<PAGE> 1
ANNUAL REPORT / MARCH 31 2000
AIM TAX-EXEMPT CASH FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
Dear Fellow Shareholder:
AIM Tax-Exempt Cash Fund continued to provide attractive
PHOTO OF tax-free income during the fiscal year ended March 31, 2000.
Charles T. At the end of the reporting period, the fund posted a
Bauer, seven-day effective yield of 3.48% and a seven-day yield of
Chairman of 3.42%. Translated to its taxable equivalent, the fund's
the Board of seven-day effective yield was 5.18% based on net asset value
AIM TAX-EXEMPT and adjusted for the highest marginal federal tax rate of
CASH FUND 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
yield compared quite favorably to popular bank money market
deposit accounts. According to the Bank Rate Monitor, which
tracks yields on bank money market deposit accounts, the
seven-day average yield on those accounts stood at 2.01% as
of March 31, 2000. Bank money market deposit accounts are
insured by the Federal Deposit Insurance Corporation (FDIC) as to interest and
principal. An investment in this fund is not insured or guaranteed by the FDIC
or any other government agency. Although a money market fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to lose money
investing in the fund.
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. Net assets in the fund stood at $60.4 million at the end of
the fiscal year.
MARKET ENVIRONMENT
The main focus during the past fiscal year has been inflation prevention. The
United States has continued on its path of record economic growth, and in
February, the current period of economic expansion became the longest in U.S.
history. However, this has not come about without some growing pains.
The Federal Reserve Board (the Fed) kept a close eye on economic
indicators--such as unemployment and consumer spending--throughout the fiscal
year, shifting into reactionary mode when it seemed that the feverish pace of
the economy was in danger of igniting inflation. Since June 1999, the Fed has
raised the federal funds rate five times, with the rate standing at 6.0% at the
close of the reporting period.
The municipal market had a rather rough year in 1999. Rising interest rates
and weak demand deflated municipal-bond prices and contributed to a decline in
new issue volume. State and local governments cut back on issuing new bonds and
refinancing older issues as the cost of borrowing money increased. Municipal
investors were generally better off in the short end of the yield curve for most
of the fiscal year because while shorter-term issues provided attractive yields,
they also avoided the price declines that hit many longer-term issues. The
still-booming U.S. economy enhanced the bottom line for many cities by allowing
them to generate increased revenues. This has also led to an increase in credit
quality in the muni market as cities' ability to repay debt has increased.
In the first quarter of 2000, states, cities and public agencies sold 39%
fewer bonds than in the first quarter of 1999. However, yield trends in the
municipal market have thus far in 2000 mirrored those in the Treasury market.
With interest rates rising and a perceived scarcity in the 30-year Treasury
bond, the Treasury yield curve became inverted, meaning yields on shorter-term
securities rose above those for long-term Treasuries. Similarly, shorter-term
muni issues have seen their yields increase (an average of 0.17%), while
longer-term issues of five years or more have seen their yields fall. This has
contributed to the muni markets' strong first-quarter performance of 2.92%,
which was driven in part by the attractiveness of muni yields versus comparable
maturity Treasury securities.
OUTLOOK
The Fed continues its diligent watch over the U.S. economy for signs of
inflation, and many analysts believe the Fed will keep raising interest rates as
long as the country's record growth continues. Economic indicators continue to
send mixed signals--some indicate a rise in inflationary pressures, some do not.
Given the current uncertainty with respect to the direction of interest rates,
the fund is well positioned for those investors seeking liquidity, safety and a
competitive level of income.
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 800-426-5463.
Respectfully submitted, COVER ART:
SUMMER SOLSTICE III
/s/ CHARLES T. BAUER BY ALLISON WATSON,
AMERICAN
Charles T. Bauer
Chairman
AIM TAX-EXEMPT CASH FUND
<PAGE> 3
SCHEDULE OF INVESTMENTS
March 31, 2000
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
SHORT-TERM MUNICIPAL
OBLIGATIONS-86.12%
ALABAMA-2.32%
Alabama Industrial
Development Board
(Industrial Partners
Project); Refunding VRD
Series 1989 RB
(LOC-Suntrust Bank)
4.10%, 01/01/07(b) -- Aa3 $1,405 $ 1,405,000
-----------------------------------------------------------------
ARKANSAS-2.15%
Arkansas (University of)
(University of Arkansas
for Medical Sciences
Campus); Refunding VRD
Series 1998 RB
3.95%, 12/01/19(b)(c) -- VMIG-1 1,300 1,300,000
-----------------------------------------------------------------
CALIFORNIA-3.47%
Huntington Beach (City of)
(Seabridge Villas
Project); Multifamily
Housing VRD Series 1985
A RB
4.00%, 02/01/10(b) -- VMIG-1 2,100 2,100,000
-----------------------------------------------------------------
CONNECTICUT-1.03%
Connecticut (State of)
Special Tax Obligation
(JP Morgan PUTTERS); VRD
Series 114 1999 A RB
3.81%, 10/01/09(b)(d) -- VMIG-1 618 618,002
-----------------------------------------------------------------
Connecticut (State of)
Special Tax Obligation
(Infrastructure Purpose
S-1); Transportation VRD
Series RB
3.85%, 12/01/10(b) A-1+ VMIG-1 5 5,000
-----------------------------------------------------------------
623,002
-----------------------------------------------------------------
DELAWARE-3.48%
Delaware (State of);
Unlimited Series 1997 B
GO
5.00%, 05/01/00 AAA Aaa 2,000 2,001,456
-----------------------------------------------------------------
Delaware (University of)
VRD Series 1998 RB
3.90%, 11/01/23(b) A-1+ -- 100 100,000
-----------------------------------------------------------------
2,101,456
-----------------------------------------------------------------
FLORIDA-5.30%
Capital Trust Agency;
Multifamily Housing VRD
Series 1999 B RB
4.00%, 12/01/32(b)(c) A-1+ -- 3,200 3,200,467
-----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
GEORGIA-0.28%
Dekalb Private Hospital
Authority (Egleston
Children's Hospital at
Emory University);
Revenue Anticipation
Certificates VRD Series
1994 A (LOC-SunTrust
Bank)
3.85%, 03/01/24(b) A-1+ VMIG-1 $ 170 $ 170,000
-----------------------------------------------------------------
ILLINOIS-12.08%
Illinois Development
Finance Authority
(American College of
Surgeons Project); Tax
Exempt VRD Series 1996
RB (LOC-Northern Trust
Co.)
3.95%, 08/01/26(b) A-1+ -- 2,083 2,083,000
-----------------------------------------------------------------
Illinois Health Facilities
Authority (Blessing
Hospital); VRD Series
1999 B RB
4.00%, 11/15/29(b)(c) A-1 VMIG-1 2,000 2,000,000
-----------------------------------------------------------------
Illinois Health Facilities
Authority (Franciscan
Eldercare Project);
Adjustable Rate
Refunding VRD Series
1996 C RB
(LOC-Lasalle National
Bank)
3.90%, 05/15/26(b) A-1+ -- 1,420 1,420,000
-----------------------------------------------------------------
Illinois Health Facilities
Authority (Resurrection
Health Care); VRD Series
1999 B RB
3.95%, 05/15/29(b) A-1+ VMIG-1 300 300,000
-----------------------------------------------------------------
Illinois Health Facilities
Authority; Revolving
Fund Pooled VRD Series D
RB (LOC-Bank One
Illinois NA)
3.90%, 08/01/15(b) A-1 VMIG-1 1,500 1,500,000
-----------------------------------------------------------------
7,303,000
-----------------------------------------------------------------
IOWA-2.66%
Iowa School Corporations
(Iowa School Cash
Anticipation Program);
Warrant Certificates
Series 2000
4.75%, 02/01/01(c) SP-1+ MIG-1 1,600 1,608,931
-----------------------------------------------------------------
KENTUCKY-1.93%
Kentucky Interlocal School
Transportation
Association; Series 1999
TRAN
4.00%, 06/30/00 SP-1+ MIG-1 1,163 1,164,207
-----------------------------------------------------------------
LOUISIANA-3.31%
Calcasieu Parish Inc.
Industrial Development
Board (Olin Corp.
Project); Refunding VRD
Series 1993 B IDR
(LOC-Wachovia Bank
Corp.)
4.10%, 02/01/16(b) A-1+ -- 2,000 2,000,000
-----------------------------------------------------------------
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MASSACHUSETTS-1.00%
Massachusetts Bay
Transportation
Authority; Series 1967
RB
5.00%, 03/01/01 AA- Aa2 $ 600 $ 604,225
-----------------------------------------------------------------
MICHIGAN-7.12%
Michigan State Hospital
Finance Authority
(Hospital Equipment Loan
Program); VRD Series
1995 A RB (LOC-First of
America Bank)
3.85%, 12/01/23(b) -- VMIG-1 400 400,000
-----------------------------------------------------------------
Monroe (County of)
Economic Development
Corp. (Detroit Edison
Co.);
Refunding Limited
Obligation VRD Series
1992 CC RB (LOC-Barclays
Bank PLC)
4.00%, 10/01/24(b) -- P-1 2,000 2,000,000
-----------------------------------------------------------------
Morgan Stanley Float
Program, Michigan State
Hospital Finance
Authority (Ascension
Health); Floating Rate
Trust Certificate VRD
Series 98 180 RB
4.01%, 05/15/05(b)(d) A-1c -- 1,300 1,300,000
-----------------------------------------------------------------
Plymouth (Township of)
Economic Development
Corp. (Key International
Project); VRD Series
1984 RB (LOC-Comerica
Bank)
4.05%, 07/01/04(b)(e) -- -- 100 100,000
-----------------------------------------------------------------
Walled Lake Michigan
Consolidated School
District; Unlimited Tax
Series II GO
7.00%, 05/01/00(c) AA+ Aa 500 501,361
-----------------------------------------------------------------
4,301,361
-----------------------------------------------------------------
MONTANA-0.99%
Missoula (County of)
(Washington Corp.
Project); VRD Series
1984 IDR (LOC-Bank of
Montreal)
3.51%, 11/01/04(b) -- VMIG-1 600 600,000
-----------------------------------------------------------------
NEW HAMPSHIRE-2.32%
New Hampshire Higher
Education and Health
Facilities Authority;
VRD Hospital Series 1985
C RB
3.95%, 12/01/25(b)(c) A-1+ -- 1,400 1,400,000
-----------------------------------------------------------------
NEW YORK-2.14%
Eagle Tax Exempt Trust;
Class A VRD Series
943802 COP
3.96%, 05/01/07(b)(c)(d) A-1+C -- 1,295 1,295,000
-----------------------------------------------------------------
NORTH CAROLINA-4.76%
North Carolina Municipal
Power Agency Number One
(Catawba Electric);
MERLOTS VRD Series 1999
Q RB
4.05%, 01/01/10(b)(c)(d) -- VMIG-1 2,875 2,875,000
-----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
NORTH DAKOTA-0.76%
North Dakota Rural Water
Finance Corp. (Public
Projects-Construction);
Series 1999 Notes
4.25%, 09/01/00 -- MIG-1 $ 460 $ 460,000
-----------------------------------------------------------------
OHIO-0.50%
Delaware (County of)
(Radiation Sterilizers,
Inc.); VRD Series 1984
IDR (LOC-Comerica Bank)
3.95%, 12/01/04(b) A-1 -- 300 300,000
-----------------------------------------------------------------
PENNSYLVANIA-2.32%
York (City of) General
Authority; Adjustable
Rate Pooled Financing
VRD Series 1996 RB
3.95%, 09/01/26(b) A-1 -- 1,400 1,400,000
-----------------------------------------------------------------
SOUTH DAKOTA-1.66%
South Dakota Housing
Development Authority
(Homeownership
Mortgage); Series C RB
4.90%, 05/01/00 AAA Aa1 1,005 1,006,007
-----------------------------------------------------------------
TENNESSEE-1.92%
Nashville and Davidson
(Counties of) (Amberwood
Ltd. Project); Metro
Government Multifamily
Housing Refunding VRD
Series 1993 A IDR
(LOC-Commerzbank AG)
4.16%, 07/01/13(b) A-1+ VMIG-1 1,160 1,160,000
-----------------------------------------------------------------
TEXAS-13.11%
Bexar (County of) Housing
Finance Authority
(Fountainhead
Apartments); Multifamily
Refunding VRD Series RB
3.90%, 09/15/26(b) A-1+ -- 2,074 2,074,000
-----------------------------------------------------------------
Dallas (City of); Water &
Sewer Commercial Paper
Notes
3.85%, 04/04/00 A-1+ P-1 2,441 2,441,000
-----------------------------------------------------------------
Texas (State of); Series
1999 A TRAN
4.50%, 08/31/00 A-1 MIG-1 2,000 2,006,181
-----------------------------------------------------------------
Trinity River Industrial
Development Authority
(Radiation Sterilizers,
Inc.); VRD Series 1985 A
IDR (LOC-Comerica Bank)
3.95%, 11/01/05(b) A-1 -- 1,400 1,400,000
-----------------------------------------------------------------
7,921,181
-----------------------------------------------------------------
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
RATING(a) PAR
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
UTAH-3.14%
Salt Lake (County of)
Housing Authority (Santa
Fe Apartments Project);
Multifamily Housing
Refunding VRD Series
1992 RB (LOC-Dresdner
Bank AG)
3.95%, 07/01/22(b) -- VMIG-1 $1,900 $ 1,900,000
-----------------------------------------------------------------
VIRGINIA-2.48%
Norfolk (City of)
Industrial Development
Authority (Sentara
Health System);
Commercial Paper Notes
3.90%, 05/17/00 A-1+ P-1 1,500 1,500,000
-----------------------------------------------------------------
WASHINGTON-3.89%
Industrial Development
Corp. of Port Townsend
(Port Townsend Paper
Corp. Project); VRD
Series 1988 A RB
(LOC-Deutsche Bank AG)
4.00%, 03/01/09(b) -- VMIG-1 500 500,000
-----------------------------------------------------------------
Tacoma (City of)
Metropolitan Park
District; Series 1994 GO
4.50%, 12/01/00(e) -- -- 1,850 1,852,867
-----------------------------------------------------------------
2,352,867
-----------------------------------------------------------------
Total Short-Term Municipal Obligations
(Cost $52,051,704) 52,051,704
-----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR
(000) VALUE
<S> <C> <C>
MEDIUM TERM NOTE(f)-4.63%
Bear Stearns & Co., Inc.,
6.57%, 11/14/00 (Cost $2,800,000) 2,800 2,800,000
--------------------------------------------------------------
MASTER NOTE AGREEMENT(f)-4.80%
BROKER/DEALER-4.80%
Merrill Lynch Mortgage Capital, Inc.,
6.64%, 08/17/00 (Cost $2,900,000)(g) 2,900 2,900,000
--------------------------------------------------------------
REPURCHASE AGREEMENT(f)(h)-3.25%
Westdeutsche Landesbank Girozentrale,
6.20%, 04/03/00 (Cost $1,961,164)(i) 1,961 1,961,164
--------------------------------------------------------------
TOTAL INVESTMENTS-98.80% (Cost
$59,712,868)(j) 59,712,868
--------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.20% 727,371
--------------------------------------------------------------
NET ASSETS-100.00% $60,440,239
==============================================================
</TABLE>
Investment Abbreviations:
COP - Certificates of Participation
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
LOC - Letter of Credit
MERLOTS - Municipal Exempt Receipts Liquidity Optional Tender
PUTTERS - Putable Tax Exempt Receipts
RB - Revenue Bonds
TRAN - Tax and Revenue Anticipation Notes
VRD - Variable Rate Demand
Notes to Schedule of Investments:
(a) Ratings assigned by Moody's Investors Service, Inc. ("Moody's") and Standard
& Poor's Corporation ("S&P"). Ratings are not covered by Independent
Auditors' Report.
(b) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined periodically.
Rate shown is the rate in effect on 03/31/00.
(c) Secured by bond insurance provided by one of the following companies: AMBAC,
FGIC, FSA or MBIA.
(d) 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.
(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) Interest does not qualify as exempt interest for federal tax purposes.
(g) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business days' notice. Interest rates on master
notes are redetermined periodically. Rate shown is the rate in effect on
03/31/00.
(h) 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 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.
(i) Joint repurchase agreement entered into 03/31/00 with a maturing value of
$100,051,667. Collateralized by $107,546,033 U.S. Government obligations,
7.00% due 07/15/29 with an aggregate market value at 03/31/00 of
$102,000,000.
(j) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
3
<PAGE> 6
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments, at value (amortized cost) $ 59,712,868
------------------------------------------------------------
Receivables for:
Capital stock sold 116,329
------------------------------------------------------------
Interest 467,651
------------------------------------------------------------
Investments sold 2,400,000
------------------------------------------------------------
Investment for deferred compensation plan 32,868
------------------------------------------------------------
Other assets 13,408
------------------------------------------------------------
Total assets 62,743,124
------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 1,915,999
------------------------------------------------------------
Dividends 17,613
------------------------------------------------------------
Deferred compensation 32,868
------------------------------------------------------------
Capital stock reacquired 246,376
------------------------------------------------------------
Accrued administrative services fees 4,000
------------------------------------------------------------
Accrued advisory fees 17,235
------------------------------------------------------------
Accrued distribution fees 14,680
------------------------------------------------------------
Accrued transfer agent fees 7,619
------------------------------------------------------------
Accrued operating expenses 46,495
------------------------------------------------------------
Total liabilities 2,302,885
------------------------------------------------------------
Net assets applicable to shares outstanding $ 60,440,239
============================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Authorized 1,000,000,000
------------------------------------------------------------
Outstanding 60,439,977
============================================================
Net asset value, offering and redemption
price per share $ 1.00
============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended March 31, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $2,155,558
-----------------------------------------------------------
EXPENSES:
Advisory fees 199,298
-----------------------------------------------------------
Administrative services fees 49,808
-----------------------------------------------------------
Directors' fees 2,480
-----------------------------------------------------------
Transfer agent fees 49,431
-----------------------------------------------------------
Distribution fees 142,356
-----------------------------------------------------------
Filing fees 41,665
-----------------------------------------------------------
Printing fees 27,764
-----------------------------------------------------------
Other 26,077
-----------------------------------------------------------
Total expenses 538,879
-----------------------------------------------------------
Less: Fees waived (85,413)
-----------------------------------------------------------
Expenses paid indirectly (615)
-----------------------------------------------------------
Net expenses 452,851
-----------------------------------------------------------
Net investment income 1,702,707
-----------------------------------------------------------
Net increase in net assets resulting from
operations $1,702,707
===========================================================
</TABLE>
See Notes to Financial Statements.
4
<PAGE> 7
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
------------ -----------
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,702,707 $ 2,023,407
----------------------------------------------------------------------------------------
Net realized gain on sales of investment securities -- 11,634
----------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities -- (160)
----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,702,707 2,034,881
----------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (1,730,612) (2,029,841)
----------------------------------------------------------------------------------------
Net increase (decrease) from capital stock transactions (690,854) 9,220,052
----------------------------------------------------------------------------------------
Net increase (decrease) in net assets (718,759) 9,225,092
----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 61,158,998 51,933,906
----------------------------------------------------------------------------------------
End of period $ 60,440,239 $61,158,998
========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $ 60,421,491 $61,130,831
----------------------------------------------------------------------------------------
Undistributed net investment income 23,318 29,998
----------------------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of investment
securities (4,570) (1,831)
----------------------------------------------------------------------------------------
$ 60,440,239 $61,158,998
========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Tax-Exempt Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. The Company is organized as a Maryland corporation
consisting of four separate portfolios. 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 AIM
Tax-Exempt Cash Fund (the "Fund"). The investment objective of the Fund is to
earn the highest level of current income free from federal income taxes that is
consistent with the preservation of capital and liquidity.
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. The
following is a summary of the significant accounting policies followed by the
Fund in the preparation of its financial statements.
A. Security Valuations--The Fund's 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 and Investment Income--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. On March 31,
2000, undistributed net investment income was increased by $21,225,
undistributed net realized gains (losses) was decreased by $2,739 and
paid-in capital was decreased by $18,486 as a result of differing book/tax
adjustments. Net assets of the Fund were unaffected by the
reclassifications.
C. Distributions--It is the policy of the Fund to declare daily dividends from
net investment income. Such distributions are paid monthly. Distributions
from net realized capital gains, if any, are generally paid annually and
recorded on ex-dividend date. The Fund may elect to use a portion of the
proceeds of fund share redemptions as distributions for federal income tax
purposes.
D. 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 $4,570 (which may be carried forward to
5
<PAGE> 8
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 pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended March 31, 2000, AIM was paid
$49,808 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. For the year ended March 31, 2000, AFS was paid $36,897
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. 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. Currently, AIM Distributors has elected to waive a portion
of its compensation payable by the Fund such that the compensation paid pursuant
to the Plan equals 0.10% of the Fund's average daily net assets.
For the year ended March 31, 2000, AIM Distributors received $56,943 as
compensation pursuant to the Plan and waived fees of $85,413.
Certain officers and directors of the Company are officers and directors of
AIM, AFS and AIM Distributors.
During the year ended March 31, 2000, the Fund paid legal fees of $3,767 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP 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 directors who are 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-INDIRECT EXPENSES
During the year ended March 31, 2000, the Fund received reductions in transfer
agency fees from AFS (an affiliate of AIM) of $615 under an expense offset
arrangement. The effect of the above arrangement resulted in a reduction of the
Fund's total expenses of $615 during the year ended March 31, 2000.
NOTE 5-CAPITAL STOCK
Changes in capital stock outstanding during the years ended March 31, 2000 and
1999 were as follows:
<TABLE>
<CAPTION>
2000 1999
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
Sold 99,988,658 $ 99,988,658 365,487,367 $ 365,487,367
-----------------------------------------------------------------------------------
Issued as
reinvestment of
dividends 1,656,515 1,656,515 1,903,872 1,903,872
-----------------------------------------------------------------------------------
Reacquired (102,336,027) (102,336,027) (358,171,187) (358,171,187)
-----------------------------------------------------------------------------------
(690,854) $ (690,854) 9,220,052 $ 9,220,052
===================================================================================
</TABLE>
6
<PAGE> 9
NOTE 6-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock
outstanding during each of the years in the five-year period ended March 31,
2000.
<TABLE>
<CAPTION>
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------ ------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.03 0.03 0.03 0.03 0.03
------------------------------------------------------------ ------- ------- ------- ------- -------
Less distributions from net investment income (0.03) (0.03) (0.03) (0.03) (0.03)
------------------------------------------------------------ ------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============================================================ ======= ======= ======= ======= =======
Total return 3.05% 2.90% 3.12% 2.82% 2.92%
============================================================ ======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $60,440 $61,159 $51,934 $56,880 $30,014
============================================================ ======= ======= ======= ======= =======
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 0.80%(a) 0.79% 0.83% 1.04% 1.05%
============================================================ ======= ======= ======= ======= =======
Without fee waivers and/or expense reimbursements 0.95%(a) 0.94% 0.98% 1.19% 1.20%
============================================================ ======= ======= ======= ======= =======
Ratio of net investment income to average net assets 2.99%(a) 2.83% 3.07% 2.78% 2.97%
============================================================ ======= ======= ======= ======= =======
</TABLE>
(a) Ratios based on average net assets of $56,942,323.
7
<PAGE> 10
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
AIM Tax-Exempt Cash Fund:
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, 2000, the related statement
of operations for the year then ended, the statement of
changes in net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years in the five-year period then ended.
These financial statements and financial highlights are
the responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with auditing
standards generally accepted in the United States of
America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are
free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as
of March 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM
Tax-Exempt Cash Fund as of March 31, 2000, the results of
its operations for the year then ended, the changes in
its net assets for each of the years in the two-year
period then ended and the financial highlights for each
of the years in the five-year period then ended, in
conformity with accounting principles generally accepted
in the United States of America.
KPMG LLP
May 1, 2000
Houston, Texas
8
<PAGE> 11
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
<S> <C> <C>
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; Carol F. Relihan A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Secretary 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Gary T. Crum Houston, TX 77046
Senior Vice President
Owen Daly II TRANSFER AGENT
Director Dana R. Sutton
Cortland Trust Inc. Vice President and Treasurer A I M Fund Services, Inc.
P.O. Box 4739
Edward K. Dunn Jr. Stuart W. Coco Houston, TX 77210-4739
Chairman, Mercantile Mortgage Corp.; Vice President
Formerly Vice Chairman and President, CUSTODIAN
Mercantile-Safe Deposit & Trust Co.; and Melville B. Cox
President, Mercantile Bankshares Vice President The Bank of New York
90 Washington Street
Jack Fields Karen Dunn Kelley 11th Floor
Chief Executive Officer Vice President New York, NY 10286
Texana Global, Inc.;
Formerly Member Mary J. Benson COUNSEL TO THE FUND
of the U.S. House of Representatives Assistant Vice President
and Assistant Treasurer Ballard Spahr
Carl Frischling Andrews & Ingersoll, LLP
Partner Sheri Morris 1735 Market Street
Kramer, Levin, Naftalis & Frankel LLP Assistant Vice President Philadelphia, PA 19103
and Assistant Treasurer
Robert H. Graham COUNSEL TO THE DIRECTORS
President and Chief Executive Officer Renee A. Friedli
A I M Management Group Inc. Assistant Secretary Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
Prema Mathai-Davis P. Michelle Grace New York, NY 10022
Chief Executive Officer, YWCA of the U.S.A. Assistant Secretary
DISTRIBUTOR
Lewis F. Pennock Nancy L. Martin
Attorney Assistant Secretary A I M Distributors, Inc.
11 Greenway Plaza
Louis S. Sklar Ofelia M. Mayo Suite 100
Executive Vice President Assistant Secretary Houston, TX 77046
Hines Interests
Limited Partnership Lisa A. Moss AUDITORS
Assistant Secretary
KPMG LLP
Kathleen J. Pflueger 700 Louisiana
Assistant Secretary Houston, TX 77002
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
</TABLE>
(UNAUDITED)
REQUIRED FEDERAL INCOME TAX INFORMATION
AIM Tax-Exempt Cash Fund paid ordinary dividends in the amount of $0.0301 per
share to shareholders during the Fund's tax year ended March 31, 2000. Of this
amount, 82.96% qualified as exempt-interest dividends for federal income tax
purposes.
For the purpose of preparing your annual federal income tax returns, however,
you should report the amounts as reflected on the appropriate Form 1099-DIV.
This report may be distributed only to current shareholders
or to the persons who have received a current prospectus of the Fund.
<PAGE> 12
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has provided
AIM Aggressive Growth Fund AIM Money Market Fund leadership in the mutual fund industry since
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund 1976 and managed approximately $176 billion
AIM Capital Development Fund in assets for more than 7.4 million
AIM Constellation Fund(1) INTERNATIONAL GROWTH FUNDS shareholders, including individual
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund investors, corporate clients and financial
AIM Large Cap Growth Fund AIM Asian Growth Fund institutions, as of March 31, 2000.
AIM Mid Cap Equity Fund AIM Developing Markets Fund The AIM Family of Funds--Registered
AIM Mid Cap Growth Fund AIM Euroland Growth Fund(5) Trademark-- is distributed nationwide, and
AIM Mid Cap Opportunities Fund(2) AIM European Development Fund AIM today is the eighth-largest mutual fund
AIM Select Growth Fund AIM International Equity Fund complex in the United States in assets under
AIM Small Cap Growth Fund(3) AIM Japan Growth Fund management, according to Strategic Insight,
AIM Small Cap Opportunities Fund(4) AIM Latin American Growth Fund an independent mutual fund monitor.
AIM Value Fund AIM New Pacific Growth Fund(8)
AIM Weingarten Fund
GLOBAL GROWTH FUNDS
GROWTH & INCOME FUNDS AIM Global Aggressive Growth Fund
AIM Advisor Flex Fund AIM Global Growth Fund
AIM Advisor Large Cap Value Fund(8) AIM Global Trends Fund(7)
AIM Advisor Real Estate Fund
AIM Balanced Fund GLOBAL GROWTH & INCOME FUNDS
AIM Basic Value Fund AIM Global Growth & Income Fund(8)
AIM Charter Fund AIM Global Utilities Fund
INCOME FUNDS GLOBAL INCOME FUNDS
AIM Floating Rate Fund AIM Emerging Markets Debt Fund(8)
AIM High Yield Fund AIM Global Government Income Fund(8)
AIM High Yield Fund II AIM Global Income Fund
AIM Income Fund AIM Strategic Income Fund
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Fund THEME FUNDS
AIM Global Consumer Products and Services Fund
TAX-FREE INCOME FUNDS AIM Global Financial Services Fund
AIM High Income Municipal Fund AIM Global Health Care Fund
AIM Municipal Bond Fund AIM Global Infrastructure Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Resources Fund
AIM Tax-Free Intermediate Fund AIM Global Telecommunications and Technology Fund(6)
</TABLE>
(1) Effective December 1, 1999, AIM Constellation Fund's investment strategy
broadened to allow investments across all market capitalizations. (2) AIM Mid
Cap Opportunities Fund closed to new investors on March 21, 2000. (3) AIM Small
Cap Growth Fund closed to new investors on November 8, 1999. (4) AIM Small Cap
Opportunities Fund closed to new investors on November 4, 1999. (5) On September
1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth Fund. Previously
the fund invested in all size companies in most areas of Europe. The fund now
seeks to invest at least 65% of its assets in large-cap companies within
countries using the euro as their currency (EMU-member countries). (6) On June
1, 1999, AIM Global Telecommunications Fund was renamed AIM Global
Telecommunications and Technology Fund. (7) Effective August 27, 1999, AIM
Global Trends Fund was restructured to operate as a traditional mutual fund.
Before that date, the fund operated as a fund of funds. (8) AIM Advisor Large
Cap Value Fund, AIM Emerging Markets Debt Fund, AIM Global Government Income
Fund, AIM Global Growth & Income Fund and AIM New Pacific Growth Fund closed to
new investors on April 28, 2000. For more complete information about any AIM
fund(s), including sales charges and expenses, ask your financial advisor or
securities dealer for a free prospectus(es). Please read the prospectus(es)
carefully before you invest or send money. If used as sales material after July
20, 2000, this report must be accompanied by a current Quarterly Review of
Performance for AIM Funds.
[AIM LOGO APPEARS HERE]
--Registered Trademark--
INVEST WITH DISCIPLINE
--Registered Trademark--
[MFS Dalbar Award Logo]
A I M DISTRIBUTORS, INC. TEC-AR-1
