<PAGE> 1
[LOGO APPEARS HERE]
[GRAPHIC COLLAGE APPEARS HERE]
AIM INTERNATIONAL EQUITY FUND
ANNUAL REPORT
OCTOBER 31, 1995
<PAGE> 2
AIM INTERNATIONAL EQUITY FUND
For shareholders who seek long-term growth of capital. The Fund invests in a
diversified portfolio of international equity securities which its investment
adviser believes will have strong earnings growth.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM International Equity Fund's performance figures are historical and
reflect reinvestment of all distributions and changes in net asset value.
Unless otherwise indicated, the Fund's performance is computed without a
sales charge.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B share
performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from
5% beginning at the time of purchase to 0% at the beginning of the seventh
year. The performance of the Fund's Class B shares will differ from that
of Class A shares.
o One-year performance includes reinvested distributions for Class A and
Class B shares of $0.4845 and $0.4705, respectively.
o The Fund's investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o The Fund's portfolio composition may change and there is no assurance the
Fund will continue to hold specific securities in any particular country.
o Past performance cannot guarantee comparable future results.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o Lipper Analytical Services, Inc. is an independent mutual fund performance
monitor. The unmanaged Lipper International Fund Index represents an
average of the performance of the 30 largest international mutual funds.
The Europe, Australia, and Far East Index (EAFE) is a group of unmanaged
foreign securities tracked by Morgan Stanley Capital International.
o An investment cannot be made in any indexes listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
<PAGE> 3
A Message from the Chairman
Dear Fellow Shareholder:
In a world market environment that was steeped in
[PHOTO OF economic and financial turbulence, AIM International Equity
CHARLES T. BAUER, Fund managed a respectable showing during the year ended
CHAIRMAN OF October 31, 1995. The Fund's Class A and Class B shares
THE BOARD OF logged total returns of 5.24% and 4.35%, respectively. Such
THE FUND, performance was enough to surpass a major foreign market
APPEARS HERE] benchmark index as well as results charted for similar
funds. Net assets of the Fund were $706.7 million at the
end of the reporting period.
For the record, Morgan Stanley's unmanaged Europe, Australia, and Far East
Index of foreign company stocks posted a one-year total return of -0.37% for the
reporting period. Similar foreign company mutual funds, as measured by the
Lipper International Fund Index, posted a one-year total return of -0.61%.
The key to the Fund's performance advantage was an earnings-driven
investment strategy that revealed a number of attractive opportunities in some
of the better-performing world markets for 1995. The Fund's managers have taken
advantage of the growing worldwide potential apparent in the technology sector.
A more complete discussion of market conditions during the reporting period and
the Fund's investment strategy is provided on page 2 of this report.
So, while it has been a difficult year for world markets, it is but one
year. We are reminded that market cycles come and go, and any performance trend
can be expected to change direction. Indeed, returns of foreign stocks as
measured by the EAFE Index have averaged 12.95% per year for 25 years. True,
lasting value is best achieved through cumulative performance over the long
term.
Therefore, even as we pause to discuss the Fund's performance during the
past year, we are ready to look ahead to the next year. AIM's disciplined
earnings-driven strategy is an ongoing evaluation of market opportunity, and as
global markets continue to grow, our job becomes more challenging.
On a personal level, the year to come has important investment implications
for all of us. Clouds on the horizon in the form of the budget debate over
retirement benefits such as Medicare and Social Security programs accentuate the
need to build your own retirement nest egg, independent of any benefits which
may--or may not--be available to you when the time comes. For many in the baby
boomer generation, that's just 10 years away.
It is our hope that you continue to rely on AIM International Equity Fund to
help build your financial future. As always, we are ready to respond to your
questions or comments about this report. Please call Client Services at
800-959-4246 during normal business hours. For automated account information 24
hours a day, call the AIM Investor Line toll-free at 800-246-5463.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE> 4
Management's
Discussion & Analysis
EUROPE LEADS WORLD EQUITY MARKETS
--------------
The top
performing
industry sectors
in Europe for
1995 have been
health care and
pharmaceuticals,
followed by
leisure, engineer-
ing, and media.
--------------
Europe delivered the strongest foreign market performance during the period
covered by this report. Low interest rates, solid earnings growth, and ongoing
restructuring campaigns appealed to investors wary of ongoing volatility in
Japan and Latin American markets. More conservative investors were attracted to
strong, defensive companies and stable currencies in Switzerland and Germany.
Growth investors bid up equity prices in Finland, Ireland, and the Netherlands.
The top performing industry sectors in Europe for 1995 have been health and
pharmaceuticals, followed by leisure, engineering, and media. Economic growth,
though still stronger than in the U.S., slowed enough to diminish the appeal of
such cyclical sectors as metals, autos, paper & packaging, and construction
companies.
Even with Europe's best efforts, foreign equity performance during the
reporting period was largely influenced by Japan, which has the largest non-U.S.
stock market--some 40% of the EAFE Index. Rising U.S. interest rates, a weak
dollar/strong yen relationship, and a stubbornly depressed real estate market
flagged Japan's efforts at economic recovery. Japan also faced such challenges
as severe earthquake damage in Kobe, increased political contention with the
U.S. over trade imbalances, and a growing banking crisis.
Then the wind changed. U.S. interest rates stabilized and the dollar began
to rebound from historical lows. Positive U.S. trade agreements and an
encouraging effort by Japan's Ministry of Finance to develop an effective
economic stimulus package helped rekindle investor interest by mid-1995.
Unfortunately, the rally evaporated when Daiwa Bank disclosed its $1.1 billion
trading scandal.
- --------------------------------------------------------------------------------
LIPPER RANKINGS (as of 10/31/95)
- --------------------------------------------------------------------------------
AIM
INTERNATIONAL INTERNATIONAL
PERIOD EQUITY FUND (A) FUNDS TOP%
- ------ --------------- ------------- ----
3 YEARS 17 99 17%
1 YEAR 21 233 10
Fund total return performance rankings are vs. all international funds tracked
by Lipper, excluding all sales charges, and including fees and expenses.
- --------------------------------------------------------------------------------
Meanwhile, other Asian markets, such as Hong Kong, Malaysia, and Singapore,
rebounded sharply from 1994 levels. Hong Kong, in particular, was up more than
34% in the first 10 months of 1995, based on local currency. New Zealand and
Australia continued to deliver strong performance in Pacific markets.
Latin American markets continued to be overshadowed by the ongoing financial
crisis in Mexico, which has yet to resolve. However, other emerging
markets--chiefly Peru, Chile, Brazil, and Argentina--began to attract investor
interest thanks to improved profitability, relative political and economic
stability, and solid growth potential.
YOUR INVESTMENT PORTFOLIO
The Fund's resilient performance during the reporting period can be attributed
to investments in some of the better performing European markets such as
Switzerland, Sweden, the Netherlands, and top Asian/Pacific markets such as Hong
Kong and Australia. The Fund also benefited from its strategic shift out of
cyclical stocks, such as building materials and construction companies, and into
defensive holdings such as pharmaceutical and media companies. As of October 31,
1995, the Fund's portfolio was comprised of 150 holdings. Of course, the Fund's
portfolio composition may change and there is no assurance the Fund will
continue to hold specific securities in any particular country.
EUROPE. Many of the better performing stocks in the Fund's portfolio were
those considered "core" holdings such as Carrefour Supermarche and Promodes S.A.
in France, Heineken N.V. in the Netherlands, and Roche Holdings A.G. of
Switzerland. Also strong were Granada and Thorn EMI PLC in the United Kingdom,
and Sweden's Astra AB.
Exposure to technology was fairly limited given that sector's limited
coverage in Europe. Certain technology holdings, such as Nokia and Philips
Electronics N.V., were sold when quarterly earnings fell short of the Fund's
investment criteria.
See important Fund disclosure on inside front cover.
2
<PAGE> 5
PACIFIC BASIN AND LATIN AMERICA. In Japan, the Fund emphasized selected
technology companies such as Rohm Co., Ltd., Tokyo Electron Ltd., and Kyocera
Corp. Hong Kong's Hutchison Whampoa Ltd. and PT Hanjaya Mandala Sampoerna
continued to be strong performers. Weightings were reduced in several Pacific
Rim countries in favor of stronger potential offered in Europe, and weightings
were reduced in underperforming positions such as companies engaged in Hong Kong
real estate and Singapore utilities.
The Fund remained underweighted in Latin America during the reporting
period, maintaining only small positions in such countries as Chile, Peru,
Argentina, and Brazil. The exclusive holding remaining in Mexico, Kimberly-Clark
de Mexico S.A., outperformed the Mexican market by 60% during the reporting
period.
OUTLOOK FOR THE FUTURE
The current environment of stable interest rates and subdued inflation bodes
well for global stock markets. Continued strength in the U.S. dollar should help
improve the profitability of European, Japanese, and Asian exports. As a result,
healthy economic expansion in Europe and Southeast Asia, excluding Japan, should
continue well into 1996. Japan has initiated economic stimulus measures which
may yet revive investor confidence during the coming year. However, Japan's
banking industry still struggles with regulatory reform.
No one can predict how these and other factors may actually affect market
performance around the world. Therefore, AIM chooses not to rely on forecasts
and projections. We do not anticipate macro-economic trends in any particular
country. Instead, we remain committed to a disciplined investment strategy which
prompts us to rely on what we know about companies in which we invest, based
upon verified financial information. Such a strategy helps us determine, on a
company-by-company basis, which stocks to own and which to sell--without
guesswork or futile attempts at market timing. We believe our commitment to this
time-tested, earnings-driven strategy will provide the best opportunity for
growth for our shareholders over the long term.
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TOP 10 EQUITY HOLDINGS (as of 10/31/95)
- --------------------------------------------------------------------------------
1. PT Hanjaya Mandala Sampoerna
2. Rohm Co., Ltd.
3. Gas Natural SDG-E.S.A.
4. Hutchison Whampoa Ltd.
5. Tokyo Electron Ltd.
6. Roche Holdings A.G.
7. Pinault-Printemps
8. Astra AB
9. Thorn EMI PLC
10. Granada Group PLC
- --------------------------------------------------------------------------------
THE TECHNOLOGY CYCLE: A SELF-PROPELLED ENGINE
Its global significance growing, the dynamic technology sector is broad and
complex--and fast-paced. The daily challenge for an investment manager is to
identify those companies with accelerating rates of growth, as well as companies
that have lost earnings momentum.
However, AIM has identified a continuing theme in technology companies which
should drive profits in this sector well into the next decade. We see it as a
self-propelled engine which shows no signs of slowing:
1) NEW TECHNOLOGIES INCREASE PRODUCTIVITY, which
2) INCREASES CORPORATE PROFITS, attracting
3) INCREASED COMPETITION, which
4) DRIVES DOWN PRICES, resulting in
5) HIGHER DEMAND AND INCREASED APPLICATION TO MORE END MARKETS,
thus encouraging
6) DEVELOPMENT OF NEW TECHNOLOGIES.
And so, the cycle continues.
- --------------------------------------------------------------------------------
See important Fund disclosure on inside front cover.
3
<PAGE> 6
Long-Term
Performance
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
For periods ended October 31, 1995
Without With
Sales Charge Sales Charge
CLASS A SHARES
Inception (4/7/92) 14.67% 12.88%
1 Year 5.24 -0.58
CLASS B SHARES
Inception (9/15/94) 4.32% 0.79%
1 Year 4.35 -0.65
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GROWTH OF A $10,000 INVESTMENT
- -------------------------------------------------------------------------------
AIM International Europe, Australia, Lipper International
Equity Fund and Far East Index Fund Index
4/7/92 $9,454 $10,000 $10,000
10/92 9,610 9,843 9,599
10/93 13,200 13,572 12,869
10/94 14,644 14,981 14,350
10/95 15,411 14,970 14,263
Past performance is no guarantee of future results.
- --------------------------------------------------------------------------------
AIM International Equity Fund's performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value. Class A share
performance reflects the maximum 5.50% sales charge, and Class B share
performance reflects the applicable contingent deferred sales charge (CDSC) for
the period involved. The CDSC on Class B shares declines from 5% beginning at
the time of purchase to 0% at the beginning of the seventh year. The performance
of the Fund's Class B shares will differ from that of Class A shares.
The Fund's investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
Lipper Analytical Services, Inc. is an independent mutual fund performance
monitor. The unmanaged Lipper International Fund Index represents an average of
the performance of the 30 largest international mutual funds. The Europe,
Australia, and Far East Index (EAFE) is a group of unmanaged foreign securities
tracked by Morgan Stanley Capital International.
An investment cannot be made in any indexes listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect sales
charges.
4
<PAGE> 7
For Consideration
<TABLE>
<S> <C>
EXPANDING OPPORTUNITIES FOR INVESTORS OVERSEAS
Many investors have discovered the growing potential offered 1996 and beyond as foreign countries continue
by investing in a portfolio that includes foreign securities. to grow and develop.
o MORE OPPORTUNITY. o GREATER DIVERSIFICATION.
Many of the largest companies in the world, based on market
capitalization, are outside the United States. In fact, 71 of Most investors recognize the benefits of diversifying
world's 90 largest companies are not American. That list includes: their investments across a variety of industries. Since
o 7 of the 10 largest APPLIANCE companies stock markets rarely move in step, it also makes sense to
o 7 of the 10 largest AUTOMOBILE companies consider diversifying into different countries. Studies
o 7 of the 10 largest INSURANCE companies show that a portfolio invested approximately 65% in U.S.
o 8 of the 10 largest CHEMICAL companies securities and 35% in foreign securities reduces the
o 8 of the 10 largest ELECTRICAL/ELECTRONICS companies overall volatility and increased returns of an equity
o 8 of the 10 largest FINANCIAL SERVICES companies portfolio over time.
o 8 of the 10 largest MACHINERY companies
o 8 of the 10 largest UTILITIES companies
o 10 of the 10 largest BANKS.
</TABLE>
Source: Morgan Stanley Capital International
o GROWTH POTENTIAL.
Many countries are growing faster than the United States.
Moreover, earnings reports for international companies have
been stronger than analysts had expected--a trend that could
continue into
- --------------------------------------------------------------------------------
BENEFITS OF A DIVERSIFIED STOCK PORTFOLIO
Growth of $10,000: 9/30/75-9/30/95
65% U.S. Stocks/ 100%
35% International Stocks U.S. Stocks
$164,938 $15,5167
Source: Morgan Stanley Capital International
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOREIGN MARKETS HAVE DELIVERED HIGHER RETURNS
Average Total Returns in U.S. Dollars: 9/30/85-9/30/95
Hong Kong 25.29%
Netherlands 22.79
Belgium 21.78
Sweden 19.51
Switzerland 19.00
Spain 18.16
France 17.92
Sing/Malaysia 16.53
United Kingdom 16.23
United States 14.90
Denmark 14.39
Austria 14.02
Australia 13.33
Japan 13.27
Germany 13.26
Source: Morgan Stanley Capital International
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(continued on next page)
See important Fund disclosure on inside front cover.
5
<PAGE> 8
For
Consideration
- -------------------------
Top market performance
moves from country to
country, and many
foreign stock markets
have outperformed the
U.S. market.
Over the past 10
years, market leadership
has rotated among seven
different countries.
During that time, the U.S.
stock market was never
the top performer, and it
was among the top five
only twice.
- --------------------------
WORLD EQUITY MARKET LEADERSHIP MOVES FROM COUNTRY TO COUNTRY (as of 9/30/95)
Annual Total % Return in U.S. Dollar Terms
- --------------------------------------------------------------------------------
Best Worst USA
12/85 Austria 176.26% Singapore/Malaysia -22.19% 31.08%
12/86 Spain 121.25 Norway -2.52 16.28
12/87 Japan 43.03 Germany -24.75 2.91
12/88 Belgium 53.63 New Zealand -13.75 14.61
12/89 Austria 103.91 Finland -9.63 30.01
12/90 U.K. 10.29 New Zealand -37.67 -3.15
12/91 Hong Kong 49.52 Finland -18.07 30.07
12/92 Hong Kong 32.29 Denmark -28.25 6.39
12/93 Hong Kong 116.70 U.S.A. 9.15 9.15
12/94 Finland 52.18 Hong Kong -28.9 1.13
9/95 Finland 47.54 Japan -4.2 29.62
- --------------------------------------------------------------------------------
Source: Morgan Stanley Capital International
IMPORTANT INFORMATION ABOUT INVESTING IN FOREIGN SECURITIES. Investors should
understand the risks associated with investing in foreign securities such as
currency risk, political and economic risk, regulatory risk, differences in
accounting, and market risk.
See important Fund disclosure on inside front cover.
6
<PAGE> 9
Financials
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
STOCKS & OTHER EQUITY INTERESTS-88.85%
ARGENTINA-0.65%
202,200 Buenos Aires Embotellado S.A.-Class B-ADR
(Beverages-Soft Drinks) $4,625,325
- ------------------------------------------------------------------------------------------
AUSTRALIA-3.67%
1,407,294 Australia & New Zealand Banking Group Ltd. (Banking) 5,895,884
- ------------------------------------------------------------------------------------------
214,282 Broken Hill Proprietary Co. Ltd. (Conglomerates) 2,902,143
- ------------------------------------------------------------------------------------------
267,100 News Corporation Ltd.-ADR (Publishing) 4,874,575
- ------------------------------------------------------------------------------------------
780,890 QBE Insurance Group Ltd. (Insurance-Broker) 3,450,002
- ------------------------------------------------------------------------------------------
2,139,900 QNI Ltd. (Metals-Miscellaneous) 4,107,669
- ------------------------------------------------------------------------------------------
741,200 Western Mining Corp. Holding Ltd. (Metals-Miscellaneous) 4,753,888
- ------------------------------------------------------------------------------------------
25,984,161
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AUSTRIA-1.24%
47,800 Oesterreichische Elektrizitaetswirtschafts AG
(Verbundgesellschaft)-Class A
(Electric Services) 2,920,668
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52,000 OMV AG (Oil & Gas-Exploration & Production) 4,490,229
- ------------------------------------------------------------------------------------------
6,800 Wienerberger Baustoffindustrie AG (Building Materials) 1,366,662
- ------------------------------------------------------------------------------------------
8,777,559
- ------------------------------------------------------------------------------------------
CANADA-2.70%
536,000 Bombardier, Inc.-Class B (Transportation-Miscellaneous) 6,600,985
- ------------------------------------------------------------------------------------------
128,000 GEAC Computer Corp. Ltd.(a) (Computer Software/Services) 1,767,428
- ------------------------------------------------------------------------------------------
291,600 Imasco, Ltd. (Tobacco) 5,223,466
- ------------------------------------------------------------------------------------------
83,400 Loewen Group, Inc. (Funeral Services) 3,339,909
- ------------------------------------------------------------------------------------------
60,300 Northern Telecom Ltd. (Telecommunications) 2,170,800
- ------------------------------------------------------------------------------------------
19,102,588
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CHILE-0.66%
64,600 Compania de Telefonos de Chile S.A.-ADR (Telecommunications) 4,651,200
- ------------------------------------------------------------------------------------------
DENMARK-1.73%
79,300 Danisco A/S (Food Processing) 3,613,781
- ------------------------------------------------------------------------------------------
24,500 Danske Traelastkompagni (Building Materials) 1,748,719
- ------------------------------------------------------------------------------------------
30,000 Novo Nordisk A/S-Class B (Medical-Drugs) 3,815,886
- ------------------------------------------------------------------------------------------
66,800 Unidanmark A/S (Banking-Money Center) 3,068,594
- ------------------------------------------------------------------------------------------
12,246,980
- ------------------------------------------------------------------------------------------
FINLAND-0.47%
7,250 Nokia Corp. (Telecommunications) 414,764
- ------------------------------------------------------------------------------------------
150,000 Repola OY (Paper & Forest Products) 2,902,816
- ------------------------------------------------------------------------------------------
3,317,580
- ------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 10
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
FRANCE-9.78%
24,700 Accor S.A. (Hotels/Motels) $2,934,643
- ------------------------------------------------------------------------------------------
9,500 Carrefour Supermarche (Retail-Stores) 5,579,436
- ------------------------------------------------------------------------------------------
21,000 Castorama Dubois (Retail-Stores) 3,405,452
- ------------------------------------------------------------------------------------------
19,000 Christian Dior S.A. (Consumer Non-Durables) 1,864,993
- ------------------------------------------------------------------------------------------
25,880 Docks de France, S.A. (Retail-Food & Drug) 3,937,490
- ------------------------------------------------------------------------------------------
26,400 ECCO Travail Temporaire (Business Services) 4,092,186
- ------------------------------------------------------------------------------------------
24,940 Essilor International-Compagnie Generale d'Optique
(Medical Instruments/Products) 4,615,591
- ------------------------------------------------------------------------------------------
1,100,000 Euro Disneyland SCA(a) (Leisure & Recreation) 3,700,333
- ------------------------------------------------------------------------------------------
28,000 Legrand (Electronic Components/Miscellaneous) 4,683,749
- ------------------------------------------------------------------------------------------
18,700 LVMH Moet Hennessy Louis Vuitton (Beverages-Alcoholic) 3,720,803
- ------------------------------------------------------------------------------------------
34,800 Pinault-Printemps, S.A. (Retail-Food & Drug) 7,543,404
- ------------------------------------------------------------------------------------------
20,800 Promodes S.A. (Retail-Food & Drug) 5,065,909
- ------------------------------------------------------------------------------------------
10,000 Rexel S.A. (Transportation-Miscellaneous) 1,615,509
- ------------------------------------------------------------------------------------------
37,600 Roussel-Uclaf (Medical-Drugs) 6,166,581
- ------------------------------------------------------------------------------------------
80,000 SGS-Thomson Microelectronics N.V.(a) (Electronic
Components/Miscellaneous) 3,620,000
- ------------------------------------------------------------------------------------------
18,920 Sidel S.A. (Machinery-Miscellaneous) 6,569,633
- ------------------------------------------------------------------------------------------
69,115,712
- ------------------------------------------------------------------------------------------
GERMANY-2.34%
6,000 Altana A.G. (Medical-Drugs) 3,488,917
- ------------------------------------------------------------------------------------------
6,300 Gehe A.G. (Medical-Drugs) 3,092,711
- ------------------------------------------------------------------------------------------
10,900 Mannesmann A.G. (Machinery-Miscellaneous) 3,587,646
- ------------------------------------------------------------------------------------------
155,000 VEBA A.G. (Electric Services) 6,363,633
- ------------------------------------------------------------------------------------------
16,532,907
- ------------------------------------------------------------------------------------------
HONG KONG-5.55%
860,000 Cheung Kong Holdings Ltd. (Real Estate) 4,849,645
- ------------------------------------------------------------------------------------------
1,106,000 Consolidated Electric Power of Asia (Electric Services) 2,238,693
- ------------------------------------------------------------------------------------------
5,669,908 First Pacific Co. (Conglomerates) 6,526,661
- ------------------------------------------------------------------------------------------
498,000 HSBC Holdings PLC (Banking) 7,246,143
- ------------------------------------------------------------------------------------------
1,398,000 Hutchison Whampoa Ltd. (Conglomerates) 7,702,679
- ------------------------------------------------------------------------------------------
1,024,000 New World Infrastructure(a) (Conglomerates) 1,801,208
- ------------------------------------------------------------------------------------------
6,000,000 Shanghai Petrochemical Co., Ltd. (Chemicals) 1,726,658
- ------------------------------------------------------------------------------------------
651,100 Sun Hung Kai Properties Ltd. (Real Estate) 5,200,076
- ------------------------------------------------------------------------------------------
1,000,000 Vatronix International (Electronic Components/Miscellaneous) 1,907,730
- ------------------------------------------------------------------------------------------
39,199,493
- ------------------------------------------------------------------------------------------
INDIA-0.21%
95,000 Reliance Industries GDS(a) (Conglomerates) 1,482,000
- ------------------------------------------------------------------------------------------
INDONESIA-2.36%
1,741,000 PT Astra International (Automobile/Trucks Parts & Tires) 3,488,133
- ------------------------------------------------------------------------------------------
1,246,000 PT Bank International Indonesia (Banking) 4,361,823
- ------------------------------------------------------------------------------------------
957,500 PT Hanjaya Mandala Sampoerna (Tobacco) 8,854,029
- ------------------------------------------------------------------------------------------
16,703,985
- ------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 11
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
IRELAND-0.45%
79,400 Elan Corp. PLC-ADR(a) (Medical-Drugs) $3,185,925
- ------------------------------------------------------------------------------------------
ISRAEL-0.51%
91,000 Teva Pharmaceutical Industries Ltd.-ADR (Medical-Drugs) 3,571,750
- ------------------------------------------------------------------------------------------
ITALY-0.93%
2,283,000 Telecom Italia Mobile S.p.A.(a) (Telecommunications) 3,831,258
- ------------------------------------------------------------------------------------------
1,827,000 Telecom Italia S.p.A. (Telecommunications) 2,773,739
- ------------------------------------------------------------------------------------------
6,604,997
- ------------------------------------------------------------------------------------------
JAPAN-19.17%
100,000 Advantest Corp. (Electronic Components/Miscellaneous) 5,669,876
- ------------------------------------------------------------------------------------------
168,299 Alpine Electronics (Electronic Components/Miscellaneous) 2,336,232
- ------------------------------------------------------------------------------------------
32,700 Autobacs Seven (Retail-Stores) 3,084,755
- ------------------------------------------------------------------------------------------
270,000 Bridgestone Corp. (Automobile/Trucks Parts & Tires) 3,747,984
- ------------------------------------------------------------------------------------------
276,000 Canon, Inc. (Office Products) 4,721,638
- ------------------------------------------------------------------------------------------
235,000 Exedy Corp. (Automobile/Trucks Parts & Tires) 3,652,671
- ------------------------------------------------------------------------------------------
100,800 Fanuc Ltd. (Machine Tools) 4,365,257
- ------------------------------------------------------------------------------------------
445,000 Fujitsu Ltd. (Computer Mainframes) 5,307,200
- ------------------------------------------------------------------------------------------
547,000 Hitachi Ltd. (Electronic Components/Miscellaneous) 5,614,644
- ------------------------------------------------------------------------------------------
195,000 Hoya Corp. (Medical Instruments/Products) 5,718,755
- ------------------------------------------------------------------------------------------
225,000 Kajima Corp. (Engineering & Construction) 2,076,348
- ------------------------------------------------------------------------------------------
200,000 Koa Corp. (Electronic Components/Miscellaneous) 3,245,515
- ------------------------------------------------------------------------------------------
77,000 Kyocera Corp. (Electronic Components/Miscellaneous) 6,307,835
- ------------------------------------------------------------------------------------------
152,000 Mitsumi Electric Co. Ltd. (Electronic 3,670,170
Components/Miscellaneous)
- ------------------------------------------------------------------------------------------
492,000 NEC Corp. (Semiconductors) 6,492,986
- ------------------------------------------------------------------------------------------
26,400 Nemic-Lambda K.K. (Electronic Components/Miscellaneous) 1,269,739
- ------------------------------------------------------------------------------------------
46,000 Nichiei Co., Ltd. (Business Services) 2,855,467
- ------------------------------------------------------------------------------------------
465,000 Nikon Corp. (Conglomerate) 6,636,688
- ------------------------------------------------------------------------------------------
17,100 Nippon Television Network (Advertising/Broadcasting) 4,078,792
- ------------------------------------------------------------------------------------------
64,000 Nissen (Retail Stores) 1,845,643
- ------------------------------------------------------------------------------------------
150 NTT Data Communications Systems Co. 3,753,849
- ------------------------------------------------------------------------------------------
224,000 Omron Corp. (Electronic Components/Miscellaneous) 5,233,491
- ------------------------------------------------------------------------------------------
58,000 Plenus Co., Ltd. (Restaurants) 2,738,550
- ------------------------------------------------------------------------------------------
582,000 Ricoh Co., Ltd. (Office Products) 6,258,370
- ------------------------------------------------------------------------------------------
133,000 Rohm Co., Ltd. (Electronic Components/Miscellaneous) 8,074,002
- ------------------------------------------------------------------------------------------
80,100 SMC (Machinery-Miscellaneous) 5,629,982
- ------------------------------------------------------------------------------------------
176,000 Tokyo Electron Ltd. (Electronic Components/Miscellaneous) 7,639,083
- ------------------------------------------------------------------------------------------
915,000 Toshiba Corp. (Electronic Components/Miscellaneous) 6,628,037
- ------------------------------------------------------------------------------------------
427,000 Yamaha Corp. (Leisure & Recreation) 6,803,949
- ------------------------------------------------------------------------------------------
135,457,508
- ------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 12
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
MALAYSIA-2.62%
1,300,000 Bandar Raya Developments Berhad (Real Estate) $1,944,116
- ------------------------------------------------------------------------------------------
247,000 Edaran Otomobil Nasional Berhad (Retail-Stores) 1,944,116
- ------------------------------------------------------------------------------------------
1,508,000 Land & General Berhad (Paper & Forest Products) 3,501,456
- ------------------------------------------------------------------------------------------
679,000 Malayan Banking Berhad (Banking) 5,477,961
- ------------------------------------------------------------------------------------------
906,000 United Engineers (Building Materials) 5,633,530
- ------------------------------------------------------------------------------------------
18,501,179
- ------------------------------------------------------------------------------------------
MEXICO-0.80%
431,000 Kimberly-Clark de Mexico S.A. (Retail-Stores) 5,625,684
- ------------------------------------------------------------------------------------------
NETHERLANDS-4.76%
540,000 Elsevier N.V. (Publishing) 6,981,873
- ------------------------------------------------------------------------------------------
32,050 Heineken N.V. (Beverages-Alcoholic) 5,687,666
- ------------------------------------------------------------------------------------------
142,000 Koninklijke Ahold N.V. (Retail-Food & Drug) 5,381,924
- ------------------------------------------------------------------------------------------
48,100 Uitgevuer Bezit N.V. (Publishing) 6,743,390
- ------------------------------------------------------------------------------------------
124,000 Vendex International N.V. (Retail-Stores) 3,575,865
- ------------------------------------------------------------------------------------------
58,000 Wolters Kluwer N.V. (Publishing) 5,278,743
- ------------------------------------------------------------------------------------------
33,649,461
- ------------------------------------------------------------------------------------------
NEW ZEALAND-0.74%
1,251,400 Telecom Corp. of New Zealand Ltd. (Telephone) 5,195,924
- ------------------------------------------------------------------------------------------
NORWAY-1.13%
86,000 Norsk Hydro A.S. (Chemicals) 3,425,084
- ------------------------------------------------------------------------------------------
14,500 Orkla A.S. (Conglomerates) 749,799
- ------------------------------------------------------------------------------------------
750,000 UNI Storebrand A.S.(a) (Insurance-Life & Health) 3,781,917
- ------------------------------------------------------------------------------------------
7,956,800
- ------------------------------------------------------------------------------------------
PHILIPPINES-0.23%
11,303,000 Metro Pacific Corp. (Conglomerates) 1,629,614
- ------------------------------------------------------------------------------------------
PORTUGAL-0.49%
182,000 Portugal Telecom S.A.(a) (Telecommunications) 3,446,459
- ------------------------------------------------------------------------------------------
SINGAPORE-1.55%
528,000 Cerebos Pacific Ltd. (Food/Processing) 3,288,323
- ------------------------------------------------------------------------------------------
845,000 City Developments Ltd. (Real Estate) 5,232,661
- ------------------------------------------------------------------------------------------
279,200 United OverSeas Bank Ltd. (Banking) 2,450,163
- ------------------------------------------------------------------------------------------
10,971,147
- ------------------------------------------------------------------------------------------
SPAIN-3.09%
16,200 Acerinox S.A. (Metals-Miscellaneous) 1,706,870
- ------------------------------------------------------------------------------------------
66,000 Corporacion Mapfre Compania Internacional De Reaseguros S.A.
(Insurance-Broker) 3,379,624
- ------------------------------------------------------------------------------------------
105,500 Empresa Nacional de Electricidad, S.A. (Telephone) 5,246,692
- ------------------------------------------------------------------------------------------
57,200 Gas Natural SDG-E.S.A. (Natural Gas Pipeline) 7,845,053
- ------------------------------------------------------------------------------------------
109,800 Tabacalera S.A. (Tobacco) 3,674,843
- ------------------------------------------------------------------------------------------
21,853,082
- ------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 13
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
SWEDEN-3.52%
207,000 Astra AB (Medical-Drugs) $7,481,252
- ------------------------------------------------------------------------------------------
61,000 Autoliv AB (Automobile/Trucks Parts & Tires) 3,499,834
- ------------------------------------------------------------------------------------------
218,000 Sandvik AB (Metals-Miscellaneous) 4,103,545
- ------------------------------------------------------------------------------------------
160,000 Skandia Forsakrings AB (Insurance--Multi-Line Property) 4,059,874
- ------------------------------------------------------------------------------------------
269,280 Telefonaktiebolaget L.M. Ericsson-ADR (Telecommunications) 5,751,653
- ------------------------------------------------------------------------------------------
24,896,158
- ------------------------------------------------------------------------------------------
SWITZERLAND-3.33%
6,200 BBC Brown Boveri Ltd. (Engineering & Construction) 7,192,284
- ------------------------------------------------------------------------------------------
5,640 Ciba-Geigy Ltd. (Medical-Drugs) 4,883,396
- ------------------------------------------------------------------------------------------
1,040 Roche Holdings A.G. (Medical-Drugs) 7,557,474
- ------------------------------------------------------------------------------------------
4,700 Sandoz AG (Chemicals) 3,879,063
- ------------------------------------------------------------------------------------------
23,512,217
- ------------------------------------------------------------------------------------------
THAILAND-2.18%
41,800 Bank of Ayudhya Ltd. (Banking) 240,850
- ------------------------------------------------------------------------------------------
1,502,920 Krung Thai Bank PLC (Banking) 5,972,263
- ------------------------------------------------------------------------------------------
246,300 Land & House Co. Ltd. (Home Building) 3,973,686
- ------------------------------------------------------------------------------------------
118,600 Thai Farmers Bank (Banking) 980,282
- ------------------------------------------------------------------------------------------
338,200 United Communication Industry (Telecommunications) 4,273,698
- ------------------------------------------------------------------------------------------
15,440,779
- ------------------------------------------------------------------------------------------
UNITED KINGDOM-11.99%
700,000 Argos PLC (Retail-Stores) 5,655,336
- ------------------------------------------------------------------------------------------
1,100,000 Asda Group PLC (Retail-Food & Drug) 1,782,609
- ------------------------------------------------------------------------------------------
330,000 BOC Group PLC (Chemicals) 4,533,913
- ------------------------------------------------------------------------------------------
517,000 British Petroleum PLC (Oil & Gas-Exploration & Production) 3,800,870
- ------------------------------------------------------------------------------------------
3,140,000 Burton Group PLC (Retail-Stores) 5,001,660
- ------------------------------------------------------------------------------------------
510,000 Compass Group PLC (Food/Processing) 3,467,194
- ------------------------------------------------------------------------------------------
750,000 Cookson Group PLC (Conglomerates) 3,474,308
- ------------------------------------------------------------------------------------------
726,000 Dixons Group PLC (Retail-Stores) 4,396,174
- ------------------------------------------------------------------------------------------
360,000 Farnell Electronics PLC (Electronic Components/Miscellaneous) 3,807,747
- ------------------------------------------------------------------------------------------
680,000 Granada Group PLC (Leisure & Recreation) 7,278,419
- ------------------------------------------------------------------------------------------
1,490,000 Medeva PLC (Medical-Drugs) 6,419,368
- ------------------------------------------------------------------------------------------
402,181 Provident Financial PLC (Finance-Consumer Credit) 4,889,758
- ------------------------------------------------------------------------------------------
649,000 Rentokil Group PLC (Business Services) 3,232,174
- ------------------------------------------------------------------------------------------
385,000 Smith (David S.) Holdings PLC (Paper & Forest Products) 3,506,087
- ------------------------------------------------------------------------------------------
645,000 Standard Chartered PLC (Banking) 5,292,569
- ------------------------------------------------------------------------------------------
745,000 Storehouse PLC (Retail-Stores) 3,533,597
- ------------------------------------------------------------------------------------------
315,000 Thorn EMI PLC (Leisure & Recreation) 7,335,889
- ------------------------------------------------------------------------------------------
925,000 Vickers PLC (Automobile Manufacturers) 3,670,751
- ------------------------------------------------------------------------------------------
1,500,000 WPP Group (Advertising/Broadcasting) 3,628,459
- ------------------------------------------------------------------------------------------
84,706,882
- ------------------------------------------------------------------------------------------
Total Stocks & Other Equity Interests 627,945,056
- ------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 14
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
RIGHTS & WARRANTS-0.15%
MALAYSIA-0.15%
270,000 YTL Corp. Berhad, expiring 1997 (Engineering & Construction) $1,051,948
- ------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
CONVERTIBLE BONDS-0.71%
$ 4,780,000 MBL International Finance Bermuda, Convertible Bonds, 3.00%,
11/30/02 4,983,150
- ------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT-2.01%(b)
14,250,684 Daiwa Securities America, Inc., 5.90%, 11/01/95(c) 14,250,684
- ------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 91.72% 648,230,838
- ------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES -- 8.28% 58,496,631
- ------------------------------------------------------------------------------------------
NET ASSETS -- 100.00% $706,727,469
==========================================================================================
</TABLE>
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102 percent of the sales price
of the repurchase agreement. The investments in some repurchase agreements
are through participation in joint accounts with other mutual funds
managed by the investment advisor.
(c) Joint repurchase agreement entered into 10/31/95 with a maturing value of
$401,494,641. Collateralized by $353,853,000 U.S. Treasury obligations,
8.375% due 08/15/08.
See Notes to Financial Statements.
12
<PAGE> 15
Financials
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $552,096,213) $648,230,838
- ----------------------------------------------------------------------------------------
Foreign currencies, at market value (cost $45,512,454) 45,335,748
- ----------------------------------------------------------------------------------------
Receivables for:
Investments sold 18,923,357
- ----------------------------------------------------------------------------------------
Capital stock sold 3,800,742
- ----------------------------------------------------------------------------------------
Dividends and interest 1,664,631
- ----------------------------------------------------------------------------------------
Foreign currency 1,705,929
- ----------------------------------------------------------------------------------------
Investment for deferred compensation plan 11,193
- ----------------------------------------------------------------------------------------
Other assets 65,581
- ----------------------------------------------------------------------------------------
Total assets 719,738,019
- ----------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 8,959,475
- ----------------------------------------------------------------------------------------
Capital stock reacquired 919,749
- ----------------------------------------------------------------------------------------
Foreign currency 1,703,525
- ----------------------------------------------------------------------------------------
Deferred compensation 11,193
- ----------------------------------------------------------------------------------------
Accrued advisory fees 557,489
- ----------------------------------------------------------------------------------------
Accrued administrative services fees 2,500
- ----------------------------------------------------------------------------------------
Accrued directors' fees 812
- ----------------------------------------------------------------------------------------
Accrued distribution fees 329,656
- ----------------------------------------------------------------------------------------
Accrued transfer agent fees 137,000
- ----------------------------------------------------------------------------------------
Accrued operating expenses 389,151
- ----------------------------------------------------------------------------------------
Total liabilities 13,010,550
- ----------------------------------------------------------------------------------------
Net assets applicable to shares outstanding $706,727,469
========================================================================================
NET ASSETS:
Class A $654,763,825
========================================================================================
Class B $ 51,963,644
========================================================================================
CAPITAL STOCK, $.001 PAR VALUE PER SHARE:
Class A:
Authorized 200,000,000
- ----------------------------------------------------------------------------------------
Outstanding 47,952,875
========================================================================================
Class B:
Authorized 200,000,000
- ----------------------------------------------------------------------------------------
Outstanding 3,836,621
========================================================================================
Class A:
Net asset value and redemption price per share $13.65
========================================================================================
Offering price per share:
(Net asset value of $13.65 divided by 94.50%) $14.44
========================================================================================
Class B:
Net asset value and offering price per share $13.54
========================================================================================
</TABLE>
See Notes to Financial Statements.
13
<PAGE> 16
Financials
STATEMENT OF OPERATIONS
For the year ended October 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $1,433,521 foreign withholding tax) $10,074,533
- ----------------------------------------------------------------------------------------
Interest 1,527,686
- ----------------------------------------------------------------------------------------
Total investment income 11,602,219
- ----------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 6,225,765
- ----------------------------------------------------------------------------------------
Administrative services fees 29,858
- ----------------------------------------------------------------------------------------
Directors' fees 11,163
- ----------------------------------------------------------------------------------------
Distribution fees-Class A 1,903,555
- ----------------------------------------------------------------------------------------
Distribution fees-Class B 208,253
- ----------------------------------------------------------------------------------------
Custodian fees 711,930
- ----------------------------------------------------------------------------------------
Transfer agent fees-Class A 1,205,385
- ----------------------------------------------------------------------------------------
Transfer agent fees-Class B 80,189
- ----------------------------------------------------------------------------------------
Other 834,857
- ----------------------------------------------------------------------------------------
Total expenses 11,210,955
- ----------------------------------------------------------------------------------------
Less advisory fees waived (77,672)
- ----------------------------------------------------------------------------------------
Net expenses 11,133,283
- ----------------------------------------------------------------------------------------
Net investment income 468,936
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES AND FOREIGN CURRENCIES:
Net realized gain (loss) on sales of:
Investment securities 19,512,242
- ----------------------------------------------------------------------------------------
Foreign currencies (210,424)
- ----------------------------------------------------------------------------------------
19,301,818
- ----------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of:
Investment securities 9,349,878
- ----------------------------------------------------------------------------------------
Foreign currencies (537,122)
- ----------------------------------------------------------------------------------------
8,812,756
- ----------------------------------------------------------------------------------------
Net gain on investment securities and foreign currencies 28,114,574
- ----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $28,583,510
========================================================================================
</TABLE>
See Notes to Financial Statements.
14
<PAGE> 17
Financials
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
OPERATIONS:
Net investment income $ 468,936 $ 1,270,473
- --------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities and
foreign currencies 19,301,818 27,935,713
- --------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 8,812,756 23,766,336
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 28,583,510 52,972,522
- --------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income:
Class A (2,166,421) (381,603)
- --------------------------------------------------------------------------------------------
Class B (19,050) --
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net realized capital gains:
Class A (23,092,160) --
- --------------------------------------------------------------------------------------------
Class B (287,957) --
- --------------------------------------------------------------------------------------------
Share transactions-net:
Class A (54,671,896) 283,363,359
- --------------------------------------------------------------------------------------------
Class B 45,389,211 4,755,554
- --------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (6,264,763) 340,709,832
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 712,992,232 372,282,400
- --------------------------------------------------------------------------------------------
End of period $706,727,469 $712,992,232
============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $590,886,286 $599,529,243
- --------------------------------------------------------------------------------------------
Undistributed net investment income 237,171 1,368,300
- --------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investment
securities and foreign currencies 19,504,994 24,808,427
- --------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 96,099,018 87,286,262
- --------------------------------------------------------------------------------------------
$706,727,469 $712,992,232
============================================================================================
</TABLE>
See Notes to Financial Statements.
15
<PAGE> 18
Financials
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM International Equity Fund (the "Fund") is a series portfolio of AIM
International Funds, Inc. (the "Company"). The Company is a Maryland corporation
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company consisting of four separate
series portfolios: AIM International Equity Fund, AIM Global Aggressive Growth
Fund, AIM Global Growth Fund and AIM Global Income Fund. The Fund currently
offers two different classes of shares: the Class A shares and the Class B
shares. Class A shares are sold with a front-end sales charge. Class B shares
are sold with a contingent deferred sales charge. Matters affecting each
portfolio or class are voted on exclusively by the shareholders of such
portfolio or class. The assets, liabilities and operations of each portfolio are
accounted for separately. Information presented in these financial statements
pertains only to the Fund. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
A. Security Valuations -- Investment securities are valued at the last sales
price on the exchange on which the securities are traded or, lacking any
sales, at the mean between the closing bid and asked prices on the day of
valuation. Securities traded in the over-the-counter market are valued at the
mean between the closing bid and asked prices on valuation date or absent a
last sales price, at the mean of the closing bid and asked prices. If a mean
is not available, as is the case in some foreign markets, the closing bid
will be used absent a last sales price. Securities for which market
quotations are not readily available are valued at fair value as determined
in good faith by or under the supervision of the Company's officers in a
manner specifically authorized by the Board of Directors. Short-term
obligations having 60 days or less to maturity are valued on the basis of
amortized cost which approximates market value. Generally, trading in foreign
securities is substantially completed each day at various times prior to the
close of the New York Stock Exchange. The values of such securities used in
computing the net asset value of the Fund's shares are determined as of such
times. Foreign currency exchange rates are also generally determined prior to
the close of the New York Stock Exchange. Occasionally, events affecting the
values of such securities and such exchange rates may occur between the times
at which they are determined and the close of the New York Stock Exchange
which will not be reflected in the computation of the Fund's net asset value.
If events materially affecting the value of such securities occur during such
period, then these securities will be valued at their fair value as
determined in good faith by or under the supervision of the Board of
Directors.
B. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions.
C. Foreign Currency Contracts -- A forward currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a forward contract to attempt to minimize the
risk to the Fund from adverse changes in the relationship between currencies.
The Fund may also enter into a forward contract for the purchase or sale of a
security denominated in a foreign currency in order to "lock in" the U.S.
dollar price of that security. The Fund could be exposed to risk if
counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
D. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses are computed on the basis of specific identification of the securities
sold. Interest income is recorded as earned from settlement date and is
recorded on an accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. On October 31, 1995,
undistributed net investment income was increased by $585,406, paid-in
capital increased by $639,728 and undistributed net realized gains reduced by
$1,225,134 in order to comply with the requirements of the American Institute
of Certified Public Accountants Statement of Position 93-2. Net assets of the
Fund were unaffected by the reclassifications discussed above.
E. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
16
<PAGE> 19
Financials
F. Organizational Costs -- Organizational costs of $23,098 were borne by the
Fund. Such costs are amortized to operations over sixty months. Prior to full
amortization of the organizational costs, the proceeds of any redemption of
the shares related to the Fund's initial formation (10,000 Class A shares)
will be reduced by a pro rata share of such unamortized organizational
expenses. The pro rata share of organizational expenses will be calculated by
dividing the number of initial shares redeemed by the remaining number of
initial shares outstanding at the time of the redemption and multiplying the
result by the unamortized organizational expenses.
G. Expenses -- Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to both
classes, e.g. advisory fees, are allocated between them.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.95% of
the first $1 billion of the Fund's average daily net assets, plus 0.90% of the
Fund's average daily net assets in excess of $1 billion. AIM is currently
voluntarily waiving a portion of its advisory fees paid by the Fund to AIM to
the extent necessary to reduce the fees paid by the Fund at net asset levels
higher than those currently incorporated in the present advisory fee schedule.
AIM will receive a fee calculated at the annual rate of 0.95% of the first $500
million of the Fund's average daily net assets, plus 0.90% of the Fund's average
daily net assets in excess of $500 million to and including $1 billion, plus
0.85% of the Fund's average daily net assets in excess of $1 billion. The waiver
of fees is entirely voluntary and the Board of Directors of the Company would be
advised of any decision by AIM to discontinue the waiver. During the year ended
October 31, 1995, AIM waived fees of $77,672. Under the terms of the advisory
agreement, AIM will, if necessary, reduce its fee or make payments to the Fund
to the extent necessary to satisfy any expense limitations imposed by the
securities laws or regulations thereunder of any state in which the Fund's
shares are qualified for sale.
The Fund, pursuant to a master administrative services agreement with AIM,
has agreed to reimburse AIM for certain administrative costs incurred in
providing accounting services to the Fund. During the year ended October 31,
1995, AIM was reimbursed $29,858 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") for certain costs incurred in providing
transfer agency services to the Fund. During the year ended October 31, 1995,
the Fund paid AFS $757,067 for such services.
The Company has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A shares and the Class B shares of the Fund. The Company has adopted Plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares (the "Class A Plan") and with respect to the Fund's Class B shares (the
"Class B Plan") (collectively the "Plans"). The Fund, pursuant to the Class A
Plan, pays AIM Distributors at an annual rate of 0.30% of the average daily net
assets attributable to the Class A shares. The Class A Plan is designed to
compensate AIM Distributors for certain promotional and other sales related
costs and to implement a program which provides periodic payments to selected
dealers and financial institutions, in amounts of up to 0.25% of the average
daily net assets of the Class A shares attributable to the customers of such
dealers or financial institutions, who furnish continuing personal shareholder
services to their customers who purchase and own Class A shares of the Fund. The
Fund, pursuant to the Class B Plan, pays AIM Distributors at an annual rate of
1.00% of the average daily net assets attributable to the Class B shares. Of
this amount, the Fund may pay a service fee of 0.25% of the average daily net
assets of the Class B shares to selected dealers and financial institutions who
furnish continuing personal shareholder services to their customers who purchase
and own Class B shares of the Fund. Any amounts not paid as a service fee under
such Plans would constitute an asset-based sales charge. The Plans also impose a
cap on the total sales charges, including asset-based sales charges, that may be
paid by the respective classes. AIM Distributors may, from time to time, assign,
transfer or pledge to one or more designees, its rights to all or a designated
portion of (a) compensation received by AIM Distributors from the Fund pursuant
to the Class B Plan (but not AIM Distributors duties and obligations pursuant to
the Class B Plan) and (b) any contingent deferred sales charges received by AIM
Distributors related to the Class B shares. During the year ended October 31,
1995, the Class A shares and the Class B shares paid AIM Distributors $1,903,555
and $208,253, respectively, as compensation under the Plans.
17
<PAGE> 20
Financials
AIM Distributors received commissions of $565,101 from sales of the Class A
shares of the Fund during the year ended October 31, 1995. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 1995,
AIM Distributors received commissions of $106,168 in contingent deferred sales
charges imposed on redemptions of Fund shares. Certain officers and directors of
the Company are officers and directors of AIM, AFS and AIM Distributors.
During the year ended October 31, 1995, the Fund incurred legal fees of
$6,527 for services rendered by the law firm of Kramer, Levin, Naftalis,
Nessen, Kamin & Frankel as counsel to the Company's directors. A member of that
firm is a director of the Company.
NOTE 3-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if so
elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4-BANK BORROWINGS
The Fund has a $10,800,000 committed line of credit with a financial institution
syndicate with Chemical Bank of New York as the administrative agent. Interest
on borrowings under the line of credit is payable on maturity or prepayment
date. During the period July 20, 1995 (effective date of Credit Agreement)
through October 31, 1995, the Fund did not borrow under the line of credit
agreement. The Fund is charged a commitment fee, payable quarterly, at the rate
of 1/10 of 1% per annum on the unused balance of the Fund's commitment.
NOTE 5-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 1995 was
$409,967,333 and $474,743,130, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of October 31, 1995 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $110,270,738
- -------------------------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (14,992,393)
- -------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $ 95,278,345
===================================================================================================================
Cost of investments for tax purposes is $522,952,493.
</TABLE>
NOTE 6-CAPITAL STOCK
Changes in the Fund's capital stock outstanding during the years ended October
31, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
------------------------------ ------------------------------
Shares Amount Shares Amount
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold:
Class A 19,941,452 $ 256,345,253 32,646,831 $ 422,295,820
- ----------------------------------------------------------- ----------- ------------- ----------- -------------
Class B* 3,764,258 49,112,660 359,146 4,768,687
- ----------------------------------------------------------- ----------- ------------- ----------- -------------
Issued as reinvestment of dividends:
Class A 1,330,022 15,787,364 17,420 217,930
- ----------------------------------------------------------- ----------- ------------- ----------- -------------
Class B* 24,816 294,807 -- --
- ----------------------------------------------------------- ----------- ------------- ----------- -------------
Reacquired:
Class A (25,762,596) (326,804,513) (10,785,235) (139,150,391)
- ----------------------------------------------------------- ----------- ------------- ----------- -------------
Class B* (310,613) (4,018,256) (986) (13,133)
- ----------------------------------------------------------- ----------- ------------- ----------- -------------
(1,012,661) $ (9,282,685) 22,237,176 $ 288,118,913
=========================================================== =========== ============= =========== =============
</TABLE>
* Sales of Class B shares commenced on September 15, 1994.
18
<PAGE> 21
Financials
NOTE 7-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a Class A share
outstanding during each of the years in the three-year period ended October 31,
1995 and the period November 5, 1991 (date operations commenced) through October
31, 1992 and for a Class B share outstanding during the year ended October 31,
1995 and the period September 15, 1994 (date sales commenced) through October
31, 1994.
<TABLE>
<CAPTION>
1995 1994 1993 1992
------- ------- ------- -------
<S> <C> <C> <C> <C>
CLASS A:
Net asset value, beginning of period $ 13.50 $ 12.18 $ 8.88 $ 8.61(a)
- ------------------------------------------------------------ ------- ------- ------- -------
Income from investment operations:
Net investment income 0.01 0.02 0.02 0.03
- ------------------------------------------------------------ ------- ------- ------- -------
Net gains on securities (both realized and unrealized) 0.62 1.31 3.29 0.26
- ------------------------------------------------------------ ------- ------- ------- -------
Total from investment operations 0.63 1.33 3.31 0.29
- ------------------------------------------------------------ ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.04) (0.01) (0.01) (0.02)
- ------------------------------------------------------------ ------- ------- ------- -------
Distributions from capital gains (0.44) -- -- --
- ------------------------------------------------------------ ------- ------- ------- -------
Total distributions (0.48) (0.01) (0.01) (0.02)
- ------------------------------------------------------------ ------- ------- ------- -------
Net asset value, end of period $ 13.65 $ 13.50 $ 12.18 $ 8.88
============================================================ ======= ======= ======= =======
Total return(b) 5.24% 10.94% 37.36% 3.36%
============================================================ ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $654,764 $708,159 $372,282 $122,663
============================================================ ======= ======= ======= =======
Ratio of expenses to average net assets 1.67%(c)(d) 1.64% 1.78% 1.80%(e)
============================================================ ======= ======= ======= =======
Ratio of net investment income to average net assets 0.10%(c)(d) 0.22% 0.28% 0.30%(e)
============================================================ ======= ======= ======= =======
Portfolio turnover rate 68% 67% 62% 41%
============================================================ ======= ======= ======= =======
</TABLE>
(a) Net asset value at the beginning of the period has been restated to reflect
a 1.1619 for 1 stock split, effected in the form of a dividend, on May 21,
1992.
(b) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.
(c) Ratios are based on average net assets of $634,518,409.
(d) After waiver of advisory fees. Ratios of expenses and net investment income
prior to waiver of advisory fees are 1.68% and 0.09%, respectively.
(e) Annualized. After waiver of advisory fees.
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
CLASS B:
Net asset value, beginning of period $ 13.49 $ 13.42
- ------------------------------------------------------------------------------------- -------- --------
Income from investment operations:
Net investment income (loss) (0.09) (0.01)
- ------------------------------------------------------------------------------------- -------- --------
Net gains on securities (both realized and unrealized) 0.61 0.08
- ------------------------------------------------------------------------------------- -------- --------
Total from investment operations 0.52 0.07
- ------------------------------------------------------------------------------------- -------- --------
Less distributions:
Dividends from net investment income (0.03) --
- ------------------------------------------------------------------------------------- -------- --------
Distributions from capital gains (0.44) --
- ------------------------------------------------------------------------------------- -------- --------
Total distributions (0.47) --
- ------------------------------------------------------------------------------------- -------- --------
Net asset value, end of period $ 13.54 $ 13.49
===================================================================================== ======== ========
Total return(a) 4.35% 0.52%
===================================================================================== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 51,964 $ 4,833
===================================================================================== ======== ========
Ratio of expenses to average net assets 2.55%(b)(c) 2.53%(d)
===================================================================================== ======== ========
Ratio of net investment income (loss) to average net assets (0.78)%(b)(c) (0.67)%(d)
===================================================================================== ======== ========
Portfolio turnover rate 68% 67%
===================================================================================== ======== ========
</TABLE>
(a) Does not deduct contingent deferred sales charges and for periods less than
one year, total returns are not annualized.
(b) Ratios are based on average net assets of $20,825,255.
(c) After waiver of advisory fees. Ratios of expenses and net investment income
(loss) prior to waiver of advisory fees are 2.56% and (0.79)%,
respectively.
(d) Annualized.
19
<PAGE> 22
Financials
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
AIM International Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of AIM
International Equity Fund (a portfolio of AIM International Funds, Inc.),
including the schedule of investments, as of October 31, 1995, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the years in the two-year period then ended and the financial
highlights for each of the years in the three-year period then ended and the
period November 5, 1991 (date operations commenced) through October 31, 1992.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of AIM
International Equity Fund as of October 31, 1995, the results of its operations
for the year then ended, the changes in its net assets for each of the years in
the two-year period then ended, and the financial highlights for each of the
years in the three-year period then ended and the period November 5, 1991 (date
operations commenced) through October 31, 1992, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
December 8, 1995
20
<PAGE> 23
Directors & Officers
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman and Chairman Suite 1919
Chief Executive Officer Houston, TX 77046
A I M Management Group Inc. Robert H. Graham
President INVESTMENT ADVISOR
Bruce L. Crockett
Director, President, and John J. Arthur A I M Advisors, Inc.
Chief Executive Officer Senior Vice President 11 Greenway Plaza
COMSAT Corporation and Treasurer Suite 1919
Houston, TX 77046
Owen Daly II Gary T. Crum
Director Senior Vice President TRANSFER AGENT
Cortland Trust Inc.
Carol F. Relihan A I M Fund Services, Inc.
Carl Frischling Vice President and 11 Greenway Plaza
Partner Secretary Suite 1919
Kramer, Levin, Naftalis, Houston, TX 77046
Nessen, Kamin & Frankel Dana R. Sutton
Vice President CUSTODIAN
Robert H. Graham and Assistant Treasurer
President and Chief State Street Bank & Trust Company
Operating Officer Robert G. Alley 225 Franklin Street
A I M Management Group Inc. Vice President Boston, MA 02110
John F. Kroeger Melville B. Cox COUNSEL TO THE FUND
Formerly, Consultant Vice President
Wendell & Stockel Ballard Spahr Andrews & Ingersoll
Associates, Inc. Jonathan C. Schoolar 1735 Market Street
Vice President Philadelphia, PA 19103
Lewis F. Pennock
Attorney P. Michelle Grace COUNSEL TO THE DIRECTORS
Assistant Secretary
Ian W. Robinson Kramer, Levin, Naftalis, Nessen,
Consultant; Former Executive David L. Kite Kamin & Frankel
Vice President and Chief Assistant Secretary 919 Third Avenue
Financial Officer New York, NY 10022
Bell Atlantic Management Nancy L. Martin
Services, Inc. Assistant Secretary DISTRIBUTOR
Louis S. Sklar Ofelia M. Mayo A I M Distributors, Inc.
Executive Vice President Assistant Secretary 11 Greenway Plaza
Hines Interests Suite 1919
Limited Partnership Kathleen J. Pflueger Houston, TX 77046
Assistant Secretary
AUDITORS
Samuel D. Sirko
Assistant Secretary KPMG Peat Marwick LLP
700 Louisiana
Stephen I. Winer NationsBank Bldg.
Assistant Secretary Houston, TX 77002
Mary J. Benson
Assistant Treasurer
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION
The Fund distributed long-term capital gains of $0.443 per share to
shareholders during its tax year ended October 31, 1995.
<PAGE> 24
<TABLE>
<S> <C>
[PHOTO OF AIM MANAGEMENT THE AIM FAMILY OF FUNDS(R)
GROUP OFFICE BUILDING]
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Constellation Fund
AIM Global Aggressive Growth Fund
GROWTH
AIM Global Growth Fund
AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME
AIM Balanced Fund
AIM Charter Fund
INCOME AND GROWTH
AIM Global Utilities Fund**
HIGH CURRENT INCOME
AIM High Yield Fund
CURRENT INCOME
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of CT
AIM Tax-Free Intermediate Shares
CURRENT INCOME AND HIGH DEGREE
OF SAFETY
AIM Intermediate Government Fund***
HIGH DEGREE OF SAFETY AND
CURRENT INCOME
AIM Limited Maturity Treasury Shares
STABILITY, LIQUIDITY, AND
CURRENT INCOME
AIM Money Market Fund
STABILITY, LIQUIDITY, AND
CURRENT TAX-FREE INCOME
AIM Tax-Exempt Cash Fund
* AIM Aggressive Growth Fund was closed to new
investors on July 18, 1995. ** On May 1,
1995, AIM Utilities Fund broadened its
investment strategy to permit up to 80%
of its total assets to be invested in
AIM Management Group has provided leadership foreign securities, and was renamed AIM
in the mutual fund industry since 1976 and Global Utilities Fund. *** On September 25,
currently manages approximately $40 billion 1995, AIM Government Securities Fund became
in assets for more than 2 million shareholders, AIM Intermediate Government Fund. For more
including individual investors, corporate clients, complete information about any AIM Fund(s),
and financial institutions. The AIM Family of including sales charges and expenses, ask
Funds(R) is distributed nationwide, and AIM your financial consultant or securities dealer
today ranks among the nation's top 20 mutual for a free prospectus(es). Please read the
fund companies in assets under management, prospectus(es) carefully before you invest or
according to Lipper Analytical Services, Inc. send money.
--------------
BULK RATE
[AIM LOGO APPEARS HERE] U.S. POSTAGE
PAID
A I M Distributors, Inc. HOUSTON, TX
11 Greenway Plaza, Suite 1919 Permit No.1919
Houston, TX 77046 --------------
</TABLE>
