0.01%          $25,122 
Nevada, State of,           
 GO Ltd Unref Bal Ser 1992A   6.750%  07-01-09  AA+  $25  25,122 
 
New Hampshire 0.70%          3,035,075 
New Hampshire Business Pollution           
 Control Auth,           
 Rev Ref Poll Control Pub Svc Co Prg Ser           
 C (D)  5.450  05-01-21  AA–  2,000  1,837,600 
New Hampshire Health & Education           
 Facilities Auth,           
 Rev Exeter Proj  6.000  10-01-24  A+  1,250  1,197,475 
 
New Jersey 3.55%          15,410,618 
New Jersey Economic           
 Development Auth,           
 Rev Ref Newark Airport Marriott Hotel  7.000  10-01-14  Ba1  1,000  896,080 
New Jersey Health Care Facilities           
 Financing Auth,           
 Rev Care Institute Inc Cherry Hill           
 Proj (G)  8.000  07-01-27  CCC–  1,120  862,131 
Tobacco Settlement Financing Corp,           
 Rev Preref Asset Backed Bond  6.750  06-01-39  AAA  5,000  5,981,800 
 Rev Preref Asset Backed Bond  6.250  06-01-43  AAA  4,000  4,704,000 
 Rev Ser 1A  4.500  06-01-23  BBB  3,995  2,966,607 
 
New Mexico 0.46%          1,976,380 
Farmington, City of,           
 Rev Ref Poll Control Tucson Elec Pwr           
 Co Ser 1997A  6.950  10-01-20  BBB–  2,000  1,976,380 
 
New York 10.94%          47,438,859 
New York City Industrial           
 Development Agency,           
 Rev Liberty 7 World Trade Ctr Ser           
 2005A (G)  6.250  03-01-15  BB+  2,000  1,699,260 
 Rev Ref Terminal One Group Assn Proj  5.500  01-01-24  BBB+  1,500  1,291,680 
New York City Municipal Water           
 Finance Auth,           
 Rev Preref Wtr & Swr Sys Ser 2000B  6.000  06-15-33  AAA  365  391,243 
 Rev Unref Bal Wtr & Swr Sys Ser 2000B  6.000  06-15-33  AAA  375  397,470 
 Rev Wtr & Swr Sys Ser EE  5.250  06-15-40  AA+  3,000  3,005,670 
New York City Transitional Finance Auth,           
 Rev Bldg Aid Ser S3  5.375  01-15-34  AA–  2,000  1,982,260 
 Rev Bldg Aid Ser S3  5.250  01-15-39  AA–  3,000  2,894,670 
 Rev Ref Future Tax Sec Ser 2002A (Zero           
 to 11-1-11 then 14.00%)  Zero  11-01-29  AAA  5,000  4,684,350 
New York Liberty Development Corp,           
 Rev Goldman Sachs Group Inc           
 Headquarters  5.250  10-01-35  A  2,500  2,065,650 
New York State Dormitory Auth,           
 Rev City Univ Sys Consol 2nd           
 Generation Ser 1993A  5.750  07-01-09  AA–  515  523,528 
 Rev Preref Ser B  7.500  05-15-11  AA–  160  167,898 
 Rev State Univ Edl Facil Ser 1993A  5.500  05-15-19  AA–  1,000  1,145,500 
 Rev Unref Bal Ser 1990B  7.500  05-15-11  AA–  145  160,664 
New York State Housing           
 Finance Agency,           
 Rev Ref State Univ Constr Ser 1986A  8.000  05-01-11  AAA  1,145  1,235,444 

See notes to financial statements

Semiannual report | Tax-Free Bond Fund  15 

FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
 
New York (continued)           
Port Auth of New York & New Jersey,           
 Cons 144th   5.000%  10-01-29  AA–  $3,500  $3,519,600 
 Rev Ref Spec Proj KIAC Partners Ser 4           
 (G)  6.750  10-01-19  BBB–  8,700  7,236,399 
Triborough Bridge & Tunnel Auth,           
 Rev Bond Ref Gen Purp  5.000  11-15-33  AA–  9,025  8,836,197 
 Rev Ser 2006A  5.000  11-15-22  AA–  3,545  3,719,556 
Westchester Tobacco Asset           
 Securitization Corp,           
 Rev Asset Backed Bond. (Zero to           
 07-15-09, then 6.95%)  Zero  07-15-39  AAA  2,000  2,481,820 
 
North Carolina 0.47%          2,026,820 
North Carolina Capital Facilities           
 Finance Agency,           
 Rev Duke Univ Proj Ser B  5.000  10-01-38  AA+  2,000  2,026,820 
 
Ohio 1.49%          6,444,443 
Buckeye Tobacco Settlement           
 Financing Auth,           
 Rev Asset Backed Sr Bond Ser 2007A–2  5.875  06-01-30  BBB  2,000  1,263,540 
 Rev Asset Backed Sr Bond Ser 2007A–2  5.125  06-01-24  BBB  5,775  4,199,753 
Ohio Air Quality Development Authority,           
 Rev Ref Pollution CTL- FirstEnergy  7.250  11-01-32  BBB  1,000  981,150 
 
Oklahoma 0.39%          1,703,180 
Tulsa Municipal Airport Trust,           
 Rev Ref Ser 2000A (P)  7.750  06-01-35  B–  2,000  1,703,180 
 
Oregon 0.85%          3,687,156 
Clackamas County School District           
 No. 12,           
 GO Unltd Ser 2007B (Zero to 6/15/11,           
 then 5.00%) (D)  Zero  06-15-28  AAA  3,130  2,737,592 
Western Generation Agency,           
 Rev Wauna Cogeneration Proj Ser           
 2006B (G)  5.000  01-01-14  BBB–  1,100  949,564 
 
Pennsylvania 4.63%          20,056,481 
Allegheny County Hospital           
 Development Auth,           
 Rev West Penn Hlth Sys Ser 2007A  5.000  11-15-28  BB  3,500  1,968,225 
Allegheny County Industrial           
 Development Auth,           
 Rev Ref Environmental Imp  5.500  11-01-16  BB+  2,500  2,198,525 
Allegheny County Redevelopment Auth,           
 Rev Tax Alloc Pittsburgh Mills Proj (G)  5.600  07-01-23  BB+  1,000  728,310 
Carbon County Industrial           
 Development Auth,           
 Rev Reg Resource Recovery Panther           
 Creek Parners Proj  6.700  05-01-12  BBB–  4,960  5,142,131 
Pennsylvania Turnpike Commission,           
 Rev Ser-C (D)  5.000  12-01-32  AA  3,120  3,085,555 
Philadelphia Industrial           
 Development Auth,           
 Rev Commercial Dev Marriott Hotel (G)  7.750  12-01-17  BB  3,250  2,760,095 
Philadelphia School District,           
 GO LTD Ser E  6.000  09-01-38  A+  4,000  4,173,640 

See notes to financial statements

16  Tax-Free Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
 
Puerto Rico 5.26%          $22,803,600 
Puerto Rico Aqueduct & Sewer Auth,           
 Rev Ref Pars & Inflos (D)   6.000%  07-01-11  AA  $200  221,780 
Puerto Rico Aqueduct & Sewer Auth.,           
 Rev Inverse Floater (D)(P)  7.470  07-01-11  AA  6,500  7,915,700 
Puerto Rico, Commonwealth of,           
 Rev Inverse Floater (D)(P)  7.720  07-01-11  AA  14,000  14,666,120 
 
Rhode Island 0.20%          888,190 
Tiverton, Town of,           
 Rev Spec Oblig Tax Mount Hope Bay           
 Village Ser 2002A (G)  6.875  05-01-22  BBB–  1,000  888,190 
 
South Carolina 1.27%          5,502,718 
Richland, County of,           
 Rev Environmental Imp International           
 Paper  6.100  04-01-23  BBB  3,325  2,413,318 
South Carolina State Public Service Auth,           
 Santee Cooper Ser A  5.500  01-01-38  AA–  3,000  3,089,400 
 
South Dakota 1.61%          6,980,800 
South Dakota Educational Enhancement           
 Funding Corp,           
 Rev Ser B  6.500  06-01-32  BBB  10,000  6,980,800 
 
Tennessee 0.78%          3,362,550 
Tennessee Energy Acquisition Corp,           
 Gas Rev., Ser A  5.250  09-01-26  A  5,000  3,362,550 
 
Texas 4.15%          18,002,070 
Bexar County Health Facilities           
 Development Corp,           
 Rev Ref Army Retirement Residence           
 Proj (G)  6.300  07-01-32  AA  1,000  1,143,550 
Brazos River Authority,           
 Ref AMT TXU Elec Ser A  8.250  10-01-30  CCC  2,000  1,170,020 
 Rev Ref Utilities Co Ser 1999A  7.700  04-01-33  CCC  1,500  825,000 
Dallas/Fort Worth International Airport,           
 Rev Ref JT Subser A–1 (D)  6.100  11-01-24  AA–  1,600  1,602,656 
Harris, County of,           
 GO Ltd Cap Apprec Ser 2002 (D)  Zero  08-15-19  AAA  3,000  1,958,100 
Houston Independent School District,           
 Rev Cap Apprec Cesar E Chavez Ser           
 1998A (D)  Zero  09-15-16  AA  900  688,590 
Mission Economic Development Corp,           
 Rev Alllied Waste Inc Proj Ser A  5.200  04-01-18  BBB  1,000  865,130 
North Texas Thruway Auth,           
 Rev Ref Sys First Tier Ser A  6.000  01-01-25  A–  3,000  3,076,230 
 Rev Ref Sys First Tier Ser K-2  6.000  01-01-38  A–  4,000  3,898,000 
San Antonio, City of,           
 Rev Ref Elec & Gas Ser A  5.250  02-01-31  AA  1,000  1,015,430 
Texas, State of,           
 GO Unltd Wtr Finl Assistance  5.750  08-01-31  AA  1,700  1,759,364 

See notes to financial statements

Semiannual report | Tax-Free Bond Fund  17 

FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
 
Utah 0.38%          $1,640,448 
Mountain Regional Water Special           
 Service District,           
 Rev Spec Assessment Spec Imp Dist No           
 2002-1 (G)   7.000%  12-01-18  BB+  $660  599,967 
Salt Lake City Hospital,           
 Rev Ref IHC Hosp Inc Ser 1998A  8.125  05-15-15  AAA  890  1,040,481 
 
Washington 0.70%          3,052,920 
Washington Public Power Supply System,           
 Rev Ref Nuclear Proj No 1 Ser 1989B  7.125  07-01-16  AA–  1,500  1,892,640 
Washington, State of,           
 GO Unltd Ser 1990A  6.750  02-01-15  AA+  1,000  1,160,280 
 
West Virginia 0.75%          3,266,580 
West Virginia State Hospital Finance Auth,           
 Rev Preref Charleston Area Med Ctr  6.750  09-01-22  A2  2,400  2,613,264 
 Rev Unref Charleston Area Med Ctr  6.750  09-01-22  A2  600  653,316 
  
Total investments (Cost $417,797,829)† 98.66%        $427,738,171 
Other assets and liabilities, net 1.34%        $5,815,220 
Total net assets 100.00%          $433,553,391 

The percentage shown for each investment category is the total value of that category as a percentage of the net assets of the Fund.

AMT Alternative Minimum Tax

GO General Obligation

(A) Credit ratings are unaudited and are rated by Moody’s Investors Service where Standard & Poor’s ratings are not available unless indicated otherwise.

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

Insurance coverage  As a % of total investments 
Assured Guaranty Ltd.  1.01 
Financial Security Assurance, Inc.  2.07 
Financial Guaranty Insurance Company  3.02 
Ambac Financial Group, Inc.  3.77 
Municipal Bond Insurance Association  20.95 

(F) The credit rating for this security is rated by Fitch.

(G) Security rated internally by John Hancock Advisers, LLC. Unaudited.

(H) Non-income-producing issuer filed for protection under the Federal Bankruptcy Code or is in default of interest payment.

(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.

† At February 28, 2009, the aggregate cost of investment securities for federal income tax purposes was $415,666,535. Net unrealized appreciation aggregated $12,071,636, of which $32,448,121 related to appreciated investment securities and $20,376,485 related to depreciated investment securities.

See notes to financial statements

18  Tax-Free Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

Financial statements

Statement of assets and liabilities 2-28-09 (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 $417,797,829)  $427,738,171 
Cash  475,722 
Receivable for shares sold  1,418,058 
Interest receivable  5,562,788 
Receivable from affiliates  95,597 
Total assets  435,290,336 
 
Liabilities   
 
Payable for investments purchased  1,015,350 
Payable for shares repurchased  258,635 
Payable to affiliates   
 Management fees  175,771 
 Distribution and service fees  101,325 
 Other  103,763 
Other payables and accrued expenses  82,101 
Total liabilities  1,736,945 
 
Net assets   
Capital paid-in  448,085,029 
Accumulated net realized loss on investments  (25,964,406) 
Net unrealized appreciation of investments  9,940,342 
Accumulated net investment income  1,492,426 
 
Net assets  $433,553,391 
 
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 ($399,489,894 ÷ 42,842,254 shares)  $9.32 
Class B ($11,423,699 ÷ 1,225,091 shares)1  $9.32 
Class C ($22,639,798 ÷ 2,428,061 shares)1  $9.32 
 
Maximum offering price per share   
Class A ($9.32 ÷ 95.5%)2  $9.76 

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

2 On single retail sales of less than $100,000. On sales of $100,000 or more and on group sales the offering price is reduced.

See notes to financial statements

Semiannual report | Tax-Free Bond Fund  19 

FINANCIAL STATEMENTS

Statement of operations For the period ended 2-28-09 (unaudited)1

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  $12,517,693 
 
Total investment income  12,517,693 
 
Expenses   
Investment management fees (Note 5)  1,147,277 
Distribution and service fees (Note 5)  628,106 
Transfer agent fees (Note 5)  177,788 
Accounting and legal services fees (Note 5)  30,455 
Professional fees  54,555 
Custodian fees  39,985 
Registration fees  25,521 
Printing fees  14,703 
Trustees’ fees  7,024 
Miscellaneous  38,688 
 
Total expenses  2,164,102 
Less expense reductions (Note 5)  (703) 
 
Net expenses  2,163,399 
 
Net investment income  10,354,294 
 
Realized and unrealized gain (loss)   
Net realized loss on investments  (8,132,747) 
Change in net unrealized appreciation (depreciation) of investments  (15,408,872) 
 
Net realized and unrealized loss  (23,541,619) 
 
Decrease in net assets from operations  ($13,187,325) 

1 Semiannual period from 9-1-08 to 2-28-09.

See notes to financial statements

20  Tax-Free Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

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.

  Year  Period 
  ended  ended 
  8-31-08  2-28-091 
 
Increase (decrease) in net assets     
From operations     
Net investment income  $20,403,322  $10,354,294 
Net realized loss  (1,960,315)  (8,132,747) 
Change in net unrealized appreciation (depreciation)  (4,001,767)  (15,408,872) 
 
Increase (decrease) in net assets resulting from operations  14,441,240  (13,187,325) 
 
Distributions to shareholders     
From net investment income     
Class A  (19,028,985)  (9,501,788) 
Class B  (534,537)  (234,038) 
Class C  (336,964)  (353,620) 
  (19,900,486)  (10,089,446) 
From Fund share transactions (Note 6)  (9,106,347)  13,756,018 
Total decrease  (14,565,593)  (9,520,753) 
 
Net assets     
Beginning of period  457,639,737  443,074,144 
 
End of period2  $443,074,144  $433,553,391 

1 Semiannual period from 9-1-08 to 2-28-09. Unaudited.

2 Includes accumulated net investment income of $1,227,578 and $1,492,426, respectively.

See notes to financial statements

Semiannual report | Tax-Free Bond Fund  21 

FINANCIAL STATEMENTS

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  8-31-041  8-31-051  8-31-06  8-31-07  8-31-08  2-28-092 
 
Per share operating performance             
Net asset value, beginning of period  $9.96  $10.22  $10.41  $10.24  $9.95  $9.82 
Net investment income3  0.49  0.48  0.47  0.45  0.45  0.23 
Net realized and unrealized gain             
 (loss) on investments  0.26  0.19  (0.18)  (0.29)  (0.13)  (0.51) 
Total from investment operations  0.75  0.67  0.29  0.16  0.32  (0.28) 
Less distributions             
From net investment income  (0.49)  (0.48)  (0.46)  (0.45)  (0.45)  (0.22) 
Net asset value, end of period  $10.22  $10.41  $10.24  $9.95  $9.82  $9.32 
Total return (%)4  7.705  6.72  2.875  1.555  3.255   (2.75)5,6 
 
Ratios and supplemental data             
Net assets, end of period             
 (in millions)  $492  $487  $459  $434  $417  $399 
Ratios (as a percentage             
 of average net assets):             
 Expenses before reductions  0.97  0.99  0.96  0.95  0.96  0.997 
 Interest and fees8  —  —  —  0.08  0.06  — 
 Expenses net of all fee waivers  0.96  0.99  0.96  1.03  1.02  0.997 
 Expenses net of all fee waivers             
 and credits  0.96  0.99  0.96  1.03  1.02  0.997 
 Net investment income  4.87  4.71  4.54  4.45  4.53  5.027 
Portfolio turnover (%)  49  32  54  40  36  21 
 

1 Audited by previous Independent Registered Public Accounting Firm.

2 Semiannual period from 9-1-08 to 2-28-09. Unaudited.

3 Based on the average of the shares outstanding.

4 Assumes dividend reinvestment and does not reflect the effect of sales charges.

5 Total returns would have been lower had certain expenses not been reduced during the periods shown.

6 Not annualized.

7 Annualized.

8 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

22  Tax-Free Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

CLASS B SHARES Period ended  8-31-041  8-31-051  8-31-06  8-31-07  8-31-08  2-28-092 
 
Per share operating performance             
Net asset value, beginning of period  $9.96  $10.22  $10.41  $10.24  $9.95  $9.82 
Net investment income3  0.42  0.41  0.39  0.38  0.38  0.20 
Net realized and unrealized gain             
 (loss) on investments  0.26  0.18  (0.18)  (0.30)  (0.14)  (0.51) 
Total from investment operations  0.68  0.59  0.21  0.08  0.24  (0.31) 
Less distributions             
From net investment income  (0.42)  (0.40)  (0.38)  (0.37)  (0.37)  (0.19) 
Net asset value, end of period  $10.22  $10.41  $10.24  $9.95  $9.82  $9.32 
Total return (%)4  6.895  5.93  2.105  0.805  2.475  (3.11)5,6 
 
Ratios and supplemental data             
Net assets, end of period             
 (in millions)  $39  $32  $21  $16  $13  $11 
Ratios (as a percentage             
 of average net assets):             
 Expenses before reductions  1.73  1.74  1.71  1.70  1.71  1.747 
 Interest and fees8  —  —  —  0.08  0.06  — 
 Expenses net of all fee waivers  1.72  1.74  1.71  1.78  1.77  1.747 
 Expenses net of all fee waivers             
   and credits  1.72  1.74  1.71  1.78  1.77  1.747 
 Net investment income  4.11  3.96  3.79  3.69  3.77  4.267 
Portfolio turnover (%)  49  32  54  40  36  21 
 

1 Audited by previous Independent Registered Public Accounting Firm.

2 Semiannual period from 9-1-08 to 2-28-09. Unaudited.

3 Based on the average of the shares outstanding.

4 Assumes dividend reinvestment and does not reflect the effect of sales charges.

5 Total returns would have been lower had certain expenses not been reduced during the periods shown.

6 Not annualized.

7 Annualized.

8 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

Semiannual report | Tax-Free Bond Fund  23 

FINANCIAL STATEMENTS

CLASS C SHARES Period ended  8-31-041  8-31-051  8-31-06  8-31-07  8-31-08  2-28-092 
 
Per share operating performance             
Net asset value, beginning of period  $9.96  $10.22  $10.41  $10.24  $9.95  $9.82 
Net investment income3  0.42  0.41  0.39  0.37  0.38  0.20 
Net realized and unrealized gain             
 (loss) on investments  0.26  0.18  (0.18)  (0.29)  (0.14)  (0.51) 
Total from investment operations  0.68  0.59  0.21  0.08  0.24  (0.31) 
Less distributions             
From net investment income  (0.42)  (0.40)  (0.38)  (0.37)  (0.37)  (0.19) 
Net asset value, end of period  $10.22  $10.41  $10.24  $9.95  $9.82  $9.32 
Total return (%)4  6.895  5.93  2.105  0.805  2.475  (3.11)5,6 
 
Ratios and supplemental data             
Net assets, end of period             
 (in millions)  $8  $7  $7  $7  $13  $23 
Ratios (as a percentage             
 of average net assets):             
 Expenses before reductions  1.72  1.74  1.71  1.70  1.71  1.747 
 Interest and fees8  —  —  —  0.08  0.06  — 
 Expenses net of all fee waivers  1.71  1.74  1.71  1.78  1.77  1.747 
 Expenses net of all fee waivers             
   and credits  1.71  1.74  1.71  1.78  1.77  1.747 
 Net investment income  4.11  3.96  3.79  3.70  3.78  4.277 
Portfolio turnover (%)  49  32  54  40  36  21 
 

1 Audited by previous Independent Registered Public Accounting Firm.

2 Semiannual period from 9-1-08 to 2-28-09. Unaudited.

3 Based on the average of the shares outstanding.

4 Assumes dividend reinvestment and does not reflect the effect of sales charges.

5 Total returns would have been lower had certain expenses not been reduced during the periods shown.

6 Not annualized.

7 Annualized.

8 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

24  Tax-Free Bond Fund | Semiannual report 

Notes to financial statements (unaudited)

Note 1 Organization

John Hancock Tax-Free Bond Fund (the Fund) is a diversified series of John Hancock Municipal Securities Trust (the Trust), an open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act). The investment objective of the Fund is to provide as high a level of interest income exempt from federal income taxes as is consistent with preservation of capital.

The Trustees have authorized the issuance of multiple classes of shares of the Fund, designated as Class A, Class B and Class C shares. The shares of each class represent an interest in the same portfolio of investments of the Fund and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission and the Internal Revenue Service. Shareholders of a class that bears distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan. Class B shares will 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. The following summarizes the significant accounting policies of the Fund:

Security valuation

Investments are stated at value as of the close of the regular trading on New York Stock Exchange (NYSE), normally at 4:00 p.m., Eastern Time. 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, which take 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. 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. Debt obligations, for which there are no prices available from an independent pricing service, are valued based on broker quotes or fair valued as described below. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value.

Other portfolio securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Fund’s Pricing Committee in accordance with procedures adopted by the Board of Trustees.

Valuations change in response to many factors including tax receipts and budget disbursements of the municipalities, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Semiannual report | Tax-Free Bond Fund  25 

Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of February 28, 2009:

  INVESTMENTS IN  OTHER FINANCIAL 
VALUATION INPUTS  SECURITIES  INSTRUMENTS* 
Level 1 — Quoted Prices  —  — 
Level 2 — Other Significant Observable Inputs  $427,738,171  — 
Level 3 — Significant Unobservable Inputs  —  — 
Total  $427,738,171  — 

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/ depreciation on the instrument.

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. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Discounts/premiums are accreted/amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful, based upon consistently applied procedures. The Fund use identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

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 appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B and Class C shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Bank borrowings

The Fund is permitted to have bank borrowings for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Fund has entered into a line of credit agreement with The Bank of New York Mellon (BNYM), the Swing Line Lender and Administrative Agent. This agreement enables the Fund to participate, with other funds managed by John Hancock Advisers LLC (the Adviser), an indirect wholly owned subsidiary of Manulife Financial Corporation (MFC), in an unsecured line of credit with BNYM,

26  Tax-Free Bond Fund | Semiannual report 

which permits borrowings of up to $150 million, collectively. Interest is charged to each fund based on its borrowing. In addition, a commitment fee is charged to each fund based on the average daily unused portion of the line of credit and is allocated among the participating funds. The Fund had no outstanding borrowings under the line of credit for the period ended February 28, 2009.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft together with interest due thereon. 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 to the extent of any overdraft.

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 $14,735,589 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 carryforwards expire as follows: August 31, 2011 — $7,431,104, August 31, 2012 — $6,837,618, August 31, 2015 — $257,214 and August 31, 2016 —$209,653. Net capital losses of $2,084,270 that are attributable to security transactions incurred after October 31, 2007, are treated as arising on September 1, 2008, the first day of the Fund’s next taxable year.

As of February 28, 2009, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. Each of the Fund’s federal tax returns filed in the 3-year period ended August 31, 2008 remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. The Fund generally declares dividends daily and pays them monthly. Capital gains, if any, are distributed annually. During the year ended August 31, 2008, the tax character of distributions paid was as follows: ordinary income $180,250 and tax exempt income $19,720,236. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of 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. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

New accounting pronouncement

In March 2008, FASB No. 161 (FAS 161), Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (FAS 133), was issued and is effective for fiscal years and interim periods beginning after November 15, 2008. FAS 161 amends and expands the disclosure requirements of FAS 133 in order to provide financial statement users an understanding of a company’s use of derivative instruments, how derivative instruments are accounted for under FAS 133 and related interpretations and how these instruments affect a company’s financial position, performance, and cash flows. FAS 161 requires companies to disclose information detailing the objectives and strategies for using derivative instruments, the level of derivative activity entered into by the company, and any credit risk-related contingent features of the agreements. As of February 28, 2009, management does not believe that the adoption of FAS 161 will have a material impact on the amounts reported in the financial statements.

Semiannual report | Tax-Free Bond Fund  27 

Note 3
Risk and uncertainties

State concentration risk

The Fund invests mainly in bonds from a single state and its performance is affected by local, state and regional factors. The risks may include economic or policy changes, erosion of the tax base, and state legislative changes (especially those regarding budgeting and taxes). Although the Fund invests mainly in investment-grade bonds, which generally have a relatively low level of credit risk, any factors that might lead to a credit decline statewide would be likely to cause widespread decline in the credit quality of the Fund’s holdings.

Insurance concentration risk

The Fund may hold insured municipal obligations which are insured as to their scheduled payment of principal and interest under an insurance policy obtained by the issuer or underwriter of the obligation at the time of its original issuance. Since there are a limited number of municipal obligation insurers, a Fund may have a concentration of investments covered by one insurer. Accordingly, the concentration may make the Fund’s value more volatile and investment values may rise and fall more rapidly. In addition, the credit quality of companies which provide the insurance may affect the value of those securities and insurance does not guarantee the market value of the insured obligation.

Municipal bond risk

The Fund generally invests in general obligation or revenue municipal bonds. The bonds are backed by the municipal issuer’s have the risk that the issuer’s credit quality will decline. General obligation bonds are backed by the municipal issuer’s ability to levy taxes. In extreme cases, a municipal issuer could declare bankruptcy or otherwise become unable to honor its commitments to bondholders which may be caused by many reasons, ranging from including fiscal mismanagement and erosion of the tax base. Revenue bonds are backed only by income associated with a specific facility. Any circumstance that reduces or threatens the economic viability of that particular facility can affect the bond’s credit quality.

Fixed income risk

Fixed income securities are subject to credit and interest rate risk and involve some risk of default in connection with principal and interest payments.

Note 4
Guarantees and indemnifications

Under the Fund’s organizational documents, its Officers and Trustees are indemnified against certain liability 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.

Note 5
Management fee and transactions with affiliates and others

The Fund has an investment management contract with the Adviser. Under the investment management contract, the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.55% of the first $500,000,000 of the Fund’s average daily net asset value, (b) 0.50% of the next $500,000,000 and (c) 0.45% of the Fund’s average daily net assets in excess of $1,000,000,000. The effective rate for the period ended February 28, 2009 is 0.55% of the Fund’s average daily net asset value. The Fund has a subadvisory agreement with MFC Global Investment Management (U.S.), LLC, a subsidiary of John Hancock Financial Services, Inc. The Fund is not responsible for payment of subadvisory fees.

The Fund has a Distribution Agreement with John Hancock Funds, LLC (JH Funds), a wholly owned subsidiary of the Adviser. The Fund has adopted Distribution Plans with respect to Class A, Class B and Class C, pursuant to Rule 12b-1 under the 1940 Act, to pay JH Funds for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to JH Funds at an annual rate not to exceed 0.25%, 1.00% and 1.00% of average daily net asset value of

28  Tax-Free Bond Fund | Semiannual report 

Class A, Class B and Class C, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of the Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

The Fund has an agreement with its custodian bank, under which custody fees are reduced by balance credits applied during the period. Accordingly, the expense reductions related to custody fee offsets amounted to $624.

Class A shares are assessed up-front sales charges. During the period ended February 28, 2009, JH Funds received net up-front sales charges of $212,894 with regard to sales of Class A shares. Of this amount, $23,502 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $170,689 was paid as sales commissions to unrelated broker-dealers and $18,703 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer. The Adviser’s indirect parent, John Hancock Life Insurance Company (JHLICO), is the indirect sole shareholder of Signator Investors.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to JH Funds and are used in whole or in part to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the period ended February 28, 2009, CDSCs received by JH Funds amounted to $7,143 for Class B shares and $6,423 for Class C shares.

The Fund has a transfer agent agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of JHLICO. The transfer agent fees are made up of three components:

• The Fund pays a monthly transfer agent fee at an annual rate of 0.01% for all classes based on each class’s average daily net assets.

• All classes of the Fund paid a monthly fee based on an annual rate of $17.50 per shareholder account.

• In addition, Signature Services is reimbursed for certain out-of-pocket expenses.

The Fund receives earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the period ended February 28, 2009, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $79 for transfer agent credits earned.

Class level expenses for the period ended February 28, 2009 were as follows:

  Distribution and  Transfer 
Share class  service fees  agent fees 
Class A  $485,950  $165,640 
Class B  56,693  4,823 
Class C  85,463  7,325 
Total  $628,106  $177,788 

The Fund has an agreement with the Adviser and affiliates to perform necessary tax, accounting, compliance, legal and other administrative services for the Fund. The compensation for the year amounted to $30,455 with an effective rate of 0.01% of the Fund’s average daily net asset value.

Mr. James R. Boyle is Chairman of the Adviser, as well as affiliated Trustee of the Fund, and is compensated by the Adviser and/ or its affiliates. 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,

Semiannual report | Tax-Free Bond Fund  29 

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 investments, as well as any unrealized gains or losses. The Deferred Compensation Plan investments had no impact on the operations of the Fund.

Note 6
Fund share transactions

This listing illustrates the number of Fund shares sold, reinvested and repurchased during the year ended August 31, 2008, and the period ended February 28, 2009, along with the corresponding dollar value.

    Year ended 8-31-08  Period ended 2-28-091 
  Shares  Amount  Shares  Amount 
Class A shares         
Sold  2,871,529  $28,467,107  3,033,523  $28,396,506 
Distributions reinvested  1,419,271  14,057,101  761,398  7,005,581 
Repurchased  (5,517,877)  (54,881,160)  (3,370,358)  (30,841,945) 
 
Net increase (decrease)  (1,227,077)  ($12,356,952)  424,563  $4,560,142 
  
Class B shares         
Sold  169,785  $1,690,375  198,269  $1,846,704 
Distributions reinvested  34,446  341,308  15,783  145,185 
Repurchased  (500,005)  (4,984,103)  (296,990)  (2,724,007) 
 
Net decrease  (295,774)  ($2,952,420)  (82,938)  ($732,118) 
     
Class C shares         
Sold  733,348  $7,224,800  1,234,775  $11,529,259 
Distributions reinvested  22,661  224,610  23,250  213,925 
Repurchased  (126,097)  (1,246,385)  (202,764)  (1,815,190) 
 
Net increase  629,912  $6,203,025  1,055,261  $9,927,994 
  
Net increase (decrease)  (892,939)  ($9,106,347)  1,396,886  $13,756,018 

1Semiannual period from 9-1-08 to 2-28-09. Unaudited.

Note 7
Purchase and sale of securities

Purchases and proceeds from sales or maturities of securities, including purchase and sales of variable rate demand notes of $18,805,000 and $19,905,000, respectively, during the period ended February 28, 2009, aggregated $95,916,583 and $85,992,928, respectively. Short-term securities are excluded from these amounts.

Note 8
Change in fiscal year end

On March 12, 2009, the Board of Trustees approved to change the Fund’s fiscal year end from August 31, to May 31.

30  Tax-Free Bond Fund | Semiannual report 

Board Consideration of and
Continuation of Investment Advisory
Agreement and Subadvisory
Agreement: John Hancock
Tax-Free Bond Fund

The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Tax-Exempt Series Fund (the Trust), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the Independent Trustees), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Adviser) and (ii) the investment subadvisory agreement (the Subadvisory Agreement) with MFC Global Investment Management (U.S.), LLC (the Subadviser) for the John Hancock Tax-Free Bond Fund (the Fund). The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the Advisory Agreements.

At meetings held on May 5–6 and June 9–10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included: (i) the investment performance of the Fund relative to a category of relevant funds (the Category) and a peer group of comparable funds (the Peer Group). The funds within each Category and Peer Group were selected by Morningstar Inc. (Morningstar), an independent provider of investment company data. Data covered a range of periods ended December 31, 2007, (ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group, (iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser, (iv) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund, (v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale, (vi) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department, (vii) the background and experience of senior management and investment professionals, and (viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholders report. The key factors considered by the Board and the conclusions reached are described below.

Nature, extent and quality of services

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. The Board considered the investment philosophy, research and

Semiannual report | Tax-Free Bond Fund  31 

investment decision-making processes of the Adviser and Subadviser. 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 and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Subadviser supported renewal of the Advisory Agreements.

Fund performance

The Board considered the performance results for the Fund over various time periods ended December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark index. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

The Board noted that, for the 1- and 10-year periods under review, the Fund’s performance was lower than the performance of its benchmark index, the Lehman Brothers Municipal Bond Index. The Board also noted that the Fund’s performance for the 3- and 5-year periods was generally in line with its benchmark index. The Board also noted that the Fund’s performance for the 1- and 10-year periods was generally in line with the performance of the Peer Group and Category medians. The Board viewed favorably that the Fund’s performance during the 3- and 5-year periods under review was higher than the performance of the Peer Group and Category medians.

Investment advisory fee and subadvisory fee rates and expenses

The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board received and considered information comparing the Advisory Agreement Rate with the advisory fees for the Peer Group and Category. The Board noted that the Advisory Agreement Rate was not appreciably higher than the median rates of the Peer Group and Category.

The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian 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 received and considered expense information regarding the Fund’s total operating expense ratio (Expense Ratio). The Board noted that, unlike the Fund, several funds in the Peer Group employed fee waivers or reimbursements. The Board received and considered information comparing the Expense Ratio of the Fund to that of the Peer Group and Category medians before the application of fee waivers and reimbursements (Gross Expense Ratio) and after the application of such waivers and reimbursement (Net Expense Ratio). The Board noted that the Fund’s Gross Expense Ratio was not appreciably higher than the Category median and was lower than the Peer Group median. The Board also noted that the Fund’s Net Expense Ratio was higher than the Category and Peer Group medians.

The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Fund’s overall performance and expenses supported the re-approval of the Advisory Agreements.

The Board also received information about the investment subadvisory fee rate (the Subadvisory Agreement Rate) payable by the Adviser to the Subadviser for investment subadvisory services. The Board concluded that the Subadvisory Agreement Rate was fair and equitable, based on its consideration of the factors described here.

32  Tax-Free Bond Fund | Semiannual report 

Profitability

The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates, including the Subadviser. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profit-ability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

Economies of scale

The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. 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 the extent the Board and the Adviser were able to identify actual or potential economies of scale from Fund-specific or allocated expenses, in order to ensure that any such economies continue to be reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the Advisory Agreement Rate.

Information about services to other clients

The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Advisory Agreement Rate and the Subadvisory Agreement Rate were not unreasonable, taking into account fee rates offered to others by the Adviser and Subadviser, respectively, after giving effect to differences in services.

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates, including the Subadviser, as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

The Board also considered the effectiveness of the Adviser’s, Subadviser’s and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other factors and broader review

As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.

Semiannual report | Tax-Free Bond Fund  33 

More information

Trustees  Investment adviser 
Patti McGill Peterson, Chairperson  John Hancock Advisers, LLC 
James R. Boyle†   
James F. Carlin  Subadviser 
William H. Cunningham*  MFC Global Investment 
Deborah C. Jackson*  Management (U.S.), LLC 
Charles L. Ladner   
Stanley Martin*  Principal distributor 
Dr. John A. Moore  John Hancock Funds, LLC 
Steven R. Pruchansky   
*Member of the Audit Committee  Custodian 
†Non-Independent Trustee  State Street Bank and Trust Company 
 
Officers  Transfer agent 
Keith F. Hartstein  John Hancock Signature Services, Inc. 
President and Chief Executive Officer 
Legal counsel 
Thomas M. Kinzler  K&L Gates LLP 
Secretary and Chief Legal Officer   
 
Francis V. Knox, Jr.   
Chief Compliance Officer   
 
Charles A. Rizzo   
Chief Financial Officer   
 
Gordon M. Shone   
Treasurer   
 
John G. Vrysen   
Chief Operating Officer   

Additional information about your fund is available without charge in several ways. As required by the SEC, you can access proxy voting information and quarterly portfolio information on your fund. The proxy voting information includes a description of proxy voting policies, procedures and information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30. The quarterly portfolio information that includes a complete list of the fund’s holdings for the first and third quarters of the fund’s fiscal period is filed on Form N-Q. You have access to this information:

By phone  On the fund’s Website  At the SEC 
1-800-225-5291  www.jhfunds.com  www.sec.gov 
      1-800-SEC-0330 
      SEC Public Reference Room 
 
You can also contact us:       
Regular mail:    Express mail:   
John Hancock Signature Services, Inc.  John Hancock Signature Services, Inc. 
P.O. Box 9510    Mutual Fund Image Operations 
Portsmouth, NH 03802-9510    164 Corporate Drive   
    Portsmouth, NH 03801   

Month-end portfolio holdings are available at www.jhfunds.com.

34  Tax-Free Bond 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 Tax-Free Bond Fund.  520SA 2/09 
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.  4/09 


A look at performance

For the period ended February 28, 2009             
 
    Average annual returns (%)  Cumulative total returns (%)    SEC 30-  
    with maximum sales charge (POP)  with maximum sales charge (POP)    day yield  
  Inception        Since  Six        Since    (%) as of 
Class  date  1-year  5-year  10-year  inception  months  1-year  5-year  10-year  inception  2-28-09  
A  12-31-93  –11.22  0.41  1.99  —  –13.96  –11.22  2.09  21.74  —         5.25 
B  8-25-86  –12.19  0.27  1.86  —  –14.59  –12.19  1.37  20.18  —         4.74 
C  4-1-99   –8.67  0.60  —  1.72  –11.09  –8.67  3.01  —  18.37         4.73 

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges on Class A shares of 4.5% and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The returns for Class C shares have been adjusted to reflect the elimination of the front-end sales charge, effective July 15, 2004. 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 the expense ratios disclosed in the Financial Highlights tables in this report. The net expenses equal the gross expenses and are as follows: Class A — 1.25%, Class B — 2.00% and Class C — 2.00%. The Fund’s expenses for the current fiscal year may be higher than the expenses listed above, for some of the following reasons: i) a significant decrease in average net assets may result in a higher advisory fee rate; ii) a significant decrease in average net assets may result in an increase in the expense ratio; and iii) the termination or expiration of expense cap reimbursements.

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 would pay on fund distributions or 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 expense reductions, without which the expenses would increase and results would have been less favorable.

6  High Yield Municipal Bond Fund | Semiannual report 

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in High Yield
Municipal Bond Fund Class A shares for the period indicated. For comparison, we’ve
shown the same investment in the Barclays Capital Municipal Bond Index.


 

      With maximum   
Class  Period beginning  Without sales charge  sales charge  Index 
B2  2-28-99  $12,018  $12,018  $15,692 
C2  4-1-99  11,837  11,837  15,671 

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B and Class C shares, respectively, as of February 28, 2009. The Class C shares investment with maximum sales charge has been adjusted to reflect the elimination of the front-end sales charge, effective July 15, 2004. 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.

Barclays Capital Municipal Bond Index is an unmanaged index that includes municipal bonds and is commonly used as a measure of bond performance.

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

1 NAV represents net asset value and POP represents public offering price.

2 No contingent deferred sales charge applicable.

3 Formerly named Lehman Brothers Municipal Bond Index.

Semiannual report | High Yield Municipal Bond 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 your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2008 with the same investment held until February 28, 2009.

  Account value  Ending value  Expenses paid during 
  on 9-1-08  on 2-28-09  period ended 2-28-091 
Class A  $1,000.00  $901.30  $5.42 
Class B  1,000.00  897.90  8.94 
Class C  1,000.00  897.90  8.94 

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 February 28, 2009, 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  High Yield Municipal Bond Fund | Semiannual report 

Hypothetical example for comparison purposes

This table allows you to compare your 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 your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2008, with the same investment held until February 28, 2009. 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 9-1-08  on 2-28-09  period ended 2-28-091 
Class A  $1,000.00  $1,019.10  $5.76 
Class B  1,000.00  1,015.40  9.49 
Class C  1,000.00  1,015.40  9.49 

Remember, these examples do not include any transaction costs, such as sales charges; 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 1.15%, 1.90% and 1.90% for Class A, Class B and Class C, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Semiannual report | High Yield Municipal Bond Fund  9 

Portfolio summary

Top 10 holdings1   
Atlanta, City of, 11-1-19, 5.000%  7.8% 
Foothill Eastern Transportation Corridor Agency, 1-1-18, Zero  4.4% 
Golden State Tobacco Securitization Corp., 6-1-27, 4.500%  3.5% 
Massachusetts Health & Educational Facilities Auth, 12-15-31, 9.200%  2.4% 
Buckeye Tobacco Settlement Financing Auth, 6-1-24, 5.125%  2.3% 
San Bernardino, County of, 8-1-17, 5.500%  1.9% 
E–470 Public Highway Authority, 9-1-35, Zero  1.7% 
Capital Projects Finance Auth, 8-15-31, 7.850%  1.7% 
California, State of, 7-1-23, 0.850%  1.6% 
New York Liberty Development Corp, 10-1-35, 5.250%  1.5% 

Sector distribution2,3       
General obligation bonds  2%  Pollution  4% 
Revenue bonds    Education  3% 
Other revenue  44%  Water & sewer  3% 
Health  12%  Economic development  3% 
Transportation  9%  Housing  2% 
Electric  5%  Tobacco  2% 
Industrial development  4%  Other  3% 
Special tax  4%     
 
Quality distribution3       
AAA  17%  BB  8% 
AA  7%  B  2% 
A  24%  Other  2% 
BBB  40%     
 

 

1 As a percentage of net assets on February 28, 2009, excluding cash and cash equivalents.

2 Sector investing is subject to greater risks than the market as a whole. Because the Fund may focus on particular sectors of the economy, its performance may depend on the performance of those sectors.

3 As a percentage of net assets on February 28, 2009.

10  High Yield Municipal Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

Fund’s investments

Securities owned by the Fund on 2-28-09 (unaudited)

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
Tax-exempt long-term bonds 97.71%        $131,469,045 
(Cost $140,633,904)           
 
Alabama 0.92%          1,237,000 
Courtland Industrial Development Board,           
 Rev Ref AMT Intl Paper Co Projs-A   5.200%  06-01-25  BBB  $2,000  1,237,000 
 
California 14.81%          19,932,738 
California GO Unltd,           
 Daily Kindergarten Univ Ser A-4 (V)  0.400  05-01-34  AA  540  540,000 
California Pollution Control           
 Financing Authority,           
 Rev Solid Waste Disp Browing Ferris           
 Inds Inc  6.750  09-01-19  BBB  1,000  960,100 
California Statewide Communities           
 Development Authority,           
 Rev Thomas Jefferson Sch Law Ser A  7.250  10-01-38  BB+  1,000  738,000 
California, State of,           
 GO Unltd Ser C–5 (V)  0.850  07-01-23  A+  2,200  2,200,000 
Foothill Eastern Transportation           
 Corridor Agency,           
 Rev Ref Toll Rd Cap Apprec  Zero  01-15-36  BBB–  4,000  375,200 
 Rev Toll Rd Cap Apprec Sr Lien           
 Ser 1995A  Zero  01-01-18  AAA  7,950  5,869,485 
Golden State Tobacco           
 Securitization Corp.,           
 Rev Asset Backed Sr Bond           
 Ser 2007 A–1  4.500  06-01-27  BBB  6,420  4,767,428 
Millbrae, City of,           
 Rev Magnolia of Millbrae Proj Ser           
 1997A (G)  7.375  09-01-27  BB  1,000  817,910 
San Bernardino, County of,           
 Rev Ref Cert of Part Med Ctr Fin           
 Proj (D)  5.500  08-01-17  AA  2,500  2,618,275 
Southern California Public           
 Power Authority,           
 Rev Natural Gas Proj No. 1 Ser 2007A  5.250  11-01-26  A  1,500  1,046,340 
 
Colorado 4.37%          5,885,290 
Colorado Health Facilities Authority,           
 Rev Christian Living Cmnty Ser A (G)  9.000  01-01-34  BB+  750  749,100 
 Rev Ref Christian Living Cmnty Proj Ser           
 2006A (G)  5.750  01-01-26  BB+  1,000  755,220 

See notes to financial statements

Semiannual report | High Yield Municipal Bond Fund  11 

FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
Colorado (continued)           
E-470 Public Highway Authority,           
 Rev Cap Apprec Sr Ser 2000B  Zero  09-01-35  BBB–  $15,700  $2,333,020 
Public Auth for Colorado Energy,           
 Rev Natural Gas   6.250%  11-15-28  A+  2,500  2,047,950 
 
Delaware 0.75%          1,012,490 
Charter MAC Equity Trust,           
 Bond (S)  6.000  04-30-19  Aaa  1,000  1,012,490 
 
District of Columbia 1.47%          1,980,420 
District of Columbia University Rev,           
 Georgetown University  5.500  04-01-36  A–  2,000  1,980,420 
 
Florida 16.47%          22,155,331 
Bonnet Creek Resort Community           
 Development District,           
 Rev Spec Assessment (G)  7.375  05-01-34  BB+  1,055  796,989 
 Rev Spec Assessment (G)  7.250  05-01-18  BB+  1,445  1,224,204 
Capital Projects Finance Auth,           
 Rev Student Hsg Cap Projs Ln Prog Ser           
 2000A (G)  7.850  08-15-31  AA  2,000  2,245,680 
 Rev Student Hsg Cap Projs Ln Prog Ser           
 2001G (G)  9.125  10-01-11  BBB  985  998,238 
Capital Region Community Development,           
 District FL (G)  7.000  05-01-39  BBB–  1,250  872,813 
Capital Trust Agency,           
 Rev Seminole Tribe Convention Ser           
 2003A (S)  8.950  10-01-33  AAA  1,000  1,259,320 
Crossings at Fleming Island Community           
 Development District,           
 Rev Ref Spec Assessment Ser           
 2000C (G)  7.100  05-01-30  BBB–  1,000  791,630 
Florida Municipal Power Agency,           
 Rev All Requirements Pwr Ser A  5.000  10-01-31  AAA  2,000  1,921,420 
Heritage Harbour North           
 Community Development,           
 Rev Spec Assessment Cap Imp (G)  6.375  05-01-38  BB+  1,250  824,588 
Miami Beach Health Facilities Authority,           
 Rev Ref Hosp Mt Sinai Medical Ctr Ser           
 2001A  6.125  11-15-11  BB  565  526,642 
Miami-Dade Cnty Aviation,           
 Rev AMT Miami Intl Ser A (D)  5.000  10-01-38  A–  2,000  1,554,060 
Orlando Urban Community           
 Development District,           
 Rev Spec Assessment Cap Imp (G)  6.000  05-01-20  BB+  645  498,508 
 Rev Spec Assessment Cap Imp (G)  6.250  05-01-34  BB+  1,000  668,150 
Pensacola Airport,           
 Rev AMT  6.000  10-01-28  BBB+  2,000  1,896,280 
Poinciana Community           
 Development District,           
 Rev Spec Assessment Ser 2000A (G)  7.125  05-01-31  BB+  1,300  1,124,981 
Seminole Tribe,           
 Rev Spec Oblig Ser 2007A (S)  5.250  10-01-27  BBB  1,000  681,290 
South Kendall Community           
 Development District,           
 Rev Spec Assessment Ser 2000A (G)  5.900  05-01-35  BBB–  960  716,918 

See notes to financial statements

12  High Yield Municipal Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
Florida (continued)           
Tolomato Community           
 Development District,           
 Rev Spec Assessment (G)   6.450%  05-01-23  BB+  $1,000  $721,300 
 Rev Spec Assessment (G)  6.650  05-01-40  BB+  1,000  632,980 
Village Community Development,           
 Spl Assmt Rev (G)  6.375  05-01-38  BB  1,000  791,350 
 Spl Assmt Rev (G)  6.500  05-01-33  A  1,500  1,407,990 
 
Georgia 10.52%          14,160,090 
Atlanta, City of,           
 Rev Tax Alloc Eastside Proj           
 Ser 2005B (G)  5.600  01-01-30  BB+  1,500  1,007,985 
 Rev Wtr & Waste Wtr (D)(P)  5.000  11-01-19  AAA  10,000  10,552,800 
Marietta Development Auth Rev Ref,           
 Life Univ  7.000  06-15-30  Ba3  1,500  1,069,785 
Municipal Electric Authority of Georgia,           
 Gen Resolution Projs Sub Ser D  5.500  01-01-26  A  1,500  1,529,520 
 
Illinois 2.70%          3,638,190 
Chicago, City of,           
 GO Tax Alloc Jr Pilsen Redev Ser           
 2004B (G)  6.750  06-01-22  BBB+  2,000  1,789,340 
Illinois Development Finance           
 Auth Pollution,           
 Auth Pollution Ctl Rev Ref Ser C1  5.950  08-15-26  BBB–  1,000  839,320 
Illinois Finance Authority,           
 Rev Rush Univ Med Ctr Oblig Grp-A  7.250  11-01-38  A–  1,000  1,009,530 
 
Indiana 0.35%          474,925 
St. Joseph, County of,           
 Rev Econ Dev Holy Cross Village Notre           
 Dame Proj Ser 2006A (G)  6.000  05-15-26  BB+  230  167,909 
 Rev Econ Dev Holy Cross Village Notre           
 Dame Proj Ser 2006A (G)  6.000  05-15-38  BB+  475  307,016 
 
Iowa 0.81%          1,093,821 
Altoona Urban Renewal Rev,           
 Annual Appropriation  6.000  06-01-34  BBB+  1,000  874,690 
Iowa Finance Authority,           
 Rev Ref Health Care Initiatives Proj  9.250  07-01-25  AAA  185  219,131 
 
Kansas 1.13%          1,524,960 
Burlington Environmental Auth,           
 Rev Ref Kansas City Power & Light (D)  5.375  09-01-35  A  1,500  1,524,960 
 
Louisiana 2.34%          3,145,205 
Louisiana Local           
 Government Environmental,           
 Rev Westlake Chemical Corp  6.750  11-01-32  BB+  2,000  1,317,780 
St. John the Baptist Parish,           
 Rev Marathon Oil Corp Ser 2007A  5.125  06-01-37  BBB+  2,500  1,827,425 
 
Maryland 1.34%          1,801,850 
Baltimore, City of,           
 Rev Spec Oblig Ser 2008A (G)  7.000  09-01-38  BB+  1,000  739,380 
Prince Georges, County of,           
 Rev Spec Tax Dist Victoria Falls Proj (G)  5.250  07-01-35  BB+  1,000  515,630 
 Spec Oblig National Harbor Proj (G)  5.200  07-01-34  BBB  1,000  546,840 

See notes to financial statements

Semiannual report | High Yield Municipal Bond Fund 

 

13 


FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
Massachusetts 6.17%          $8,297,503 
Massachusetts Development           
 Finance Agency,           
 Haverhill Proj Ser 1998B   5.500%  12-01-19  BBB  $1,700  1,361,258 
 Rev Linden Ponds Facil Ser 2007A (G)  5.750  11-15-42  BB+  1,500  817,770 
Massachusetts Health & Educational           
 Facilities Auth,           
 Rev Caregroup Ser 2008E-1  5.125  07-01-33  BBB+  1,000  748,500 
 Rev Preref Civic Investments, Inc.           
 Ser 2002B (G)  9.200  12-15-31  AA  2,500  3,181,850 
 Rev Jordan Hosp Ser 2003E  6.750  10-01-33  BB–  1,000  716,130 
Massachusetts State College Bldg Auth,           
 Proj Rev Ser A  5.500  05-01-49  A+  1,500  1,471,995 
 
Minnesota 0.58%          779,170 
North Oaks Senior Housing,           
 Rev Presbyterian Homes (G)  6.000  10-01-27  BB–  1,000  779,170 
 
Mississippi 0.61%          818,140 
Mississippi Business Finance Corp,           
 Rev Sys Energy Res Inc Proj  5.875  04-01-22  BBB  1,000  818,140 
 
Nevada 0.53%          707,620 
Sparks Tourism Improvement Rev,           
 Sr Sales Tax Ser A (S)  6.750  06-15-28  Ba2  1,000  707,620 
 
New Hampshire 0.87%          1,171,785 
New Hampshire Business           
 Finance Authority,           
 Rev AMT Public Service Co Proj Ser           
 2006B (D)  4.750  05-01-21  AA–  1,500  1,171,785 
 
New Jersey 2.81%          3,786,297 
New Jersey Health Care Facilities           
 Financing Auth,           
 Rev Care Institute Inc Cherry Hill           
 Proj (G)  8.000  07-01-27  CCC–  1,250  962,200 
 Rev Ref St Peters Univ Hosp Ser 2000A  6.875  07-01-30  BBB–  1,000  909,230 
New Jersey Tobacco Settlement           
 Financing Corp,           
 Rev Asset Backed Bond  6.250  06-01-43  AAA  1,000  1,176,000 
 Rev Ser 1A  4.500  06-01-23  BBB  995  738,867 
 
New York 4.89%          6,576,395 
Long Island Power Auth,           
 Rev Gen Elec Sys Ser C  5.250  09-01-29  A3  1,475  1,445,957 
 Rev Ser A  5.750  04-01-39  A–  1,000  1,028,710 
New York City Industrial           
 Development Agency,           
 Rev Liberty 7 World Trade Ctr Ser           
 2005A (G)  6.250  03-01-15  BB+  1,500  1,274,445 
New York City Municipal Water           
 Finance Auth,           
 Rev Wtr & Swr Sys Ser F Sub Ser F-2 (V)  0.450  06-15-35  AAA  300  300,000 
New York Liberty Development Corp,           
 Rev Goldman Sachs Group Inc           
 Headquarters  5.250  10-01-35  A  2,500  2,065,650 
Port Auth of New York & New Jersey,           
 Rev Ref Spec Proj KIAC Partners           
 Ser 4 (G)  6.750  10-01-19  BBB–  555  461,633 

See notes to financial statements

14  High Yield Municipal Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
North Carolina 0.78%          $1,045,970 
North Carolina Eastern Municipal           
 Power Agency,           
 Rev Pwr Sys Ser C   6.750%  01-01-24  BBB+  $1,000  1,045,970 
Ohio 3.51%          4,727,814 
Buckeye Tobacco Settlement           
 Financing Auth,           
 Rev Asset Backed Sr Bond Ser           
 2007A–2  5.125  06-01-24  BBB  4,190  3,047,094 
Hickory Chase Community Authority,           
 Rev infrastructure Impt Proj (G)  7.000  12-01-38  BB  1,000  699,570 
Ohio Air Quality Development Authority,           
 Rev Ref Pollution CTL- FirstEnergy  7.250  11-01-32  BBB  1,000  981,150 
 
Oklahoma 2.65%          3,562,210 
Oklahoma Municipal Power Authority,           
 OK MUN PWR-A  6.000  01-01-38  A  1,685  1,769,722 
Tulsa Municipal Airport Trust,           
 Rev American Airlines Proj  6.250  06-01-20  B–  1,375  940,898 
 Rev Ref Ser 2000A  7.750  06-01-35  B–  1,000  851,590 
 
Oregon 1.01%          1,363,270 
Western Generation Agency,           
 Rev Wauna Cogeneration Proj Ser           
 2006B (G)  5.000  01-01-14  BBB–  1,105  953,880 
 Rev Wauna Cogeneration Proj Ser           
 2006B (G)  5.000  01-01-16  BBB–  500  409,390 
 
Pennsylvania 1.07%          1,441,760 
Allegheny County Hospital           
 Development Auth,           
 Rev West Penn Hlth Sys Ser 2007A  5.000  11-15-28  BB  1,000  562,350 
Allegheny County Industrial           
 Development Auth,           
 Rev Ref Environmental Imp  5.500  11-01-16  BB+  1,000  879,410 
 
Puerto Rico 2.24%          3,009,265 
Puerto Rico Aqueduct & Sewer Auth,           
 Rev Sr Lien Ser 2008A  6.000  07-01-38  BBB–  1,000  899,940 
 Rev Sr Lien Ser 2008A (Zero to 7-1-11           
 then 6.125%)  Zero  07-01-24  BBB–  1,500  1,107,615 
Puerto Rico Housing Finance           
 Authority Rev,           
 Vivienda Modernization  4.750  10-01-11  BBB  1,000  1,001,710 
 
Rhode Island 0.40%          530,906 
Tiverton, Town of,           
 Rev Spec Oblig Tax Mount Hope Bay           
 Village Ser 2002A (G)  6.875  05-01-22  BBB–  345  306,426 
Tobacco Settlement Financing Corp,           
 Rev Asset Bkd Ser 2002A  6.000  06-01-23  BBB  250  224,480 
 
South Carolina 1.08%          1,446,766 
Lancaster, County of,           
 Rev Assessment Edenmoor Imp Dist           
 Ser 2006A (G)  5.750  12-01-37  BB  985  496,686 
Tobacco Settlement Revenue           
 Management Authority,           
 Rev Ref Tobacco Settlement  5.000  06-01-18  BBB  1,000  950,080 

See notes to financial statements

Semiannual report | High Yield Municipal Bond Fund  15 

FINANCIAL STATEMENTS

  Interest  Maturity  Credit  Par value   
State, issuer, description  rate  date  rating (A)  (000)  Value 
Tennessee 0.85%          $1,141,170 
Johnson City Health & Educational           
 Facilities Board,           
 Rev Ref Hosp 1st Mtg States Hlth Ser           
 2000A MTN   7.500%  07-01-33  A2  $1,000  1,141,170 
 
Texas 8.63%          11,605,874 
Bexar County Health Facilities           
 Development Corp,           
 Rev Ref Army Retirement Residence           
 Proj (G)  6.300  07-01-32  AA  150  171,533 
Brazos Harbor Industrial           
 Development Corp,           
 Rev Ref Dow ChemEnvironmental           
 Facs Proj  5.900  05-01-38  BBB  1,500  997,545 
Brazos River Authority,           
 Rev Ref Utilities Co Ser 1999A  7.700  04-01-33  CCC  1,000  550,000 
Guadalupe-blanco River Authority,           
 Rev E I Du Pont De Nemours & Co Proj  6.400  04-01-26  A  1,000  930,300 
Gulf Coast Industrial           
 Development Authority,           
 Rev Solid Waste Disposal Citgo           
 Petroleum Proj  8.000  04-01-28  Baa3  2,100  1,942,605 
Gulf Coast Waste Disposal Authority,           
 Rev Ref Ser 2002A  6.100  08-01-24  BBB  1,500  1,060,200 
Harris County Health Facilities           
 Development Corp,           
 Rev Ref Memory of Hermann           
 Healthcare Sys B  7.250  12-01-35  A  1,000  1,046,090 
Metro Health Facilities           
 Development Corp,           
 Rev Wilson N Jones Mem Hosp Proj  7.250  01-01-31  Ba3  1,000  771,800 
Mission Economic Development Corp,           
 Rev Alllied Waste Inc Proj Ser A  5.200  04-01-18  BBB  1,000  865,130 
 Rev Waste Mgmt Inc Proj  6.000  08-01-20  BBB  975  933,016 
North Texas Thruway Auth,           
 Rev Ref Sys First Tier Ser K-2  6.000  01-01-38  A–  1,000  974,500 
North Texas Tollway Authority Rev,           
 Toll 2nd Tier Ref Ser F  5.750  01-01-38  BBB+  1,500  1,363,155 
 
Wyoming 1.05%          1,414,820 
Sweetwater County of,           
 Rev Ref Solid Waste Disposal FMC           
 Corp Proj  5.600  12-01-35  BBB  2,000  1,414,820 
 
Total investments (Cost $140,633,904)† 97.71%        $131,469,045 
 
Other assets and liabilities, net 2.29%        $3,086,352 
 
Total net assets 100.00%          $134,555,397 

The percentage shown for each investment category is the total value of that category as a percentage of the net assets of the Fund.

See notes to financial statements

16  High Yield Municipal Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

Notes to Schedule of Investments

AMT Alternative Minimum Tax

MTN Medium-Term Note

(A) Credit ratings are unaudited and are rated by Moody’s Investors Service where Standard & Poor’s ratings are not available unless indicated otherwise.

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

Insurance coverage  As a % of total investments 
CIFG Holding Limited  2.28 
Financial Guaranty Insurance Company  1.16 
Financial Security Assurance, Inc.  8.03 
Municipal Bond Insurance Association  2.88 

(G) Security rated internally by John Hancock Advisers, LLC. Unaudited.

(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.

(V) Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of February 28, 2009.

† At February 28, 2009, the aggregate cost of investment securities for federal income tax purposes was $140,020,934. Net unrealized depreciation aggregated $8,551,889, of which $5,634,223 related to appreciated investment securities and $14,186,112 related to depreciated investment securities.

See notes to financial statements

Semiannual report | High Yield Municipal Bond Fund  17 

FINANCIAL  STATEMENTS

Financial statements

Statement of assets and liabilities 2-28-09 (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 $140,633,904)  $131,469,045 
Cash  69,128 
Receivable for shares sold  1,987,905 
Interest receivable  2,404,116 
Receivable from affiliates  20,064 
 
Total assets  135,950,258 
 
Liabilities   
Payable for investments purchased  1,079,274 
Payable for shares repurchased  171,201 
Dividends payable  102 
Payable to affiliates   
 Management fees  57,761 
 Distribution and service fees  39,597 
 Other  27,816 
Other payables and accrued expenses  19,110 
 
Total liabilities  1,394,861 
 
Net assets   
Capital paid-in  160,174,242 
Accumulated net realized loss on investments  (16,741,397) 
Net unrealized depreciation of investments  (9,164,859) 
Accumulated net investment income  287,411 
 
Net assets  $134,555,397 
 
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 ($104,320,066 ÷ 14,908,208 shares)  $7.00 
Class B ($7,095,835 ÷ 1,014,075 shares)1  $7.00 
Class C ($23,139,496 ÷ 3,307,078 shares)1  $7.00 
 
Maximum offering price per share   
Class A ($7.00 ÷ 95.5%)2  $7.33 

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

2 On single retail sales of less than $100,000. On sales of $100,000 or more and on group sales the offering price is reduced.

See notes to financial statements

18  High Yield Municipal Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

Statement of operations For the period ended 2-28-09 (unaudited)1

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  $4,218,567 
 
Total investment income  4,218,567 
Expenses   
Investment management fees (Note 5)  349,694 
Distribution and service fees (Note 5)  248,793 
Transfer agent fees (Note 5)  34,968 
Accounting and legal services fees (Note 5)  8,473 
Professional fees  43,376 
Printing fees  22,021 
Registration fees  20,803 
Custodian fees  19,940 
Trustees’ fees  1,682 
Miscellaneous  18,898 
 
Total expenses  768,648 
Less expense reductions (Note 5)  (147) 
 
Net expenses  768,501 
Net investment income  3,450,066 
 
Realized and unrealized gain (loss)   
Net realized loss on investments  (5,142,455) 
Change in net unrealized appreciation (depreciation) of investments  (10,708,069) 
 
Net realized and unrealized loss  (15,850,524) 
 
Decrease in net assets from operations  ($12,400,458) 

1 Semiannual period from 9-1-08 to 2-28-09. Unaudited.

See notes to financial statements

Semiannual report | High Yield Municipal Bond Fund  19 

FINANCIAL STATEMENTS

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.

  Year  Period 
  ended  ended 
  8-31-08  2-28-091 
Increase (decrease) in net assets     
From operations     
Net investment income  $4,765,634  $3,450,066 
Net realized loss  (2,343,261)  (5,142,455) 
Change in net unrealized appreciation (depreciation)  (1,963,817)  (10,708,069) 
 
Increase (decrease) in net assets resulting from operations  458,556  (12,400,458) 
 
Distributions to shareholders     
From net investment income     
Class A  (3,699,573)  (2,485,849) 
Class B  (387,707)  (174,088) 
Class C  (626,760)  (498,644) 
  (4,714,040)  (3,158,581) 
From Fund share transactions (Note 6)  38,375,589  25,471,606 
 
Total increase  34,120,105  9,912,567 
Net assets     
Beginning of period  90,522,725  124,642,830 
End of period2  $124,642,830  $134,555,397 

1 Semiannual period from 9-1-08 to 2-28-09. Unaudited.

2 Includes accumulated (distributions in excess of) net investment income of ($4,074) and $287,411, respectively.

See notes to financial statements

20  High Yield Municipal Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

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  8-31-041  8-31-051  8-31-06  8-31-07  8-31-08  2-28-092 
Per share operating performance             
Net asset value, beginning of period  $8.14  $8.27  $8.62  $8.68  $8.33  $7.99 
Net investment income3  0.47  0.43  0.42  0.41  0.41  0.22 
Net realized and unrealized gain             
 (loss) on investments  0.12  0.35  0.05  (0.35)  (0.34)  (1.01) 
Total from investment operations  0.59  0.78  0.47  0.06  0.07  (0.79) 
Less distributions             
From net investment income  (0.46)  (0.43)  (0.41)  (0.41)  (0.41)  (0.20) 
Net asset value, end of period  $8.27  $8.62  $8.68  $8.33  $7.99  $7.00 
Total return (%)4  7.415  9.64  5.615  0.605  0.815   (9.87)5,6 
Ratios and supplemental data             
Net assets, end of period             
 (in millions)  $69  $72  $72  $71  $94  $104 
Ratios (as a percentage             
 of average net assets):             
 Expenses before reductions  1.10  1.14  1.09  1.13  1.09  1.157 
 Interest and fees8  —  —  —  0.20  0.16  — 
 Expenses net of all fee waivers  1.09  1.14  1.09  1.33  1.25  1.157 
 Expenses net of all fee waivers             
    and credits  1.09  1.14  1.09  1.33  1.25  1.157 
 Net investment income  5.67  5.09  4.71  4.77  4.85  6.137 
Portfolio turnover (%)  57  65  52  63  75  41 
  

1 Audited by previous Independent Registered Public Accounting Firm.

2 Semiannual period from 9-1-08 to 2-28-09. Unaudited.

3 Based on the average of the shares outstanding.

4 Assumes dividend reinvestment and does not reflect the effect of sales charges.

5 Total returns would have been lower had certain expenses not been reduced during the periods shown.

6 Not annualized.

7 Annualized.

8 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

Semiannual report | High Yield Municipal Bond Fund  21 

FINANCIAL STATEMENTS

CLASS B SHARES Period ended  8-31-041  8-31-051  8-31-06  8-31-07  8-31-08  2-28-092 
Per share operating performance             
Net asset value, beginning of period  $8.14  $8.27  $8.62  $8.68  $8.33  $7.99 
Net investment income3  0.41  0.37  0.36  0.35  0.35  0.19 
Net realized and unrealized gain             
 (loss) on investments  0.12  0.35  0.04  (0.36)  (0.34)  (1.01) 
Total from investment operations  0.53  0.72  0.40  (0.01)  0.01  (0.82) 
Less distributions             
From net investment income  (0.40)  (0.37)  (0.34)  (0.34)  (0.35)  (0.17) 
Net asset value, end of period  $8.27  $8.62  $8.68  $8.33  $7.99  $7.00 
Total return (%)4  6.625  8.84  4.835  (0.15)5  0.065  (10.21)5,6 
Ratios and supplemental data             
Net assets, end of period             
 (in millions)  $31  $24  $16  $11  $8  $7 
Ratios (as a percentage             
 of average net assets):             
 Expenses before reductions  1.84  1.87  1.84  1.88  1.84  1.907 
 Interest and fees8  —  —  —  0.20  0.16  — 
 Expenses net of all fee waivers  1.83  1.87  1.84  2.08  2.00  1.907 
 Expenses net of all fee waivers             
   and credits  1.83  1.87  1.84  2.08  2.00  1.907 
 Net investment income  4.93  4.35  4.11  4.05  4.09  5.387 
Portfolio turnover (%)  57  65  52  63  75  41 
  

1 Audited by previous Independent Registered Public Accounting Firm.

2 Semiannual period from 9-1-08 to 2-28-09. Unaudited.

3 Based on the average of the shares outstanding.

4 Assumes dividend reinvestment and does not reflect the effect of sales charges.

5 Total returns would have been lower had certain expenses not been reduced during the periods shown.

6 Not annualized.

7 Annualized.

8 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

22  High Yield Municipal Bond Fund | Semiannual report 

FINANCIAL STATEMENTS

CLASS C SHARES Period ended  8-31-041  8-31-051  8-31-06  8-31-07  8-31-08  2-28-092 
Per share operating performance             
Net asset value, beginning of period  $8.14  $8.27  $8.62  $8.68  $8.33  $7.99 
Net investment income3  0.40  0.36  0.35  0.34  0.34  0.19 
Net realized and unrealized gain             
 (loss) on investments  0.13  0.36  0.05  (0.35)  (0.33)  (1.01) 
Total from investment operations  0.53  0.72  0.40  (0.01)  0.01  (0.82) 
Less distributions             
From net investment income  (0.40)  (0.37)  (0.34)  (0.34)  (0.35)  (0.17) 
Net asset value, end of period  $8.27  $8.62  $8.68  $8.33  $7.99  $7.00 
Total return (%)4  6.615  8.82  4.835  (0.15)5  0.065  (10.21)5,6 
Ratios and supplemental data             
Net assets, end of period             
 (in millions)  $8  $8  $9  $9  $23  $23 
Ratios (as a percentage             
 of average net assets):             
 Expenses before reductions  1.84  1.89  1.84  1.88  1.84  1.907 
 Interest and fees8  —  —  —  0.20  0.16  — 
 Expenses net of all fee waivers  1.83  1.89  1.84  2.08  2.00  1.907 
 Expenses net of all fee waivers             
   and credits  1.83  1.89  1.84  2.08  2.00  1.907 
 Net investment income  4.88  4.33  4.09  4.02  4.11  5.367 
Portfolio turnover (%)  57  65  52  63  75  41 
  

1 Audited by previous Independent Registered Public Accounting Firm.

2 Semiannual period from 9-1-08 to 2-28-09. Unaudited.

3 Based on the average of the shares outstanding.

4 Assumes dividend reinvestment and does not reflect the effect of sales charges.

5 Total returns would have been lower had certain expenses not been reduced during the periods shown.

6 Not annualized.

7 Annualized.

8 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

Semiannual report | High Yield Municipal Bond Fund  23 

Notes to financial statements (unaudited)

Note 1
Organization

John Hancock High Yield Municipal Bond Fund (the Fund) is a non-diversified series of John Hancock Municipal Securities Trust (the Trust), an open-end management investment company 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 that is largely exempt from federal income tax, consistent with preservation of capital.

The Trustees have authorized the issuance of multiple classes of shares of the Fund, designated as Class A, Class B and Class C shares. The shares of each class represent an interest in the same portfolio of investments of the Fund and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission and the Internal Revenue Service. Shareholders of a class that bears distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan. Class B shares will 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. The following summarizes the significant accounting policies of the Fund:

Security valuation

Investments are stated at value as of the close of the regular trading on New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. 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, which take 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. 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. Debt obligations, for which there are no prices available from an independent pricing service, are valued based on broker quotes or fair valued as described below. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value.

Other portfolio securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Fund’s Pricing Committee in accordance with procedures adopted by the Board of Trustees.

Valuations change in response to many factors including tax receipts and budget disbursements of the municipalities, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar

24  High Yield Municipal Bond Fund | Semiannual report 

securities, interest rates, prepayment speeds, credit risk and others.

Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of February 28, 2009:

  INVESTMENTS IN  OTHER FINANCIAL 
VALUATION INPUTS  SECURITIES  INSTRUMENTS* 
Level 1 — Quoted Prices  —  — 
Level 2 — Other Significant Observable Inputs  $131,469,045  — 
Level 3 — Significant Unobservable Inputs  —  — 
Total  $131,469,045  — 

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/ depreciation on the instrument.

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. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Discounts/premiums are accreted/amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful, based upon consistently applied procedures. The Fund use identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

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 appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B and Class C shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Expenses

The majority of expenses are directly identifi-able to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Bank borrowings

The Fund is permitted to have bank borrowings for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Fund has entered into a line of credit agreement with The Bank of New York Mellon (BNYM), the Swing Line Lender and Administrative Agent. This agreement enables the Fund to participate, with other funds managed by John Hancock Advisers LLC (the Adviser), an indirect wholly

Semiannual report | High Yield Municipal Bond Fund  25 

owned subsidiary of Manulife Financial Corporation (MFC), in an unsecured line of credit with BNYM, which permits borrowings of up to $150 million, collectively. Interest is charged to each fund based on its borrowing. In addition, a commitment fee is charged to each fund based on the average daily unused portion of the line of credit and is allocated among the participating funds. The Fund had no outstanding borrowings under the line of credit for the period ended February 28, 2009.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft together with interest due thereon. 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 to the extent of any overdraft.

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 $10,064,061 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 carryforwards expire as follows: August 31, 2010 — $1,227,272, August 31, 2011 — $2,540,698, August 31, 2012 —$2,816,241, August 31, 2013 — $1,681,342, August 31, 2014 — $119,574, August 31, 2015 — $1,176,656 and August 31, 2016 —$502,278. Net capital losses of $1,816,118 that are attributable to security transactions incurred after October 31, 2007, are treated as arising on September 1, 2008, the first day of the Fund’s next taxable year.

As of February 28, 2009, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. Each of the Fund’s federal tax returns filed in the 3-year period ended August 31, 2008 remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. The Fund generally declares dividends daily and pays them monthly. Capital gains, if any, are distributed annually. During the year ended August 31, 2008, the tax character of distributions paid was as follows: ordinary income $85,708 and tax exempt income $4,648,369. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of 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. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

New accounting pronouncement

In March 2008, FASB No. 161 (FAS 161), Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (FAS 133), was issued and is effective for fiscal years and interim periods beginning after November 15, 2008. FAS 161 amends and expands the disclosure requirements of FAS 133 in order to provide financial statement users an understanding of a company’s use of derivative instruments, how derivative instruments are accounted for under FAS 133 and related interpretations and how these instruments affect a company’s financial position, performance, and cash flows. FAS 161 requires companies to disclose information detailing the objectives and strategies for using derivative instruments, the level of derivative activity entered into by the company, and any credit risk-related

26  High Yield Municipal Bond Fund | Semiannual report 

contingent features of the agreements. As of February 28, 2009, management does not believe that the adoption of FAS 161 will have a material impact on the amounts reported in the financial statements.

Note 3
Risk and uncertainties
Investing in high yield securities

Investing in high yield securities may involve greater risks and considerations not typically associated with investing in U.S. government bonds and other high quality fixed-income securities. These securities are non-investment grade securities, often referred to as “junk bonds.” Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high yield securities may be less liquid due to the extent that there is no established retail secondary market and because of a decline in the value of such securities. The Fund may not be able to sell bonds at desired prices and that large purchases or sales of certain high-yield bond issues may cause substantial fluctuations in share price, yield and total return.

State concentration risk

The Fund invests mainly in bonds from a single state and its performance is affected by local, state and regional factors. The risks may include economic or policy changes, erosion of the tax base, and state legislative changes (especially those regarding budgeting and taxes). Although the Fund invests mainly in investment-grade bonds, which generally have a relatively low level of credit risk, any factors that might lead to a credit decline statewide would be likely to cause widespread decline in the credit quality of the Fund’s holdings.

Insurance concentration risk

The Fund may hold insured municipal obligations which are insured as to their scheduled payment of principal and interest under an insurance policy obtained by the issuer or underwriter of the obligation at the time of its original issuance. Since there are a limited number of municipal obligation insurers, a Fund may have a concentration of investments covered by one insurer. Accordingly, the concentration may make the Fund’s value more volatile and investment values may rise and fall more rapidly. In addition, the credit quality of companies which provide the insurance may affect the value of those securities and insurance does not guarantee the market value of the insured obligation.

Municipal bond risk

The Fund generally invests in general obligation or revenue municipal bonds. The bonds are backed by the municipal issuer’s have the risk that the issuer’s credit quality will decline. General obligation bonds are backed by the municipal issuer’s ability to levy taxes. In extreme cases, a municipal issuer could declare bankruptcy or otherwise become unable to honor its commitments to bondholders which may be caused by many reasons, ranging from including fiscal mismanagement and erosion of the tax base. Revenue bonds are backed only by income associated with a specific facility. Any circumstance that reduces or threatens the economic viability of that particular facility can affect the bond’s credit quality.

Fixed income risk

Fixed income securities are subject to credit and interest rate risk and involve some risk of default in connection with principal and interest payments.

Note 4
Guarantees and indemnifications

Under the Fund’s organizational documents, its Officers and Trustees are indemnified against certain liability 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.

Note 5
Management fee and transactions with
affiliates and others

The Fund has an investment management contract with the Adviser. Under the investment management contract, the Fund pays a monthly

Semiannual report | High Yield Municipal Bond Fund  27 

management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.625% of the first $75,000,000 of the Fund’s average daily net asset value, (b) 0.5625% of the next 75,000,000 and (c) 0.50% of the Fund’s average daily net asset value in excess of $150,000,000. The effective rate for the period ended February 28, 2009 is 0.60% of the Fund’s average daily net asset value. The Fund has a subadvisory agreement with MFC Global Investment Management (U.S.), LLC, a subsidiary of John Hancock Financial Services, Inc. The Fund is not responsible for payment of subadvisory fees.

The Fund has a Distribution Agreement with John Hancock Funds, LLC (JH Funds), a wholly owned subsidiary of the Adviser. The Fund has adopted Distribution Plans with respect to Class A, Class B and Class C, pursuant to Rule 12b-1 under the 1940 Act, to pay JH Funds for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to JH Funds at an annual rate not to exceed 0.25%, 1.00% and 1.00% of average daily net asset value of Class A, Class B and Class C, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of the Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

The Fund has an agreement with its custodian bank, under which custody fees are reduced by balance credits applied during the period. Accordingly, the expense reductions related to custody fee offsets amounted to $133.

Class A shares are assessed up-front sales charges. During the period ended February 28, 2009, JH Funds received net up-front sales charges of $302,415 with regard to sales of Class A shares. Of this amount, $35,146 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $267,241 was paid as sales commissions to unrelated broker-dealers and $28 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer. The Adviser’s indirect parent, John Hancock Life Insurance Company (JHLICO), is the indirect sole shareholder of Signator Investors.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to JH Funds and are used in whole or in part to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the period ended February 28, 2009, CDSCs received by JH Funds amounted to $174,821 for Class B shares and $30,231 for Class C shares.

The Fund has a transfer agent agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of JHLICO. The transfer agent fees are made up of three components:

• The Fund pays a monthly transfer agent fee at an annual rate of 0.01% for all classes based on each class’s average daily net assets.

• All classes of the Fund paid a monthly fee based on an annual rate of $17.50 per shareholder account.

• In addition, Signature Services is reimbursed for certain out-of-pocket expenses.

The Fund receives earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the period ended February 28, 2009, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $14 for transfer agent credits earned.

Class level expenses for the period ended February 28, 2009 were as follows:

  Distribution and  Transfer 
Share class  service fees  agent fees 
Class A  $110,520  $26,638 
Class B  35,680  2,150 
Class C  102,593  6,180 
Total  $248,793  $34,968 

28  High Yield Municipal Bond Fund | Semiannual report 

The Fund has an agreement with the Adviser and affiliates to perform necessary tax, accounting, compliance, legal and other administrative services for the Fund. The compensation for the year amounted to $8,473 with an effective rate of 0.01% of the Fund’s average daily net asset value.

Mr. James R. Boyle is Chairman of the Adviser, as well as affiliated Trustee of the Fund, and is compensated by the Adviser and/or its affiliates. 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 investments, as well as any unrealized gains or losses. The Deferred Compensation Plan investments had no impact on the operations of the Fund.

Note 6
Fund share transactions

This listing illustrates the number of Fund shares sold, reinvested and repurchased during the year ended August 31, 2008, and the period ended February 28, 2009, along with the corresponding dollar value.

    Year ended 8-31-08  Period ended 2-28-091 
  Shares  Amount  Shares  Amount 
Class A shares         
Sold  4,915,022  $39,839,099  4,992,692  $35,178,893 
Distributions reinvested  250,989  2,041,557  235,573  1,648,583 
Repurchased  (1,894,507)  (15,471,342)  (2,055,165)  (14,592,468) 
Net increase  3,271,504  $26,409,314  3,173,100  $22,235,008 
 
Class B shares         
Sold  211,312  $1,716,618  164,058  $1,167,573 
Distributions reinvested  21,935  179,122  12,012  84,105 
Repurchased  (458,316)  (3,769,732)  (210,611)  (1,490,732) 
Net decrease  (225,069)  ($1,873,992)  (34,541)  ($239,054) 
 
Class C shares         
Sold  2,153,756  $17,641,134  1,254,524  $8,883,863 
Distributions reinvested  41,481  336,595  44,804  313,297 
Repurchased  (502,921)  (4,137,462)  (812,538)  (5,721,508) 
Net increase  1,692,316  $13,840,267  486,790  $3,475,652 
 
Net increase  4,738,751  $38,375,589  3,625,349  $25,471,606 

1Semiannual period from 9-1-08 to 2-28-09. Unaudited.

Note 7
Purchase and sale of securities

Purchases and proceeds from sales or maturities of securities, including purchase and sales of variable rate demand notes of $10,390,000 and $10,590,000, respectively, during the period ended February 28, 2009, aggregated $72,286,792 and $48,324,992, respectively. Short-term securities are excluded from these amounts.

Note 8
Subsequent event

On March 12, 2009, the Board of Trustees approved to change the Fund’s fiscal year end from August 31 to May 31.

Semiannual report | High Yield Municipal Bond Fund  29 

Board Consideration of and
Continuation of Investment Advisory
Agreement and Subadvisory
Agreement: John Hancock
High Yield Municipal Bond Fund

The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Tax-Exempt Series Fund (the Trust), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the Independent Trustees), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Adviser) and (ii) the investment subadvisory agreement (the Subadvisory Agreement) with MFC Global Investment Management (U.S.), LLC (the Subadviser) for the John Hancock High Yield Municipal Bond Fund (the Fund). The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the Advisory Agreements.

At meetings held on May 5–6 and June 9–10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included: (i) the investment performance of the Fund relative to a category of relevant funds (the Category) and a peer group of comparable funds (the Peer Group). The funds within each Category and Peer Group were selected by Morningstar Inc. (Morningstar), an independent provider of investment company data. Data covered a range of periods ended December 31, 2007, (ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group, (iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser, (iv) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund, (v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale, (vi) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department, (vii) the background and experience of senior management and investment professionals, and (viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholders report. The key factors considered by the Board and the conclusions reached are described below.

Nature, extent and quality of services

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. The Board considered the investment philosophy, research and

30  High Yield Municipal Bond Fund | Semiannual report 

investment decision-making processes of the Adviser and Subadviser. 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 and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Subadviser supported renewal of the Advisory Agreements.

Fund performance

The Board considered the performance results for the Fund over various time periods ended December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark index. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

The Board noted that the Fund’s performance for the 1- and 10-year periods was lower than the performance of its benchmark index, the Lehman Brothers Municipal Bond Index, as was the Category and Peer Group medians. The Board also noted that the Fund’s performance was higher than the benchmark index for the 3- and 5-year periods. The Board favorably viewed that the Fund’s performance has higher than the Category and Peer Group medians for the 1-, 3- and 5-year periods.

Investment advisory fee and subadvisory
fee rates and expenses

The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board received and considered information comparing the Advisory Agreement Rate with the advisory fees for the Peer Group and Category. The Board noted that the Advisory Agreement Rate was not appreciably higher than the median rates of the Peer Group and Category.

The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian 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 received and considered expense information regarding the Fund’s total operating expense ratio (Expense Ratio). The Board noted that, unlike the Fund, several funds in the Peer Group employed fee waivers or reimbursements. The Board received and considered information comparing the Expense Ratio of the Fund to that of the Peer Group and Category medians before the application of fee waivers and reimbursements (Gross Expense Ratio) and after the application of such waivers and reimbursement (Net Expense Ratio). The Board noted that the Fund’s Gross Expense Ratio and Net Expense Ratio were higher than the Category and Peer Group medians.

The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Fund’s overall expense results and performance supported the re-approval of the Advisory Agreements.

The Board also received information about the investment subadvisory fee rate (the Subadvisory Agreement Rate) payable by the Adviser to the Subadviser for investment subadvisory services. The Board concluded that the Subadvisory Agreement Rate was fair and equitable, based on its consideration of the factors described here.

Profitability

The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates, including the

Semiannual report | High Yield Municipal Bond Fund  31 

Subadviser. 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 concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

Economies of scale

The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. 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 the extent the Board and the Adviser were able to identify actual or potential economies of scale from Fund-specific or allocated expenses, in order to ensure that any such economies continue to be reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the Advisory Agreement Rate.

Information about services to other clients

The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Advisory Agreement Rate and the Subadvisory Agreement Rate were not unreasonable, taking into account fee rates offered to others by the Adviser and Subadviser, respectively, after giving effect to differences in services.

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates, including the Subadviser, as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

The Board also considered the effectiveness of the Adviser’s, Subadviser’s and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other factors and broader review

As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.

32  High Yield Municipal Bond Fund | Semiannual report 

More information

Trustees  Investment adviser 
Patti McGill Peterson, Chairperson  John Hancock Advisers, LLC 
James R. Boyle†   
James F. Carlin  Subadviser 
William H. Cunningham*  MFC Global Investment 
Deborah C. Jackson*    Management (U.S.), LLC 
Charles L. Ladner   
Stanley Martin*  Principal distributor 
Dr. John A. Moore  John Hancock Funds, LLC 
Steven R. Pruchansky   
Custodian 
*Member of the Audit Committee  State Street Bank and Trust Company 
†Non-Independent Trustee   
Transfer agent 
Officers  John Hancock Signature Services, Inc. 
 
Keith F. Hartstein  Legal counsel 
President and Chief Executive Officer  K&L Gates LLP 
 
Thomas M. Kinzler   
Secretary and Chief Legal Officer   
 
Francis V. Knox, Jr.   
Chief Compliance Officer   
 
Charles A. Rizzo   
Chief Financial Officer   
 
Gordon M. Shone   
Treasurer   
 
John G. Vrysen   
Chief Operating Officer   

Additional information about your fund is available without charge in several ways. As required by the SEC, you can access proxy voting information and quarterly portfolio information on your fund. The proxy voting information includes a description of proxy voting policies, procedures and information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30. The quarterly portfolio information that includes a complete list of the fund’s holdings for the first and third quarters of the fund’s fiscal period is filed on Form N-Q. You have access to this information:

By phone  On the fund’s Website  At the SEC 
1-800-225-5291  www.jhfunds.com  www.sec.gov 
      1-800-SEC-0330 
      SEC Public Reference Room 
 
You can also contact us:       
Regular mail:    Express mail:   
John Hancock Signature Services, Inc.  John Hancock Signature Services, Inc. 
P.O. Box 9510    Mutual Fund Image Operations 
Portsmouth, NH 03802-9510    164 Corporate Drive   
    Portsmouth, NH 03801   

Month-end portfolio holdings are available at www.jhfunds.com.

Semiannual report | High Yield Municipal Bond Fund  33 

  

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 High Yield Municipal Bond Fund.  590SA 2/09 
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.  4/09 

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.

There were no material changes to previously disclosed John Hancock Funds – Governance Committee Charter.

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) Submission of Matters to a Vote of Security Holders is attached. See attached “John Hancock Funds – Governance Committee Charter”.

(c)(2) 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 Municipal Series Trust

By: /s/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer

Date: April 27, 2009

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: April 27, 2009

By: /s/ Charles A. Rizzo
-------------------------------------
Charles A. Rizzo
Chief Financial Officer

Date: April 27, 2009