-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, STUEJ2LphadyaeVicYfxelFDL6gR+MRkJ+X2qysFE4r+1NHxyluFF+o7voyzOWWv kJFFT2gM5LKJjteahHalWg== 0000950129-04-000007.txt : 20040102 0000950129-04-000007.hdr.sgml : 20040101 20040102162908 ACCESSION NUMBER: 0000950129-04-000007 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031031 FILED AS OF DATE: 20040102 EFFECTIVENESS DATE: 20040102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIM INTERNATIONAL MUTUAL FUNDS CENTRAL INDEX KEY: 0000880859 IRS NUMBER: 760352823 STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-06463 FILM NUMBER: 04501497 BUSINESS ADDRESS: STREET 1: 11 GREENWAY PLAZA STE 100 CITY: HOUSTON STATE: TX ZIP: 77046 BUSINESS PHONE: 7136261919 MAIL ADDRESS: STREET 1: AIM INTERNATIONAL FUNDS INC STREET 2: 11 GREENWAY PLAZA SUITE 100 CITY: HOUSTON STATE: TX ZIP: 77046 FORMER COMPANY: FORMER CONFORMED NAME: AIM INTERNATIONAL FUNDS INC /MD/ DATE OF NAME CHANGE: 20000620 FORMER COMPANY: FORMER CONFORMED NAME: AIM INTERNATIONAL MUTUAL FUNDS DATE OF NAME CHANGE: 20000323 FORMER COMPANY: FORMER CONFORMED NAME: AIM INTERNATIONAL FUNDS INC DATE OF NAME CHANGE: 19920909 N-CSR 1 h10335nvcsr.txt AIM INTERNATIONAL MUTUAL FUNDS - OCTOBER 31, 2003 OMB APPROVAL ------------------------- OMB Number: 3235-0570 Expires: Nov. 30, 2005 Estimated average burden hours per response: 5.0 ------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-6463 --------------------------------------------- AIM International Mutual Funds - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 11 Greenway Plaza, Suite 100 Houston, Texas 77046 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Robert H. Graham 11 Greenway Plaza, Suite 100 Houston, Texas 77046 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (713) 626-1919 ----------------------------- Date of fiscal year end: 10/31 ------------------- Date of reporting period: 10/31/03 ------------------ AIM Asia Pacific Growth Fund Annual Report to Shareholders o October 31, 2003 [COVER IMAGE] YOUR GOALS. OUR SOLUTIONS. [AIM INVESTMENTS LOGO APPEARS HERE] --Servicemark-- --Servicemark-- ================================================================================ AIM ASIA PACIFIC GROWTH FUND SEEKS TO PROVIDE LONG-TERM GROWTH OF CAPITAL. ================================================================================ ABOUT INFORMATION THROUGHOUT THIS REPORT: o Unless otherwise stated, information o International investing presents o The MSCI All Country (AC) Asia Pacific presented is as of 10/31/03 and is based certain risks not associated with Free ex-Japan Index is a group of on total net assets. investing solely in the United States. developed and emerging Asian and These include risks relating to Asia-Pacific markets (except Japan) o AIM Asia Pacific Growth Fund's fluctuations in the value of the U.S. covered by Morgan Stanley Capital performance figures are historical, and dollar relative to the values of other International. A "free" index represents they reflect fund expenses, the currencies, the custody arrangements investable opportunities for global reinvestment of distributions, and made for the fund's foreign holdings, investors, taking into account the local changes in net asset value. differences in accounting, political market restrictions on share ownership risks and the lesser degree of public by foreign investors. o When sales charges are included in information required to be provided by performance figures, Class A share non-U.S. companies. o The unmanaged Lipper Pacific ex-Japan performance reflects the maximum 5.50% Fund Index represents an average of the sales charge, and Class B and Class C o The fund's investment return and largest Pacific ex-Japan funds tracked share performance reflects the principal value will fluctuate, so an by Lipper, Inc., an independent mutual applicable contingent deferred sales investor's shares, when redeemed, may be fund performance monitor, and is charge (CDSC) for the period involved. worth more or less than their original considered representative of Pacific The CDSC on Class B shares declines from cost. ex-Japan stocks. 5% beginning at the time of purchase to 0% at the beginning of the seventh year. o The fund may participate in the o The unmanaged Standard & Poor's The CDSC on Class C shares is 1% for the initial public offering (IPO) market in Composite Index of 500 Stocks (the S&P first year after purchase. The some market cycles. A significant 500--Registered Trademark--) is an index performance of the fund's share classes portion of the fund's returns during of common stocks frequently used as a will differ due to different sales certain periods was attributable to its general measure of U.S. stock market charge structures and class expenses. investments in IPOs. These investments performance. have a magnified impact when the fund's o Had the advisor not waived fees and/or asset base is relatively small. As the o A direct investment cannot be made in reimbursed expenses, returns would have fund's assets grow, the impact of IPO an index. Unless otherwise indicated, been lower. investments will decline, which may index results include reinvested reduce the effect of IPO investments on dividends, and they do not reflect sales o A 2% redemption fee will be imposed on the fund's total return. For additional charges. Performance of an index of certain redemptions or exchanges out of information regarding the impact of IPO funds reflects fund expenses, the fund within 30 days of purchase. investments on the fund's performance, performance of a market index does not. Exceptions to the redemption fee are please see the fund's prospectus. listed in the fund's prospectus. A description of the policies and o Industry classifications used in this procedures that the fund uses to o Effective 9/30/03, Class B shares are report are generally according to the determine how to vote proxies relating not available as an investment for Global Industry Classification Standard, to portfolio securities is available retirement plans maintained pursuant to which was developed by and is the without charge, upon request, by calling Section 401 of the Internal Revenue exclusive property and a service mark of 800-959-4246, or on the AIM Web site, Code, including 401(k) plans, money Morgan Stanley Capital International AIMinvestments.com. purchase pension plans and profit Inc. and Standard & Poor's. sharing plans. Plans that have existing accounts invested in Class B shares will continue to be allowed to make additional purchases.
======================================================= NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE This report may be distributed only to shareholders or to persons who have received a current prospectus of the fund. =======================================================
AIMinvestments.com TO OUR SHAREHOLDERS DEAR FELLOW SHAREHOLDER IN THE AIM new policies and strengthened existing ones--to discourage FAMILY OF FUNDS harmful short-term trading. These steps include: --Registered Trademark--: o Strengthening daily monitoring of trading [PHOTO OF As you may be aware, there has been a activities. ROBERT H great deal of media coverage recently GRAHAM] about the mutual fund industry and o Imposing redemption fees on additional funds we allegations of improper activities by believe may be vulnerable to harmful short-term ROBERT H. GRAHAM certain individuals and companies. As trading activity. part of these widespread investigations, INVESCO Funds Group (IFG), the former o Implementing an enhanced exchange policy (effective [PHOTO OF adviser to certain INVESCO Funds, was on or about March 1, 2004) designed to limit MARK H. recently named as a defendant in exchanges between funds. WILIAMSON] separate civil enforcement actions by the U.S. Securities and Exchange o Employing an enhanced fair value pricing policy on MARK H. WILLIAMSON Commission (SEC), the Office of the New certain foreign securities as well as certain York Attorney General and the State of illiquid securities. Colorado over an issue known as "market timing." A number of private class or derivative actions also were filed in the None of these tools alone, nor all of them taken wake of the regulators' actions. together, eliminate the possibility of short-term trading strategies that may be detrimental to a fund. Moreover, each Investors are understandably concerned and frustrated of these tools involves judgments that are inherently about these reports, and we would like to take this subjective. We have always sought and continue to seek to opportunity to assure you that, based on an investigation make these judgments to the best of our abilities and in a conducted by an outside firm, IFG and its parent company, manner that we believe is consistent with the best interests AMVESCAP PLC, believe that these civil actions are without of our fund shareholders. And we remain committed to being merit. IFG is contesting the charges. as vigilant as possible in the future to identify and address any harmful market timing investors who have the We encourage you to continue to monitor this situation, potential to harm our long-term fund shareholders. particularly as IFG has the opportunity to address the allegations that have been made. Current information will be We sincerely hope these developments and the media posted on our Web site at AIMinvestments.com. We will coverage surrounding them do not result in you or other continue to communicate to you on our Web site about our shareholders losing confidence in AIM or INVESCO Funds. finding, and the actions we are taking to protect and Amidst this storm of controversy in the mutual fund promote the interests of our shareholders. The independent industry, we believe we can find encouragement in the trustees of the funds are receiving regular reports from recovering economy and rising equity markets. As we write their independent counsel and outside counsel hired by this letter, for instance, the S&P 500--Registered AMVESCAP PLC, the parent of AIM and IFG, to perform an Trademark-- Index is up approximately 23% year-to-date. ongoing investigation of market timing. Although past performance is no guarantee of future results, there appear to be indicators that the economy and stock A COMPLEX ISSUE markets are showing signs of welcomed improvement. We encourage you to read the enclosed discussion of your fund's Market timing is an investment technique not defined in any performance during this past reporting period. regulation that involves frequent short-term trading of mutual fund shares, sometimes with a goal to exploit OUR UNWAVERING COMMITMENT inefficiencies in the way mutual funds price their shares. We recognize that fund management companies have tried to At AIM Investments, we have never wavered in our commitment deal with this complex issue in various ways and believe to helping you build solutions for your financial goals. Our that industry-wide guidance is in order. To that end, we company was founded on a core principle of integrity, and we welcome SEC Chairman William Donaldson's pledge to adopt new have always worked hard to earn the trust of our rules designed to curb market timing abuses. Comprehensive shareholders. We are committed to doing all we can to rulemaking is necessary and is the best way to establish new maintain your trust and confidence. industry responsibilities designed to protect shareholders. We support practical rule changes and structural Thank you for your continued participation in AIM modifications that are fair, enforceable and, most Investments. Please call your financial advisor or one of importantly, beneficial for investors. our Client Service representatives at 800-959-4246 if you have any further questions or concerns about your AIM AIM Investments has policies in place designed to Investments account. identify, prevent and eliminate harmful trading or other activities deemed to be detrimental to the funds. We have Sincerely, also recently taken additional steps--implemented /s/ ROBERT H. GRAHAM /s/ MARK H. WILLIAMSON Robert H. Graham Mark H. Williamson Chairman and President President and CEO The AIM Family of Funds AIM Investments --Registered Trademark-- December 18, 2003
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE third quarter, increasing the city-state's gross domestic product significantly from the prior quarter. FUND OUTPERFORMS INDEX, PEER GROUP In the Pacific Rim region, the Bank of Australia recently reported that the Amid signs of an improving global some of the strongest economic growth improving international situation has economic environment, AIM Asia Pacific rates in the world. Indeed, an October been accompanied by a marked Growth Fund posted double-digit returns 2003 statement by the World Bank strengthening of the domestic economy for the reporting period ended October suggested that the slowdown in emerging since mid-year. Consumer spending in 31, 2003. For the fiscal year covered by Asian economies early in 2003 was less Australia has increased with strong this report, the fund's Class A, Class than feared, and the Bank expects growth in retail sales and motor vehicle B, and Class C shares returned 41.62%, overall Asian growth to reach 5% in sales. Consumer confidence is now close 40.75%, and 40.61%, respectively, at net 2003. to historical highs. One area of the asset value. Australian economy that did not share in Of course, there continues to be a this general strength was the export Over the same period, the fund wide variance in economic growth amid sector, where performance has been held outperformed its benchmark, the MSCI All Asian economies. China continues to be back by a number of factors including Country (AC) Asia Pacific Free ex-Japan the growth engine for the region, the weak global environment of the past Index, which returned 38.75%. The fund's bolstered by the strength of its exports couple of years, the drought and the Class A shares at NAV posted a slightly and domestic consumption. In fact, there downturn in international tourism higher return than its peer group, the is evidence that policy makers are now earlier in the year. Lipper Pacific ex-Japan Fund Index, focusing on means to prevent overheating which returned 41.34% for the fiscal in the areas of real estate and On the currency front, the U.S. year. infrastructure. dollar continued to be weak compared to many foreign currencies during the MARKET CONDITIONS Beyond China, activity in other fiscal year. Some Asian currencies, such parts of Asia picked up in the third as the Hong Kong dollar, are pegged to During the fiscal year, Asia/Pacific Rim quarter of 2003. The slump in tourism the U.S. dollar and, therefore saw stocks, as represented by the MSCI All appears to be over as international little fluctuation from the U.S. Country (AC) Asia Pacific Free ex-Japan arrivals to countries most affected by currency. However, several Asian/Pacific Index, posted strong returns, SARS have almost fully recovered. Along Rim currencies appreciated significantly significantly outperforming U.S. stocks, with the increase in tourism, industrial against the U.S. dollar including the as represented by the S&P 500 Index. production and exports began to rise South Korean won, Indian rupee and the Despite external shocks, such as the across the region in the third quarter, Australian dollar. outbreak of SARS (severe acute after weakening the prior quarter. For respiratory syndrome) and weak global instance, in Singapore, exports of economic conditions earlier in the year, electronics and biomedical products rose Asian economies continued to post significantly in the
=================================================================================================================================== TOTAL RETURNS TOP 10 EQUITY HOLDINGS* 10/31/02-10/31/03 1. Samsung Electronics Co., Ltd. (South Korea) 3.4% [BAR CHART] 2. Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) 2.8 AIM ASIA PACIFIC GROWTH FUND CLASS A SHARES AT NAV 41.62% 3. Hana Bank (South Korea) 2.7 MSCI ALL COUNTRY (AC) 4. Dah Sing Financial Group (Hong Kong) 2.2 ASIA PACIFIC FREE EX-JAPAN INDEX 38.75% 5. BHP Billiton Ltd. (Australia) 1.9 6. Techtronic Industries Co. Ltd. (Hong Kong) 1.9 7. Li & Fung Ltd. (Bermuda) 1.8 8. ASM Pacific Technology Ltd. (Cayman Islands) 1.8 9. Ranbaxy Laboratories Ltd. (India) 1.7 Source: Lipper, Inc. 10. Esprit Holdings Ltd. (Bermuda) 1.7 *Excludes money market fund holdings. The fund's holdings are subject to change, and there is no assurance that the fund will continue to hold any particular security. ===================================================================================================================================
2 YOUR FUND The fund's investment strategy is to At the close of the reporting period, SHUXIN CAO focus on stocks with above-average, the fund was overweight in information long-term growth in earnings and strong technology, industrials, consumer [PHOTO OF Mr. Cao, Chartered prospects for future growth. To that discretionary and consumer staples SHUXIN CAO] Financial Analyst, end, Techtronic Industries, a supplier sectors versus its benchmark. is manager of AIM of home improvement products based in Asia Pacific Growth Fund. He joined AIM Hong Kong, is a good example of a stock IN CLOSING in 1997. Mr. Cao graduated from Tianjin that contributed to fund performance Foreign Language Institute with a B.A. during the fiscal year. The managing director of the in English. He also received an M.B.A. International Monetary Fund suggested in from Texas A&M University and is a Techtronic reported that the a recent speech regarding emerging Certified Public Accountant. company's revenue and net profit for the markets that Asia has become an six months ended June 2003 were 21.6% increasingly important force in the and 24.1% higher than the same period in global economy. Indeed, despite BARRETT K. SIDES the prior year. The company's chief challenges such as the SARS outbreak, executive officer underscored that these Asian markets posted strong regional [PHOTO OF Mr. Sides is lead results were achieved at a time when the returns for the fiscal year. Whether BARRETT K. manager of AIM Asia global business environment was these market rallies are sustainable SIDES] Pacific Growth Fund. adversely affected by war in Iraq and remains to be seen. Regardless of He joined AIM in the SARS outbreak, which affected the economic or market trends, we remain 1990. Mr. Sides graduated with a B.S. in confidence of consumers and retailers. committed to owning stocks that fit the economics from Bucknell University. He fund's investment objective. also received a master's in While fund performance was strong international business from the over the fiscal year, Kookmin Bank, See important fund and index University of St. Thomas. South Korea's largest lender, proved disclosures inside front cover. somewhat of a drag on performance as Assisted by Asia Pacific Team merger-related issues and fears over liquidity issues in the credit card sector have hampered bank stocks recently.
[GRAPHIC] For More Information Visit AIMinvestments.com =================================================================================================================================== TOP 10 COUNTRIES TOP 10 INDUSTRIES* TOTAL NUMBER OF HOLDINGS* 96 1. South Korea 18.1% 1. Diversified Banks 12.4% TOTAL NET ASSETS $130.6 MILLION 2. Taiwan 15.9 2. Electronic Equipment Manufacturers 6.0 3. Hong Kong 12.6 3. Semiconductors 4.9 4. Australia 11.7 4. Industrial Conglomerates 4.5 5. India 9.4 5. Packaged Foods & Meats 4.1 6. Singapore 6.0 6. Pharmaceuticals 3.2 7. China 4.8 7. Diversified Metals & Mining 2.6 8. Cayman Islands 4.2 8. Construction, Farm Machinery & Heavy Trucks 2.5 9. Thailand 3.6 9. Construction Materials 2.4 10. Bermuda 3.5 10. Marine 2.3 ===================================================================================================================================
3 FUND PERFORMANCE [MOUNTAIN CHART] RESULTS OF A $10,000 INVESTMENT 11/3/97-10/31/03*
DATE AIM ASIA PACIFIC AIM ASIA PACIFIC AIM ASIA PACIFIC MSCI ALL COUNTRY AC GROWTH FUND GROWTH FUND GROWTH FUND ASIA PACIFIC FREE CLASS A SHARES CLASS B SHARES CLASS C SHARES EX-JAPAN INDEX *11/3/979450 $ 10000 $ 10000 $ 10000 $ 10000 1/31/1998 7834 8280 8290 8811 4/30/1998 8713 9199 9200 9367 7/31/1998 6682 7039 7030 7421 10/31/1998 7267 7629 7610 8110 1/31/1999 7305 7668 7640 8905 4/30/1999 9138 9580 9553 11029 7/31/1999 10459 10932 10914 11713 10/31/1999 10232 10662 10642 11340 1/31/2000 12085 12574 12544 13038 4/30/2000 13502 14016 14007 11981 7/31/2000 12456 12915 12906 11335 10/31/2000 10167 10511 10502 9410 1/31/2001 10810 11160 11160 10248 4/30/2001 9685 9985 9985 8948 7/31/2001 9285 9554 9554 8501 10/31/2001 8188 8419 8409 7626 1/31/2002 9407 9653 9645 9298 4/30/2002 9969 10225 10208 9941 7/31/2002 9092 9311 9294 8994 10/31/2002 8130 8307 8289 8601 1/31/2003 8339 8508 8490 8680 4/30/2003 8063 8216 8199 8722 7/31/2003 9712 9883 9847 10275 10/31/2003 $ 11516 $ 11594 $ 11654 $ 12010 Source: Lipper, Inc.
*Index performance is for the period 10/31/97-10/31/03 Your fund's total return includes sales charges, expenses and management fees. The performance of the fund's share classes will differ due to different sales charge structures and class expenses. For fund performance calculations and indexes used in this report, please see the inside front cover. Performance shown in the chart and table does not reflect deduction of taxes a shareholder would pay on fund distributions or sale of fund shares. Performance of the indexes does not reflect the effects of taxes. Results for B shares are calculated as if a hypothetical shareholder had liquidated his entire investment in the fund at the close of the reporting period and paid the applicable contingent deferred sales charges. This chart uses a logarithmic scale, which means the price scale (vertical axis) is structured so that a given distance always represents the same percent change in price, rather than the same absolute change in price. For example, the distance from one to 10 is the same as the distance from 10 to 100 on a logarithmic chart, but the latter distance is 10 times greater on a linear chart. A logarithmic scale better illustrates performance in the fund's early years before reinvested distributions and compounding create the potential for the original investment to grow to very large numbers. Past performance cannot guarantee comparable future results. DUE TO SIGNIFICANT MARKET VOLATILITY, RESULTS OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE SHOWN. CALL YOUR FINANCIAL ADVISOR FOR MORE CURRENT PERFORMANCE. =================================================================================================================================== FUND VS. INDEX AVERAGE ANNUAL TOTAL RETURNS In addition to fund returns as of the Total returns 10/31/02-10/31/03, As of 10/31/03, including sales charges close of the fiscal year, industry excluding sales charges regulations require us to provide CLASS A SHARES average annual total returns (including Class A Shares 41.62% Inception(11/3/97) 2.38% sales charges) for periods ended 9/30/03, the most recent calendar Class B Shares 40.75 5 Years 8.40 quarter-end, which were as follows. Class C Shares 40.61 1 Year 33.78 MSCI All Country (AC) Asia Pacific Free ex-Japan Index 38.75 CLASS B SHARES AVERAGE ANNUAL TOTAL RETURNS Inception (11/3/97) 2.50% As of 9/30/03, including sales charges 5 Years 8.63 1 Year 35.75 CLASS A SHARES Inception(11/3/97) 1.07% CLASS C SHARES 5 Years 9.22 Inception (11/3/97) 2.59% 1 Year 25.08 5 Years 8.90 1 Year 39.61 CLASS B SHARES Inception (11/3/97) 1.20% 5 Years 9.44 1 Year 26.62 CLASS C SHARES Inception (11/3/97) 1.29% 5 Years 9.67 1 Year 30.46 ===================================================================================================================================
4 FINANCIALS SCHEDULE OF INVESTMENTS October 31, 2003
MARKET SHARES VALUE - ------------------------------------------------------------------------ FOREIGN STOCKS & OTHER EQUITY INTERESTS-93.00% AUSTRALIA-11.70% Amcor Ltd. (Paper Packaging) 174,500 $ 1,049,770 - ------------------------------------------------------------------------ BHP Billiton Ltd. (Diversified Metals & Mining) 305,700 2,535,730 - ------------------------------------------------------------------------ BHP Steel Ltd. (Steel) 286,940 1,100,703 - ------------------------------------------------------------------------ Boral Ltd. (Construction Materials) 240,200 935,009 - ------------------------------------------------------------------------ Coca-Cola Amatil Ltd. (Soft Drinks) 80,000 333,492 - ------------------------------------------------------------------------ Cochlear Ltd. (Health Care Equipment) 29,300 653,218 - ------------------------------------------------------------------------ Computershare Ltd. (Data Processing Services) 519,200 1,315,520 - ------------------------------------------------------------------------ Foodland Associated Ltd. (Food Retail) 40,576 549,943 - ------------------------------------------------------------------------ Promina Group Ltd. (Property & Casualty Insurance) (Acquired 05/12/03; Cost $125,108)(a) 107,700 253,066 - ------------------------------------------------------------------------ Ramsay Health Care Ltd. (Health Care Facilities) 423,700 1,289,457 - ------------------------------------------------------------------------ St. George Bank Ltd. (Diversified Banks) 53,100 785,454 - ------------------------------------------------------------------------ Toll Holdings Ltd. (Trucking) 350,100 2,071,468 - ------------------------------------------------------------------------ Wesfarmers Ltd. (Industrial Conglomerates) 48,200 989,293 - ------------------------------------------------------------------------ WMC Resources Ltd. (Diversified Metals & Mining)(b) 220,000 797,210 - ------------------------------------------------------------------------ Woolworths Ltd. (Food Retail) 78,500 617,809 ======================================================================== 15,277,142 ======================================================================== BERMUDA-3.51% Esprit Holdings Ltd. (Apparel Retail) 691,000 2,171,165 - ------------------------------------------------------------------------ Li & Fung Ltd. (Distributors) 1,434,000 2,409,820 ======================================================================== 4,580,985 ======================================================================== CAYMAN ISLANDS-4.19% ASM Pacific Technology Ltd. (Semiconductor Equipment) 634,000 2,371,703 - ------------------------------------------------------------------------ Global Bio-chem Technology Group Co. Ltd. (Biotechnology) 3,620,000 1,841,326 - ------------------------------------------------------------------------ Xinao Gas Holdings Ltd. (Gas Utilities)(b) 2,332,000 1,253,747 ======================================================================== 5,466,776 ======================================================================== CHINA-4.78% Anhui Conch Cement Co. Ltd.-Class H (Construction Materials) 442,000 503,722 - ------------------------------------------------------------------------ China Petroleum and Chemical Corp. (Sinopec)- Class H (Integrated Oil & Gas) 4,994,000 1,655,964 - ------------------------------------------------------------------------ China Shipping Development Co. Ltd.-Class H (Marine) 874,000 573,993 - ------------------------------------------------------------------------ Lianhua Supermarket Holdings Ltd.-Class H (Food Retail)(b) 1,027,000 1,005,099 - ------------------------------------------------------------------------ Tong Ren Tang Technologies Co. Ltd-Class H (Pharmaceuticals) 274,000 525,729 - ------------------------------------------------------------------------
MARKET SHARES VALUE - ------------------------------------------------------------------------ CHINA-(CONTINUED) Travelsky Technology Ltd.-Class H (Data Processing & Outsourced Services) (Acquired 02/01/01-06/13/03; Cost $464,016)(a) 750,000 $ 705,032 - ------------------------------------------------------------------------ Weiqiao Textile Co. Ltd.-Class H (Textiles) (Acquired 09/19/03-09/24/03; Cost $1,259,195)(a)(b) 1,087,100 1,273,902 ======================================================================== 6,243,441 ======================================================================== HONG KONG-12.57% Cathay Pacific Airways Ltd. (Airlines) 924,000 1,766,947 - ------------------------------------------------------------------------ Cheung Kong (Holdings) Ltd. (Real Estate Management & Development) 126,000 1,050,595 - ------------------------------------------------------------------------ China Merchants Holdings International Co. Ltd. (Industrial Conglomerates) 1,116,000 1,508,963 - ------------------------------------------------------------------------ CNOOC Ltd.-ADR (Oil & Gas Exploration & Production) 20,600 775,590 - ------------------------------------------------------------------------ COFCO International Ltd. (Packaged Foods & Meats) 1,913,000 1,182,446 - ------------------------------------------------------------------------ Dah Sing Financial Group (Diversified Banks) 415,600 2,903,356 - ------------------------------------------------------------------------ Denway Motors Ltd. (Automobile Manufacturers) 796,000 656,021 - ------------------------------------------------------------------------ Hutchison Whampoa Ltd. (Industrial Conglomerates) 168,000 1,303,441 - ------------------------------------------------------------------------ Lee & Man Paper Manufacturing Ltd. (Metal & Glass Containers) (Acquired 09/22/03-09/26/03; Cost $738,776)(a)(b) 1,359,800 1,006,857 - ------------------------------------------------------------------------ Sun Hung Kai Properties Ltd. (Real Estate Management & Development) 99,000 838,216 - ------------------------------------------------------------------------ Techtronic Industries Co. Ltd. (Household Appliances) (Acquired 07/26/02-08/09/02; Cost $688,550)(a) 894,000 2,463,635 - ------------------------------------------------------------------------ Wing Hang Bank Ltd. (Diversified Banks)(b) 154,000 949,907 ======================================================================== 16,405,974 ======================================================================== INDIA-9.38% Bajaj Auto Ltd. (Motorcycle Manufacturers) 42,000 848,202 - ------------------------------------------------------------------------ Bharat Forge Ltd. (Industrial Machinery) 53,300 696,475 - ------------------------------------------------------------------------ Dr. Reddy's Laboratories Ltd. (Pharmaceuticals) 55,500 1,463,672 - ------------------------------------------------------------------------ HDFC Bank Ltd. (Diversified Banks) 202,400 1,412,825 - ------------------------------------------------------------------------ HDFC Bank Ltd.-ADR (Diversified Banks) 17,500 453,075 - ------------------------------------------------------------------------ Hindustan Lever Ltd. (Household Products) 179,636 692,066 - ------------------------------------------------------------------------ Housing Development Finance Corp. Ltd. (Thrifts & Mortgage Finance) 104,300 1,196,504 - ------------------------------------------------------------------------ Infosys Technologies Ltd. (IT Consulting & Other Services) 20,682 2,163,784 - ------------------------------------------------------------------------ Ranbaxy Laboratories Ltd. (Pharmaceuticals) 100,560 2,181,500 - ------------------------------------------------------------------------
F-1
MARKET SHARES VALUE - ------------------------------------------------------------------------ INDIA-(CONTINUED) Tata Motors Ltd. (Construction, Farm Machinery & Heavy Trucks)(b) 138,000 $ 1,140,357 ======================================================================== 12,248,460 ======================================================================== INDONESIA-0.95% PT Lippo Bank Tbk (Diversified Banks)(b) 1,181,296 64,650 - ------------------------------------------------------------------------ PT Telekomunikasi Indonesia (Integrated Telecommunication Services) 1,671,000 1,180,015 ======================================================================== 1,244,665 ======================================================================== NETHERLANDS-0.72% Hardie (James) Industries N.V. (Construction Materials) 185,000 938,795 ======================================================================== PHILIPPINES-1.57% Philippine Long Distance Telephone Co. (Integrated Telecommunication Services)(b) 98,000 1,353,249 - ------------------------------------------------------------------------ SM Prime Holdings (Real Estate Management & Development) 5,333,900 693,214 ======================================================================== 2,046,463 ======================================================================== SINGAPORE-5.99% Keppel Corp. Ltd. (Industrial Conglomerates) 604,000 2,065,996 - ------------------------------------------------------------------------ Neptune Orient Lines Ltd. (Marine)(b) 704,000 898,465 - ------------------------------------------------------------------------ SembCorp Logistics Ltd. (Marine Ports & Services) 1,392,000 1,344,386 - ------------------------------------------------------------------------ Singapore Airlines Ltd. (Airlines)(b) 116,000 806,899 - ------------------------------------------------------------------------ United Overseas Bank Ltd. (Diversified Banks) 178,000 1,391,664 - ------------------------------------------------------------------------ Venture Corp. Ltd. (Electronic Manufacturing Services) 121,000 1,314,688 ======================================================================== 7,822,098 ======================================================================== SOUTH KOREA-18.14% Cheil Communications Inc. (Advertising) 11,240 1,377,102 - ------------------------------------------------------------------------ CJ Corp. (Packaged Foods & Meats) 43,090 2,151,769 - ------------------------------------------------------------------------ Daewoo Shipbuilding & Marine Engineering Co., Ltd. (Construction, Farm Machinery & Heavy Trucks)(b) 154,000 2,068,948 - ------------------------------------------------------------------------ Hana Bank (Diversified Banks) 204,600 3,561,267 - ------------------------------------------------------------------------ Hankook Tire Co. Ltd. (Tires & Rubber) 185,400 1,279,863 - ------------------------------------------------------------------------ Hyundai Department Store Co., Ltd. (Department Stores) 56,000 1,417,153 - ------------------------------------------------------------------------ Hyundai Motor Co. Ltd. (Automobile Manufacturers) 20,200 673,333 - ------------------------------------------------------------------------ Kook Soon Dang Brewery Co., Ltd. (Packaged Foods & Meats) 104,872 1,949,458 - ------------------------------------------------------------------------ Kookmin Bank (Diversified Banks) 50,700 1,850,646 - ------------------------------------------------------------------------ LG Chem Ltd. (Commodity Chemicals) 15,830 635,340 - ------------------------------------------------------------------------ POSCO-ADR (Steel) 38,500 1,115,730 - ------------------------------------------------------------------------ Samsung Electronics Co., Ltd. (Electronic Equipment Manufacturers) 11,320 4,495,480 - ------------------------------------------------------------------------
MARKET SHARES VALUE - ------------------------------------------------------------------------ SOUTH KOREA-(CONTINUED) Shinsegae Co., Ltd. (Department Stores) 5,500 $ 1,103,718 ======================================================================== 23,679,807 ======================================================================== TAIWAN-15.86% Ambit Microsystems Corp. (Computer Storage & Peripherals) 567,500 1,555,482 - ------------------------------------------------------------------------ Asia Optical Co., Inc. (Photographic Products) 316,000 2,086,177 - ------------------------------------------------------------------------ AU Optronics Corp. (Electronic Equipment Manufacturers) 637,000 859,847 - ------------------------------------------------------------------------ AU Optronics Corp.-ADR (Electronic Equipment Manufacturers) 31,500 427,770 - ------------------------------------------------------------------------ Chinatrust Financial Holding Co. Ltd. (Diversified Banks) 548,000 570,127 - ------------------------------------------------------------------------ Compal Electronics Inc. (Computer Hardware) 794,250 1,205,537 - ------------------------------------------------------------------------ Hon Hai Precision Industry Co., Ltd. (Electronic Equipment Manufacturers) 348,240 1,560,050 - ------------------------------------------------------------------------ Ichia Technologies, Inc. (Computer Storage & Peripherals)(b) 480,000 877,100 - ------------------------------------------------------------------------ Largan Precision Co., Ltd. (Photographic Products) 58,100 621,583 - ------------------------------------------------------------------------ MediaTek Inc. (Semiconductors) 166,050 1,712,865 - ------------------------------------------------------------------------ Merry Electronics Co., Ltd. (Electronic Equipment Manufacturers) 302,000 489,537 - ------------------------------------------------------------------------ Novatek Microelectronics Corp., Ltd. (Semiconductors) 310,500 979,178 - ------------------------------------------------------------------------ Oriental Union Chemical Corp. (Commodity Chemicals) 892,000 1,156,734 - ------------------------------------------------------------------------ Quanta Computers Inc. (Computer Hardware) 508,255 1,385,605 - ------------------------------------------------------------------------ Taiwan Semiconductor Manufacturing Co. Ltd. (Semiconductors)(b) 1,842,307 3,637,918 - ------------------------------------------------------------------------ Wan Hai Lines Ltd. (Marine) 1,030,000 1,007,840 - ------------------------------------------------------------------------ Yang Ming Marine Transport (Marine) 577,000 578,190 ======================================================================== 20,711,540 ======================================================================== THAILAND-3.64% Kasikornbank PCL (Diversified Banks)(b) 1,146,000 1,276,521 - ------------------------------------------------------------------------ Land & Houses PCL (Homebuilding) 2,072,000 700,175 - ------------------------------------------------------------------------ Siam Cement PCL (The) (Construction Materials) 143,000 808,961 - ------------------------------------------------------------------------ Siam Commercial Bank PCL (Diversified Banks)(b) 927,000 957,165 - ------------------------------------------------------------------------ Thai Olefins PCL (Diversified Chemicals)(b)(c) 1,330,000 1,008,736 ======================================================================== 4,751,558 ======================================================================== Total Foreign Stocks & Other Equity Interests (Cost $84,197,745) 121,417,704 ========================================================================
PRINCIPAL AMOUNT BONDS & NOTES-0.00% INDIA-0.00% Hindustan Lever Ltd. (Household Products), Sec. Deb., 9.00%, 01/01/05 (Cost $0)(d)(e) INR $ 512,800 727 ========================================================================
F-2
MARKET SHARES VALUE ======================================================================== MONEY MARKET FUNDS-3.10% STIC Liquid Assets Portfolio(f) 2,018,963 $ 2,018,963 - ------------------------------------------------------------------------ STIC Prime Portfolio(f) 2,018,963 2,018,963 ======================================================================== Total Money Market Funds (Cost $4,037,926) 4,037,926 ======================================================================== TOTAL INVESTMENTS-96.10% (excluding investments purchased with cash collateral from securities loaned) (Cost $88,235,671) 125,456,357 ======================================================================== INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED MONEY MARKET FUNDS-5.33% STIC Liquid Assets Portfolio(f)(g) 3,479,857 3,479,857 - ------------------------------------------------------------------------ STIC Prime Portfolio(f)(g) 3,479,856 3,479,856 ======================================================================== Total Money Market Funds (purchased with cash collateral from securities loaned) (Cost $6,959,713) 6,959,713 ======================================================================== TOTAL INVESTMENTS-101.43% (Cost $95,195,384) 132,416,070 ======================================================================== OTHER ASSETS LESS LIABILITIES-(1.43%) (1,862,080) ======================================================================== NET ASSETS-100.00% $130,553,990 ________________________________________________________________________ ========================================================================
Investment Abbreviations: ADR - American Depositary Receipt Deb. - Debentures INR - Indian Rupee Sec. - Secured
Notes to Schedule of Investments: (a) Security not registered under the Securities Act of 1933, as amended (e.g., the security was purchased in a Rule 144A transaction or a Regulation D transaction). The security may be resold only pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The Fund has no rights to demand registration of these securities. The aggregate market value of these securities at 10/31/03 was $5,702,492, which represented 4.37% of the Fund's net assets . Unless otherwise indicated, these securities are not considered to be illiquid. (b) Non-income producing security. (c) Security fair valued in accordance with the procedures established by the Board of Directors. (d) Foreign denominated security. Par value is denominated in currency indicated. (e) Acquired as part of an arrangement for issue of bonus debentures. (f) The money market fund and the Fund are affiliated by having the same investment advisor. (g) The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Notes to Financial Statements. F-3 STATEMENT OF ASSETS AND LIABILITIES October 31, 2003 ASSETS: Investments, at market value (cost $84,197,745)* $121,418,431 - ----------------------------------------------------------- Investments in affiliated money market funds (cost $10,997,639) 10,997,639 - ----------------------------------------------------------- Foreign currencies, at value (cost $4,994,962) 4,984,405 - ----------------------------------------------------------- Cash 1,200,007 - ----------------------------------------------------------- Receivables for: Investments sold 1,087,972 - ----------------------------------------------------------- Capital stock sold 1,556,439 - ----------------------------------------------------------- Dividends and interest 45,475 - ----------------------------------------------------------- Investment for deferred compensation plan 26,850 - ----------------------------------------------------------- Other assets 37,282 ___________________________________________________________ =========================================================== Total assets 141,354,500 ___________________________________________________________ =========================================================== LIABILITIES: Payables for: Investments purchased 2,064,506 - ----------------------------------------------------------- Capital stock reacquired 1,425,110 - ----------------------------------------------------------- Deferred compensation plan 26,850 - ----------------------------------------------------------- Collateral upon return of securities loaned 6,959,713 - ----------------------------------------------------------- Accrued distribution fees 55,145 - ----------------------------------------------------------- Accrued directors' fees 3,072 - ----------------------------------------------------------- Accrued transfer agent fees 69,977 - ----------------------------------------------------------- Accrued operating expenses 196,137 =========================================================== Total liabilities 10,800,510 =========================================================== Net assets applicable to shares outstanding $130,553,990 ___________________________________________________________ =========================================================== NET ASSETS CONSIST OF: Capital (par value and additional paid-in) $165,932,574 - ----------------------------------------------------------- Undistributed net investment income (loss) (31,403) - ----------------------------------------------------------- Undistributed net realized gain (loss) from investment securities, foreign currencies and futures contracts (72,581,591) - ----------------------------------------------------------- Unrealized appreciation of investment securities and foreign currencies 37,234,410 =========================================================== $130,553,990 ___________________________________________________________ =========================================================== NET ASSETS: Class A $ 97,191,762 ___________________________________________________________ =========================================================== Class B $ 24,599,404 ___________________________________________________________ =========================================================== Class C $ 8,762,824 ___________________________________________________________ =========================================================== CAPITAL STOCK, $0.001 PAR VALUE PER SHARE: Class A: Authorized 240,000,000 - ----------------------------------------------------------- Outstanding 8,049,332 ___________________________________________________________ =========================================================== Class B: Authorized 240,000,000 - ----------------------------------------------------------- Outstanding 2,113,430 ___________________________________________________________ =========================================================== Class C: Authorized 240,000,000 - ----------------------------------------------------------- Outstanding 755,464 ___________________________________________________________ =========================================================== Class A: Net asset value per share $ 12.07 - ----------------------------------------------------------- Offering price per share: (Net asset value of $12.07 / 94.50%) $ 12.77 ___________________________________________________________ =========================================================== Class B: Net asset value and offering price per share $ 11.64 ___________________________________________________________ =========================================================== Class C: Net asset value and offering price per share $ 11.60 ___________________________________________________________ ===========================================================
* At October 31, 2003, securities with an aggregate market value of $5,698,851 were on loan to brokers. See Notes to Financial Statements. F-4 STATEMENT OF OPERATIONS For the year ended October 31, 2003 INVESTMENT INCOME: Dividends (net of foreign withholding tax of $218,980) $ 2,180,473 - ------------------------------------------------------------------------- Dividends from affiliated money market funds 69,535 - ------------------------------------------------------------------------- Securities lending 10,836 ========================================================================= Total investment income 2,260,844 ========================================================================= EXPENSES: Advisory fees 999,693 - ------------------------------------------------------------------------- Administrative services fees 50,000 - ------------------------------------------------------------------------- Custodian fees 228,701 - ------------------------------------------------------------------------- Distribution fees: Class A 276,977 - ------------------------------------------------------------------------- Class B 199,152 - ------------------------------------------------------------------------- Class C 61,793 - ------------------------------------------------------------------------- Interest 10,506 - ------------------------------------------------------------------------- Transfer agent fees 658,980 - ------------------------------------------------------------------------- Directors' fees 10,428 - ------------------------------------------------------------------------- Other 214,070 ========================================================================= Total expenses 2,710,300 ========================================================================= Less: Fees waived, expenses reimbursed and expense offset arrangements (164,537) ========================================================================= Net expenses 2,545,763 ========================================================================= Net investment income (loss) (284,919) ========================================================================= REALIZED AND UNREALIZED GAIN FROM INVESTMENT SECURITIES, FOREIGN CURRENCIES AND FUTURES CONTRACTS: Net realized gain from: Investment securities (net of tax on the sale of foreign investments of $111,412-Note 1F) 12,454,577 - ------------------------------------------------------------------------- Foreign currencies 79,177 - ------------------------------------------------------------------------- Futures contracts 14,714 ========================================================================= 12,548,468 ========================================================================= Change in net unrealized appreciation of: Investment securities (net of change in estimated tax on foreign investments held of $88,167-Note 1F) 31,321,936 - ------------------------------------------------------------------------- Foreign currencies 39,026 ========================================================================= 31,360,962 ========================================================================= Net gain from investment securities, foreign currencies and futures contracts 43,909,430 ========================================================================= Net increase in net assets resulting from operations $43,624,511 _________________________________________________________________________ =========================================================================
See Notes to Financial Statements. F-5 STATEMENT OF CHANGES IN NET ASSETS For the years ended October 31, 2003 and 2002
2003 2002 - ----------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $ (284,919) $ (644,688) - ----------------------------------------------------------------------------------------- Net realized gain (loss) from investment securities, foreign currencies and futures contracts 12,548,468 (1,874,392) - ----------------------------------------------------------------------------------------- Change in net unrealized appreciation of investment securities and foreign currencies 31,360,962 6,142,476 ========================================================================================= Net increase in net assets resulting from operations 43,624,511 3,623,396 ========================================================================================= Share transactions-net: Class A 549,387 (1,562,080) - ----------------------------------------------------------------------------------------- Class B (2,436,802) (5,905,946) - ----------------------------------------------------------------------------------------- Class C 75,797 686,025 ========================================================================================= Net increase (decrease) in net assets resulting from share transactions (1,811,618) (6,782,001) ========================================================================================= Net increase (decrease) in net assets 41,812,893 (3,158,605) ========================================================================================= NET ASSETS: Beginning of year 88,741,097 91,899,702 ========================================================================================= End of year (including undistributed net investment income (loss) of $(31,403) and $(26,192) for 2003 and 2002, respectively) $130,553,990 $88,741,097 _________________________________________________________________________________________ =========================================================================================
See Notes to Financial Statements. F-6 NOTES TO FINANCIAL STATEMENTS October 31, 2003 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Asia Pacific Growth Fund, (the "Fund") is a series portfolio of AIM International Funds, Inc. (the "Company"). The Company is a Maryland corporation registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of five separate portfolios. The Fund currently offers multiple classes of shares. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Effective November 25, 2003, the Fund redomesticated as a series portfolio of a newly formed Delaware statutory trust, AIM International Mutual Funds. The Fund's investment objective is long-term growth of capital. Companies are listed in the Schedule of Investments based on the country in which they are organized. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not securities reported on the NASDAQ National Market System) is valued on the basis of prices furnished by independent pricing services or market makers. Each security reported on the NASDAQ National Market System is valued at the NASDAQ Official Closing Price ("NOCP") as of the close of the customary trading session on the valuation date or absent a NOCP, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Company's officers in a manner specifically authorized by the Board of Directors of the Company. Market trends, movement in exchange traded funds and ADRs, and the bid/ask quotes of brokers and information providers may be reviewed in the course of making a good faith determination of a security's fair value. Short-term obligations having 60 days or less to maturity and commercial paper are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Foreign securities are converted into U.S. dollar amounts using exchange rates as of the close of the NYSE. Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of the close of the respective markets. Occasionally, events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE which would not ordinarily be reflected in the computation of the Fund's net asset value. If a development/event is so significant that there is a reasonably high degree of certainty as to both the effect and the degree of effect that the development/event has actually caused that closing price to no longer reflect actual value, the closing prices, as determined at the close of the applicable foreign market, may be adjusted to reflect the fair value of the affected foreign securities as of the close of the NYSE as determined in good faith by or under the supervision of the Board of Directors. 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 on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date. The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class. C. DISTRIBUTIONS -- Distributions from income and net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes. D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M 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 gain) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. Any capital loss carryforwards listed are reduced for limitations, if any, to the extent required by the Internal Revenue Code. F-7 E. REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements. 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. Eligible securities for collateral are U.S. Government Securities, U.S. Government Agency Securities and/or Investment Grade Debt Securities. Collateral consisting of U.S. Government Securities and U.S. Government Agency Securities is marked to market daily to ensure its market value is at least 102% of the sales price of the repurchase agreement. Collateral consisting of Investment Grade Debt Securities is marked to market daily to ensure its market value is at least 105% of the sales price of the repurchase agreement. The investments in some repurchase agreements are through participation with other mutual funds, private accounts and certain non-registered investment companies managed by the investment advisor or its affiliates ("Joint repurchase agreements"). If the seller of a repurchase agreement fails to repurchase the security in accordance with the terms of the agreement, the Fund might incur expenses in enforcing its rights, and could experience losses, including a decline in the value of the underlying security and loss of income. F. FOREIGN CURRENCY TRANSLATIONS -- Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. G. FOREIGN CURRENCY CONTRACTS -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund may enter into a foreign currency contract to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. The Fund may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Fund could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. H. FUTURES CONTRACTS -- The Fund may purchase or sell futures contracts as a hedge against changes in market conditions. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities as collateral for the account of the broker (the Fund's agent in acquiring the futures position). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by "marking to market" on a daily basis to reflect the market value of the contracts at the end of each day's trading. Variation margin payments are made or received depending upon whether unrealized gains or losses are incurred. When the contracts are closed, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund's basis in the contract. Risks also include to varying degrees, the risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities. I. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. 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 0.95% of the first $500 million of the Fund's average daily net assets, plus 0.90% of the Fund's average daily net assets in excess of $500 million. AIM has voluntarily agreed to waive fees and/or reimburse expenses (excluding Rule 12b-1 fees, interest, taxes, fund merger and reorganization, extraordinary items, including other items designed as such by the Board of Directors and increases in expenses due to expense offset arrangements, if any) for Class A, Class B and Class C shares to the extent necessary to limit the total annual fund operating expenses of Class A shares to 2.25%. Voluntary waivers or reimbursements may be modified or discontinued at any time without further notice to investors. Further, AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of 25% of the advisory fee AIM receives from the affiliated money market funds in which the Fund has invested (excluding investments made in affiliated money market funds with cash collateral from securities loaned by the Fund). For the year ended October 31, 2003, AIM waived fees of $157,515. Under a prior agreement to limit the aggregate costs of certain shareholder services provided by third party administrators, AIM reimbursed fees of $4,765 for Class A, Class B and Class C shares based on the relative net assets of those classes. 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 October 31, 2003, AIM was paid $50,000 for such services. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay AIM Investment Services, Inc. ("AISI"), formerly known as AIM Fund Services, Inc., a fee for providing transfer agency and shareholder services to the Fund. During the year ended October 31, 2003, AISI retained $394,369 for such services. F-8 The Company has entered into master distribution agreements with A I M Distributors, Inc. ("AIM Distributors") to serve as the distributor for the Class A, Class B and Class C shares of the Fund. The Company has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A, Class B and Class C shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays AIM Distributors compensation at the annual rate of 0.35% of the Fund's average daily net assets of Class A shares and 1.00% of the average daily net assets of Class B and Class C shares. Of these amounts, AIM Distributors may pay a service fee up to 0.25% of the average daily net assets of the Class A, Class B or Class C shares to selected dealers and financial institutions who furnish continuing personal shareholder services to their customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. NASD Rules also impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. Pursuant to the Plans, for the year ended October 31, 2003, the Class A, Class B and Class C shares paid $276,977, $199,152, and $61,793, respectively. Front-end sales commissions and contingent deferred sales charges ("CDSC") (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the year ended October 31, 2003, AIM Distributors retained $9,282 in front-end sales commissions from the sale of Class A shares and $118,133, $0 and $17,361 from Class A, Class B shares and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders. Certain officers and directors of the Company are officers and directors of AIM, AISI and/or AIM Distributors. NOTE 3--EXPENSE OFFSET ARRANGEMENTS For the year ended October 31, 2003, the Fund received reductions in transfer agency fees from AISI (an affiliate of AIM) of $2,257 under an expense offset arrangement which resulted in a reduction of the Fund's total expenses of $2,257. NOTE 4--DIRECTORS' FEES Directors' fees represent remuneration paid to each Director of the Company who is not an "interested person" of AIM. Directors have the option to defer compensation payable by the Company. The Directors deferring compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Current Directors are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Directors over a period of time based on the number of years of service. Certain former Directors also participate in a retirement plan and receive benefits under such plan. During the year ended October 31, 2003, the Fund paid legal fees of $2,242 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Directors. A member of that firm is a Director of the Company. NOTE 5--BORROWINGS The Fund may participate in an interfund lending facility that AIM has established for temporary borrowings by the AIM Funds. An interfund loan will be made under this facility only if the loan rate (an average of the rate available on bank loans and the rate available on investments in overnight repurchase agreements) is favorable to both the lending fund and the borrowing fund. Under certain circumstances, a loan will be secured by collateral. To the extent that the loan is required to be secured by collateral, the collateral is marked to market daily to ensure that the market value is at least 102% of the outstanding principal value of the loan. Effective June 26, 2003, the Fund became a participant in an uncommitted unsecured revolving line of credit facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the lesser of (i) $125,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit can borrow on a first come, first served basis. Principal on each loan outstanding shall bear interest at the bid rate quoted by SSB at the time of the request for the loan. During the reporting period, the Fund was a participant in a committed line of credit facility with a syndicate administered by Citibank, N.A. The Fund could borrow up to the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which were parties to the line of credit could borrow on a first come, first served basis. The funds which were party to the line of credit were charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee was allocated among the funds based on their respective average net assets for the period. The committed line of credit facility expired May 20, 2003. During the year ended October 31, 2003, the Fund did not borrow or lend under the interfund lending facility or borrow under either the uncommitted unsecured revolving line of credit facility or the committed line of credit facility. Additionally the Fund is permitted to carry a negative or overdrawn balance in its account with the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds in the account so the custodian can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank. In either case, the custodian bank will be compensated an amount equal to the Federal Funds rate plus 100 basis points. NOTE 6--PORTFOLIO SECURITIES LOANED The Fund may lend portfolio securities to the extent of one-third of the Fund's total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Cash collateral pursuant to these loans is invested in short-term money market instruments or affiliated money market funds. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. It is the Fund's policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation F-9 date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. At October 31, 2003, securities with an aggregate value of $5,698,851 were on loan to brokers. The loans were secured by cash collateral of $6,959,713 received by the Fund and subsequently invested in affiliated money market funds. For the year ended October 31, 2003, the Fund received fees of $10,836 for securities lending. NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS Distributions to Shareholders: There were no ordinary income or long-term capital gain distributions paid during the years ended October 31, 2003 and 2002. Tax Components of Net Assets: As of October 31, 2003, the components of net assets on a tax basis were as follows: Unrealized appreciation -- investments 36,214,209 - ----------------------------------------------------------- Temporary book/tax differences (31,403) - ----------------------------------------------------------- Capital loss carryforward (71,561,390) - ----------------------------------------------------------- Capital (par value and additional paid-in) 165,932,574 =========================================================== Total net assets $130,553,990 ___________________________________________________________ ===========================================================
The difference between book-basis and tax-basis unrealized appreciation is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's unrealized appreciation difference is attributable primarily to the tax deferral of losses on wash sales. The tax-basis unrealized appreciation on investments amount includes appreciation on foreign currencies of $13,724. The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund's temporary book/tax differences are the result of the deferral of director compensation and director retirement plan expenses. The Fund has a capital loss carryforward for tax purposes which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD - ---------------------------------------------------------- October 31, 2005 $42,625,901 - ---------------------------------------------------------- October 31, 2009 27,317,937 - ---------------------------------------------------------- October 31, 2010 1,617,552 ========================================================== Total capital loss carryforward $71,561,390 __________________________________________________________ ==========================================================
NOTE 8--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities and money market funds) purchased and sold by the Fund during the year ended October 31, 2003 was $96,700,298 and $102,655,872, respectively.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - ----------------------------------------------------------- Aggregate unrealized appreciation of investment securities $36,491,625 - ----------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (291,140) =========================================================== Net unrealized appreciation of investment securities $36,200,485 ___________________________________________________________ =========================================================== Cost of investments for tax purposes is $96,215,585.
NOTE 9--RECLASSIFICATION OF PERMANENT DIFFERENCES Primarily as a result of reclassification of net operating losses and foreign currency transactions on October 31, 2003, undistributed net investment income (loss) was increased by $279,708, undistributed net realized gains increased by $28,917 and capital stock decreased by $308,625. This reclassification had no effect on net assets of the Fund. F-10 NOTE 10--CAPITAL STOCK INFORMATION The Fund currently offers three different classes of shares: Class A shares, Class B shares and Class C shares. Class A shares are sold with a front-end sales charge. Class B shares and Class C shares are sold with CDSC. Under some circumstances, Class A shares are subject to CDSC. Generally, Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase.
CHANGES IN SHARES OUTSTANDING - ----------------------------------------------------------------------------------------------------------------------- YEAR ENDED OCTOBER 31, --------------------------------------------------------- 2003 2002 --------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------------- Sold: Class A 52,026,302 $ 482,251,871 36,470,984 $ 349,896,882 - ----------------------------------------------------------------------------------------------------------------------- Class B 1,753,073 15,942,378 2,963,386 28,352,153 - ----------------------------------------------------------------------------------------------------------------------- Class C 8,347,302 74,077,447 10,574,444 98,792,151 ======================================================================================================================= Automatic conversion of Class B shares to Class A shares: Class A 191,930 1,805,340 369,580 3,681,223 - ----------------------------------------------------------------------------------------------------------------------- Class B (198,534) (1,805,340) (381,540) (3,681,223) ======================================================================================================================= Reacquired: Class A (51,529,825) (483,507,824) (36,664,943) (355,140,185) - ----------------------------------------------------------------------------------------------------------------------- Class B (1,848,491) (16,573,840) (3,215,765) (30,576,876) - ----------------------------------------------------------------------------------------------------------------------- Class C (8,321,179) (74,001,650) (10,405,450) (98,106,126) ======================================================================================================================= 420,578 $ (1,811,618) (289,304) $ (6,782,001) _______________________________________________________________________________________________________________________ =======================================================================================================================
NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A -------------------------------------------------------------- YEAR ENDED OCTOBER 31, -------------------------------------------------------------- 2003 2002 2001 2000 1999 - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 8.53 $ 8.59 $10.70 $ 10.76 $ 7.69 - ---------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.01)(a) (0.04)(a) (0.01)(a) (0.07)(a) (0.03)(a) - ---------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 3.55 (0.02) (2.06) 0.01 3.14 ============================================================================================================================ Total from investment operations 3.54 (0.06) (2.07) (0.06) 3.11 ============================================================================================================================ Less distributions: Dividends from net investment income -- -- -- -- (0.04) - ---------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains -- -- (0.04) -- -- ============================================================================================================================ Net asset value, end of period $ 12.07 $ 8.53 $ 8.59 $ 10.70 $ 10.76 ____________________________________________________________________________________________________________________________ ============================================================================================================================ Total return(b) 41.50% (0.70)% (19.46)% (0.56)% 40.66% ____________________________________________________________________________________________________________________________ ============================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $97,192 $62,806 $61,729 $93,755 $25,420 ____________________________________________________________________________________________________________________________ ============================================================================================================================ Ratio of expenses to average net assets: With fee waivers 2.26%(c) 2.25% 2.02% 1.92% 1.92% - ---------------------------------------------------------------------------------------------------------------------------- Without fee waivers 2.41%(c) 2.49% 2.37% 2.06% 2.72% ============================================================================================================================ Ratio of net investment income (loss) to average net assets (0.11)%(c) (0.41)% (0.06)% (0.57)% (0.50)% ============================================================================================================================ Portfolio turnover rate 100% 114% 73% 64% 142% ____________________________________________________________________________________________________________________________ ============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratio are based on average daily net assets of $79,136,415. F-11 NOTE 11--FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B -------------------------------------------------------------- YEAR ENDED OCTOBER 31, -------------------------------------------------------------- 2003 2002 2001 2000 1999 - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 8.27 $ 8.38 $10.50 $ 10.65 $ 7.63 - ---------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.07)(a) (0.10)(a) (0.07)(a) (0.17)(a) (0.13)(a) - ---------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 3.44 (0.01) (2.01) 0.02 3.16 ============================================================================================================================ Total from investment operations 3.37 (0.11) (2.08) (0.15) 3.03 ============================================================================================================================ Less distributions: Dividends from net investment income -- -- -- -- (0.01) - ---------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains -- -- (0.04) -- -- ============================================================================================================================ Net asset value, end of period $ 11.64 $ 8.27 $ 8.38 $ 10.50 $ 10.65 ____________________________________________________________________________________________________________________________ ============================================================================================================================ Total return(b) 40.75% (1.31)% (19.92)% (1.41)% 39.76% ____________________________________________________________________________________________________________________________ ============================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $24,599 $19,916 $25,479 $39,852 $12,070 ____________________________________________________________________________________________________________________________ ============================================================================================================================ Ratio of expenses to average net assets: With fee waivers 2.91%(c) 2.90% 2.67% 2.67% 2.79% - ---------------------------------------------------------------------------------------------------------------------------- Without fee waivers 3.06%(c) 3.14% 3.02% 2.76% 3.59% ============================================================================================================================ Ratio of net investment income (loss) to average net assets (0.76)%(c) (1.06)% (0.72)% (1.32)% (1.37)% ============================================================================================================================ Portfolio turnover rate 100% 114% 73% 64% 142% ____________________________________________________________________________________________________________________________ ============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratio are based on average daily net assets of $19,915,168. F-12 NOTE 11--FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C ------------------------------------------------------------- YEAR ENDED OCTOBER 31, ------------------------------------------------------------- 2003 2002 2001 2000 1999 - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 8.25 $ 8.37 $ 10.49 $10.63 $ 7.61 - --------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.07)(a) (0.10)(a) (0.07)(a) (0.17)(a) (0.13)(a) - --------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 3.42 (0.02) (2.01) 0.03 3.16 =========================================================================================================================== Total from investment operations 3.35 (0.12) (2.08) (0.14) 3.03 =========================================================================================================================== Less distributions: Dividends from net investment income -- -- -- -- (0.01) - --------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains -- -- (0.04) -- -- =========================================================================================================================== Net asset value, end of period $11.60 $ 8.25 $ 8.37 $10.49 $10.63 ___________________________________________________________________________________________________________________________ =========================================================================================================================== Total return(b) 40.61% (1.43)% (19.94)% (1.32)% 39.86% ___________________________________________________________________________________________________________________________ =========================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $8,763 $6,019 $ 4,692 $6,797 $5,008 =========================================================================================================================== Ratio of expenses to average net assets: With fee waivers 2.91%(c) 2.90% 2.67% 2.67% 2.79% - --------------------------------------------------------------------------------------------------------------------------- Without fee waivers 3.06%(c) 3.14% 3.02% 2.76% 3.59% =========================================================================================================================== Ratio of net investment income (loss) to average net assets (0.76)%(c) (1.06)% (0.72)% (1.32)% (1.37)% =========================================================================================================================== Portfolio turnover rate 100% 114% 73% 64% 142% ___________________________________________________________________________________________________________________________ ===========================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratio are based on average daily net assets of $6,179,255. NOTE 12--SUBSEQUENT EVENTS Your Fund's investment advisor, A I M Advisors, Inc. ("AIM") is an indirect wholly owned subsidiary of AMVESCAP PLC ("AMVESCAP"). Another indirect wholly owned subsidiary of AMVESCAP, INVESCO Funds Group, Inc. ("INVESCO"), was, until recently, the investment advisor to the INVESCO Funds. On December 2, 2003, each of the Securities and Exchange Commission ("SEC") and the Office of the Attorney General of the State of New York ("NYAG") filed civil proceedings against INVESCO and Raymond R. Cunningham, in his capacity as the Chief Executive Officer of INVESCO. Mr. Cunningham currently holds the positions of Chief Operating Officer and Senior Vice President of A I M Management Group, Inc., the parent company of AIM, and he also holds the position of Senior Vice President with AIM. In addition, on December 2, 2003, the State of Colorado filed civil proceedings against INVESCO. Neither your Fund nor any of the funds in the AIM Family of Funds(R), which includes the INVESCO Funds (the "Funds") has been named as a defendant in any of these proceedings. The SEC proceeding alleges that INVESCO failed to disclose in the INVESCO Funds' prospectuses and to the INVESCO Funds' independent directors that INVESCO had entered into certain arrangements permitting market timing of the INVESCO Funds. The SEC is seeking injunctions, including permanent injunctions from serving as an investment advisor, officer or director of an investment company; an accounting of all market timing as well as certain fees and compensation received; disgorgement; civil monetary penalties; and other relief. The NYAG proceeding is also based on the circumstances described above. The NYAG is seeking injunctions, including permanent injunctions from directly or indirectly selling or distributing shares of mutual funds; disgorgement of all profits obtained, including fees collected, and payment of all restitution and damages caused, directly or indirectly from the alleged illegal activities; civil monetary penalties; and other relief. The Colorado proceeding is also based on the circumstances described above. The State of Colorado is seeking injunctions; restitution, disgorgement and other equitable relief; civil monetary penalties; and other relief. If INVESCO is unsuccessful in its defense of these proceedings, it could be barred from serving as an investment advisor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Similarly, if Mr. Cunningham is unsuccessful in his defense of these proceedings, he could be barred from serving as an officer or director of any registered investment company. Such results could also affect the ability of AIM, or any other investment advisor directly or indirectly owned by AMVESCAP, from serving as an investment advisor to any registered investment company, including your Fund. Your Fund has been informed by AIM that, if either of these results occurs, AIM will seek exemptive relief from the SEC to permit it to continue to serve as your Fund's investment advisor. There can be no assurance that such exemptive relief will be granted. AIM has received inquiries from the SEC, the NASD, Inc., the NYAG and the Secretary of the Commonwealth of Massachusetts with respect to market timing, late trading, fair value pricing and other similar issues and AIM has been providing full cooperation with respect to these inquiries. F-13 NOTE 12--SUBSEQUENT EVENTS (CONTINUED) In addition to the complaints described above, multiple lawsuits, including purported class action and shareholder derivative suits, have been filed against certain Funds, INVESCO, AIM, AMVESCAP and certain related parties, primarily based upon the allegations in the complaints described above, but also regarding the funds' fair valuation pricing methodology. Such lawsuits allege a variety of theories for recovery including, but not limited to: (i) violation of various provisions of the Federal securities laws; (ii) breach of fiduciary duty; and (iii) breach of contract. The lawsuits have been filed in both Federal and state courts and seek such remedies as compensatory damages; restitution; rescission; accounting for wrongfully gotten gains, profits and compensation; injunctive relief; disgorgement; equitable relief; interest and the payment of attorneys' and experts' fees. Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the Funds, INVESCO, AIM, AMVESCAP and related parties in the future. As a result of these developments, investors in the Funds might react by redeeming their investments. This might require the Funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the Funds. At the present time, management of AIM and the Fund is unable to estimate the impact, if any, that the outcome of these matters described above may have on the Fund or AIM's financial condition. F-14 REPORT OF INDEPENDENT AUDITORS To the Board of Directors/Trustees and Shareholders of AIM Asia Pacific Growth Fund In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the AIM Asia Pacific Growth Fund (one of the funds constituting AIM International Funds, Inc., now known as AIM International Mutual Funds; hereafter referred to as the "Fund") at October 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The financial highlights for each of the periods ended on or before October 31, 2000 were audited by other independent accountants whose report dated December 6, 2000, expressed an unqualified opinion on the financial highlights. PRICEWATERHOUSECOOPERS LLP December 16, 2003 Houston, Texas F-15 PROXY RESULTS (UNAUDITED) A Special Meeting of Shareholders of AIM International Funds, Inc., a Maryland corporation, was held on October 21, 2003. The meeting was adjourned and reconvened on October 28, 2003, on November 4, 2003, on November 11, 2003, on November 17, 2003 and reconvened on November 21, 2003. The meeting was held for the following purposes: (1)* To elect sixteen individuals to the Board, each of whom will serve until his or her successor is elected and qualified: Bob R. Baker, Frank S. Bayley, James T. Bunch, Bruce L. Crockett, Albert R. Dowden, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H. Graham, Gerald J. Lewis, Prema Mathai-Davis, Lewis F. Pennock, Ruth H. Quigley, Louis S. Sklar, Larry Soll, Ph.D. and Mark H. Williamson. (2)* To approve an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation. The results of the voting on the above matters were as follows:
WITHHOLDING DIRECTORS/MATTER VOTES FOR AUTHORITY - --------------------------------------------------------------------------------- (1)* Bob R. Baker................................. 162,211,196 3,444,279 Frank S. Bayley.............................. 162,236,962 3,418,513 James T. Bunch............................... 162,287,588 3,367,887 Bruce L. Crockett............................ 162,276,496 3,378,979 Albert R. Dowden............................. 162,251,386 3,404,089 Edward K. Dunn, Jr. ......................... 162,221,226 3,434,249 Jack M. Fields............................... 162,278,318 3,377,157 Carl Frischling.............................. 162,182,906 3,472,569 Robert H. Graham............................. 162,243,892 3,411,583 Gerald J. Lewis.............................. 162,147,868 3,507,607 Prema Mathai-Davis........................... 162,219,866 3,435,609 Lewis F. Pennock............................. 162,263,207 3,392,268 Ruth H. Quigley.............................. 162,163,064 3,492,411 Louis S. Sklar............................... 162,243,759 3,411,716 Larry Soll, Ph.D. ........................... 162,236,226 3,419,249 Mark H. Williamson........................... 162,238,962 3,416,513
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 76,302,938 2,822,366 86,530,171**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on October 28, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 84,066,011 2,989,031 83,338,957**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 4, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 95,512,525 3,144,748 78,504,573**
F-16 PROXY RESULTS (UNAUDITED) -- (CONTINUED) The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 11, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 109,217,698 3,531,752 71,913,039**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 17, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 116,710,545 3,761,148 69,451,190**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 21, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 137,239,949 4,617,039 51,798,672**
* Proposal required approval by a combined vote of all the portfolios of AIM International Funds, Inc. ** Includes Broker Non-Votes F-17 OTHER INFORMATION TRUSTEES AND OFFICERS As of January 1, 2003 The address of each trustee and officer of AIM International Funds, Inc., now known as AIM International Mutual Funds (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 132 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED PERSONS - ------------------------------------------------------------------------------------------------------------------------------------ Robert H. Graham(1) -- 1946 1991 Director and Chairman, A I M Management Group Inc. None Trustee, Chairman and (financial services holding company); and Director and Vice President Chairman, AMVESCAP PLC and Chairman of AMVESCAP PLC -- AIM Division (parent of AIM and a global investment management firm) Formerly: President and Chief Executive Officer, A I M Management Group Inc.; Director, Chairman and President, A I M Advisors, Inc. (registered investment advisor); and Director and Chairman, A I M Capital Management, Inc. (registered investment advisor), A I M Distributors, Inc. (registered broker dealer), AIM Investment Services, Inc., (registered transfer agent), and Fund Management Company (registered broker dealer); and Chief Executive Officer, AMVESCAP PLC -- Managed Products - ------------------------------------------------------------------------------------------------------------------------------------ Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Officer, A I M Director and Chairman, Trustee and Executive Vice Management Group Inc. (financial services holding company); INVESCO Bond Funds, President Director, Chairman and President, A I M Advisors, Inc. Inc., INVESCO (registered investment advisor); Director, A I M Capital Combination Stock & Management, Inc. (registered investment advisor) and A I M Bond Funds, Inc., Distributors, Inc. (registered broker dealer); Director and INVESCO Counselor Chairman, AIM Investment Services, Inc. (registered transfer Series Funds, Inc., agent); and Fund Management Company (registered broker INVESCO International dealer); and Chief Executive Officer, AMVESCAP PLC -- AIM Funds, Inc., INVESCO Division (parent of AIM and a global investment management Manager Series Funds, firm) Inc., INVESCO Money Formerly: Director, Chairman, President and Chief Executive Market Funds, Inc., Officer, INVESCO Funds Group, Inc. and INVESCO Distributors, INVESCO Sector Funds, Inc.; Chief Executive Officer, AMVESCAP PLC -- Managed Inc., INVESCO Stock Products; Chairman and Chief Executive Officer of Funds, Inc., INVESCO NationsBanc Advisors, Inc.; and Chairman of NationsBanc Treasurer's Series Investments, Inc. Funds, Inc. and INVESCO Variable Investment Funds, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ Bob R. Baker(3) -- 1936 2003 Consultant None Trustee Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation - ------------------------------------------------------------------------------------------------------------------------------------ Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc. Trustee (registered investment company) - ------------------------------------------------------------------------------------------------------------------------------------ James T. Bunch(3) -- 1942 2003 Co-President and Founder, Green, Manning & Bunch Ltd., None Trustee (investment banking firm); and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation Formerly: General Counsel and Director, Boettcher & Co.; and Chairman and Managing Partner, law firm of Davis, Graham & Stubbs - ------------------------------------------------------------------------------------------------------------------------------------ Bruce L. Crockett -- 1944 1992 Chairman, Crockett Technology Associates (technology ACE Limited (insurance Trustee consulting company) company); and Captaris, Inc. (unified messaging provider) - ------------------------------------------------------------------------------------------------------------------------------------ Albert R. Dowden -- 1941 2000 Director of a number of public and private business Cortland Trust, Inc. Trustee corporations, including the Boss Group Ltd. (private (Chairman) (registered investment and management) and Magellan Insurance Company investment company); Formerly: Director, President and Chief Executive Officer, Annuity and Life Re Volvo Group North America, Inc.; Senior Vice President, AB (Holdings), Ltd. Volvo; and director of various affiliated Volvo Group (insurance company) companies - ------------------------------------------------------------------------------------------------------------------------------------ Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage Corp.; President and None Trustee Chief Operating Officer, Mercantile-Safe Deposit & Trust Co.; and President, Mercantile Bankshares Corp. - ------------------------------------------------------------------------------------------------------------------------------------ Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Group, Inc. Administaff Trustee (government affairs company) and Texana Timber LP - ------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Graham is considered an interested person of the Trust because he is a director of AMVESCAP PLC, parent of the advisor to the Trust. (2) Mr. Williamson is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. Mr. Williamson became Executive Vice President of the Trust on March 4, 2003. (3) Elected trustee of the Trust on October 21, 2003. Trustees and Officers (continued) As of January 1, 2003 The address of each trustee and officer of AIM International Funds, Inc., now known as AIM International Mutual Funds (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 132 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ POSITION(S) HELD WITH OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S) THE TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ Carl Frischling -- 1937 1991 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Cortland Trust, Inc. Trustee (registered investment company) - ------------------------------------------------------------------------------------------------------------------------------------ Gerald J. Lewis(3) -- 1933 2003 Chairman, Lawsuit Resolution Services (San Diego, General Chemical Trustee California) Group, Inc., Formerly: Associate Justice of the California Court of Wheelabrator Appeals Technologies, Inc. (waste management company), Fisher Scientific, Inc., Henley Manufacturing, Inc. (laboratory supplies), and California Coastal Properties, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of the USA None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Lewis F. Pennock -- 1942 1991 Partner, law firm of Pennock & Cooper None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Ruth H. Quigley -- 1935 2001 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Louis S. Sklar -- 1939 1991 Executive Vice President, Development and Operations Hines None Trustee Interests Limited Partnership (real estate development company) - ------------------------------------------------------------------------------------------------------------------------------------ Larry Soll, Ph.D.(3) -- 1942 2003 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ OTHER OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary and General N/A Senior Vice President Counsel, A I M Management Group Inc. (financial services holding company) and A I M Advisors, Inc.; Vice President, A I M Capital Management, Inc., A I M Distributors, Inc. and AIM Investment Services, Inc.; and Director, Vice President and General Counsel, Fund Management Company Formerly: Senior Vice President and General Counsel, Liberty Financial Companies, Inc.; and Senior Vice President and General Counsel, Liberty Funds Group, LLC - ------------------------------------------------------------------------------------------------------------------------------------ Gary T. Crum(5) -- 1947 1991 Director, Chairman and Director of Investments, A I M N/A Senior Vice President Capital Management, Inc.; Director and Executive Vice President, A I M Management Group Inc.; Director and Senior Vice President, A I M Advisors, Inc.; and Director, A I M Distributors, Inc. and AMVESCAP PLC Formerly: Chief Executive Officer and President, A I M Capital Management Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Robert G. Alley -- 1948 1994 Managing Director and Chief Fixed Income Officer, A I M N/A Vice President Capital Management, Inc.; and Vice President, A I M Advisors, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Stuart W. Coco -- 1955 2002 Managing Director and Chief Research Officer -- Fixed N/A Vice President Income, A I M Capital Management, Inc.; and Vice President, A I M Advisors, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Melville B. Cox -- 1943 1992 Vice President and Chief Compliance Officer, A I M Advisors, N/A Vice President Inc. and A I M Capital Management, Inc.; and Vice President, AIM Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Edgar M. Larsen(5) -- 1940 1999 Vice President, A I M Advisors, Inc., and President, Chief N/A Vice President Executive Officer and Chief Investment Officer, A I M Capital Management, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Dana R. Sutton -- 1959 1991 Vice President and Fund Treasurer, A I M Advisors, Inc. N/A Vice President and Treasurer - ------------------------------------------------------------------------------------------------------------------------------------
(3) Elected trustee of the Trust on October 21, 2003. (4) Mr. Carome became Senior Vice President of the Trust on May 13, 2003. (5) Information is current as of January 10, 2003. The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.347.4246. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS 11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, Inc. PricewaterhouseCoopers LLP Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana, Suite 2900 Houston, TX 77046 Suite 100 Suite 100 Houston, TX 777002 Houston, TX 77046 Houston, TX 77046-1173 COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. State Street Bank and Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 Trust Company 1735 Market Street 919 Third Avenue Houston, TX 77210-4739 225 Franklin Street Philadelphia, PA 19103 New York, NY 10022-3852 Boston, MA 02110
DOMESTIC EQUITY INTERNATIONAL/GLOBAL EQUITY FIXED INCOME AIM Aggressive Growth Fund AIM Asia Pacific Growth Fund TAXABLE AIM Balanced Fund* AIM Developing Markets Fund AIM Floating Rate Fund AIM Basic Balanced Fund* AIM European Growth Fund AIM High Yield Fund AIM Basic Value Fund AIM European Small Company Fund AIM Income Fund AIM Blue Chip Fund AIM Global Aggressive Growth Fund AIM Intermediate Government Fund AIM Capital Development Fund AIM Global Growth Fund AIM Limited Maturity Treasury Fund AIM Charter Fund AIM Global Trends Fund AIM Money Market Fund AIM Constellation Fund AIM Global Value Fund(4) AIM Short Term Bond Fund AIM Dent Demographic Trends Fund AIM International Emerging Growth Fund AIM Total Return Bond Fund AIM Diversified Dividend Fund(1) AIM International Growth Fund INVESCO U.S. Government Money Fund AIM Emerging Growth Fund AIM Trimark Fund AIM Large Cap Basic Value Fund INVESCO International Core Equity Fund(5) TAX-FREE AIM Large Cap Growth Fund AIM Libra Fund AIM High Income Municipal Fund AIM Mid Cap Basic Value Fund SECTOR EQUITY AIM Municipal Bond Fund AIM Mid Cap Core Equity Fund AIM Tax-Exempt Cash Fund AIM Mid Cap Growth Fund AIM Global Health Care Fund AIM Tax-Free Intermediate Fund AIM Opportunities I Fund AIM Real Estate Fund AIM Opportunities II Fund INVESCO Advantage Health Sciences Fund AIM Opportunities III Fund INVESCO Energy Fund AIM Premier Equity Fund INVESCO Financial Services Fund AIM Select Equity Fund INVESCO Gold & Precious Metals Fund AIM Small Cap Equity Fund(2) INVESCO Health Sciences Fund AIM Small Cap Growth Fund(3) INVESCO Leisure Fund AIM Trimark Endeavor Fund INVESCO Multi-Sector Fund AM Trimark Small Companies Fund INVESCO Technology Fund AIM Weingarten Fund INVESCO Utilities Fund INVESCO Core Equity Fund INVESCO Dynamics Fund INVESCO Mid-Cap Growth Fund INVESCO Small Company Growth Fund INVESCO S&P 500 Index Fund INVESCO Total Return Fund*
* Domestic equity and income fund (1)Effective May 2, 2003, AIM Large Cap Core Equity Fund was renamed AIM Diversified Dividend Fund. (2)AIM Small Cap Equity Fund was closed to most investors on December 19, 2003. For information on who may continue to invest in AIM Small Cap Equity Fund, please contact your financial advisor. (3)AIM Small Cap Growth Fund was closed to most investors on March 18, 2002. For information on who may continue to invest in AIM Small Cap Growth Fund, please contact your financial advisor. (4)Effective April 30, 2003, AIM Worldwide Spectrum Fund was renamed AIM Global Value Fund. (5)Effective November 24, 2003, INVESCO International Blue Chip Value Fund was renamed INVESCO International Core Equity Fund. For more complete information about any AIM or INVESCO fund, including sales charges and expenses, ask your financial advisor for a prospectus. Please read it carefully before investing. If used after January 20, 2004, this brochure must be accompanied by a fund Performance & Commentary or by an AIM Quarterly Performance Review for the most recent quarter-end. Mutual funds distributed by A I M Distributors, Inc. A I M Management Group Inc. has provided leadership in the investment management industry since 1976 and manages $142 billion in assets for approximately 11 million shareholders, including individual investors, corporate clients and financial institutions. AIM is a subsidiary of AMVESCAP PLC, one of the world's largest independent financial services companies with $345 billion in assets under management. Data as of September 30, 2003. AIMinvestments.com APG-AR-1 YOUR GOALS. OUR SOLUTIONS.--Servicemark-- - -------------------------------------------------------------------------------------------- Mutual Retirement Annuities College Separately Offshore Alternative Cash [AIM INVESTMENTS LOGO APPEARS HERE] Funds Products Savings Managed Products Investments Management --Servicemark-- Plans Accounts
AIM EUROPEAN GROWTH FUND Annual Report to Shareholders o October 31, 2003 [COVER IMAGE] YOUR GOALS. OUR SOLUTIONS. [AIM INVESTMENTS LOGO APPEARS HERE] --Servicemark-- --Servicemark-- ================================================================================ AIM EUROPEAN GROWTH FUND SEEKS TO PROVIDE LONG-TERM GROWTH OF CAPITAL. ================================================================================ ABOUT INFORMATION THROUGHOUT THIS REPORT: o Unless otherwise stated, information o Investing in small and mid-size CLASS B SHARES presented is as of 10/31/03 and is based companies may involve risks not Inception (11/3/97) 10.46% on total net assets. associated with investing in more 5 Years 7.46 established companies. Also, small 1 Year 21.48 o AIM European Growth Fund's performance companies may have business risk, figures are historical, and they reflect significant stock price fluctuations and CLASS C SHARES fund expenses, the reinvestment of illiquidity. Inception (11/3/97) 10.58% distributions, and changes in net asset 5 Years 7.77 value. o The fund's investment return and 1 Year 25.47 principal value will fluctuate, so an o When sales charges are included in investor's shares, when redeemed, may be CLASS R SHARES* performance figures, Class A share worth more or less than their original Inception 11.17% performance reflects the maximum 5.50% cost. 5 Years 8.35 sales charge, and Class B and Class C 1 Year 27.11 share performance reflects the o Industry classifications used in this applicable contingent deferred sales report are generally according to the INVESTOR CLASS SHARES** charge (CDSC) for the period involved. Global Industry Classification Standard, Inception 11.34% The CDSC on Class B shares declines from which was developed by and is the 5 Years 8.52 5% beginning at the time of purchase to exclusive property and a service mark of 1 Year 27.30 0% at the beginning of the seventh year. Morgan Stanley Capital International The CDSC on Class C shares is 1% for the Inc. and Standard & Poor's. *The returns shown for these periods are first year after purchase. The the blended returns of the historical performance of the fund's share classes o The unmanaged MSCI Europe Growth Index performance of the fund's Class R shares will differ due to different sales is a subset of the unmanaged MSCI Europe since their inception and the restated charge structures and class expenses. Index, which represents the performance historical performance of the fund's of European stocks tracked by Morgan Class A shares (for the periods prior to o A 2% redemption fee will be imposed on Stanley Capital International. The inception of the Class R shares) at net certain redemptions or exchanges out of Growth portion measures performance of asset value, adjusted to reflect the the fund within 30 days of purchase. companies with higher price/earnings higher Rule 12b-1 fees applicable to the Exceptions to the redemption fee are ratios and higher forecasted growth Class R shares. The inception date of listed in the fund's prospectus. values. Class A shares is 11/3/97. The inception date of the fund's Class R shares is o Effective 9/30/03, Class B shares are o The unmanaged MSCI Europe, Australasia 6/3/02. not available as an investment for and the Far East Index (the EAFE(R)) is retirement plans maintained pursuant to a group of foreign securities tracked by **The returns shown as of 10/31/03 on Section 401 of the Internal Revenue Morgan Stanley Capital International. page 4 are the blended returns of the Code, including 401(k) plans, money historical performance of Investor Class purchase pension plans and profit o The unmanaged Lipper European Fund shares since their inception and the sharing plans. Plans that have existing Index represents an average of the 30 restated historical performance of the accounts invested in Class B shares will largest European funds tracked by fund's Class A shares (for periods prior continue to be allowed to make Lipper, Inc., an independent mutual fund to inception of the Investor Class additional purchases. performance monitor. shares) at net asset value, adjusted to reflect the higher Rule 12b-1 fees o Class R shares are available only to o A direct investment cannot be made in applicable to Class A shares. Investor certain retirement plans. Please see the an index. Unless otherwise indicated, Class shares would have different prospectus for more information. They index results include reinvested returns because, although the shares are are sold at net asset value, that is, dividends, and they do not reflect sales invested in the same portfolio of without up-front sales charges. charges. Performance of an index of securities, the Investor Class has a funds reflects fund expenses; different expense structure. The o Investor Class shares are closed to performance of a market index does not. inception date of the fund's Class A most investors. For more information on In addition to fund returns as of the shares is 11/3/97. The inception date of who may continue to invest in the close of the fiscal year, industry the fund's Investor Class shares is Investor Class shares, please see the regulations require us to provide 9/30/03. Calculation of returns as of appropriate prospectus. average annual total returns (including 9/30/03 is the restated historical sales charges) for periods ended performance of the fund's Class A shares o International investing presents 9/30/03, the most recent calendar as described. certain risks not associated with quarter-end, which were as follows. investing solely in the United States. Past performance cannot guarantee These include risks relating to Average annual total returns comparable future results. fluctuations in the value of the U.S. As of 9/30/03, including sales charges dollar relative to the values of other A description of the policies and currencies, the custody arrangements CLASS A SHARES procedures that the fund uses to made for the fund's foreign holdings, Inception (11/3/97) 10.28% determine how to vote proxies relating differences in accounting, political 5 Years 7.30 to portfolio securities is available risks and the lesser degree of public 1 Year 20.31 without charge, upon request, by calling information required to be provided by 800-959-4246, or on the AIM Web site, non-U.S. companies. AIMinvestments.com. o Investing in a single-sector or single-region mutual fund may involve greater risk and potential reward than investing in a more diversified fund.
===================================================== NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE This report may be distributed only to shareholders or to persons who have received a current prospectus of ===================================================== the fund.
AIMinvestments.com TO OUR SHAREHOLDERS DEAR FELLOW SHAREHOLDER IN new policies and strengthened existing ` THE AIM FAMILY OF FUNDS ones--to discourage harmful short-term --Registered Trademark--: trading. These steps include: As you may be aware, there has o Strengthening daily monitoring [[PHOTO OF been a great deal of media of trading activities. ROBERT H. coverage recently about the GRAHAM] mutual fund industry and o Imposing redemption fees on allegations of improper additional funds we believe may ROBERT H. GRAHAM activities by certain be vulnerable to harmful individuals and companies. short-term trading activity. [PHOTO OF As part of these widespread MARK H. investigations, INVESCO Funds o Implementing an enhanced WILLIAMSON] Group (IFG), the former adviser exchange policy (effective on or to certain INVESCO Funds, was about March 1, 2004) designed to MARK H. WILLIAMSON recently named as a defendant in limit exchanges between funds. separate civil enforcement actions by the U.S. Securities and Exchange Commission (SEC), o Employing an enhanced fair value the Office of the New York Attorney General and the pricing policy on certain State of Colorado over an issue known as "market foreign securities as well as timing." A number of private class or derivative certain illiquid securities. actions also were filed in the wake of the regulators' actions. None of these tools alone, nor all of them taken together, eliminate the Investors are understandably concerned and possibility of short-term trading frustrated about these reports, and we would like strategies that may be detrimental to a to take this opportunity to assure you that, based fund. Moreover, each of these tools on an investigation conducted by an outside firm, involves judgments that are inherently IFG and its parent company, AMVESCAP PLC, believe subjective. We have always sought and that these civil actions are without merit. IFG is continue to seek to make these judgments contesting the charges. to the best of our abilities and in a manner that we believe is consistent We encourage you to continue to monitor this with the best interests of our fund situation, particularly as IFG has the opportunity shareholders. And we remain committed to to address the allegations that have been made. being as vigilant as possible in the Current information will be posted on our Web site future to identify and address any at AIMinvestments.com. We will continue to harmful market timing investors who have communicate to you on our Web site about our the potential to harm our long-term fund finding, and the actions we are taking to protect shareholders. and promote the interests of our shareholders. The independent trustees of the funds are receiving We sincerely hope these developments regular reports from their independent counsel and and the media coverage surrounding them outside counsel hired by AMVESCAP PLC, the parent do not result in you or other of AIM and IFG, to perform an ongoing shareholders losing confidence in AIM or investigation of market timing. INVESCO Funds. Amidst this storm of controversy in the mutual fund industry, A COMPLEX ISSUE we believe we can find encouragement in the recovering economy and rising equity Market timing is an investment technique not markets. As we write this letter, for defined in any regulation that involves frequent instance, the S&P 500(R) Index is up short-term trading of mutual fund shares, approximately 23% year-to-date. Although sometimes with a goal to exploit inefficiencies in past performance is no guarantee of the way mutual funds price their shares. We future results, there appear to be recognize that fund management companies have indicators that the economy and stock tried to deal with this complex issue in various markets are showing signs of welcomed ways and believe that industry-wide guidance is in improvement. We encourage you to read order. To that end, we welcome SEC Chairman the enclosed discussion of your fund's William Donaldson's pledge to adopt new rules performance during this past reporting designed to curb market timing abuses. period. Comprehensive rulemaking is necessary and is the best way to establish new industry OUR UNWAVERING COMMITMENT responsibilities designed to protect shareholders. We support practical rule changes and structural At AIM Investments, we have never At AIM Investments, we have never modifications wavered in our commitment to helping you that are fair, enforceable and, most wavered in build solutions for your financial our commitment to helping you importantly, goals. Our company was founded on a core beneficial for investors. build solutions for your principle of integrity, and we have financial always worked hard to earn the trust of our shareholders. We are committed to AIM Investments has policies in place designed doing all we can to maintain your trust principle of integrity, and we have to identify, and confidence. prevent and eliminate harmful trading always worked hard to earn the trust of or other Thank you for your continued activities deemed to be detrimental to our participation in AIM Investments. Please shareholders. We are committed to the funds. We call your financial advisor or one of have also recently taken additional doing all we our Client Service representatives at can to maintain your trust steps--implemented and 800-959-4246 if you have any further confidence. questions or concerns about your AIM Investments account. Sincerely, /S/ ROBERT H. GRAHAM /S/ MARK H. WILLIAMSON Robert H. Graham Mark H. Williamson Chairman and President President and CEO The AIM Family of Funds AIM Investments --Registered Trademark-- December 18, 2003
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE EUROPEAN MARKETS REBOUND AMID GLOBAL ECONOMIC RECOVERY Amid signs of an improving global markets rallied. European equity markets both August and September, and the economic environment, AIM European led the charge--posting some of the Purchasing Manager's Index--a survey of Growth Fund posted double-digit returns strongest regional returns in the world. purchasing managers that measures the for the reporting period ended October European equity markets would continue general health of the manufacturing 31, 2003. For the fiscal year covered by to show strength throughout most of the sector--increased for the fourth this report, the fund's Class A shares remainder of the reporting period. consecutive month in October. returned 28.40% at net asset value. Fund performance for other share classes is While European stock markets posted ======================================== shown in the table on page 3. gains, growth in the euro zone remained ... ECONOMIC GROWTH weak. According to a recent report by Over the same period, the fund the Bank of England, there continued to PROSPECTS FOR THE EURO outperformed its benchmarks, the MSCI be a contrast between weak euro area Europe Index and MSCI Europe Growth economic data and more promising ZONE BEGAN TO PICK UP Index, which returned 24.16% and 17.16%, business survey indicators. Indeed, respectively. The fund also posted a annualized gross domestic product (GDP) IN THE THIRD QUARTER... higher return than its peer group, the for the euro zone fell by 0.1% in the ======================================== Lipper European Fund Index, which second quarter. (In contrast, it should returned 24.62% for the fiscal year. be noted that preliminary GDP estimates In monetary affairs, the European rose 0.7% for the second quarter in Central Bank (ECB) reduced short-term MARKET CONDITIONS Europe's largest non-euro country, the interest rates at both its March and United Kingdom.) German retail sales June meetings leaving rates at 2.00% at In general, European markets began the (excluding car-related sales) and French the end of the fiscal year. The ECB's fiscal year with a short-lived rally in consumer spending on manufactured goods Governing Council cited subdued euro November. By December and throughout both declined in August. area growth and the negative impact of most of the first few months of 2003, SARS (severe acute respiratory syndrome) European stocks generally declined as However, economic growth prospects on the global economy as the reason for geopolitical tensions and concern over for the euro zone began to pick up in the rate reductions. The Bank of England weak global economic conditions mounted. the third quarter as preliminary also reduced rates in February and again In April, as the uncertainty about the estimates indicate euro area annualized in July leaving the benchmark rate for outcome of the war in Iraq began to GDP rose 0.4%. And business surveys also the United Kingdom at 3.50% as of fade, most world began to show promise. Euro-area October 31, 2003. industrial confidence increased in YOUR FUND Strong foreign currency appreciation--the euro and British pound appreciated 16% and
Total Returns 10/31/02-10/31/03 [BAR Chart] AIM European Growth Fund Class A shares at NAV 28.40% MSCi Europe Index 24.16% Source: Lipper, Inc. ===================================================================================================================== TOP 10 EQUITY HOLDINGS* TOP 10 INDUSTRIES* 1. Anglo Irish Bank Corp. PLC (Ireland) 5.0% 1. Diversified Banks 14.2% 2. Puma A.G. Rudolf Dassler Sport (Germany) 3.6 2. Pharmaceuticals 7.8 3. Grafton Group PLC (Ireland) 2.6 3. Wireless Telecommunication Services 7.6 4. Merloni Elettrodomestici S.p.A. (Italy) 2.1 4. Footwear 3.6 5. Mobistar S.A. (Belgium) 2.1 5. Food Retail 3.5 6. Vodafone Group PLC (United Kingdom) 1.9 6. Integrated Oil & Gas 3.5 7. OTP Bank Rt. (Hungary) 1.7 7. Health Care Equipment 2.9 8. Imperial Tobacco Group PLC (United Kingdom) 1.6 8. Publishing 2.6 9. Colruyt N.V. (Belgium) 1.6 9. Trading Companies & Distributors 2.6 10. ICAP PLC (United Kingdom) 1.6 10. Integrated Telecommunication Services 2.4 *Excludes money market fund holdings. The fund's holdings are subject to change, and there is no assurance that the fund will continue to hold any particular security. Performance comparisons for other share classes can be found in the Fund vs. Index table on the opposite page. =====================================================================================================================
2 8%, respectively, against the U.S. sales increased by 37.8%. On a currency JASON T. HOLZER dollar during the fiscal year--proved neutral basis, third quarter sales were Mr. Holzer, Chartered favorable for the fund as we do not up 43.5%. Financial Analyst, is hedge currencies. We buy securities in [PHOTO OF co-manager of AIM European local currency and then translate that Stocks in the utilities and JASON T. Growth Fund. Mr. Holzer value back into U.S. dollars for the materials sectors contributed the least HOLZER] joined AIM in 1996. He fund. to fund performance over the reporting received a B.A. in period, while the information technology quantitative economics and an M.S. in The fund's ability to invest in all sector detracted from performance. We engineering- economic systems from Stanford capitalization levels also played a role believe our underweight exposure to University. in relative performance. Many European information technology stocks compared sector funds invest primarily in to our benchmark proved a missed large-cap securities--a disadvantage opportunity as the sector recorded the CLAS G. OLSSON during the reporting period as European second-highest return in the MSCI Europe Mr. Olsson is co-manager small-cap stocks generally outperformed Index during the fiscal year. [PHOTO OF of AIM European Growth Fund. their large-cap counterparts. As of the CLAS G. Mr. Olsson joined AIM in end of the reporting period, more than IN CLOSING OLSSON] 1994. Mr. Olsson became a 75% of the fund's net assets were in commissioned naval officer small and mid-cap stocks. After a few challenging years, European at the Royal Swedish Naval Academy in 1988. markets began to post strong returns He received a B.B.A. from The University of Stocks in the financials and again in 2003, eclipsing the performance Texas at Austin. consumer discretionary sectors of U.S. markets during a period when contributed the most to fund performance most would argue the U.S. economy was Assisted by Europe/Canada Team during the fiscal year. Anglo Irish Bank stronger. Whether European market Corp., a long-time holding for the fund, rallies are sustainable and whether euro is an example of a financial stock that area economic conditions will continue continued to benefit performance. to improve, remains to be seen. However, Headquartered in Dublin, this Irish European stocks, in general, continue to business bank continued to experience trade at a discount to their U.S. significant growth. counterparts, and therefore perhaps offer compelling diversification In the consumer discretionary opportunities beyond American soil. sector, Puma AG Rudolf Dassler Sport, a German sporting goods company, also SEE IMPORTANT FUND AND INDEX contributed to fund performance during DISCLOSURES INSIDE FRONT COVER. the fiscal year. During the third quarter of 2003, Puma's consolidated
[GRAPHIC] For More Information Visit AIMinvestments.com ================================================================================================================================== TOP 10 COUNTRIES * FUND VS. INDEXES **The one-year return shown for Investor Class shares is the blended return of 1. United Kingdom 25.4% Total returns, 10/31/02-10/31/03, Investor Class shares since their excluding sales charges inception and the restated one-year 2. Ireland 10.3 performance of the fund's Class A shares Class A Shares 28.40% at the net asset value, adjusted to 3. Italy 7.6 reflect the higher Rule 12b-1 fees Class B Shares 27.52 applicable to Class A shares. Investor 4. Germany 7.6 Class shares would have different Class C Shares 27.57 returns because, although the shares are 5. Switzerland 5.5 invested in the same portfolio of Class R Shares 28.16 securities, the Investor Class has a 6. Spain 5.1 different expense structure. The Investor Class Shares** 28.33 inception date of the fund's Class A 7. France 4.6 shares is 11/3/97. The inception date of MSCI EAFE Index (Broad Market Index) 27.03 the fund's Investor Class shares is 8. Belgium 3.7 9/30/03. MSCI Europe Index 24.16 9. Netherlands 3.6 MSCI Europe Growth Index 10. Sweden 3.6 (Style-Specific Index) 17.16 Lipper European Fund Index (Peer Group Index) 24.62 TOTAL NUMBER OF HOLDINGS* 106 TOTAL NET ASSETS $442.0 MILLION Source: Lipper, Inc. ==================================================================================================================================
3 FUND PERFORMANCE RESULTS OF A $10,000 INVESTMENT 11/3/97-10/31/03* [MOUNTAIN CHART]
Lipper MSCI Date AIM European AIM European AIM European European MSCI Europe MSCI Growth Fund Growth Fund Growth Fund Fund EAFE Growth Europe Class A Shares Class B Shares Class C Shares Index Index Index Index 11/3/1997 $ 9450 $ 10000 $ 10000 $ 10000 $ 10000 $ 10000 $ 10000 1/31/1998 10026 10600 10600 10694 10441 10964 10963 4/30/1998 12910 13609 13609 12738 11544 12652 12907 7/31/1998 14535 15298 15308 13346 11692 13270 13576 10/31/1998 12248 12867 12878 11533 10965 12436 12306 1/31/1999 14322 15025 15038 12985 11946 14004 13440 4/30/1999 13195 13815 13818 13002 12640 13029 13637 7/31/1999 13904 14526 14538 13065 12827 12607 13323 10/31/1999 15530 16196 16209 13468 13490 13456 13846 1/31/2000 23676 24644 24669 15741 14245 15279 14561 4/30/2000 24130 25064 25088 16952 14396 15939 14997 7/31/2000 24375 25284 25308 16872 13982 14788 14951 10/31/2000 22323 23115 23140 15574 13099 13389 13977 1/31/2001 21528 22246 22270 15799 13050 13230 14368 4/30/2001 18001 18577 18600 14070 12050 11602 12991 7/31/2001 16970 17487 17508 12845 10946 10416 11920 10/31/2001 15627 16068 16089 11501 9834 9453 10784 1/31/2002 15958 16377 16400 11717 9712 9665 10903 4/30/2002 17028 17446 17471 12279 10377 9962 11404 7/31/2002 15401 15767 15780 10708 9094 8467 9753 10/31/2002 14759 15076 15091 10032 8534 8263 9287 1/31/2003 14211 14486 14500 9677 8262 7833 8946 *Index performance is for 4/30/2003 15459 15734 15739 10350 8689 8457 9674 the period 10/31/97-10/31/03. 7/31/2003 16842 17115 17129 11415 9667 8938 10613 10/31/2003 $ 18949 $ 19130 $ 19250 $ 12502 $ 10842 $ 9681 $ 11531 Source: Lipper, Inc.
Your fund's total return includes sales charges, expenses and management fees. The performance of the fund's share classes will differ due to different sales charge structures and class expenses. For fund performance calculations and indexes used in this report, please see the inside front cover. Performance shown in the chart and table does not reflect deduction of taxes a shareholder would pay on fund distributions or sale of fund shares. Performance of the indexes does not reflect the effects of taxes. Your fund's total return includes sales charges, expenses and management fees. Results for B shares are calculated as if a hypothetical shareholder had liquidated his entire investment in the fund at the close of the reporting period and paid the applicable contingent deferred sales charges. This chart uses a logarithmic scale, which means the price scale (vertical axis) is structured so that a given distance always represents the same percent change in price, rather than the same absolute change in price. For example, the distance from one to 10 is the same as the distance from 10 to 100 on a logarithmic chart, but the latter distance is 10 times greater on a linear chart. A logarithmic scale better illustrates performance in the fund's early years before reinvested distributions and compounding create the potential for the original investment to grow to very large numbers. Since the last reporting period, the fund has elected to use the MSCI EAFE Index as its broad-based market index since the MSCI EAFE Index is such a widely recognized gauge of international performance. The fund will no longer measure its performance against the MSCI Europe, the index published in previous reports to shareholders. Because this is the first reporting period since we have adopted the new index, SEC guidelines require that we compare the fund's performance to both the old and the new index. The fund has also included a style-specific index, MSCI Europe Growth Index. The fund believes this index more closely reflects the performance of the securities in which the fund invests. In addition, the unmanaged Lipper European Fund Index, which may or may not include AIM European Growth Fund, is included for comparison to a peer group. ================================================================================================================================= AVERAGE ANNUAL TOTAL RETURNS CLASS R SHARES** ***The returns shown as of 10/31/03 are As of 10/31/03, including sales charges Inception 12.13% the blended returns of the historical 5 Years 8.95 performance of Investor Class shares CLASS A SHARES 1 Year 28.16 since their inception and the restated Inception (11/3/97) 11.26% historical performance of the fund's 5 Years 7.90 INVESTOR CLASS SHARES*** Class A shares (for periods prior to 1 Year 21.32 Inception 12.30% inception of the Investor Class shares) 5 Years 9.11 at the net asset value and reflect the CLASS B SHARES 1 Year 28.33 higher Rule 12b-1 fees applicable to Inception (11/3/97) 11.43% Class A shares. Investor Class shares 5 Years 8.07 **The returns shown for these periods would have different returns because, 1 Year 22.52 are the blended returns of the although the shares are invested in the historical performance of the fund's same portfolio of securities, the CLASS C SHARES Class R shares since their inception and Investor Class has a different expense Inception (11/3/97) 11.55% the restated historical performance of structure. The inception date of the 5 Years 8.37 the fund's Class A shares (for the fund's Class A shares is 11/3/97. The 1 Year 26.57 periods prior to inception of the Class inception date of the fund's Investor R shares) at net asset value, adjusted Class shares is 9/30/03. to reflect the higher Rule 12b-1 fees applicable to the Class R shares. The Past performance cannot guarantee inception date of Class A shares is comparable future results. DUE TO 11/3/97. The inception date of the SIGNIFICANT MARKET VOLATILITY, RESULTS fund's Class R shares is 6/3/02. OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE SHOWN. CALL YOUR FINANCIAL ADVISOR FOR MORE CURRENT PERFORMANCE. =================================================================================================================================
4 FINANCIALS SCHEDULE OF INVESTMENTS October 31, 2003
MARKET SHARES VALUE - ------------------------------------------------------------------------ STOCKS & OTHER EQUITY INTERESTS-96.08% AUSTRIA-0.57% Erste Bank der oesterreichischen Sparkassen A.G. (Diversified Banks) 22,865 $ 2,519,270 ======================================================================== BELGIUM-3.70% Colruyt N.V. (Food Retail) 79,100 7,147,405 - ------------------------------------------------------------------------ Mobistar S.A. (Wireless Telecommunication Services)(a) 184,134 9,214,993 ======================================================================== 16,362,398 ======================================================================== BERMUDA-2.06% Golar LNG Ltd. (Oil & Gas Refining, Marketing & Transportation)(a) 185,600 2,153,950 - ------------------------------------------------------------------------ Willis Group Holdings Ltd. (Insurance Brokers) 209,300 6,969,690 ======================================================================== 9,123,640 ======================================================================== CZECH REPUBLIC-0.73% Komercni Banka A.S. (Diversified Banks) 36,470 3,246,732 ======================================================================== DENMARK-2.28% A P Moller-Maersk A.S. (Marine) 504 3,942,900 - ------------------------------------------------------------------------ GN Store Nord A.S. (Health Care Equipment) 583,900 3,776,314 - ------------------------------------------------------------------------ Topdanmark A.S. (Multi-Line Insurance)(a) 47,300 2,344,066 ======================================================================== 10,063,280 ======================================================================== FRANCE-4.60% Autoroutes du Sud de la France (Highways & Railtracks) 56,953 1,748,396 - ------------------------------------------------------------------------ BNP Paribas S.A. (Diversified Banks) 55,127 2,886,557 - ------------------------------------------------------------------------ France Telecom S.A. (Integrated Telecommunication Services)(a) 86,306 2,081,608 - ------------------------------------------------------------------------ Imerys S.A. (Construction Materials)(a) 14,544 2,780,002 - ------------------------------------------------------------------------ Lagardere S.C.A. (Publishing) 29,088 1,458,069 - ------------------------------------------------------------------------ Neopost S.A. (Office Electronics)(a) 44,000 2,177,006 - ------------------------------------------------------------------------ Pernod-Ricard S.A. (Distillers & Vintners) 19,513 1,876,201 - ------------------------------------------------------------------------ Total S.A. (Integrated Oil & Gas)(a) 34,273 5,308,366 ======================================================================== 20,316,205 ======================================================================== GERMANY-7.55% Altana A.G. (Pharmaceuticals) 22,280 1,399,175 - ------------------------------------------------------------------------ Continental A.G. (Tires & Rubber) 165,325 5,592,406 - ------------------------------------------------------------------------ Deutsche Boerse A.G. (Specialized Finance) 91,459 5,066,561 - ------------------------------------------------------------------------ KarstadtQuelle A.G. (Department Stores) 83,171 2,059,951 - ------------------------------------------------------------------------ Puma A.G. Rudolf Dassler Sport (Footwear) (Acquired 01/30/02-10/15/02; Cost $4,420,997)(b) 108,800 15,815,419 - ------------------------------------------------------------------------ Stada Arzneimittel A.G. (Pharmaceuticals) 66,728 3,446,854 ======================================================================== 33,380,366 ========================================================================
MARKET SHARES VALUE - ------------------------------------------------------------------------
GREECE-3.18% Coca-Cola Hellenic Bottling Co. S.A. (Soft Drinks) 108,546 $ 2,094,914 - ------------------------------------------------------------------------ Cosmote Mobile Communications S.A. (Wireless Telecomunication Services) 132,993 1,522,169 - ------------------------------------------------------------------------ Germanos S.A. (Computer & Electronics Retail) 105,000 2,262,453 - ------------------------------------------------------------------------ OPAP S.A. (Casinos & Gaming) (Acquired 07/14/03-08/13/03; Cost $1,926,272)(b) 172,589 2,119,319 - ------------------------------------------------------------------------ Vodafone Panafon S.A. (Wireless Telecommunication Services) 873,124 6,068,823 ======================================================================== 14,067,678 ======================================================================== HUNGARY-3.03% Gedeon Richter Rt. (Pharmaceuticals) 57,300 5,861,241 - ------------------------------------------------------------------------ OTP Bank Rt. (Diversified Banks) 618,400 7,535,762 ======================================================================== 13,397,003 ======================================================================== IRELAND-10.33% Anglo Irish Bank Corp. PLC (Diversified Banks) 1,848,985 22,126,412 - ------------------------------------------------------------------------ Depfa Bank PLC (Diversified Banks) 54,797 6,113,084 - ------------------------------------------------------------------------ Grafton Group PLC (Trading Companies & Distributors)(c) 1,828,280 11,331,145 - ------------------------------------------------------------------------ IAWS Group PLC (Agricultural Products) 237,500 2,531,213 - ------------------------------------------------------------------------ Independent News & Media PLC (Publishing) 1,633,800 3,558,230 ======================================================================== 45,660,084 ======================================================================== ISRAEL-1.03% Taro Pharmaceutical Industries Ltd. (Pharmaceuticals)(a) 49,300 3,167,525 - ------------------------------------------------------------------------ Teva Pharmaceutical Industries Ltd.-ADR (Pharmaceuticals) 24,300 1,382,427 ======================================================================== 4,549,952 ======================================================================== ITALY-7.62% Banca Intesa S.p.A. (Diversified Banks) 699,200 2,348,966 - ------------------------------------------------------------------------ Banco Popolare di Verona e Novara Scrl (Diversified Banks) 356,900 5,498,896 - ------------------------------------------------------------------------ Davide Campari-Milano S.p.A. (Distillers & Vintners) 104,400 4,474,861 - ------------------------------------------------------------------------ Eni S.p.A. (Integrated Oil & Gas) 342,114 5,413,758 - ------------------------------------------------------------------------ Mediaset S.p.A. (Broadcasting & Cable TV) 342,000 3,442,890 - ------------------------------------------------------------------------ Merloni Elettrodomestici S.p.A. (Household Appliances) 561,652 9,434,363 - ------------------------------------------------------------------------ UniCredito Italiano S.p.A. (Diversified Banks) 620,000 3,045,333 ======================================================================== 33,659,067 ========================================================================
F-1
MARKET SHARES VALUE - ------------------------------------------------------------------------ NETHERLANDS-3.64% Aalberts Industries N.V. (Industrial Conglomerates) 120,200 $ 2,917,197 - ------------------------------------------------------------------------ Koninklijke (Royal) KPN N.V. (Integrated Telecommunication Services)(a) 416,665 3,156,764 - ------------------------------------------------------------------------ Koninklijke (Royal) Philips Electronics N.V. (Consumer Electronics) 51,100 1,372,774 - ------------------------------------------------------------------------ Koninklijke Numico N.V. (Packaged Foods & Meats)(a) 120,627 2,712,360 - ------------------------------------------------------------------------ Randstad Holding N.V. (Employment Services)(a) 123,925 2,347,221 - ------------------------------------------------------------------------ Sligro Food Group N.V. (Food Distributors) 57,800 1,540,043 - ------------------------------------------------------------------------ Versatel Telecom International N.V. (Integrated Telecommunication Services)(a) 882,000 2,023,071 ======================================================================== 16,069,430 ======================================================================== NORWAY-2.58% Ekornes A.S.A. (Home Furnishings) 323,151 5,364,030 - ------------------------------------------------------------------------ Schibsted A.S.A. (Publishing) 30,906 541,272 - ------------------------------------------------------------------------ Smedvig A.S.A.-Class A (Oil & Gas Drilling) 289,878 1,998,090 - ------------------------------------------------------------------------ Telenor A.S.A. (Integrated Telecommunication Services) 641,628 3,474,943 ======================================================================== 11,378,335 ======================================================================== RUSSIA-1.92% AO VimpelCom-ADR (Wireless Telecommunication Services)(a) 104,600 6,809,460 - ------------------------------------------------------------------------ Mobile Telesystems-ADR (Wireless Telecommunication Services) 21,600 1,673,784 ======================================================================== 8,483,244 ======================================================================== SPAIN-5.11% Banco Popular Espanol S.A. (Diversified Banks) 66,140 3,427,207 - ------------------------------------------------------------------------ Corporacion Mapfre S.A. (Multi-Line Insurance) 468,943 5,823,608 - ------------------------------------------------------------------------ Enagas (Gas Utilities) (Acquired 06/25/02- 04/23/03; Cost $2,094,069)(b) 327,760 3,018,564 - ------------------------------------------------------------------------ Gamesa Corporacion Tecnologica, S.A. (Heavy Electrical Equipment) 88,401 2,384,061 - ------------------------------------------------------------------------ Grupo Ferrovial, S.A. (Construction & Engineering) 116,048 3,301,743 - ------------------------------------------------------------------------ Repsol YPF, S.A. (Integrated Oil & Gas) 267,692 4,651,617 ======================================================================== 22,606,800 ======================================================================== SWEDEN-3.57% Alfa Laval A.B. (Industrial Machinery) 189,751 2,494,589 - ------------------------------------------------------------------------ Atlas Copco A.B.-Class A (Industrial Machinery) 66,300 2,318,685 - ------------------------------------------------------------------------ Elekta A.B.-Class B (Health Care Equipment)(a) 139,704 2,763,874 - ------------------------------------------------------------------------ Elekta A.B.-Rts. (Health Care Equipment)(d) 139,704 7,133 - ------------------------------------------------------------------------ Swedish Match A.B. (Tobacco) 439,152 3,559,313 - ------------------------------------------------------------------------ Telefonaktiebolaget LM Ericsson A.B. (Communications Equipment)(a) 1,233,874 2,110,344 - ------------------------------------------------------------------------ Volvo A.B.-Class B (Construction, Farm Machinery & Heavy Trucks) 90,000 2,504,244 ======================================================================== 15,758,182 ========================================================================
MARKET SHARES VALUE - ------------------------------------------------------------------------
SWITZERLAND-5.49% Actelion Ltd. (Biotechnology)(a) 24,100 $ 2,283,423 - ------------------------------------------------------------------------ Credit Suisse Group (Diversified Capital Markets) 115,277 4,046,391 - ------------------------------------------------------------------------ Micronas Semiconductor Holding A.G. (Semiconductors)(a) 70,000 2,898,389 - ------------------------------------------------------------------------ Roche Holding A.G. (Pharmaceuticals) 31,850 2,625,653 - ------------------------------------------------------------------------ Schindler Holding A.G. (Industrial Machinery)(a) 3,591 902,840 - ------------------------------------------------------------------------ Schindler Holding A.G.-Participation Ctfs. (Industrial Machinery)(a) 2,038 456,132 - ------------------------------------------------------------------------ Straumann A.G. (Health Care Equipment) 16,200 1,918,644 - ------------------------------------------------------------------------ Swiss Life Holding (Life & Health Insurance)(a) 16,800 2,838,854 - ------------------------------------------------------------------------ Syngenta A.G. (Fertilizers & Agricultural Chemicals) 45,165 2,410,889 - ------------------------------------------------------------------------ UBS A.G. (Diversified Capital Markets) 63,440 3,880,991 ======================================================================== 24,262,206 ======================================================================== UNITED KINGDOM-25.37% AstraZeneca PLC (Pharmaceuticals) 96,410 4,522,792 - ------------------------------------------------------------------------ Barclays PLC (Diversified Banks) 456,420 3,844,497 - ------------------------------------------------------------------------ Cattles PLC (Consumer Finance) 1,059,920 5,730,364 - ------------------------------------------------------------------------ Centrica PLC (Gas Utilities) 1,336,960 4,180,548 - ------------------------------------------------------------------------ Enterprise Inns PLC (Restaurants) 465,290 6,667,389 - ------------------------------------------------------------------------ Galen Holdings PLC (Pharmaceuticals) 525,840 6,741,880 - ------------------------------------------------------------------------ ICAP PLC (Investment Banking & Brokerage) 302,860 7,076,279 - ------------------------------------------------------------------------ Imperial Tobacco Group PLC (Tobacco) 432,040 7,153,803 - ------------------------------------------------------------------------ Inchcape PLC (Distributors) 114,530 2,651,480 - ------------------------------------------------------------------------ Johnston Press PLC (Publishing) 743,690 5,840,721 - ------------------------------------------------------------------------ lastminute.com PLC (Internet Software & Services)(a) 488,300 2,453,747 - ------------------------------------------------------------------------ Man Group PLC (Asset Management & Custody Banks) 172,590 4,238,405 - ------------------------------------------------------------------------ Morgan Crucible Co. PLC (Industrial Machinery)(a) 1,120,200 2,468,069 - ------------------------------------------------------------------------ Morrison (William) Supermarkets PLC (Food Retail) 1,075,420 4,082,673 - ------------------------------------------------------------------------ Next PLC (Department Stores) 217,020 4,340,105 - ------------------------------------------------------------------------ Photo-Me International PLC (Photographic Products)(a) 1,160,000 2,349,332 - ------------------------------------------------------------------------ PHS Group PLC (Diversified Commercial Services) 1,485,000 2,137,122 - ------------------------------------------------------------------------ Reckitt Benckiser PLC (Household Products) 192,285 4,040,969 - ------------------------------------------------------------------------ Shire Pharmaceuticals Group PLC (Pharmaceuticals)(a) 680,810 5,151,881 - ------------------------------------------------------------------------ Smith & Nephew PLC (Health Care Supplies) 510,440 4,050,801 - ------------------------------------------------------------------------ Tesco PLC (Food Retail) 1,105,835 4,427,725 - ------------------------------------------------------------------------ Travis Perkins PLC (Home Improvement Retail) 272,290 5,508,237 - ------------------------------------------------------------------------ Ultra Electronics Holdings PLC (Aerospace & Defense) 484,810 4,239,745 - ------------------------------------------------------------------------
F-2
MARKET SHARES VALUE - ------------------------------------------------------------------------ UNITED KINGDOM-(CONTINUED) Vodafone Group PLC (Wireless Telecommunication Services) 3,912,340 $ 8,205,409 ======================================================================== 112,103,973 ======================================================================== UNITED STATES OF AMERICA-1.72% Autoliv, Inc.-SDR (Auto Parts & Equipment) 104,406 3,424,808 - ------------------------------------------------------------------------ Synthes-Stratec, Inc. (Health Care Equipment) 4,563 4,173,558 ======================================================================== 7,598,366 ======================================================================== Total Stocks & Other Equity Interests (Cost $302,620,322) 424,606,211 ======================================================================== MONEY MARKET FUNDS-1.36% STIC Liquid Assets Portfolio(e) 3,005,612 3,005,612 - ------------------------------------------------------------------------ STIC Prime Portfolio(e) 3,005,612 3,005,612 ======================================================================== Total Money Market Funds (Cost $6,011,224) 6,011,224 ======================================================================== TOTAL INVESTMENTS-97.44% (excluding investments purchased with cash collateral from securities loaned) (Cost $308,631,546) 430,617,435 ========================================================================
MARKET SHARES VALUE - ------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED MONEY MARKET FUNDS-2.74% STIC Liquid Assets Portfolio(e)(f) 12,113,481 $ 12,113,481 ======================================================================== Total Money Market Funds (purchased with cash collateral from securities loaned) (Cost $12,113,481) 12,113,481 ======================================================================== TOTAL INVESTMENTS-100.18% (Cost $320,745,027) 442,730,916 ======================================================================== OTHER ASSETS LESS LIABILITIES-(0.18%) (779,974) ======================================================================== NET ASSETS-100.00% $441,950,942 ________________________________________________________________________ ========================================================================
Investment Abbreviations: ADR - American Depositary Receipt Ctfs. - Certificates Rts. - Rights SDR - Swedish Depositary Receipt
Notes to Schedule of Investments: (a) Non-income producing security. (b) Security not registered under the Securities Act of 1933, as amended (e.g., the security was purchased in a Rule 144A transaction or a Regulation D transaction). The security may be resold only pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The Fund has no rights to demand registration of these securities. The aggregate market value of these securities at 10/31/03 was $20,953,302, which represented 4.74% of the Fund's net assets. Unless otherwise indicated, these securities are not considered to be illiquid. (c) Consists of more than one class of securities traded together as a unit. (d) Non-income producing security acquired as part of a unit with or in exchange for other securities. (e) The money market fund and the Fund are affiliated by having the same investment advisor. (f) The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Notes to Financial Statements. F-3 STATEMENT OF ASSETS AND LIABILITIES October 31, 2003 ASSETS: Investments, at market value (cost $302,620,322)* $ 424,606,211 - ------------------------------------------------------------ Investments in affiliated money market funds (cost $18,124,705) 18,124,705 - ------------------------------------------------------------ Foreign currencies, at value (cost $8,238,403) 8,183,817 - ------------------------------------------------------------ Receivables for: Investments sold 7,902,204 - ------------------------------------------------------------ Capital stock sold 468,123 - ------------------------------------------------------------ Dividends and interest 499,231 - ------------------------------------------------------------ Investment for deferred compensation plan 33,205 - ------------------------------------------------------------ Other assets 46,794 ============================================================ Total assets 459,864,290 ____________________________________________________________ ============================================================ LIABILITIES: Payables for: Investments purchased 3,707,615 - ------------------------------------------------------------ Capital stock reacquired 1,502,810 - ------------------------------------------------------------ Deferred compensation plan 33,205 - ------------------------------------------------------------ Collateral upon return of securities loaned 12,113,481 - ------------------------------------------------------------ Accrued distribution fees 206,211 - ------------------------------------------------------------ Accrued directors' fees 10,726 - ------------------------------------------------------------ Accrued transfer agent fees 202,061 - ------------------------------------------------------------ Accrued operating expenses 137,239 ============================================================ Total liabilities 17,913,348 ============================================================ Net assets applicable to shares outstanding $ 441,950,942 ____________________________________________________________ ============================================================ NET ASSETS CONSIST OF: Capital (par value and additional paid-in) $ 464,817,523 - ------------------------------------------------------------ Undistributed net investment income 267,863 - ------------------------------------------------------------ Undistributed net realized gain (loss) from investment securities, foreign currencies and futures contracts (145,058,846) - ------------------------------------------------------------ Unrealized appreciation of investment securities and foreign currencies 121,924,402 ============================================================ $ 441,950,942 ____________________________________________________________ ============================================================ NET ASSETS: Class A $ 301,658,752 ____________________________________________________________ ============================================================ Class B $ 107,959,389 ____________________________________________________________ ============================================================ Class C $ 31,509,288 ____________________________________________________________ ============================================================ Class R $ 660,269 ____________________________________________________________ ============================================================ Investor Class $ 163,244 ____________________________________________________________ ============================================================ CAPITAL STOCK, $0.001 PAR VALUE PER SHARE: Class A: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 15,064,592 ____________________________________________________________ ============================================================ Class B: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 5,613,582 ____________________________________________________________ ============================================================ Class C: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 1,637,499 ____________________________________________________________ ============================================================ Class R: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 33,046 ____________________________________________________________ ============================================================ Investor Class: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 8,156 ____________________________________________________________ ============================================================ Class A: Net asset value per share $ 20.02 - ------------------------------------------------------------ Offering price per share: (Net asset value of $20.02 divided by 94.50%) $ 21.19 ____________________________________________________________ ============================================================ Class B: Net asset value and offering price per share $ 19.23 ____________________________________________________________ ============================================================ Class C: Net asset value and offering price per share $ 19.24 ____________________________________________________________ ============================================================ Class R: Net asset value and offering price per share $ 19.98 ____________________________________________________________ ============================================================ Investor Class: Net asset value and offering price per share $ 20.01 ____________________________________________________________ ============================================================
* At October 31, 2003, securities with an aggregate market value of $11,629,769 were on loan to brokers. See Notes to Financial Statements. F-4 STATEMENT OF OPERATIONS For the year ended October 31, 2003 INVESTMENT INCOME: Dividends (net of foreign withholding tax of $956,608) $ 7,673,782 - -------------------------------------------------------------------------- Dividends from affiliated money market funds 266,520 - -------------------------------------------------------------------------- Securities lending 304,526 ========================================================================== Total investment income 8,244,828 ========================================================================== EXPENSES: Advisory fees 3,983,818 - -------------------------------------------------------------------------- Administrative services fees 125,283 - -------------------------------------------------------------------------- Custodian fees 523,726 - -------------------------------------------------------------------------- Distribution fees: Class A 1,030,346 - -------------------------------------------------------------------------- Class B 965,110 - -------------------------------------------------------------------------- Class C 279,643 - -------------------------------------------------------------------------- Class R 2,429 - -------------------------------------------------------------------------- Investor Class 9 - -------------------------------------------------------------------------- Transfer agent fees 1,965,469 - -------------------------------------------------------------------------- Directors' fees 15,817 - -------------------------------------------------------------------------- Other 376,094 ========================================================================== Total expenses 9,267,744 ========================================================================== Less: Fees waived, expenses reimbursed and expense offset arrangements (46,965) ========================================================================== Net expenses 9,220,779 ========================================================================== Net investment income (loss) (975,951) ========================================================================== REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES, FOREIGN CURRENCIES AND FUTURES CONTRACTS: Net realized gain (loss) from: Investment securities 19,531,063 - -------------------------------------------------------------------------- Foreign currencies 1,249,813 - -------------------------------------------------------------------------- Futures contracts (283,125) ========================================================================== 20,497,751 ========================================================================== Change in net unrealized appreciation (depreciation) of: Investment securities 92,348,452 - -------------------------------------------------------------------------- Foreign currencies (116,126) ========================================================================== 92,232,326 ========================================================================== Net gain from investment securities, foreign currencies and futures contracts 112,730,077 ========================================================================== Net increase in net assets resulting from operations $111,754,126 __________________________________________________________________________ ==========================================================================
See Notes to Financial Statements. F-5 STATEMENT OF CHANGES IN NET ASSETS For the years ended October 31, 2003 and 2002
2003 2002 - ------------------------------------------------------------------------------------------ OPERATIONS: Net investment income (loss) $ (975,951) $ (2,138,702) - ------------------------------------------------------------------------------------------ Net realized gain (loss) from investment securities, foreign currencies and futures contracts 20,497,751 (58,034,155) - ------------------------------------------------------------------------------------------ Change in net unrealized appreciation of investment securities and foreign currencies 92,232,326 53,982,841 ========================================================================================== Net increase (decrease) in net assets resulting from operations 111,754,126 (6,190,016) ========================================================================================== Share transactions-net: Class A (62,533,328) 125,417,383 - ------------------------------------------------------------------------------------------ Class B (13,312,226) (2,223,760) - ------------------------------------------------------------------------------------------ Class C (3,175,123) (4,011,667) - ------------------------------------------------------------------------------------------ Class R 467,649 16,969 - ------------------------------------------------------------------------------------------ Investor Class 162,286 -- ========================================================================================== Net increase (decrease) in net assets resulting from share transactions (78,390,742) 119,198,925 ========================================================================================== Net increase in net assets 33,363,384 113,008,909 ========================================================================================== NET ASSETS: Beginning of year 408,587,558 295,578,649 ========================================================================================== End of year (including undistributed net investment income (loss) of $267,863 and $(36,848) for 2003 and 2002, respectively) $441,950,942 $408,587,558 __________________________________________________________________________________________ ==========================================================================================
See Notes to Financial Statements. F-6 NOTES TO FINANCIAL STATEMENTS October 31, 2003 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM European Growth Fund (the "Fund") is a series portfolio of AIM International Funds, Inc. (the "Company"). The Company is a Maryland corporation registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of five separate portfolios. The Fund currently offers multiple classes of shares. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Effective November 25, 2003, the Fund redomesticated as a series portfolio of a newly formed Delaware statutory trust, AIM International Mutual Funds. The Fund's investment objective is long-term growth of capital. Companies are listed in the Schedule of Investments based on the country in which they are organized. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not securities reported on the NASDAQ National Market System) is valued on the basis of prices furnished by independent pricing services or market makers. Each security reported on the NASDAQ National Market System is valued at the NASDAQ Official Closing Price ("NOCP") as of the close of the customary trading session on the valuation date or absent a NOCP, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Company's officers in a manner specifically authorized by the Board of Directors of the Company. Market trends, movement in exchange traded funds and ADRs, and the bid/ask quotes of brokers and information providers may be reviewed in the course of making a good faith determination of a security's fair value. Short-term obligations having 60 days or less to maturity and commercial paper are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Foreign securities are converted into U.S. dollar amounts using exchange rates as of the close of the NYSE. Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of the close of the respective markets. Occasionally, events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE which would not ordinarily be reflected in the computation of the Fund's net asset value. If a development/event is so significant that there is a reasonably high degree of certainty as to both the effect and the degree of effect that the development/event has actually caused that closing price to no longer reflect actual value, the closing prices, as determined at the close of the applicable foreign market, may be adjusted to reflect the fair value of the affected foreign securities as of the close of the NYSE as determined in good faith by or under the supervision of the Board of Directors. 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 on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date. The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class. C. DISTRIBUTIONS -- Distributions from income and net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes. D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M 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 gain) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. Any capital loss carryforwards listed are reduced for limitations, if any, to the extent required by the Internal Revenue Code. F-7 E. FOREIGN CURRENCY TRANSLATIONS -- Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. F. FOREIGN CURRENCY CONTRACTS -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund may enter into a foreign currency contract to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. The Fund may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Fund could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. G. FUTURES CONTRACTS -- The Fund may purchase or sell futures contracts as a hedge against changes in market conditions. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities as collateral for the account of the broker (the Fund's agent in acquiring the futures position). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by "marking to market" on a daily basis to reflect the market value of the contracts at the end of each day's trading. Variation margin payments are made or received depending upon whether unrealized gains or losses are incurred. When the contracts are closed, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund's basis in the contract. Risks also include to varying degrees, the risk of loss in excess of the variation margin. H. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. 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 0.95% of the first $500 million of the Fund's average daily net assets, plus 0.90% of the Fund's average daily net assets in excess of $500 million. AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of 25% of the advisory fee AIM receives from the affiliated money market funds in which the Fund has invested (excluding investments made in affiliated money market funds with cash collateral from securities loaned by the Fund). For the year ended October 31, 2003, AIM waived fees of $4,811 and reimbursed expenses of $34,241. 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 October 31, 2003, AIM was paid $125,283 for such services. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay AIM Investment Services, Inc. ("AISI"), formerly known as A I M Fund Services, Inc., a fee for providing transfer agency and shareholder services to the Fund. During the year ended October 31, 2003, AISI retained $1,087,026 for such services. The Trust has entered into master distribution agreements with A I M Distributors, Inc. ("AIM Distributors") to serve as the distributor for the Class A, Class B, Class C, Class R and the Investor Class shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A, Class B, Class C, Class R and the Investor Class shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays AIM Distributors compensation at the annual rate of 0.35% of the Fund's average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares, 0.50% of the average daily net assets of Class R shares and 0.25% of the average daily net assets of the Investor Class shares. Of these amounts, AIM Distributors may pay a service fee up to 0.25% of the average daily net assets of the Class A, Class B, Class C or Class R shares to selected dealers and financial institutions who furnish continuing personal shareholder services to their customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. NASD Rules also impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. Pursuant to the Plans, for the year ended October 31, 2003, the Class A, Class B, Class C, Class R and the Investor Class shares paid $1,030,346, $965,110, $279,643, $2,429 and $9, respectively. Front-end sales commissions and contingent deferred sales charges ("CDSC") (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the year ended October 31, 2003, AIM Distributors retained $46,667 in front-end sales commissions from the sale of Class A shares and $324,229, $69 and $14,575 from Class A, Class B and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders. F-8 Certain officers and directors of the Company are officers and directors of AIM, AISI and/or AIM Distributors. NOTE 3--EXPENSE OFFSET ARRANGEMENTS For the year ended October 31, 2003, the Fund received reductions in transfer agency fees from AISI (an affiliate of AIM) of $7,666 and reduction in custodian fees of $247 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $7,913. NOTE 4--DIRECTORS' FEES Directors' fees represent remuneration paid to each Director of the Company who is not an "interested person" of AIM. Directors have the option to defer compensation payable by the Company. The Directors deferring compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Current Directors are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Directors over a period of time based on the number of years of service. Certain former Directors also participate in a retirement plan and receive benefits under such plan. During the year ended October 31, 2003, the Fund paid legal fees of $2,846 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Directors. A member of that firm is a Director of the Company. NOTE 5--BORROWINGS The Fund may participate in an interfund lending facility that AIM has established for temporary borrowings by the AIM Funds. An interfund loan will be made under this facility only if the loan rate (an average of the rate available on bank loans and the rate available on investments in overnight repurchase agreements) is favorable to both the lending fund and the borrowing fund. Under certain circumstances, a loan will be secured by collateral. To the extent that the loan is required to be secured by collateral, the collateral is marked to market daily to ensure that the market value is at least 102% of the outstanding principal value of the loan. Effective June 26, 2003, the Fund became a participant in an uncommitted unsecured revolving line of credit facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the lesser of (i) $125,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit can borrow on a first come, first served basis. Principal on each loan outstanding shall bear interest at the bid rate quoted by SSB at the time of the request for the loan. During the reporting period, the Fund was a participant in a committed line of credit facility with a syndicate administered by Citibank, N.A. The Fund could borrow up to the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which were parties to the line of credit could borrow on a first come, first served basis. The funds which were party to the line of credit were charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee was allocated among the funds based on their respective average net assets for the period. The committed line of credit facility expired May 20, 2003. During the year ended October 31, 2003, the Fund did not borrow or lend under the interfund lending facility or borrow under either the uncommitted unsecured revolving line of credit facility or the committed line of credit facility. Additionally the Fund is permitted to carry a negative or overdrawn balance in its account with the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds in the account so the custodian can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank. In either case, the custodian bank will be compensated an amount equal to the Federal Funds rate plus 100 basis points. NOTE 6--PORTFOLIO SECURITIES LOANED The Fund may lend portfolio securities to the extent of one-third of the Fund's total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Cash collateral pursuant to these loans is invested in short-term money market instruments or affiliated money market funds. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. It is the Fund's policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. At October 31, 2003, securities with an aggregate value of $11,629,769 were on loan to brokers. The loans were secured by cash collateral of $12,113,481 received by the Fund and subsequently invested in an affiliated money market fund. For the year ended October 31, 2003, the Fund received fees of $304,526 for securities lending. NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS Distributions to Shareholders: There were no ordinary income or long-term capital gain distributions paid during the years ended October 31, 2003 and 2002. Tax Components of Net Assets: As of October 31, 2003, the components of net assets on a tax basis were as follows: Undistributed ordinary income $ 314,297 - ------------------------------------------------------------------------------------------ Unrealized appreciation -- investments 120,966,369 - ------------------------------------------------------------------------------------------ Temporary book/tax differences (46,435) - ------------------------------------------------------------------------------------------ Capital loss carryforward (144,100,812) - ------------------------------------------------------------------------------------------ Capital (par value and additional paid-in) 464,817,523 ========================================================================================== Total net assets $ 441,950,942 __________________________________________________________________________________________ ==========================================================================================
The difference between book-basis and tax-basis unrealized appreciation is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's unrealized appreciation difference is attributable primarily to the tax deferral of losses on wash sales. The tax-basis unrealized appreciation on F-9 investments amount includes appreciation (depreciation) on foreign currencies of $(61,487). The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund's temporary book/tax differences are the result of the deferral of director compensation and director retirement plan expenses. The Fund has a capital loss carryforward for tax purposes which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD - -------------------------------------------------------------------------------- October 31, 2009 $ 85,467,686 - -------------------------------------------------------------------------------- October 31, 2010 58,633,126 ================================================================================ Total capital loss carryforward $144,100,812 ________________________________________________________________________________ ================================================================================
NOTE 8--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities and money market funds) purchased and sold by the Fund during the year ended October 31, 2003 was $316,660,103 and $381,381,472, respectively.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - ------------------------------------------------------------------------------- Aggregate unrealized appreciation of investment securities $121,776,115 - ------------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (748,259) =============================================================================== Net unrealized appreciation of investment securities $121,027,856 _______________________________________________________________________________ =============================================================================== Cost of investments for tax purposes is $321,703,060.
NOTE 9--RECLASSIFICATION OF PERMANENT DIFFERENCES Primarily as a result of differing book/tax treatment of nondeductible redomestication expenses and foreign currency transactions, on October 31, 2003, undistributed net investment income (loss) was increased by $1,280,662, undistributed net realized gain (loss) was decreased by $1,256,104 and paid in capital decreased by $24,558. This reclassification had no effect on net assets of the Fund. F-10 NOTE 10--CAPITAL STOCK INFORMATION The Fund currently offers five different classes of shares: Class A shares, Class B shares, Class C shares, Class R shares and Investor Class shares. Class A shares are sold with a front-end sales charge. Class B shares and Class C shares are sold with CDSC. Class R shares and Investor Class shares are sold at net asset value. Under some circumstances, Class A shares and Class R shares are subject to CDSC. Generally, Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase.
CHANGES IN CAPITAL STOCK OUTSTANDING - ---------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- YEAR ENDED OCTOBER 31, -------------------------------------------------------------- 2003 2002 ------------------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT - ---------------------------------------------------------------------------------------------------------------------------- Sold: Class A 82,916,233 $ 1,366,427,023 37,092,178 $ 609,947,178 - ---------------------------------------------------------------------------------------------------------------------------- Class B 734,581 11,741,120 889,627 14,708,041 - ---------------------------------------------------------------------------------------------------------------------------- Class C 4,899,091 77,913,071 2,584,399 41,058,289 - ---------------------------------------------------------------------------------------------------------------------------- Class R* 439,162 7,228,264 992 17,020 - ---------------------------------------------------------------------------------------------------------------------------- Investor Class** 8,159 162,338 -- -- ============================================================================================================================ Issued in connection with acquisitions:*** Class A -- -- 9,495,949 145,720,423 - ---------------------------------------------------------------------------------------------------------------------------- Class B -- -- 867,993 12,890,199 - ---------------------------------------------------------------------------------------------------------------------------- Class C -- -- 104,957 1,559,763 ============================================================================================================================ Automatic conversion of Class B shares to Class A shares: Class A 236,630 3,953,498 130,942 2,186,186 - ---------------------------------------------------------------------------------------------------------------------------- Class B (245,600) (3,953,498) (137,878) (2,186,186) ============================================================================================================================ Reacquired: Class A (86,282,624) (1,432,913,849) (38,067,728) (632,436,404) - ---------------------------------------------------------------------------------------------------------------------------- Class B (1,338,030) (21,099,848) (1,710,546) (27,635,814) - ---------------------------------------------------------------------------------------------------------------------------- Class C (5,072,535) (81,088,194) (2,905,211) (46,629,719) - ---------------------------------------------------------------------------------------------------------------------------- Class R* (407,105) (6,760,615) (3) (51) - ---------------------------------------------------------------------------------------------------------------------------- Investor Class** (3) (52) -- -- ============================================================================================================================ (4,112,041) $ (78,390,742) 8,345,671 $ 119,198,925 ____________________________________________________________________________________________________________________________ ============================================================================================================================
* Class R shares commenced sales on June 3, 2002. ** Investor Class shares commenced sales on September 30, 2003. *** As of the close of business on September 20, 2002, the Fund acquired all the net assets of AIM Euroland Growth Fund pursuant to a plan of reorganization approved by AIM Euroland Growth Fund shareholders on September 4, 2002. The acquisition was accomplished by a tax-free exchange of 10,468,899 shares of the Fund for 22,408,695 shares of AIM Euroland Growth Fund outstanding as of the close of business on September 20, 2002. AIM Euroland Growth Fund's net assets at that date of $160,170,385 including $(26,495,326) of unrealized appreciation (depreciation), were combined with those of the Fund. The aggregate net assets of the Fund immediately before the acquisition were $244,433,808. F-11 NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A ------------------------------------------------------------------ YEAR ENDED OCTOBER 31, ------------------------------------------------------------------ 2003 2002 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 15.60 $ 16.52 $ 23.59 $ 16.42 $ 12.96 - -------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.01)(a) (0.07)(a) (0.06)(a) (0.21)(a) (0.11) - -------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 4.43 (0.85) (7.01) 7.38 3.58 ================================================================================================================================ Total from investment operations 4.42 (0.92) (7.07) 7.17 3.47 ================================================================================================================================ Less dividends from net investment income -- -- -- -- (0.01) ================================================================================================================================ Net asset value, end of period $ 20.02 $ 15.60 $ 16.52 $ 23.59 $ 16.42 ________________________________________________________________________________________________________________________________ ================================================================================================================================ Total return(b) 28.33% (5.57)% (29.97)% 43.67% 26.81% ________________________________________________________________________________________________________________________________ ================================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $301,659 $283,812 $157,651 $273,605 $99,148 ________________________________________________________________________________________________________________________________ ================================================================================================================================ Ratio of expenses to average net assets 2.01%(c)(d) 1.93% 1.83% 1.69% 1.88% ================================================================================================================================ Ratio of net investment income (loss) to average net assets (0.04)%(c) (0.42)% (0.32)% (0.82)% (0.69)% ________________________________________________________________________________________________________________________________ ================================================================================================================================ Portfolio turnover rate 81% 94% 99% 112% 122% ________________________________________________________________________________________________________________________________ ================================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $294,384,443. (d) After fee waivers and/or reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 2.02%.
CLASS B ----------------------------------------------------------------- YEAR ENDED OCTOBER 31, ----------------------------------------------------------------- 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 15.08 $ 16.07 $ 23.11 $ 16.20 $ 12.87 - ------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.11)(a) (0.18)(a) (0.19)(a) (0.38)(a) (0.22) - ------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 4.26 (0.81) (6.85) 7.29 3.55 =============================================================================================================================== Total from investment operations 4.15 (0.99) (7.04) 6.91 3.33 =============================================================================================================================== Net asset value, end of period $ 19.23 $ 15.08 $ 16.07 $ 23.11 $ 16.20 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Total return(b) 27.52% (6.16)% (30.46)% 42.65% 25.87% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $107,959 $97,436 $105,324 $169,614 $67,074 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratio of expenses to average net assets 2.66%(c)(d) 2.58% 2.50% 2.39% 2.63% =============================================================================================================================== Ratio of net investment income (loss) to average net assets (0.69)%(c) (1.07)% (0.98)% (1.52)% (1.44)% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Portfolio turnover rate 81% 94% 99% 112% 122% _______________________________________________________________________________________________________________________________ ===============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $96,511,040. (d) After fee waivers and/or reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 2.67%. F-12 NOTE 11--FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C -------------------------------------------------------------- YEAR ENDED OCTOBER 31, -------------------------------------------------------------- 2003 2002 2001 2000 1999 - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 15.09 $ 16.09 $ 23.13 $ 16.21 $ 12.88 - ---------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.11)(a) (0.18)(a) (0.19)(a) (0.38)(a) (0.23) - ---------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 4.26 (0.82) (6.85) 7.30 3.56 ============================================================================================================================ Total from investment operations 4.15 (1.00) (7.04) 6.92 3.33 ============================================================================================================================ Net asset value, end of period $ 19.24 $ 15.09 $ 16.09 $ 23.13 $ 16.21 ____________________________________________________________________________________________________________________________ ============================================================================================================================ Total return(b) 27.50% (6.22)% (30.44)% 42.69% 25.85% ____________________________________________________________________________________________________________________________ ============================================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $31,509 $27,323 $32,604 $54,164 $11,938 ____________________________________________________________________________________________________________________________ ============================================================================================================================ Ratio of expenses to average net assets 2.66%(c)(d) 2.58% 2.50% 2.39% 2.63% ============================================================================================================================ Ratio of net investment income (loss) to average net assets (0.69)%(c) (1.07)% (0.98)% (1.52)% (1.44)% ____________________________________________________________________________________________________________________________ ============================================================================================================================ Portfolio turnover rate 81% 94% 99% 112% 122% ____________________________________________________________________________________________________________________________ ============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $27,964,290. (d) After fee waivers and/or reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 2.67%.
CLASS R ------------------------------- JUNE 3, 2002 (DATE SALES YEAR ENDED COMMENCED) TO OCTOBER 31, OCTOBER 31, 2003 2002 - --------------------------------------------------------------------------------------------- Net asset value, beginning of period $15.59 $ 18.35 - --------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.03)(a) (0.04)(a) - --------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 4.42 (2.72) ============================================================================================= Total from investment operations 4.39 (2.76) ============================================================================================= Net asset value, end of period $19.98 $ 15.59 _____________________________________________________________________________________________ ============================================================================================= Total return(b) 28.16% (15.04)% _____________________________________________________________________________________________ ============================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $ 660 $ 15 _____________________________________________________________________________________________ ============================================================================================= Ratio of expenses to average net assets 2.16%(c)(d) 2.08%(e) ============================================================================================= Ratio of net investment income (loss) to average net assets (0.19)%(c) (0.57)%(e) _____________________________________________________________________________________________ ============================================================================================= Portfolio turnover rate(f) 81% 94% _____________________________________________________________________________________________ =============================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and is not annualized for periods less than one year. (c) Ratios are based on average daily net assets of $485,853. (d) After fee waivers and/or reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 2.17%. (e) Annualized. (f) Not annualized for periods less than one year. F-13 NOTE 11--FINANCIAL HIGHLIGHTS (CONTINUED)
INVESTOR CLASS ------------------ SEPTEMBER 30, 2003 (DATE SALES COMMENCED) TO OCTOBER 31, 2003 - ---------------------------------------------------------------------------------- Net asset value, beginning of period $18.84 - ---------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.00(a) ================================================================================== Net gains on securities (both realized and unrealized) 1.17 ================================================================================== Total from investment operations 1.17 ================================================================================== Net asset value, end of period $20.01 __________________________________________________________________________________ ================================================================================== Total return(b) 6.21% __________________________________________________________________________________ ================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $ 163 __________________________________________________________________________________ ================================================================================== Ratio of expenses to average net assets 1.79%(c)(d) ================================================================================== Ratio of net investment income to average net assets 0.18%(c) __________________________________________________________________________________ ================================================================================== Portfolio turnover rate(e) 81% __________________________________________________________________________________ ==================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and is not annualized for periods less than one year. (c) Ratios are annualized and based on average daily net assets of $42,611. (d) After fee waivers and/or reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 1.79%. (e) Not annualized for periods less than one year. NOTE 12--SUBSEQUENT EVENTS On November 24, 2003, INVESCO European Fund ("Selling Fund") transferred substantially all of its assets to the Fund in exchange for shares of the Selling Fund in a tax-free reorganization. The results of the reorganization are as follows: The acquisition was accomplished by a tax-free exchange of 8,080,669 shares of the Fund for 18,162,024 shares of INVESCO European Fund outstanding as of the open of business on November 24, 2003. INVESCO European Fund's net assets at that date of $162,973,764 including $27,261,043 of unrealized appreciation, were combined with those of the Fund. The aggregate net assets of the Fund immediately before the acquisition were $444,879,513. Included in net assets of the acquired fund is undistributed net investment income (loss) of $(289,707) and undistributed net realized gain (loss) of $(298,154,211). Your Fund's investment advisor, A I M Advisors, Inc. ("AIM") is an indirect wholly owned subsidiary of AMVESCAP PLC ("AMVESCAP"). Another indirect wholly owned subsidiary of AMVESCAP, INVESCO Funds Group, Inc. ("INVESCO"), was, until recently, the investment advisor to the INVESCO Funds. On December 2, 2003, each of the Securities and Exchange Commission ("SEC") and the Office of the Attorney General of the State of New York ("NYAG") filed civil proceedings against INVESCO and Raymond R. Cunningham, in his capacity as the Chief Executive Officer of INVESCO. Mr. Cunningham currently holds the positions of Chief Operating Officer and Senior Vice President of A I M Management Group, Inc., the parent company of AIM, and he also holds the position of Senior Vice President with AIM. In addition, on December 2, 2003, the State of Colorado filed civil proceedings against INVESCO. Neither your Fund nor any of the funds in the AIM Family of Funds(R), which includes the INVESCO Funds (the "Funds") has been named as a defendant in any of these proceedings. The SEC proceeding alleges that INVESCO failed to disclose in the INVESCO Funds' prospectuses and to the INVESCO Funds' independent directors that INVESCO had entered into certain arrangements permitting market timing of the INVESCO Funds. The SEC is seeking injunctions, including permanent injunctions from serving as an investment advisor, officer or director of an investment company; an accounting of all market timing as well as certain fees and compensation received; disgorgement; civil monetary penalties; and other relief. The NYAG proceeding is also based on the circumstances described above. The NYAG is seeking injunctions, including permanent injunctions from directly or indirectly selling or distributing shares of mutual funds; disgorgement of all profits obtained, including fees collected, and payment of all restitution and damages caused, directly or indirectly from the alleged illegal activities; civil monetary penalties; and other relief. The Colorado proceeding is also based on the circumstances described above. The State of Colorado is seeking injunctions; restitution, disgorgement and other equitable relief; civil monetary penalties; and other relief. If INVESCO is unsuccessful in its defense of these proceedings, it could be barred from serving as an investment advisor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Similarly, if Mr. Cunningham is unsuccessful in his defense of these proceedings, he could be barred from serving as an officer or director of any registered investment company. Such results could also affect the ability of AIM, or any other investment advisor directly or indirectly owned by AMVESCAP, from serving as an investment advisor to any F-14 NOTE 12--SUBSEQUENT EVENTS (CONTINUED) registered investment company, including your Fund. Your Fund has been informed by AIM that, if either of these results occurs, AIM will seek exemptive relief from the SEC to permit it to continue to serve as your Fund's investment advisor. There can be no assurance that such exemptive relief will be granted. AIM has received inquiries from the SEC, the NASD, Inc., the NYAG and the Secretary of the Commonwealth of Massachusetts with respect to market timing, late trading, fair value pricing and other similar issues and AIM has been providing full cooperation with respect to these inquiries. In addition to the complaints described above, multiple lawsuits, including purported class action and shareholder derivative suits, have been filed against certain Funds, INVESCO, AIM, AMVESCAP and certain related parties, primarily based upon the allegations in the complaints described above, but also regarding the funds' fair valuation pricing methodology. Such lawsuits allege a variety of theories for recovery including, but not limited to: (i) violation of various provisions of the Federal securities laws; (ii) breach of fiduciary duty; and (iii) breach of contract. The lawsuits have been filed in both Federal and state courts and seek such remedies as compensatory damages; restitution; rescission; accounting for wrongfully gotten gains, profits and compensation; injunctive relief; disgorgement; equitable relief; interest and the payment of attorneys' and experts' fees. Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the Funds, INVESCO, AIM, AMVESCAP and related parties in the future. As a result of these developments, investors in the Funds might react by redeeming their investments. This might require the Funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the Funds. At the present time, management of AIM and the Fund is unable to estimate the impact, if any, that the outcome of these matters described above may have on the Fund or AIM's financial condition. F-15 REPORT OF INDEPENDENT AUDITORS To the Board of Directors/Trustees and Shareholders of AIM European Growth Fund: In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the AIM European Growth Fund (one of the funds constituting AIM International Funds, Inc., now known as AIM International Mutual Funds; hereafter referred to as the "Fund") at October 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The financial highlights for each of the periods ended on or before October 31, 2000 were audited by other independent accountants whose report dated December 6, 2000, expressed an unqualified opinion on the financial highlights. PRICEWATERHOUSECOOPERS LLP December 16, 2003 Houston, Texas F-16 PROXY RESULTS (UNAUDITED) A Special Meeting of Shareholders of AIM International Funds, Inc., a Maryland corporation, was held on October 21, 2003. The meeting was adjourned and reconvened on October 28, 2003, on November 4, 2003, on November 11, 2003, on November 17, 2003 and reconvened on November 21, 2003. The meeting was held for the following purposes: (1)* To elect sixteen individuals to the Board, each of whom will serve until his or her successor is elected and qualified: Bob R. Baker, Frank S. Bayley, James T. Bunch, Bruce L. Crockett, Albert R. Dowden, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H. Graham, Gerald J. Lewis, Prema Mathai-Davis, Lewis F. Pennock, Ruth H. Quigley, Louis S. Sklar, Larry Soll, Ph.D. and Mark H. Williamson. (2)* To approve an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation. The results of the voting on the above matters were as follows:
WITHHOLDING DIRECTORS/MATTER VOTES FOR AUTHORITY - --------------------------------------------------------------------------------- (1)* Bob R. Baker................................. 162,211,196 3,444,279 Frank S. Bayley.............................. 162,236,962 3,418,513 James T. Bunch............................... 162,287,588 3,367,887 Bruce L. Crockett............................ 162,276,496 3,378,979 Albert R. Dowden............................. 162,251,386 3,404,089 Edward K. Dunn, Jr. ......................... 162,221,226 3,434,249 Jack M. Fields............................... 162,278,318 3,377,157 Carl Frischling.............................. 162,182,906 3,472,569 Robert H. Graham............................. 162,243,892 3,411,583 Gerald J. Lewis.............................. 162,147,868 3,507,607 Prema Mathai-Davis........................... 162,219,866 3,435,609 Lewis F. Pennock............................. 162,263,207 3,392,268 Ruth H. Quigley.............................. 162,163,064 3,492,411 Louis S. Sklar............................... 162,243,759 3,411,716 Larry Soll, Ph.D. ........................... 162,236,226 3,419,249 Mark H. Williamson........................... 162,238,962 3,416,513
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 76,302,938 2,822,366 86,530,171**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on October 28, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 84,066,011 2,989,031 83,338,957**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 4, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 95,512,525 3,144,748 78,504,573**
F-17 PROXY RESULTS (UNAUDITED) (CONTINUED) The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 11, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 109,217,698 3,531,752 71,913,039**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 17, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 116,710,545 3,761,148 69,451,190**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 21, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 137,239,949 4,617,039 51,798,672**
* Proposal required approval by a combined vote of all the portfolios of AIM International Funds, Inc. ** Includes Broker Non-Votes F-18 OTHER INFORMATION TRUSTEES AND OFFICERS As of January 1, 2003 The address of each trustee and officer of AIM International Funds, Inc., now known as AIM International Mutual Funds (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 132 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) TRUST SINCE DURING PAST 5 YEARS - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED PERSONS - ------------------------------------------------------------------------------------------------------------------------------------ Robert H. Graham(1) -- 1946 1991 Director and Chairman, A I M Management Group Inc. None Trustee, Chairman and (financial services holding company); and Director and Vice President Chairman, AMVESCAP PLC and Chairman of AMVESCAP PLC -- AIM Division (parent of AIM and a global investment management firm) Formerly: President and Chief Executive Officer, A I M Management Group Inc.; Director, Chairman and President, A I M Advisors, Inc. (registered investment advisor); and Director and Chairman, A I M Capital Management, Inc. (registered investment advisor), A I M Distributors, Inc. (registered broker dealer), AIM Investment Services, Inc., (registered transfer agent), and Fund Management Company (registered broker dealer); and Chief Executive Officer, AMVESCAP PLC -- Managed Products - ------------------------------------------------------------------------------------------------------------------------------------ Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Officer, A I M Director and Chairman, Trustee and Executive Vice Management Group Inc. (financial services holding company); INVESCO Bond Funds, President Director, Chairman and President, A I M Advisors, Inc. Inc., INVESCO (registered investment advisor); Director, A I M Capital Combination Stock & Management, Inc. (registered investment advisor) and A I M Bond Funds, Inc., Distributors, Inc. (registered broker dealer); Director and INVESCO Counselor Chairman, AIM Investment Services, Inc. (registered transfer Series Funds, Inc., agent); and Fund Management Company (registered broker INVESCO International dealer); and Chief Executive Officer, AMVESCAP PLC -- AIM Funds, Inc., INVESCO Division (parent of AIM and a global investment management Manager Series Funds, firm) Inc., INVESCO Money Formerly: Director, Chairman, President and Chief Executive Market Funds, Inc., Officer, INVESCO Funds Group, Inc. and INVESCO Distributors, INVESCO Sector Funds, Inc.; Chief Executive Officer, AMVESCAP PLC -- Managed Inc., INVESCO Stock Products; Chairman and Chief Executive Officer of Funds, Inc., INVESCO NationsBanc Advisors, Inc.; and Chairman of NationsBanc Treasurer's Series Investments, Inc. Funds, Inc. and INVESCO Variable Investment Funds, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ Bob R. Baker(3) -- 1936 2003 Consultant None Trustee Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation - ------------------------------------------------------------------------------------------------------------------------------------ Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc. Trustee (registered investment company) - ------------------------------------------------------------------------------------------------------------------------------------ James T. Bunch(3) -- 1942 2003 Co-President and Founder, Green, Manning & Bunch Ltd., None Trustee (investment banking firm); and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation Formerly: General Counsel and Director, Boettcher & Co.; and Chairman and Managing Partner, law firm of Davis, Graham & Stubbs - ------------------------------------------------------------------------------------------------------------------------------------ Bruce L. Crockett -- 1944 1992 Chairman, Crockett Technology Associates (technology ACE Limited (insurance Trustee consulting company) company); and Captaris, Inc. (unified messaging provider) - ------------------------------------------------------------------------------------------------------------------------------------ Albert R. Dowden -- 1941 2000 Director of a number of public and private business Cortland Trust, Inc. Trustee corporations, including the Boss Group Ltd. (private (Chairman) (registered investment and management) and Magellan Insurance Company investment company); Formerly: Director, President and Chief Executive Officer, Annuity and Life Re Volvo Group North America, Inc.; Senior Vice President, AB (Holdings), Ltd. Volvo; and director of various affiliated Volvo Group (insurance company) companies - ------------------------------------------------------------------------------------------------------------------------------------ Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage Corp.; President and None Trustee Chief Operating Officer, Mercantile-Safe Deposit & Trust Co.; and President, Mercantile Bankshares Corp. - ------------------------------------------------------------------------------------------------------------------------------------ Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Group, Inc. Administaff Trustee (government affairs company) and Texana Timber LP - ------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Graham is considered an interested person of the Trust because he is a director of AMVESCAP PLC, parent of the advisor to the Trust. (2) Mr. Williamson is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. Mr. Williamson became Executive Vice President of the Trust on March 4, 2003. (3) Elected trustee of the Trust on October 21, 2003. Trustees and Officers (continued) As of January 1, 2003 The address of each trustee and officer of AIM International Funds, Inc., now known as AIM International Mutual Funds (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 132 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ PRINCIPAL OCCUPATION(S) POSITION(S) HELD WITH THE TRUST OR OFFICER SINCE DURING PAST 5 YEARS - ------------------------------------------------------------------------------------------------------------------- Carl Frischling -- 1937 1991 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Trustee - ------------------------------------------------------------------------------------------------------------------- Gerald J. Lewis(3) -- 1933 2003 Chairman, Lawsuit Resolution Services (San Diego, Trustee California) Formerly: Associate Justice of the California Court of Appeals - ------------------------------------------------------------------------------------------------------------------- Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of the USA Trustee - ------------------------------------------------------------------------------------------------------------------- Lewis F. Pennock -- 1942 1991 Partner, law firm of Pennock & Cooper Trustee - ------------------------------------------------------------------------------------------------------------------- Ruth H. Quigley -- 1935 2001 Retired Trustee - ------------------------------------------------------------------------------------------------------------------- Louis S. Sklar -- 1939 1991 Executive Vice President, Development and Operations Hines Trustee Interests Limited Partnership (real estate development company) - ------------------------------------------------------------------------------------------------------------------- Larry Soll, Ph.D.(3) -- 1942 2003 Retired Trustee - ------------------------------------------------------------------------------------------------------------------- OTHER OFFICERS - ------------------------------------------------------------------------------------------------------------------- Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary and General Senior Vice President Counsel, A I M Management Group Inc. (financial services holding company) and A I M Advisors, Inc.; Vice President, A I M Capital Management, Inc., A I M Distributors, Inc. and AIM Investment Services, Inc.; and Director, Vice President and General Counsel, Fund Management Company Formerly: Senior Vice President and General Counsel, Liberty Financial Companies, Inc.; and Senior Vice President and General Counsel, Liberty Funds Group, LLC - ------------------------------------------------------------------------------------------------------------------- Gary T. Crum(5) -- 1947 1991 Director, Chairman and Director of Investments, A I M Senior Vice President Capital Management, Inc.; Director and Executive Vice President, A I M Management Group Inc.; Director and Senior Vice President, A I M Advisors, Inc.; and Director, A I M Distributors, Inc. and AMVESCAP PLC Formerly: Chief Executive Officer and President, A I M Capital Management Inc. - ------------------------------------------------------------------------------------------------------------------- Robert G. Alley -- 1948 1994 Managing Director and Chief Fixed Income Officer, A I M Vice President Capital Management, Inc., and Vice President, A I M Advisors, Inc. - ------------------------------------------------------------------------------------------------------------------- Stuart W. Coco -- 1955 2002 Managing Director and Chief Research Officer -- Fixed Vice President Income, A I M Capital Management, Inc.; and Vice President, A I M Advisors, Inc. - ------------------------------------------------------------------------------------------------------------------- Melville B. Cox -- 1943 1992 Vice President and Chief Compliance Officer, A I M Advisors, Vice President Inc. and A I M Capital Management, Inc.; and Vice President, AIM Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------- Edgar M. Larsen(5) -- 1940 1999 Vice President, A I M Advisors, Inc., and President, Chief Vice President Executive Officer and Chief Investment Officer, A I M Capital Management, Inc. - ------------------------------------------------------------------------------------------------------------------- Dana R. Sutton -- 1959 1991 Vice President and Fund Treasurer, A I M Advisors, Inc. Vice President and Treasurer - ------------------------------------------------------------------------------------------------------------------- NAME, YEAR OF BIRTH AND OTHER DIRECTORSHIP(S) POSITION(S) HELD WITH THE TRUST HELD BY TRUSTEE - --------------------------------- ---------------------- Carl Frischling -- 1937 Cortland Trust, Inc. Trustee (registered investment company) - ------------------------------------------------------------------------------------------------------------------- Gerald J. Lewis(3) -- 1933 General Chemical Trustee Group, Inc., Wheelabrator Technologies, Inc. (waste management company), Fisher Scientific, Inc., Henley Manufacturing, Inc. (laboratory supplies), and California Coastal Properties, Inc. - ------------------------------------------------------------------------------------------------------------------- Prema Mathai-Davis -- 1950 None Trustee - ------------------------------------------------------------------------------------------------------------------- Lewis F. Pennock -- 1942 None Trustee - ------------------------------------------------------------------------------------------------------------------- Ruth H. Quigley -- 1935 None Trustee - ------------------------------------------------------------------------------------------------------------------- Louis S. Sklar -- 1939 None Trustee - ------------------------------------------------------------------------------------------------------------------- Larry Soll, Ph.D.(3) -- 1942 None Trustee - ------------------------------------------------------------------------------------------------------------------- OTHER OFFICERS - ------------------------------------------------------------------------------------------------------------------- Kevin M. Carome(4) -- 1956 N/A Senior Vice President - ------------------------------------------------------------------------------------------------------------------- Gary T. Crum(5) -- 1947 N/A Senior Vice President - ------------------------------------------------------------------------------------------------------------------- Robert G. Alley -- 1948 N/A Vice President - ------------------------------------------------------------------------------------------------------------------- Stuart W. Coco -- 1955 N/A Vice President - ------------------------------------------------------------------------------------------------------------------- Melville B. Cox -- 1943 N/A Vice President - ------------------------------------------------------------------------------------------------------------------- Edgar M. Larsen(5) -- 1940 N/A Vice President - ------------------------------------------------------------------------------------------------------------------- Dana R. Sutton -- 1959 N/A Vice President and Treasurer - -------------------------------------------------------------------------------------------------------------------
(3) Elected trustee of the Trust on October 21, 2003. (4) Mr. Carome became Senior Vice President of the Trust on May 13, 2003. (5) Information is current as of January 10, 2003. The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.347.4246. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS 11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, Inc. PricewaterhouseCoopers LLP Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana, Suite 2900 Houston, TX 77046 Suite 100 Suite 100 Houston, TX 77002 Houston, TX 77046 Houston, TX 77046-1173 COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. State Street Bank and Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 Trust Company 1735 Market Street 919 Third Avenue Houston, TX 77210-4739 225 Franklin Street Philadelphia, PA 19103 New York, NY 10022-3852 Boston, MA 02110
REQUIRED FEDERAL INCOME TAX INFORMATION (UNAUDITED) Of ordinary dividends paid to shareholders during the tax year November 1, 2003 through November 23, 2003, 3.96% is eligible for the dividends received deduction for corporations. For the tax year November 1, 2003 through November 23, 2003, the Fund designates 100%, or the maximum amount allowable, of its dividend distributions as qualified dividend income. The actual amount for the calendar year will be designated in the Fund's year end tax statement. DOMESTIC EQUITY INTERNATIONAL/GLOBAL EQUITY FIXED INCOME AIM Aggressive Growth Fund AIM Asia Pacific Growth Fund TAXABLE AIM Balanced Fund* AIM Developing Markets Fund AIM Basic Balanced Fund* AIM European Growth Fund AIM Floating Rate Fund AIM Basic Value Fund AIM European Small Company Fund AIM High Yield Fund AIM Blue Chip Fund AIM Global Aggressive Growth Fund AIM Income Fund AIM Capital Development Fund AIM Global Growth Fund AIM Intermediate Government Fund AIM Charter Fund AIM Global Trends Fund AIM Limited Maturity Treasury Fund AIM Constellation Fund AIM Global Value Fund(4) AIM Money Market Fund AIM Dent Demographic Trends Fund AIM International Emerging Growth Fund AIM Short Term Bond Fund AIM Diversified Dividend Fund1 AIM International Growth Fund AIM Total Return Bond Fund AIM Emerging Growth Fund AIM Trimark Fund INVESCO U.S. Government Money Fund AIM Large Cap Basic Value Fund INVESCO International Core Equity Fund(5) AIM Large Cap Growth Fund AIM Libra Fund AIM Mid Cap Basic Value Fund AIM Mid Cap Core Equity Fund SECTOR EQUITY TAX-FREE AIM Mid Cap Growth Fund AIM Opportunities I Fund AIM Global Health Care Fund AIM High Income Municipal Fund AIM Opportunities II Fund AIM Real Estate Fund AIM Municipal Bond Fund AIM Opportunities III Fund INVESCO Advantage Health Sciences Fund AIM Tax-Exempt Cash Fund AIM Premier Equity Fund INVESCO Energy Fund AIM Tax-Free Intermediate Fund AIM Select Equity Fund INVESCO Financial Services Fund AIM Small Cap Equity Fund(2) INVESCO Gold & Precious Metals Fund AIM Small Cap Growth Fund(3) INVESCO Health Sciences Fund AIM Trimark Endeavor Fund INVESCO Leisure Fund AM Trimark Small Companies Fund INVESCO Multi-Sector Fund AIM Weingarten Fund INVESCO Technology Fund INVESCO Core Equity Fund INVESCO Utilities Fund INVESCO Dynamics Fund INVESCO Mid-Cap Growth Fund INVESCO Small Company Growth Fund INVESCO S&P 500 Index Fund INVESCO Total Return Fund*
* Domestic equity and income fund (1)Effective May 2, 2003, AIM Large Cap Core Equity Fund was renamed AIM Diversified Dividend Fund. (2)AIM Small Cap Equity Fund was closed to most investors on December 19, 2003. For information on who may continue to invest in AIM Small Cap Equity Fund, please contact your financial advisor. (3)AIM Small Cap Growth Fund was closed to most investors on March 18, 2002. For information on who may continue to invest in AIM Small Cap Growth Fund, please contact your financial advisor. (4)Effective April 30, 2003, AIM Worldwide Spectrum Fund was renamed AIM Global Value Fund. (5)Effective November 24, 2003, INVESCO International Blue Chip Value Fund was renamed INVESCO International Core Equity Fund. For more complete information about any AIM or INVESCO fund, including sales charges and expenses, ask your financial advisor for a prospectus. Please read it carefully before investing. If used after January 20, 2004, this brochure must be accompanied by a fund Performance & Commentary or by an AIM Quarterly Performance Review for the most recent quarter-end. Mutual funds distributed by A I M Distributors, Inc. A I M Management Group Inc. has provided leadership in the investment management industry since 1976 and manages $142 billion in assets for approximately 11 million shareholders, including individual investors, corporate clients and financial institutions. AIM is a subsidiary of AMVESCAP PLC, one of the world's largest independent financial services companies with $345 billion in assets under management. Data as of September 30, 2003. AIMinvestments.com EGR-AR-1 YOUR GOALS. OUR SOLUTIONS.--Servicemark-- - ------------------------------------------------------------------------------------------ MUTUAL RETIREMENT ANNUITIES COLLEGE SEPARATELY OFFSHORE ALTERNATIVE CASH [AIM INVESTMENTS LOGO APPEARS HERE] FUNDS PRODUCTS SAVINGS MANAGED PRODUCTS INVESTMENTS MANAGEMENT --Servicemark-- PLANS ACCOUNTS
AIM GLOBAL AGGRESSIVE GROWTH FUND Annual Report to Shareholders o October 31, 2003 [COVER IMAGE] YOUR GOALS. OUR SOLUTIONS. [AIM INVESTMENTS LOGO APPEARS HERE] --Servicemark-- --Servicemark-- ================================================================================ AIM GLOBAL AGGRESSIVE GROWTH FUND SEEKS TO PROVIDE ABOVE-AVERAGE LONG-TERM GROWTH OF CAPITAL. ================================================================================ ABOUT INFORMATION THROUGHOUT THIS REPORT: o Unless otherwise stated, information sharing plans. Plans that have existing o The unmanaged MSCI All Country (AC) presented is as of 10/31/03 and is based accounts invested in Class B shares will World Free Index tracks the performance on total net assets. continue to be allowed to make additional of approximately 50 developed and purchases. emerging countries covered by Morgan o AIM Global Aggressive Growth Fund's Stanley Capital International. A "free" performance figures are historical, and o International investing presents index represents investable opportunities they reflect fund expenses, the certain risks not associated with for global investors, taking into account reinvestment of distributions, and investing solely in the United States. the local market restrictions on share changes in net asset value. These include risks relating to ownership by foreign investors. fluctuations in the value of the U.S. o When sales charges are included in dollar relative to the values of other o The unmanaged Standard & Poor's performance figures, Class A share currencies, the custody arrangements made Composite Index of 500 Stocks (the S&P performance reflects the maximum 4.75% for the fund's foreign holdings, 500--Registered Trademark--) is an index sales charge, and Class B and Class C differences in accounting, political of common stocks frequently used as a share performance reflects the applicable risks and the lesser degree of public general measure of U.S. stock market contingent deferred sales charge (CDSC) information required to be provided by performance. for the period involved. The CDSC on non-U.S. companies. Class B shares declines from 5% beginning o The unmanaged MSCI Japan Index is a at the time of purchase to 0% at the o The fund's investment return and market-value-weighted average of the beginning of the seventh year. The CDSC principal value will fluctuate, so an performance of more than 300 securities on Class C shares is 1% for the first investor's shares, when redeemed, may be on the Japanese stock exchanges tracked year after purchase. The performance of worth more or less than their original by Morgan Stanley Capital International. the fund's share classes will differ due cost. to different sales charge structures and o A direct investment cannot be made in class expenses. o Investing in small and mid-size an index. Unless otherwise indicated, companies may involve risks not index results include reinvested o A 2% redemption fee will be imposed on associated with investing in more dividends, and they do not reflect sales certain redemptions or exchanges out of established companies. Also, small charges or fund expenses. the fund within 30 days of purchase. companies may have business risk, Exceptions to the redemption fee are significant stock price fluctuations and A description of the policies and listed in the fund's prospectus. illiquidity. procedures that the fund uses to determine how to vote proxies relating to o Effective 9/30/03, Class B shares are o Industry classifications used in this portfolio securities is available without not available as an investment for report are generally according to the charge, upon request, by calling retirement plans maintained pursuant to Global Industry Classification Standard, 800-959-4246, or on the AIM Web site, Section 401 of the Internal Revenue Code, which was developed by and is the AIMinvestments.com. including 401(k) plans, money purchase exclusive property and a service mark of pension plans and profit Morgan Stanley Capital International Inc. and Standard & Poor's.
======================================================= NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE This report may be distributed only to shareholders or to persons who have received a current prospectus of the fund. =======================================================
AIMinvestments.com TO OUR SHAREHOLDERS DEAR FELLOW SHAREHOLDER IN new policies and strengthened existing ones--to discourage THE AIM FAMILY OF FUNDS harmful short-term trading. These steps include: --Registered Trademark--: o Strengthening daily monitoring of trading activities. [PHOTO OF As you may be aware, there has been a ROBERT H. great deal of media coverage recently o Imposing redemption fees on additional funds we GRAHAM] about the mutual fund industry and believe may be vulnerable to harmful short-term allegations of improper activities by trading activity. ROBERT H. GRAHAM certain individuals and companies. As part of these widespread investigations, o Implementing an enhanced exchange policy (effective on INVESCO Funds Group (IFG), the former or about March 1, 2004) designed to limit exchanges [PHOTO OF adviser to certain INVESCO Funds, was between funds. MARK H. recently named as a defendant in WILLIAMSON] separate civil enforcement actions by o Employing an enhanced fair value pricing policy on the U.S. Securities and Exchange certain foreign securities as well as certain illiquid MARK H. WILLIAMSON Commission (SEC), the Office of the New securities. York Attorney General and the State of Colorado over an issue known as "market timing." A number of None of these tools alone, nor all of them taken private class or derivative actions also were filed in the together, eliminate the possibility of short-term trading wake of the regulators' actions. strategies that may be detrimental to a fund. Moreover, each of these tools involves judgments that are inherently Investors are understandably concerned and frustrated subjective. We have always sought and continue to seek to about these reports, and we would like to take this make these judgments to the best of our abilities and in a opportunity to assure you that, based on an investigation manner that we believe is consistent with the best interests conducted by an outside firm, IFG and its parent company, of our fund shareholders. And we remain committed to being AMVESCAP PLC, believe that these civil actions are without as vigilant as possible in the future to identify and merit. IFG is contesting the charges. address any harmful market timing investors who have the potential to harm our long-term fund shareholders. We encourage you to continue to monitor this situation, particularly as IFG has the opportunity to address the We sincerely hope these developments and the media allegations that have been made. Current information will be coverage surrounding them do not result in you or other posted on our Web site at AIMinvestments.com. We will shareholders losing confidence in AIM or INVESCO Funds. continue to communicate to you on our Web site about our Amidst this storm of controversy in the mutual fund finding, and the actions we are taking to protect and industry, we believe we can find encouragement in the promote the interests of our shareholders. The independent recovering economy and rising equity markets. As we write trustees of the funds are receiving regular reports from this letter, for instance, the S&P 500--Registered their independent counsel and outside counsel hired by Trademark-- Index is up approximately 23% year-to-date. AMVESCAP PLC, the parent of AIM and IFG, to perform an Although past performance is no guarantee of future results, ongoing investigation of market timing. there appear to be indicators that the economy and stock markets are showing signs of welcomed improvement. We A COMPLEX ISSUE encourage you to read the enclosed discussion of your fund's performance during this past reporting period. Market timing is an investment technique not defined in any regulation that involves frequent short-term trading of OUR UNWAVERING COMMITMENT mutual fund shares, sometimes with a goal to exploit inefficiencies in the way mutual funds price their shares. At AIM Investments, we have never wavered in our commitment We recognize that fund management companies have tried to to helping you build solutions for your financial goals. Our deal with this complex issue in various ways and believe company was founded on a core principle of integrity, and we that industry-wide guidance is in order. To that end, we have always worked hard to earn the trust of our welcome SEC Chairman William Donaldson's pledge to adopt new shareholders. We are committed to doing all we can to rules designed to curb market timing abuses. Comprehensive maintain your trust and confidence. rulemaking is necessary and is the best way to establish new industry responsibilities designed to protect shareholders. Thank you for your continued participation in AIM We support practical rule changes and structural Investments. Please call your financial advisor or one of modifications that are fair, enforceable and, most our Client Service representatives at 800-959-4246 if you importantly, beneficial for investors. have any further questions or concerns about your AIM Investments account. AIM Investments has policies in place designed to identify, prevent and eliminate harmful trading or other Sincerely, activities deemed to be detrimental to the funds. We have also recently taken additional steps--implemented /s/ ROBERT H. GRAHAM /s/ MARK H. WILLIAMSON Robert H. Graham Mark H. Williamson Chairman and President President and CEO The AIM Family of Funds AIM Investments --Registered Trademark-- December 18, 2003
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE ECONOMIC RECOVERY BENEFITS spending on manufactured goods declined GLOBAL MARKETS AND FUND in August. However, preliminary estimates indicates euro zone annualized Amid signs of an improving global year ended October 31, 2003. The U.S. GDP rose 0.4% in the third quarter and economic environment, AIM Global economy also appeared to rally in 2003 recent business surveys offer promise. Aggressive Growth Fund, along with many as the nation's gross domestic product Euro-area industrial confidence global equity markets, posted positive (GDP) expanded at an annualized rate of increased in both August and September, returns for the reporting period ended 3.3% in the second quarter and 8.2% in and the Purchasing Manager's Index--a October 31, 2003. For the fiscal year the third quarter of 2003. The job survey of purchasing managers that covered by this report, the fund's Class market remained weak, however, as the measures the general health of the A, Class B and Class C shares returned nation's unemployment rate stood at 6.0% manufacturing sector--increased for the 29.82%, 29.08% and 29.17%, respectively, at the close of the reporting period. fourth consecutive month in October. at net asset value. Over the same period, the fund significantly In Asia, Japan's economy finally In monetary affairs, policy settings outperformed its benchmark, the MSCI All appeared to be showing signs of a for many major economies became more Country (AC) World Free Index, which cyclical upswing. While deflationary expansionary during the reporting returned 24.86%. pressures still persist, industrial period. The Federal Reserve, Bank of production rose strongly in September. England and the European Central Bank MARKET CONDITIONS Amid this backdrop, Japanese equities all reduced short-term interest rates in rose sharply through the summer but sold 2003; leaving their benchmark rates at As the global economic recovery appeared off in late October. Despite the fall, 1.00%, 3.50% and 2.00%, respectively, as to gain momentum in 2003, equity markets however, the MSCI Japan Index returned of October 31, 2003. Monetary in the U.S. and abroad generally posted 32.94% for the fiscal year. authorities in many Asian countries also positive returns for the fiscal year, adopted expansionary policies during the with emerging market stocks generally While European stock markets posted reporting period. outperforming those in developed some of the best regional returns for countries. Market returns and economic the fiscal year, growth in the euro zone On the currency front, although the growth, however, varied considerably by remains weak. According to a recent U.S. dollar showed a few pockets of region. report by the Bank of England, there strength during the fiscal year, for the continues to be a contrast between weak most part, foreign currencies proved In the United States, the S&P 500, euro area economic data and more stronger. During the reporting period, frequently cited as a measure of the promising business survey indicators. the British pound, Canadian dollar, performance of the U.S. stock market, Euro zone annualized GDP fell by 0.1% in euro, Swiss franc, and Japanese yen returned 20.79% for the the second quarter and French consumer appreciated significantly against the U.S. dollar.
================================================================================================================================== TOTAL RETURNS TOP 10 EQUITY HOLDINGS* TOP 10 INDUSTRIES* 10/31/02-10/31/03 1. Anglo Irish Bank Corp. PLC 1. Diversified Banks 10.4% (Ireland) 5.0% 2. AO VimpelCom-ADR (Russia) 1.8 2. Pharmaceuticals 6.8 3. Taro Pharmaceutical Industries 3. Semiconductors 3.8 Ltd. (Israel) 1.8 4. Willis Group Holdings Ltd. 4. Data Processing & Outsourced (Bermuda) 1.6 Services 3.4 5. Enterprise Inns PLC (United 5. Wireless Telecommunication BAR CHART Kingdom) 1.4 Services 3.4 AIM GLOBAL AGGRESSIVE 6. ICAP PLC (United Kingdom) 1.3 6. Industrial Machinery 3.2 GROWTH FUND CLASS A SHARES AT NAV 29.82% 7. Travis Perkins PLC (United 7. Electronic Equipment MSCI AC WORLD Kingdom) 1.3 Manufacturers 2.9 FREE INDEX 24.86% 8. OTP Bank Rt. (Hungary) 1.2 8. Health Care Equipment 2.9 9. Samsung Electronics Co., Ltd. 9. Auto Parts & Equipment 2.7 (South Korea) 1.2 10. Banco Popolare di Verona e 10. Asset Management & Novara Scrl (Italy) 1.1 Custody Banks 2.4 Source: Lipper, Inc. *Excludes money market fund holdings. Performance comparisons for other share The fund's holdings are subject to classes can be found in the Fund vs. change, and there is no assurance that Index table on the opposite page. the fund will continue to hold any particular security. ==================================================================================================================================
2 YOUR FUND fund's holdings. On a regional basis, JASON T. HOLZER roughly one-third of the portfolio's [PHOTO OF Mr. Holzer, Chartered Stocks in the financials and health care assets were in European equities, JASON T. Financial Analyst, is sectors contributed the most to fund one-third in U.S. stocks, with the HOLZER] co-manager of AIM Global performance during the fiscal year. remainder divided among stocks in Asia, Aggressive Growth Fund. Anglo Irish Bank Corp. is an example of Latin America and the South Pacific Mr. Holzer joined AIM in 1996. He a financial stock that benefited the (Australia). received a B.A. in quantitative fund. Headquartered in Dublin, we economics and an M.S. in believe this Irish business bank At the end of the fiscal year, more engineering-economic systems from continued to experience significant than 80% of the fund's holdings were in Stanford University. growth. small- and mid-cap stocks. This proved positive for the fund as global ROBERT M. KIPPES Taro Pharmaceutical Industries, a small-cap stocks significantly [PHOTO OF Mr. Kippes is co-manager multi-national, science-based outperformed their larger-cap ROBERT M. of AIM Global Aggressive pharmaceutical company headquartered in counterparts during the fiscal year. KIPPES] Growth Fund. He joined Israel, also contributed to performance AIM in 1989. Mr. Kippes in the health care sector. Taro reported IN CLOSING received a B.B.A. in finance from a 50% increase in sales for the third Stephen F. Austin State University. quarter of 2003 from a year prior. The After a few challenging years, global company attributes increased sales to markets began to post strong returns BARRETT K. SIDES growth in their core U.S. generics again in 2003. Whether world-wide market [PHOTO OF Mr. Sides is co-manager business and sales of proprietary rallies are sustainable remains to be BARRETT K. of AIM Global Aggressive prescription products. seen. Regardless, we will continue to SIDES] Growth Fund. He joined focus on stocks with above-average, AIM in 1990. Mr. Sides A stock that proved a drag on long-term growth in earnings and strong graduated with a B.S. in economics from performance during the fiscal year was prospects for future growth to achieve Bucknell University. He also received a U.S.-based CDW Corp., a provider of the fund's investment objective. master's in international business from technology solutions for businesses, the University of St. Thomas. government agencies and educational See important fund and index institutions. Despite record third disclosures inside front cover. Assisted by Asia Pacific Team, quarter sales, sharply rising Europe/Canada Team and Mid Cap Growth advertising costs and other expenses Team caused third quarter 2003 earnings to fall below year-ago levels. Since the beginning of the fiscal year, we increased the number of stocks in the fund's portfolio from 133 to 164. We feel this gives us an even greater opportunity to diversify the
===================================================================================== TOP 10 COUNTRIES* FUND VS. INDEX Total returns 10/31/02-10/31/03, 1. United States 33.5% excluding sales charges 2. United Kingdom 9.2 Class A Shares 29.82% 3. Japan 7.1 Class B Shares 29.08 4. Ireland 5.7 Class C Shares 29.17 5. Bermuda 3.2 MSCI All Country (AC) World Free Index 24.86 6. Germany 3.2 TOTAL NUMBER OF HOLDINGS* 164 7. Switzerland 3.0 TOTAL NET ASSETS $860 million 8. Mexico 2.7 9. Taiwan 2.7 10. South Korea 2.6 =====================================================================================
[GRAPHIC] For More Information Visit AIMinvestments.com 3 FUND PERFORMANCE RESULTS OF A $10,000 INVESTMENT 9/15/94-10/31/03* [MOUNTAIN CHART]
DATE AIM GLOBAL AGGRESSIVE AIM GLOBAL AGGRESSIVE MSCI AC GROWTH FUND GROWTH FUND WORLD CLASS A SHARES CLASS B SHARES FREE INDEX 9/15/1994 $ 9525 $ 10000 $ 10000 10/31/94 9735 10210 10016 1/31/95 9258 9710 9418 4/30/95 10305 10789 10317 7/31/95 12514 13079 10938 10/31/95 12467 13020 10809 1/31/96 12856 13407 11740 4/30/96 14700 15304 12263 7/31/96 14012 14571 11882 10/31/96 15062 15635 12522 1/31/97 16019 16609 13219 4/30/97 14833 15363 13553 7/31/97 17911 18515 15779 10/31/97 16516 17059 14534 1/31/98 15837 16336 15279 4/30/98 18722 19286 17181 7/31/98 17785 18292 17164 10/31/98 15166 15574 16428 1/31/99 17353 17791 18607 4/30/99 17431 17852 19774 7/31/99 18624 19045 19943 10/31/99 20975 21424 20703 1/31/00 29482 30065 21877 4/30/00 29824 30374 22345 7/31/00 28493 28985 21842 10/31/00 26064 26474 20867 1/31/01 24040 24386 20405 4/30/01 19733 20002 18699 7/31/01 18516 18738 17642 10/31/01 15933 16102 15619 1/31/02 16491 16640 16276 4/30/02 16882 17016 16351 7/31/02 14592 14689 14086 10/31/02 13933 14016 13499 1/31/03 13692 13747 13163 4/30/03 14287 14339 14034 7/31/03 16123 16154 15472 10/31/03 $ 18093 $ 18187 $ 16907 Source: Lipper, Inc.
*Index performance is for the period 8/31/94-10/31/03 Your fund's total return includes sales charges, expenses and management fees. The performance of the fund's share classes will differ due to different sales charge structures and class expenses. For fund performance calculations and indexes used in this report, please see the inside front cover. Performance shown in the chart and table does not reflect deduction of taxes a shareholder would pay on fund distributions or sale of fund shares. Performance of the indexes does not reflect the effects of taxes. Your fund's total return includes sales charges, expenses and management fees. Results for B shares are calculated as if a hypothetical shareholder had liquidated his entire investment in the fund at the close of the reporting period and paid the applicable contingent deferred sales charges. This chart uses a logarithmic scale, which means the price scale (vertical axis) is structured so that a given distance always represents the same percent change in price, rather than the same absolute change in price. For example, the distance from one to 10 is the same as the distance from 10 to 100 on a logarithmic chart, but the latter distance is 10 times greater on a linear chart. A logarithmic scale better illustrates performance in the fund's early years before reinvested distributions and compounding create the potential for the original investment to grow to very large numbers. ================================================================================================================================== AVERAGE ANNUAL TOTAL RETURNS In addition to fund returns as of the CLASS C SHARES As of 10/31/03, including sales charges close of the fiscal year, industry Inception (8/4/97) -1.39% regulations require us to provide 5 Years 2.82 CLASS A SHARES average annual total returns (including 1 Year 22.67 Inception (9/15/94) 6.71% sales charges) for periods ended 5 Years 2.59 9/30/03, the most recent calendar Past performance cannot guarantee 1 Year 23.64 quarter-end, which were as follows. comparable future results. DUE TO SIGNIFICANT MARKET VOLATILITY, RESULTS CLASS B SHARES AVERAGE ANNUAL TOTAL RETURNS OF AN INVESTMENT MADE TODAY MAY DIFFER Inception (9/15/94) 6.77% As of 9/30/03, including sales charges SUBSTANTIALLY FROM THE HISTORICAL 5 Years 2.73 PERFORMANCE SHOWN. CALL YOUR FINANCIAL 1 Year 24.08 CLASS A SHARES ADVISOR FOR MORE CURRENT PERFORMANCE. Inception (9/15/94) 5.99% CLASS C SHARES 5 Years 2.36 Inception (8/4/97) -0.31% 1 Year 18.35 5 Years 3.05 1 Year 28.17 CLASS B SHARES Inception (9/15/94) 6.05% 5 Years 2.50 1 Year 18.70 ==================================================================================================================================
4 FINANCIALS SCHEDULE OF INVESTMENTS October 31, 2003
MARKET SHARES VALUE - ------------------------------------------------------------------------- FOREIGN STOCKS & OTHER EQUITY INTERESTS-61.97% AUSTRALIA-1.33% Boral Ltd. (Construction Materials) 1,045,900 $ 4,071,296 - ------------------------------------------------------------------------- Computershare Ltd. (Data Processing & Outsourced Services) 1,432,900 3,630,603 - ------------------------------------------------------------------------- Wesfarmers Ltd. (Industrial Conglomerates) 182,400 3,743,714 ========================================================================= 11,445,613 ========================================================================= AUSTRIA-1.05% Erste Bank der oesterreichischen Sparkassen A.G. (Diversified Banks) 82,000 9,034,775 ========================================================================= BELGIUM-0.39% Delhaize Group (Food Retail)(a) 70,600 3,340,981 ========================================================================= BERMUDA-3.18% Esprit Holdings Ltd. (Apparel Retail) 1,825,500 5,735,835 - ------------------------------------------------------------------------- Li & Fung Ltd. (Distributors) 3,188,000 5,357,397 - ------------------------------------------------------------------------- Marvell Technology Group Ltd. (Semiconductors)(a) 65,000 2,851,550 - ------------------------------------------------------------------------- Willis Group Holdings Ltd. (Insurance Brokers) 403,300 13,429,890 ========================================================================= 27,374,672 ========================================================================= BRAZIL-0.37% Petroleo Brasileiro S.A.-ADR (Integrated Oil & Gas) 135,600 3,186,600 ========================================================================= CANADA-1.60% Cognos, Inc. (Application Software)(a) 95,700 3,298,779 - ------------------------------------------------------------------------- Power Financial Corp. (Other Diversified Financial Services) 72,600 2,499,290 - ------------------------------------------------------------------------- Research In Motion Ltd. (Communications Equipment)(a) 52,100 2,301,330 - ------------------------------------------------------------------------- Shoppers Drug Mart Corp. (Drug Retail) (Acquired 05/16/03; Cost $4,266,652)(a)(b)(c)(d) 256,500 5,631,911 ========================================================================= 13,731,310 ========================================================================= CHINA-0.20% Weiqiao Textile Co. Ltd.-Series H (Textiles) (Acquired 09/24/03; Cost $1,774,426)(a)(c) 1,478,000 1,731,972 ========================================================================= FRANCE-1.15% Autoroutes du Sud de la France (Highways & Railtracks) 103,000 3,161,989 - ------------------------------------------------------------------------- Imerys S.A. (Construction Materials)(a) 24,900 4,759,492 - ------------------------------------------------------------------------- Pernod Ricard S.A. (Distillers & Vintners) 20,500 1,971,103 ========================================================================= 9,892,584 =========================================================================
MARKET SHARES VALUE - ------------------------------------------------------------------------- GERMANY-3.17% Continental A.G. (Tires & Rubber) 273,340 $ 9,246,201 - ------------------------------------------------------------------------- Deutsche Boerse A.G. (Specialized Finance) 99,510 5,512,563 - ------------------------------------------------------------------------- KarstadtQuelle A.G. (Department Stores) 161,600 4,002,454 - ------------------------------------------------------------------------- Puma A.G. Rudolf Dassler Sport (Footwear) (Acquired 10/29/02-10/30/03; Cost $4,715,039)(c) 58,662 8,527,244 ========================================================================= 27,288,462 ========================================================================= GREECE-1.40% Coca-Cola Hellenic Bottling Co. S.A. (Soft Drinks) 248,100 4,788,275 - ------------------------------------------------------------------------- Cosmote Mobile Communications S.A. (Wireless Telecommunication Services) 298,925 3,421,342 - ------------------------------------------------------------------------- Greek Organisation of Football Prognostics S.A. (Casinos & Gaming) (Acquired 07/14/03- 08/13/03; Cost $3,507,653)(c) 315,000 3,868,065 ========================================================================= 12,077,682 ========================================================================= HONG KONG-0.84% Cathay Pacific Airways Ltd. (Airlines) 2,590,000 4,952,805 - ------------------------------------------------------------------------- China Merchants Holdings International Co. Ltd. (Industrial Conglomerates) 1,662,000 2,247,218 ========================================================================= 7,200,023 ========================================================================= HUNGARY-1.19% OTP Bank Rt. (Diversified Banks) 843,300 10,276,371 ========================================================================= INDIA-1.74% Dr. Reddy's Laboratories Ltd.-ADR (Pharmaceuticals) 242,400 6,462,384 - ------------------------------------------------------------------------- Ranbaxy Laboratories Ltd. (Pharmaceuticals) 392,500 8,514,704 ========================================================================= 14,977,088 ========================================================================= INDONESIA-0.42% PT Telekomunikasi Indonesia (Integrated Telecommunication Services) 5,100,000 3,601,483 ========================================================================= IRELAND-5.74% Anglo Irish Bank Corp. PLC (Diversified Banks) 3,566,315 42,677,337 - ------------------------------------------------------------------------- Depfa Bank PLC (Diversified Banks) 21,300 2,376,201 - ------------------------------------------------------------------------- Independent News & Media PLC (Publishing) 1,970,400 4,291,307 ========================================================================= 49,344,845 ========================================================================= ISRAEL-1.82% Taro Pharmaceutical Industries Ltd. (Pharmaceuticals)(a) 243,260 15,629,455 =========================================================================
F-1
MARKET SHARES VALUE - ------------------------------------------------------------------------- ITALY-1.11% Banco Popolare di Verona e Novara Scrl (Diversified Banks) 618,000 $ 9,521,764 ========================================================================= JAPAN-7.13% Daiwa House Industry Co., Ltd. (Homebuilding) 240,000 2,590,462 - ------------------------------------------------------------------------- Fanuc Ltd. (Industrial Machinery) 136,700 8,223,398 - ------------------------------------------------------------------------- Hosiden Corp. (Electronic Equipment Manufacturers) 304,000 4,205,315 - ------------------------------------------------------------------------- Ibiden Co., Ltd. (Electronic Equipment Manufacturers) 213,000 2,965,872 - ------------------------------------------------------------------------- JSR Corp. (Specialty Chemicals) 289,000 6,128,231 - ------------------------------------------------------------------------- Nidec Corp. (Electronic Equipment Manufacturers) 81,700 7,918,684 - ------------------------------------------------------------------------- NOK Corp. (Auto Parts & Equipment) 186,000 7,329,632 - ------------------------------------------------------------------------- Stanley Electric Co., Ltd. (Auto Parts & Equipment) 344,000 7,325,810 - ------------------------------------------------------------------------- Suzuki Motor Corp. (Automobile Manufacturers) 428,000 6,193,302 - ------------------------------------------------------------------------- THK CO., Ltd. (Industrial Machinery) 135,900 2,758,072 - ------------------------------------------------------------------------- Trend Micro Inc. (Application Software)(a) 205,100 5,655,743 ========================================================================= 61,294,521 ========================================================================= MEXICO-2.69% Alfa, S.A.-Class A (Industrial Conglomerates) 1,970,100 5,622,727 - ------------------------------------------------------------------------- Americal Movil S.A. de C.V.-ADR (Wireless Telecommunication Services) 295,200 7,025,760 - ------------------------------------------------------------------------- Cemex S.A. de C.V.-ADR Wts., expiring 12/21/04 (Construction Materials)(e) 16,212 34,856 - ------------------------------------------------------------------------- Grupo Financiero BBVA Bancomer, S.A. de C.V.- Class B (Diversified Banks)(a) 4,663,800 3,974,144 - ------------------------------------------------------------------------- Wal-Mart de Mexico S.A. de C.V.-Series C (Hypermarkets & Super Centers) 2,478,400 6,477,419 ========================================================================= 23,134,906 ========================================================================= NETHERLANDS-1.16% Euronext N.V. (Specialized Finance) 96,200 2,345,873 - ------------------------------------------------------------------------- James Hardie Industries N.V. (Construction Materials) 485,800 2,465,225 - ------------------------------------------------------------------------- Koninklijke Numico N.V.-Dutch Ctfs. (Packaged Foods & Meats) 228,900 5,146,934 ========================================================================= 9,958,032 ========================================================================= NORWAY-0.79% Telenor A.S.A. (Integrated Telecommunication Services) 1,248,900 6,763,821 ========================================================================= RUSSIA-2.22% AO VimpelCom-ADR (Wireless Telecommunication Services)(a) 241,890 15,747,039 - ------------------------------------------------------------------------- Mobile Telesystems-ADR (Wireless Telecommunication Services) 43,100 3,339,819 ========================================================================= 19,086,858 =========================================================================
MARKET SHARES VALUE - ------------------------------------------------------------------------- SINGAPORE-0.43% Venture Corp. Ltd. (Electronic Manufacturing Services) 345,000 $ 3,748,491 ========================================================================= SOUTH KOREA-2.60% Daewoo Shipbuilding & Marine Engineering Co., Ltd. (Construction, Farm Machinery & Heavy Trucks)(a) 244,000 3,278,074 - ------------------------------------------------------------------------- Hankook Tire Co. Ltd. (Tires & Rubber) 462,000 3,189,303 - ------------------------------------------------------------------------- Kookmin Bank (Diversified Banks) 155,180 5,664,365 - ------------------------------------------------------------------------- Samsung Electronics Co., Ltd. (Electronic Equipment Manufacturers) 25,800 10,245,881 ========================================================================= 22,377,623 ========================================================================= SPAIN-0.95% Corporacion Mapfre S.A. (Multi-Line Insurance) 347,000 4,309,249 - ------------------------------------------------------------------------- Grupo Ferrovial, S.A. (Construction & Engineering) 136,600 3,886,479 ========================================================================= 8,195,728 ========================================================================= SWEDEN-1.69% Atlas Copco A.B.-Class A (Industrial Machinery) 128,000 4,476,496 - ------------------------------------------------------------------------- Swedish Match A.B. (Tobacco) 844,300 6,843,025 - ------------------------------------------------------------------------- Tele2 A.B.-Class B (Integrated Telecommunication Services)(a) 64,100 3,211,259 ========================================================================= 14,530,780 ========================================================================= SWITZERLAND-3.02% Geberit A.G. (Building Products) 15,630 6,413,384 - ------------------------------------------------------------------------- Nobel Biocare Holding A.G. (Health Care Supplies) 40,700 3,598,142 - ------------------------------------------------------------------------- Schindler Holding A.G. (Industrial Machinery)(a) 6,400 1,609,072 - ------------------------------------------------------------------------- Schindler Holding A.G.-COP (Industrial Machinery)(a) 3,800 850,492 - ------------------------------------------------------------------------- Straumann A.G. (Health Care Equipment) 31,100 3,683,322 - ------------------------------------------------------------------------- Swiss Life Holding (Life & Health Insurance)(a) 30,600 5,170,770 - ------------------------------------------------------------------------- Syngenta A.G. (Fertilizers & Agricultural Chemicals) 87,300 4,660,038 ========================================================================= 25,985,220 ========================================================================= TAIWAN-2.68% Ambit Microsystems Corp. (Computer Storage & Peripherals) 840,700 2,304,306 - ------------------------------------------------------------------------- Compal Electronics Inc. (Computer Hardware) 3,287,160 4,989,353 - ------------------------------------------------------------------------- MediaTek Inc. (Semiconductors) 379,350 3,913,130 - ------------------------------------------------------------------------- Novatek Microelectronics Corp., Ltd. (Semiconductors) 779,900 2,459,455 - ------------------------------------------------------------------------- Taiwan Semiconductor Manufacturing Co. Ltd. (Semiconductors)(a) 4,741,579 9,362,977 ========================================================================= 23,029,221 =========================================================================
F-2
MARKET SHARES VALUE - ------------------------------------------------------------------------- THAILAND-0.69% Kasikornbank PLC (Diversified Banks)(a) 2,342,000 $ 2,608,736 - ------------------------------------------------------------------------- Siam Commercial Bank PCL (Diversified Banks)(a) 3,213,000 3,317,553 ========================================================================= 5,926,289 ========================================================================= UNITED KINGDOM-9.22% Cattles PLC (Consumer Finance) 614,500 3,322,240 - ------------------------------------------------------------------------- Enterprise Inns PLC (Restaurants) 829,800 11,890,647 - ------------------------------------------------------------------------- Galen Holdings PLC (Pharmaceuticals) 548,885 7,037,344 - ------------------------------------------------------------------------- ICAP PLC (Investment Banking & Brokerage) 488,150 11,405,552 - ------------------------------------------------------------------------- Inchcape PLC (Distributors) 162,100 3,752,772 - ------------------------------------------------------------------------- Man Group PLC (Asset Management & Custody Banks) 331,600 8,143,317 - ------------------------------------------------------------------------- Morrison (William) Supermarkets PLC (Food Retail) 1,865,700 7,082,854 - ------------------------------------------------------------------------- Shire Pharmaceuticals Group PLC (Pharmaceuticals)(a) 1,151,400 8,712,968 - ------------------------------------------------------------------------- Smith & Nephew PLC (Health Care Supplies) 885,275 7,025,455 - ------------------------------------------------------------------------- Travis Perkins PLC (Home Improvement Retail) 539,740 10,918,564 ========================================================================= 79,291,713 ========================================================================= Total Foreign Stocks & Other Equity Interests (Cost $365,083,367) 532,978,883 ========================================================================= DOMESTIC COMMON STOCKS & OTHER EQUITY INTERESTS-33.50% AIR FREIGHT & LOGISTICS-0.48% Expeditors International of Washington, Inc. 110,000 4,129,400 ========================================================================= APPAREL RETAIL-0.67% Chico's FAS, Inc.(a) 75,000 2,815,500 - ------------------------------------------------------------------------- Pacific Sunwear of California, Inc.(a) 127,500 2,943,975 ========================================================================= 5,759,475 ========================================================================= APPLICATION SOFTWARE-1.09% Fair Isaac Corp. 57,000 3,635,460 - ------------------------------------------------------------------------- Mercury Interactive Corp.(a) 49,400 2,294,136 - ------------------------------------------------------------------------- PeopleSoft, Inc.(a) 165,000 3,425,400 ========================================================================= 9,354,996 ========================================================================= ASSET MANAGEMENT & CUSTODY BANKS-1.47% Investors Financial Services Corp. 89,300 3,154,969 - ------------------------------------------------------------------------- Legg Mason, Inc. 88,000 7,326,000 - ------------------------------------------------------------------------- T. Rowe Price Group Inc. 52,000 2,139,800 ========================================================================= 12,620,769 ========================================================================= AUTO PARTS & EQUIPMENT-0.95% Autoliv, Inc.-SDR 131,300 4,307,006 - ------------------------------------------------------------------------- Gentex Corp. 100,000 3,905,000 ========================================================================= 8,212,006 =========================================================================
MARKET SHARES VALUE - ------------------------------------------------------------------------- BIOTECHNOLOGY-0.48% Celgene Corp.(a) 100,000 $ 4,169,000 ========================================================================= BROADCASTING & CABLE TV-0.39% Univision Communications Inc.-Class A(a) 97,920 3,324,384 ========================================================================= COMMUNICATIONS EQUIPMENT-1.48% Comverse Technology, Inc.(a) 230,800 4,163,632 - ------------------------------------------------------------------------- QLogic Corp.(a) 40,400 2,264,420 - ------------------------------------------------------------------------- UTStarcom, Inc.(a) 200,000 6,300,000 ========================================================================= 12,728,052 ========================================================================= COMPUTER & ELECTRONICS RETAIL-0.41% Best Buy Co., Inc. 60,000 3,498,600 ========================================================================= CONSTRUCTION & ENGINEERING-0.57% Jacobs Engineering Group Inc.(a) 105,000 4,863,600 ========================================================================= CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS-0.47% AGCO Corp.(a) 224,700 4,044,600 ========================================================================= DATA PROCESSING & OUTSOURCED SERVICES-3.02% Affiliated Computer Services, Inc.-Class A(a) 150,000 7,339,500 - ------------------------------------------------------------------------- CheckFree Corp.(a) 102,600 2,824,578 - ------------------------------------------------------------------------- Fiserv, Inc.(a) 141,500 4,997,780 - ------------------------------------------------------------------------- Iron Mountain Inc.(a) 118,000 4,512,320 - ------------------------------------------------------------------------- Paychex, Inc. 90,000 3,502,800 - ------------------------------------------------------------------------- SunGard Data Systems Inc.(a) 100,000 2,805,000 ========================================================================= 25,981,978 ========================================================================= DEPARTMENT STORES-0.26% Kohl's Corp.(a) 40,000 2,242,800 ========================================================================= DIVERSIFIED COMMERCIAL SERVICES-0.62% Apollo Group, Inc.-Class A(a) 70,000 4,447,100 - ------------------------------------------------------------------------- Bright Horizons Family Solutions, Inc.(a) 20,000 859,200 ========================================================================= 5,306,300 ========================================================================= EMPLOYMENT SERVICES-1.09% Monster Worldwide Inc.(a) 160,000 4,075,200 - ------------------------------------------------------------------------- Robert Half International Inc.(a) 225,000 5,312,250 ========================================================================= 9,387,450 ========================================================================= ENVIRONMENTAL SERVICES-0.27% Stericycle, Inc.(a) 50,000 2,309,000 ========================================================================= GENERAL MERCHANDISE STORES-0.40% Dollar Tree Stores, Inc.(a) 89,800 3,428,564 =========================================================================
F-3
MARKET SHARES VALUE - ------------------------------------------------------------------------- HEALTH CARE DISTRIBUTORS-0.49% Omnicare, Inc. 110,600 $ 4,240,404 ========================================================================= HEALTH CARE EQUIPMENT-2.47% ResMed Inc.(a) 74,600 3,116,042 - ------------------------------------------------------------------------- Synthes-Stratec, Inc. 7,590 6,942,211 - ------------------------------------------------------------------------- Varian Medical Systems, Inc.(a) 109,400 6,995,036 - ------------------------------------------------------------------------- Zimmer Holdings, Inc.(a) 65,600 4,185,936 ========================================================================= 21,239,225 ========================================================================= HEALTH CARE SERVICES-1.18% Express Scripts, Inc.(a) 100,000 5,492,000 - ------------------------------------------------------------------------- Lincare Holdings Inc.(a) 119,700 4,661,118 ========================================================================= 10,153,118 ========================================================================= HEALTH CARE SUPPLIES-0.81% Fisher Scientific International Inc.(a) 173,000 6,963,250 ========================================================================= INDUSTRIAL MACHINERY-1.15% Danaher Corp. 90,000 7,456,500 - ------------------------------------------------------------------------- Eaton Corp. 24,200 2,425,808 ========================================================================= 9,882,308 ========================================================================= INVESTMENT BANKING & BROKERAGE-1.04% Bear Stearns Cos. Inc. (The) 65,000 4,956,250 - ------------------------------------------------------------------------- Lehman Brothers Holdings Inc. 55,800 4,017,600 ========================================================================= 8,973,850 ========================================================================= LEISURE PRODUCTS-0.26% Marvel Enterprises, Inc.(a) 75,000 2,208,750 ========================================================================= MANAGED HEALTH CARE-0.25% Aetna Inc. 38,000 2,181,580 ========================================================================= MULTI-LINE INSURANCE-0.28% HCC Insurance Holdings, Inc. 83,800 2,441,932 ========================================================================= OIL & GAS DRILLING-0.95% Patterson-UTI Energy, Inc.(a) 202,400 5,786,616 - ------------------------------------------------------------------------- Pride International, Inc.(a) 147,700 2,419,326 ========================================================================= 8,205,942 ========================================================================= OIL & GAS EQUIPMENT & SERVICES-0.88% National-Oilwell, Inc.(a) 250,000 4,767,500 - ------------------------------------------------------------------------- Varco International, Inc.(a) 160,000 2,814,400 ========================================================================= 7,581,900 ========================================================================= OIL & GAS EXPLORATION & PRODUCTION-0.36% Newfield Exploration Co.(a) 78,900 3,134,697 =========================================================================
MARKET SHARES VALUE - ------------------------------------------------------------------------- PHARMACEUTICALS-1.45% Eon Labs, Inc.(a) 70,000 $ 2,947,700 - ------------------------------------------------------------------------- Medicis Pharmaceutical Corp.-Class A 150,000 9,502,500 ========================================================================= 12,450,200 ========================================================================= REGIONAL BANKS-0.34% Southwest Bancorp. of Texas, Inc. 81,500 2,926,665 ========================================================================= RESTAURANTS-0.97% Brinker International, Inc.(a) 125,000 3,978,750 - ------------------------------------------------------------------------- Starbucks Corp.(a) 137,300 4,338,680 ========================================================================= 8,317,430 ========================================================================= SEMICONDUCTORS-1.61% Altera Corp.(a) 110,300 2,231,369 - ------------------------------------------------------------------------- Linear Technology Corp. 100,000 4,261,000 - ------------------------------------------------------------------------- LSI Logic Corp.(a) 350,000 3,234,000 - ------------------------------------------------------------------------- Microchip Technology Inc. 125,000 4,088,750 ========================================================================= 13,815,119 ========================================================================= SPECIALTY CHEMICALS-0.28% Valspar Corp. (The) 50,000 2,385,000 ========================================================================= SPECIALTY STORES-2.39% Bed Bath & Beyond Inc.(a) 103,900 4,388,736 - ------------------------------------------------------------------------- Staples, Inc.(a) 275,000 7,375,500 - ------------------------------------------------------------------------- Williams-Sonoma, Inc.(a) 250,000 8,832,500 ========================================================================= 20,596,736 ========================================================================= TECHNOLOGY DISTRIBUTORS-1.05% CDW Corp. 150,000 9,007,500 ========================================================================= THRIFTS & MORTGAGE FINANCE-0.39% Radian Group Inc. 63,700 3,369,730 ========================================================================= TRADING COMPANIES & DISTRIBUTORS-0.78% Fastenal Co. 150,000 6,670,500 ========================================================================= Total Domestic Common Stocks & Other Equity Interests (Cost $233,070,596) 288,106,810 ========================================================================= MONEY MARKET FUNDS-3.07% STIC Liquid Assets Portfolio(f) 13,178,755 13,178,755 - ------------------------------------------------------------------------- STIC Prime Portfolio(f) 13,178,755 13,178,755 ========================================================================= Total Money Market Funds (Cost $26,357,510) 26,357,510 ========================================================================= TOTAL INVESTMENTS-98.54% (excluding investments purchased with cash collateral from securities loaned) (Cost $624,511,473) 847,443,203 =========================================================================
F-4
MARKET SHARES VALUE - ------------------------------------------------------------------------- INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED MONEY MARKET FUNDS-15.81% STIC Liquid Assets Portfolio(f)(g) 67,998,953 $ 67,998,953 - ------------------------------------------------------------------------- STIC Prime Portfolio(f)(g) 67,998,954 67,998,954 ========================================================================= Total Money Market Funds (purchased with cash collateral from securities loaned) (Cost $135,997,907) 135,997,907 ========================================================================= TOTAL INVESTMENTS-114.35% (Cost $760,509,380) 983,441,110 ========================================================================= OTHER ASSETS LESS LIABILITIES-(14.35%) (123,406,254) ========================================================================= NET ASSETS-100.00% $ 860,034,856 _________________________________________________________________________ =========================================================================
Investment Abbreviations: ADR - American Depositary Receipt COP - Certificates of Participation Ctfs. - Certificates SDR - Swedish Depositary Receipt Wts. - Warrants
Notes to Schedule of Investments: (a) Non-income producing security. (b) Security fair valued in accordance with the procedures established by the Board of Directors. (c) Security not registered under the Securities Act of 1933, as amended (e.g., the security was purchased in a Rule 144A transaction or a Regulation D transaction). The security may be resold only pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The Fund has no rights to demand registration of these securities. The aggregate market value of these securities at 10/31/03 was $19,759,192, which represented 2.30% of the Fund's net assets. Unless otherwise indicated, these securities are not considered to be illiquid. (d) Security considered to be illiquid. The aggregate market value of this security considered illiquid at 10/31/03 represented 0.65% of the Fund's net assets. (e) Non-income producing security acquired as part of a unit with or in exchange for other securities. (f) The money market fund and the Fund are affiliated by having the same investment advisor. (g) The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Notes to Financial Statements. F-5 STATEMENT OF ASSETS AND LIABILITIES October 31, 2003 ASSETS: Investments, at market value (cost $598,153,963)* $ 821,085,693 - ------------------------------------------------------------ Investments in affiliated money market funds (cost $162,355,417) 162,355,417 - ------------------------------------------------------------ Foreign currencies, at value (cost $11,425,538) 11,401,398 - ------------------------------------------------------------ Cash 2,999,997 - ------------------------------------------------------------ Receivables for: Investments sold 15,486,944 - ------------------------------------------------------------ Capital stock sold 227,603 - ------------------------------------------------------------ Dividends 328,265 - ------------------------------------------------------------ Investment for deferred compensation plan 67,025 - ------------------------------------------------------------ Other assets 61,675 ============================================================ Total assets 1,014,014,017 ____________________________________________________________ ============================================================ LIABILITIES: Payables for: Investments purchased 13,654,608 - ------------------------------------------------------------ Capital stock reacquired 2,605,753 - ------------------------------------------------------------ Deferred compensation plan 67,025 - ------------------------------------------------------------ Collateral upon return of securities loaned 135,997,907 - ------------------------------------------------------------ Accrued distribution fees 512,942 - ------------------------------------------------------------ Accrued directors' fees 71,699 - ------------------------------------------------------------ Accrued transfer agent fees 629,578 - ------------------------------------------------------------ Accrued operating expenses 439,649 ============================================================ Total liabilities 153,979,161 ============================================================ Net assets applicable to shares outstanding $ 860,034,856 ____________________________________________________________ ============================================================ NET ASSETS CONSIST OF: Capital (par value and additional paid-in) $ 908,474,206 - ------------------------------------------------------------ Undistributed net investment income (loss) (140,210) - ------------------------------------------------------------ Undistributed net realized gain (loss) from investment securities, foreign currencies and futures contracts (271,234,706) - ------------------------------------------------------------ Unrealized appreciation of investment securities and foreign currencies 222,935,566 ============================================================ $ 860,034,856 ____________________________________________________________ ============================================================ NET ASSETS: Class A $ 465,854,702 ____________________________________________________________ ============================================================ Class B $ 374,026,747 ____________________________________________________________ ============================================================ Class C $ 20,153,407 ____________________________________________________________ ============================================================ CAPITAL STOCK, $0.001 PAR VALUE PER SHARE: Class A: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 32,628,984 ____________________________________________________________ ============================================================ Class B: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 27,808,914 ____________________________________________________________ ============================================================ Class C: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 1,497,810 ____________________________________________________________ ============================================================ Class A: Net asset value per share $ 14.28 - ------------------------------------------------------------ Offering price per share: (Net asset value of $14.28 divided by 95.25%) $ 14.99 ____________________________________________________________ ============================================================ Class B: Net asset value and offering price per share $ 13.45 ____________________________________________________________ ============================================================ Class C: Net asset value and offering price per share $ 13.46 ____________________________________________________________ ============================================================
* At October 31, 2003, securities with an aggregate market value of $130,595,645 were on loan to brokers. See Notes to Financial Statements. F-6 STATEMENT OF OPERATIONS For the year ended October 31, 2003 INVESTMENT INCOME: Dividends (net of foreign withholding tax of $915,292) $ 8,280,348 - -------------------------------------------------------------------------- Dividends from affiliated money market funds 231,459 - -------------------------------------------------------------------------- Interest 45,579 - -------------------------------------------------------------------------- Securities lending 420,504 ========================================================================== Total investment income 8,977,890 ========================================================================== EXPENSES: Advisory fees 7,183,961 - -------------------------------------------------------------------------- Administrative services fees 199,512 - -------------------------------------------------------------------------- Custodian fees 715,743 - -------------------------------------------------------------------------- Distribution fees: Class A 2,093,225 - -------------------------------------------------------------------------- Class B 3,607,240 - -------------------------------------------------------------------------- Class C 188,488 - -------------------------------------------------------------------------- Transfer agent fees 4,116,449 - -------------------------------------------------------------------------- Directors' fees 23,207 - -------------------------------------------------------------------------- Other 583,336 ========================================================================== Total expenses 18,711,161 ========================================================================== Less: Fees waived, expenses reimbursed and expense offset arrangements (61,104) ========================================================================== Net expenses 18,650,057 ========================================================================== Net investment income (loss) (9,672,167) ========================================================================== REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES, FOREIGN CURRENCIES AND FUTURES CONTRACTS: Net realized gain (loss) from: Investment securities (net of tax on sale of foreign investments of $150,326 -- Note 1E) 27,799,873 - -------------------------------------------------------------------------- Foreign currencies 220,851 - -------------------------------------------------------------------------- Futures contracts (182,984) ========================================================================== 27,837,740 ========================================================================== Change in net unrealized appreciation of: Investment securities (net of change in estimated tax on foreign investments held of $25,766 -- Note 1E) 192,846,597 - -------------------------------------------------------------------------- Foreign currencies 388,741 ========================================================================== 193,235,338 ========================================================================== Net gain from investment securities, foreign currencies and futures contracts 221,073,078 ========================================================================== Net increase in net assets resulting from operations $211,400,911 __________________________________________________________________________ ==========================================================================
See Notes to Financial Statements. F-7 STATEMENT OF CHANGES IN NET ASSETS For the years ended October 31, 2003 and 2002
2003 2002 - --------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $ (9,672,167) $ (15,311,459) - --------------------------------------------------------------------------------------------- Net realized gain (loss) from investment securities, foreign currencies and futures contracts 27,837,740 (155,410,958) - --------------------------------------------------------------------------------------------- Change in net unrealized appreciation of investment securities and foreign currencies 193,235,338 54,124,434 ============================================================================================= Net increase (decrease) in net assets resulting from operations 211,400,911 (116,597,983) ============================================================================================= Share transactions-net: Class A (55,232,478) (104,866,509) - --------------------------------------------------------------------------------------------- Class B (104,788,041) (135,727,235) - --------------------------------------------------------------------------------------------- Class C (3,906,281) (6,268,941) ============================================================================================= Net increase (decrease) in net assets resulting from share transactions (163,926,800) (246,862,685) ============================================================================================= Net increase (decrease) in net assets 47,474,111 (363,460,668) ============================================================================================= NET ASSETS: Beginning of year 812,560,745 1,176,021,413 ============================================================================================= End of year (including undistributed investment income (loss) of $(140,210) and $(128,848) for 2003 and 2002, respectively) $ 860,034,856 $ 812,560,745 _____________________________________________________________________________________________ =============================================================================================
See Notes to Financial Statements. F-8 NOTES TO FINANCIAL STATEMENTS October 31, 2003 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Global Aggressive Growth Fund (the "Fund") is a series portfolio of AIM International Funds, Inc. (the "Company"). The Company is a Maryland corporation registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of five separate portfolios. The Fund currently offers multiple classes of shares. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Effective November 25, 2003, the Fund redomesticated as a series portfolio of a newly formed Delaware statutory trust, AIM International Mutual Funds. The Fund's investment objective is above-average long-term growth of capital. Companies are listed in the Schedule of Investments based on the country in which they are organized. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not securities reported on the NASDAQ National Market System) is valued on the basis of prices furnished by independent pricing services or market makers. Each security reported on the NASDAQ National Market System is valued at the NASDAQ Official Closing Price ("NOCP") as of the close of the customary trading session on the valuation date or absent a NOCP, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Company's officers in a manner specifically authorized by the Board of Directors of the Company. Market trends, movement in exchange traded funds and ADRs, and the bid/ask quotes of brokers and information providers may be reviewed in the course of making a good faith determination of a security's fair value. Short-term obligations having 60 days or less to maturity and commercial paper are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Foreign securities are converted into U.S. dollar amounts using exchange rates as of the close of the NYSE. Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of the close of the respective markets. Occasionally, events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE which would not ordinarily be reflected in the computation of the Fund's net asset value. If a development/event is so significant that there is a reasonably high degree of certainty as to both the effect and the degree of effect that the development/event has actually caused that closing price to no longer reflect actual value, the closing prices, as determined at the close of the applicable foreign market, may be adjusted to reflect the fair value of the affected foreign securities as of the close of the NYSE as determined in good faith by or under the supervision of the Board of Directors. 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 on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date. The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class. C. DISTRIBUTIONS -- Distributions from income and net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes. D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M 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 gain) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. Any capital loss carryforwards listed are reduced for limitations, if any, to the extent required by the Internal Revenue Code. F-9 E. FOREIGN CURRENCY TRANSLATIONS -- Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. F. FOREIGN CURRENCY CONTRACTS -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund may enter into a foreign currency contract to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. The Fund may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Fund could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. G. FUTURES CONTRACTS -- The Fund may purchase or sell futures contracts as a hedge against changes in market conditions. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities as collateral for the account of the broker (the Fund's agent in acquiring the futures position). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by "marking to market" on a daily basis to reflect the market value of the contracts at the end of each day's trading. Variation margin payments are made or received depending upon whether unrealized gains or losses are incurred. When the contracts are closed, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund's basis in the contract. H. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. 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 0.90% of the first $1 billion of the Fund's average daily net assets, plus 0.85% of the Fund's average daily net assets in excess of $1 billion. AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of 25% of the advisory fee AIM receives from the affiliated money market funds in which the Fund has invested (excluding investments made in affiliated money market funds with cash collateral from securities loaned by the Fund). For the year ended October 31, 2003, AIM waived fees of $5,105. Under a prior agreement to limit the aggregate costs of certain shareholder services provided by third party administrators, AIM reimbursed fees of $40,620 for Class A, Class B and Class C shares based on the relative net assets of those classes. 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 October 31, 2003, AIM was paid $199,512 for such services. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay AIM Investment Services, Inc. ("AISI"), formerly known as A I M Fund Services, Inc., a fee for providing transfer agency and shareholder services to the Fund. During the year ended October 31, 2003, AISI retained $2,246,108 for such services. The Company has entered into master distribution agreements with A I M Distributors, Inc. ("AIM Distributors") to serve as the distributor for the Class A, Class B and Class C shares of the Fund. The Company has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A, Class B and Class C shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays AIM Distributors compensation at the annual rate of 0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the average daily net assets of Class B and Class C shares. Of these amounts, AIM Distributors may pay a service fee up to 0.25% of the average daily net assets of the Class A, Class B or Class C shares to selected dealers and financial institutions who furnish continuing personal shareholder services to their customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. NASD Rules also impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. Pursuant to the Plans, for the year ended October 31, 2003, the Class A, Class B and Class C shares paid $2,093,225, $3,607,240 and $188,488, respectively. Front-end sales commissions and contingent deferred sales charges ("CDSC") (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the year ended October 31, 2003, AIM Distributors retained $65,241 in front-end sales commissions from the sale of Class A shares and $244,404 ,$8 and $17,014 from Class A, Class B and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders. Certain officers and directors of the Company are officers and directors of AIM, AISI and/or AIM Distributors. F-10 NOTE 3--EXPENSE OFFSET ARRANGEMENTS For the year ended October 31, 2003, the Fund received reductions in transfer agency fees from AISI (an affiliate of AIM) of $15,295 and reductions in custodian fees of $84 under an expense offset arrangements which resulted in a reduction of the Fund's total expenses of $15,379. NOTE 4--DIRECTORS' FEES Directors' fees represent remuneration paid to each Director of the Company who is not an "interested person" of AIM. Directors have the option to defer compensation payable by the Company. The Directors deferring compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Current Directors are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Directors over a period of time based on the number of years of service. Certain former Directors also participate in a retirement plan and receive benefits under such plan. During the year ended October 31, 2003, the Fund paid legal fees of $3,535 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Directors. A member of that firm is a Director of the Company. NOTE 5--BORROWINGS The Fund may participate in an interfund lending facility that AIM has established for temporary borrowings by the AIM Funds. An interfund loan will be made under this facility only if the loan rate (an average of the rate available on bank loans and the rate available on investments in overnight repurchase agreements) is favorable to both the lending fund and the borrowing fund. Under certain circumstances, a loan will be secured by collateral. To the extent that the loan is required to be secured by collateral, the collateral is marked to market daily to ensure that the market value is at least 102% of the outstanding principal value of the loan. Effective June 26, 2003, the Fund became a participant in an uncommitted unsecured revolving line of credit facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the lesser of (i) $125,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit can borrow on a first come, first served basis. Principal on each loan outstanding shall bear interest at the bid rate quoted by SSB at the time of the request for the loan. During the reporting period, the Fund was a participant in a committed line of credit facility with a syndicate administered by Citibank, N.A. The Fund could borrow up to the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which were parties to the line of credit could borrow on a first come, first served basis. The funds which were party to the line of credit were charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee was allocated among the funds based on their respective average net assets for the period. The committed line of credit facility expired May 20, 2003. During the year ended October 31, 2003, the Fund did not borrow or lend under the interfund lending facility or borrow under either the uncommitted unsecured revolving line of credit facility or the committed line of credit facility. Additionally the Fund is permitted to carry a negative or overdrawn balance in its account with the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds in the account so the custodian can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank. In either case, the custodian bank will be compensated an amount equal to the Federal Funds rate plus 100 basis points. NOTE 6--PORTFOLIO SECURITIES LOANED The Fund may lend portfolio securities to the extent of one-third of the Fund's total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Cash collateral pursuant to these loans is invested in short-term money market instruments or affiliated money market funds. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. It is the Fund's policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. At October 31, 2003, securities with an aggregate value of $130,595,645 were on loan to brokers. The loans were secured by cash collateral of $135,997,907 received by the Fund and subsequently invested in affiliated money market funds. For the year ended October 31, 2003, the Fund received fees of $420,504 for securities lending. NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS Distributions to Shareholders: There were no ordinary income or long-term capital gain distributions paid during the years ended October 31, 2003 and 2002. Tax Components of Net Assets: As of October 31, 2003, the components of net assets on a tax basis were as follows: Unrealized appreciation -- investments $ 221,150,075 - ------------------------------------------------------------ Temporary book/tax differences (140,210) - ------------------------------------------------------------ Capital loss carryforward (269,449,215) - ------------------------------------------------------------ Capital (par value and additional paid-in) 908,474,206 ============================================================ Total net assets $ 860,034,856 ____________________________________________________________ ============================================================
The difference between book-basis and tax-basis unrealized appreciation is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's unrealized appreciation difference is attributable primarily to the tax deferral of losses on wash sales. The tax-basis unrealized appreciation on investments amount includes appreciation on foreign currencies written of $3,837. F-11 The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund's temporary book/tax differences are the result of director deferral of compensation and director retirement plan expenses. The Fund has a capital loss carryforward for tax purposes which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD - ---------------------------------------------------------- October 31, 2009 $112,245,103 - ---------------------------------------------------------- October 31, 2010 157,204,112 ========================================================== Total capital loss carryforward $269,449,215 __________________________________________________________ ==========================================================
NOTE 8--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities and money market funds) purchased and sold by the Fund during the year ended October 31, 2003 was $486,452,638 and $629,598,992, respectively.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - ----------------------------------------------------------- Aggregate unrealized appreciation of investment securities $229,787,088 - ----------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (8,640,850) =========================================================== Net unrealized appreciation of investment securities $221,146,238 ___________________________________________________________ =========================================================== Cost of investments for tax purposes is $762,294,872.
NOTE 9--RECLASSIFICATION OF PERMANENT DIFFERENCES Primarily as a result of differing book/tax treatment of foreign currency transactions and net operating losses, on October 31, 2003, undistributed net investment income (loss) was increased by $9,660,805, undistributed net realized gains (losses) decreased by $71,616 and paid in capital decreased by $9,589,189. This reclassification had no effect on net assets of the Fund. NOTE 10--CAPITAL STOCK INFORMATION The Fund currently offers three different classes of shares: Class A shares, Class B shares and Class C shares. Class A shares are sold with a front-end sales charge. Class B shares and Class C shares are sold with CDSC. Under some circumstances, Class A shares are subject to CDSC. Generally, Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase.
CHANGES IN CAPITAL STOCK OUTSTANDING - -------------------------------------------------------------------------------------------------------------------------- YEAR ENDED OCTOBER 31, ------------------------------------------------------------ 2003 2002 ---------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------------------------------------------- Sold: Class A 68,284,222 $ 794,508,847 60,670,511 $ 751,546,029 - -------------------------------------------------------------------------------------------------------------------------- Class B 1,029,386 11,457,035 1,348,844 16,159,835 - -------------------------------------------------------------------------------------------------------------------------- Class C 2,302,210 25,526,168 1,454,890 17,014,301 ========================================================================================================================== Automatic conversion of Class B shares to Class A shares: Class A 2,977,413 35,471,200 265,149 3,136,806 - -------------------------------------------------------------------------------------------------------------------------- Class B (3,153,173) (35,471,200) (281,263) (3,136,806) ========================================================================================================================== Reacquired: Class A (75,474,194) (885,212,525) (68,922,876) (859,549,344) - -------------------------------------------------------------------------------------------------------------------------- Class B (7,319,506) (80,773,876) (12,604,513) (148,750,264) - -------------------------------------------------------------------------------------------------------------------------- Class C (2,636,776) (29,432,449) (1,982,324) (23,283,242) ========================================================================================================================== (13,990,418) $(163,926,800) (20,051,582) $(246,862,685) __________________________________________________________________________________________________________________________ ==========================================================================================================================
F-12 NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A --------------------------------------------------------------------------------- YEAR ENDED OCTOBER 31, --------------------------------------------------------------------------------- 2003 2002 2001 2000 1999 - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.00 $ 12.58 $ 25.87 $ 21.95 $ 15.87 - --------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.13) (0.15)(a) (0.13) (0.28)(a) (0.17)(a) - --------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 3.41 (1.43) (8.42) 5.56 6.25 =========================================================================================================================== Total from investment operations 3.28 (1.58) (8.55) 5.28 6.08 =========================================================================================================================== Less distributions from net realized gains -- -- (4.74) (1.36) -- =========================================================================================================================== Net asset value, end of period $ 14.28 $ 11.00 $ 12.58 $ 25.87 $ 21.95 ___________________________________________________________________________________________________________________________ =========================================================================================================================== Total return(b) 29.82% (12.56)% (38.87)% 24.27% 38.31% ___________________________________________________________________________________________________________________________ =========================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $465,855 $405,360 $563,828 $1,103,740 $852,198 ___________________________________________________________________________________________________________________________ =========================================================================================================================== Ratio of expenses to average net assets 2.10%(c)(d) 2.00% 1.87% 1.65% 1.80% =========================================================================================================================== Ratio of net investment income (loss) to average net assets (0.97)%(c) (1.19)% (0.75)% (0.96)% (0.95)% ___________________________________________________________________________________________________________________________ =========================================================================================================================== Portfolio turnover rate 64% 73% 87% 62% 60% ___________________________________________________________________________________________________________________________ ===========================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $418,645,092. (d) After fee waivers. Ratio of expenses to average net assets prior to fee waivers and expense reimbursements was 2.11%.
CLASS B ------------------------------------------------------------------------------ YEAR ENDED OCTOBER 31, ------------------------------------------------------------------------------ 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 10.42 $ 11.97 $ 24.98 $ 21.35 $ 15.52 - ------------------------------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income (loss) (0.19) (0.20)(a) (0.21) (0.42)(a) (0.27)(a) - ------------------------------------------------------------------------------------------------------------------------ Net gains (losses) on securities (both realized and unrealized) 3.22 (1.35) (8.06) 5.41 6.10 ======================================================================================================================== Total from investment operations 3.03 (1.55) (8.27) 4.99 5.83 ======================================================================================================================== Less distributions from net realized gains -- -- (4.74) (1.36) -- ======================================================================================================================== Net asset value, end of period $ 13.45 $ 10.42 $ 11.97 $ 24.98 $ 21.35 ________________________________________________________________________________________________________________________ ======================================================================================================================== Total return(b) 29.08% (12.95)% (39.19)% 23.56% 37.56% ________________________________________________________________________________________________________________________ ======================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $374,027 $388,101 $583,933 $1,158,979 $926,972 ________________________________________________________________________________________________________________________ ======================================================================================================================== Ratio of expenses to average net assets 2.60%(c)(d) 2.51% 2.39% 2.19% 2.37% ======================================================================================================================== Ratio of net investment income (loss) to average net assets (1.47)%(c) (1.70)% (1.27)% (1.50)% (1.52)% ________________________________________________________________________________________________________________________ ======================================================================================================================== Portfolio turnover rate 64% 73% 87% 62% 60% ________________________________________________________________________________________________________________________ ========================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $360,723,958. (d) After fee waivers. Ratio of expenses to average net assets prior to fee waivers and expense reimbursements was 2.61%. F-13 NOTE 11--FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C ----------------------------------------------------------------------- YEAR ENDED OCTOBER 31, ----------------------------------------------------------------------- 2003 2002 2001 2000 1999 - ----------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.42 $ 11.98 $ 24.99 $ 21.35 $ 15.52 - ----------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.19) (0.20)(a) (0.21) (0.42)(a) (0.27)(a) - ----------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 3.23 (1.36) (8.06) 5.42 6.10 ================================================================================================================= Total from investment operations 3.04 (1.56) (8.27) 5.00 5.83 ================================================================================================================= Less distributions from net realized gains -- -- (4.74) (1.36) -- ================================================================================================================= Net asset value, end of period $ 13.46 $ 10.42 $ 11.98 $ 24.99 $ 21.35 _________________________________________________________________________________________________________________ ================================================================================================================= Total return(b) 29.17% (13.02)% (39.17)% 23.61% 37.56% _________________________________________________________________________________________________________________ ================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $20,153 $19,099 $28,260 $50,908 $16,325 _________________________________________________________________________________________________________________ ================================================================================================================= Ratio of expenses to average net assets 2.60%(c)(d) 2.51% 2.39% 2.19% 2.37% ================================================================================================================= Ratio of net investment income (loss) to average net assets (1.47)%(c) (1.70)% (1.28)% (1.50)% (1.52)% _________________________________________________________________________________________________________________ ================================================================================================================= Portfolio turnover rate 64% 73% 87% 62% 60% _________________________________________________________________________________________________________________ =================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $18,848,844. (d) After fee waivers. Ratio of expenses to average net assets prior to fee waivers and expense reimbursements was 2.61%. NOTE 12--SUBSEQUENT EVENTS Your Fund's investment advisor, A I M Advisors, Inc. ("AIM") is an indirect wholly owned subsidiary of AMVESCAP PLC ("AMVESCAP"). Another indirect wholly owned subsidiary of AMVESCAP, INVESCO Funds Group, Inc. ("INVESCO"), was, until recently, the investment advisor to the INVESCO Funds. On December 2, 2003, each of the Securities and Exchange Commission ("SEC") and the Office of the Attorney General of the State of New York ("NYAG") filed civil proceedings against INVESCO and Raymond R. Cunningham, in his capacity as the Chief Executive Officer of INVESCO. Mr. Cunningham currently holds the positions of Chief Operating Officer and Senior Vice President of A I M Management Group, Inc., the parent company of AIM, and he also holds the position of Senior Vice President with AIM. In addition, on December 2, 2003, the State of Colorado filed civil proceedings against INVESCO. Neither your Fund nor any of the funds in the AIM Family of Funds(R), which includes the INVESCO Funds (the "Funds") has been named as a defendant in any of these proceedings. The SEC proceeding alleges that INVESCO failed to disclose in the INVESCO Funds' prospectuses and to the INVESCO Funds' independent directors that INVESCO had entered into certain arrangements permitting market timing of the INVESCO Funds. The SEC is seeking injunctions, including permanent injunctions from serving as an investment advisor, officer or director of an investment company; an accounting of all market timing as well as certain fees and compensation received; disgorgement; civil monetary penalties; and other relief. The NYAG proceeding is also based on the circumstances described above. The NYAG is seeking injunctions, including permanent injunctions from directly or indirectly selling or distributing shares of mutual funds; disgorgement of all profits obtained, including fees collected, and payment of all restitution and damages caused, directly or indirectly from the alleged illegal activities; civil monetary penalties; and other relief. The Colorado proceeding is also based on the circumstances described above. The State of Colorado is seeking injunctions; restitution, disgorgement and other equitable relief; civil monetary penalties; and other relief. If INVESCO is unsuccessful in its defense of these proceedings, it could be barred from serving as an investment advisor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Similarly, if Mr. Cunningham is unsuccessful in his defense of these proceedings, he could be barred from serving as an officer or director of any registered investment company. Such results could also affect the ability of AIM, or any other investment advisor directly or indirectly owned by AMVESCAP, from serving as an investment advisor to any registered investment company, including your Fund. Your Fund has been informed by AIM that, if either of these results occurs, AIM will seek exemptive relief from the SEC to permit it to continue to serve as your Fund's investment advisor. There can be no assurance that such exemptive relief will be granted. AIM has received inquiries from the SEC, the NASD, Inc., the NYAG and the Secretary of the Commonwealth of Massachusetts with respect to market timing, late trading, fair value pricing and other similar issues and AIM has been providing full cooperation with respect to these inquiries. In addition to the complaints described above, multiple lawsuits, including purported class action and shareholder derivative suits, have been filed against certain Funds, INVESCO, AIM, AMVESCAP and certain related parties, primarily based upon the allegations in the complaints described above, but also regarding the funds' fair valuation pricing methodology. Such lawsuits allege a variety of theories for recovery including, but not limited to: F-14 NOTE 12--SUBSEQUENT EVENTS (CONTINUED) (i) violation of various provisions of the Federal securities laws; (ii) breach of fiduciary duty; and (iii) breach of contract. The lawsuits have been filed in both Federal and state courts and seek such remedies as compensatory damages; restitution; rescission; accounting for wrongfully gotten gains, profits and compensation; injunctive relief; disgorgement; equitable relief; interest and the payment of attorneys' and experts' fees. Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the Funds, INVESCO, AIM, AMVESCAP and related parties in the future. As a result of these developments, investors in the Funds might react by redeeming their investments. This might require the Funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the Funds. At the present time, management of AIM and the Fund is unable to estimate the impact, if any, that the outcome of these matters described above may have on the Fund or AIM's financial condition. F-15 REPORT OF INDEPENDENT AUDITORS To the Board of Directors/Trustees and Shareholders of AIM Global Aggressive Growth Fund In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the AIM Global Aggressive Growth Fund (one of the funds constituting AIM International Funds, Inc. now known as AIM International Mutual Funds; hereafter referred to as the "Fund") at October 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The financial highlights for each of the periods ended on or before October 31, 2000 were audited by other independent accountants whose report dated December 6, 2000, expressed an unqualified opinion on the financial highlights. PRICEWATERHOUSECOOPERS LLP December 16, 2003 Houston, Texas F-16 PROXY RESULTS (UNAUDITED) A Special Meeting of Shareholders of AIM International Funds, Inc., a Maryland corporation, was held on October 21, 2003. The meeting was adjourned and reconvened on October 28, 2003, on November 4, 2003, on November 11, 2003, on November 17, 2003 and reconvened on November 21, 2003. The meeting was held for the following purposes: (1)* To elect sixteen individuals to the Board, each of whom will serve until his or her successor is elected and qualified: Bob R. Baker, Frank S. Bayley, James T. Bunch, Bruce L. Crockett, Albert R. Dowden, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H. Graham, Gerald J. Lewis, Prema Mathai-Davis, Lewis F. Pennock, Ruth H. Quigley, Louis S. Sklar, Larry Soll, Ph.D. and Mark H. Williamson. (2)* To approve an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation. The results of the voting on the above matters were as follows:
WITHHOLDING DIRECTORS/MATTER VOTES FOR AUTHORITY - --------------------------------------------------------------------------------- (1)* Bob R. Baker................................. 162,211,196 3,444,279 Frank S. Bayley.............................. 162,236,962 3,418,513 James T. Bunch............................... 162,287,588 3,367,887 Bruce L. Crockett............................ 162,276,496 3,378,979 Albert R. Dowden............................. 162,251,386 3,404,089 Edward K. Dunn, Jr. ......................... 162,221,226 3,434,249 Jack M. Fields............................... 162,278,318 3,377,157 Carl Frischling.............................. 162,182,906 3,472,569 Robert H. Graham............................. 162,243,892 3,411,583 Gerald J. Lewis.............................. 162,147,868 3,507,607 Prema Mathai-Davis........................... 162,219,866 3,435,609 Lewis F. Pennock............................. 162,263,207 3,392,268 Ruth H. Quigley.............................. 162,163,064 3,492,411 Louis S. Sklar............................... 162,243,759 3,411,716 Larry Soll, Ph.D. ........................... 162,236,226 3,419,249 Mark H. Williamson........................... 162,238,962 3,416,513
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 76,302,938 2,822,366 86,530,171**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on October 28, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 84,066,011 2,989,031 83,338,957**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 4, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 95,512,525 3,144,748 78,504,573**
F-17 PROXY RESULTS (UNAUDITED) (CONTINUED) The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 11, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 109,217,698 3,531,752 71,913,039**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 17, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 116,710,545 3,761,148 69,451,190**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 21, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 137,239,949 4,617,039 51,798,672**
* Proposal required approval by a combined vote of all the portfolios of AIM International Funds, Inc. ** Includes Broker Non-Votes F-18 OTHER INFORMATION TRUSTEES AND OFFICERS As of January 1, 2003 The address of each trustee and officer of AIM International Funds, Inc., now known as AIM International Mutual Funds (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 132 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - --------------------------------------------------------------------------------------------------------------------------------- INTERESTED PERSONS - --------------------------------------------------------------------------------------------------------------------------------- Robert H. Graham(1) -- 1946 1991 Director and Chairman, A I M Management Group Inc. None Trustee, Chairman and (financial services holding company); and Director President and Vice Chairman, AMVESCAP PLC and Chairman of AMVESCAP PLC -- AIM Division (parent of AIM and a global investment management firm) Formerly: President and Chief Executive Officer, A I M Management Group Inc.; Director, Chairman and President, A I M Advisors, Inc. (registered investment advisor); and Director and Chairman, A I M Capital Management, Inc. (registered investment advisor), A I M Distributors, Inc. (registered broker dealer), AIM Investment Services, Inc., (registered transfer agent), and Fund Management Company (registered broker dealer); and Chief Executive Officer, AMVESCAP PLC -- Managed Products - --------------------------------------------------------------------------------------------------------------------------------- Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Officer, A I M Director and Chairman, Trustee and Executive Vice Management Group Inc. (financial services holding INVESCO Bond Funds, President company); Director, Chairman and President, A I M Inc., INVESCO Advisors, Inc. (registered investment advisor); Combination Stock & Director, A I M Capital Management, Inc. (registered Bond Funds, Inc., investment advisor) and A I M Distributors, Inc. INVESCO Counselor (registered broker dealer); Director and Chairman, Series Funds, Inc., AIM Investment Services, Inc. (registered transfer INVESCO International agent); and Fund Management Company (registered Funds, Inc., INVESCO broker dealer); and Chief Executive Officer, AMVESCAP Manager Series Funds, PLC -- AIM Division (parent of AIM and a global Inc., INVESCO Money investment management firm) Market Funds, Inc., Formerly: Director, Chairman, President and Chief INVESCO Sector Funds, Executive Officer, INVESCO Funds Group, Inc. and Inc., INVESCO Stock INVESCO Distributors, Inc.; Chief Executive Officer, Funds, Inc., INVESCO AMVESCAP PLC -- Managed Products; Chairman and Chief Treasurer's Series Executive Officer of NationsBanc Advisors, Inc.; and Funds, Inc. and Chairman of NationsBanc Investments, Inc. INVESCO Variable Investment Funds, Inc. - --------------------------------------------------------------------------------------------------------------------------------- INDEPENDENT TRUSTEES - --------------------------------------------------------------------------------------------------------------------------------- Bob R. Baker(3) -- 1936 2003 Consultant None Trustee Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation - --------------------------------------------------------------------------------------------------------------------------------- Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc. Trustee (registered investment company) - --------------------------------------------------------------------------------------------------------------------------------- James T. Bunch(3) -- 1942 2003 Co-President and Founder, Green, Manning & Bunch None Trustee Ltd., (investment banking firm); and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation Formerly: General Counsel and Director, Boettcher & Co.; and Chairman and Managing Partner, law firm of Davis, Graham & Stubbs - --------------------------------------------------------------------------------------------------------------------------------- Bruce L. Crockett -- 1944 1992 Chairman, Crockett Technology Associates (technology ACE Limited (insurance Trustee consulting company) company); and Captaris, Inc. (unified messaging provider) - --------------------------------------------------------------------------------------------------------------------------------- Albert R. Dowden -- 1941 2000 Director of a number of public and private business Cortland Trust, Inc. Trustee corporations, including the Boss Group Ltd. (private (Chairman) (registered investment and management) and Magellan Insurance investment company); Company Formerly: Director, President and Chief Annuity and Life Re Executive Officer, Volvo Group North America, Inc.; (Holdings), Ltd. Senior Vice President, AB Volvo; and director of (insurance company) various affiliated Volvo Group companies - --------------------------------------------------------------------------------------------------------------------------------- Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage Corp.; None Trustee President and Chief Operating Officer, Mercantile-Safe Deposit & Trust Co.; and President, Mercantile Bankshares Corp. - --------------------------------------------------------------------------------------------------------------------------------- Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Group, Administaff Trustee Inc. (government affairs company) and Texana Timber LP - ---------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Graham is considered an interested person of the Trust because he is a director of AMVESCAP PLC, parent of the advisor to the Trust. (2) Mr. Williamson is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. Mr. Williamson became Executive Vice President of the Trust on March 4, 2003. (3) Elected trustee of the Trust on October 21, 2003. Trustees and Officers (continued) As of January 1, 2003 The address of each trustee and officer of AIM International Funds, Inc., now known as AIM International Mutual Funds (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 132 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S) POSITION(S) HELD WITH THE TRUST OR OFFICER SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - --------------------------------------------------------------------------------------------------------------------------- Carl Frischling -- 1937 1991 Partner, law firm of Kramer Levin Cortland Trust, Inc. Trustee Naftalis and Frankel LLP (registered investment company) - --------------------------------------------------------------------------------------------------------------------------- Gerald J. Lewis(3) -- 1933 2003 Chairman, Lawsuit Resolution General Chemical Trustee Services (San Diego, California) Group, Inc., Formerly: Associate Justice of the Wheelabrator California Court of Appeals Technologies, Inc. (waste management company), Fisher Scientific, Inc., Henley Manufacturing, Inc. (laboratory supplies), and California Coastal Properties, Inc. - --------------------------------------------------------------------------------------------------------------------------- Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, None Trustee YWCA of the USA - --------------------------------------------------------------------------------------------------------------------------- Lewis F. Pennock -- 1942 1991 Partner, law firm of Pennock & None Trustee Cooper - --------------------------------------------------------------------------------------------------------------------------- Ruth H. Quigley -- 1935 2001 Retired None Trustee - --------------------------------------------------------------------------------------------------------------------------- Louis S. Sklar -- 1939 1991 Executive Vice President, None Trustee Development and Operations Hines Interests Limited Partnership (real estate development company) - --------------------------------------------------------------------------------------------------------------------------- Larry Soll, Ph.D.(3) -- 1942 2003 Retired None Trustee - --------------------------------------------------------------------------------------------------------------------------- OTHER OFFICERS - --------------------------------------------------------------------------------------------------------------------------- Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, N/A Senior Vice President Secretary and General Counsel, A I M Management Group Inc. (financial services holding company) and A I M Advisors, Inc.; Vice President, A I M Capital Management, Inc., A I M Distributors, Inc. and AIM Investment Services, Inc.; and Director, Vice President and General Counsel, Fund Management Company Formerly: Senior Vice President and General Counsel, Liberty Financial Companies, Inc.; and Senior Vice President and General Counsel, Liberty Funds Group, LLC - --------------------------------------------------------------------------------------------------------------------------- Gary T. Crum(5) -- 1947 1991 Director, Chairman and Director of N/A Senior Vice President Investments, A I M Capital Management, Inc.; Director and Executive Vice President, A I M Management Group Inc.; Director and Senior Vice President, A I M Advisors, Inc.; and Director, A I M Distributors, Inc. and AMVESCAP PLC Formerly: Chief Executive Officer and President, A I M Capital Management Inc. - --------------------------------------------------------------------------------------------------------------------------- Robert G. Alley -- 1948 1994 Managing Director and Chief Fixed N/A Vice President Income Officer, A I M Capital Management, Inc.; and Vice President, A I M Advisors, Inc. - --------------------------------------------------------------------------------------------------------------------------- Stuart W. Coco -- 1955 2002 Managing Director and Chief N/A Vice President Research Officer -- Fixed Income, A I M Capital Management, Inc.; and Vice President, A I M Advisors, Inc. - --------------------------------------------------------------------------------------------------------------------------- Melville B. Cox -- 1943 1992 Vice President and Chief Compliance N/A Vice President Officer, A I M Advisors, Inc. and A I M Capital Management, Inc.; and Vice President, AIM Investment Services, Inc. - --------------------------------------------------------------------------------------------------------------------------- Edgar M. Larsen(5) -- 1940 1999 Vice President, A I M Advisors, N/A Vice President Inc., and President, Chief Executive Officer and Chief Investment Officer, A I M Capital Management, Inc. - --------------------------------------------------------------------------------------------------------------------------- Dana R. Sutton -- 1959 1991 Vice President and Fund Treasurer, N/A Vice President and Treasurer A I M Advisors, Inc. - ---------------------------------------------------------------------------------------------------------------------------
(3) Elected trustee of the Trust on October 21, 2003. (4) Mr. Carome became Senior Vice President of the Trust on May 13, 2003. (5) Information is current as of January 10, 2003. The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.347.4246. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS 11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, Inc. PricewaterhouseCoopers LLP Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana, Suite 2900 Houston, TX 77046 Suite 100 Suite 100 Houston, TX 77002 Houston, TX 77046 Houston, TX 77046-1173 COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. State Street Bank and Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 Trust Company 1735 Market Street 919 Third Avenue Houston, TX 77210-4739 225 Franklin Street Philadelphia, PA 19103 New York, NY 10022-3852 Boston, MA 02110
DOMESTIC EQUITY INTERNATIONAL/GLOBAL EQUITY FIXED INCOME AIM Aggressive Growth Fund AIM Asia Pacific Growth Fund TAXABLE AIM Balanced Fund* AIM Developing Markets Fund AIM Basic Balanced Fund* AIM European Growth Fund AIM Floating Rate Fund AIM Basic Value Fund AIM European Small Company Fund AIM High Yield Fund AIM Blue Chip Fund AIM Global Aggressive Growth Fund AIM Income Fund AIM Capital Development Fund AIM Global Growth Fund AIM Intermediate Government Fund AIM Charter Fund AIM Global Trends Fund AIM Limited Maturity Treasury Fund AIM Constellation Fund AIM Global Value Fund(4) AIM Money Market Fund AIM Dent Demographic Trends Fund AIM International Emerging Growth Fund AIM Short Term Bond Fund AIM Diversified Dividend Fund(1) AIM International Growth Fund AIM Total Return Bond Fund AIM Emerging Growth Fund AIM Trimark Fund INVESCO U.S. Government Money Fund AIM Large Cap Basic Value Fund INVESCO International Core Equity Fund(5) AIM Large Cap Growth Fund TAX-FREE AIM Libra Fund AIM Mid Cap Basic Value Fund SECTOR EQUITY AIM High Income Municipal Fund AIM Mid Cap Core Equity Fund AIM Municipal Bond Fund AIM Mid Cap Growth Fund AIM Global Health Care Fund AIM Tax-Exempt Cash Fund AIM Opportunities I Fund AIM Real Estate Fund AIM Tax-Free Intermediate Fund AIM Opportunities II Fund INVESCO Advantage Health Sciences Fund AIM Opportunities III Fund INVESCO Energy Fund AIM Premier Equity Fund INVESCO Financial Services Fund AIM Select Equity Fund INVESCO Gold & Precious Metals Fund AIM Small Cap Equity Fund(2) INVESCO Health Sciences Fund AIM Small Cap Growth Fund(3) INVESCO Leisure Fund AIM Trimark Endeavor Fund INVESCO Multi-Sector Fund AM Trimark Small Companies Fund INVESCO Technology Fund AIM Weingarten Fund INVESCO Utilities Fund INVESCO Core Equity Fund INVESCO Dynamics Fund INVESCO Mid-Cap Growth Fund INVESCO Small Company Growth Fund INVESCO S&P 500 Index Fund INVESCO Total Return Fund*
* Domestic equity and income fund (1) Effective May 2, 2003, AIM Large Cap Core Equity Fund was renamed AIM Diversified Dividend Fund. (2) AIM Small Cap Equity Fund was closed to most investors on December 19, 2003. For information on who may continue to invest in AIM Small Cap Equity Fund, please contact your financial advisor. (3) AIM Small Cap Growth Fund was closed to most investors on March 18, 2002. For information on who may continue to invest in AIM Small Cap Growth Fund, please contact your financial advisor. (4) Effective April 30, 2003, AIM Worldwide Spectrum Fund was renamed AIM Global Value Fund. (5) Effective November 24, 2003, INVESCO International Blue Chip Value Fund was renamed INVESCO International Core Equity Fund. For more complete information about any AIM or INVESCO fund, including sales charges and expenses, ask your financial advisor for a prospectus. Please read it carefully before investing. If used after January 20, 2004, this brochure must be accompanied by a fund Performance & Commentary or by an AIM Quarterly Performance Review for the most recent quarter-end. Mutual funds distributed by A I M Distributors, Inc. A I M Management Group Inc. has provided leadership in the investment management industry since 1976 and manages $142 billion in assets for approximately 11 million shareholders, including individual investors, corporate clients and financial institutions. AIM is a subsidiary of AMVESCAP PLC, one of the world's largest independent financial services companies with $345 billion in assets under management. Data as of September 30, 2003. AIMinvestments.com GLA-AR-1 YOUR GOALS. OUR SOLUTIONS.--Servicemark-- - ------------------------------------------------------------------------------------- Mutual Retirement Annuities College Separately Offshore Alternative Cash [AIM INVESTMENTS LOGO APPEARS HERE] Funds Products Savings Managed Products Investments Management --Servicemark-- Plans Accounts
AIM Global Growth Fund Annual Report to Shareholders o October 31, 2003 [COVER IMAGE] YOUR GOALS. OUR SOLUTIONS. [AIM LOGO APPEARS HERE] --Servicemark-- --Servicemark-- ================================================================================ AIM GLOBAL GROWTH FUND SEEKS TO PROVIDE LONG-TERM GROWTH OF CAPITAL. ================================================================================ ABOUT INFORMATION THROUGHOUT THIS REPORT: o Unless otherwise stated, information o International investing presents o The unmanaged MSCI Japan Index is a presented is as of 10/31/03 and is based certain risks not associated with market-value-weighted average of the on total net assets. investing solely in the United States. performance of more than 300 securities These include risks relating to on the Japanese stock exchanges tracked o AIM Global Growth Fund's performance fluctuations in the value of the U.S. by Morgan Stanley Capital International. figures are historical, and they reflect dollar relative to the values of other fund expenses, the reinvestment of currencies, the custody arrangements o A direct investment cannot be made in distributions, and changes in net asset made for the fund's foreign holdings, an index. Unless otherwise indicated, differences in accounting, political index results include reinvested value. risks and the lesser degree of public dividends, and they do not reflect sales information required to be provided by charges or fund expenses. o When sales charges are included in non-U.S. companies. performance figures, Class A share A description of the policies and performance reflects the maximum 4.75% o The fund's investment return and procedures that the fund uses to sales charge, and Class B and Class C principal value will fluctuate, so an determine how to vote proxies relating share performance reflects the investor's shares, when redeemed, may be to portfolio securities is available applicable contingent deferred sales worth more or less than their original without charge, upon request, by calling charge (CDSC) for the period involved. cost. 800-959-4246, or on the AIM Web site, The CDSC on Class B shares declines from AIMinvestments.com. 5% beginning at the time of purchase to o Industry classifications used in this 0% at the beginning of the seventh year. report are generally according to the The CDSC on Class C shares is 1% for the Global Industry Classification Standard, first year after purchase. The which was developed by and is the performance of the fund's share classes exclusive property and a service mark of will differ due to different sales Morgan Stanley Capital International charge structures and class expenses. Inc. and Standard & Poor's. o A 2% redemption fee will be imposed on o The unmanaged MSCI World Index is a certain redemptions or exchanges out of group of global securities tracked by the fund within 30 days of purchase. Morgan Stanley Capital International. Exceptions to the redemption fee are listed in the fund's prospectus. o The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P o Effective 9/30/03, Class B shares are 500--Registered Trademark--) is an index not available as an investment for of common stocks frequently used as a retirement plans maintained pursuant to general measure of U.S. stock market Section 401 of the Internal Revenue performance. Code, including 401(k) plans, money purchase pension plans and profit sharing plans. Plans that have existing accounts invested in Class B shares will continue to be allowed to make additional purchases.
===================================================== NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE This report may be distributed only to shareholders or to persons who have received a current prospectus of the fund. =====================================================
AIMinvestments.com TO OUR SHAREHOLDERS DEAR FELLOW SHAREHOLDER IN new policies and strengthened existing ones--to discourage THE AIM FAMILY OF FUNDS harmful short-term trading. These steps include: --Registered Trademark--: o Strengthening daily monitoring of trading activities. [PHOTO OF As you may be aware, there has been a ROBERT H. great deal of media coverage recently o Imposing redemption fees on additional funds we GRAHAM] about the mutual fund industry and believe may be vulnerable to harmful short-term allegations of improper activities by trading activity. ROBERT H. GRAHAM certain individuals and companies. As part of these widespread investigations, o Implementing an enhanced exchange policy (effective on INVESCO Funds Group (IFG), the former or about March 1, 2004) designed to limit exchanges [PHOTO OF adviser to certain INVESCO Funds, was between funds. MARK H. recently named as a defendant in WILLIAMSON] separate civil enforcement actions by o Employing an enhanced fair value pricing policy on the U.S. Securities and Exchange certain foreign securities as well as certain illiquid MARK H. WILLIAMSON Commission (SEC), the Office of the New securities. York Attorney General and the State of Colorado over an issue known as "market timing." A number of None of these tools alone, nor all of them taken private class or derivative actions also were filed in the together, eliminate the possibility of short-term trading wake of the regulators' actions. strategies that may be detrimental to a fund. Moreover, each of these tools involves judgments that are inherently Investors are understandably concerned and frustrated subjective. We have always sought and continue to seek to about these reports, and we would like to take this make these judgments to the best of our abilities and in a opportunity to assure you that, based on an investigation manner that we believe is consistent with the best interests conducted by an outside firm, IFG and its parent company, of our fund shareholders. And we remain committed to being AMVESCAP PLC, believe that these civil actions are without as vigilant as possible in the future to identify and merit. IFG is contesting the charges. address any harmful market timing investors who have the potential to harm our long-term fund shareholders. We encourage you to continue to monitor this situation, particularly as IFG has the opportunity to address the We sincerely hope these developments and the media allegations that have been made. Current information will be coverage surrounding them do not result in you or other posted on our Web site at AIMinvestments.com. We will shareholders losing confidence in AIM or INVESCO Funds. continue to communicate to you on our Web site about our Amidst this storm of controversy in the mutual fund finding, and the actions we are taking to protect and industry, we believe we can find encouragement in the promote the interests of our shareholders. The independent recovering economy and rising equity markets. As we write trustees of the funds are receiving regular reports from this letter, for instance, the S&P 500--Registered their independent counsel and outside counsel hired by Trademark-- Index is up approximately 23% year-to-date. AMVESCAP PLC, the parent of AIM and IFG, to perform an Although past performance is no guarantee of future results, ongoing investigation of market timing. there appear to be indicators that the economy and stock markets are showing signs of welcomed improvement. We A COMPLEX ISSUE encourage you to read the enclosed discussion of your fund's performance during this past reporting period. Market timing is an investment technique not defined in any regulation that involves frequent short-term trading of OUR UNWAVERING COMMITMENT mutual fund shares, sometimes with a goal to exploit inefficiencies in the way mutual funds price their shares. At AIM Investments, we have never wavered in our commitment We recognize that fund management companies have tried to to helping you build solutions for your financial goals. Our deal with this complex issue in various ways and believe company was founded on a core principle of integrity, and we that industry-wide guidance is in order. To that end, we have always worked hard to earn the trust of our welcome SEC Chairman William Donaldson's pledge to adopt new shareholders. We are committed to doing all we can to rules designed to curb market timing abuses. Comprehensive maintain your trust and confidence. rulemaking is necessary and is the best way to establish new industry responsibilities designed to protect shareholders. Thank you for your continued participation in AIM We support practical rule changes and structural Investments. Please call your financial advisor or one of modifications that are fair, enforceable and, most our Client Service representatives at 800-959-4246 if you importantly, beneficial for investors. have any further questions or concerns about your AIM Investments account. AIM Investments has policies in place designed to identify, prevent and eliminate harmful trading or other Sincerely, activities deemed to be detrimental to the funds. We have also recently taken additional steps--implemented /s/ ROBERT H. GRAHAM /s/ MARK H. WILLIAMSON Robert H. Graham Mark H. Williamson Chairman and President President and CEO The AIM Family of Funds AIM Investments --Registered Trademark-- December 18, 2003
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE August. However, preliminary estimates indicate euro zone annualized MARKETS AROUND THE WORLD REBOUND AMIDST GDP rose 0.4% in the third quarter, and GLOBAL ECONOMIC RECOVERY recent business surveys also offered promise. Euro-area industrial confidence Amid signs of an improving global appeared to rally in 2003 as the increased in both August and September economic environment, AIM Global Growth nation's gross domestic product (GDP) and the Fund posted positive returns for the expanded at an annualized rate of 3.3% reporting period ended October 31, 2003. in the second quarter and 8.2% in the ======================================== For the fiscal year covered by this third quarter of 2003. The job market report, the fund's Class A, Class B and remained weak, however, as the nation's DURING THE REPORTING PERIOD, THE BRITISH Class C shares returned 17.77%, 17.19%, unemployment rate stood at 6.0% at the and 17.19%, respectively, at net asset close of the reporting period. POUND, CANADIAN DOLLAR, EURO, SWISS value. The fund's benchmark, the MSCI World Index, posted a higher return of In Asia, Japan's economy finally FRANC, AND JAPANESE YEN APPRECIATED 23.71% due in part, we believe, to the appeared to be showing signs of a fact the market appeared to reward cyclical upswing. While deflationary SIGNIFICANTLY AGAINST THE U.S. DOLLAR. high-beta stocks, which we were not pressures persisted, industrial invested in. production rose strongly in September. ======================================== Amid this backdrop, Japanese equities MARKET CONDITIONS rose sharply through the summer but sold Purchasing Managers Index--a off in late October. Despite the fall, survey of purchasing managers that As global economic recovery appeared to however, the MSCI Japan Index returned measures the general health of the gain momentum in 2003, equity markets in 32.94% for the fiscal year. manufacturing sector--increased for the the U.S. and abroad generally posted fourth consecutive month in October. positive returns for the fiscal year, While European stock markets posted with emerging market stocks generally some of the best regional returns for In monetary affairs, policy settings outperforming those in developed the fiscal year, growth in the euro zone for many major economies became more countries. Market returns and economic remained weak. According to a recent expansionary during the reporting growth, however, varied considerably by report by the Bank of England, there period. The Federal Reserve, the Bank of region. continues to be a contrast between weak England and the European Central Bank euro area economic data and more all reduced short-term interest rates in In the United States, the S&P 500, promising business survey indicators. 2003, leaving their benchmark rates at frequently cited as a measure of the Annualized GDP in the euro zone fell by 1.00%, 3.50% and 2.00%, respectively, performance of the U.S. stock market, 0.1% in the second quarter, and French returned 20.79% for the year ended consumer spending on manufactured goods October 31, 2003. The U.S. economy also declined in
================================================================================================================================== TOP 10 equity holdings* TOP 10 INDUSTRIES* 1. Teva Pharmaceutical Industries Ltd.-ADR (Israel) 3.2% 1. Pharmaceuticals 8.7% 2. Samsung Electronics Co., Ltd. (South Korea) 1.8 2. Electronic Equipment Manufacturers 6.0 3. Nitto Denko Corp. (Japan) 1.7 3. Integrated Oil & Gas 5.2 4. Microsoft Corp. 1.7 4. Semiconductors 4.1 5. Hoya Corp. (Japan) 1.7 5. Diversified Banks 4.1 6. Vodafone Group PLC (United Kingdom) 1.5 6. Systems Software 3.9 7. Canon Inc. (Japan) 1.5 7. Health Care Equipment 3.0 8. VERITAS Software Corp. 1.5 8. Diversified Capital Markets 2.7 9. Citigroup Inc. 1.5 9. Wireless Telecommunication Services 2.7 10. Intel Corp. 1.5 10. Household Products 2.6 *Excludes money market fund holdings. The fund's holdings are subject to change, and there is no assurance that the fund will continue to hold any particular security. ==================================================================================================================================
2 as of October 31, 2003. Monetary pharmaceutical company based in Israel. KIRK L. ANDERSON authorities in many Asian countries also Teva reported net income of $157 million [PHOTO OF Mr. Anderson is adopted expansionary policies during the for the third quarter, up 63% from a KIRK L. co-manager of the reporting period. year ago, while diluted ANDERSON] AIM Global Growth earnings-per-share reached $0.53, up 47% Fund. He joined AIM During the reporting period, the from the prior year. in 1994. Mr. Anderson earned a B.A. in British pound, Canadian dollar, euro, political science from Texas A&M Swiss franc, and Japanese yen Sega Corporation, however, detracted University. He also received an M.S. in appreciated significantly against the from fund performance as the company finance from the University of Houston. U.S. dollar. faced delays in bringing new game titles to market. As of the end of the YOUR FUND reporting period, we longer owned the MATTHEW W. DENNIS stock. [PHOTO OF Mr. Dennis, The fund's investment strategy is to MATTHEW W. Chartered Financial focus on stocks which are thought to Although all sectors appeared to DENNIS] Analyst, is a have above-average, long-term growth in contribute positively to fund co-manager of AIM earnings and strong prospects for future performance for the fiscal year, Global Growth Fund. He has been in the growth. To that end, stocks in the utility, telecommunications services and investment business since 1994. Mr. information technology and health care industrial stocks contributed the least. Dennis received a B.A. in economics from sectors contributed most positively to The University of Texas at Austin. He fund performance during the fiscal year. On a regional basis, given the also earned an M.S. in finance from improving economic climate in the United Texas A&M University. Online retailer Amazon.com is a good States, we found more investment example of a stock that benefited fund opportunities in U.S. stocks and performance during the fiscal year. By therefore increased our exposure there. aggressively cutting prices and offering CLAS G. OLSSON Mr. customers free shipping, Amazon has IN CLOSING [PHOTO OF Olsson is co-manager sharply increased its sales and CLAS G. of AIM Global Growth profitability. For the third quarter, After a few challenging years, global OLSSON] Fund. Mr. Olsson sales rose from $851 million in 2002 to markets began to post strong returns joined AIM in 1994. $1.13 billion in 2003, transforming a again in 2003. Whether world-wide market Mr. Olsson became a commissioned naval $10 million third-quarter loss in 2002 rallies are sustainable remains to be officer at the Royal Swedish Naval into a $52 million third-quarter profit seen. Regardless of economic or market Academy in 1988. He also received a in 2003 and boosting the company's share trends, we remain committed to owning B.B.A. from The University of Texas at price. stocks that fit the fund's investment Austin. objective. A strong performer for the fund in the health care sector was Teva See important fund and index BARRETT K. SIDES Mr. Pharmaceuticals, a global disclosures inside front cover. [PHOTO OF Sides is co-manager BARRETT K. of AIM Global Growth SIDES] Fund. He joined AIM in 1990. Mr. Sides graduated with a B.S. in economics from Bucknell University. He also received a master's in international business from the University of St. Thomas. Assisted by Large Cap Growth Team, Asia Pacific Team and Europe/Canada Team
[GRAPHIC] For More Information Visit AIMinvestments.com =============================================================================================== TOP 10 COUNTRIES* 1. United States 40.8% TOTAL NUMBER OF HOLDINGS* 118 2. United Kingdom 12.4 TOTAL NET ASSETS $544.5 BILLION 3. Japan 10.4 4. France 4.6 5. Canada 3.6 6. Switzerland 3.4 7. Israel 3.2 8. Italy 2.2 9. Germany 2.0 10. Netherlands 1.9 ===============================================================================================
3 FUND PERFORMANCE [MOUNTAIN CHART] RESULTS OF A $10,000 INVESTMENT 9/15/94-10/31/03*
DATE AIM GLOBAL AIM GLOBAL GROWTH FUND GROWTH FUND MSCI CLASS A SHARES CLASS B SHARES WORLD INDEX 9/15/1994 $ 9525 $ 10000 $ 10000 10/31/1994 9744 10220 10010 1/31/1995 9062 9490 9516 4/30/1995 10092 10549 10466 7/31/1995 11578 12109 11073 10/31/1995 11741 12260 10959 1/31/1996 12314 12840 11875 4/30/1996 13245 13796 12424 7/31/1996 12847 13359 12049 10/31/1996 13768 14296 12745 1/31/1997 14797 15343 13396 4/30/1997 14632 15149 13708 7/31/1997 17327 17918 15976 10/31/1997 16143 16676 14883 1/31/1998 16712 17232 15750 4/30/1998 19180 19760 17689 7/31/1998 19686 20249 17845 10/31/1998 17826 18306 17153 1/31/1999 20969 21509 19470 4/30/1999 21073 21575 20511 7/31/1999 21761 22252 20612 10/31/1999 23970 24476 21427 1/31/2000 29077 29657 22441 4/30/2000 29357 29894 23031 7/31/2000 28626 29100 22543 10/31/2000 26721 27142 21661 1/31/2001 23603 23931 21068 4/30/2001 19032 19282 19343 7/31/2001 17986 18193 18243 10/31/2001 15722 15880 16134 1/31/2002 16239 16380 16670 4/30/2002 16510 16628 16664 7/31/2002 14246 14339 14354 10/31/2002 13653 13727 13738 1/31/2003 12996 13046 13354 4/30/2003 13631 13669 14235 7/31/2003 14818 14838 15613 10/31/2003 $ 16069 $ 16163 $ 16995 Source: Lipper, Inc.
Your fund's total return includes sales charges, expenses and management fees. The performance of the fund's share classes will differ due to different sales charge structures and class expenses. For fund performance calculations and indexes used in this report, please see the inside front cover. Performance shown in the chart and table does not reflect deduction of taxes a shareholder would pay on fund distributions or sale of fund shares. Performance of the indexes does not reflect the effects of taxes. Your fund's total return includes sales charges, expenses and management fees. Results for B shares are calculated as if a hypothetical shareholder had liquidated his entire investment in the fund at the close of the reporting period and paid the applicable contingent deferred sales charges. This chart uses a logarithmic scale, which means the price scale (vertical axis) is structured so that a given distance always represents the same percent change in price, rather than the same absolute change in price. For example, the distance from one to 10 is the same as the distance from 10 to 100 on a logarithmic chart, but the latter distance is 10 times greater on a linear chart. A logarithmic scale better illustrates performance in the fund's early years before reinvested distributions and compounding create the potential for the original investment to grow to very large numbers. *Index performance is for the period 8/31/94-10/31/03 Past performance cannot guarantee comparable future results. DUE TO SIGNIFICANT MARKET VOLATILITY, RESULTS OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE SHOWN. CALL YOUR FINANCIAL ADVISOR FOR MORE CURRENT PERFORMANCE. =================================================================================================================================== FUND VS. INDEXES AVERAGE ANNUAL TOTAL RETURNS In addition to fund returns as of the TOTAL RETURNS 10/31/02-10/31/03, As of 10/31/03, including sales charges close of the fiscal year, industry excluding sales charges regulations require us to provide CLASS A SHARES average annual total returns (including CLASS A SHARES 17.77% Inception (9/15/94) 5.33% sales charges) for periods ended 5 Years -3.00 9/30/03, the most recent calendar CLASS B SHARES 17.19 1 Year 12.19 quarter-end, which were as follows. CLASS C SHARES 17.19 CLASS B SHARES AVERAGE ANNUAL TOTAL RETURNS As of 9/30/03, including sales charges MSCI World Index 23.71 Inception (9/15/94) 5.40% CLASS A SHARES 5 Years -2.92 Inception (9/15/94) 4.70% 1 Year 12.19 5 Years -3.26 1 Year 11.77 CLASS C SHARES CLASS B SHARES Inception (8/4/97) -1.52% 5 Years -2.56 Inception (9/15/94) 4.76% 1 Year 16.19 5 Years -3.19 1 Year 11.87 CLASS C SHARES Inception (8/4/97) -2.46% 5 Years -2.81 1 Year 15.86 ===================================================================================================================================
4 FINANCIALS SCHEDULE OF INVESTMENTS October 31, 2003
MARKET SHARES VALUE - -------------------------------------------------------------------------- FOREIGN STOCKS & OTHER EQUITY INTERESTS-55.18% AUSTRALIA-0.82% BHP Billiton Ltd. (Diversified Metals & Mining) 538,700 $ 4,468,425 ========================================================================== BERMUDA-1.18% Ingersoll-Rand Co.-Class A (Industrial Machinery) 50,000 3,020,000 - -------------------------------------------------------------------------- Nabors Industries, Ltd. (Oil & Gas Drilling)(a) 90,000 3,402,000 ========================================================================== 6,422,000 ========================================================================== BRAZIL-0.81% Companhia de Bebidas das Americas-ADR (Brewers) 111,600 2,365,920 - -------------------------------------------------------------------------- Petroleo Brasileiro S.A.-ADR (Integrated Oil & Gas) 86,300 2,028,050 ========================================================================== 4,393,970 ========================================================================== CANADA-3.59% Bombardier Inc.-Class B (Aerospace & Defense) 418,000 1,876,799 - -------------------------------------------------------------------------- Loblaw Cos. Ltd. (Food Retail) (Acquired 11/13/02-11/14/02; Cost $2,455,102)(b) 67,500 3,268,771 - -------------------------------------------------------------------------- Manulife Financial Corp. (Life & Health Insurance) 96,300 2,921,502 - -------------------------------------------------------------------------- Petro-Canada (Integrated Oil & Gas) 73,000 2,941,593 - -------------------------------------------------------------------------- Royal Bank of Canada (Diversified Banks) 40,150 1,933,047 - -------------------------------------------------------------------------- Suncor Energy, Inc. (Integrated Oil & Gas) 313,600 6,585,957 ========================================================================== 19,527,669 ========================================================================== CAYMAN ISLANDS-0.63% Noble Corp. (Oil & Gas Drilling)(a) 100,000 3,433,000 ========================================================================== FRANCE-4.64% BNP Paribas S.A. (Diversified Banks) 84,910 4,446,052 - -------------------------------------------------------------------------- Carrefour S.A. (Hypermarkets & Supercenters) 58,300 3,050,000 - -------------------------------------------------------------------------- France Telecom S.A. (Integrated Telecommunication Services)(a) 67,700 1,632,851 - -------------------------------------------------------------------------- Pernod Ricard S.A. (Distillers & Vintners) 35,170 3,381,643 - -------------------------------------------------------------------------- Renault S.A. (Automobile Manufacturers) 69,160 4,558,737 - -------------------------------------------------------------------------- Societe Generale (Diversified Banks) 23,160 1,714,418 - -------------------------------------------------------------------------- Total S.A. (Integrated Oil & Gas) 41,759 6,467,833 ========================================================================== 25,251,534 ==========================================================================
MARKET SHARES VALUE - -------------------------------------------------------------------------- GERMANY-2.02% Altana A.G. (Pharmaceuticals) 52,855 $ 3,319,271 - -------------------------------------------------------------------------- Deutsche Telekom A.G. (Integrated Telecommunication Services)(a) 182,500 2,864,702 - -------------------------------------------------------------------------- Metro A.G. (Hypermarkets & Supercenters)(a) 74,200 3,023,967 - -------------------------------------------------------------------------- Siemens A.G. (Industrial Conglomerates)(a) 26,400 1,773,819 ========================================================================== 10,981,759 ========================================================================== HONG KONG-1.01% Cheung Kong (Holdings) Ltd. (Real Estate Management & Development) 457,000 3,810,491 - -------------------------------------------------------------------------- Sun Hung Kai Properties Ltd. (Real Estate Management & Development) 203,000 1,718,766 ========================================================================== 5,529,257 ========================================================================== INDIA-0.83% Infosys Technologies Ltd.-ADR (IT Consulting & Services) 53,500 4,526,635 ========================================================================== ISRAEL-3.20% Teva Pharmaceutical Industries Ltd.-ADR (Pharmaceuticals) 306,200 17,419,718 ========================================================================== ITALY-2.23% Banca Intesa S.p.A. (Diversified Banks) 547,400 1,838,993 - -------------------------------------------------------------------------- Eni S.p.A. (Integrated Oil & Gas) 284,800 4,506,797 - -------------------------------------------------------------------------- Mediaset S.p.A. (Broadcasting & Cable TV)(a) 285,000 2,869,075 - -------------------------------------------------------------------------- UniCredito Italiano S.p.A. (Diversified Banks) 602,700 2,960,359 ========================================================================== 12,175,224 ========================================================================== JAPAN-10.37% Canon Inc. (Office Electronics) 170,000 8,230,797 - -------------------------------------------------------------------------- Fuji Photo Film Co., Ltd. (Photographic Products) 56,000 1,651,256 - -------------------------------------------------------------------------- Hirose Electric Co., Ltd. (Electronic Equipment Manufacturers) 54,200 6,664,015 - -------------------------------------------------------------------------- Hoya Corp. (Electronic Equipment Manufacturers) 100,200 9,073,444 - -------------------------------------------------------------------------- KDDI Corp. (Wireless Telecommunication Services) 740 4,020,568 - -------------------------------------------------------------------------- Keyence Corp. (Electronic Equipment Manufacturers) 33,300 7,327,940 - -------------------------------------------------------------------------- Nitto Denko Corp. (Specialty Chemicals) 176,800 9,284,092 - -------------------------------------------------------------------------- Ricoh Co., Ltd. (Office Electronics) 180,000 3,415,544 - -------------------------------------------------------------------------- Toyota Motor Corp. (Automobile Manufacturers) 98,100 2,794,439 - --------------------------------------------------------------------------
F-1
MARKET SHARES VALUE - -------------------------------------------------------------------------- JAPAN-(CONTINUED) Trend Micro Inc. (Application Software)(a) 144,600 $ 3,987,423 ========================================================================== 56,449,518 ========================================================================== MEXICO-0.86% Telefonos de Mexico S.A. de C.V.-ADR (Integrated Telecommunication Services) 35,500 1,141,325 - -------------------------------------------------------------------------- Wal-Mart de Mexico S.A. de C.V.-Series C (Hypermarkets & Super Centers) 1,350,600 3,529,859 ========================================================================== 4,671,184 ========================================================================== NETHERLANDS-1.86% ABN AMRO Holding N.V. (Diversified Banks) 135,830 2,840,208 - -------------------------------------------------------------------------- Aegon N.V. (Life & Health Insurance) 132,800 1,735,340 - -------------------------------------------------------------------------- Koninklijke (Royal) KPN N.V. (Integrated Telecommunication Services)(a) 506,600 3,838,135 - -------------------------------------------------------------------------- Koninklijke (Royal) Philips Electronics N.V. (Consumer Electronics) 63,700 1,711,266 ========================================================================== 10,124,949 ========================================================================== NORWAY-0.52% Telenor A.S.A (Integrated Telecommunication Services) 527,400 2,856,305 ========================================================================== SINGAPORE-0.41% Singapore Airlines Ltd. (Airlines)(a) 324,000 2,253,751 ========================================================================== SOUTH KOREA-1.79% Samsung Electronics Co., Ltd. (Electronic Equipment Manufacturers) 24,500 9,729,615 ========================================================================== SPAIN-1.05% Banco Popular Espanol S.A. (Diversified Banks) 53,310 2,762,389 - -------------------------------------------------------------------------- Repsol YPF, S.A. (Integrated Oil & Gas) 170,000 2,954,047 ========================================================================== 5,716,436 ========================================================================== SWEDEN-1.58% Atlas Copco A.B.-Class A (Industrial Machinery) 82,000 2,867,755 - -------------------------------------------------------------------------- Telefonaktiebolaget LM Ericsson A.B.-Class B (Communications Equipment) 1,551,500 2,653,592 - -------------------------------------------------------------------------- Volvo A.B.-Class B (Construction, Farm Machinery & Heavy Trucks) 110,000 3,060,743 ========================================================================== 8,582,090 ========================================================================== SWITZERLAND-3.42% Alcon, Inc. (Health Care Supplies) 79,000 4,353,690 - -------------------------------------------------------------------------- Credit Suisse Group (Diversified Capital Markets)(a) 137,339 4,820,800 - -------------------------------------------------------------------------- Nestle S.A. (Packaged Foods & Meats) 10,200 2,237,243 - --------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------- SWITZERLAND-(CONTINUED) Roche Holding A.G. (Pharmaceuticals) 39,800 $ 3,281,035 - -------------------------------------------------------------------------- UBS A.G. (Diversified Capital Markets) 64,330 3,935,437 ========================================================================== 18,628,205 ========================================================================== UNITED KINGDOM-12.36% AstraZeneca PLC (Pharmaceuticals) 155,375 7,288,962 - -------------------------------------------------------------------------- Barclays PLC (Diversified Banks) 445,000 3,748,304 - -------------------------------------------------------------------------- Centrica PLC (Gas Utilities) 1,100,750 3,441,942 - -------------------------------------------------------------------------- GlaxoSmithKline PLC (Pharmaceuticals) 191,200 4,089,457 - -------------------------------------------------------------------------- GUS PLC (Catalog Retail)(a) 386,500 4,716,289 - -------------------------------------------------------------------------- Imperial Tobacco Group PLC (Tobacco) 422,700 6,999,149 - -------------------------------------------------------------------------- Kingfisher PLC (Home Improvement Retail) 627,760 3,005,596 - -------------------------------------------------------------------------- mm02 PLC (Wireless Telecommunication Services)(a) 1,934,000 2,097,756 - -------------------------------------------------------------------------- Next PLC (Department Stores) 242,500 4,849,670 - -------------------------------------------------------------------------- Reckitt Benckiser PLC (Household Products) 317,950 6,681,885 - -------------------------------------------------------------------------- Smith & Nephew PLC (Health Care Supplies) 735,025 5,833,086 - -------------------------------------------------------------------------- Tesco PLC (Food Retail) 1,556,019 6,230,246 - -------------------------------------------------------------------------- Vodafone Group PLC (Wireless Telecommunication Services) 3,969,810 8,325,942 ========================================================================== 67,308,284 ========================================================================== Total Foreign Stocks & Other Equity Interests (Cost $234,948,732) 300,449,528 ========================================================================== DOMESTIC COMMON STOCKS-40.38% APPAREL RETAIL-0.60% Gap, Inc. (The) 170,000 3,243,600 ========================================================================== BIOTECHNOLOGY-1.37% Amgen Inc.(a) 121,000 7,472,960 ========================================================================== CASINOS & GAMING-0.87% International Game Technology 144,000 4,716,000 ========================================================================== COMMUNICATIONS EQUIPMENT-1.06% Cisco Systems, Inc.(a) 275,000 5,769,500 ========================================================================== COMPUTER & ELECTRONICS RETAIL-1.07% Best Buy Co., Inc. 100,000 5,831,000 ========================================================================== COMPUTER HARDWARE-1.35% Dell Inc.(a) 120,000 4,334,400 - -------------------------------------------------------------------------- International Business Machines Corp. 34,000 3,042,320 ========================================================================== 7,376,720 ==========================================================================
F-2
MARKET SHARES VALUE - -------------------------------------------------------------------------- COMPUTER STORAGE & PERIPHERALS-1.21% EMC Corp.(a) 475,000 $ 6,574,000 ========================================================================== CONSUMER FINANCE-0.84% SLM Corp. 117,000 4,581,720 ========================================================================== DATA PROCESSING & OUTSOURCED SERVICES-0.92% First Data Corp. 140,000 4,998,000 ========================================================================== DIVERSIFIED CAPITAL MARKETS-1.05% J.P. Morgan Chase & Co. 160,000 5,744,000 ========================================================================== DIVERSIFIED COMMERCIAL SERVICES-1.11% Apollo Group, Inc.-Class A(a) 95,000 6,035,350 ========================================================================== FOOTWEAR-0.65% NIKE, Inc.-Class B 55,000 3,514,500 ========================================================================== HEALTH CARE EQUIPMENT-3.01% Boston Scientific Corp.(a) 85,000 5,756,200 - -------------------------------------------------------------------------- Guidant Corp. 82,500 4,208,325 - -------------------------------------------------------------------------- Medtronic, Inc. 57,000 2,597,490 - -------------------------------------------------------------------------- Zimmer Holdings, Inc.(a) 60,000 3,828,600 ========================================================================== 16,390,615 ========================================================================== HOME IMPROVEMENT RETAIL-0.88% Home Depot, Inc. (The) 130,000 4,819,100 ========================================================================== HOUSEHOLD PRODUCTS-1.35% Procter & Gamble Co. (The) 75,000 7,371,750 ========================================================================== HYPERMARKETS & SUPER CENTERS-1.03% Wal-Mart Stores, Inc. 95,000 5,600,250 ========================================================================== INDUSTRIAL CONGLOMERATES-0.51% 3M Co. 35,000 2,760,450 ========================================================================== INTEGRATED OIL & GAS-0.54% Exxon Mobil Corp. 80,000 2,926,400 ========================================================================== INTERNET RETAIL-2.13% Amazon.com, Inc.(a) 100,000 5,442,000 - -------------------------------------------------------------------------- eBay Inc.(a) 110,000 6,153,400 ========================================================================== 11,595,400 ========================================================================== INTERNET SOFTWARE & SERVICES-1.32% Yahoo! Inc.(a) 165,000 7,210,500 ==========================================================================
MARKET SHARES VALUE - -------------------------------------------------------------------------- INVESTMENT BANKING & BROKERAGE-1.00% Goldman Sachs Group, Inc. (The) 58,000 $ 5,446,200 ========================================================================== MANAGED HEALTH CARE-1.57% Aetna Inc. 47,000 2,698,270 - -------------------------------------------------------------------------- UnitedHealth Group Inc. 115,000 5,851,200 ========================================================================== 8,549,470 ========================================================================== MOVIES & ENTERTAINMENT-0.48% Viacom Inc.-Class B 65,000 2,591,550 ========================================================================== OTHER DIVERSIFIED FINANCIAL SERVICES-1.48% Citigroup Inc. 170,000 8,058,000 ========================================================================== PERSONAL PRODUCTS-0.69% Avon Products, Inc. 55,000 3,737,800 ========================================================================== PHARMACEUTICALS-2.18% Allergan, Inc. 33,000 2,495,460 - -------------------------------------------------------------------------- Pfizer Inc. 165,000 5,214,000 - -------------------------------------------------------------------------- Wyeth 94,000 4,149,160 ========================================================================== 11,858,620 ========================================================================== SEMICONDUCTOR EQUIPMENT-0.87% Novellus Systems, Inc.(a) 115,000 4,748,350 ========================================================================== SEMICONDUCTORS-4.11% Analog Devices, Inc.(a) 110,000 4,876,300 - -------------------------------------------------------------------------- Intel Corp. 240,000 7,932,000 - -------------------------------------------------------------------------- Linear Technology Corp. 110,000 4,687,100 - -------------------------------------------------------------------------- Microchip Technology Inc. 150,000 4,906,500 ========================================================================== 22,401,900 ========================================================================== SOFT DRINKS-0.53% PepsiCo, Inc. 60,000 2,869,200 ========================================================================== SPECIALTY STORES-0.66% Bed Bath & Beyond Inc.(a) 85,000 3,590,400 ========================================================================== SYSTEMS SOFTWARE-3.94% Microsoft Corp. 350,000 9,152,500 - -------------------------------------------------------------------------- Oracle Corp.(a) 350,000 4,186,000 - -------------------------------------------------------------------------- VERITAS Software Corp.(a) 225,000 8,133,750 ========================================================================== 21,472,250 ========================================================================== Total Domestic Common Stocks (Cost $171,643,319) 219,855,555 ==========================================================================
F-3
PRINCIPAL MARKET AMOUNT VALUE - -------------------------------------------------------------------------- U.S. TREASURY BILLS-0.37% 0.85%, 12/18/03 (Cost $1,997,781)(c) $2,000,000(d) $ 1,997,781 ==========================================================================
SHARES MONEY MARKET FUNDS-3.47% STIC Liquid Assets Portfolio(e) 9,455,693 9,455,693 - -------------------------------------------------------------------------- STIC Prime Portfolio(e) 9,455,693 9,455,693 ========================================================================== Total Money Market Funds (Cost $18,911,386) 18,911,386 ========================================================================== TOTAL INVESTMENTS-99.40% (excluding investments purchased with cash collateral from securities loaned) (Cost $427,501,218) 541,214,250 ==========================================================================
MARKET SHARES VALUE - -------------------------------------------------------------------------- INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED MONEY MARKET FUNDS-5.96% STIC Liquid Assets Portfolio(e)(f) 32,430,653 $ 32,430,653 ========================================================================== Total Money Market Funds (purchased with cash collateral from securities loaned) (Cost $32,430,653) 32,430,653 ========================================================================== TOTAL INVESTMENTS-105.36% (Cost $459,931,871) 573,644,903 ========================================================================== OTHER ASSETS LESS LIABILITIES-(5.36%) (29,171,009) ========================================================================== NET ASSETS-100.00% $544,473,894 __________________________________________________________________________ ==========================================================================
Investment Abbreviations: ADR - American Depositary Receipt
Notes to Schedule of Investments: (a) Non-income producing security. (b) Security not registered under the Securities Act of 1933, as amended (e.g., the security was purchased in a Rule 144A transaction or a Regulation D transaction). The security may be resold only pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The Fund has no rights to demand registration of these securities. The market value of this security at 10/31/03 represented 0.60% of the Fund's net assets. Unless otherwise indicated, this security is not considered to be illiquid. (c) Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund. (d) A portion of the principal balance was pledged as collateral to cover margin requirements for open futures contracts. See Note 1 section H and Note 8. (e) The money market fund and the Fund are affiliated by having the same investment advisor. (f) The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Notes to Financial Statements. F-4 STATEMENT OF ASSETS AND LIABILITIES October 31, 2003 ASSETS: Investments, at market value (cost $408,589,832)* $ 522,302,864 - ------------------------------------------------------------ Investments in affiliated money market funds (cost $51,342,039) 51,342,039 - ------------------------------------------------------------ Foreign currencies, at value (cost $1,823,326) 1,805,635 - ------------------------------------------------------------ Receivables for: Investments sold 7,090,052 - ------------------------------------------------------------ Variation margin 5,139 - ------------------------------------------------------------ Capital stock sold 201,009 - ------------------------------------------------------------ Dividends and interest 593,849 - ------------------------------------------------------------ Investment for deferred compensation plan 49,371 - ------------------------------------------------------------ Other assets 36,512 ============================================================ Total assets 583,426,470 ____________________________________________________________ ============================================================ LIABILITIES: Payables for: Investments purchased 2,994,078 - ------------------------------------------------------------ Capital stock reacquired 2,449,725 - ------------------------------------------------------------ Deferred compensation plan 49,371 - ------------------------------------------------------------ Collateral upon return of securities loaned 32,430,653 - ------------------------------------------------------------ Accrued distribution fees 315,504 - ------------------------------------------------------------ Accrued directors' fees 28,659 - ------------------------------------------------------------ Accrued transfer agent fees 383,358 - ------------------------------------------------------------ Accrued operating expenses 301,228 ============================================================ Total liabilities 38,952,576 ============================================================ Net assets applicable to shares outstanding $ 544,473,894 ____________________________________________________________ ============================================================ NET ASSETS CONSIST OF: Capital (par value and additional paid-in) $ 883,610,818 - ------------------------------------------------------------ Undistributed net investment income (loss) (79,013) - ------------------------------------------------------------ Undistributed net realized gain (loss) from investment securities, foreign currencies, futures contracts and option contracts (453,018,495) - ------------------------------------------------------------ Unrealized appreciation of investment securities, foreign currencies and futures contracts 113,960,584 ============================================================ $ 544,473,894 ____________________________________________________________ ============================================================ NET ASSETS: Class A $ 329,738,979 ____________________________________________________________ ============================================================ Class B $ 181,890,932 ____________________________________________________________ ============================================================ Class C $ 32,843,983 ____________________________________________________________ ============================================================ CAPITAL STOCK, $0.001 PAR VALUE PER SHARE: Class A: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 22,116,661 ____________________________________________________________ ============================================================ Class B: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 12,830,760 ____________________________________________________________ ============================================================ Class C: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 2,315,729 ____________________________________________________________ ============================================================ Class A: Net asset value per share $ 14.91 - ------------------------------------------------------------ Offering price per share: (Net asset value of $14.91 divided by 95.25%) $ 15.65 ____________________________________________________________ ============================================================ Class B: Net asset value and offering price per share $ 14.18 ____________________________________________________________ ============================================================ Class C: Net asset value and offering price per share $ 14.18 ____________________________________________________________ ============================================================
* At October 31, 2003, securities with an aggregate market value of $30,924,556 were on loan to brokers. See Notes to Financial Statements. F-5 STATEMENT OF OPERATIONS For the year ended October 31, 2003 INVESTMENT INCOME: Dividends (net of foreign withholding tax of $694,061) $ 7,364,117 - ------------------------------------------------------------------------- Dividends from affiliated money market funds 288,908 - ------------------------------------------------------------------------- Interest 15,263 - ------------------------------------------------------------------------- Securities lending 283,347 ========================================================================= Total investment income 7,951,635 ========================================================================= EXPENSES: Advisory fees 4,616,269 - ------------------------------------------------------------------------- Administrative services fees 142,045 - ------------------------------------------------------------------------- Custodian fees 318,974 - ------------------------------------------------------------------------- Distribution fees: Class A 1,639,781 - ------------------------------------------------------------------------- Class B 1,832,533 - ------------------------------------------------------------------------- Class C 318,810 - ------------------------------------------------------------------------- Transfer agent fees 2,792,448 - ------------------------------------------------------------------------- Directors' fees 18,746 - ------------------------------------------------------------------------- Other 490,651 ========================================================================= Total expenses 12,170,257 ========================================================================= Less: Fees waived, expenses reimbursed and expense offset arrangements (40,680) ========================================================================= Net expenses 12,129,577 ========================================================================= Net investment income (loss) (4,177,942) ========================================================================= REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES, FOREIGN CURRENCIES, FUTURES CONTRACTS AND OPTION CONTRACTS: Net realized gain (loss) from: Investment securities (9,250,227) - ------------------------------------------------------------------------- Foreign currencies 873,544 - ------------------------------------------------------------------------- Futures contracts 997,479 - ------------------------------------------------------------------------- Option contracts written 313,095 ========================================================================= (7,066,109) ========================================================================= Change in net unrealized appreciation (depreciation) of: Investment securities 99,287,098 - ------------------------------------------------------------------------- Foreign currencies (35,074) - ------------------------------------------------------------------------- Futures contracts 255,322 - ------------------------------------------------------------------------- Option contracts written (7,821) ========================================================================= 99,499,525 ========================================================================= Net gain from investment securities, foreign currencies, futures contracts and option contracts 92,433,416 ========================================================================= Net increase in net assets resulting from operations $88,255,474 _________________________________________________________________________ =========================================================================
See Notes to Financial Statements. F-6 STATEMENT OF CHANGES IN NET ASSETS For the years ended October 31, 2003 and 2002
2003 2002 - -------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $ (4,177,942) $ (7,462,645) - -------------------------------------------------------------------------------------------- Net realized gain (loss) from investment securities, foreign currencies, futures contracts and option contracts (7,066,109) (100,653,432) - -------------------------------------------------------------------------------------------- Change in net unrealized appreciation of investment securities, foreign currencies, futures contracts and option contracts 99,499,525 18,740,463 ============================================================================================ Net increase (decrease) in net assets resulting from operations 88,255,474 (89,375,614) ============================================================================================ Share transactions-net: Class A (61,964,974) (52,935,575) - -------------------------------------------------------------------------------------------- Class B (51,840,921) (129,582,901) - -------------------------------------------------------------------------------------------- Class C (6,896,642) (11,592,089) ============================================================================================ Net increase (decrease) in net assets resulting from share transactions (120,702,537) (194,110,565) ============================================================================================ Net increase (decrease) in net assets (32,447,063) (283,486,179) ============================================================================================ NET ASSETS: Beginning of year 576,920,957 860,407,136 ============================================================================================ End of year (including undistributed investment income (loss) of $(79,013) and $(68,156) for 2003 and 2002, respectively) $ 544,473,894 $ 576,920,957 ____________________________________________________________________________________________ ============================================================================================
See Notes to Financial Statements. F-7 NOTES TO FINANCIAL STATEMENTS October 31, 2003 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM Global Growth Fund (the "Fund") is a series portfolio of AIM International Funds, Inc. (the "Company"). The Company is a Maryland corporation registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of five separate portfolios. The Fund currently offers multiple classes of shares. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Effective November 25, 2003, the Fund redomesticated as a series portfolio of a newly formed Delaware statutory trust, AIM International Mutual Funds. The Fund's investment objective is long-term growth of capital. Each company listed in the Schedule of Investments is organized in the United States unless otherwise noted. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not securities reported on the NASDAQ National Market System) is valued on the basis of prices furnished by independent pricing services or market makers. Each security reported on the NASDAQ National Market System is valued at the NASDAQ Official Closing Price ("NOCP") as of the close of the customary trading session on the valuation date or absent a NOCP, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Company's officers in a manner specifically authorized by the Board of Directors of the Company. Market trends, movement in exchange traded funds and ADRs, and the bid/ask quotes of brokers and information providers may be reviewed in the course of making a good faith determination of a security's fair value. Short-term obligations having 60 days or less to maturity and commercial paper are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Foreign securities are converted into U.S. dollar amounts using exchange rates as of the close of the NYSE. Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of the close of the respective markets. Occasionally, events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE which would not ordinarily be reflected in the computation of the Fund's net asset value. If a development/event is so significant that there is a reasonably high degree of certainty as to both the effect and the degree of effect that the development/event has actually caused that closing price to no longer reflect actual value, the closing prices, as determined at the close of the applicable foreign market, may be adjusted to reflect the fair value of the affected foreign securities as of the close of the NYSE as determined in good faith by or under the supervision of the Board of Directors. 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 on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date. The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class. C. DISTRIBUTIONS -- Distributions from income and net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes. D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M 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 gain) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. Any capital loss carryforwards listed are reduced for limitations, if any, to the extent required by the Internal Revenue Code. F-8 E. FOREIGN CURRENCY TRANSLATIONS -- Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. F. FOREIGN CURRENCY CONTRACTS -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund may enter into a foreign currency contract to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. The Fund may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Fund could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. G. COVERED CALL OPTIONS -- The Fund may write call options, on a covered basis; that is, the Fund will own the underlying security. When the Fund writes a covered call option, an amount equal to the premium received by the Fund is recorded as an asset and an equivalent liability. The amount of the liability is subsequently "marked-to-market" to reflect the current market value of the option written. The current market value of a written option is the mean between the last bid and asked prices on that day. If a written call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. A risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. H. FUTURES CONTRACTS -- The Fund may purchase or sell futures contracts as a hedge against changes in market conditions. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities as collateral for the account of the broker (the Fund's agent in acquiring the futures position). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by "marking to market" on a daily basis to reflect the market value of the contracts at the end of each day's trading. Variation margin payments are made or received depending upon whether unrealized gains or losses are incurred. When the contracts are closed, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund's basis in the contract. Risks also include to varying degrees, the risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities. I. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. 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 0.85% of the first $1 billion of the Fund's average daily net assets, plus 0.80% of the Fund's average daily net assets in excess of $1 billion. AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of 25% of the advisory fee AIM receives from the affiliated money market funds in which the Fund has invested (excluding investments made in affiliated money market funds with cash collateral from securities loaned by the Fund). For the year ended October 31, 2003, AIM waived fees of $5,828. Under a prior agreement to limit the aggregate costs of certain shareholder services provided by third party administrators, AIM reimbursed fees of $24,370 for Class A, Class B and Class C shares based on the relative net assets of those classes. 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 October 31, 2003, AIM was paid $142,045 for such services. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay AIM Investment Services, Inc. ("AISI"), formerly known as A I M Fund Services, Inc., a fee for providing transfer agency and shareholder services to the Fund. During the year ended October 31, 2003, AISI retained $1,536,624 for such services. The Company has entered into master distribution agreements with A I M Distributors, Inc. ("AIM Distributors") to serve as the distributor for the Class A, Class B and Class C shares of the Fund. The Company has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A, Class B and Class C shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays AIM Distributors compensation at the annual rate of 0.50% of the Fund's average daily net assets of Class A shares and 1.00% of the average daily net assets of Class B and Class C shares. Of these amounts, AIM Distributors may pay a service fee up to 0.25% of the average daily net assets of the Class A, Class B or Class C shares to selected dealers and financial institutions who furnish continuing personal shareholder services to their customers F-9 who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. NASD Rules also impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. Pursuant to the Plans, for the year ended October 31, 2003, the Class A, Class B and Class C shares paid $1,639,781, $1,832,533 and $318,810, respectively. Front-end sales commissions and contingent deferred sales charges ("CDSC") (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During year ended October 31, 2003, AIM Distributors retained $44,111 in front-end sales commissions from the sale of Class A shares and $43,611, $374 and $72,935 from Class A, Class B and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders. Certain officers and directors of the Company are officers and directors of AIM, AISI and/or AIM Distributors. NOTE 3--EXPENSE OFFSET ARRANGEMENTS For the year ended October 31, 2003, the Fund received reductions in transfer agency fees from AISI (an affiliate of AIM) of $10,482 under an expense offset arrangement which resulted in a reduction of the Fund's total expenses of $10,482. NOTE 4--DIRECTORS' FEES Directors' fees represent remuneration paid to each Director of the Company who is not an "interested person" of AIM. Directors have the option to defer compensation payable by the Company. The Directors deferring compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Current Directors are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Directors over a period of time based on the number of years of service. Certain former Directors also participate in a retirement plan and receive benefits under such plan. During the year ended October 31, 2003, the Fund paid legal fees of $3,154 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Directors. A member of that firm is a Director of the Company. NOTE 5--BORROWINGS The Fund may participate in an interfund lending facility that AIM has established for temporary borrowings by the AIM Funds. An interfund loan will be made under this facility only if the loan rate (an average of the rate available on bank loans and the rate available on investments in overnight repurchase agreements) is favorable to both the lending fund and the borrowing fund. Under certain circumstances, a loan will be secured by collateral. To the extent that the loan is required to be secured by collateral, the collateral is marked to market daily to ensure that the market value is at least 102% of the outstanding principal value of the loan. Effective June 26, 2003, the Fund became a participant in an uncommitted unsecured revolving line of credit facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the lesser of (i) $125,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit can borrow on a first come, first served basis. Principal on each loan outstanding shall bear interest at the bid rate quoted by SSB at the time of the request for the loan. During the reporting period, the Fund was a participant in a committed line of credit facility with a syndicate administered by Citibank, N.A. The Fund could borrow up to the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which were parties to the line of credit could borrow on a first come, first served basis. The funds which were party to the line of credit were charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee was allocated among the funds based on their respective average net assets for the period. The committed line of credit facility expired May 20, 2003. During the year ended October 31, 2003, the Fund did not borrow or lend under the interfund lending facility or borrow under either the uncommitted unsecured revolving line of credit facility or the committed line of credit facility. Additionally the Fund is permitted to carry a negative or overdrawn balance in its account with the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds in the account so the custodian can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank. In either case, the custodian bank will be compensated an amount equal to the Federal Funds rate plus 100 basis points. NOTE 6--PORTFOLIO SECURITIES LOANED The Fund may lend portfolio securities to the extent of one-third of the Fund's total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Cash collateral pursuant to these loans is invested in short-term money market instruments or affiliated money market funds. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. It is the Fund's policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. At October 31, 2003, securities with an aggregate value of $30,924,556 were on loan to brokers. The loans were secured by cash collateral of $32,430,653 received by the Fund and subsequently invested in an affiliated money market fund. For the year ended October 31, 2003, the Fund received fees of $283,347 for securities lending. F-10 NOTE 7--OPTION CONTRACTS WRITTEN
TRANSACTIONS DURING THE PERIOD - ---------------------------------------------------------- CALL OPTION CONTRACTS ---------------------- NUMBER OF PREMIUMS CONTRACTS RECEIVED - ---------------------------------------------------------- Beginning of period 260 $ 65,671 - ---------------------------------------------------------- Written 4,190 870,709 - ---------------------------------------------------------- Closed (2,080) (541,172) - ---------------------------------------------------------- Exercised (2,370) (395,208) ========================================================== End of period -- $ -- __________________________________________________________ ==========================================================
NOTE 8--FUTURES CONTRACTS On October 31, 2003, $1,250,000 principal amount of U.S. Treasury obligations were pledged as collateral to cover margin requirements for open futures contracts. OPEN FUTURES CONTRACTS - ---------------------------------------------------------------------------
NO. OF MONTH/ MARKET UNREALIZED CONTRACT CONTRACTS COMMITMENT VALUE APPRECIATION - --------------------------------------------------------------------------- Dow Jones Eurostoxx 50 35 Dec.-03/Long $1,048,108 $ 56,896 - --------------------------------------------------------------------------- FTSE 100 Index 8 Dec.-03/Long 582,604 14,729 - --------------------------------------------------------------------------- S&P 500 Index 21 Dec.-03/Long 5,509,875 175,728 - --------------------------------------------------------------------------- S&P 500/ TSE 60 Index 4 Dec.-03/Long 264,786 7,969 =========================================================================== $7,405,373 $255,322 ___________________________________________________________________________ ===========================================================================
NOTE 9--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS Distributions to Shareholders: There were no ordinary income or long-term capital gain distributions paid during the years ended October 31, 2003 and 2002. Tax Components of Net Assets: As of October 31, 2003, the components of net assets on a tax basis were as follows: Unrealized appreciation -- investments $ 112,776,515 - ------------------------------------------------------------ Temporary book/tax differences (79,013) - ------------------------------------------------------------ Capital loss carryforward (451,834,426) - ------------------------------------------------------------ Capital (par value and additional paid-in) 883,610,818 ============================================================ Total net assets $ 544,473,894 ____________________________________________________________ ============================================================
The difference between book-basis and tax-basis unrealized appreciation is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's unrealized appreciation difference is attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on certain futures contracts. The tax-basis unrealized appreciation on investments amount includes appreciation (depreciation) on foreign currencies of $(7,770) and $79,594 on futures contracts. The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund's temporary book/tax differences are the result of the deferral of director compensation and director retirement plan expenses. The Fund has a capital loss carryforward for tax purposes which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD - ---------------------------------------------------------- October 31, 2009 $339,470,549 - ---------------------------------------------------------- October 31, 2010 101,042,257 - ---------------------------------------------------------- October 31, 2011 11,321,620 ========================================================== Total capital loss carryforward $451,834,426 __________________________________________________________ ==========================================================
NOTE 10--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities and money market funds) purchased and sold by the Fund during the year ended October 31, 2003 was $385,167,710 and $505,155,230, respectively.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - ----------------------------------------------------------- Aggregate unrealized appreciation of investment securities $116,412,403 - ----------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (3,707,712) =========================================================== Net unrealized appreciation of investment securities $112,704,691 ___________________________________________________________ =========================================================== Cost of investments for tax purposes is $460,940,212.
NOTE 11--RECLASSIFICATION OF PERMANENT DIFFERENCES Primarily as a result of differing book/tax treatment of disallowance of redomestication expenses, net operating losses and foreign currencies transactions on October 31, 2003, undistributed net investment income (loss) was increased by $4,167,085, undistributed net realized gains (losses) decreased by $875,168 and paid in capital decreased by $3,291,917. This reclassification had no effect on net assets of the Fund. F-11 NOTE 12--CAPITAL STOCK INFORMATION The Fund currently offers three different classes of shares: Class A shares, Class B shares and Class C shares. Class A shares are sold with a front-end sales charge. Class B shares and Class C shares are sold with CDSC. Under some circumstances, Class A shares are subject to CDSC. Generally, Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase.
CHANGES IN SHARES OUTSTANDING - -------------------------------------------------------------------------------------------------------------------------- YEAR ENDED OCTOBER 31, ------------------------------------------------------------ 2003 2002 ---------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------------------------------------------- Sold: Class A 51,726,502 $ 670,164,581 34,069,111 $ 487,124,735 - -------------------------------------------------------------------------------------------------------------------------- Class B 752,382 9,376,506 1,053,636 14,789,675 - -------------------------------------------------------------------------------------------------------------------------- Class C 1,419,606 17,656,486 1,832,747 23,276,761 ========================================================================================================================== Automatic conversion of Class B shares to Class A shares: Class A 1,238,115 16,013,175 2,493,588 36,815,557 - -------------------------------------------------------------------------------------------------------------------------- Class B (1,298,734) (16,013,175) (2,576,415) (36,815,557) ========================================================================================================================== Reacquired: Class A (57,392,873) (748,142,730) (40,176,531) (576,875,867) - -------------------------------------------------------------------------------------------------------------------------- Class B (3,671,639) (45,204,252) (7,795,399) (107,557,019) - -------------------------------------------------------------------------------------------------------------------------- Class C (1,977,996) (24,553,128) (2,644,180) (34,868,850) ========================================================================================================================== (9,204,637) $(120,702,537) (13,743,443) $(194,110,565) __________________________________________________________________________________________________________________________ ==========================================================================================================================
NOTE 13--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A ------------------------------------------------------------------- YEAR ENDED OCTOBER 31, ------------------------------------------------------------------- 2003 2002 2001 2000 1999 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.66 $ 14.58 $ 24.83 $ 23.43 $ 17.91 - --------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.08) (0.11)(a) (0.13) (0.03)(a) (0.10) - --------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 2.33 (1.81) (10.08) 2.77 6.12 ================================================================================================================================= Total from investment operations 2.25 (1.92) (10.21) 2.74 6.02 ================================================================================================================================= Less distributions from net realized gains -- -- (0.04) (1.34) (0.50) ================================================================================================================================= Net asset value, end of period $ 14.91 $ 12.66 $ 14.58 $ 24.83 $ 23.43 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Total return(b) 17.77% (13.17)% (41.17)% 11.52% 34.43% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $329,739 $335,954 $439,612 $796,992 $388,549 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratio of expenses to average net assets 2.04%(c) 1.95% 1.68%(d) 1.62%(d) 1.67% ================================================================================================================================= Ratio of net investment income (loss) to average net assets (0.58)%(c) (0.75)% (0.66)% (0.10)% (0.57)% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Portfolio turnover rate 75% 98% 134% 110% 93% _________________________________________________________________________________________________________________________________ =================================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustment in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $327,956,190. (d) After fee waivers. Ratio of expenses to average net assets prior to fee waivers were 1.79% and 1.63% for the year ended 2001 and 2000, respectively. F-12 NOTE 13--FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B ------------------------------------------------------------------- YEAR ENDED OCTOBER 31, ------------------------------------------------------------------- 2003 2002 2001 2000 1999 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.09 $ 14.00 $ 23.98 $ 22.78 $ 17.52 - --------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.15) (0.17)(a) (0.24) (0.17)(a) (0.23)(a) - --------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 2.24 (1.74) (9.70) 2.71 5.99 ================================================================================================================================= Total from investment operations 2.09 (1.91) (9.94) 2.54 5.76 ================================================================================================================================= Less distributions from net realized gains -- -- (0.04) (1.34) (0.50) ================================================================================================================================= Net asset value, end of period $ 14.18 $ 12.09 $ 14.00 $ 23.98 $ 22.78 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Total return(b) 17.29% (13.64)% (41.50)% 10.95% 33.69% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $181,891 $206,189 $369,171 $806,409 $425,345 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratio of expenses to average net assets 2.54%(c) 2.45% 2.19%(d) 2.16%(d) 2.23% ================================================================================================================================= Ratio of net investment income (loss) to average net assets (1.08)%(c) (1.25)% (1.16)% (0.64)% (1.13)% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Portfolio turnover rate 75% 98% 134% 110% 93% _________________________________________________________________________________________________________________________________ =================================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustment in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $183,253,282. (d) After fee waivers. Ratio of expenses to average net assets prior to fee waivers were 2.30% and 2.17% for the year ended 2001 and 2000, respectively.
CLASS C ----------------------------------------------------------------- YEAR ENDED OCTOBER 31, ----------------------------------------------------------------- 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.10 $ 14.01 $ 23.98 $ 22.79 $ 17.52 - ------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.15) (0.17)(a) (0.22) (0.17)(a) (0.23)(a) - ------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 2.23 (1.74) (9.71) 2.70 6.00 =============================================================================================================================== Total from investment operations 2.08 (1.91) (9.93) 2.53 5.77 =============================================================================================================================== Less distributions from net realized gains -- -- (0.04) (1.34) (0.50) =============================================================================================================================== Net asset value, end of period $ 14.18 $ 12.10 $ 14.01 $ 23.98 $ 22.79 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Total return(b) 17.19% (13.63)% (41.46)% 10.90% 33.69% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $ 32,844 $ 34,778 $ 51,624 $ 88,810 $ 31,356 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratio of expenses to average net assets 2.54%(c) 2.45% 2.19%(d) 2.16%(d) 2.23% =============================================================================================================================== Ratio of net investment income (loss) to average net assets (1.08)%(c) (1.25)% (1.16)% (0.64)% (1.13)% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Portfolio turnover rate 75% 98% 134% 110% 93% _______________________________________________________________________________________________________________________________ ===============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustment in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $31,880,974. (d) After fee waivers. Ratio of expenses to average net assets prior to fee waivers were 2.30% and 2.17% for the year ended 2001 and 2000, respectively. F-13 NOTE 14--SUBSEQUENT EVENTS Your Fund's investment advisor, A I M Advisors, Inc. ("AIM") is an indirect wholly owned subsidiary of AMVESCAP PLC ("AMVESCAP"). Another indirect wholly owned subsidiary of AMVESCAP, INVESCO Funds Group, Inc. ("INVESCO"), was, until recently, the investment advisor to the INVESCO Funds. On December 2, 2003, each of the Securities and Exchange Commission ("SEC") and the Office of the Attorney General of the State of New York ("NYAG") filed civil proceedings against INVESCO and Raymond R. Cunningham, in his capacity as the Chief Executive Officer of INVESCO. Mr. Cunningham currently holds the positions of Chief Operating Officer and Senior Vice President of A I M Management Group, Inc., the parent company of AIM, and he also holds the position of Senior Vice President with AIM. In addition, on December 2, 2003, the State of Colorado filed civil proceedings against INVESCO. Neither your Fund nor any of the funds in the AIM Family of Funds(R), which includes the INVESCO Funds (the "Funds") has been named as a defendant in any of these proceedings. The SEC proceeding alleges that INVESCO failed to disclose in the INVESCO Funds' prospectuses and to the INVESCO Funds' independent directors that INVESCO had entered into certain arrangements permitting market timing of the INVESCO Funds. The SEC is seeking injunctions, including permanent injunctions from serving as an investment advisor, officer or director of an investment company; an accounting of all market timing as well as certain fees and compensation received; disgorgement; civil monetary penalties; and other relief. The NYAG proceeding is also based on the circumstances described above. The NYAG is seeking injunctions, including permanent injunctions from directly or indirectly selling or distributing shares of mutual funds; disgorgement of all profits obtained, including fees collected, and payment of all restitution and damages caused, directly or indirectly from the alleged illegal activities; civil monetary penalties; and other relief. The Colorado proceeding is also based on the circumstances described above. The State of Colorado is seeking injunctions; restitution, disgorgement and other equitable relief; civil monetary penalties; and other relief. If INVESCO is unsuccessful in its defense of these proceedings, it could be barred from serving as an investment advisor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Similarly, if Mr. Cunningham is unsuccessful in his defense of these proceedings, he could be barred from serving as an officer or director of any registered investment company. Such results could also affect the ability of AIM, or any other investment advisor directly or indirectly owned by AMVESCAP, from serving as an investment advisor to any registered investment company, including your Fund. Your Fund has been informed by AIM that, if either of these results occurs, AIM will seek exemptive relief from the SEC to permit it to continue to serve as your Fund's investment advisor. There can be no assurance that such exemptive relief will be granted. AIM has received inquiries from the SEC, the NASD, Inc., the NYAG and the Secretary of the Commonwealth of Massachusetts with respect to market timing, late trading, fair value pricing and other similar issues and AIM has been providing full cooperation with respect to these inquiries. In addition to the complaints described above, multiple lawsuits, including purported class action and shareholder derivative suits, have been filed against certain Funds, INVESCO, AIM, AMVESCAP and certain related parties, primarily based upon the allegations in the complaints described above, but also regarding the funds' fair valuation pricing methodology. Such lawsuits allege a variety of theories for recovery including, but not limited to: (i) violation of various provisions of the Federal securities laws; (ii) breach of fiduciary duty; and (iii) breach of contract. The lawsuits have been filed in both Federal and state courts and seek such remedies as compensatory damages; restitution; rescission; accounting for wrongfully gotten gains, profits and compensation; injunctive relief; disgorgement; equitable relief; interest and the payment of attorneys' and experts' fees. Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the Funds, INVESCO, AIM, AMVESCAP and related parties in the future. As a result of these developments, investors in the Funds might react by redeeming their investments. This might require the Funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the Funds. At the present time, management of AIM and the Fund is unable to estimate the impact, if any, that the outcome of these matters described above may have on the Fund or AIM's financial condition. F-14 REPORT OF INDEPENDENT AUDITORS To the Board of Directors/Trustees and Shareholders of AIM Global Growth Fund In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the AIM Global Growth Fund (one of the funds constituting AIM International Funds, Inc., now known as AIM International Mutual Funds; hereafter referred to as the "Fund") at October 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The financial highlights for each of the periods ended on or before October 31, 2000 were audited by other independent accountants whose report dated December 6, 2000, expressed an unqualified opinion on the financial highlights. PRICEWATERHOUSECOOPERS LLP December 16, 2003 Houston, Texas F-15 PROXY RESULTS (UNAUDITED) A Special Meeting of Shareholders of AIM International Funds, Inc., a Maryland corporation, was held on October 21, 2003. The meeting was adjourned and reconvened on October 28, 2003, on November 4, 2003, on November 11, 2003, on November 17, 2003 and reconvened on November 21, 2003. The meeting was held for the following purposes: (1)* To elect sixteen individuals to the Board, each of whom will serve until his or her successor is elected and qualified: Bob R. Baker, Frank S. Bayley, James T. Bunch, Bruce L. Crockett, Albert R. Dowden, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H. Graham, Gerald J. Lewis, Prema Mathai-Davis, Lewis F. Pennock, Ruth H. Quigley, Louis S. Sklar, Larry Soll, Ph.D. and Mark H. Williamson. (2)* To approve an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation. The results of the voting on the above matters were as follows:
WITHHOLDING DIRECTORS/MATTER VOTES FOR AUTHORITY - --------------------------------------------------------------------------------- (1)* Bob R. Baker................................. 162,211,196 3,444,279 Frank S. Bayley.............................. 162,236,962 3,418,513 James T. Bunch............................... 162,287,588 3,367,887 Bruce L. Crockett............................ 162,276,496 3,378,979 Albert R. Dowden............................. 162,251,386 3,404,089 Edward K. Dunn, Jr. ......................... 162,221,226 3,434,249 Jack M. Fields............................... 162,278,318 3,377,157 Carl Frischling.............................. 162,182,906 3,472,569 Robert H. Graham............................. 162,243,892 3,411,583 Gerald J. Lewis.............................. 162,147,868 3,507,607 Prema Mathai-Davis........................... 162,219,866 3,435,609 Lewis F. Pennock............................. 162,263,207 3,392,268 Ruth H. Quigley.............................. 162,163,064 3,492,411 Louis S. Sklar............................... 162,243,759 3,411,716 Larry Soll, Ph.D. ........................... 162,236,226 3,419,249 Mark H. Williamson........................... 162,238,962 3,416,513
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 76,302,938 2,822,366 86,530,171**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on October 28, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 84,066,011 2,989,031 83,338,957**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 4, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 95,512,525 3,144,748 78,504,573**
F-16 PROXY RESULTS (UNAUDITED) (CONTINUED) The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 11, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 109,217,698 3,531,752 71,913,039**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 17, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 116,710,545 3,761,148 69,451,190**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 21, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 137,239,949 4,617,039 51,798,672**
* Proposal required approval by a combined vote of all the portfolios of AIM International Funds, Inc. ** Includes Broker Non-Votes F-17 OTHER INFORMATION TRUSTEES AND OFFICERS As of January 1, 2003 The address of each trustee and officer of AIM International Funds, Inc., now known as AIM International Mutual Funds (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 132 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------- INTERESTED PERSONS - ------------------------------------------------------------------------------------------------------------------------------- Robert H. Graham(1) -- 1946 1991 Director and Chairman, A I M Management None Group Inc. Trustee, Chairman and (financial services holding company); and Director and Vice President Chairman, AMVESCAP PLC and Chairman of AMVESCAP PLC -- AIM Division (parent of AIM and a global investment management firm) Formerly: President and Chief Executive Officer, A I M Management Group Inc.; Director, Chairman and President, A I M Advisors, Inc. (registered investment advisor); and Director and Chairman, A I M Capital Management, Inc. (registered investment advisor), A I M Distributors, Inc. (registered broker dealer), AIM Investment Services, Inc., (registered transfer agent), and Fund Management Company (registered broker dealer); and Chief Executive Officer, AMVESCAP PLC -- Managed Products - ------------------------------------------------------------------------------------------------------------------------------- Mark H. Williamson(2) -- 1951 2003 Director, President and Chief Executive Director and Chairman, Officer, A I M Trustee and Executive Vice INVESCO Bond Funds, Management Group Inc. (financial services Inc., INVESCO holding company); President Director, Combination Stock & Chairman and President, A I M Advisors, Bond Funds, Inc., Inc. (registered investment advisor); INVESCO Counselor Director, A I M Capital Management, Inc. Series Funds, Inc., (registered investment advisor) and A I M INVESCO International Distributors, Inc. (registered broker Funds, Inc., INVESCO dealer); Director and Chairman, AIM Manager Series Funds, Investment Services, Inc. (registered Inc., INVESCO Money transfer agent); and Fund Management Market Funds, Inc., Company (registered broker dealer); and INVESCO Sector Funds, Chief Executive Officer, AMVESCAP PLC -- Inc., INVESCO Stock AIM Division (parent of AIM and a global Funds, Inc., INVESCO investment management firm) Treasurer's Series Formerly: Director, Chairman, President and Funds, Inc. and Chief Executive Officer, INVESCO Funds INVESCO Variable Group, Inc. and INVESCO Distributors, Inc.; Investment Funds, Inc. Chief Executive Officer, AMVESCAP PLC -- Managed Products; Chairman and Chief Executive Officer of NationsBanc Advisors, Inc.; and Chairman of NationsBanc Investments, Inc. - ------------------------------------------------------------------------------------------------------------------------------- INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------- Bob R. Baker(3) -- 1936 2003 Consultant None Trustee Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation - ------------------------------------------------------------------------------------------------------------------------------- Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc. Trustee (registered investment company) - ------------------------------------------------------------------------------------------------------------------------------- James T. Bunch(3) -- 1942 2003 Co-President and Founder, Green, Manning & None Bunch Ltd., Trustee (investment banking firm); and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation Formerly: General Counsel and Director, Boettcher & Co.; and Chairman and Managing Partner, law firm of Davis, Graham & Stubbs - ------------------------------------------------------------------------------------------------------------------------------- Bruce L. Crockett -- 1944 1992 Chairman, Crockett Technology Associates ACE Limited (insurance (technology Trustee consulting company) company); and Captaris, Inc. (unified messaging provider) - ------------------------------------------------------------------------------------------------------------------------------- Albert R. Dowden -- 1941 2000 Director of a number of public and private Cortland Trust, Inc. business Trustee corporations, including (Chairman) (registered the Boss Group Ltd. (private investment and investment company); management) and Magellan Insurance Company Annuity and Life Re Formerly: Director, President and Chief (Holdings), Ltd. Executive Officer, Volvo Group North (insurance company) America, Inc.; Senior Vice President, AB Volvo; and director of various affiliated Volvo Group companies - ------------------------------------------------------------------------------------------------------------------------------- Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage None Corp.; President and Trustee Chief Operating Officer, Mercantile-Safe Deposit & Trust Co.; and President, Mercantile Bankshares Corp. - ------------------------------------------------------------------------------------------------------------------------------- Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Administaff Century Group, Inc. Trustee (government affairs company) and Texana Timber LP - -------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Graham is considered an interested person of the Trust because he is a director of AMVESCAP PLC, parent of the advisor to the Trust. (2) Mr. Williamson is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. Mr. Williamson became Executive Vice President of the Trust on March 4, 2003. (3) Elected trustee of the Trust on October 21, 2003. Trustees and Officers (continued) As of January 1, 2003 The address of each trustee and officer of AIM International Funds, Inc., now known as AIM International Mutual Funds (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 132 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S) POSITION(S) HELD WITH THE TRUST OR OFFICER SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------- Carl Frischling -- 1937 1991 Partner, law firm of Kramer Levin Cortland Trust, Inc. Trustee Naftalis and Frankel LLP (registered investment company) - ------------------------------------------------------------------------------------------------------------------------------- Gerald J. Lewis(3) -- 1933 2003 Chairman, Lawsuit Resolution Services General Chemical Trustee (San Diego, California) Group, Inc., Formerly: Associate Justice of the Wheelabrator California Court of Appeals Technologies, Inc. (waste management company), Fisher Scientific, Inc., Henley Manufacturing, Inc. (laboratory supplies), and California Coastal Properties, Inc. - ------------------------------------------------------------------------------------------------------------------------------- Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA None Trustee of the USA - ------------------------------------------------------------------------------------------------------------------------------- Lewis F. Pennock -- 1942 1991 Partner, law firm of Pennock & Cooper None Trustee - ------------------------------------------------------------------------------------------------------------------------------- Ruth H. Quigley -- 1935 2001 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------- Louis S. Sklar -- 1939 1991 Executive Vice President, Development None Trustee and Operations Hines Interests Limited Partnership (real estate development company) - ------------------------------------------------------------------------------------------------------------------------------- Larry Soll, Ph.D.(3) -- 1942 2003 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------- OTHER OFFICERS - ------------------------------------------------------------------------------------------------------------------------------- Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, N/A Senior Vice President Secretary and General Counsel, A I M Management Group Inc. (financial services holding company) and A I M Advisors, Inc.; Vice President, A I M Capital Management, Inc., A I M Distributors, Inc. and AIM Investment Services, Inc.; and Director, Vice President and General Counsel, Fund Management Company Formerly: Senior Vice President and General Counsel, Liberty Financial Companies, Inc.; and Senior Vice President and General Counsel, Liberty Funds Group, LLC - ------------------------------------------------------------------------------------------------------------------------------- Gary T. Crum(5) -- 1947 1991 Director, Chairman and Director of N/A Senior Vice President Investments, A I M Capital Management, Inc.; Director and Executive Vice President, A I M Management Group Inc.; Director and Senior Vice President, A I M Advisors, Inc.; and Director, A I M Distributors, Inc. and AMVESCAP PLC Formerly: Chief Executive Officer and President, A I M Capital Management Inc. - ------------------------------------------------------------------------------------------------------------------------------- Robert G. Alley -- 1948 1994 Managing Director and Chief Fixed Income N/A Vice President Officer, A I M Capital Management, Inc.; and Vice President, A I M Advisors, Inc. - ------------------------------------------------------------------------------------------------------------------------------- Stuart W. Coco -- 1955 2002 Managing Director and Chief Research N/A Vice President Officer -- Fixed Income, A I M Capital Management, Inc.; and Vice President, A I M Advisors, Inc. - ------------------------------------------------------------------------------------------------------------------------------- Melville B. Cox -- 1943 1992 Vice President and Chief Compliance N/A Vice President Officer, A I M Advisors, Inc. and A I M Capital Management, Inc.; and Vice President, AIM Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------- Edgar M. Larsen(5) -- 1940 1999 Vice President, A I M Advisors, Inc., N/A Vice President and President, Chief Executive Officer and Chief Investment Officer, A I M Capital Management, Inc. - ------------------------------------------------------------------------------------------------------------------------------- Dana R. Sutton -- 1959 1991 Vice President and Fund Treasurer, N/A Vice President and Treasurer A I M Advisors, Inc. - -------------------------------------------------------------------------------------------------------------------------------
(3) Elected trustee of the Trust on October 21, 2003. (4) Mr. Carome became Senior Vice President of the Trust on May 13, 2003. (5) Information is current as of January 10, 2003. The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.347.4246. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS 11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, Inc. PricewaterhouseCoopers LLP Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana, Suite 2900 Houston, TX 77046 Suite 100 Suite 100 Houston, TX 77002 Houston, TX 77046 Houston, TX 77046-1173 COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. State Street Bank and Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 Trust Company 1735 Market Street 919 Third Avenue Houston, TX 77210-4739 225 Franklin Street Philadelphia, PA 19103 New York, NY 10022-3852 Boston, MA 02110
DOMESTIC EQUITY INTERNATIONAL/GLOBAL EQUITY FIXED INCOME AIM Aggressive Growth Fund AIM Asia Pacific Growth Fund TAXABLE AIM Balanced Fund* AIM Developing Markets Fund AIM Basic Balanced Fund* AIM European Growth Fund AIM Floating Rate Fund AIM Basic Value Fund AIM European Small Company Fund AIM High Yield Fund AIM Blue Chip Fund AIM Global Aggressive Growth Fund AIM Income Fund AIM Capital Development Fund AIM Global Growth Fund AIM Intermediate Government Fund AIM Charter Fund AIM Global Trends Fund AIM Limited Maturity Treasury Fund AIM Constellation Fund AIM Global Value Fund(4) AIM Money Market Fund AIM Dent Demographic Trends Fund AIM International Emerging Growth Fund AIM Short Term Bond Fund AIM Diversified Dividend Fund(1) AIM International Growth Fund AIM Total Return Bond Fund AIM Emerging Growth Fund AIM Trimark Fund INVESCO U.S. Government Money Fund AIM Large Cap Basic Value Fund INVESCO International Core Equity Fund(5) AIM Large Cap Growth Fund TAX-FREE AIM Libra Fund AIM Mid Cap Basic Value Fund SECTOR EQUITY AIM High Income Municipal Fund AIM Mid Cap Core Equity Fund AIM Municipal Bond Fund AIM Mid Cap Growth Fund AIM Global Health Care Fund AIM Tax-Exempt Cash Fund AIM Opportunities I Fund AIM Real Estate Fund AIM Tax-Free Intermediate Fund AIM Opportunities II Fund INVESCO Advantage Health Sciences Fund AIM Opportunities III Fund INVESCO Energy Fund AIM Premier Equity Fund INVESCO Financial Services Fund AIM Select Equity Fund INVESCO Gold & Precious Metals Fund AIM Small Cap Equity Fund(2) INVESCO Health Sciences Fund AIM Small Cap Growth Fund(3) INVESCO Leisure Fund AIM Trimark Endeavor Fund INVESCO Multi-Sector Fund AM Trimark Small Companies Fund INVESCO Technology Fund AIM Weingarten Fund INVESCO Utilities Fund INVESCO Core Equity Fund INVESCO Dynamics Fund INVESCO Mid-Cap Growth Fund INVESCO Small Company Growth Fund INVESCO S&P 500 Index Fund INVESCO Total Return Fund*
* Domestic equity and income fund (1) Effective May 2, 2003, AIM Large Cap Core Equity Fund was renamed AIM Diversified Dividend Fund. (2) AIM Small Cap Equity Fund was closed to most investors on December 19, 2003. For information on who may continue to invest in AIM Small Cap Equity Fund, please contact your financial advisor. (3) AIM Small Cap Growth Fund was closed to most investors on March 18, 2002. For information on who may continue to invest in AIM Small Cap Growth Fund, please contact your financial advisor. (4) Effective April 30, 2003, AIM Worldwide Spectrum Fund was renamed AIM Global Value Fund. (5) Effective November 24, 2003, INVESCO International Blue Chip Value Fund was renamed INVESCO International Core Equity Fund. For more complete information about any AIM or INVESCO fund, including sales charges and expenses, ask your financial advisor for a prospectus. Please read it carefully before investing. If used after January 20, 2004, this brochure must be accompanied by a fund Performance & Commentary or by an AIM Quarterly Performance Review for the most recent quarter-end. Mutual funds distributed by A I M Distributors, Inc. A I M Management Group Inc. has provided leadership in the investment management industry since 1976 and manages $142 billion in assets for approximately 11 million shareholders, including individual investors, corporate clients and financial institutions. AIM is a subsidiary of AMVESCAP PLC, one of the world's largest independent financial services companies with $345 billion in assets under management. Data as of September 30, 2003. AIMinvestments.com GLG-AR-1 YOUR GOALS. OUR SOLUTIONS.--Servicemark-- - -------------------------------------------------------------------------------------------- Mutual Retirement Annuities College Separately Offshore Alternative Cash [AIM INVESTMENTS LOGO APPEARS HERE] Funds Products Savings Managed Products Investments Management --Servicemark-- Plans Accounts
AIM INTERNATIONAL GROWTH FUND Annual Report to Shareholders o October 31, 2003 [COVER IMAGE] YOUR GOALS. OUR SOLUTIONS. [AIM INVESTMENTS LOGO APPEARS HERE] --Servicemark-- --Servicemark-- ================================================================================ AIM INTERNATIONAL GROWTH FUND SEEKS TO PROVIDE LONG-TERM GROWTH OF CAPITAL. ================================================================================ ABOUT INFORMATION THROUGHOUT THIS REPORT: o Unless otherwise stated, information o Class R shares are available only to o The unmanaged MSCI Japan Index is a presented is as of 10/31/03 and is based certain retirement plans. Please see the market-value-weighted average of the on total net assets. prospectus for more information. They are performance of more than 300 securities sold at net asset value, that is, without on the Japanese stock exchanges tracked o AIM International Growth Fund's up-front sales charges. by Morgan Stanley Capital International. performance figures are historical, and they reflect fund expenses, the o International investing presents o A direct investment cannot be made in reinvestment of distributions, and certain risks not associated with an index. Unless otherwise indicated, changes in net asset value. investing solely in the United States. index results include reinvested These include risks relating to dividends, and they do not reflect sales o When sales charges are included in fluctuations in the value of the U.S. charges or fund expenses performance figures, Class A share dollar relative to the values of other performance reflects the maximum 5.50% currencies, the custody arrangements made A DESCRIPTION OF THE POLICIES AND sales charge, and Class B and Class C for the fund's foreign holdings, PROCEDURES THAT THE FUND USES TO share performance reflects the applicable differences in accounting, political DETERMINE HOW TO VOTE PROXIES RELATING TO contingent deferred sales charge (CDSC) risks and the lesser degree of public PORTFOLIO SECURITIES IS AVAILABLE WITHOUT for the period involved. The CDSC on information required to be provided by CHARGE, UPON REQUEST, BY CALLING Class B shares declines from 5% beginning non-U.S. companies. 800-959-4246, OR ON THE AIM WEB SITE, at the time of purchase to 0% at the AIMINVESTMENTS.COM. beginning of the seventh year. The CDSC o The fund's investment return and on Class C shares is 1% for the first principal value will fluctuate, so an year after purchase. The performance of investor's shares, when redeemed, may be the fund's share classes will differ due worth more or less than their original to different sales charge structures and cost. class expenses. o Industry classifications used in this o A 2% redemption fee will be imposed on report are generally according to the certain redemptions or exchanges out of Global Industry Classification Standard, the fund within 30 days of purchase. which was developed by and is the Exceptions to the redemption fee are exclusive property and a service mark of listed in the fund's prospectus. Morgan Stanley Capital International Inc. and Standard & Poor's. o Effective 9/30/03, Class B shares are not available as an investment for o The unmanaged MSCI Europe, Australasia retirement plans maintained pursuant to and the Far East (the EAFE--Registered Section 401 of the Internal Revenue Code, Trademark--) Growth Index is a subset of including 401(k) plans, money purchase the unmanaged MSCI EAFE--Registered pension plans and profit sharing plans. Trademark-- Index, which represents the Plans that have existing accounts performance of foreign stocks tracked by invested in Class B shares will continue Morgan Stanley Capital International. The to be allowed to make additional Growth portion measures performance of purchases. companies with higher price/earnings ratios and higher forecasted growth values.
======================================================= NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE This report may be distributed only to shareholders or to persons who have received a current prospectus of the fund. =======================================================
AIMinvestments.com TO OUR SHAREHOLDERS Dear Fellow Shareholder in new policies and strengthened existing ones-- to discourage The AIM Family of Funds harmful short-term trading. These steps include: --Registered Trademark-- o Strengthening daily monitoring of trading activities. [PHOTO OF As you may be aware, there has been a ROBERT H. great deal of media coverage recently o Imposing redemption fees on additional funds we believe GRAHAM] about the mutual fund industry and may be vulnerable to harmful short-term trading allegations of improper activities by activity. ROBERT H. GRAHAM certain individuals and companies. As part of these widespread investigations, o Implementing an enhanced exchange policy (effective on INVESCO Funds Group (IFG), the former or about March 1, 2004) designed to limit exchanges [PHOTO OF adviser to certain INVESCO Funds, was between funds. MARK H. recently named as a defendant in WILLIAMSON] separate civil enforcement actions by o Employing an enhanced fair value pricing policy on the U.S. Securities and Exchange certain foreign securities as well as certain illiquid MARK H. WILLIAMSON Commission (SEC), the Office of the New securities. York Attorney General and the State of Colorado over an issue known as "market timing." A number of None of these tools alone, nor all of them taken together, private class or derivative actions also were filed in the eliminate the possibility of short-term trading strategies wake of the regulators' actions. that may be detrimental to a fund. Moreover, each of these tools involves judgments that are inherently subjective. We Investors are understandably concerned and frustrated have always sought and continue to seek to make these about these reports, and we would like to take this judgments to the best of our abilities and in a manner that opportunity to assure you that, based on an investigation we believe is consistent with the best interests of our fund conducted by an outside firm, IFG and its parent company, shareholders. And we remain committed to being as vigilant as AMVESCAP PLC, believe that these civil actions are without possible in the future to identify and address any harmful merit. IFG is contesting the charges. market timing investors who have the potential to harm our long-term fund shareholders. We encourage you to continue to monitor this situation, particularly as IFG has the opportunity to address the We sincerely hope these developments and the media allegations that have been made. Current information will be coverage surrounding them do not result in you or other posted on our Web site at AIMinvestments.com. We will shareholders losing confidence in AIM or INVESCO Funds. continue to communicate to you on our Web site about our Amidst this storm of controversy in the mutual fund finding, and the actions we are taking to protect and industry, we believe we can find encouragement in the promote the interests of our shareholders. The independent recovering economy and rising equity markets. As we write trustees of the funds are receiving regular reports from this letter, for instance, the S&P 500--Registered their independent counsel and outside counsel hired by Trademark-- Index is up approximately 23% year-to-date. AMVESCAP PLC, the parent of AIM and IFG, to perform an Although past performance is no guarantee of future results, ongoing investigation of market timing. there appear to be indicators that the economy and stock markets are showing signs of welcomed improvement. We A COMPLEX ISSUE encourage you to read the enclosed discussion of your fund's performance during this past reporting period. Market timing is an investment technique not defined in any regulation that involves frequent short-term trading of OUR UNWAVERING COMMITMENT mutual fund shares, sometimes with a goal to exploit inefficiencies in the way mutual funds price their shares. We At AIM Investments, we have never wavered in our commitment recognize that fund management companies have tried to deal to helping you build solutions for your financial goals. Our with this complex issue in various ways and believe that company was founded on a core principle of integrity, and we industry-wide guidance is in order. To that end, we welcome have always worked hard to earn the trust of our SEC Chairman William Donaldson's pledge to adopt new rules shareholders. We are committed to doing all we can to designed to curb market timing abuses. Comprehensive maintain your trust and confidence. rulemaking is necessary and is the best way to establish new industry responsibilities designed to protect shareholders. Thank you for your continued participation in AIM We support practical rule changes and structural Investments. Please call your financial advisor or one of our modifications that are fair, enforceable and, most Client Service representatives at 800-959-4246 if you have importantly, beneficial for investors. any further questions or concerns about your AIM Investments account. AIM Investments has policies in place designed to identify, prevent and eliminate harmful trading or other Sincerely, activities deemed to be detrimental to the funds. We have also recently taken additional steps --implemented /s/ ROBERT H. GRAHAM /s/ MARK H. WILLIAMSON Robert H. Graham Mark H. Williamson Chairman and President President and CEO The AIM Family of Funds AIM Investments --Registered Trademark-- December 18, 2003
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE FUND BENEFITS FROM STRENGTH OF statement by the International Monetary INTERNATIONAL EQUITIES Fund (IMF), the SARS threat has now abated. Amid signs of an improving global conditions. In April, however, economic environment, AIM International international markets rallied strongly While European stock markets posted Growth Fund posted double-digit returns and continued to gain momentum throughout some of the best returns for the fiscal for the reporting period ended October much of the rest of the reporting period. year, growth in the euro zone remains 31, 2003. For the fiscal year covered by Given this environment, most markets in weak. According to a recent report by the this report, the fund's Class A, Class B, Asia and Europe posted positive returns Bank of England, there continues to be a Class C and Class R shares returned for the fiscal year, with emerging market contrast between weak euro area economic 20.02%, 19.14%, 19.12%, and 19.31% stocks generally outperforming those in data and more promising business survey respectively, at net asset value. developed countries. Market returns and indicators. economic growth, however, varied The fund's benchmark, the MSCI EAFE considerably by region. Indeed, euro zone annualized GDP fell Index, posted a higher return of 27.03% by 0.1% in the second quarter. German due in part, we believe, to the fact the In Asia, Japan's economy finally retail sales (excluding car-related market appeared to reward high-beta appeared to be showing signs of a sales) and French consumer spending on stocks, which we were not invested in. cyclical upswing. While structural manufactured goods both fell in August. Over the longer-term, however, the fund difficulties and deflationary pressures However, preliminary estimates indicate continues to outperform the index. For persisted, industrial production rose annualized euro zone GDP rose 0.4% in the example, as the chart below indicates, strongly in September and exports have third quarter and recent business surveys since the fund's inception Class A shares shown healthy gains for nearly a year. offered promise. Euro-area industrial at NAV returned 7.04%, while the MSCI Amid this backdrop, Japanese equities confidence increased in both August and EAFE Index returned 5.48% over the same rose sharply through the summer but sold September, and the Purchasing Managers period. off late in October. Despite the decline, Index--a survey of purchasing managers however, the MSCI Japan Index returned that measures the general health of the MARKET CONDITIONS 32.94% for the fiscal year. Many emerging manufacturing sector--increased for the Asian markets also produced positive fourth consecutive month in October. After a short-lived rally at the end of returns for the reporting period after 2002, international markets largely struggling earlier in the year with the In monetary affairs, policy settings declined at the beginning of 2003 amidst SARS (severe acute respiratory syndrome) for many major economies became more concern over the war in Iraq and weak epidemic. According to a September 2003 expansionary during the reporting period. global economic The Bank of England and the European Central Bank reduced short-term interest rates in 2003 leaving their benchmark rates at
=================================================================================================================================== AVERAGE ANNUAL TOTAL RETURNS TOTAL NUMBER OF HOLDINGS** 121 TOP 10 EQUITY HOLDINGS** SINCE INCEPTION 4/7/92-10/31/03 TOTAL NET ASSETS $1.6 billion 1. Teva Pharmaceutical Industries 3.1% Ltd.-ADR (Israel) [BAR CHART] 2. Vodafone Group PLC 2.4 AIM INTERNATIONAL (United Kingdom) GROWTH FUND CLASS A SHARES AT NAV 7.04% 3. Loblaw Cos. Ltd. (Canada) 2.3 MSCI EAFE INDEX 5.48%* 4. Nitto Denko Corp. (Japan) 2.0 5. Suncor Energy, Inc. (Canada) 1.8 6. Total S.A.-Class B (France) 1.7 7. Imperial Tobacco Group PLC 1.7 (United Kingdom) *Index performance from 3/31/92-10/31/03 8. Taiwan Semiconductor 1.7 Manufacturing Co. Ltd. (Taiwan) The performance of the fund's Class A, Class B, Class C and Class R shares will 9. Samsung Electronics Co. Ltd. 1.6 differ due to different sales charge (South Korea) structures and class expenses. 10. Hoya Corp. (Japan) 1.6 ===================================================================================================================================
Source: Lipper, Inc. 2 3.50% and 2.00%, respectively as of while diluted earnings-per-share reached SHUXIN CAO October 31, 2003. Monetary authorities in $0.53, up 47%. In its most recent [PHOTO OF Mr. Cao, Chartered many Asian countries also adopted earnings announcement, Loblaw reported SHUXIN Financial Analyst, is expansionary policies during the basic net earnings for the third quarter CAO] manager of AIM reporting period. of 2003, a 16.2% increase from a year International Growth Fund. earlier. He joined AIM in 1997. Mr. Cao graduated On the currency front, although the from Tianjin Foreign Language Institute U.S. dollar showed a few pockets of Sega Corporation, however, detracted with a B.A. in English. He also received strength during the fiscal year, for the from fund performance as the company an M.B.A. from Texas A&M University and most part, foreign currencies proved faced delays in bringing new game titles is a Certified Public Accountant. stronger. In particular, the Australian to market. As of the end of the reporting dollar, Canadian dollar and euro showed period, we no longer owned the stock. JASON T. HOLZER strength against the dollar during the [PHOTO OF Mr. Holzer, Chartered reporting period appreciating 26%, 18% Sectors that contributed most to fund JASON T. Financial Analyst, is and 16%, respectively. Other notable performance over the fiscal year included HOLZER] manager of AIM currencies that gained ground on the financials, information technology and International Growth Fund. dollar included the Swiss franc, British energy. Sectors that contributed the Mr. Holzer joined AIM in 1996. He pound, Japanese yen and South Korean won. least included consumer discretionary and received a B.A. in quantitative economics utilities. and an M.S. in engineering-economic YOUR FUND systems from Stanford University. IN CLOSING As noted above, foreign currency CLAS G. OLSSON appreciation versus the U.S. dollar was After a few challenging years, [PHOTO OF Mr. Olsson is co-lead quite strong during the fiscal year. This international markets began to post CLAS G. manager of AIM proved favorable for the fund as we did strong returns again in 2003. Whether OLSSON] International Growth Fund. not hedge currencies. We bought these market rallies are sustainable Mr. Olsson joined AIM in securities in local currency but then remains to be seen. However, 1994. Mr. Olsson became a commissioned translated that value back into U.S. international stocks, in general, naval officer at the Royal Swedish Naval dollars for the fund. continue to trade at a discount to their Academy in 1988. He also received a U.S. counterparts, and therefore offer B.B.A. from The University of Texas at Two stocks that contributed to fund potential diversification opportunities Austin. performance during the fiscal year were beyond America soil. Teva Pharmaceuticals, a global BARRETT K. SIDES pharmaceutical company based in Israel, [PHOTO OF Mr. Sides is co-lead and Loblaw Cos. Ltd., one of Canada's See important fund and index BARRETT K. manager of AIM largest food distributors. Teva reported disclosures inside front cover. SIDES] International Growth Fund. net income of $157 million for the third He joined AIM in 1990. Mr. quarter, up 63% from a year ago, Sides graduated with a B.S. in economics from Bucknell University. He also received a master's in international business from the University of St. Thomas. Assisted by Asia Pacific Team and Europe/Canada Team
=================================================================================================================================== TOP 10 COUNTRIES** TOP 10 INDUSTRIES** FUND VS. INDEXES Total returns 10/31/02-10/31/03, 1. United Kingdom 19.4% 1. Diversified Banks 11.1% excluding sales charges 2. Japan 18.1% 2. Pharmaceuticals 9.2 Class A Shares 20.02% 3. Canada 8.7% 3. Electronic Equipment Class B Shares 19.14 Manufacturers 7.7 4. France 6.5% Class C Shares 19.12 4. Integrated Oil & Gas 6.8 5. Italy 4.3% Class R Shares 19.31 5. Wireless Telecommunication 5.0 6. Germany 4.3% Services MSCI EAFE Index 27.03 7. Switzerland 4.0% 6. Food Retail 4.7 Source: Lipper, Inc. 8. Taiwan 4.0% 7. Specialty Chemicals 3.5 [GRAPHIC] 9. Israel 3.1% 8. Integrated Telecommunication 3.2 For More Information Visit Services AIMinvestments.com 10. Sweden 2.7% 9. Automobile Manufacturers 3.1 **Excludes money market fund holdings. 10. Diversified Capital Markets 2.3 The fund's holdings are subject to change, and there is no assurance that the fund will continue to hold any particular security. ===================================================================================================================================
3 FUND PERFORMANCE RESULTS OF A $10,000 INVESTMENT 4/7/92-10/31/03* [MOUNTAIN CHART]
DATE AIM INTERNATIONAL MSCI GROWTH FUND EAFE CLASS A SHARES INDEX 4/7/92 $ 9450 $ 10000 10/31/92 9602 9822 10/31/93 13189 13501 10/31/94 14630 14863 10/31/95 15396 14808 10/31/96 17825 16359 10/31/97 19864 17116 10/31/98 21078 18767 10/31/99 26502 23090 10/31/00 27338 22421 10/31/01 19691 16831 10/31/02 17290 14608 10/31/03 $ 20756 $ 18557
Source: Lipper, Inc. *Performance for MSCI EAFE Index measured from 3/31/92 Your fund's total return includes sales charges, expenses and management fees. The performance of the fund's share classes will differ due to different sales charge structures and class expenses. For fund performance calculations and indexes used in this report, please see the inside front cover. Performance shown in the chart and table does not reflect deduction of taxes a shareholder would pay on fund distributions or sale of fund shares. Performance of the indexes does not reflect the effects of taxes. This chart uses a logarithmic scale, which means the price scale (vertical axis) is structured so that a given distance always represents the same percent change in price, rather than the same absolute change in price. For example, the distance from one to 10 is the same as the distance from 10 to 100 on a logarithmic chart, but the latter distance is 10 times greater on a linear chart. A logarithmic scale better illustrates performance in the fund's early years before reinvested distributions and compounding create the potential for the original investment to grow to very large numbers. Past performance cannot guarantee comparable future results. DUE TO SIGNIFICANT MARKET VOLATILITY, RESULTS OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE SHOWN. CALL YOUR FINANCIAL ADVISOR FOR MORE CURRENT PERFORMANCE. =================================================================================================================================== AVERAGE ANNUAL TOTAL RETURNS In addition to fund returns as of the CLASS R SHARES* As of 10/31/03, including sales charges close of the fiscal year, industry 10 Years 4.38% regulations require us to provide average 5 Years -1.02 CLASS A SHARES annual total returns (including sales 1 Year 17.70 Inception (4/7/92) 6.52% charges) for periods ended 9/30/03, the 10 Years 4.05 most recent calendar quarter-end, which *The returns shown for these periods are 5 Years -1.42 were as follows. the blended returns of the historical 1 Year 13.40 performance of the fund's Class R shares AVERAGE ANNUAL TOTAL RETURNS since their inception and the restated CLASS B SHARES As of 9/30/03, including sales charges historical performance of the fund's Inception (9/15/94) 3.29% Class A shares (for the periods prior to 5 Years -1.39 CLASS A SHARES inception of the Class R shares) at net 1 Year 14.14 Inception (4/7/92) 5.98% asset value, adjusted to reflect the 10 Years 4.02 higher Rule 12b-1 fees applicable to the CLASS C SHARES 5 Years -1.89 Class R shares. The inception date of Inception (8/4/97) -1.28% 1 Year 11.81 Class A shares is 4/7/92. The inception 5 Years -1.03 date of the fund's Class R shares is 1 Year 18.12 CLASS B SHARES 6/3/02. Calculation of blended returns as Inception (9/15/94) 2.60% of 10/31/03 is from 10/31/93. Calculation CLASS R SHARES* 5 Years -1.86 of blended returns as of 9/30/03 is from 10 Years 4.40% 1 Year 12.36 9/30/93. 5 Years -0.57 1 Year 19.31 CLASS C SHARES Inception (8/4/97) -2.30% 5 Years -1.49 1 Year 16.35 ===================================================================================================================================
4 SUPPLEMENT TO ANNUAL REPORT DATED 10/31/03 AIM INTERNATIONAL GROWTH FUND INSTITUTIONAL CLASS SHARES AVERAGE ANNUAL TOTAL RETURNS Please note that past performance is not For periods ended 10/31/03 indicative of future results. More The following information has been recent returns may be more or less than prepared to provide Institutional Class INCEPTION (3/15/02) 1.13% those shown. All returns assume shareholders with a performance overview 1 Year 20.64 reinvestment of distributions at net specific to their holdings. asset value. Investment return and Institutional Class shares are offered AVERAGE ANNUAL TOTAL RETURNS principal value will fluctuate so your exclusively to institutional investors, For periods ended 9/30/03 shares, when redeemed, may be worth more including defined contribution plans (most recent calendar quarter-end) or less than their original cost. See that meet certain criteria. Performance full report for information on of Institutional Class shares will INCEPTION (3/15/02) -2.90% comparative benchmarks. If you have differ from performance of Class A 1 Year 18.88 questions, please consult your fund shares due to differing sales charges prospectus or call 800-451-4246. A I M and class expenses. Distributors, Inc.
FOR INSTITUTIONAL INVESTOR USE ONLY This material is prepared for institutional investor use only and may not be quoted, reproduced or shown to members of the public, nor used in written form as sales literature for public use. YOUR GOALS. OUR SOLUTIONS. [AIM INVESTMENTS LOGO APPEARS HERE] --Servicemark-- --Servicemark-- AIMinvestments.com IGR-INS-1 10/03 FINANCIALS SCHEDULE OF INVESTMENTS October 31, 2003
MARKET SHARES VALUE - -------------------------------------------------------------------------- STOCKS & OTHER EQUITY INTERESTS-96.61% AUSTRALIA-1.54% Amcor Ltd. (Paper Packaging) 1,037,900 $ 6,243,877 - -------------------------------------------------------------------------- BHP Billiton Ltd. (Diversified Metals & Mining) 1,814,700 15,052,628 - -------------------------------------------------------------------------- Promina Group Ltd. (Property & Casualty Insurance) (Acquired 05/12/03; Cost $1,630,929)(a) 1,404,000 3,299,021 ========================================================================== 24,595,526 ========================================================================== AUSTRIA-0.58% Erste Bank der oesterreichischen Sparkassen A.G. (Diversified Banks) 84,231 9,280,587 ========================================================================== BRAZIL-0.51% Companhia de Bebidas das Americas-ADR (Brewers) 386,300 8,189,560 ========================================================================== CANADA-8.70% Bombardier Inc.-Class B (Aerospace & Defense) 1,193,200 5,357,409 - -------------------------------------------------------------------------- Canadian National Railway Co. (Railroads) 232,300 13,962,666 - -------------------------------------------------------------------------- CP Railway Ltd. (Railroads) 616,100 17,265,753 - -------------------------------------------------------------------------- Loblaw Cos. Ltd. (Food Retail) (Acquired 11/10/00-10/10/01; Cost $24,025,835)(a) 751,300 36,382,636 - -------------------------------------------------------------------------- Manulife Financial Corp. (Life & Health Insurance) 458,700 13,915,813 - -------------------------------------------------------------------------- Petro-Canada (Integrated Oil & Gas) 357,500 14,405,745 - -------------------------------------------------------------------------- Royal Bank of Canada (Diversified Banks) 182,090 8,766,836 - -------------------------------------------------------------------------- Suncor Energy, Inc. (Integrated Oil & Gas) 1,362,800 28,620,350 ========================================================================== 138,677,208 ========================================================================== DENMARK-0.84% A P Moller-Maersk A.S.-Class B (Marine) 1,709 13,369,873 ========================================================================== FRANCE-6.54% BNP Paribas S.A. (Diversified Banks) 277,988 14,555,991 - -------------------------------------------------------------------------- Carrefour S.A. (Hypermarkets & Super Centers) 164,335 8,597,284 - -------------------------------------------------------------------------- France Telecom S.A. (Integrated Telecommunication Services)(b) 314,138 7,576,672 - -------------------------------------------------------------------------- Lagardere S.C.A. (Publishing) 104,014 5,213,819 - -------------------------------------------------------------------------- Pernod Ricard S.A. (Distillers & Vintners) 147,478 14,180,209 - -------------------------------------------------------------------------- Renault S.A. (Automobile Manufacturers) 288,067 18,988,168 - -------------------------------------------------------------------------- Societe Generale (Diversified Banks) 103,072 7,629,900 - -------------------------------------------------------------------------- Total S.A.-Class B (Integrated Oil & Gas) 177,249 27,453,170 ========================================================================== 104,195,213 ========================================================================== GERMANY-4.31% Altana A.G. (Pharmaceuticals) 220,684 13,858,861 - --------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------- GERMANY-(CONTINUED) Continental A.G. (Tires & Rubber) 253,900 $ 8,588,609 - -------------------------------------------------------------------------- Deutsche Boerse A.G. (Specialized Finance) 148,168 8,208,074 - -------------------------------------------------------------------------- Deutsche Telekom A.G. (Integrated Telecommunication Services)(b) 754,304 11,840,308 - -------------------------------------------------------------------------- Metro A.G. (Hypermarkets & Super Centers) 213,683 8,708,495 - -------------------------------------------------------------------------- Puma A.G. Rudolf Dassler Sport (Footwear) (Acquired 10/08/03-10/30/03; Cost $8,769,073)(a) 63,102 9,172,652 - -------------------------------------------------------------------------- Siemens A.G. (Industrial Conglomerates)(b) 122,689 8,243,486 ========================================================================== 68,620,485 ========================================================================== HONG KONG-2.38% Cathay Pacific Airways Ltd. (Airlines) 5,189,000 9,922,820 - -------------------------------------------------------------------------- Cheung Kong (Holdings) Ltd. (Real Estate Management & Development) 801,000 6,678,782 - -------------------------------------------------------------------------- China Merchants Holdings International Co. Ltd. (Industrial Conglomerates) 1,818,000 2,458,149 - -------------------------------------------------------------------------- CNOOC Ltd.-ADR (Oil & Gas Exploration & Production) 152,800 5,752,920 - -------------------------------------------------------------------------- Hutchison Whampoa Ltd. (Industrial Conglomerates) 933,000 7,238,752 - -------------------------------------------------------------------------- Sun Hung Kai Properties Ltd. (Real Estate Management & Development) 688,000 5,825,178 ========================================================================== 37,876,601 ========================================================================== HUNGARY-0.57% OTP Bank Rt. (Diversified Banks)(b) 748,200 9,117,492 ========================================================================== INDIA-1.42% Housing Development Finance Corp. Ltd. (Thrifts & Mortgage Finance) 228,736 2,624,004 - -------------------------------------------------------------------------- Infosys Technologies Ltd. (IT Consulting & Other Services) 191,172 20,000,717 ========================================================================== 22,624,721 ========================================================================== IRELAND-0.91% Angloz Irish Bank Corp. PLC (Diversified Banks) 1,208,700 14,464,257 ========================================================================== ISRAEL-3.07% Teva Pharmaceutical Industries Ltd.-ADR (Pharmaceuticals) 859,100 48,874,199 ========================================================================== ITALY-4.34% Banca Intesa S.p.A. (Diversified Banks) 2,656,700 8,925,197 - -------------------------------------------------------------------------- Banco Popolare di Verona e Novara Scrl (Diversified Banks) 1,119,180 17,243,637 - -------------------------------------------------------------------------- Eni S.p.A. (Integrated Oil & Gas) 1,143,649 18,097,590 - -------------------------------------------------------------------------- Mediaset S.p.A. (Broadcasting & Cable TV) 1,188,600 11,965,554 - --------------------------------------------------------------------------
F-1
MARKET SHARES VALUE - -------------------------------------------------------------------------- ITALY-(CONTINUED) UniCredito Italiano S.p.A. (Diversified Banks) 2,616,100 $ 12,849,833 ========================================================================== 69,081,811 ========================================================================== JAPAN-18.10% Canon Inc. (Office Electronics) 410,000 19,850,746 - -------------------------------------------------------------------------- Daiwa House Industry Co., Ltd. (Homebuilding) 593,000 6,400,601 - -------------------------------------------------------------------------- Fanuc Ltd. (Industrial Machinery) 252,200 15,171,478 - -------------------------------------------------------------------------- Fuji Photo Film Co., Ltd. (Photographic Products) 170,000 5,012,741 - -------------------------------------------------------------------------- Hirose Electric Co., Ltd. (Electronic Equipment Manufacturers) 173,700 21,356,816 - -------------------------------------------------------------------------- Hoya Corp. (Electronic Equipment Manufacturers) 276,600 25,047,051 - -------------------------------------------------------------------------- JSR Corp. (Specialty Chemicals) 724,000 15,352,384 - -------------------------------------------------------------------------- KDDI Corp. (Wireless Telecommunication Services) 2,210 12,007,372 - -------------------------------------------------------------------------- Keyence Corp. (Electronic Equipment Manufacturers) 95,200 20,949,545 - -------------------------------------------------------------------------- Nidec Corp. (Electronic Equipment Manufacturers) 175,900 17,048,917 - -------------------------------------------------------------------------- Nissan Motor Co., Ltd. (Automobile Manufacturers) 1,863,300 20,891,751 - -------------------------------------------------------------------------- Nitto Denko Corp. (Specialty Chemicals) 596,700 31,333,810 - -------------------------------------------------------------------------- NOK Corp. (Auto Parts & Equipment) 269,000 10,600,382 - -------------------------------------------------------------------------- Ricoh Co., Ltd. (Office Electronics) 471,000 8,937,341 - -------------------------------------------------------------------------- Shin-Etsu Chemical Co., Ltd. (Specialty Chemicals) 237,300 8,832,881 - -------------------------------------------------------------------------- Takeda Chemical Industries, Ltd. (Pharmaceuticals) 338,400 11,980,124 - -------------------------------------------------------------------------- Toyota Motor Corp. (Automobile Manufacturers) 342,000 9,742,082 - -------------------------------------------------------------------------- Trend Micro Inc. (Application Software)(b) 331,900 9,152,321 - -------------------------------------------------------------------------- Yamaha Corp. (Leisure Products) 264,000 5,321,806 - -------------------------------------------------------------------------- Yamanouchi Pharmaceutical Co., Ltd. (Pharmaceuticals) 534,000 13,413,178 ========================================================================== 288,403,327 ========================================================================== MEXICO-2.22% America Movil S.A. de C.V.-Series L-ADR (Wireless Telecommunication Services) 649,100 15,448,580 - -------------------------------------------------------------------------- Grupo Financiero BBVA Bancomer, S.A. de C.V.- Class B (Diversified Banks)(b) 10,436,700 8,893,381 - -------------------------------------------------------------------------- Wal-Mart de Mexico S.A. de C.V.-Series C (Hypermarkets & Super Centers) 4,251,000 11,110,196 ========================================================================== 35,452,157 ========================================================================== NETHERLANDS-2.39% ABN AMRO Holding N.V. (Diversified Banks) 397,900 8,320,098 - -------------------------------------------------------------------------- Aegon N.V. (Life & Health Insurance) 637,479 8,330,140 - -------------------------------------------------------------------------- James Hardie Industries N.V. (Construction Materials) 732,500 3,717,121 - --------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------- NETHERLANDS-(CONTINUED) Koninklijke (Royal) KPN N.V. (Integrated Telecommunication Services)(b) 1,684,959 $ 12,765,692 - -------------------------------------------------------------------------- Koninklijke (Royal) Philips Electronics N.V. (Consumer Electronics) 184,880 4,966,700 ========================================================================== 38,099,751 ========================================================================== NORWAY-0.79% Telenor A.S.A. (Integrated Telecommunication Services) 2,321,602 12,573,385 ========================================================================== SINGAPORE-1.38% Keppel Corp. Ltd. (Industrial Conglomerates) 2,300,000 7,867,203 - -------------------------------------------------------------------------- Singapore Airlines Ltd. (Airlines) 947,000 6,587,353 - -------------------------------------------------------------------------- United Overseas Bank Ltd. (Diversified Banks) 960,000 7,505,605 ========================================================================== 21,960,161 ========================================================================== SOUTH KOREA-2.64% Daewoo Shipbuilding & Marine Engineering Co., Ltd. (Construction & Farm Machinery & Heavy Trucks)(b) 305,000 4,097,592 - -------------------------------------------------------------------------- Kookmin Bank (Diversified Banks) 323,360 11,803,255 - -------------------------------------------------------------------------- Samsung Electronics Co., Ltd. (Electronic Equipment Manufacturers) 65,700 26,091,255 ========================================================================== 41,992,102 ========================================================================== SPAIN-2.28% Banco Popular Espanol S.A. (Diversified Banks) 305,845 15,848,114 - -------------------------------------------------------------------------- Repsol YPF, S.A. (Integrated Oil & Gas) 1,181,716 20,534,383 ========================================================================== 36,382,497 ========================================================================== SWEDEN-2.72% AB SKF-Class B (Industrial Machinery) 135,100 4,759,289 - -------------------------------------------------------------------------- Atlas Copco A.B.-Class A (Industrial Machinery) 234,200 8,190,588 - -------------------------------------------------------------------------- ForeningsSparbanken A.B. (Diversified Banks) 484,700 8,042,554 - -------------------------------------------------------------------------- Tele2 A.B.-Class B (Integrated Telecommunication Services)(b) 117,500 5,886,473 - -------------------------------------------------------------------------- Telefonaktiebolaget LM Ericsson (Communications Equipment) 4,463,292 7,633,746 - -------------------------------------------------------------------------- Volvo A.B.-Class B (Construction & Farm Machinery & Heavy Trucks) 314,900 8,762,071 ========================================================================== 43,274,721 ========================================================================== SWITZERLAND-3.97% Credit Suisse Group (Diversified Capital Markets) 536,212 18,821,825 - -------------------------------------------------------------------------- Nestle S.A. (Packaged Foods & Meats) 27,119 5,948,214 - -------------------------------------------------------------------------- Roche Holding A.G. (Pharmaceuticals) 146,575 12,083,361 - -------------------------------------------------------------------------- Syngenta A.G. (Fertilizers & Agricultural Chemicals) 164,689 8,791,031 - -------------------------------------------------------------------------- UBS A.G. (Diversified Capital Markets) 286,398 17,520,618 ========================================================================== 63,165,049 ==========================================================================
F-2
MARKET SHARES VALUE - -------------------------------------------------------------------------- TAIWAN-3.96% Compal Electronics Inc. (Computer Hardware) 5,778,880 $ 8,771,362 - -------------------------------------------------------------------------- Hon Hai Precision Industry Co., Ltd. (Electronic Equipment Manufacturers) 2,785,960 12,480,575 - -------------------------------------------------------------------------- MediaTek Inc. (Semiconductors) 703,000 7,251,695 - -------------------------------------------------------------------------- Quanta Computer Inc. (Computer Hardware) 3,031,000 8,263,115 - -------------------------------------------------------------------------- Taiwan Semiconductor Manufacturing Co. Ltd. (Semiconductors) 13,305,513 26,273,780 ========================================================================== 63,040,527 ========================================================================== UNITED KINGDOM-19.42% AstraZeneca PLC (Pharmaceuticals) 514,875 24,153,849 - -------------------------------------------------------------------------- Barclays PLC (Diversified Banks) 1,676,680 14,122,937 - -------------------------------------------------------------------------- Centrica PLC (Gas Utilities) 4,458,290 13,940,654 - -------------------------------------------------------------------------- Enterprise Inns PLC (Restaurants) 311,400 4,462,217 - -------------------------------------------------------------------------- Galen Holdings PLC (Pharmaceuticals) 426,000 5,461,815 - -------------------------------------------------------------------------- GlaxoSmithKline PLC (Pharmaceuticals) 530,470 11,345,892 - -------------------------------------------------------------------------- GUS PLC (Catalog Retail) 1,250,290 15,256,739 - -------------------------------------------------------------------------- ICAP PLC (Investment Banking & Brokerage) 375,300 8,768,829 - -------------------------------------------------------------------------- Imperial Tobacco Group PLC (Tobacco) 1,607,620 26,619,287 - -------------------------------------------------------------------------- Kingfisher PLC (Home Improvement Retail) 1,686,995 8,077,012 - -------------------------------------------------------------------------- Man Group PLC (Asset Management & Custody Banks) 401,860 9,868,738 - -------------------------------------------------------------------------- mm02 PLC (Wireless Telecommunication Services)(b) 11,905,490 12,913,552 - -------------------------------------------------------------------------- Next PLC (Department Stores) 1,019,420 20,387,014 - -------------------------------------------------------------------------- Reckitt Benckiser PLC (Household Products) 1,100,240 23,122,116 - -------------------------------------------------------------------------- Shire Pharmaceuticals Group PLC (Pharmaceuticals)(b) 673,350 5,095,429 - -------------------------------------------------------------------------- Smith & Nephew PLC (Health Care Supplies) 3,075,235 24,404,760 - -------------------------------------------------------------------------- Tesco PLC (Food Retail) 5,919,043 23,699,641 - -------------------------------------------------------------------------- Travis Perkins PLC (Home Improvement Retail) 218,700 4,424,148 - --------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------- UNITED KINGDOM-(CONTINUED) Vodafone Group PLC (Wireless Telecommunication Services) 18,480,590 $ 38,759,619 - -------------------------------------------------------------------------- Morrison (William) Supermarkets PLC (Food Retail) 3,812,970 14,475,376 ========================================================================== 309,359,624 ========================================================================== UNITED STATES OF AMERICA-1.03% Autoliv, Inc.-SDR (Auto Parts & Equipment) 251,000 8,233,500 - -------------------------------------------------------------------------- Synthes-Stratec, Inc. (Health Care Equipment)(b) 8,900 8,140,406 ========================================================================== 16,373,906 ========================================================================== Total Stocks & Other Equity Interests (Cost $1,206,227,506) 1,539,044,740 ========================================================================== PRINCIPAL AMOUNT BONDS-0.00% INDIA-0.00% Hindustan Lever Ltd. (Household Products), Sec. Deb., 9.00%, 01/01/05 (Cost $0) INR 1,100,000 1,558 ========================================================================== TOTAL INVESTMENTS-96.61% (excluding investments purchased with cash collateral from securities loaned) (Cost $1,206,227,506) 1,539,046,298 ========================================================================== SHARES INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED MONEY MARKET FUNDS-2.69% STIC Liquid Assets Portfolio(c)(d) 42,838,030 42,838,030 ========================================================================== Total Money Market Funds (purchased with cash collateral from securities loaned) (Cost $42,838,030) 42,838,030 ========================================================================== TOTAL INVESTMENTS-99.30% (Cost $1,249,065,536) 1,581,884,328 ========================================================================== OTHER ASSETS LESS LIABILITIES-0.70% 11,118,235 ========================================================================== NET ASSETS-100.00% $1,593,002,563 __________________________________________________________________________ ==========================================================================
Investment Abbreviations: ADR - American Depositary Receipt Deb. - Debentures INR - Indian Rupee SDR - Swedish Depository Receipt Sec. - Secured
Notes to Schedule of Investments: (a) Security not registered under the Securities Act of 1933, as amended (e.g., the security was purchased in a Rule 144A transaction or a Regulation D transaction). The security may be resold only pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The Fund has no rights to demand registration of these securities. The aggregate market value of these securities at 10/31/03 was $48,854,309, which represented 3.07% of the Fund's net assets. Unless otherwise indicated, these securities are not considered to be illiquid. (b) Non-income producing security. (c) The money market fund and the Fund are affiliated by having the same investment advisor. (d) The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Notes to Financial Statements. F-3 STATEMENT OF ASSETS AND LIABILITIES October 31, 2003 ASSETS: Investments, at market value (cost $1,206,227,506)* $1,539,046,298 - ------------------------------------------------------------ Investments in affiliated money market funds (cost $42,838,030) 42,838,030 - ------------------------------------------------------------ Foreign currencies, at value (cost $39,494,059) 39,394,759 - ------------------------------------------------------------ Cash 14,454,167 - ------------------------------------------------------------ Receivables for: Investments sold 20,287,918 - ------------------------------------------------------------ Capital stock sold 3,280,743 - ------------------------------------------------------------ Dividends and interest 3,469,334 - ------------------------------------------------------------ Amount due from advisor 15,290 - ------------------------------------------------------------ Investment for deferred compensation plan 88,383 - ------------------------------------------------------------ Other assets 185,212 ============================================================ Total assets 1,663,060,134 ____________________________________________________________ ============================================================ LIABILITIES: Payables for: Investments purchased 14,808,329 - ------------------------------------------------------------ Capital stock reacquired 9,828,142 - ------------------------------------------------------------ Deferred compensation plan 88,383 - ------------------------------------------------------------ Collateral upon return of securities loaned 42,838,030 - ------------------------------------------------------------ Accrued distribution fees 676,640 - ------------------------------------------------------------ Accrued directors' fees 98,268 - ------------------------------------------------------------ Accrued transfer agent fees 1,257,312 - ------------------------------------------------------------ Accrued operating expenses 462,467 ============================================================ Total liabilities 70,057,571 ============================================================ Net assets applicable to shares outstanding $1,593,002,563 ____________________________________________________________ ============================================================ NET ASSETS CONSIST OF: Capital (par value and additional paid-in) $1,787,466,539 - ------------------------------------------------------------ Undistributed net investment income 1,385,424 - ------------------------------------------------------------ Undistributed net realized gain (loss) from investment securities, foreign currencies and futures contracts (528,589,622) - ------------------------------------------------------------ Unrealized appreciation of investment securities and foreign currencies 332,740,222 ============================================================ $1,593,002,563 ____________________________________________________________ ============================================================ NET ASSETS: Class A $1,117,420,019 ____________________________________________________________ ============================================================ Class B $ 360,671,403 ____________________________________________________________ ============================================================ Class C $ 113,964,516 ____________________________________________________________ ============================================================ Class R $ 867,405 ____________________________________________________________ ============================================================ Institutional Class $ 79,220 ____________________________________________________________ ============================================================ CAPITAL STOCK, $0.001 PAR VALUE PER SHARE: Class A: Authorized 480,000,000 - ------------------------------------------------------------ Outstanding 73,387,899 ____________________________________________________________ ============================================================ Class B: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 25,188,905 ____________________________________________________________ ============================================================ Class C: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 7,951,939 ____________________________________________________________ ============================================================ Class R: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 57,282 ____________________________________________________________ ============================================================ Institutional Class: Authorized 240,000,000 - ------------------------------------------------------------ Outstanding 5,155 ____________________________________________________________ ============================================================ Class A: Net asset value per share $ 15.23 - ------------------------------------------------------------ Offering price per share: (Net asset value of $15.23 divided by 94.50%) $ 16.12 ____________________________________________________________ ============================================================ Class B: Net asset value and offering price per share $ 14.32 ____________________________________________________________ ============================================================ Class C: Net asset value and offering price per share $ 14.33 ____________________________________________________________ ============================================================ Class R: Net asset value and offering price per share $ 15.14 ____________________________________________________________ ============================================================ Institutional Class: Net asset value and offering price per share $ 15.37 ____________________________________________________________ ============================================================
* At October 31, 2003, securities with an aggregate market value of $38,847,584 were on loan to brokers. See Notes to Financial Statements. F-4 STATEMENT OF OPERATIONS For the year ended October 31, 2003 INVESTMENT INCOME: Dividends (net of foreign withholding tax of $3,554,080) $ 27,094,609 - -------------------------------------------------------------------------- Dividends from affiliated money market funds 803,434 - -------------------------------------------------------------------------- Interest 79,655 - -------------------------------------------------------------------------- Securities lending 1,001,326 ========================================================================== Total investment income 28,979,024 ========================================================================== EXPENSES: Advisory fees 14,723,373 - -------------------------------------------------------------------------- Administrative services fees 387,366 - -------------------------------------------------------------------------- Custodian fees 1,354,320 - -------------------------------------------------------------------------- Distribution fees: Class A 3,330,664 - -------------------------------------------------------------------------- Class B 3,602,319 - -------------------------------------------------------------------------- Class C 1,092,583 - -------------------------------------------------------------------------- Class R 2,950 - -------------------------------------------------------------------------- Transfer agent fees 6,313,971 - -------------------------------------------------------------------------- Transfer agent fees -- Institutional Class 65 - -------------------------------------------------------------------------- Directors' fees 36,990 - -------------------------------------------------------------------------- Other 1,128,604 ========================================================================== Total expenses 31,973,205 ========================================================================== Less: Fees waived, expenses reimbursed and expenses paid indirectly (1,251,776) ========================================================================== Net expenses 30,721,429 ========================================================================== Net investment income (loss) (1,742,405) ========================================================================== REALIZED AND UNREALIZED GAIN FROM INVESTMENT SECURITIES, FOREIGN CURRENCIES AND FUTURES CONTRACTS: Net realized gain from: Investment securities 46,644,664 - -------------------------------------------------------------------------- Foreign currencies 3,194,368 - -------------------------------------------------------------------------- Futures contracts 593,783 ========================================================================== 50,432,815 ========================================================================== Change in net unrealized appreciation of: Investment securities 262,645,749 - -------------------------------------------------------------------------- Foreign currencies 7,957 ========================================================================== 262,653,706 ========================================================================== Net gain from investment securities, foreign currencies and futures contracts 313,086,521 ========================================================================== Net increase in net assets resulting from operations $311,344,116 __________________________________________________________________________ ==========================================================================
See Notes to Financial Statements. F-5 STATEMENT OF CHANGES IN NET ASSETS For the years ended October 31, 2003 and 2002
2003 2002 - ---------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $ (1,742,405) $ (8,846,063) - ---------------------------------------------------------------------------------------------- Net realized gain (loss) from investment securities, foreign currencies and futures contracts 50,432,815 (221,331,772) - ---------------------------------------------------------------------------------------------- Change in net unrealized appreciation of investment securities, and foreign currencies 262,653,706 52,979,939 ============================================================================================== Net increase (decrease) in net assets resulting from operations 311,344,116 (177,197,896) ============================================================================================== Share transactions-net: Class A (206,630,297) (212,077,269) - ---------------------------------------------------------------------------------------------- Class B (101,031,208) (148,436,124) - ---------------------------------------------------------------------------------------------- Class C (20,132,725) (35,844,117) - ---------------------------------------------------------------------------------------------- Class R 636,461 49,318 - ---------------------------------------------------------------------------------------------- Institutional Class (8,827) 80,835 ============================================================================================== Net increase (decrease) in net assets resulting from share transactions (327,166,596) (396,227,357) ============================================================================================== Net increase (decrease) in net assets (15,822,480) (573,425,253) ============================================================================================== NET ASSETS: Beginning of year 1,608,825,043 2,182,250,296 ============================================================================================== End of year (including undistributed net investment income (loss) of $1,385,424 and $(168,216) for 2003 and 2002, respectively) $1,593,002,563 $1,608,825,043 ______________________________________________________________________________________________ ==============================================================================================
See Notes to Financial Statements. F-6 NOTES TO FINANCIAL STATEMENTS October 31, 2003 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES AIM International Growth Fund (the "Fund") is a series portfolio of AIM International Funds, Inc. (the "Company"). The Company is a Maryland corporation registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company consisting of five separate portfolios. The Fund currently offers multiple classes of shares. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Effective November 25, 2003, the Fund redomesticated as a series portfolio of a newly formed Delaware statutory trust, AIM International Mutual Funds. The Fund's investment objective is long-term growth of capital. Companies are listed in the Schedule of Investments based on the country in which they are organized. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security traded in the over-the-counter market (but not securities reported on the NASDAQ National Market System) is valued on the basis of prices furnished by independent pricing services or market makers. Each security reported on the NASDAQ National Market System is valued at the NASDAQ Official Closing Price ("NOCP") as of the close of the customary trading session on the valuation date or absent a NOCP, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Company's officers in a manner specifically authorized by the Board of Directors of the Company. Market trends, movement in exchange traded funds and ADRs, and the bid/ask quotes of brokers and information providers may be reviewed in the course of making a good faith determination of a security's fair value. Short-term obligations having 60 days or less to maturity and commercial paper are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ("NYSE"). Foreign securities are converted into U.S. dollar amounts using exchange rates as of the close of the NYSE. Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of the close of the respective markets. Occasionally, events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE which would not ordinarily be reflected in the computation of the Fund's net asset value. If a development/event is so significant that there is a reasonably high degree of certainty as to both the effect and the degree of effect that the development/event has actually caused that closing price to no longer reflect actual value, the closing prices, as determined at the close of the applicable foreign market, may be adjusted to reflect the fair value of the affected foreign securities as of the close of the NYSE as determined in good faith by or under the supervision of the Board of Directors. 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 on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date. The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class. C. DISTRIBUTIONS -- Distributions from income and net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to use a portion of the proceeds from redemptions as distributions for federal income tax purposes. D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of Subchapter M 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 gain) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. Any capital loss carryforwards listed are reduced for limitations, if any, to the extent required by the Internal Revenue Code. E. FOREIGN CURRENCY TRANSLATIONS -- Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments are included F-7 with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. F. FOREIGN CURRENCY CONTRACTS -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund may enter into a foreign currency contract to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. The Fund may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Fund could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. G. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to the Institutional Class are charged to such class. Transfer agency fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. 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 0.95% of the first $1 billion of the Fund's average daily net assets, plus 0.90% of the Fund's average daily net assets in excess of $1 billion. AIM has contractually agreed to waive advisory fees payable by the Fund to AIM at the annual rate of 0.05% on net assets in excess of $500 million. Further, AIM has voluntarily agreed to waive advisory fees of the Fund in the amount of 25% of the advisory fee AIM receives from the affiliated money market funds in which the Fund has invested (excluding investments made in affiliated money market funds with cash collateral from securities loaned by the Fund). For the year ended October 31, 2003, AIM waived fees of $555,986. Under a prior agreement to limit the aggregate costs of certain shareholder services provided by third party administrators, AIM reimbursed fees of $670,300 for Class A, Class B, Class C and Class R shares based on the relative net assets of those classes. 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 October 31, 2003, AIM was paid $387,366 for such services. The Fund, pursuant to a transfer agency and service agreement, has agreed to pay AIM Investment Services, Inc. ("AISI"), formerly known as A I M Fund Services, Inc., a fee for providing transfer agency and shareholder services to the Fund. For the Institutional Class, the transfer agent has contractually agreed to reimburse class specific transfer agent fees to the extent necessary to limit transfer agent fees to 0.10% of the average net assets. During the year ended October 31, 2003, AISI retained $2,406,157 for such services. The Company has entered into master distribution agreements with A I M Distributors, Inc. ("AIM Distributors") to serve as the distributor for the Class A, Class B, Class C, Class R and the Institutional Class shares of the Fund. The Company has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A, Class B, Class C and Class R shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays AIM Distributors compensation at the annual rate of 0.30% of the Fund's average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares and 0.50% of the average daily net assets of Class R shares. Of these amounts, the AIM Distributors may pay a service fee up to 0.25% of the average daily net assets of the Class A, Class B, Class C or Class R shares to selected dealers and financial institutions who furnish continuing personal shareholder services to their customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. NASD Rules also impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. Pursuant to the Plans, for the year ended October 31, 2003, the Class A, Class B, Class C and Class R shares paid $3,330,664, $3,602,319, $1,092,583 and $2,950, respectively. Front-end sales commissions and contingent deferred sales charges ("CDSC") (collectively the "sales charges") are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the year ended October 31, 2003, AIM Distributors retained $85,350 in front-end sales commissions from the sale of Class A shares and $1,104,821, $142, $36,471 and $0 from Class A, Class B, Class C and Class R shares, respectively, for CDSC imposed upon redemptions by shareholders. Certain officers and directors of the Company are officers and directors of AIM, AISI and/or AIM Distributors. NOTE 3--EXPENSE OFFSET ARRANGEMENTS For the year ended October 31, 2003, the Fund received reductions in transfer agency fees from AISI (an affiliate of AIM) of $24,533 and reductions in custodian fees of $957 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $25,490. NOTE 4--DIRECTORS' FEES Directors' fees represent remuneration paid to each Director of the Company who is not an "interested person" of AIM. Directors have the option to defer compensation payable by the Company. The Directors deferring compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Current Directors are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Directors over a period of time based on the number of years of service. Certain former Trustees also participate in a retirement plan and receive benefits under such plan. During the year ended October 31, 2003, the Fund paid legal fees of $4,784 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Directors. A member of that firm is a Director of the Company. F-8 NOTE 5--BORROWINGS The Fund may participate in an interfund lending facility that AIM has established for temporary borrowings by the AIM Funds. An interfund loan will be made under this facility only if the loan rate (an average of the rate available on bank loans and the rate available on investments in overnight repurchase agreements) is favorable to both the lending fund and the borrowing fund. Under certain circumstances, a loan will be secured by collateral. To the extent that the loan is required to be secured by collateral, the collateral is marked to market daily to ensure that the market value is at least 102% of the outstanding principal value of the loan. Effective June 26, 2003, the Fund became a participant in an uncommitted unsecured revolving line of credit facility with State Street Bank and Trust Company ("SSB"). The Fund may borrow up to the lesser of (i) $125,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit can borrow on a first come, first served basis. Principal on each loan outstanding shall bear interest at the bid rate quoted by SSB at the time of the request for the loan. During the reporting period, the Fund was a participant in a committed line of credit facility with a syndicate administered by Citibank, N.A. The Fund could borrow up to the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which were parties to the line of credit could borrow on a first come, first served basis. The funds which were party to the line of credit were charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee was allocated among the funds based on their respective average net assets for the period. The committed line of credit facility expired May 20, 2003. During the year ended October 31, 2003, the Fund did not borrow or lend under the interfund lending facility or borrow under either the uncommitted unsecured revolving line of credit facility or the committed line of credit facility. Additionally the Fund is permitted to carry a negative or overdrawn balance in its account with the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds in the account so the custodian can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank. In either case, the custodian bank will be compensated an amount equal to the Federal Funds rate plus 100 basis points. NOTE 6--PORTFOLIO SECURITIES LOANED The Fund may lend portfolio securities to the extent of one-third of the Fund's total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its agencies. Cash collateral pursuant to these loans is invested in short-term money market instruments or affiliated money market funds. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. It is the Fund's policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. At October 31, 2003, securities with an aggregate value of $38,847,584 were on loan to brokers. The loans were secured by cash collateral of $42,838,030 received by the Fund and subsequently invested in an affiliated money market fund. For the year ended October 31, 2003, the Fund received fees of $1,001,326 for securities lending. NOTE 7--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS Distributions to Shareholders: There were no ordinary income or long-term capital gain distributions paid during the years ended October 31, 2003 and 2002. Tax Components of Net Assets: As of October 31, 2003, the components of net assets on a tax basis were as follows: Undistributed ordinary income $ 1,573,558 - ------------------------------------------------------------ Unrealized appreciation -- investments 330,833,847 - ------------------------------------------------------------ Temporary book/tax differences (188,136) - ------------------------------------------------------------ Capital loss carryforward (526,683,245) - ------------------------------------------------------------ Capital (par value and additional paid-in) 1,787,466,539 ============================================================ Total net assets $1,593,002,563 ____________________________________________________________ ============================================================
The difference between book-basis and tax-basis unrealized appreciation is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund's unrealized appreciation difference is attributable primarily to the tax deferral of losses on wash sales. Amount includes appreciation (depreciation) on foreign currencies of $(78,570). The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund's temporary book/tax differences are the result of the deferral of director compensation and director retirement plan expenses. The Fund has a capital loss carryforward for tax purposes which expires as follows:
CAPITAL LOSS EXPIRATION CARRYFORWARD - ---------------------------------------------------------- October 31, 2008 $ 8,427,649 - ---------------------------------------------------------- October 31, 2009 296,794,208 - ---------------------------------------------------------- October 31, 2010 221,461,388 ========================================================== Total capital loss carryforward $526,683,245 __________________________________________________________ ==========================================================
F-9 NOTE 8--INVESTMENT SECURITIES The aggregate amount of investment securities (other than short-term securities and money market funds) purchased and sold by the Fund during the year ended October 31, 2003 was $1,136,347,378 and $1,406,098,946 respectively.
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS - ----------------------------------------------------------- Aggregate unrealized appreciation of investment securities $337,542,565 - ----------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (6,630,148) =========================================================== Net unrealized appreciation of investment securities $330,912,417 ___________________________________________________________ =========================================================== Cost of investments for tax purposes is $1,250,971,911.
NOTE 9--RECLASSIFICATION OF PERMANENT DIFFERENCES Primarily as a result of differing book/tax treatment of foreign currency transactions and capital loss limitations, on October 31, 2003, undistributed net investment income was increased by $3,296,045, undistributed net realized gains decreased by $3,622,479 and paid in capital increased by $326,434. This reclassification had no effect on net assets of the Fund. NOTE 10--CAPITAL STOCK INFORMATION The Fund currently offers five different classes of shares: Class A shares, Class B shares, Class C shares, Class R shares and the Institutional Class shares. Class A shares are sold with front-end sales charge. Class B shares and Class C shares are sold with CDSC. Class R shares and the Institutional Class shares are sold at net asset value. Under some circumstances, Class A shares and Class R shares are subject to CDSC. Generally, Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase.
CHANGES IN SHARES OUTSTANDING - -------------------------------------------------------------------------------------------------------------------------------- YEAR ENDED OCTOBER 31, ------------------------------------------------------------------ 2003 2002 ------------------------------- ------------------------------- SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------------------------------------------------- Sold: Class A 360,002,923 $ 4,667,044,231 368,401,191 $ 5,196,926,844 - -------------------------------------------------------------------------------------------------------------------------------- Class B 1,810,130 22,361,870 3,311,442 44,849,213 - -------------------------------------------------------------------------------------------------------------------------------- Class C 18,493,883 227,638,038 15,573,890 203,220,053 - -------------------------------------------------------------------------------------------------------------------------------- Class R* 1,257,373 16,539,372 3,845 49,318 - -------------------------------------------------------------------------------------------------------------------------------- Institutional Class** -- -- 5,818 80,835 ================================================================================================================================ Automatic conversion of Class B shares to Class A shares: Class A 2,013,886 26,283,106 660,780 9,377,577 - -------------------------------------------------------------------------------------------------------------------------------- Class B (2,133,943) (26,283,106) (698,495) (9,377,577) ================================================================================================================================ Reacquired: Class A (374,808,645) (4,899,957,634) (380,070,713) (5,418,381,690) - -------------------------------------------------------------------------------------------------------------------------------- Class B (7,880,064) (97,109,972) (13,644,671) (183,907,760) - -------------------------------------------------------------------------------------------------------------------------------- Class C (20,026,701) (247,770,763) (18,116,304) (239,064,170) - -------------------------------------------------------------------------------------------------------------------------------- Class R* (1,203,936) (15,902,911) -- -- - -------------------------------------------------------------------------------------------------------------------------------- Institutional Class** (663) (8,827) -- -- ================================================================================================================================ (22,475,757) $ (327,166,596) (24,573,217) $ (396,227,357) ________________________________________________________________________________________________________________________________ ================================================================================================================================
* Class R shares commenced sales on June 3, 2002. ** Institutional Class shares commenced sales on March 15, 2002. F-10 NOTE 11--FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A ---------------------------------------------------------------------------- YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------------- 2003 2002 2001 2000 1999 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.69 $ 14.45 $ 21.60 $ 21.73 $ 17.59 - --------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.01(a) (0.03)(a) (0.01) 0.08(a) (0.03) - --------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 2.53 (1.73) (5.66) 0.72 4.49 ================================================================================================================================= Total from investment operations 2.54 (1.76) (5.67) 0.80 4.46 ================================================================================================================================= Less distributions: Dividends from net investment income -- -- -- -- (0.11) - --------------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gains -- -- (1.48) (0.93) (0.21) ================================================================================================================================= Total distributions -- -- (1.48) (0.93) (0.32) ================================================================================================================================= Net asset value, end of period $ 15.23 $ 12.69 $ 14.45 $ 21.60 $ 21.73 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Total return(b) 20.02% (12.18)% (27.96)% 3.16% 25.73% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratios/supplemental data: Net assets, end of period (000s omitted) $1,117,420 $1,093,344 $1,404,269 $2,325,636 $2,058,419 _________________________________________________________________________________________________________________________________ ================================================================================================================================= Ratio of expenses to average net assets: With fee waivers and expense reimbursements 1.74%(c) 1.70% 1.57% 1.44% 1.48% - --------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and expense reimbursements 1.82%(c) 1.74% 1.61% 1.48% 1.52% ================================================================================================================================= Ratio of net investment income (loss) to average net assets 0.09%(c) (0.21)% (0.04)% 0.30% (0.14)% _________________________________________________________________________________________________________________________________ ================================================================================================================================= Portfolio turnover rate 77% 77% 85% 87% 86% _________________________________________________________________________________________________________________________________ =================================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $1,110,221,314.
CLASS B ----------------------------------------------------------------- YEAR ENDED OCTOBER 31, ----------------------------------------------------------------- 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.02 $ 13.78 $ 20.81 $ 21.11 $ 17.13 - ------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.08)(a) (0.12)(a) (0.13) (0.11)(a) (0.17)(a) - ------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 2.38 (1.64) (5.42) 0.74 4.36 =============================================================================================================================== Total from investment operations 2.30 (1.76) (5.55) 0.63 4.19 =============================================================================================================================== Less distributions from net realized gains -- -- (1.48) (0.93) (0.21) =============================================================================================================================== Net asset value, end of period $ 14.32 $ 12.02 $ 13.78 $ 20.81 $ 21.11 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Total return(b) 19.14% (12.77)% (28.48)% 2.42% 24.72% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $360,671 $401,288 $612,125 $997,843 $887,106 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratio of expenses to average net assets: With fee waivers and expense reimbursements 2.44%(c) 2.40% 2.27% 2.18% 2.27% - ------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and expense reimbursements 2.52%(c) 2.44% 2.31% 2.22% 2.31% =============================================================================================================================== Ratio of net investment income (loss) to average net assets (0.61)(c) (0.91)% (0.75)% (0.44)% (0.93)% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Portfolio turnover rate 77% 77% 85% 87% 86% _______________________________________________________________________________________________________________________________ ===============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $360,231,865. F-11 NOTE 11--FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C ----------------------------------------------------------------- YEAR ENDED OCTOBER 31, ----------------------------------------------------------------- 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.03 $ 13.79 $ 20.82 $ 21.13 $ 17.14 - ------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) (0.08)(a) (0.12)(a) (0.13) (0.11)(a) (0.17)(a) - ------------------------------------------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 2.38 (1.64) (5.42) 0.73 4.37 =============================================================================================================================== Total from investment operations 2.30 (1.76) (5.55) 0.62 4.20 =============================================================================================================================== Less distributions from net realized gains -- -- (1.48) (0.93) (0.21) =============================================================================================================================== Net asset value, end of period $ 14.33 $ 12.03 $ 13.79 $ 20.82 $ 21.13 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Total return(b) 19.12% (12.76)% (28.47)% 2.37% 24.76% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $113,965 $114,070 $165,857 $253,998 $118,208 _______________________________________________________________________________________________________________________________ =============================================================================================================================== Ratio of expenses to average net assets: With fee waivers and expense reimbursements 2.44%(c) 2.40% 2.27% 2.18% 2.27% - ------------------------------------------------------------------------------------------------------------------------------- Without fee waivers and expense reimbursements 2.52%(c) 2.44% 2.31% 2.22% 2.31% =============================================================================================================================== Ratio of net investment income (loss) to average net assets (0.61)(c) (0.91)% (0.75)% (0.44)% (0.93)% _______________________________________________________________________________________________________________________________ =============================================================================================================================== Portfolio turnover rate 77% 77% 85% 87% 86% _______________________________________________________________________________________________________________________________ ===============================================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and does not include sales charges. (c) Ratios are based on average daily net assets of $109,258,326.
CLASS R ---------------------------------- JUNE 3, 2002 (DATE SALES YEAR ENDED COMMENCED) TO OCTOBER 31, OCTOBER 31, 2003 2002 - ------------------------------------------------------------------------------------------------ Net asset value, beginning of period $12.69 $ 15.27 - ------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income (loss) 0.01(a) (0.02)(a) - ------------------------------------------------------------------------------------------------ Net gains (losses) on securities (both realized and unrealized) 2.44 (2.56) ================================================================================================ Total from investment operations 2.45 (2.58) ================================================================================================ Net asset value, end of period $15.14 $ 12.69 ________________________________________________________________________________________________ ================================================================================================ Total return(b) 19.31% (16.90)% ________________________________________________________________________________________________ ================================================================================================ Ratios/supplemental data: Net assets, end of period (000s omitted) $ 867 $ 49 ________________________________________________________________________________________________ ================================================================================================ Ratio of expenses to average net assets: With fee waivers and expense reimbursements 1.94%(c) 1.89%(d) - ------------------------------------------------------------------------------------------------ Without fee waivers and expense reimbursements 2.02%(c) 1.93%(d) ================================================================================================ Ratio of net investment income (loss) to average net assets (0.11)(c) (0.40)(d) ________________________________________________________________________________________________ ================================================================================================ Portfolio turnover rate(e) 77% 77% ________________________________________________________________________________________________ ================================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and is not annualized for periods less than one year. (c) Ratios are based on average daily net assets of $589,989. (d) Annualized. (e) Not annualized for periods less than one year. F-12 NOTE 11--FINANCIAL HIGHLIGHTS (CONTINUED)
INSTITUTIONAL CLASS --------------------------------- MARCH 15, 2002 (DATE SALES YEAR ENDED COMMENCED) TO OCTOBER 31, OCTOBER 31, 2003 2002 - ----------------------------------------------------------------------------------------------- Net asset value, beginning of period $12.73 $ 15.09 - ----------------------------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.09(a) 0.03(a) - ----------------------------------------------------------------------------------------------- Net gains (losses) on securities (both realized and unrealized) 2.55 (2.39) =============================================================================================== Total from investment operations 2.64 (2.36) =============================================================================================== Net asset value, end of period $15.37 $ 12.73 _______________________________________________________________________________________________ =============================================================================================== Total return(b) 20.74% (15.64)% _______________________________________________________________________________________________ =============================================================================================== Ratios/supplemental data: Net assets, end of period (000s omitted) $ 79 $ 74 _______________________________________________________________________________________________ =============================================================================================== Ratio of expenses to average net assets: With fee waivers and expense reimbursements 1.17%(c) 1.16%(d) - ----------------------------------------------------------------------------------------------- Without fee waivers and expense reimbursements 1.21%(c) 1.20%(d) =============================================================================================== Ratio of net investment income to average net assets 0.66%(c) 0.33%(d) _______________________________________________________________________________________________ =============================================================================================== Portfolio turnover rate(e) 77% 77% _______________________________________________________________________________________________ ===============================================================================================
(a) Calculated using average shares outstanding. (b) Includes adjustments in accordance with accounting principles generally accepted in the United States of America and is not annualized for periods less than one year. (c) Ratios are based on average daily net assets of $73,309. (d) Annualized. (e) Not annualized for periods less than one year. NOTE 12--SUBSEQUENT EVENTS Your Fund's investment advisor, A I M Advisors, Inc. ("AIM") is an indirect wholly owned subsidiary of AMVESCAP PLC ("AMVESCAP"). Another indirect wholly owned subsidiary of AMVESCAP, INVESCO Funds Group, Inc. ("INVESCO"), was, until recently, the investment advisor to the INVESCO Funds. On December 2, 2003, each of the Securities and Exchange Commission ("SEC") and the Office of the Attorney General of the State of New York ("NYAG") filed civil proceedings against INVESCO and Raymond R. Cunningham, in his capacity as the Chief Executive Officer of INVESCO. Mr. Cunningham currently holds the positions of Chief Operating Officer and Senior Vice President of A I M Management Group, Inc., the parent company of AIM, and he also holds the position of Senior Vice President with AIM. In addition, on December 2, 2003, the State of Colorado filed civil proceedings against INVESCO. Neither your Fund nor any of the funds in the AIM Family of Funds(R), which includes the INVESCO Funds (the "Funds") has been named as a defendant in any of these proceedings. The SEC proceeding alleges that INVESCO failed to disclose in the INVESCO Funds' prospectuses and to the INVESCO Funds' independent directors that INVESCO had entered into certain arrangements permitting market timing of the INVESCO Funds. The SEC is seeking injunctions, including permanent injunctions from serving as an investment advisor, officer or director of an investment company; an accounting of all market timing as well as certain fees and compensation received; disgorgement; civil monetary penalties; and other relief. The NYAG proceeding is also based on the circumstances described above. The NYAG is seeking injunctions, including permanent injunctions from directly or indirectly selling or distributing shares of mutual funds; disgorgement of all profits obtained, including fees collected, and payment of all restitution and damages caused, directly or indirectly from the alleged illegal activities; civil monetary penalties; and other relief. The Colorado proceeding is also based on the circumstances described above. The State of Colorado is seeking injunctions; restitution, disgorgement and other equitable relief; civil monetary penalties; and other relief. If INVESCO is unsuccessful in its defense of these proceedings, it could be barred from serving as an investment advisor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Similarly, if Mr. Cunningham is unsuccessful in his defense of these proceedings, he could be barred from serving as an officer or director of any registered investment company. Such results could also affect the ability of AIM, or any other investment advisor directly or indirectly owned by AMVESCAP, from serving as an investment advisor to any registered investment company, including your Fund. Your Fund has been informed by AIM that, if either of these results occurs, AIM will seek exemptive relief from the SEC to permit it to continue to serve as your Fund's investment advisor. There can be no assurance that such exemptive relief will be granted. AIM has received inquiries from the SEC, the NASD, Inc., the NYAG and the Secretary of the Commonwealth of Massachusetts with respect to market timing, late trading, fair value pricing and other similar issues and AIM has been providing full cooperation with respect to these inquiries. F-13 NOTE 12--SUBSEQUENT EVENTS (CONTINUED) In addition to the complaints described above, multiple lawsuits, including purported class action and shareholder derivative suits, have been filed against certain Funds, INVESCO, AIM, AMVESCAP and certain related parties, primarily based upon the allegations in the complaints described above, but also regarding the funds' fair valuation pricing methodology. Such lawsuits allege a variety of theories for recovery including, but not limited to: (i) violation of various provisions of the Federal securities laws; (ii) breach of fiduciary duty; and (iii) breach of contract. The lawsuits have been filed in both Federal and state courts and seek such remedies as compensatory damages; restitution; rescission; accounting for wrongfully gotten gains, profits and compensation; injunctive relief; disgorgement; equitable relief; interest and the payment of attorneys' and experts' fees. Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed against the Funds, INVESCO, AIM, AMVESCAP and related parties in the future. As a result of these developments, investors in the Funds might react by redeeming their investments. This might require the Funds to sell investments to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the Funds. At the present time, management of AIM and the Fund is unable to estimate the impact, if any, that the outcome of these matters described above may have on the Fund or AIM's financial condition. F-14 REPORT OF INDEPENDENT AUDITORS To the Board of Directors/Trustees and Shareholders of AIM International Growth Fund In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the AIM International Growth Fund (one of the funds constituting AIM International Funds, Inc., now known as AIM International Mutual Funds; hereafter referred to as the "Fund") at October 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The financial highlights for each of the periods ended on or before October 31, 2000 were audited by other independent accountants whose report dated December 6, 2000, expressed an unqualified opinion on the financial highlights. PRICEWATERHOUSECOOPERS LLP December 16, 2003 Houston, Texas F-15 PROXY RESULTS (UNAUDITED) A Special Meeting of Shareholders of AIM International Funds, Inc., a Maryland corporation, was held on October 21, 2003. The meeting was adjourned and reconvened on October 28, 2003, on November 4, 2003, on November 11, 2003, on November 17, 2003 and reconvened on November 21, 2003. The meeting was held for the following purposes: (1)* To elect sixteen individuals to the Board, each of whom will serve until his or her successor is elected and qualified: Bob R. Baker, Frank S. Bayley, James T. Bunch, Bruce L. Crockett, Albert R. Dowden, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H. Graham, Gerald J. Lewis, Prema Mathai-Davis, Lewis F. Pennock, Ruth H. Quigley, Louis S. Sklar, Larry Soll, Ph.D. and Mark H. Williamson. (2)* To approve an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation. The results of the voting on the above matters were as follows:
WITHHOLDING DIRECTORS/MATTER VOTES FOR AUTHORITY - --------------------------------------------------------------------------------- (1)* Bob R. Baker................................. 162,211,196 3,444,279 Frank S. Bayley.............................. 162,236,962 3,418,513 James T. Bunch............................... 162,287,588 3,367,887 Bruce L. Crockett............................ 162,276,496 3,378,979 Albert R. Dowden............................. 162,251,386 3,404,089 Edward K. Dunn, Jr. ......................... 162,221,226 3,434,249 Jack M. Fields............................... 162,278,318 3,377,157 Carl Frischling.............................. 162,182,906 3,472,569 Robert H. Graham............................. 162,243,892 3,411,583 Gerald J. Lewis.............................. 162,147,868 3,507,607 Prema Mathai-Davis........................... 162,219,866 3,435,609 Lewis F. Pennock............................. 162,263,207 3,392,268 Ruth H. Quigley.............................. 162,163,064 3,492,411 Louis S. Sklar............................... 162,243,759 3,411,716 Larry Soll, Ph.D. ........................... 162,236,226 3,419,249 Mark H. Williamson........................... 162,238,962 3,416,513
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 76,302,938 2,822,366 86,530,171**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on October 28, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 84,066,011 2,989,031 83,338,957**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 4, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - -------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 95,512,525 3,144,748 78,504,573**
F-16 PROXY RESULTS (UNAUDITED) (CONTINUED) The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 11, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 109,217,698 3,531,752 71,913,039**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 17, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 116,710,545 3,761,148 69,451,190**
The Special Meeting of Shareholders of the Company noted above was adjourned and reconvened on November 21, 2003. At the reconvened meeting the following matter was then considered:
VOTES WITHHELD/ MATTER VOTES FOR AGAINST ABSTENTIONS - --------------------------------------------------------------------------------------------------------------- (2)* Approval of an Agreement and Plan of Reorganization which provides for the redomestication of Company as a Delaware statutory trust and, in connection therewith, the sale of all of Company's assets and the dissolution of Company as a Maryland corporation........................................ 137,239,949 4,617,039 51,798,672**
* Proposal required approval by a combined vote of all the portfolios of AIM International Funds, Inc. ** Includes Broker Non-Votes F-17 OTHER INFORMATION TRUSTEES AND OFFICERS As of January 1, 2003 The address of each trustee and officer of AIM International Funds, Inc., now known as AIM International Mutual Funds (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 132 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ POSITION(S) HELD WITH THE OR OFFICER PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S) TRUST SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED PERSONS - ------------------------------------------------------------------------------------------------------------------------------------ Robert H. Graham(1) -- 1946 1991 Director and Chairman, A I M Management Group Inc. None Trustee, Chairman and (financial services holding company); and Director and Vice President Chairman, AMVESCAP PLC and Chairman of AMVESCAP PLC -- AIM Division (parent of AIM and a global investment management firm) Formerly: President and Chief Executive Officer, A I M Management Group Inc.; Director, Chairman and President, A I M Advisors, Inc. (registered investment advisor); and Director and Chairman, A I M Capital Management, Inc. (registered investment advisor), A I M Distributors, Inc. (registered broker dealer), AIM Investment Services, Inc., (registered transfer agent), and Fund Management Company (registered broker dealer); and Chief Executive Officer, AMVESCAP PLC -- Managed Products - ------------------------------------------------------------------------------------------------------------------------------------ Mark H. Williamson(2) -- 195 2003 Director, President and Chief Executive Officer, A I M Director and Chairman, Trustee and Executive Vice Management Group Inc. (financial services holding company); INVESCO Bond Funds, President Director, Chairman and President, A I M Advisors, Inc. Inc., INVESCO (registered investment advisor); Director, A I M Capital Combination Stock & Management, Inc. (registered investment advisor) and A I M Bond Funds, Inc., Distributors, Inc. (registered broker dealer); Director and INVESCO Counselor Chairman, AIM Investment Services, Inc. (registered transfer Series Funds, Inc., agent); and Fund Management Company (registered broker INVESCO International dealer); and Chief Executive Officer, AMVESCAP PLC -- AIM Funds, Inc., INVESCO Division (parent of AIM and a global investment management Manager Series Funds, firm) Inc., INVESCO Money Formerly: Director, Chairman, President and Chief Executive Market Funds, Inc., Officer, INVESCO Funds Group, Inc. and INVESCO Distributors, INVESCO Sector Funds, Inc.; Chief Executive Officer, AMVESCAP PLC -- Managed Inc., INVESCO Stock Products; Chairman and Chief Executive Officer of Funds, Inc., INVESCO NationsBanc Advisors, Inc.; and Chairman of NationsBanc Treasurer's Series Investments, Inc. Funds, Inc. and INVESCO Variable Investment Funds, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ Bob R. Baker(3) -- 1936 2003 Consultant None Trustee Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation - ------------------------------------------------------------------------------------------------------------------------------------ Frank S. Bayley -- 1939 2001 Of Counsel, law firm of Baker & McKenzie Badgley Funds, Inc. Trustee (registered investment company) - ------------------------------------------------------------------------------------------------------------------------------------ James T. Bunch(3) -- 1942 2003 Co-President and Founder, Green, Manning & Bunch Ltd., None Trustee (investment banking firm); and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation Formerly: General Counsel and Director, Boettcher & Co.; and Chairman and Managing Partner, law firm of Davis, Graham & Stubbs - ------------------------------------------------------------------------------------------------------------------------------------ Bruce L. Crockett -- 1944 1992 Chairman, Crockett Technology Associates (technology ACE Limited (insurance Trustee consulting company) company); and Captaris, Inc. (unified messaging provider) - ------------------------------------------------------------------------------------------------------------------------------------ Albert R. Dowden -- 1941 2000 Director of a number of public and private business Cortland Trust, Inc. Trustee corporations, including the Boss Group Ltd. (private (Chairman) (registered investment and management) and Magellan Insurance Company investment company); Formerly: Director, President and Chief Executive Officer, Annuity and Life Re Volvo Group North America, Inc.; Senior Vice President, AB (Holdings), Ltd. Volvo; and director of various affiliated Volvo Group (insurance company) companies - ------------------------------------------------------------------------------------------------------------------------------------ Edward K. Dunn, Jr. -- 1935 1998 Formerly: Chairman, Mercantile Mortgage Corp.; President and None Trustee Chief Operating Officer, Mercantile-Safe Deposit & Trust Co.; and President, Mercantile Bankshares Corp. - ------------------------------------------------------------------------------------------------------------------------------------ Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Century Group, Inc. Administaff Trustee (government affairs company) and Texana Timber LP - ------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Graham is considered an interested person of the Trust because he is a director of AMVESCAP PLC, parent of the advisor to the Trust. (2) Mr. Williamson is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of, the Trust. Mr. Williamson became Executive Vice President of the Trust on March 4, 2003. (3) Elected trustee of the Trust on October 21, 2003. TRUSTEES AND OFFICERS (CONTINUED) As of January 1, 2003 The address of each trustee and officer of AIM International Funds, Inc., now known as AIM International Mutual Funds (the "Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Each trustee oversees 132 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Column two below includes length of time served with predecessor entities, if any.
NAME, YEAR OF BIRTH AND TRUSTEE AND/ PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIP(S) POSITION(S) HELD WITH THE TRUST OR OFFICER SINCE DURING PAST 5 YEARS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ Carl Frischling -- 1937 1991 Partner, law firm of Kramer Levin Naftalis and Frankel LLP Cortland Trust, Inc. Trustee (registered investment company) - ------------------------------------------------------------------------------------------------------------------------------------ Gerald J. Lewis(3) -- 1933 2003 Chairman, Lawsuit Resolution Services (San Diego, General Chemical Trustee California) Group, Inc., Formerly: Associate Justice of the California Court of Wheelabrator Appeals Technologies, Inc. (waste management company), Fisher Scientific, Inc., Henley Manufacturing, Inc. (laboratory supplies), and California Coastal Properties, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Prema Mathai-Davis -- 1950 1998 Formerly: Chief Executive Officer, YWCA of the USA None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Lewis F. Pennock -- 1942 1991 Partner, law firm of Pennock & Cooper None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Ruth H. Quigley -- 1935 2001 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Louis S. Sklar -- 1939 1991 Executive Vice President, Development and Operations Hines None Trustee Interests Limited Partnership (real estate development company) - ------------------------------------------------------------------------------------------------------------------------------------ Larry Soll, Ph.D.(3) -- 1942 2003 Retired None Trustee - ------------------------------------------------------------------------------------------------------------------------------------ OTHER OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ Kevin M. Carome(4) -- 1956 2003 Director, Senior Vice President, Secretary and General N/A Senior Vice President Counsel, A I M Management Group Inc. (financial services holding company) and A I M Advisors, Inc.; Vice President, A I M Capital Management, Inc., A I M Distributors, Inc. and AIM Investment Services, Inc.; and Director, Vice President and General Counsel, Fund Management Company Formerly: Senior Vice President and General Counsel, Liberty Financial Companies, Inc.; and Senior Vice President and General Counsel, Liberty Funds Group, LLC - ------------------------------------------------------------------------------------------------------------------------------------ Gary T. Crum(5) -- 1947 1991 Director, Chairman and Director of Investments, A I M N/A Senior Vice President Capital Management, Inc.; Director and Executive Vice President, A I M Management Group Inc.; Director and Senior Vice President, A I M Advisors, Inc.; and Director, A I M Distributors, Inc. and AMVESCAP PLC Formerly: Chief Executive Officer and President, A I M Capital Management Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Robert G. Alley(5) -- 1948 1994 Managing Director and Chief Fixed Income Officer, A I M N/A Vice President Capital Management, Inc.; and Vice President, A I M Advisors, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Stuart W. Coco -- 1955 2002 Managing Director and Chief Research Officer -- Fixed N/A Vice President Income, A I M Capital Management, Inc.; and Vice President, A I M Advisors, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Melville B. Cox -- 1943 1992 Vice President and Chief Compliance Officer, A I M Advisors, N/A Vice President Inc. and A I M Capital Management, Inc.; and Vice President, AIM Investment Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Edgar M. Larsen(5) -- 1940 1999 Vice President, A I M Advisors, Inc., and President, Chief N/A Vice President Executive Officer and Chief Investment Officer, A I M Capital Management, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Dana R. Sutton -- 1959 1991 Vice President and Fund Treasurer, A I M Advisors, Inc. N/A Vice President and Treasurer - ------------------------------------------------------------------------------------------------------------------------------------
(3) Elected trustee of the Trust on October 21, 2003. (4) Mr. Carome became Senior Vice President of the Trust on May 13, 2003. (5) Information is current as of January 10, 2003. The Statement of Additional Information of the Trust includes additional information about the Fund's Trustees and is available upon request, without charge, by calling 1.800.347.4246. OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS 11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, Inc. PricewaterhouseCoopers LLP Suite 100 11 Greenway Plaza 11 Greenway Plaza 1201 Louisiana, Suite 2900 Houston, TX 77046 Suite 100 Suite 100 Houston, TX 77002 Houston, TX 77046 Houston, TX 77046-1173 COUNSEL TO THE FUND COUNSEL TO THE TRUSTEES TRANSFER AGENT CUSTODIAN Ballard Spahr Kramer, Levin, Naftalis & AIM Investment Services, Inc. State Street Bank and Andrews & Ingersoll, LLP Frankel LLP P.O. Box 4739 Trust Company 1735 Market Street 919 Third Avenue Houston, TX 77210-4739 225 Franklin Street Philadelphia, PA 19103 New York, NY 10022-3852 Boston, MA 02110
DOMESTIC EQUITY INTERNATIONAL/GLOBAL EQUITY FIXED INCOME AIM Aggressive Growth Fund AIM Asia Pacific Growth Fund TAXABLE AIM Balanced Fund* AIM Developing Markets Fund AIM Basic Balanced Fund* AIM European Growth Fund AIM Floating Rate Fund AIM Basic Value Fund AIM European Small Company Fund AIM High Yield Fund AIM Blue Chip Fund AIM Global Aggressive Growth Fund AIM Income Fund AIM Capital Development Fund AIM Global Growth Fund AIM Intermediate Government Fund AIM Charter Fund AIM Global Trends Fund AIM Limited Maturity Treasury Fund AIM Constellation Fund AIM Global Value Fund(4) AIM Money Market Fund AIM Dent Demographic Trends Fund AIM International Emerging Growth Fund AIM Short Term Bond Fund AIM Diversified Dividend Fund(1) AIM International Growth Fund AIM Total Return Bond Fund AIM Emerging Growth Fund AIM Trimark Fund INVESCO U.S. Government Money Fund AIM Large Cap Basic Value Fund INVESCO International Core Equity Fund(5) AIM Large Cap Growth Fund TAX-FREE AIM Libra Fund SECTOR EQUITY AIM Mid Cap Basic Value Fund AIM High Income Municipal Fund AIM Mid Cap Core Equity Fund AIM Global Health Care Fund AIM Municipal Bond Fund AIM Mid Cap Growth Fund AIM Real Estate Fund AIM Tax-Exempt Cash Fund AIM Opportunities I Fund INVESCO Advantage Health Sciences Fund AIM Tax-Free Intermediate Fund AIM Opportunities II Fund INVESCO Energy Fund AIM Opportunities III Fund INVESCO Financial Services Fund AIM Premier Equity Fund INVESCO Gold & Precious Metals Fund AIM Select Equity Fund INVESCO Health Sciences Fund AIM Small Cap Equity Fund(2) INVESCO Leisure Fund AIM Small Cap Growth Fund(3) INVESCO Multi-Sector Fund AIM Trimark Endeavor Fund INVESCO Technology Fund AM Trimark Small Companies Fund INVESCO Utilities Fund AIM Weingarten Fund INVESCO Core Equity Fund INVESCO Dynamics Fund INVESCO Mid-Cap Growth Fund INVESCO Small Company Growth Fund INVESCO S&P 500 Index Fund INVESCO Total Return Fund*
* Domestic equity and income fund (1) Effective May 2, 2003, AIM Large Cap Core Equity Fund was renamed AIM Diversified Dividend Fund. (2) AIM Small Cap Equity Fund was closed to most investors on December 19, 2003. For information on who may continue to invest in AIM Small Cap Equity Fund, please contact your financial advisor. (3) AIM Small Cap Growth Fund was closed to most investors on March 18, 2002. For information on who may continue to invest in AIM Small Cap Growth Fund, please contact your financial advisor. (4) Effective April 30, 2003, AIM Worldwide Spectrum Fund was renamed AIM Global Value Fund. (5) Effective November 24, 2003, INVESCO International Blue Chip Value Fund was renamed INVESCO International Core Equity Fund. For more complete information about any AIM or INVESCO fund, including sales charges and expenses, ask your financial advisor for a prospectus. Please read it carefully before investing. If used after January 20, 2004, this brochure must be accompanied by a fund Performance & Commentary or by an AIM Quarterly Performance Review for the most recent quarter-end. Mutual funds distributed by A I M Distributors, Inc. A I M Management Group Inc. has provided leadership in the investment management industry since 1976 and manages $142 billion in assets for approximately 11 million shareholders, including individual investors, corporate clients and financial institutions. AIM is a subsidiary of AMVESCAP PLC, one of the world's largest independent financial services companies with $345 billion in assets under management. Data as of September 30, 2003. AIMinvestments.com IGR-AR-1 YOUR GOALS. OUR SOLUTIONS.--Servicemark-- - ------------------------------------------------------------------------------------- Mutual Retirement Annuities College Separately Offshore Alternative Cash [AIM INVESTMENTS LOGO APPEARS HERE] Funds Products Savings Managed Products Investments Management --Servicemark-- Plans Accounts
ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, Registrant had adopted a code of ethics (the "Code") that applies to the Registrant's principal executive office ("PEO") and principal financial officer ("PFO"). There were no amendments to the Code during the period covered by the report. The Registrant did not grant any waivers, including implicit waivers, from any provisions of the Code to the PEO or PFO during the period covered by this report. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Board of Trustees has determined that the registrant has at least one audit committee financial expert serving on its Audit Committee. The Audit Committee financial expert is Prema Mathai-Davis. Ms. Mathai-Davis is "independent" within the meaning of that term used in Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) As of December 18, 2003, an evaluation was performed under the supervision and with the participation of the officers of AIM International Mutual Funds (the "Company"), including the Principal Executive Officer (PEO") and Principal Financial Officer ("PFO"), to assess the effectiveness of the Company's disclosure controls and procedures, as that term in defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act"), as amended. Based on that evaluation, the Company's officers, including the PEO and PFO, concluded that, as of December 18, 2003, the Company's disclosure controls and procedures were reasonably designed so as to ensure: (1) that information required to be disclosed by the Company on Form N-CSR is recorded, processed, summarized and reported with in the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Company is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure. 1 (b) There have been no changes in the Company's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the Company's last fiscal half-year (the Company's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. ITEM 10. EXHIBITS. CODE OF ETHICS. (a)(1) Code of Ethics. (a)(2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Act. (b) Certification of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Act and Section 906 of the Sarbanes-Oxley Act of 2002. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Registrant: AIM International Mutual Funds ------------------------------- By: /s/ ROBERT H. GRAHAM ----------------------------------- Robert H. Graham Principal Executive Officer Date: December 18, 2003 ----------------------------------- By: /s/ DANA R. SUTTON ----------------------------------- Dana R. Sutton Principal Financial Officer Date: December 18, 2003 ----------------------------------- EXHIBIT INDEX 10(a)(1) Code of Ethics 10(a)(2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended. (b) Certification of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002. EX-99.CODE ETH 3 h10335exv99wcodeeth.txt CODE OF ETHICS Item 10(a)(1) THE AIM FAMILY OF FUNDS CODE OF ETHICS FOR SENIOR OFFICERS I. INTRODUCTION The Boards of Directors/Trustees ("Board") of The AIM Family of Funds (the "Companies") have adopted this code of ethics (this "Code") applicable to their Principal Executive Officer and Principal Financial and Accounting Officer (the "Covered Officers") to promote: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely and understandable disclosure in documents filed with the Securities and Exchange Commission ("SEC") and in other public communications; o compliance with applicable governmental laws, rules and regulations; o the prompt internal reporting to an appropriate person or persons identified in the Code of violations of the Code; and o accountability for adherence to the Code. II. COVERED OFFICERS SHOULD ACT HONESTLY AND CANDIDLY Each Covered Officer named in Exhibit A to this Code owes a duty to the Companies to act with integrity. Integrity requires, among other things, being honest and candid. Deceit and subordination of principle are inconsistent with integrity. Each Covered Officer must: o act with integrity, including being honest and candid while still maintaining the confidentiality of information where required by law or the Companies' policies; o observe both the form and spirit of laws and governmental rules and regulations, accounting standards and policies of the Companies; o adhere to a high standard of business ethics; and o place the interests of the Companies before the Covered Officer's own personal interests. Business practices Covered Officers should be guided by and adhere to these fiduciary standards. III. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF INTEREST GUIDING PRINCIPLES. A "conflict of interest" occurs when an individual's private interest interferes with the interests of the Companies. A conflict of interest can arise when a Covered Officer takes actions or has interests that may make it difficult to perform his or her work for the Companies objectively and effectively. For example, a conflict of interest would arise if a Covered Officer, or a member or his family, receives improper personal benefits as a result of his or her position in any of the Companies. In addition, investment companies should be sensitive to situations that create apparent, but not actual, conflicts of interest. Service to the Companies should never be subordinated to personal gain and advantage. Certain conflicts of interest covered by this Code arise out of the relationships between Covered Officers and the Companies that already are subject to conflict of interest provisions in the Investment Company Act of 1940, as amended and the Investment Advisers Act of 1940, as amended. For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Companies because of their status as "affiliated persons" of the Companies. Therefore, as to the existing statutory and regulatory prohibitions on individual behavior, they will be deemed to be incorporated in this Code and therefore any material violation will also be deemed a violation of this Code. Covered Officers must in all cases comply with applicable statutes and regulations. As to conflicts arising from, or as a result of the contractual relationship between, the Companies and the investment adviser of which the Covered Officers are also officers or employees, it is recognized by the Board that, subject to the adviser's fiduciary duties to the Companies, the Covered Officers will in the normal course of their duties (whether formally for the Companies or for the adviser, or for both) be involved in establishing policies and implementing decisions which will have different effects on the adviser and the Companies. The Board recognizes that the participation of the Covered Officers in such activities is inherent in the contractual relationship between the Companies and the adviser and is consistent with the expectation of the Board of the performance by the Covered Officers of their duties as officers of the Companies. In addition, it is recognized by the Board that the Covered Officers may also be officers or employees of other investment companies advised by the same adviser and the codes which apply to senior officers of those investment companies will apply to the Covered Officers acting in those distinct capacities. Each Covered Officer must: o avoid conflicts of interest wherever possible; o handle any actual or apparent conflict of interest ethically; o not use his or her personal influence or personal relationships to influence investment decisions or financial reporting by an investment company whereby the Covered Officer would benefit personally to the detriment of any of the Companies; o not cause an investment company to take action, or fail to take action, for the personal benefit of the Covered Officer rather than the benefit of such company; o not use knowledge of portfolio transactions made or contemplated for an investment company to profit or cause others to profit, by the market effect of such transactions; and o as described in more detail below, discuss any material transaction or relationship that could reasonably be expected to give rise to a conflict of interest with the Chief Legal Officer of the AIM Funds (the "Chief Legal Officer"). Some conflict of interest situations that should always be discussed with the Chief Legal Officer, if material, include the following: o any outside business activity that detracts from an individual's ability to devote appropriate time and attention to his or her responsibilities with the Companies; o being in the position of supervising, reviewing or having any influence on the job evaluation, pay or benefit of any immediate family member; o any direct ownership interest in, or any consulting or employment relationship with, any of the Companies' service providers, other than its investment adviser, distributor or other AMVESCAP affiliated entities and other than a de minimis ownership interest (for purposes of this section of the Code an ownership interest of 1% or less shall constitute a de minimis ownership interest, and an ownership interest of more than 1% creates a rebuttable presumption that there may be a material conflict of interest); and o a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Companies for effecting portfolio transactions or for selling or redeeming shares, other than an interest arising from the Covered Officer's employment with AIM, its subsidiaries, its parent organizations and any affiliates or subsidiaries thereof, such as compensation or equity ownership, and other than an interest arising from a de minimis ownership interest in a company with which the Companies execute portfolios transactions or a company that receives commissions or other fees related to its sales and redemptions of shares of the Companies (for purposes of this section of the Code an ownership interest of 1% or less shall constitute a de minimis ownership interest, and an ownership interest of more than 1% creates a rebuttable presumption that there may be a material conflict of interest). IV. DISCLOSURE Each Covered Officer is required to be familiar, and comply, with the Companies' disclosure controls and procedures so that the Companies' subject reports and documents filed with the SEC comply in all material respects with the applicable federal securities laws and SEC rules. In addition, each Covered Officer having direct or supervisory authority regarding these SEC filings or the Companies' other public communications should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Companies and take other appropriate steps regarding these disclosures with the goal of making full, fair, accurate, timely and understandable disclosure. Each Covered Officer must: o familiarize himself/herself with the disclosure requirements applicable to the Companies as well as the business and financial operations of the Companies; and o not knowingly misrepresent, or cause others to misrepresent, facts about the Companies to others, whether within or outside the Companies, including representations to the Companies' internal auditors, independent Directors/Trustees, independent auditors, and to governmental regulators and self-regulatory organizations. V. COMPLIANCE It is the Companies' policy to comply in all material respects with all applicable governmental laws, rules and regulations. It is the personal responsibility of each Covered Officer to adhere to the standards and restrictions imposed by those laws, rules and regulations, including those relating to affiliated transactions, accounting and auditing matters. VI. REPORTING AND ACCOUNTABILITY Each Covered Officer must: o upon receipt of the Code, sign and submit to the Chief Compliance Officer of the Companies an acknowledgement stating that he or she has received, read, and understands the Code. o annually thereafter submit a form to the Chief Compliance Officer of the Companies confirming that he or she has received, read and understands the Code and has complied with the requirements of the Code. o not retaliate against any employee or other Covered Officer for reports of potential violations that are made in good faith. o notify the Chief Legal Officer promptly if he becomes aware of any existing or potential violation of this Code. Failure to do so is itself a violation of this Code. Except as described otherwise below, the Chief Legal Officer is responsible for applying this Code to specific situations in which questions are presented to him or her and has the authority to interpret this Code in any particular situation. The Chief Legal Officer shall take all action he or she considers appropriate to investigate any actual or potential violations reported to him or her. The Chief Legal Officer is authorized to consult, as appropriate, with the Chairman of the Audit Committees of the Board, counsel to the Companies and counsel to the independent Directors/Trustees, and is encouraged to do so. The Chief Legal Officer is responsible for granting waivers and determining sanctions, as appropriate. In addition, approvals, interpretations, or waivers sought by the Covered Officers may also be considered by the Chairman of the AIM Funds Audit Committees. The Companies will follow these procedures in investigating and enforcing this Code, and in reporting on the Code: o the Chief Legal Officer will take all appropriate action to investigate any violations reported to him or her; o violations and potential violations will be reported to the Chairman of the Audit Committees of the Board after such investigation; o if the Chairman of the Audit Committees determines that a violation has occurred, he or she will inform the Board, which will take all appropriate disciplinary or preventive action; o appropriate disciplinary or preventive action may include a letter of censure, suspension, dismissal or, in the event of criminal or other serious violations of law, notification to the SEC or other appropriate law enforcement authorities; o the Chief Legal Officer will be responsible for granting waivers, as appropriate; and o any changes to or waivers of this Code will, to the extent required, be disclosed on Form N-CSR as provided by SEC rules. VII. OTHER POLICIES AND PROCEDURES The Companies' and the Advisers' and Principal Underwriters' codes of ethics under Rule 17j-1 under the Investment Company Act and the Advisers' more detailed policies and procedures set forth in its Compliance and Supervisory Procedures Manual are separate requirements applying to Covered Officers and others, and are not part of this Code. VIII. AMENDMENTS This Code may not be amended except in written form, which is specifically approved by a majority vote of the Companies' Board, including a majority of independent Directors/Trustees. IX. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code shall be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the members of the Companies' Board, counsel to the Companies, and counsel to the independent Directors/Trustees. Date: September 17, 2003 EXHIBIT A Persons Covered by this Code of Ethics: Robert H. Graham Dana R. Sutton Date: September 27, 2003 THE AIM FAMILY OF FUNDS CODE OF ETHICS--ACKNOWLEDGEMENT I hereby acknowledge that I am a Principal Officer of the Companies and I am aware of and subject to the Companies' Code of Ethics. Accordingly, I have read and understood the requirements of the Code of Ethics and I am committed to fully comply with the Code of Ethics. I recognize my obligation to promote: 1. Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; 2. Full, fair, accurate, timely, and understandable disclosure in reports and documents that the Companies file with, or submit to, the Commission and in other public communications made by the Companies; and 3. Compliance with applicable governmental laws, rules, and regulations. - --------------------------- ---------------------------------------------- Date Name: Title: EX-99.CERT 4 h10335exv99wcert.txt CERTIFICATIONS PURSUANT TO SECTION 302 SARBANES OXLEY - 302 CERTIFICATION I, Robert H. Graham, certify that: 1. I have reviewed this report on Form N-CSR of AIM International Mutual Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 18, 2003 \S\ Robert H. Graham ----------------- --------------------------------------------- Robert H. Graham, Principal Executive Officer SARBANES OXLEY - 302 CERTIFICATION I, Dana R. Sutton, certify that: 1. I have reviewed this report on Form N-CSR of AIM International Mutual Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 18, 2003 \S\ Dana R. Sutton ----------------- ------------------------------------------- Dana R. Sutton, Principal Financial Officer EX-99.906CERT 5 h10335exv99w906cert.txt CERTIFICATIONS PURSUANT TO SECTION 906 SARBANES OXLEY - 906 CERTIFICATION CERTIFICATION OF SHAREHOLDER In connection with the Certified Shareholder Report of AIM International Mutual Funds (the "Company") on Form N-CSR for the period ended October 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert H. Graham, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: December 18, 2003 \S\ Robert H. Graham ----------------- --------------------------- Robert H. Graham Principal Executive Officer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. SARBANES OXLEY - 906 CERTIFICATION CERTIFICATION OF SHAREHOLDER REPORT In connection with the Certified Shareholder Report of AIM International Mutual Funds (the "Company") on Form N-CSR for the period ended October 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Dana R. Sutton, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: December 18, 2003 \S\ Dana R. Sutton ----------------- --------------------------- Dana R. Sutton Principal Financial Officer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----