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[AIM LOGO]
[GRAPHIC COLLAGE]
AIM TAX-EXEMPT CASH FUND
ANNUAL REPORT
MARCH 31, 1995
<PAGE> 2
CHAIRMAN'S LETTER
Dear Shareholder:
The bright spot in an otherwise chaotic investment environment
has been money market funds. During the year ended March 31,
[PHOTO of 1995, investors looking for safety and liquidity benefited as
Charles T. yields on money market funds rose to the highest levels in
Bauer almost four years--rivaling yields offered by short-term
Chairman of certificates of deposit.
the Board of We are pleased to note that AIM Tax-Exempt Cash Fund's
the Fund] focus on selected high-quality, tax-exempt money market
instruments of shorter maturity proved effective as interest
rates increased sharply during the year. As of March 31, 1995,
the Funds seven-day effective annualized yield was 3.11%--a significant
increase over the 1.82% seven-day effective annualized yield recorded as of
the same day one year ago. The taxable equivalent on the Fund's seven-day
effective annualized yield was 4.78%, when adjusted for the highest marginal
federal income tax rate of 39.6% for federal income taxes. The taxable
equivalent yield is calculated in the same manner as the standard yield with
an adjustment for a stated, assumed tax rate.
By comparison, the IBC/Donoghue's Tax-Free Money Funds Stockbroker and
General Purpose Category(TM) which reported a seven-day effective annualized
yield of 3.68% as of March 31, 1995. Net assets in the Fund stood at $30.4
million by the end of the period.
To achieve this performance, the Fund took advantage of attractive
yields available in selected tax-exempt money market instruments, most recently
from issuers in Florida, Texas, Georgia, Pennsylvania, and Louisiana. Weighted
average maturity as of March 31, 1995, was 22 days, and more than 77% of the
portfolio was invested in money market instruments maturing in seven days or
less. Purchasing securities with shorter maturities allowed the Fund to respond
quickly to opportunities for improved yield as interest rates increased. In
addition, strong, stable demand coupled with sharply falling supply helped
support yields of municipal securities relative to taxable securities during
most of the year.
The Fund's overall performance was made possible by 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 Funds Board of Directors to be of comparable quality to a
rated security that meets such quality standards.
We are pleased with the Fund's performance during a period of extreme
volatility for most financial securities. As always, AIM remains committed to
the primary objectives of safety, liquidity, and yield in professional money
fund management. We welcome your comments about this report or about this Fund.
Please call us at (800) 659-1005.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
<PAGE> 3
FINANCIALS
SCHEDULE OF INVESTMENTS
March 31, 1995
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES-98.37%
ALABAMA--1.65%
Winfield (City of) (Union Underwear,
Inc. Project); IDR
4.15%, 12/01/97(b)(c) A-1+ -- $ 500 $ 500,000
---------------------------------------------------------------------------------------
ALASKA--0.88%
North Slope (Borough of); Alaska
Refunding GO
10.40%, 06/30/95(d) NRR NRR 265 268,602
---------------------------------------------------------------------------------------
ARIZONA--1.65%
Maricopa (County of) Tempe Union High
School District No. 213 TAN
4.70%, 07/28/95 SP-1+ -- 500 500,779
---------------------------------------------------------------------------------------
CONNECTICUT--1.32%
Connecticut (State of); Economic
Recovery Notes Series 1991 A GO
5.40%, 06/15/95 AA- A2 200 200,459
---------------------------------------------------------------------------------------
Connecticut State Development Authority
(The Allen Group Inc.); Floating Rate
Refunding Series 1983 IDR
3.95%, 02/01/13(b)(c) -- P-1 200 200,000
---------------------------------------------------------------------------------------
400,459
---------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA--2.14%
District of Columbia (The Catholic
University of America Issue);
Series 1993 RB
4.20%, 10/01/95(f) AAA -- 150 150,000
---------------------------------------------------------------------------------------
District of Columbia (Catholic
University); Variable/Fixed
Rate Series A RB
4.10%, 12/01/09(b)(c) -- VMIG-1 500 500,000
---------------------------------------------------------------------------------------
650,000
---------------------------------------------------------------------------------------
FLORIDA--13.50%
Florida Housing Finance Agency (Monterey
Meadows Apartments); Multi-Family
Housing Series 1985-YY RB
4.05%, 12/01/07(b)(c) A-1 -- 800 800,000
---------------------------------------------------------------------------------------
Jacksonville (City of) (Baptist Health
Properties Project); Health Facilities
Authority RB
4.50%, 06/01/20(b)(c) A-1 -- 500 500,000
---------------------------------------------------------------------------------------
Orange (County of) Florida School
District; Revenue
Anticipation Notes Series A
3.75%, 04/06/95 -- MIG-1 1,500 1,499,821
---------------------------------------------------------------------------------------
St. Johns (County of) (Remington At Ponte
Vedra Project); Housing Finance
Authority Series 1993 RB
4.05%, 02/01/17(c)(f) A-1+ -- 1,300 1,300,000
---------------------------------------------------------------------------------------
4,099,821
---------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 4
FINANCIALS
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
GEORGIA--9.22%
Development Authority of DeKalb County
(Joyce International, Inc. Project);
Monthly Floating Rate 1984 Demand IDR
4.00%, 01/01/00(b)(c) A-1 -- $1,300 $ 1,300,000
---------------------------------------------------------------------------------------
Development Authority of Richmond County
(NutraSweet Company); Adjustable Monthly
Mode-Taxable Series 1990 IDR
6.10%, 06/01/00(b)(c)(g) AAA -- 1,500 1,500,000
---------------------------------------------------------------------------------------
2,800,000
---------------------------------------------------------------------------------------
ILLINOIS--5.60%
Illinois (State of); Series A 1979 GO
5.50%, 06/01/95 AA- Aa 100 100,185
---------------------------------------------------------------------------------------
Illinois Development Finance Authority
(Jewish Charities); Variable Rate
Demand Series 1994-1995 Notes
4.25%, 06/30/95(b)(c) A-1+ -- 200 200,000
---------------------------------------------------------------------------------------
Illinois Health Facilities Authority
(The University of Chicago Hospitals
Project); Adjustable Rate Series
1994 C RB
4.10%, 08/15/26(c)(f) -- VMIG-1 1,400 1,400,000
---------------------------------------------------------------------------------------
1,700,185
---------------------------------------------------------------------------------------
IOWA--0.66%
Burlington (City of) (Joyce
International Project);
1984 IDR
4.00%, 07/01/95(b)(c) A-1 -- 200 200,000
---------------------------------------------------------------------------------------
LOUISIANA--6.92%
Parish of DeSoto (Central Louisiana
Electric Company, Inc. Project);
Adjustable Tender Pollution
Control Series 1991 Refunding RB
4.00%, 07/01/18(b)(c) A-1+ VMIG-1 100 100,000
---------------------------------------------------------------------------------------
Plaquemine Port Harbor and Terminal
Authority (TECO Energy, Inc.);
Marine Terminal Facility
Series A 1985 Refunding RB
3.80%, 04/17/95 -- P-1 2,000 2,000,000
---------------------------------------------------------------------------------------
2,100,000
---------------------------------------------------------------------------------------
MICHIGAN--4.28%
Michigan State Hospital Finance
Authority (Hospital Equipment Loan
Program); Adjustable
Series 1995 A RB
4.15%, 12/01/23(b)(c) -- VMIG-1 1,000 1,000,000
---------------------------------------------------------------------------------------
Plymouth (Township of) Economic
Development Corporation (Key
International Project); Floating
Rate Monthly Demand Series 1984 IDR
4.00%, 07/01/04(b)(c)(e) -- -- 300 300,000
---------------------------------------------------------------------------------------
1,300,000
---------------------------------------------------------------------------------------
MONTANA--3.62%
Missoula (County of) (Washington
Corporations Project); Floating Rate
Monthly Demand Series 1984 IDR
4.05%, 11/01/04(b)(c)(e) -- -- 1,100 1,100,000
---------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 5
FINANCIALS
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
NEVADA--0.56%
North Las Vegas (City of) Nevada; Limited
Tax Series 1994 GO
8.25%, 06/01/95(f) AAA Aaa $ 170 $ 171,108
---------------------------------------------------------------------------------------
NEW JERSEY--2.21%
Bayonne (City of) New Jersey; Series 1994
GO
5.80%, 05/01/95(f) AAA Aaa 670 670,940
---------------------------------------------------------------------------------------
NEW YORK--4.94%
Dormitory Authority of the State of New
York; Oxford University Press, Inc.
Series 1993 RB
4.45%, 07/01/23(b)(c) -- VMIG-1 1,500 1,500,000
---------------------------------------------------------------------------------------
NORTH CAROLINA--0.33%
New Hanover County Industrial Facilities
and Pollution Control Financing
Authority (Gang-Nail Systems,
Inc. Project); Series 1984 IDR
4.15%, 12/01/99(b)(c) -- P-1 100 100,000
---------------------------------------------------------------------------------------
OHIO--0.99%
Delaware (County of) (Radiation
Sterilizers, Inc.); Series 1984 IDR
4.00%, 12/01/04(b)(c) A-1 -- 300 300,000
---------------------------------------------------------------------------------------
OREGON--3.95%
Clackamus (County of); Hospital Facility
Authority (Kaiser Permanente Medical
Care Program); 1984 Tender Bond
3.85%, 04/01/95 A-1+ -- 200 199,987
---------------------------------------------------------------------------------------
Klamath Falls (City of) (Salt Caves
Hydroelectric Project); Fixed Adjustable
Rate Series 1986 B RB
3.75%, 05/02/95(d)(h) SP-1+ NRR 1,000 999,225
---------------------------------------------------------------------------------------
1,199,212
---------------------------------------------------------------------------------------
PENNSYLVANIA--7.73%
Beaver (County of) Industrial Development
Authority (Duquesne Light Company
Project); Pollution Control
Series 1994 Refunding RB
4.50%, 10/10/95(b)(h) -- VMIG-1 550 550,000
---------------------------------------------------------------------------------------
Beaver (County of) Industrial Development
Authority (Ohio Edison Company);
Pollution Control Series A RB
3.45%, 10/01/95(b) A-1+ P-1 500 496,909
---------------------------------------------------------------------------------------
Delaware (County of) Industrial
Development Authority (Scotfoam
Corporation Project); Series
1985 IDR
4.00%, 10/01/05(b)(c)(e) -- -- 700 700,000
---------------------------------------------------------------------------------------
Delaware (County of) Industrial
Development Authority (Scott
Paper Company Project);
Variable Rate
Demand Series 1984 D RB
4.25%, 12/01/18(b)(c) A-1+ -- 600 600,000
---------------------------------------------------------------------------------------
2,346,909
---------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 6
FINANCIALS
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
SOUTH DAKOTA--0.60%
South Dakota Building Authority; GO
7.875%, 09/01/95(f) AAA Aaa $ 180 $ 182,125
---------------------------------------------------------------------------------------
TENNESSEE--1.65%
Industrial Development Board of the
Metropolitan Government of Nashville
& Davidson County (Amberwood, Ltd.
Project); Multi-family Housing
Series 1993 A RB
4.00%, 07/01/95(b)(h) -- VMIG-1 500 500,000
---------------------------------------------------------------------------------------
TEXAS--9.48%
Austin (County of) (Justin Industries)
Industrial Development
Corporation; Adjustable Tender Bonds
4.25%, 12/01/14(b)(c) -- P-1 900 900,000
---------------------------------------------------------------------------------------
Cherokee (County of); Series 1994
Unlimited GO
4.40%, 09/15/95(f) AAA Aaa 80 79,940
---------------------------------------------------------------------------------------
Houston (City of); Certificates of
Obligation Series 1993 B
4.15%, 04/01/14(c) A-1+ VMIG-1 1,700 1,700,000
---------------------------------------------------------------------------------------
North Central Texas Health Facilities
Development Corporation
(Presbyterian Medical Center); Health
Facility Series 1985 D RB
4.60%, 12/01/15(c)(f) A-1 VMIG-1 200 200,000
---------------------------------------------------------------------------------------
2,879,940
---------------------------------------------------------------------------------------
VIRGINIA--4.94%
Virginia Housing Development Authority
(AHC Service Corp.); Series 1987 A RB
4.15%, 09/01/17(b)(c) -- P-1 1,500 1,500,000
---------------------------------------------------------------------------------------
WASHINGTON--1.65%
Industrial Development Corporation of Port
Townsend (Port Townsend Paper Corp.
Project); Series 1988 A Refunding RB
4.20%, 03/01/09(b)(c) -- VMIG-1 500 500,000
---------------------------------------------------------------------------------------
WEST VIRGINIA--4.94%
West Virginia Hospital Finance Authority
(VHA Mid-Atlantic States, Inc. Capital
Asset Financing Program);
Series 1985 G
4.10%, 12/01/25(c)(f) A-1 -- 1,500 1,500,000
---------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 7
FINANCIALS
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
WYOMING--2.96%
Platte (County of) Pollution Control
(Tri-State Generation and
Transmission Association, Inc.,
Project); Series 1984 B Refunding RB
4.60%, 07/01/14(b)(c) -- P-1 900 $ 900,000
---------------------------------------------------------------------------------------
Total Short-Term Municipal Securities 29,870,080
---------------------------------------------------------------------------------------
REPURCHASE AGREEMENT(i)--0.87%
Goldman Sachs & Co., Inc.
6.30%, 04/03/95(g)(j) 264 264,661
---------------------------------------------------------------------------------------
Total Repurchase Agreement 264,661
---------------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.24% 30,134,741(k)
---------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES--0.76% 229,815
---------------------------------------------------------------------------------------
NET ASSETS--100.00% $30,364,556
=======================================================================================
</TABLE>
ABBREVIATIONS:
GO -General Obligation Bonds
IDR -Industrial Development Revenue Bonds
NRR -Not re-rated
RB -Revenue Bonds
TAN -Tax Anticipation Notes
NOTES TO SCHEDULE OF INVESTMENTS:
<TABLE>
<S> <C>
(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. Ratings are not covered
by the Independent Auditors' Report.
(b) Secured by a letter of credit.
(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 03/31/95.
(d) Secured by an escrow fund of U.S. Treasury obligations.
(e) 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.
(f) Secured by bond insurance.
(g) Interest does not qualify as exempt interest for federal tax purposes.
(h) Subject to an irrevocable call or mandatory put. Maturity date and value reflect such
call or put.
(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 investments in some repurchase agreements are through
participation in joint accounts with other mutual funds managed by the investment
advisor. The collateral is marked to market daily to ensure its market value as
being 102% of the maturing value of the repurchase agreement.
(j) Joint repurchase agreement entered into 03/31/95 with a maturing value of $268,814,612,
with the Fund's pro-rata interest being $264,800. Collateralized by $275,283,000
U.S. Treasury obligations, 0.00% to 7.125% due 05/04/95 to 02/29/00.
(k) Cost for federal income tax purposes is $30,132,306.
</TABLE>
See Notes to Financial Statements.
6
<PAGE> 8
FINANCIALS
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments at value (amortized cost) $ 30,134,741
---------------------------------------------------------------------------------------
Interest receivable 248,782
---------------------------------------------------------------------------------------
Investment for deferred compensation plan 10,641
---------------------------------------------------------------------------------------
Other assets 9,714
---------------------------------------------------------------------------------------
Total assets 30,403,878
---------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Dividends 1,352
---------------------------------------------------------------------------------------
Deferred compensation 10,641
---------------------------------------------------------------------------------------
Accrued advisory fees 9,196
---------------------------------------------------------------------------------------
Accrued distribution fees 7,672
---------------------------------------------------------------------------------------
Accrued administrative service fees 2,924
---------------------------------------------------------------------------------------
Accrued operating expenses 7,537
---------------------------------------------------------------------------------------
Total liabilities 39,322
---------------------------------------------------------------------------------------
Net assets applicable to shares outstanding $ 30,364,556
=======================================================================================
Capital stock, $.001 par value per share:
Authorized 1,000,000,000
---------------------------------------------------------------------------------------
Outstanding 30,404,030
=======================================================================================
Net asset value, offering and redemption price per share $1.00
=======================================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 9
FINANCIALS
STATEMENT OF OPERATIONS
For the year ended March 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $ 1,206,916
---------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 119,085
---------------------------------------------------------------------------------------
Custodian fees 14,265
---------------------------------------------------------------------------------------
Administrative service fees 43,481
---------------------------------------------------------------------------------------
Directors' fees and expenses 5,060
---------------------------------------------------------------------------------------
Transfer agent fees 51,345
---------------------------------------------------------------------------------------
Distribution fees 34,024
---------------------------------------------------------------------------------------
Other 77,140
---------------------------------------------------------------------------------------
Total expenses 344,400
---------------------------------------------------------------------------------------
Net investment income 862,516
---------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES:
Net realized gain (loss) on sales of investment securities (52,241)
---------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 1,646
---------------------------------------------------------------------------------------
Net gain (loss) on investment securities (50,595)
---------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 811,921
=======================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 10
FINANCIALS
STATEMENT OF CHANGES IN NET ASSETS
For the year ended March 31, 1995
and the three months ended March 31, 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
OPERATIONS:
Net investment income $ 862,516 $ 148,513
Net realized gain (loss) on sales of investment
securities (52,241) (1,320)
Net unrealized appreciation of investment
securities 1,646 546
---------------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 811,921 147,739
---------------------------------------------------------------------------------------
Distributions to shareholders from net investment
income (853,604) (148,513)
---------------------------------------------------------------------------------------
Net increase (decrease) from capital stock
transactions (3,251,715) (1,570,854)
---------------------------------------------------------------------------------------
Net increase (decrease) in net assets (3,293,398) (1,571,628)
---------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 33,657,954 35,229,582
---------------------------------------------------------------------------------------
End of period $30,364,556 $33,657,954
=======================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $30,404,030 $33,655,745
---------------------------------------------------------------------------------------
Undistributed net investment income 8,912 --
---------------------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of
investment securities (50,821) 1,420
---------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 2,435 789
---------------------------------------------------------------------------------------
$30,364,556 $33,657,954
=======================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 11
FINANCIALS
NOTES TO FINANCIAL STATEMENTS
March 31, 1995
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> 12
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 and shareholder services to the Fund. During the year ended
March 31, 1995, the Fund reimbursed AIM $43,481 for such services. Effective
November 1, 1994, A I M Fund Services, Inc. ("AFS") became the transfer agent
for the Fund and was paid $12,405 for such services during the five months ended
March 31, 1995.
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 year ended March 31, 1995, the Fund paid AIM Distributors
$34,024 as compensation pursuant to the Plan.
Certain officers and directors of the Company are officers and directors
of AIM, AFS and AIM Distributors. The Fund paid legal fees of $3,132 for
services rendered by Reid & Priest as counsel to the Board of Directors.
Effective September 1994, the firm Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel was appointed counsel to the Board of Directors. The Fund paid legal
fees of $601 for services rendered by that firm as counsel to the Fund's Board
of Directors. A member of that firm is a director of the Company and, prior to
September 1994, was a member of Reid & Priest.
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of the Company. The company invests directors' fees,
if so elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
11
<PAGE> 13
FINANCIALS
NOTE 4 - CAPITAL STOCK
Changes in capital stock outstanding during the year ended March 31, 1995 and
the three months ended March 31, 1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
------------------------ -------------------------
Shares Value Shares Value
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Sold 57,113,755 $57,113,755 19,620,250 $ 19,620,250
------------------------- ----------- ----------- ----------- ------------
Issued as reinvestment of
dividends 813,463 813,463 140,650 140,650
------------------------- ----------- ----------- ----------- ------------
Reacquired (61,178,933) (61,178,933) (21,331,754) (21,331,754)
------------------------- ----------- ----------- ----------- ------------
(3,251,715) $(3,251,715) (1,570,854) $ (1,570,854)
=========== =========== =========== ============
</TABLE>
NOTE 5 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a Fund share outstanding
during the year ended March 31, 1995, the three months ended March 31, 1994 and
each of the years in the eight-year period ended December 31, 1993.
<TABLE>
<CAPTION>
March 31, December 31,
---------------------- ----------------------------------------------------------------------------
1995 1994 1993 1992(a) 1991 1990 1989 1988 1987 1986
------- ------- ------- ------- ------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <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 $ 1.00 $ 1.00 $ 1.00
----------------------- ------- ------- ------ ------- ------- -------- ------- ------- ------- -------
Income from investment
operations:
Net investment income 0.03 0.004 0.02 0.02 0.04 0.05 0.05 0.05 0.04 0.05
----------------------- ------- ------- ------ ------- ------- -------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.03) (0.004) (0.02) (0.02) (0.04) (0.05) (0.05) (0.05) (0.04) (0.05)
----------------------- ------- ------- ------ ------- ------- -------- ------- ------- ------- -------
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======================= ======= ======= ======= ======= ======= ======== ======= ======= ======= =======
Total return 2.54% 1.73%(d) 1.78% 2.42% 3.91% 5.17% 5.62% 4.65% 3.95% 4.68%
======================= ======= ======= ======= ======= ======= ======== ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of
period (000s omitted) $30,365 $33,658 $35,230 $41,291 $43,366 $43,302 $45,995 $51,597 $54,616 $54,531
======================= ======= ======= ======= ======= ======= ======== ======= ======= ======= =======
Ratio of expenses to
average net assets 1.01%(b)(c) 1.00%(c)(d) 1.00%(e) 0.98%(f) 0.98% 0.99% 0.93% 0.83% 0.72% 0.59%
======================= ======= ======= ======= ======= ======= ======== ======= ======= ======= =======
Ratio of net investment
income to average net
assets 2.53%(b)(c) 1.75%(c)(d) 1.76%(e) 2.42%(f) 3.87% 5.05% 5.48% 4.54% 3.87% 4.51%
======================= ======= ======= ======= ======= ======= ======== ======= ======= ======= =======
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Ratios are based on average daily net assets of $34,024,407.
(c) After waiver of distribution fees. Annualized 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 1995, and 1.14% and 1.61%,
respectively for 1994.
(d) Annualized.
(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> 14
AUDITORS' REPORT
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
AIM Tax-Exempt Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of AIM
Tax-Exempt Cash Fund (a portfolio of AIM Tax-Exempt Funds, Inc.), including the
schedule of investments, as of March 31, 1995, and the related statement of
operations for the year then ended, the statement of changes in net assets for
the year then ended and the three-month period ended March 31, 1994, and the
financial highlights for the year then ended, the three-month period ended
March 31, 1994, and the year ended December 31, 1993. 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 the 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 the 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
March 31, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of AIM Tax-Exempt Cash Fund as of March 31, 1995, the results of its
operations for the year then ended, changes in its net assets for the year then
ended and the three-month period ended March 31, 1994, and the financial
highlights for the year then ended, the three-month period ended March 31,
1994, and the year ended December 31, 1993, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
May 5, 1995
13
<PAGE> 15
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 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 A I M Advisors, Inc.
Executive Officer John J. Arthur 11 Greenway Plaza
COMSAT Corporation Senior Vice President and Suite 1919
Treasurer Houston, TX 77046
Owen Daly II
Director Gary T. Crum TRANSFER AGENT
Cortland Trust Inc. Senior Vice President A I M Fund Services, Inc.
P.O. Box 4739
Carl Frischling Carol F. Relihan Houston, TX 77210-4739
Partner Vice President and Secretary
Kramer, Levin, Naftalis, Nessen, CUSTODIAN
Kamin & Frankel Dana R. Sutton State Street Bank & Trust Co.
Vice President 225 Franklin Street
Robert H. Graham and Assistant Treasurer Boston, MA 02110
President
A I M Management Group Inc. Stuart W. Coco COUNSEL TO THE FUND
Vice President Ballard Spahr
John F. Kroeger Andrews & Ingersoll
Formerly, Consultant Melville B. Cox 1735 Market Street
Wendell & Stockel Associates, Inc. Vice President Philadelphia, PA 19103
Lewis F. Pennock Karen Dunn Kelley COUNSEL TO THE DIRECTORS
Attorney Vice President Kramer, Levin, Naftalis,
Nessen, Kamin & Frankel
Ian W. Robinson P. Michelle Grace 919 Third Avenue
Consultant; Former Executive Assistant Secretary New York, NY 10022
Vice President and
Chief Financial Officer Nancy L. Martin DISTRIBUTOR
Bell Atlantic Management Assistant Secretary A I M Distributors, Inc.
Services, Inc. 11 Greenway Plaza
Ofelia M. Mayo Suite 1919
Louis S. Sklar Assistant Secretary Houston, TX 77046
Executive Vice President
Hines Interests Kathleen J. Pflueger AUDITORS
Limited Partnership Assistant Secretary KPMG Peat Marwick LLP
700 Louisiana
Samuel D. Sirko NationsBank Bldg.
Assistant Secretary Houston, TX 77002
Stephen I. Winer
Assistant Secretary
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION
AIM Tax-Exempt Cash Fund paid ordinary dividends in the amount of 2.54 cents
per share during its tax year ended March 31, 1995. Of this amount, 77.32%
qualified as exempt-interest dividends for federal income tax purposes. Of the
total interest dividends, alternative minimum taxable income was 0.74%.
14
<PAGE> 16
[AIM LOGO] A I M DISTRIBUTORS, INC. BULK RATE
11 GREENWAY PLAZA, SUITE 1919 U.S. POSTAGE
HOUSTON, TEXAS 77046 PAID
Houston, TX
THE AIM FAMILY OF FUNDS(R) Permit No. 2332
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 [FULL PAGE PHOTO OF
AIM Charter Fund AIM MANAGEMENT GROUP 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 Government Securities 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 May 2, 1994. For
more complete information about any AIM Fund, including sales charges and
expenses, ask your investment broker or securities dealer for a free
prospectus(es). Please read the prospectus(es) carefully before you invest or
send money. This report may be distributed only to current shareholders or to
persons who have received a current prospectus of the Fund.
