<PAGE>
[AIM LOGO APPEARS HERE]
(GRAPHIC COLLAGE APPEARS HERE)
AIM TAX-EXEMPT CASH FUND
SEMIANNUAL REPORT
SEPTEMBER 30, 1995
<PAGE>
CHAIRMAN'S LETTER
Dear Shareholder:
Money market investors continued to enjoy attractive,
relatively stable current income, even as money fund yields
began to reflect the gradual decline in interest rates. At
the close of the six months ended September 30, 1995, AIM
[Photo of Tax-Exempt Cash Fund posted a seven-day effective
Charles T. Bauer, annualized yield of 2.99%.
Chairman of During the reporting period, the most significant event
the Board of the affecting yields on money market securities came in July when
Fund, appears the Federal Reserve Bank lowered short-term interest rates by
here] 0.25%. Lower interest rates caused current income on money
market securities to slip slightly from previous months.
However, yields on money market securities have remained
considerably higher than one year ago. Money market mutual
funds, in particular, continued to outperform returns
produced by bank money market deposit accounts.
AIM Tax-Exempt Cash Fund compared favorably to bank money market deposit
accounts, especially on a tax-adjusted yield basis. As of September 30, 1995,
the taxable equivalent on the Fund's seven-day effective annualized yield was
4.95%, when adjusted for the highest marginal federal income tax rate of 39.6%.
The Bank Rate Monitor, which tracks yields on bank money market deposit
accounts, reported the seven-day average yield on those accounts stood at 2.82%
as of September 30, 1995. Of course, bank money market deposit accounts are
guaranteed by the FDIC as to interest and principal. The taxable equivalent
yield is calculated in the same manner as the standard yield with an adjustment
for a stated, assumed tax rate.
The Fund's overall performance was facilitated by its adherence to a strict
investment discipline of purchasing only securities of superior credit quality.
Specifically, the Fund invests only in "Eligible Securities" as defined in Rule
2a-7 under the Investment Company Act of 1940. "Eligible Securities" are
securities rated in one of the two highest categories by two nationally
recognized statistical rating organizations, or if unrated, are determined by
the Fund's Board of Directors to be of comparable quality to a rated security
that meets such quality standards. As with any money market mutual fund, your
investment in the Fund is neither insured nor guaranteed by the U.S. government,
and there can be no assurance that the Fund will be able to maintain a stable
net asset value of $1.00 per share.
During the reporting period, the Fund extended its weighted average maturity
to 48.9 days. Approximately 68% of the portfolio was invested in money market
instruments maturing in seven days or less. More than 15% of the portfolio was
invested at maturities ranging from eight to 90 days, and approximately 16% of
the portfolio was invested in securities maturing in 120 to 181 days or more.
Generally, longer average maturity in a money market fund has the effect of
allowing fund managers to retain higher yields when interest rates are falling,
which last occurred in July.
While most analysts believe short-term interest rates should remain relatively
stable, seasonal increases in new issue supply of commercial paper and other
short-term securities anticipated in late December could raise money fund rates
temporarily until mid-January.
We are pleased to send you this report concerning AIM Tax-Exempt Cash Fund. As
always, we welcome your comments about this report or about this Fund. You may
reach us by calling 800-246-5463.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE>
FINANCIALS
SCHEDULE OF INVESTMENTS
September 30, 1995
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
RATING(a) PAR
S&P MOODY'S (000) VALUE
SHORT-TERM MUNICIPAL SECURITIES-98.05%
ARIZONA-2.89%
Maricopa (County of) (Samaritan Health
Services);
Arizona Industrial Development Authority
Series 1985 A RB
8.00%, 12/01/95(b) AAA Aaa $ 850 $ 855,204
- -----------------------------------------------------------------------------
COLORADO-2.70%
Colorado Housing Finance Authority (Grant
Plaza Project);
Multi-Family Mortgage Series 1991 A RB
4.525%, 11/01/09(c)(d) A-1+ -- 800 800,000
- -----------------------------------------------------------------------------
DISTRICT OF COLUMBIA-4.22%
District of Columbia (Columbia Hospital
for Women);
Variable Rate Demand Series 1988 A RB
4.60%, 07/01/20(c)(d) -- VMIG-1 1,100 1,100,000
- -----------------------------------------------------------------------------
District of Columbia (The Catholic
University of America Issue);
Series 1993 RB
4.20%, 10/01/95(b) AAA -- 150 150,000
- -----------------------------------------------------------------------------
1,250,000
- -----------------------------------------------------------------------------
FLORIDA-6.08%
Florida Housing Finance Agency (Monterey
Meadows Apartments);
Multi-Family Housing Series 1985-YY RB
4.35%, 12/01/07(c)(d) A-1 -- 800 800,000
- -----------------------------------------------------------------------------
Jacksonville (City of) (Baptist Medical
Center);
Health Facilities Authority RB
4.60%, 06/01/08(c)(d) A-1+ VMIG-1 1,000 1,000,000
- -----------------------------------------------------------------------------
1,800,000
- -----------------------------------------------------------------------------
GEORGIA-0.34%
Atlanta (City of) (Underground Atlanta
Project);
Georgia Downtown Development Authority
IDR
6.80%, 10/01/95 AA Aa 100 100,007
- -----------------------------------------------------------------------------
ILLINOIS-3.72%
Illinois Development Finance Authority
(Olin Corporation);
Variable Rate Refunding Series 1993 D RB
4.55%, 03/01/16(c)(d) A-1+ -- 600 600,000
- -----------------------------------------------------------------------------
Illinois (State of); Series 1986 GO
5.50%, 12/01/95 AA- A1 500 501,364
- -----------------------------------------------------------------------------
1,101,364
- -----------------------------------------------------------------------------
LOUISIANA-4.72%
Plaquemine Port Harbor and Terminal
Authority (TECO Energy, Inc.); Marine
Terminal Facility Series B Refunding RB
3.80%, 12/06/95(e) -- P-1 1,400 1,400,000
- -----------------------------------------------------------------------------
MARYLAND-2.36%
Maryland Industrial Development Financing
Authority (Liberty Medical Center);
Variable Rate Demand/Fixed Rate 1989
Issue Refunding RB
4.50%, 07/01/18(c)(d) -- A1 700 700,000
- -----------------------------------------------------------------------------
</TABLE>
2
<PAGE>
FINANCIALS
<TABLE>
<S> <C> <C> <C> <C>
RATING(a) PAR
S&P MOODY'S (000) VALUE
MICHIGAN-7.43%
Michigan State Hospital Finance Authority
(Hospital Equipment Loan Program);
Adjustable Series 1995 A RB
4.45%, 12/01/23(c)(d) -- VMIG-1 $1,000 $ 1,000,000
- -----------------------------------------------------------------------------
Michigan Strategic Fund (Consumer's Power
Corporation); Pollution Control Variable
Rate Demand Series 1988 A RB
4.40%, 04/15/18(c)(d) -- P-1 1,000 1,000,000
- -----------------------------------------------------------------------------
Plymouth (Township of) Economic Development
Corporation (Key International Project);
Variable Rate Demand Series 1984 RB
3.85%, 07/01/04(c)(d)(f) -- -- 200 200,000
- -----------------------------------------------------------------------------
2,200,000
- -----------------------------------------------------------------------------
MINNESOTA-1.71%
Minnesota (State of) (Water Pollution
Control); Public Facilities Authority
Series A RB
6.35%, 03/01/96 AAA Aa 500 505,675
- -----------------------------------------------------------------------------
MISSISSIPPI-1.18%
Jackson (City of) Jackson Public School
District; Refunding Series 1995 GO
4.10%, 04/01/96(b) AAA Aaa 350 350,000
- -----------------------------------------------------------------------------
MONTANA-4.05%
Missoula (County of) (Washington
Corporations Project); Floating Rate
Monthly Demand Series 1984 IDR
3.80%, 11/01/04(c)(d)(f) -- -- 1,200 1,200,000
- -----------------------------------------------------------------------------
NEVADA-1.69%
Nevada (State of) (FMC Corporation
Project); State Dept. of Commerce Series
1985 IDR
4.00%, 09/15/96(d)(e) -- VMIG-1 500 500,000
- -----------------------------------------------------------------------------
NEW YORK-8.98%
Merrill Lynch Group Float Program; Power
Supply System Series 1993 A RB
4.50%, 01/01/16(b)(c)(g) -- VMIG-1 1,260 1,260,000
- -----------------------------------------------------------------------------
New York (City of); Fiscal 1994 Series A
Adjustable Rate Bonds,
Subseries A-4 GO
4.80%, 08/01/23(c)(d) A-1 VMIG-1 1,400 1,400,000
- -----------------------------------------------------------------------------
2,660,000
- -----------------------------------------------------------------------------
NORTH CAROLINA-1.84%
Durham (County of); Public Improvement
Series 1987 GO
7.00%, 02/01/96(h) AAA NRR 440 444,101
- -----------------------------------------------------------------------------
New Hanover County Industrial Facilities
and Pollution Control Financing Authority
(Gang-Nail Systems, Inc. Project); Series
1984 IDR
4.45%, 12/01/99(c)(d) -- P-1 100 100,000
- -----------------------------------------------------------------------------
544,101
- -----------------------------------------------------------------------------
</TABLE>
3
<PAGE>
FINANCIALS
<TABLE>
<S> <C> <C> <C> <C>
RATING(a) PAR
S&P MOODY'S (000) VALUE
OHIO-4.91%
Cleveland (City of) (Waterfront Transit
Line Project); Regional Transit
Authority of Ohio Certificates of
Participation
9.10%, 07/01/96(b) AAA Aaa $ 150 $ 155,406
- -----------------------------------------------------------------------------
Delaware (County of) (Radiation
Sterilizers, Inc.); Series 1984 IDR
3.85%, 12/01/04(c)(d) A-1 -- 300 300,000
- -----------------------------------------------------------------------------
Ohio (State of) (The Cincinnati Gas &
Electric Company Project); Air Quality
Development Authority Refunding Series
1995 A RB
4.50%, 09/01/30(c)(d) -- VMIG-1 1,000 1,000,000
- -----------------------------------------------------------------------------
1,455,406
- -----------------------------------------------------------------------------
OREGON-1.52%
Klamath Falls (City of) (Salt Caves
Hydroelectric Project); Fixed Adjustable
Rate Series 1986 B RB
4.40%, 05/01/96(e)(h) SP-1+ NRR 450 450,000
- -----------------------------------------------------------------------------
PENNSYLVANIA-9.79%
Allegheny (County of); Series 1972 GO
5.25%, 11/01/95(h) NRR Aaa 250 250,215
- -----------------------------------------------------------------------------
Beaver (County of) Industrial Development
Authority (Duquesne Light Company
Project); Pollution Control Series 1994
Refunding RB
4.50%, 10/10/95(d)(e) -- VMIG-1 550 550,000
- -----------------------------------------------------------------------------
Beaver (County of) Industrial Development
Authority (Ohio Edison Company);
Pollution Control Series A RB
3.45%, 10/01/95(d) A-1+ P-1 500 499,983
- -----------------------------------------------------------------------------
Delaware (County of) Industrial
Development Authority (Scotfoam
Corporation Project); Variable Rate
Demand Series 1985 IDR
3.85%, 10/01/05(c)(d)(f) -- -- 1,000 1,000,000
- -----------------------------------------------------------------------------
Delaware (County of) Industrial
Development Authority (Scott Paper
Company Project); Variable Rate Demand
Series 1984 D RB
4.40%, 12/01/18(c)(d) A-1+ Aa2 600 600,000
- -----------------------------------------------------------------------------
2,900,198
- -----------------------------------------------------------------------------
TENNESSEE-4.39%
Industrial Development Board of the
Metropolitan Government of Nashville &
Davidson County (Amberwood, Ltd.
Project); Multi-family Housing Series
1993 A RB
4.64%, 07/01/13(c)(d) -- VMIG-1 1,300 1,300,000
- -----------------------------------------------------------------------------
</TABLE>
4
<PAGE>
FINANCIALS
<TABLE>
<S> <C> <C> <C> <C>
RATING(a) PAR
S&P MOODY'S (000) VALUE
TEXAS-13.44%
Cameron (County of); Series 1995
Certificates of Participation
7.50%, 02/01/96(b) AAA Aaa $ 165 $ 166,559
- ------------------------------------------------------------------------------
Hockley (County of); Industrial
Development Corporation (Amoco Project);
Adjustable-Rate Pollution Control Series
1983 RB
3.65%, 03/01/96(e) A-1+ Aa1 1,300 1,299,197
- ------------------------------------------------------------------------------
Houston (City of); Certificates of
Obligation Series 1993 B
4.20%, 04/01/14(c) A-1+ VMIG-1 1,000 1,000,000
- ------------------------------------------------------------------------------
Lower Colorado River Authority Series; B
Commercial Paper Notes
3.90%, 10/11/95 A-1+ P-1 1,000 1,000,000
- ------------------------------------------------------------------------------
Texas A&M University; Reserves Combined
Fee RB
7.625%, 07/01/96(e)(h) AAA Aaa 500 514,654
- ------------------------------------------------------------------------------
3,980,410
- ------------------------------------------------------------------------------
UTAH-0.98%
Utah State School Finance Cooperative
(Capital Improvements Financing Pool);
Series 1988 RB
8.375%, 02/15/96(e)(h) AAA Aaa 285 289,849
- ------------------------------------------------------------------------------
VIRGINIA-3.37%
Virginia Housing Development Authority
(AHC Service Corp.);
Series 1987 A RB
4.50%, 09/01/17(c)(d) -- P-1 1,000 1,000,000
- ------------------------------------------------------------------------------
WASHINGTON-1.69%
Industrial Development Corporation of Port
Townsend (Port Townsend Paper Corp.
Project); Series 1988 A Refunding RB
4.35%, 03/01/09(c)(d) -- VMIG-1 500 500,000
- ------------------------------------------------------------------------------
WEST VIRGINIA-4.05%
Berkley (County of) West Virginia Board of
Education Public Schools; Unlimited Tax
Series 1995 GO
6.05%, 06/01/96(b) AAA Aaa 690 700,073
- ------------------------------------------------------------------------------
West Virginia Hospital Finance Authority
(VHA Mid-Atlantic States, Inc. Capital
Asset Financing Program); Series 1985 G
RB
4.20%, 12/01/25(b)(c) A-1 Aaa 500 500,000
- ------------------------------------------------------------------------------
1,200,073
- ------------------------------------------------------------------------------
Total Short-Term Municipal Securities 29,042,287
- ------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
FINANCIALS
<TABLE>
<S> <C> <C>
PAR VALUE
REPURCHASE AGREEMENT(i)-0.03%
Daiwa Securities America, Inc.
6.50%, 10/02/95(j)(k) $ 8,884 $ 8,884
- -----------------------------------------------------------------------
Total Repurchase Agreement 8,884
- -----------------------------------------------------------------------
TOTAL INVESTMENTS-98.08% 29,051,171(l)
- -----------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.92% 568,303
- -----------------------------------------------------------------------
NET ASSETS-100.00% $29,619,474
=======================================================================
</TABLE>
ABBREVIATIONS:
GO -General Obligation Bonds
IDR -Industrial Development Revenue Bonds
NRR -Not re-rated
RB -Revenue Bonds
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Ratings assigned by Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("Moody's"). NRR indicates a security that is not
re-rated subsequent to funding of an escrow fund (consisting of U.S.
Treasury obligations); this funding is pursuant to an advance refunding of
the security.
(b) Secured by bond insurance.
(c) Demand security; payable upon demand by the Fund at specified time
intervals no greater than 13 months. Interest rate is redetermined
periodically. Rate shown was the rate in effect on 09/30/95.
(d) Secured by a letter of credit.
(e) Subject to an irrevocable call or mandatory put by the issuer. Maturity
date and value reflect such call or put.
(f) Unrated; determined by the investment advisor to be of comparable quality
to the rated securities in which the Fund may invest, pursuant to
guidelines for the determination of quality adopted by the Board of
Directors and followed by the investment advisor.
(g) The Fund may invest in synthetic municipal instruments the value of and
return on which are derived from underlying securities. The types of
synthetic municipal instruments in which the Fund may invest include
variable rate instruments. These instruments involve the deposit into a
trust of one or more long-term tax-exempt bonds or notes ("Underlying
Bonds"), and the sale of certificates evidencing interests in the trust to
investors such as the Fund. The trustee receives the long-term fixed rate
interest payments on the Underlying Bonds, and pays certificate holders
short-term floating or variable interest rates which are reset
periodically. A "variable rate trust certificate" evidences an interest in
a trust entitling the certificate holder to receive variable rate interest
based on prevailing short-term interest rates and also typically providing
the certificate holder with the conditional right to put its certificate at
par value plus accrued interest. Because synthetic municipal instruments
involve a trust and a third party conditional put feature, they involve
complexities and potential risks that may not be present where a municipal
security is owned directly.
(h) Secured by an escrow fund of U.S. Treasury obligations.
(i) 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% 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.
(j) Interest does not qualify as exempt interest for federal tax purposes.
(k) Joint repurchase agreement entered into 09/29/95 with a maturing value of
$504,321,256. Collateralized by $522,938,000 U.S. Treasury obligations,
0.00% to 8.375% due 03/28/96 to 04/30/00.
(l) Cost for federal income tax purposes is $29,047,851.
See Notes to Financial Statements.
6
<PAGE>
FINANCIALS
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments at value (amortized cost) $ 29,051,171
- ------------------------------------------------------------------------
Receivable for investments sold 500,055
- ------------------------------------------------------------------------
Interest receivable 199,124
- ------------------------------------------------------------------------
Investment for deferred compensation plan 11,049
- ------------------------------------------------------------------------
Other assets 54,463
- ------------------------------------------------------------------------
Total assets 29,815,862
- ------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 156,126
- ------------------------------------------------------------------------
Dividends 1,559
- ------------------------------------------------------------------------
Deferred compensation 11,049
- ------------------------------------------------------------------------
Accrued advisory fees 8,570
- ------------------------------------------------------------------------
Accrued distribution fees 7,352
- ------------------------------------------------------------------------
Accrued administrative services fees 2,792
- ------------------------------------------------------------------------
Accrued operating expenses 8,940
- ------------------------------------------------------------------------
Total liabilities 196,388
- ------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 29,619,474
========================================================================
Capital stock, $.001 par value per share:
Authorized 1,000,000,000
- ------------------------------------------------------------------------
Outstanding 29,638,963
========================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
FINANCIALS
STATEMENT OF OPERATIONS
For the six months ended September 30, 1995
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $602,020
- ----------------------------------------------------------------
EXPENSES:
Advisory fees 51,663
- ----------------------------------------------------------------
Custodian fees 5,878
- ----------------------------------------------------------------
Administrative services fees 17,099
- ----------------------------------------------------------------
Directors' fees and expenses 2,546
- ----------------------------------------------------------------
Transfer agent fees 31,833
- ----------------------------------------------------------------
Distribution fees 14,761
- ----------------------------------------------------------------
Other 30,636
- ----------------------------------------------------------------
Total expenses 154,416
- ----------------------------------------------------------------
Net investment income 447,604
- ----------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT SECURITIES:
Net realized gain on sales of investment securities 4,113
- ----------------------------------------------------------------
Net unrealized appreciation of investment securities 885
- ----------------------------------------------------------------
Net gain on investment securities 4,998
- ----------------------------------------------------------------
Net increase in net assets resulting from operations $452,602
================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
FINANCIALS
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 1995 and the year ended March 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1995 1995
<S> <C> <C>
OPERATIONS:
Net investment income $ 447,604 $ 862,516
- -----------------------------------------------------------------------------
Net realized gain (loss) on sales of investment
securities 4,113 (52,241)
- -----------------------------------------------------------------------------
Net unrealized appreciation of investment
securities 885 1,646
- -----------------------------------------------------------------------------
Net increase in net assets resulting from
operations 452,602 811,921
- -----------------------------------------------------------------------------
Distributions to shareholders from net investment
income (432,617) (853,604)
- -----------------------------------------------------------------------------
Net increase (decrease) from capital stock
transactions (765,067) (3,251,715)
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets (745,082) (3,293,398)
- -----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 30,364,556 33,657,954
- -----------------------------------------------------------------------------
End of period $29,619,474 $30,364,556
=============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $29,638,963 $30,404,030
- -----------------------------------------------------------------------------
Undistributed net investment income 23,899 8,912
- -----------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of
investment securities (46,708) (50,821)
- -----------------------------------------------------------------------------
Unrealized appreciation of investment securities 3,320 2,435
- -----------------------------------------------------------------------------
$29,619,474 $30,364,556
=============================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
FINANCIALS
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Tax-Exempt Cash Fund (the "Fund") is a series portfolio of AIM Tax-Exempt
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 series management investment company consisting of three separate
portfolios: AIM Tax-Exempt Cash Fund, AIM Tax-Exempt Bond Fund of Connecticut
and the Intermediate Portfolio. Matters affecting each portfolio are voted on
exclusively by the shareholders of such portfolio. 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 preparation of its financial statements.
A. Security Valuations - The Fund invests only in securities which have
maturities of 397 days or less from the date of purchase. The securities are
valued on the basis of amortized cost which approximates market value. This
method values a security at its cost on the date of purchase and thereafter
assumes a constant amortization to maturity of premiums or original issue
discounts.
B. Securities Transactions, Investment Income and Distributions - Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date,
adjusted for amortization of premiums and discounts on investments, and is
recorded on the accrual basis. Discounts, other than original issue, are
amortized to unrealized appreciation for financial reporting purposes.
Dividends to shareholders are declared daily and are paid monthly.
C. 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. The Fund has a capital loss
carryforward of $1,710 (which may be carried forward to offset future
taxable capital gains, if any) which expires, if not previously utilized,
through the year 2003. The Fund cannot distribute capital gains to
shareholders until the tax loss carryforwards have been utilized.
10
<PAGE>
FINANCIALS
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 investment advisory agreement,
the Fund pays an advisory fee to AIM at an annual rate of 0.35% of the Fund's
average daily net assets. This agreement requires AIM to reduce its fees or, if
necessary, make payments to the Fund to the extent required 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 six months ended September 30,
1995, the Fund reimbursed AIM $17,099 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency
services to the Fund. During the six months ended September 30, 1995, the Fund
paid AFS $20,428 for such services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") pursuant to which AIM Distributors
serves as the distributor for the Fund. The Company has also adopted a plan
pursuant to Rule 12b-1 under the 1940 Act (the "Plan") with respect to the Fund
whereby the Fund will pay AIM Distributors up to a maximum annual rate of 0.25%
of the Fund's average daily net assets as compensation for services related to
the sale and distribution of the Fund's shares. Currently, AIM Distributors has
voluntarily elected to waive a portion of its compensation payable by the Fund
such that the compensation paid pursuant to the Plan equals 0.10% per annum of
the Fund's average daily net assets. This waiver may be rescinded by AIM
Distributors at any time without further notice to investors. The Plan provides
that of the aggregate amount payable under the Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund in amounts
of up to 0.25% of the average daily net assets of the Fund attributable to the
customers of such dealers or financial institutions may be characterized as a
service fee, and that payments to dealers and other financial institutions in
excess of such amount and payments to AIM Distributors would be characterized
as an asset-based sales charge. The Plan also imposes a cap on the total amount
of sales charges, including asset-based sales charges, that may be paid by the
Company with respect to the Fund. As a result of AIM Distributors' waiver of
compensation due from the Fund, payments to dealers and other financial
institutions by that Fund will be limited to 0.10% of the Fund's average daily
net assets. During the six months ended September 30, 1995, the Fund paid AIM
Distributors $14,761 as compensation pursuant to the Plan. Certain officers and
directors of the company are officers of AIM, AFS, and AIM Distributors.
The Fund paid legal fees of $1,243 for services rendered by Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel as counsel to the Fund's Board of 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 invests directors' fees, if so
elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
11
<PAGE>
FINANCIALS
NOTE 4 - CAPITAL STOCK
Changes in capital stock outstanding during the six months ended September 30,
1995 and the year ended March 31, 1995 were as follows:
<TABLE>
<CAPTION>
September 30, March 31,
1995 1995
------------------------ -------------------------
Shares Value Shares Value
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Sold 22,389,563 $22,389,563 57,113,755 $ 57,113,755
- ------------------------- ----------- ----------- ----------- ------------
Issued as reinvestment of
dividends 419,779 419,779 813,463 813,463
- ------------------------- ----------- ----------- ----------- ------------
Reacquired (23,574,409) (23,574,409) (61,178,933) (61,178,933)
- ------------------------- ----------- ----------- ----------- ------------
(765,067) $ (765,067) (3,251,715) $ (3,251,715)
=========== =========== =========== ============
</TABLE>
NOTE 5 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a Fund share outstanding
during the six months ended September 30, 1995, the year ended March 31, 1995,
the three months ended March 31, 1994 and each of the years in the seven-year
period ended December 31, 1993.
<TABLE>
<CAPTION>
March 31,
September 30, -------------------
1995 1995 1994
------------- ------- -------
<S> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00
- ----------------------- ------- ------- -------
Income from investment
operations:
Net investment income 0.02 0.03 0.004
- ----------------------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.02) (0.03) (0.004)
- ----------------------- ------- ------- -------
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00
======================= ======= ======= =======
Total return 2.94%(b) 2.54% 1.73%(b)
======================= ======= ======= =======
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (000s omitted) $29,619 $30,365 $33,658
======================= ======= ======= =======
Ratio of expenses to
average net assets 1.05%(c) 1.01%(d) 1.00%(b)(d)
======================= ======= ======= =======
Ratio of net investment
income to average net
assets 3.03%(c) 2.53%(d) 1.75%(b)(d)
======================= ======= ======= =======
<CAPTION>
December 31,
--------------------------------------------------------------------
1993 1992(a) 1991 1990 1989 1988 1987
----------- ----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------ ----------- ----------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income 0.02 0.02 0.04 0.05 0.05 0.05 0.04
- ------------------------ ----------- ----------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income (0.02) (0.02) (0.04) (0.05) (0.05) (0.05) (0.04)
- ------------------------ ----------- ----------- -------- -------- -------- -------- --------
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======================== =========== =========== ======== ======== ======== ======== ========
Total return 1.78% 2.42% 3.91% 5.17% 5.62% 4.65% 3.95%
======================== =========== =========== ======== ======== ======== ======== ========
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (000s omitted) $35,230 $41,291 $43,366 $43,302 $45,995 $51,597 $54,616
======================== =========== =========== ======== ======== ======== ======== ========
Ratio of expenses to
average net assets 1.00%(e) 0.98%(f) 0.98% 0.99% 0.93% 0.83% 0.72%
======================== =========== =========== ======== ======== ======== ======== ========
Ratio of net investment
income to average net
assets 1.76%(e) 2.42%(f) 3.87% 5.05% 5.48% 4.54% 3.87%
======================== =========== =========== ======== ======== ======== ======== ========
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Annualized.
(c) Ratios are annualized and based on average daily net assets of $29,441,023.
Annualized ratios of expenses and net investment income prior to waiver of
distribution fees were 1.20% and 2.88%, respectively.
(d) After waiver of distribution fees. Ratios of expenses and net investment
income to average net assets prior to waiver of distribution fees were
1.16% and 2.38%, respectively for the year ended March 31, 1995, and 1.14%
and 1.61%, respectively for 1994.
(e) After waiver of advisory fees and expense reimbursements. Ratios of
expenses and net investment income to average net assets prior to waiver of
advisory fees and expense reimbursements are 1.36% and 1.40%, respectively.
(f) After waiver of advisory fees. Ratios of expenses and net investment income
to average net assets prior to waiver of advisory fees are 1.00% and 2.40%,
respectively.
12
<PAGE>
DIRECTORS & OFFICERS
<TABLE>
<S> <C> <C>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman and Chief Executive Officer Chairman Suite 1919
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director, President, and Chief
Executive Officer John J. Arthur A I M Advisors, Inc.
COMSAT Corporation Senior Vice President and Treasurer 11 Greenway Plaza
Suite 1919
Owen Daly II Gary T. Crum Houston, TX 77046
Director Senior Vice President
Cortland Trust Inc. TRANSFER AGENT
Carol F. Relihan
Carl Frischling Vice President and Secretary A I M Fund Services, Inc.
Partner P.O. Box 4739
Kramer, Levin, Naftalis, Nessen, Dana R. Sutton Houston, TX 77210-4739
Kamin & Frankel Vice President
and Assistant Treasurer CUSTODIAN
Robert H. Graham
President Stuart W. Coco The Bank of New York
A I M Management Group Inc. Vice President 110 Washington Street
New York, NY 10286
John F. Kroeger Melville B. Cox
Formerly, Consultant Vice President COUNSEL TO THE FUND
Wendell & Stockel Associates, Inc.
Karen Dunn Kelley Ballard Spahr
Lewis F. Pennock Vice President Andrews & Ingersoll
Attorney 1735 Market Street
P. Michelle Grace Philadelphia, PA 19103
Ian W. Robinson Assistant Secretary
Consultant, Former Executive COUNSEL TO THE DIRECTORS
Vice President and Nancy L. Martin
Chief Financial Officer Assistant Secretary Kramer, Levin, Naftalis,
Bell Atlantic Management Nessen, Kamin & Frankel
Services, Inc. Ofelia M. Mayo 919 Third Avenue
Assistant Secretary New York, NY 10022
Louis S. Sklar
Executive Vice President Kathleen J. Pflueger DISTRIBUTOR
Hines Interests Assistant Secretary
Limited Partnership A I M Distributors, Inc.
Samuel D. Sirko 11 Greenway Plaza
Assistant Secretary Suite 1919
Houston, TX 77046
Stephen I. Winer
Assistant Secretary
</TABLE>
13
<PAGE>
A I M DISTRIBUTORS, INC.
[AIM LOGO 11 GREENWAY PLAZA, SUITE 1919
APPEARS HERE] HOUSTON, TEXAS 77046
THE AIM FAMILY OF FUNDS(R)
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 [FULL PAGE PHOTO OF
AIM Balanced Fund AIM MANAGEMENT GROUP
AIM Charter Fund OFFICE BUILDING]
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 Conn.
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 foreign securities and was renamed AIM Global Utilities Fund.
***On September 25, 1995, AIM Government Securities Fund became AIM
Intermediate Government Fund. For more complete information about any AIM
Fund(s), including sales charges and expenses, ask your financial consultant
or securities dealer for a free prospectus(es). Please read the
prospectus(es) carefully before you invest or send money.
