<PAGE> 1
[AIM LOGO APPEARS HERE]
AIM TAX-EXEMPT CASH FUND
SEMIANNUAL REPORT
SEPTEMBER 30, 1997
<PAGE> 2
The Chairman's Letter
Dear Fellow Shareholder:
AIM Tax-Exempt Cash Fund continued to provide attractive,
[PHOTO OF tax-free income during the six months ended September 30,
Charles T. 1997. At the close of the period, the Fund posted a
Bauer, seven-day effective annualized yield of 3.38% and a
Chairman of seven-day SEC yield of 3.33%. Translated to its
the Board of taxable-equivalent, the Fund's seven-day effective
THE FUND, annualized yield was 5.18% based on net asset value and
APPEARS HERE] adjusted for the highest marginal federal tax rate of 39.6%.
The taxable-equivalent yield is calculated in the same
manner as the standard yield with an adjustment for the
stated, assumed tax rate.
The Fund's 5.18% taxable-equivalent seven-day effective
annualized yield, based on net asset value and adjusted for the highest marginal
federal tax rate of 39.6%, compared favorable to popular bank money market
deposit accounts. The Bank Rate Monitor, which tracks yields on bank money
market deposit accounts, reported the seven-day average yield on those accounts
stood at 2.61% as of September 30, 1997. Bank money market deposits accounts are
insured by the FDIC as to interest and principal. As with any money market
mutual fund, an investment in the Fund is neither insured nor guaranteed by the
U.S. government, the FDIC, or a bank, and there can be no assurance that the
Fund will be able to maintain a stable net asset value of $1.00 per share.
The Fund maintained its strict adherence to an 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.
The six-month period ended September 30, 1997, was dominated by concerns that
rapid economic growth would prompt the Federal Reserve Board (the Fed) to raise
interest rates to contain inflation. That perpetuated volatility in the
financial markets. However, there was little evidence of accelerating inflation.
For the 12-month period ended September 30, 1997, consumer prices rose just
2.2%, compared to a 3.3% increase for 1996. The absence of inflationary
pressures caused the Fed to leave interest rates unchanged during the reporting
period.
OUTLOOK
As 1997 draws to a close, economic growth appears to be moderating and
inflation remains low. If these conditions persist, it should prove beneficial
for the financial markets.
In October, shortly after the reporting period ended, Fed Chairman Alan
Greenspan raised the specter of an interest-rate hike by suggesting in
congressional testimony that economic growth had been on an "unsustainable
track" and that financial markets reflected an "optimistic outlook." Later in
the month, world financial markets were jolted by currency devaluations in
Southeast Asia and a dramatic decline in equity markets both here and abroad.
The consensus of market watchers was that this market turmoil probably had
significantly reduced any potential near-term rate hike, as the Fed would
probably not take any action that could destabilize the markets further.
Whichever direction interest rates move, the tax-free market will possibly
lag in its reaction to the change. The abundance of short-term cash in the
markets may lead to only a slight change in rates on tax-free money market
instruments.
We are pleased to send you this report on the performance of AIM Tax-Exempt
Cash Fund. As always, we welcome your comments about this report or about this
Fund. You may reach us by calling 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
---------------------------
AIM Tax-Exempt Cash
Fund continued to
provide attractive, tax-
free income during the
six months ended
September 30, 1997.
----------------------------
<PAGE> 3
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
SHORT-TERM MUNICIPAL
SECURITIES-90.91%
ALABAMA-2.61%
Alabama Industrial
Development Board
(Industrial Partners
Project); Variable/Fixed
Rate Refunding Series 1989
RB
4.25% 01/01/07(b)(c) - VMIG-1 $1,295 $ 1,295,000
- ---------------------------------------------------------------------
ALASKA-4.92%
Alaska Housing Finance Corp.;
General Mortgage Series
1991 A RB
4.00% 06/01/26(c) A-1+ VMIG-1 2,000 2,000,000
- ---------------------------------------------------------------------
Fairbanks North Star (Borough
of) Alaska; GO
8.00% 11/01/97(d) AAA Aaa 445 446,539
- ---------------------------------------------------------------------
2,446,539
- ---------------------------------------------------------------------
ARIZONA-5.03%
Maricopa (County of)
Pollution Control Corp.
(Arizona Public Services
Company Palo Verde
Project); Series 1994 E PCR
3.85% 05/01/29(b)(c) A-1+ P-1 2,500 2,500,000
- ---------------------------------------------------------------------
COLORADO-6.14%
Colorado Housing Finance
Authority (Grant Plaza
Project); Multifamily
Mortgage Series 1991 A RB
4.175% 11/01/09(b)(c) - VMIG-1 800 800,000
- ---------------------------------------------------------------------
Eagle (County of) Smith Creek
Metropolitan District;
Variable Rate Series 1997
RB
3.85% 10/01/35(b)(c) A-1+ - 2,250 2,250,000
- ---------------------------------------------------------------------
3,050,000
- ---------------------------------------------------------------------
GEORGIA-6.04%
Elbert & Bowman (Counties of)
(Seaboard Farms of
Elberton); Series 1985 IDR
4.10% 07/01/05(b)(c) A-1 - 1,000 1,000,000
- ---------------------------------------------------------------------
Monroe (County of) Georgia
Development Authority
(Oglethorpe Power Corp.);
Pollution Control Series A RB
5.35% 01/01/98(d) AAA Aaa 500 501,711
- ---------------------------------------------------------------------
Roswell (City of) Georgia
Housing Development
Authority (Azalea Project);
Multifamily Housing Series
1996 RB
4.15% 06/15/25(b)(c) A-1+ - 1,500 1,500,000
- ---------------------------------------------------------------------
3,001,711
- ---------------------------------------------------------------------
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
ILLINOIS-9.30%
Cook (County of)
(Village of South
Barrington); Variable Rate
Demand Series 1997 GO
4.05% 12/01/15(b)(c) A-1+ - $2,000 $ 2,000,000
- ---------------------------------------------------------------------
Illinois Health Facilities
Authority (Franciscan
Eldercare Project);
Adjustable Rate Refunding
Series 1996 C RB
4.15% 05/15/26(b)(c) A-1+ - 1,420 1,420,000
- ---------------------------------------------------------------------
Illinois Health Facilities
Authority
(Rush-Presbyterian-St.
Luke's Medical Center
Obligated Group); Series
1989 A RB
3.85% 11/20/97(b) A-1+ VMIG-1 1,200 1,200,000
- ---------------------------------------------------------------------
4,620,000
- ---------------------------------------------------------------------
INDIANA-5.03%
Indianapolis (City of)
(Children's Museum Project);
Economic Development
Floating Rate Series 1995 RB
3.95% 10/01/25(b)(c) A-1+ - 1,400 1,400,000
- ---------------------------------------------------------------------
Indianapolis (City of);
Local Improvement Series
1997 A RB
4.375% 01/08/98 SP-1+ - 1,100 1,101,797
- ---------------------------------------------------------------------
2,501,797
- ---------------------------------------------------------------------
IOWA-7.30%
Iowa Higher Education Loan
Authority; Private College
Facility RB
4.15% 12/01/15(c)(d) A-1+ VMIG-1 1,119 1,119,000
- ---------------------------------------------------------------------
Iowa School Corporations
(Iowa School Cash
Anticipation Program);
Warrant Certificates TRAN
4.25% Series 1997-1998 B
01/30/98(d) AAA - 1,000 1,001,304
- ---------------------------------------------------------------------
4.50% Series 1997-1998 A
06/26/98(d) SP-1+ MIG-1 1,500 1,507,423
- ---------------------------------------------------------------------
3,627,727
- ---------------------------------------------------------------------
KANSAS-2.02%
Wichita (City of); Renewal
and Improvement Series 192
GO
4.50% 02/26/98 SP-1+ MIG-1 1,000 1,002,675
- ---------------------------------------------------------------------
MARYLAND - 1.21%
Maryland Industrial
Development Financing
Authority (Liberty Medical
Center); Variable Rate
Demand/Fixed Rate 1989
Issue Refunding RB
4.15% 07/01/18(b)(c) - VMIG-1 600 600,000
- ---------------------------------------------------------------------
</TABLE>
2
<PAGE> 4
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MICHIGAN-2.01%
Michigan State Hospital
Finance Authority (Hospital
Equipment Loan Program);
Adjustable Series 1995 A RB
4.15% 12/01/23(b)(c) - VMIG-1 $ 800 $ 800,000
- ---------------------------------------------------------------------
Plymouth (Township of)
Economic Development Corp.
(Key International
Project); Variable Rate
Demand Series 1984 RB
3.70% 07/01/04(b)(c)(e) - - 200 200,000
- ---------------------------------------------------------------------
1,000,000
- ---------------------------------------------------------------------
MINNESOTA-1.01%
Mankato (City of)
(Northern States Power Co.
Project);
Floating Collateralized
Series 1985 PCR
4.25% 03/01/11(c) AA- Aa3 500 500,000
- ---------------------------------------------------------------------
MISSOURI-2.82%
Missouri (State of) Health
and Education Facilities
Authority Washington
University; Series 1996 A RB
3.90% 09/01/30(c) A-1+ VMIG-1 1,400 1,400,000
- ---------------------------------------------------------------------
MONTANA-2.01%
Missoula (County of)
(Washington Corp. Project);
Floating Rate Monthly Demand
Series 1984 IDR
3.56% 11/01/04(b)(c)(e) - - 1,000 1,000,000
- ---------------------------------------------------------------------
NEVADA-2.01%
Clark (County of) (Nevada
Power Company Project);
Refunding Series 1995 C IDR
4.10% 10/01/30(b)(c) A-1+ - 1,000 1,000,000
- ---------------------------------------------------------------------
NEW JERSEY-4.83%
Morris (County of); BAN
3.57% 12/11/97 SP-1+ MIG-1 2,400 2,398,485
- ---------------------------------------------------------------------
NEW HAMPSHIRE-2.82%
New Hampshire Higher Education
and Health Facilities
Authority; Variable Rate
Hospital Series 1985 C RB
4.15% 12/01/25(c)(d) A-1 - 1,400 1,400,000
- ---------------------------------------------------------------------
NORTH CAROLINA-2.82%
Alamance (County of)
Industrial Facilities and
Pollution Control Financing
Authority (Science
Manufacturing, Inc.
Project); Series 1985 IDR
3.85% 04/01/15(b)(c) - P-1 1,400 1,400,000
- ---------------------------------------------------------------------
OHIO-0.60%
Delaware (County of)
(Radiation Sterilizers,
Inc.); Series 1984 IDR
3.75% 12/01/04(b)(c) A-1 - 300 300,000
- ---------------------------------------------------------------------
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
OREGON-2.02%
Klamath Falls (City of) (Salt
Caves Hydroelectric);
Adjustable/Fixed Refunding
Series 1986 C RB
4.50% 05/01/98(f) SP-1+ - $1,000 $ 1,003,495
- ---------------------------------------------------------------------
PENNSYLVANIA-2.01%
Delaware (County of)
Industrial Development
Authority (Scotfoam Corp.
Project); Variable Rate
Demand Series 1985 IDR
3.70% 10/01/05(b)(c)(e) - - 1,000 1,000,000
- ---------------------------------------------------------------------
RHODE ISLAND-2.01%
Rhode Island (State of)
Industrial Facilities
Authority (Blackstone
Valley Electric Company);
Variable Rate Series 1984 RB
3.80% 12/01/14(b)(c) A-1 - 1,000 1,000,000
- ---------------------------------------------------------------------
TENNESSEE-2.45%
Industrial Development Board
of the Metropolitan
Government of Nashville &
Davidson County (Amberwood,
Ltd. Project); Multifamily
Housing Series 1993 A RB
4.38% 07/01/13(b)(c) - VMIG-1 1,220 1,220,000
- ---------------------------------------------------------------------
TEXAS-8.86%
Harris County Health
Facilities Development
Corp. (St. Lukes Episcopal
Hospital); Series 1997 B RB
3.85% 02/15/27(c) A-1+ - 2,000 2,000,000
- ---------------------------------------------------------------------
Houston (City of); Series
1997 TRAN
4.50% 06/30/98 SP-1+ MIG-1 1,000 1,004,664
- ---------------------------------------------------------------------
Trinity River Industrial
Development Authority
(Radiation Sterilizers, Inc.
Project); Variable Rate
Demand Series 1985 A IDR
3.75% 11/01/05(b)(c) A-1 - 1,400 1,400,000
- ---------------------------------------------------------------------
4,404,664
- ---------------------------------------------------------------------
WASHINGTON-1.01%
Industrial Development Corp.
of Port Townsend (Port
Townsend Paper Corp.
Project); Series 1988 A
Variable Rate Refunding RB
4.10% 03/01/09(b)(c) - VMIG-1 500 500,000
- ---------------------------------------------------------------------
WISCONSIN-2.02%
Wisconsin (State of); GO
4.50% 06/15/98 SP-1+ MIG-1 1,000 1,004,411
- ---------------------------------------------------------------------
Total Short-Term Municipal Securities 45,176,504
- ---------------------------------------------------------------------
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MASTER NOTE AGREEMENT(g)-2.01%
BROKER/DEALER
Merrill Lynch Mortgage
Capital Inc.
6.80% 08/17/98(h) - - $1,000 $ 1,000,000
- ---------------------------------------------------------------------
COMMERCIAL PAPER(i)(g)-4.01%
ELECTRICAL EQUIPMENT
Sony Capital Corp.
5.70% 10/23/97 A-1+ P-1 2,000 1,993,033
- ---------------------------------------------------------------------
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENT(g)(j)-0.28%
Goldman, Sachs & Co., Inc.
6.15% 10/01/97(k) $ 136,159
- ---------------------------------------------------------------------
TOTAL INVESTMENTS-97.21% 48,305,696(l)
- ---------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-2.79% 1,388,330
- ---------------------------------------------------------------------
NET ASSETS-100.00% $49,694,026
=====================================================================
</TABLE>
Abbreviations:
<TABLE>
<S> <C>
BAN -- Bond Anticipation Notes
GO -- General Obligation Bonds
IDR -- Industrial Development Revenue Bonds
PCR -- Pollution Control Revenue Bonds
RB -- Revenue Bonds
TRAN -- Tax and Revenue Anticipation Notes
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Ratings assigned by Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("Moody's").
(b) Secured by a letter of credit.
(c) Demand security; payable upon demand by the Fund at specified time
intervals no greater than thirteen months. Interest rates are
redetermined periodically. Rate shown is the rate in effect on
09/30/97.
(d) Secured by bond insurance.
(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 an escrow fund of U.S. Treasury obligations.
(g) Interest does not qualify as exempt interest for federal tax
purposes.
(h) The Portfolio may demand prepayment of notes purchased under the
Master Note Purchase Agreement generally upon two business days'
notice. Interest rates on master notes are redetermined periodically.
Rate shown is the rate in effect on 09/30/97.
(i) Commercial paper traded on a discount basis. In such case the
interest rate shown represents the rate of discount paid or received
at the time of purchase by the Fund.
(j) 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, private accounts, and certain non-registered
investment companies managed by the investment advisor or its
affiliates.
(k) Joint repurchase agreement entered into 09/30/97 with a maturing
value of $1,200,205,000. Collateralized by $1,056,712,000 U.S.
Government obligations, 3.375% to 14.00% due 12/31/97 to 08/15/26
with an aggregate market value at 09/30/97 of $1,225,197,883.
(l) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
4
<PAGE> 6
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1997
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (amortized cost) $ 48,305,696
- ------------------------------------------------------------
Receivables for:
Fund shares sold 1,312,587
- ------------------------------------------------------------
Interest 358,796
- ------------------------------------------------------------
Investment for deferred compensation plan 19,609
- ------------------------------------------------------------
Other assets 12,724
- ------------------------------------------------------------
Total assets 50,009,412
- ------------------------------------------------------------
LIABILITIES:
Payables for:
Dividends 1,724
- ------------------------------------------------------------
Deferred compensation 19,609
- ------------------------------------------------------------
Fund shares reacquired 218,139
- ------------------------------------------------------------
Accrued advisory fees 14,908
- ------------------------------------------------------------
Accrued distribution fees 13,045
- ------------------------------------------------------------
Accrued administrative service fees 3,009
- ------------------------------------------------------------
Accrued transfer agent fees 7,549
- ------------------------------------------------------------
Accrued operating expenses 37,403
- ------------------------------------------------------------
Total liabilities 315,386
- ------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 49,694,026
============================================================
Capital stock, $.001 par value per share:
Authorized 1,000,000,000
- ------------------------------------------------------------
Outstanding 49,678,200
============================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 1.00
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended September 30, 1997
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $1,036,937
- -----------------------------------------------------------
EXPENSES:
Advisory fees 91,161
- -----------------------------------------------------------
Custodian fees 4,962
- -----------------------------------------------------------
Administrative service fees 18,309
- -----------------------------------------------------------
Directors' fees and expenses 6,545
- -----------------------------------------------------------
Transfer agent fees 26,630
- -----------------------------------------------------------
Distribution fees 65,115
- -----------------------------------------------------------
Registration and filing fees 14,980
- -----------------------------------------------------------
Other 38,232
- -----------------------------------------------------------
Total expenses 265,934
- -----------------------------------------------------------
Less: Fees waived by advisor (39,069)
- -----------------------------------------------------------
Net expenses 226,865
- -----------------------------------------------------------
Net investment income 810,072
- -----------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT
SECURITIES:
Net realized gain on sales of investment
securities 6,778
- -----------------------------------------------------------
Net unrealized appreciation of investment
securities 3,285
- -----------------------------------------------------------
Net gain on investment securities 10,063
- -----------------------------------------------------------
Net increase in net assets resulting from
operations $ 820,135
===========================================================
</TABLE>
See Notes to Financial Statements.
5
<PAGE> 7
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 1997 and the year ended March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1997 1997
------------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income $ 810,072 $ 998,764
- -----------------------------------------------------------------------------------------
Net realized gain on sales of investment securities 6,778 7,711
- -----------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment
securities 3,285 (741)
- -----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 820,135 1,005,734
- -----------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (807,460) (996,476)
- -----------------------------------------------------------------------------------------
Net increase (decrease) from capital stock transactions (7,198,841) 26,856,591
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets (7,186,166) 26,865,849
- -----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 56,880,192 30,014,343
- -----------------------------------------------------------------------------------------
End of period $49,694,026 $56,880,192
=========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $49,678,200 $56,877,041
- -----------------------------------------------------------------------------------------
Undistributed net investment income 36,617 34,005
- -----------------------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of investment
securities (24,076) (30,854)
- -----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 3,285 --
- -----------------------------------------------------------------------------------------
$49,694,026 $56,880,192
=========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the six months ended September 30, 1997
(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 AIM Tax-Free Intermediate Fund. 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 Fund's
investment objective is to earn the highest level of current income free from
federal income taxes that is consistent with safety of principal and liquidity.
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
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.
It is the policy of the Fund to declare daily dividends from net investment
income. Such dividends are paid monthly.
6
<PAGE> 8
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 $28,816 (which may be carried forward to offset future
taxable capital gains, if any) which expires, if not previously utilized,
through the year 2004. The Fund cannot distribute capital gains to
shareholders until the tax loss carryforwards have been utilized.
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 the annual rate of 0.35% of the Fund's
average daily net assets.
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, 1997, the Fund reimbursed AIM $18,309 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, 1997, the Fund
paid AFS $17,636 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. During the six months ended September 30,
1997, AIM Distributors waived fees of $39,069. 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, 1997, the
Fund paid AIM Distributors $26,046 as compensation pursuant to the Plan.
Certain officers and directors of the Company are officers and directors of
AIM, AFS and AIM Distributors. During the six months ended September 30, 1997,
the Fund paid legal fees of $849 for services rendered by Kramer, Levin,
Naftalis & 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.
NOTE 4-CAPITAL STOCK
Changes in capital stock outstanding during the six months ended September 30,
1997 and the year ended March 31, 1997:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997 MARCH 31, 1997
---------------------------- ---------------------------
SHARES VALUE SHARES VALUE
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Sold 97,429,043 $ 97,429,043 96,643,811 $ 96,643,811
- ---------------------------------------------------------------------------------
Issued as
reinvestment of
dividends 776,348 776,348 948,679 948,679
- ---------------------------------------------------------------------------------
Reacquired (105,404,232) (105,404,232) (70,735,899) (70,735,899)
- ---------------------------------------------------------------------------------
(7,198,841) $ (7,198,841) 26,856,591 $ 26,856,591
=================================================================================
</TABLE>
7
<PAGE> 9
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock
outstanding during the six months ended September 30, 1997, each of the years in
the three-year period ended March 31, 1997, the three months ended March 31,
1994 and each of the years in the two-year period ended December 31, 1993.
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
SEPTEMBER 30, ---------------------------------------------- --------------------
1997 1997 1996 1995 1994 1993 1992(a)
------------- -------- -------- -------- -------- -------- --------
<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 0.03 0.03 0.03 0.004 0.02 0.02
- ------------------------------------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment
income (0.02) (0.03) (0.03) (0.03) (0.004) (0.02) (0.02)
- ------------------------------------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===================================== ======== ======== ======== ======== ======== ======== ========
Total return 3.13%(b) 2.82% 2.92% 2.54% 1.73%(b) 1.78% 2.42%
===================================== ======== ======== ======== ======== ======== ======== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s
omitted) $ 49,694 $ 56,880 $ 30,014 $ 30,365 $ 33,658 $ 35,230 $ 41,291
===================================== ======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets(c) 0.87%(d) 1.04% 1.05% 1.01% 1.00%(b) 1.00% 0.98%
===================================== ======== ======== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets(e) 3.11%(d) 2.78% 2.97% 2.53% 1.75%(b) 1.76% 2.42%
===================================== ======== ======== ======== ======== ======== ======== ========
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Annualized.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.02% (annualized), 1.19%, 1.20%, 1.16%, 1.14% (annualized), 1.36% and 1.00%
for the six months ended 09/30/97 and the periods 1997 - 1992, respectively.
(d) Ratios are annualized and based on average daily net assets of $51,949,656.
(e) After fee waivers and/or expense reimbursements. Ratios of income to average
net assets prior to fee waivers and/or expense reimbursements were 2.96%
(annualized), 2.63%, 2.82%, 2.38%, 1.61% (annualized), 1.40% and 2.40% for
the six months ended 09/30/97 and the periods 1997-1992, respectively.
8
<PAGE> 10
Directors & Officers
<TABLE>
<S> <C> <C>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director, ACE Limited
Formerly Director, President, and John J. Arthur A I M Advisors, Inc.
Chief Executive Officer Senior Vice President and Treasurer 11 Greenway Plaza
COMSTAT Corporation Suite 100
Gary T. Crum Houston, TX 77046
Owen Daly II Senior Vice President
Director TRANSFER AGENT
Cortland Trust Inc. Carol F. Relihan
Senior Vice President and Secretary A I M Fund Services, Inc.
Jack Fields P.O. Box 4739
Formerly Member of the Dana R. Sutton Houston, TX 77210-4739
U.S. House of Representatives Vice President
and Assistant Treasurer CUSTODIAN
Carl Frischling
Partner Stuart W. Coco The Bank of New York
Kramer, Levin, Naftalis & Frankel Vice President 90 Washington Street, 11th Floor
New York, NY 10286
Robert H. Graham Melville B. Cox
President and Chief Executive Officer Vice President COUNSEL TO THE FUND
A I M Management Group Inc.
Karen Dunn Kelly Ballard Spahr
John F. Kroeger Vice President Andrews & Ingersoll
Formerly Consultant 1735 Market Street
Wendell & Stockel Associates, Inc. P. Michelle Grace Philadelphia, PA 19103
Assistant Secretary
Lewis F. Pennock COUNSEL TO THE DIRECTORS
Attorney Nancy L. Martin
Assistant Secretary Kramer, Levin, Naftalis & Frankel
Ian W. Robinson 919 Third Avenue
Consultant; Formerly Executive Ofelia M. Mayo New York, NY 10022
Vice President and Assistant Secretary
Chief Financial Officer DISTRIBUTOR
Bell Atlantic Management Kathleen J. Pflueger
Services, Inc. Assistant Secretary A I M Distributors, Inc.
11 Greenway Plaza
Louis S. Sklar Samuel D. Sirko Suite 100
Executive Vice President Assistant Secretary Houston, TX 77046
Hines Interests
Limited Partnership Stephen I. Winer
Assistant Secretary
</TABLE>
This report may be distributed only to current shareholders
or to persons who have received a current prospectus of the Fund.
<PAGE> 11
<TABLE>
<S> <C>
THE AIM FAMILY OF FUNDS--Registered Trademark--
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Capital Development Fund
AIM Constellation Fund
AIM Global Aggressive Growth Fund
GROWTH OF CAPITAL
AIM Advisor International Value Fund
[PHOTO OF AIM Blue Chip Fund
11 GREENWAY PLAZA AIM Global Growth Fund
APPEARS HERE] AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME OR INCOME WITH CAPITAL GROWTH
AIM Advisor Flex Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Balanced Fund
AIM Charter Fund
AIM Global Utilities Fund
HIGH CURRENT INCOME OR CURRENT INCOME
AIM High Yield Fund
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
CURRENT INCOME AND HIGH DEGREE OF SAFETY
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Shares
AIM Money Market Fund
AIM Tax-Exempt Cash Fund
A I M Management Group Inc. has provided leadership in the *AIM Aggressive Growth Fund was closed to new investors on
mutual fund industry since 1976 and managed approximately June 5, 1997. For more complete information about any AIM
$82 billion in assets for more than 3.6 million shareholders, Fund(s), including sales charges and expenses, ask your
including individual investors, corporate clients, and financial financial consultant or securities dealer for a free
institutions, as of September 30, 1997. The AIM Family of prospectus(es). Please read the prospectus(es) carefully
Funds--Registered Trademark-- is distributed nationwide, and before you invest or send money.
AIM today ranks among the nation's top 15 mutual fund
companies in assets under management, according to Lipper INVEST WITH DISCIPLINE-SM-
Analytical Services, Inc.
[AIM LOGO APPEARS HERE] -----------------
BULK RATE
A I M Distributors, Inc. U.S. POSTAGE
11 Greenway Plaza, Suite 100 PAID
Houston, TX 77046 HOUSTON, TX
Permit No. 1919
-----------------
</TABLE>
