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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 811-06463
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)
Philip A. Taylor 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: 10/31/07
Item 1. Reports to Stockholders.
INTERNATIONAL/
GLOBAL EQUITY
AIM Asia Pacific Growth Fund
Annual Report to Shareholders - October 31, 2007
Emerging Markets
Table of Contents
Letters to Shareholders ......... 2
Performance Summary ............. 4
Management Discussion ........... 4
Long-term Fund Performance ...... 6
Supplemental Information ........ 8
Schedule of Investments ......... 9
Financial Statements ............ 12
Notes to Financial Statements ... 15
Financial Highlights ............ 22
Auditor's Report ................ 25
Fund Expenses ................... 26
Approval of Advisory Agreement .. 27 [COVER GLOBE IMAGE]
Tax Information ................. 29
Trustees and Officers ........... 30
[AIM INVESTMENT SOLUTIONS]
[GRAPHIC] [GRAPHIC]
[DOMESTIC [FIXED
EQUITY] INCOME]
[GRAPHIC] [GRAPHIC] [GRAPHIC]
[TARGET [TARGET [DIVERSIFIED
RISK] MATURITY] PORTFOLIOS]
[GRAPHIC] [GRAPHIC]
[SECTOR [INTERNATIONAL/
EQUITY] GLOBAL EQUITY]
[AIM INVESTMENTS LOGO]
- -- REGISTERED TRADEMARK --
AIM Asia Pacific Growth Fund
Dear Shareholders of the AIM Family of Funds:
I'm pleased to provide you with this report, which includes a discussion of how your Fund was managed
during the period under review and factors that affected its performance. The following pages contain
important information that answers questions you may have about your investment.
[TAYLOR
PHOTO] Despite notable volatility at points throughout the fiscal year ended October 31, 2007, major stock
market indexes in the U.S. and abroad generally performed well. Reasons for their favorable performance
included positive economic growth, particularly overseas; strong corporate profits; and action by the U.S.
Federal Reserve Board (the Fed) to reassure skittish markets, among other factors.
Philip Taylor
At its September 18, 2007, meeting, the Fed cut the federal funds target rate for the first time since
June 2003.(1) The cut followed 17 rate increases from June 2004 to June 2006(1) and was intended to address
investor concerns about a weak housing market generally and problems in the subprime mortgage market
specifically. The Fed's action triggered an immediate and broad stock market rally. The Fed cut this key
interest rate again on October 31, 2007.(1)
At AIM Investments --REGISTERED TRADEMARK--, we know that market conditions change--often suddenly and
sometimes dramatically. We can help you deal with market volatility by offering a broad range of mutual
funds, including:
o Domestic, global and international equity funds
o Taxable and tax-exempt fixed-income funds
o Allocation portfolios, with risk/return characteristics to match your needs
o AIM Independence Funds--target-maturity funds that combine retail mutual funds and PowerShares
--REGISTERED TRADEMARK-- exchange-traded funds--with risk/return characteristics that change as your
target retirement date nears
I encourage you to talk with your financial advisor if you have concerns about your portfolio. We
believe in the value of working with a trusted financial advisor who can recommend AIM funds that are
appropriate for your portfolio and that address your long-term investment goals and risk tolerance
regardless of prevailing short-term market conditions.
In conclusion
My colleague, Bob Graham, recently announced his decision to step down as vice chair of the AIM Funds board
of directors. In 1976, Bob was one of three men who co-founded AIM. In the three decades since, he has been
instrumental in transforming AIM from a small investment management firm into one of America's most
respected mutual fund companies--and, in 1997, into a global independent retail and institutional
investment manager.
In May, with shareholder approval, AIM Investments' parent company changed its name from AMVESCAP PLC to
Invesco Ltd., uniting our worldwide operations and global expertise under one new name. While the name of
our parent company may be new to you, I can assure you that our commitment to excellent customer service
remains unchanged. Our highly trained, courteous client service representatives are eager to answer your
questions, provide you with product information or assist you with account transactions. I encourage you
to give us an opportunity to serve you by calling us at 800-959-4246.
We at AIM are committed to helping you achieve your financial goals. We work every day to earn your
trust, and we're grateful for the confidence you've placed in us.
Sincerely,
/S/ PHILIP TAYLOR
Philip Taylor
President - AIM Funds
CEO, AIM Investments
December 17, 2007
Source: (1)U.S. Federal Reserve Board
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
2
AIM Asia Pacific Growth Fund
Dear Fellow Shareholders:
In overseeing the management of the AIM family of funds on your behalf, your Board of Trustees of the AIM
Funds continues to focus on improved investment performance, reduced shareholder costs, and high ethical
standards.
[CROCKETT
PHOTO] Your Board welcomes two new members: Marty Flanagan, President and CEO of INVESCO, AIM's parent company,
and Phil Taylor, who was named CEO of AIM Investments --REGISTERED TRADEMARK-- in April 2006. Robert
Graham, who has given more than 30 years of leadership to the company and the mutual fund industry since
founding AIM in 1976, has retired, stepping down in the process from his most recent role as vice chairman
of the Board. We thank Bob for his many contributions and wish him a long and happy future.
Bruce L. Crockett
Our review of fund performance has shown healthy progress, but the process is necessarily one of
continuous improvement. In general, as of October 31, 2007, we have seen persistent investment discipline
and more consistently good results. While this statement may not apply to every AIM Fund all the time, as I
write this letter, the overall trend in fund management and performance has been positive.
The investment management talent at AIM has recently been enhanced by the promotion of Karen Dunn Kelley
to Head of INVESCO's Worldwide Fixed Income as well as Director of AIM Global and Cash Management, with
responsibility for all fixed income and money market funds that serve both institutional and individual
investors. Under Karen's direction, AIM's cash management organization grew to one of the world's largest
and most respected, with top-tier performance. The operations now combined under her charge represent more
than $150 billion in assets, 120 investment professionals, and products that span the entire yield curve
(as of October 31, 2007).
In other news, your Board took a more active role in preparing for "proxy season," the period when fund
managers must vote the shares held by their funds "for" or "against" various proposals on the ballots of
the issuing companies. Beginning in the 2007 proxy season, AIM implemented new proxy voting policies,
developed by management in conjunction with an ad hoc Board committee, which provided a solid framework for
properly evaluating and executing the many decisions the AIM Funds are required to make to vote shares.
In general, the AIM Funds voted for proposals that would allow shareholders a greater role in election
of directors, proxy access and "say for pay." The AIM Funds voted against directors whom AIM believed
failed to govern well in cases of corporate mismanagement, such as the backdating of options grants, and
against "poison pill" and "take under" proposals that would favor the financial interests of managers at
the expense of investors in the case of a merger or acquisition. You can view the proxy votes cast for your
fund by going to AIMinvestments.com. Click the "About Us" tab, then go to "Required Notices" and "Proxy
Voting Activity."
Additionally, your Board raised the amount its members are recommended to invest in the AIM Funds within
three years of joining the Board, with the goal of aligning our interests even more closely with yours.
Furthermore, at our June meeting we renewed the investment advisory contracts between the AIM Funds and
AIM for another year, applying the same rigorous evaluation process that was enhanced and formalized in
2005. For more information on this process, please visit AIMinvestments.com. Click on the "Products and
Performance" tab and go to "Investment Advisory Agreement Renewals."
Your Board's ability to best represent your interests depends on our knowledge of your opinions and
concerns. Please send me an email (bruce@brucecrockett.com) with your thoughts on the following:
1) How important is it to you to hear about your Board's decisions and activities in these letters?
2) What other information (on overall performance, specific funds, managers, etc.) would make the
letters more meaningful to you?
3) Would you prefer that communications from your Board continue to be delivered in paper form by
regular mail or be sent electronically by email?
If you would prefer to communicate through a quick online survey, please go to AIMinvestments.com and
provide your responses there.
We need to hear from you to do our best job, and I look forward to your responses.
Sincerely,
/S/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Directors
December 17, 2007
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
3
AIM Asia Pacific Growth Fund
Management's discussion of Fund performance While research responsibilities within the
portfolio management team are focused by
================================================================================ market capitalization, such as large-or
PERFORMANCE SUMMARY mid/small-cap, we select investments for the
Fund by using a bottom-up investment
Steady market gains over the first half of the year under review, aided by approach, which means that we construct the
improving corporate earnings and record levels of merger and acquisition Fund primarily on a stock-by-stock basis. We
activity, were followed by a more uneven climb by markets over the second half focus on the strengths of individual
of the review period. Market volatility increased during the year due to companies rather than sectors, countries or
negative news in areas of the U.S. economy, as well as problems emanating from market-cap trends.
the U.S. subprime mortgage market, which spread globally.
We believe disciplined sell decisions are
Within this environment we are pleased to once again have provided key to successful investing. We consider
shareholders with double-digit Fund returns at net asset value. As the table selling a stock for one of the following
illustrates, your Fund, excluding applicable sales charges, significantly reasons:
outperformed its broad market benchmark but underperformed its style-specific
benchmark. The impressive strength of emerging Asian equities enabled us to o A company's fundamentals deteriorate, or
outperform our broad market index, which is composed of stocks from developed it posts disappointing earnings.
nations. We attribute our underperformance versus the style-specific benchmark
to the Fund's returns in China and Hong Kong. o A stock's price seems overvalued.
Your Fund's long-term performance appears later in this report. o A more attractive opportunity becomes
available.
FUND VS. INDEXES
Market conditions and your Fund
Total returns, 10/31/06 - 10/31/07, excluding applicable sales charges. If
sales charges were included, returns would be lower. Asian stock markets significantly
outperformed developed stock markets over
Class A Shares 60.00% the 12-month period ending October 31, 2007,
Class B Shares 58.88 although concerns about the U.S. subprime
Class C Shares 58.86 mortgage market and wider credit issues
MSCI EAFE Index* (Broad Market Index) 24.91 triggered some falls toward the end of the
MSCI AC Asia Pacific Ex-Japan Index* (Style-Specific Index) 66.76 review period.(1) Asian macroeconomic data
Lipper Pacific Region Ex-Japan Funds Index* (Peer Group Index) 72.82 remained strong despite concerns over a U.S.
SOURCE: *LIPPER INC. slowdown. Corporate earnings results also
================================================================================ provided positive news with companies
generally releasing in-line or
How we invest Quality, Valuation) strategy focuses better-than-expected figures. This positive
primarily on identifying quality backdrop allowed a number of Asian markets
When selecting stocks for your Fund, we companies that have experienced, or to deliver strong positive performance
employ a disciplined investment exhibit the potential for, results during the period, with markets such
strategy that emphasizes fundamental accelerating or above-average earnings as China, Hong Kong and India taking the
research, supported by both growth but whose prices do not fully lead.
quantitative analysis and portfolio reflect these attributes.
construction techniques. Our EQV
(Earnings,
(continued)
======================================= ====================================== =================================================
PORTFOLIO COMPOSITION TOP FIVE COUNTRIES* TOP 10 EQUITY HOLDINGS*
By sector 1. Australia 16.2% 1. WCT Engineering Berhad (Malaysia) 2.3%
Industrials 21.0% 2. Hong Kong 14.8 2. Ezra Holdings Ltd. (Singapore) 2.3
Financials 19.1 3. South Korea 11.8 3. Bharat Heavy Electricals Ltd. (India) 2.1
Consumer Discretionary 17.4 4. Malaysia 9.3 4. CSL Ltd. (Australia) 2.0
Information Technology 8.7 5. China 8.8 5. Cnooc Ltd.-ADR (Hong Kong) 2.0
Energy 6.5 6. BHP Billiton Ltd. (Australia) 2.0
Materials 5.8 Total Net Assets $870.0 million 7. Hutchison Whampoa Ltd.
Consumer Staples 5.4 (Hong Kong) 1.8
Health Care 3.1 Total Number of Holdings* 93 8. Esprit Holdings Ltd. (Hong Kong) 1.8
Telecommunication Services 2.6 9. SP Setia Berhad (Malaysia) 1.8
Utilities 1.8 10. Keppel Corp. Ltd. (Singapore) 1.8
Money Market Funds Plus Other
Assets Less Liabilities 8.6
The Fund's holdings are subject to
change, and there is no assurance that
the Fund will continue to hold any
particular security.
* Excluding money market fund holdings.
======================================= ======================================
4
AIM Asia Pacific Growth Fund
From a Fund perspective, the overall cautious from a valuation perspective PARTICULAR SECURITY. THE INFORMATION IS
quality of the portfolio and the and stayed out of these names. NOT A COMPLETE ANALYSIS OF EVERY ASPECT
performance of individual securities OF ANY MARKET, COUNTRY, INDUSTRY,
largely explained the Fund's solid absolute The Fund also benefited from its SECURITY OR THE FUND. STATEMENTS OF FACT
results. Holdings across Australia, Taiwan, all-cap flexibility, which enables it to ARE FROM SOURCES CONSIDERED RELIABLE,
Malaysia and Singapore enabled the Fund to invest across a wide range of the BUT A I M ADVISORS, INC. MAKES NO
deliver more than 50% returns in each of market-cap spectrum. We believe that the REPRESENTATION OR WARRANTY AS TO THEIR
these markets. small/mid-cap universe remains less COMPLETENESS OR ACCURACY. ALTHOUGH
efficient, consequently allowing us to HISTORICAL PERFORMANCE IS NO GUARANTEE
Although stronger growth opportunities identify attractive investment OF FUTURE RESULTS, THESE INSIGHTS MAY
elsewhere in the region resulted in an opportunities that the market may not HELP YOU UNDERSTAND OUR INVESTMENT
underweight position in Australian equities follow closely. While overall valuations MANAGEMENT PHILOSOPHY.
compared to the style-specific benchmark, for the mid-and small-cap areas of the
solid stock selection in health care and market look fully valued, we continue to See important Fund and index
industrial-related stocks enabled the Fund find stock-specific opportunities that disclosures later in this report.
to outperform the index in this market. meet our investment criteria.
Australian pharmaceutical manufacturer CSL Shuxin Cao
LIMITED, a top-10 holding and top Foreign exchange was another [CAO Chartered Financial
contributor, was up more than 130% for the contributor to Fund performance. Because PHOTO] Analyst, senior portfolio
period. In Malaysia, our ability to we do not typically hedge currencies--we manager, is co-manager of AIM
identify and invest in construction firm buy stocks in their local currency and Asia Pacific Growth Fund. He joined AIM
WCT ENGINEERING and real estate developer then translate that value back into in 1997. Mr. Cao graduated from Tianjin
SP SETIA--stocks not represented in the dollars--foreign currency appreciation Foreign Language Institute with a B.A.
index--enabled the Fund to nearly double versus the U.S. dollar boosted Fund in English. He also earned an M.B.A.
the index return in this market. performance from Texas A&M University and is a
certified public accountant.
As noted, China led market performance, In closing
delivering more than 150% during the Mark Jason
12-month period.(1) The Fund reflected Over the past 12 months, the Fund has [JASON Chartered Financial
these results, returning double-digit experienced strong double-digit returns PHOTO] Analyst, portfolio
returns in this market. Again, stock with some of our underlying investments manager, is co-manager of
selection was the driver of absolute up more than 150% for the period. It AIM Asia Pacific Growth Fund. He joined
results. PING AN INSURANCE and XINYI GLASS would be imprudent for us to suggest AIM in 2001 as a senior equity analyst.
HOLDINGS delivered stellar results over the that such a level of performance is He spent more than five years focusing
period. Ping An Insurance, a leader in the sustainable over the long term. However, on Asian and Latin American stocks
under-penetrated Chinese insurance market, we believe that Asia is in much better before assuming his current duties in
continued to report strong earnings growth shape fundamentally when compared with 2007. Mr. Jason earned a Bachelor of
and benefited from robust liquidity in the circumstances surrounding the Science degree in finance and a Bachelor
Chinese equities. Likewise, Xinyi Glass financial crisis of 1997. Corporate debt of Science degree in real estate from
Holdings, a Chinese automobile and levels are much lower, earnings continue the University of California at
construction glass manufacturer, enjoyed to be strong and corporations are Northridge.
strong profit growth, new capacity generating much higher rates of return
expansion and secular growth in the export on equity than those in 1997. Despite Barrett K. Sides
markets. Both stocks were up over 300% for these improved fundamentals, a [SIDES Senior portfolio manager,
the period. liquidity-driven rally over the past few PHOTO] is co-manager of AIM Asia
months that has stretched valuation in Pacific Growth Fund. He
As previously noted, the Fund did certain Asian markets keeps us cautious joined AIM in 1990. Mr. Sides graduated
underperform its style-specific index, on the region in the short term. with a B.S. in economics from Bucknell
primarily due to the Fund's relative University. He also earned an M.B.A. in
returns in China and Hong Kong. Although We welcome new shareholders who international business from the
the Fund delivered strong returns in both invested in the Fund during the University of St. Thomas.
markets, lack of exposure to certain strong reporting period and thank all our
index names detracted from relative shareholders for your continued Assisted by the Asia Pacific/Latin
results. We missed out on strong-performing investment in AIM Asia Pacific Growth America Team
index heavyweights China Life Insurance, Fund.
PetroChina and wireless operator China
Mobile. All three surged during the period, Source: (1)Lipper Inc.
contributing to gains in the index and
detracting from relative Fund results. We THE VIEWS AND OPINIONS EXPRESSED IN
were MANAGEMENT'S DISCUSSION OF FUND
PERFORMANCE ARE THOSE OF A I M ADVISORS,
INC. THESE VIEWS AND OPINIONS ARE
SUBJECT TO CHANGE AT ANY TIME BASED ON
FACTORS SUCH AS MARKET AND ECONOMIC
CONDITIONS. THESE VIEWS AND OPINIONS MAY
NOT BE RELIED UPON AS INVESTMENT ADVICE
OR RECOMMENDATIONS, OR AS AN OFFER FOR A
5
AIM Asia Pacific Growth Fund
Your Fund's long-term performance
Past performance cannot guarantee This chart, which is a logarithmic
comparable future results. chart, presents the fluctuations in the
value of the Fund and its indexes. We
The data shown in the chart include believe that a logarithmic chart is more
reinvested distributions, applicable effective than other types of charts in
sales charges, Fund expenses and illustrating changes in value during the
management fees. Index results include early years shown in the chart. The
reinvested dividends, but they do not vertical axis, the one that indicates
reflect sales charges. Performance of an the dollar value of an investment, is
index of funds reflects fund expenses constructed with each segment
and management fees; performance of a representing a percent change in the
market index does not. Performance shown value of the investment. In this chart,
in the chart and table(s) does not each segment represents a doubling, or
reflect deduction of taxes a shareholder 100% change, in the value of the
would pay on Fund distributions or sale investment. In other words, the space
of Fund shares. Performance of the between $5,000 and $10,000 is the same
indexes does not reflect the effects of size as the space between $10,000 and
taxes. $20,000, and so on.
6
====================================================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT
INDEX DATA FROM 10/31/97, FUND DATA FROM 11/3/97
AIM ASIA PACIFIC AIM ASIA PACIFIC AIM ASIA PACIFIC LIPPER PACIFIC REGION
GROWTH FUND GROWTH FUND GROWTH FUND MSCI EAFE EX-JAPAN FUNDS
DATE -CLASS A SHARES -CLASS B SHARES -CLASS C SHARES INDEX(1) INDEX(1)
10/31/97 $ 10000 $10000
11/97 $8401 $8890 $8890 9898.06 9650
12/97 8174 8650 8650 9984.39 9400
1/98 7834 8280 8290 10441.02 8511
2/98 9346 9879 9880 11110.97 9823
3/98 9167 9690 9690 11453.09 9751
4/98 8713 9199 9200 11543.75 9170
5/98 7759 8189 8190 11487.72 8065
6/98 6814 7189 7180 11574.69 7196
7/98 6682 7039 7030 11692.03 7014
8/98 5633 5939 5920 10243.52 6164
9/98 6474 6809 6800 9929.47 6787
10/98 7267 7629 7610 10964.52 7760
11/98 7475 7848 7820 11526.25 8133
12/98 7477 7848 7820 11980.96 8185
1/99 7305 7668 7640 11945.58 7981
2/99 7201 7558 7540 11660.89 7790
3/99 7714 8078 8061 12147.63 8516
4/99 9138 9580 9553 12639.84 9786
5/99 9395 9841 9813 11988.9 9562
6/99 10867 11372 11345 12456.32 11093
7/99 10459 10932 10914 12826.56 11082
8/99 10440 10902 10884 12873.4 11339
9/99 9946 10371 10353 13002.98 10767
10/99 10232 10662 10642 13490.02 11026
11/99 11628 12114 12085 13958.72 12606
12/99 12560 13074 13045 15211.54 14314
1/00 12085 12574 12544 14245.02 14151
2/00 13282 13815 13786 14628.49 14382
3/00 15126 15707 15689 15195.55 14927
4/00 13502 14016 14007 14395.91 13032
5/00 12447 12914 12906 14044.31 12199
6/00 13321 13805 13798 14593.56 13150
7/00 12456 12915 12906 13981.73 12397
8/00 12419 12864 12856 14103.09 12459
9/00 11183 11573 11564 13416.38 11173
10/00 10167 10511 10502 13099.46 10169
11/00 9872 10211 10202 12608.23 9678
12/00 9743 10065 10065 13056.37 9617
1/01 10810 11160 11160 13049.64 10806
2/01 10201 10527 10528 12071.34 10249
3/01 9123 9402 9402 11266.65 9082
4/01 9685 9985 9985 12049.59 9401
5/01 9772 10076 10066 11624.32 9401
6/01 9600 9885 9885 11148.93 9206
7/01 9285 9554 9554 10946.08 8850
8/01 8731 8982 8981 10668.69 8553
9/01 7797 8017 8017 9588.09 7334
10/01 8188 8419 8409 9833.66 7669
11/01 8712 8951 8951 10196.16 8605
12/01 9179 9422 9413 10256.74 9174
1/02 9407 9653 9645 9711.75 9537
2/02 9465 9713 9695 9779.87 9645
3/02 9931 10185 10167 10356.38 10286
4/02 9969 10225 10208 10377.2 10359
5/02 9921 10165 10147 10508.69 10308
6/02 9502 9733 9715 10090.38 9790
7/02 9092 9311 9294 9094.26 9352
8/02 8882 9080 9062 9073.62 9127
9/02 8044 8227 8208 8099.17 8124
10/02 8130 8307 8289 8534.46 8344
11/02 8454 8629 8611 8921.8 8887
12/02 8187 8358 8339 8621.81 8377
1/03 8339 8508 8490 8261.87 8437
2/03 8177 8337 8320 8072.26 8091
====================================================================================================================================
SOURCE: (1)LIPPER INC.
====================================================================================================================================
[MOUNTAIN CHART]
3/03 7796 7945 7928 7913.66 7714
4/03 8063 8216 8199 8689.29 8117
5/03 8654 8819 8792 9215.8 8842
6/03 9178 9341 9304 9438.51 9389
7/03 9712 9883 9847 9666.98 10064
8/03 10493 10667 10640 9900.43 10776
9/03 10646 10828 10791 10205.62 10912
10/03 11513 11692 11656 10841.73 11793
11/03 11522 11703 11666 11082.77 11701
12/03 12266 12446 12409 11948.6 12571
1/04 12627 12808 12761 12117.56 13080
2/04 13066 13250 13202 12397.29 13489
3/04 12913 13079 13041 12467.04 13228
4/04 12236 12396 12358 12185.03 12622
5/04 12112 12266 12217 12226 12390
6/04 11807 11945 11905 12493.88 12276
7/04 11655 11784 11745 12088.41 12003
8/04 12207 12336 12297 12141.79 12503
9/04 12731 12858 12809 12459.12 13012
10/04 13074 13200 13151 12883.98 13201
11/04 14036 14165 14106 13764.12 14339
12/04 14493 14617 14569 14367.85 14826
1/05 14550 14667 14620 14104.24 14904
2/05 15321 15440 15383 14713.68 15702
3/05 14749 14847 14800 14344.04 15051
4/05 14673 14766 14720 14006.8 14930
5/05 14768 14857 14801 14013.58 15403
6/05 15226 15308 15263 14199.53 15738
7/05 15960 16041 15986 14634.83 16837
8/05 16046 16112 16056 15004.59 16743
9/05 16723 16786 16729 15672.92 17792
10/05 15628 15671 15623 15215.18 16809
11/05 16658 16696 16639 15587.29 18132
12/05 17496 17524 17466 16312.62 19212
1/06 19021 19035 18966 17314.2 20594
2/06 19107 19114 19048 17275.9 20464
3/06 19923 19919 19844 17845.28 21181
4/06 21112 21096 21023 18697.55 22310
5/06 19721 19698 19623 17971.46 20535
6/06 19490 19455 19381 17970.27 20271
7/06 19509 19455 19391 18148.15 20294
8/06 20124 20059 19984 18647.13 20932
9/06 20718 20632 20568 18675.96 21732
10/06 21888 21779 21705 19402.35 22573
11/06 23499 23380 23296 19982.17 24186
12/06 24178 24037 23953 20609.46 25646
1/07 24377 24225 24140 20748.92 25466
2/07 24964 24787 24703 20916.34 25491
3/07 25830 25629 25547 21449.5 26023
4/07 27093 26870 26779 22402.11 27195
5/07 28646 28391 28300 22795.17 29280
6/07 29431 29160 29050 22823.02 30528
7/07 30635 30327 30226 22486.89 32205
8/07 30068 29753 29643 22135.48 31834
9/07 32437 32065 31958 23319.73 35042
10/07 35034 35104 34476 24236 39010
====================================================================================================================================
AIM Asia Pacific Growth Fund
=========================================== =========================================
AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/07, including applicable As of 9/30/07, the most recent calendar
sales charges quarter-end, including applicable sales
charges
CLASS A SHARES CLASS A SHARES
Inception (11/3/97) 13.37% Inception (11/3/97) 12.62%
5 Years 32.41 5 Years 30.69
1 Year 51.19 1 Year 47.96
CLASS B SHARES CLASS B SHARES
Inception (11/3/97) 13.39% Inception (11/3/97) 12.64%
5 Years 32.90 5 Years 31.14
1 Year 53.88 1 Year 50.44
CLASS C SHARES CLASS C SHARES
Inception (11/3/97) 13.19% Inception (11/3/97) 12.44%
5 Years 32.99 5 Years 31.24
1 Year 57.86 1 Year 54.38
=========================================== =========================================
THE PERFORMANCE DATA QUOTED REPRESENT PAST YEAR. THE CDSC ON CLASS C SHARES IS 1%
PERFORMANCE AND CANNOT GUARANTEE COMPARABLE FOR THE FIRST YEAR AFTER PURCHASE.
FUTURE RESULTS; CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER. PLEASE VISIT THE PERFORMANCE OF THE FUND'S SHARE
AIMINVESTMENTS.COM FOR THE MOST RECENT CLASSES WILL DIFFER PRIMARILY DUE TO
MONTH-END PERFORMANCE. PERFORMANCE FIGURES DIFFERENT SALES CHARGE STRUCTURES AND
REFLECT REINVESTED DISTRIBUTIONS,CHANGES IN CLASS EXPENSES.
NET ASSET VALUE AND THE EFFECT OF THE
MAXIMUM SALES CHARGE UNLESS OTHERWISE HAD THE ADVISOR NOT WAIVED FEES
STATED. INVESTMENT RETURN AND PRINCIPAL AND/OR REIMBURSED EXPENSES IN THE
VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE A PAST,PERFORMANCE WOULD HAVE BEEN LOWER.
GAIN OR LOSS WHEN YOU SELL SHARES.
A REDEMPTION FEE OF 2% WILL BE
THE TOTAL ANNUAL FUND OPERATING EXPENSE IMPOSED ON CERTAIN REDEMPTIONS OR
RATIO SET FORTH IN THE MOST RECENT FUND EXCHANGES OUT OF THE FUND WITHIN 30 DAYS
PROSPECTUS AS OF THE DATE OF THIS REPORT OF PURCHASE. EXCEPTIONS TO THE
FOR CLASS A, CLASS B AND CLASS C SHARES REDEMPTION FEE ARE LISTED IN THE FUND'S
WAS 1.84%, 2.59% AND 2.59%, RESPECTIVELY. PROSPECTUS.
THE EXPENSE RATIOS PRESENTED ABOVE MAY VARY
FROM THE EXPENSE RATIOS PRESENTED IN OTHER
SECTIONS OF THIS REPORT THAT ARE BASED ON
EXPENSES INCURRED DURING THE PERIOD COVERED
BY THIS REPORT.
CLASS A SHARE PERFORMANCE REFLECTS
THE MAXIMUM 5.50% SALES CHARGE, AND
CLASS B AND CLASS C SHARE PERFORMANCE
REFLECTS THE APPLICABLE CONTINGENT
DEFERRED SALES CHARGE (CDSC) FOR THE
PERIOD INVOLVED. THE CDSC ON CLASS B
SHARES DECLINES FROM 5% BEGINNING AT THE
TIME OF PURCHASE TO 0% AT THE BEGINNING FOR A DISCUSSION OF THE RISKS OF
OF THE SEVENTH INVESTING IN YOUR FUND AND INDEXES USED
IN THIS REPORT, PLEASE TURN THE PAGE.
7
AIM Asia Pacific Growth Fund
AIM ASIA PACIFIC GROWTH FUND'S INVESTMENT OBJECTIVE IS LONG-TERM GROWTH OF
CAPITAL.
o Unless otherwise stated, information presented in this report
is as of October 31, 2007, and is based on total net assets.
o Unless otherwise noted, all data in this report are from A I M
Management Group Inc.
About share classes About indexes used in this report Other information
o Class B shares are not available as an o The MSCI EAFE --REGISTERED TRADEMARK-- o The returns shown in the management's
investment for retirement plans maintained INDEX is a free float-adjusted market discussion of Fund performance are based
pursuant to Section 401 of the Internal capitalization index that is designed to on net asset values calculated for
Revenue Code, including 401(k) plans, money measure developed market equity shareholder transactions. Generally
purchase pension plans and profit sharing performance, excluding the U.S. and accepted accounting principles require
plans, except for plans that have existing Canada. adjustments to be made to the net assets
accounts invested in Class B shares. of the Fund at period end for financial
o The MSCI ALL COUNTRY ASIA PACIFIC reporting purposes, and as such, the net
Principal risks of investing in the EX-JAPAN INDEX measures the performance asset values for shareholder
Fund of securities listed on stock exchanges transactions and the returns based on
of 12 countries in the Asia-Pacific those net asset values may differ from
o Investing in developing countries can region including developed and emerging the net asset values and returns
add additional risk, such as high rates of countries, but excluding Japan. reported in the Financial Highlights.
inflation or sharply devalued currencies
against the U.S. dollar. Transaction costs o The LIPPER PACIFIC REGION EX-JAPAN o Industry classifications used in this
are often higher, and there may be delays FUNDS INDEX is an equally weighted report are generally according to the
in settlement procedures. representation of the largest funds in Global Industry Classification Standard,
the Lipper Pacific Region Ex-Japan Funds which was developed by and is the
o Prices of equity securities change in category. These funds seek to exclusive property and a service mark of
response to many factors including the concentrate their investments in equity Morgan Stanley Capital International
historical and prospective earnings of the securities with primary trading markets Inc. and Standard & Poor's.
issuer, the value of its assets, general or operations concentrated in the
economic conditions, interest rates, Pacific region (including Asian o The Chartered Financial Analyst
investor perceptions and market liquidity. countries) and that specifically do not --REGISTERED TRADEMARK-- (CFA
invest in Japan. --REGISTERED TRADEMARK--) designation
o Foreign securities have additional risks, is a globally recognized standard for
including exchange rate changes, political o The Fund is not managed to track the measuring the competence and integrity
and economic upheaval, the relative lack of performance of any particular index, of investment professionals.
information, relatively low market including the indexes defined here, and
liquidity, and the potential lack of strict consequently, the performance of the
financial and accounting controls and Fund may deviate significantly from the
standards. performance of the indexes.
o Investing in a fund that invests in o A direct investment cannot be made in
smaller companies involves risks not an index. Unless otherwise indicated,
associated with investing in more index results include reinvested
established companies, such as business dividends, and they do not reflect sales
risk, stock price fluctuations and charges. Performance of an index of
illiquidity. funds reflects fund expenses;
performance of a market index does not.
o The prices of initial public offering
(IPO) securities may go up and down more
than prices of equity securities of
companies with longer trading histories. In
addition, companies offering securities in
IPOs may have less experienced management
or limited operating histories. There can
be no assurance that the fund will have
favorable IPO investment opportunities.
======================================================================================= ==========================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND FUND NASDAQ SYMBOLS
PROSPECTUS, WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND Class A Shares ASIAX
EXPENSES. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. Class B Shares ASIBX
Class C Shares ASICX
======================================================================================= ==========================================
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
AIMINVESTMENTS.COM
8
AIM Asia Pacific Growth Fund
SCHEDULE OF INVESTMENTS(a)
October 31, 2007
<Table>
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------
FOREIGN COMMON STOCKS & OTHER EQUITY
INTERESTS-91.35%
AUSTRALIA-16.24%
Asciano Group (Railroads)(b)(c)(d) 695,700 $ 5,477,853
- -------------------------------------------------------------------------
Australia and New Zealand Banking Group Ltd.
(Diversified Banks)(b)(c) 263,700 7,444,195
- -------------------------------------------------------------------------
BHP Billiton Ltd. (Diversified Metals &
Mining)(b) 392,900 17,102,452
- -------------------------------------------------------------------------
Boart Longyear Group (Construction &
Engineering)(b)(d) 2,648,000 6,361,860
- -------------------------------------------------------------------------
Boart Longyear Group (Construction &
Engineering) (Acquired; 04/04/07 Cost
$5,262,233)(b)(d)(e) 3,500,000 8,408,801
- -------------------------------------------------------------------------
Bradken Ltd. (Construction & Farm Machinery &
Heavy Trucks)(b) 616,425 8,540,256
- -------------------------------------------------------------------------
Brambles Ltd. (Diversified Commercial &
Professional Services)(b)(c) 428,189 5,703,279
- -------------------------------------------------------------------------
Computershare Ltd. (Data Processing &
Outsourced Services)(b) 1,336,200 10,798,150
- -------------------------------------------------------------------------
CSL Ltd. (Biotechnology)(c) 520,008 17,679,193
- -------------------------------------------------------------------------
MFS Ltd. (Hotels, Resorts & Cruise
Lines)(b)(c) 2,537,196 12,463,711
- -------------------------------------------------------------------------
QBE Insurance Group Ltd. (Property & Casualty
Insurance)(b) 243,000 7,411,798
- -------------------------------------------------------------------------
Ramsay Health Care Ltd. (Health Care
Facilities)(b)(c) 465,700 4,638,467
- -------------------------------------------------------------------------
Toll Holdings Ltd. (Air Freight &
Logistics)(b)(c) 829,000 10,366,511
- -------------------------------------------------------------------------
United Group Ltd. (Construction &
Engineering)(b)(c) 600,900 12,076,901
- -------------------------------------------------------------------------
Woolworths Ltd. (Food Retail)(b) 217,200 6,812,919
=========================================================================
141,286,346
=========================================================================
CHINA-8.81%
Century Sunshine Ecological Technology
Holdings Ltd. (Fertilizers & Agricultural
Chemicals)(b) 40,085,000 2,517,923
- -------------------------------------------------------------------------
China Green (Holdings) Ltd. (Agricultural
Products)(b) 4,656,000 5,237,501
- -------------------------------------------------------------------------
China Petroleum and Chemical Corp. (Sinopec)-
Class H (Integrated Oil & Gas)(b) 5,472,000 8,324,411
- -------------------------------------------------------------------------
Kingdee International Software Group Co. Ltd.
(Application Software)(b) 7,605,000 5,749,960
- -------------------------------------------------------------------------
Kowloon Development Co. Ltd. (Real Estate
Management & Development)(b) 3,637,000 11,330,113
- -------------------------------------------------------------------------
Mingyuan Medicare Development Co. Ltd.
(Technology Distributors)(b) 40,610,000 6,294,403
- -------------------------------------------------------------------------
Minth Group Ltd. (Auto Parts & Equipment)(b) 3,320,000 5,080,539
- -------------------------------------------------------------------------
Pine Agritech Ltd. (Agricultural Products)(b) 3,495,000 1,290,034
- -------------------------------------------------------------------------
Stella International Holdings Ltd.
(Footwear)(b) 4,019,500 8,857,373
- -------------------------------------------------------------------------
Xinyi Glass Holdings Co. Ltd. (Auto Parts &
Equipment)(b) 7,000,000 9,594,394
- -------------------------------------------------------------------------
</Table>
<Table>
SHARES VALUE
- -------------------------------------------------------------------------
<Caption>
CHINA-(CONTINUED)
Xiwang Sugar Holdings Co. Ltd. (Packaged
Foods & Meats)(b) 12,146,000 $ 5,814,585
- -------------------------------------------------------------------------
Yantai North Andre Juice Co. Ltd.-Class H
(Packaged Foods & Meats)(b) 57,266,000 6,548,989
=========================================================================
76,640,225
=========================================================================
HONG KONG-14.81%
Champion Real Estate Investment Trust (Office
REIT's) (Acquired; 05/16/06 Cost
$1,993,400)(b)(e) 3,000,000 1,843,460
- -------------------------------------------------------------------------
Champion Real Estate Investment Trust (Office
REIT's)(b) 1,800,000 1,106,076
- -------------------------------------------------------------------------
Cheung Kong (Holdings) Ltd. (Real Estate
Management & Development)(b) 724,000 14,223,392
- -------------------------------------------------------------------------
Cnooc Ltd.-ADR (Oil & Gas Exploration &
Production)(c) 81,300 17,600,637
- -------------------------------------------------------------------------
Dickson Concepts (International) Ltd.
(Apparel Retail)(b) 5,426,000 4,538,943
- -------------------------------------------------------------------------
Esprit Holdings Ltd. (Apparel Retail)(b) 913,500 15,533,443
- -------------------------------------------------------------------------
eSun Holdings Ltd. (Movies &
Entertainment)(b)(d) 8,984,000 6,581,052
- -------------------------------------------------------------------------
Hopewell Holdings Ltd. (Highways &
Railtracks)(b) 1,760,000 9,108,149
- -------------------------------------------------------------------------
Hutchison Whampoa Ltd. (Industrial
Conglomerates)(b) 1,254,000 15,803,287
- -------------------------------------------------------------------------
Li & Fung Ltd. (Distributors)(b) 3,062,200 14,498,693
- -------------------------------------------------------------------------
Paliburg Holdings Ltd. (Hotels, Resorts &
Cruise Lines)(b) 116,132,400 3,921,744
- -------------------------------------------------------------------------
Paliburg Holdings Ltd.-Wts., expiring 2010
(Hotels, Resorts & Cruise Lines) (Acquired
10/12/07; Cost $0)(d)(e)(f)(g) 12,903,600 83,244
- -------------------------------------------------------------------------
Regal Hotels International Holdings Ltd.
(Hotels, Resorts & Cruise Lines)(b) 94,100,000 8,071,484
- -------------------------------------------------------------------------
Top Form International Ltd. (Apparel,
Accessories & Luxury Goods)(b) 2,345,000 299,424
- -------------------------------------------------------------------------
Transport International Holdings Ltd.
(Trucking)(b) 454,800 2,313,582
- -------------------------------------------------------------------------
Wing Hang Bank Ltd. (Diversified Banks)(b) 659,500 7,754,767
- -------------------------------------------------------------------------
Yue Yuen Industrial (Holdings) Ltd.
(Footwear)(b) 1,796,000 5,584,079
=========================================================================
128,865,456
=========================================================================
INDIA-5.81%
Bharat Heavy Electricals Ltd. (Heavy
Electrical Equipment)(b) 280,400 18,750,721
- -------------------------------------------------------------------------
Grasim Industries Ltd. (Construction
Materials)(b) 87,700 8,347,010
- -------------------------------------------------------------------------
Housing Development Finance Corp. Ltd.
(Thrifts & Mortgage Finance)(b) 99,300 7,041,507
- -------------------------------------------------------------------------
Infosys Technologies Ltd. (IT Consulting &
Other Services)(b) 222,656 10,512,161
- -------------------------------------------------------------------------
</Table>
9
AIM Asia Pacific Growth Fund
<Table>
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------
INDIA-(CONTINUED)
Maruti Suzuki India Ltd. (Automobile
Manufacturers)(b) 212,600 $ 5,868,211
=========================================================================
50,519,610
=========================================================================
INDONESIA-3.08%
PT Astra International Tbk (Automobile
Manufacturers)(b) 4,462,500 12,731,597
- -------------------------------------------------------------------------
PT Indocement Tunggal Prakarsa Tbk
(Construction Materials)(b) 4,943,500 4,504,874
- -------------------------------------------------------------------------
PT Telekomunikasi Indonesia-Series B
(Integrated Telecommunication Services)(b) 7,920,000 9,598,404
=========================================================================
26,834,875
=========================================================================
MALAYSIA-9.29%
Bumiputra-Commerce Holdings Berhad
(Diversified Banks)(b) 2,500,000 8,691,388
- -------------------------------------------------------------------------
Digi.com Berhad (Wireless Telecommunication
Services)(b) 970,000 7,336,232
- -------------------------------------------------------------------------
Goldis Berhad (Pharmaceuticals)(b) 5,947,000 4,523,732
- -------------------------------------------------------------------------
Kossan Rubber Industries Berhad (Commodity
Chemicals)(b) 5,826,300 7,212,449
- -------------------------------------------------------------------------
Public Bank Berhad (Diversified Banks)(b) 3,252,000 11,179,522
- -------------------------------------------------------------------------
SP Setia Berhad (Real Estate Management &
Development)(b) 6,495,000 15,412,504
- -------------------------------------------------------------------------
WCT Engineering Berhad (Construction &
Engineering)(b) 8,020,633 20,133,862
- -------------------------------------------------------------------------
YTL Cement Berhad (Construction Materials)(b) 4,163,000 6,300,696
=========================================================================
80,790,385
=========================================================================
PHILIPPINES-6.03%
First Gen Corp. (Independent Power Producers
& Energy Traders) (Acquired 01/19/07; Cost
$2,223,208)(b)(e) 1,962,600 2,739,930
- -------------------------------------------------------------------------
First Gen Corp. (Independent Power Producers
& Energy Traders)(b) 1,573,900 2,197,266
- -------------------------------------------------------------------------
First Philippine Holdings (Electric
Utilities)(b) 2,340,200 4,681,141
- -------------------------------------------------------------------------
GMA Network Inc.-PDR (Broadcasting & Cable
TV) (Acquired 07/16/07; Cost
$275,621)(b)(d)(e)(h) 1,468,000 292,327
- -------------------------------------------------------------------------
GMA Network Inc.-PDR (Broadcasting & Cable
TV)(b)(d)(h) 46,236,000 9,207,120
- -------------------------------------------------------------------------
Megaworld Corp. (Real Estate Management &
Development)(b) 73,289,000 7,609,856
- -------------------------------------------------------------------------
Philippine Long Distance Telephone Co.
(Wireless Telecommunication Services)(b) 78,000 5,369,711
- -------------------------------------------------------------------------
PNOC Energy Development Corp. (Independent
Power Producers & Energy Traders)
(Acquired; 12/04/06 Cost $152,259)(b)(e) 2,335,000 411,052
- -------------------------------------------------------------------------
PNOC Energy Development Corp. (Independent
Power Producers & Energy Traders)(b) 32,261,000 5,679,201
- -------------------------------------------------------------------------
SM Investments Corp. (Industrial
Conglomerates)(b) 1,618,985 14,265,470
=========================================================================
52,453,074
=========================================================================
</Table>
<Table>
SHARES VALUE
- -------------------------------------------------------------------------
<Caption>
SINGAPORE-5.30%
Ezra Holdings Ltd. (Oil & Gas Equipment &
Services)(b) 4,082,000 $ 19,641,618
- -------------------------------------------------------------------------
Keppel Corp. Ltd. (Industrial
Conglomerates)(b) 1,484,000 15,313,572
- -------------------------------------------------------------------------
United Overseas Bank Ltd. (Diversified
Banks)(b) 745,000 11,173,891
=========================================================================
46,129,081
=========================================================================
SOUTH KOREA-11.74%
CJ CheilJedang Corp. (Packaged Foods & Meats) 20,554 6,801,207
- -------------------------------------------------------------------------
CJ Corp. (Industrial Conglomerates)(b) 30,195 3,380,735
- -------------------------------------------------------------------------
Daegu Bank (Regional Banks)(b) 503,800 9,010,049
- -------------------------------------------------------------------------
Hana Financial Group Inc. (Diversified
Banks)(b) 266,527 13,559,855
- -------------------------------------------------------------------------
Hyundai Department Store Co., Ltd.
(Department Stores)(b) 91,240 12,690,373
- -------------------------------------------------------------------------
Hyundai Development Co. (Construction &
Engineering)(b) 70,550 7,902,937
- -------------------------------------------------------------------------
Hyundai Mipo Dockyard Co., Ltd. (Construction
& Farm Machinery & Heavy Trucks)(b) 13,200 5,899,936
- -------------------------------------------------------------------------
Joongang Construction Co., Ltd. (Construction
& Engineering)(b) 241,550 4,654,400
- -------------------------------------------------------------------------
Kookmin Bank (Diversified Banks)(b) 56,600 4,666,638
- -------------------------------------------------------------------------
Lotte Confectionery Co., Ltd. (Packaged Foods
& Meats)(b) 5,040 8,297,577
- -------------------------------------------------------------------------
Shinsegae Co., Ltd. (Hypermarkets & Super
Centers)(b) 7,800 6,124,415
- -------------------------------------------------------------------------
Sung Kwang Bend Co., Ltd. (Building
Products)(b) 200,080 8,365,857
- -------------------------------------------------------------------------
Taegu Department Store Co., Ltd. (Department
Stores)(b) 347,300 6,191,241
- -------------------------------------------------------------------------
TechnoSemiChem Co., Ltd. (Commodity
Chemicals)(b) 194,076 4,614,804
=========================================================================
102,160,024
=========================================================================
TAIWAN-6.09%
Basso Industry Corp. (Household
Appliances)(b) 3,334,000 4,360,017
- -------------------------------------------------------------------------
Delta Electronics Inc. (Electronic Equipment
Manufacturers)(b) 1,828,250 7,447,932
- -------------------------------------------------------------------------
Hon Hai Precision Industry Co., Ltd.
(Electronic Manufacturing Services)(b) 1,422,216 10,929,822
- -------------------------------------------------------------------------
Hung Poo Real Estate Development Corp. (Real
Estate Management & Development)(b) 6,485,580 6,531,279
- -------------------------------------------------------------------------
MediaTek Inc. (Semiconductors)(b) 625,385 12,407,397
- -------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing Co. Ltd.
(Semiconductors)(b) 2,291,073 4,572,191
- -------------------------------------------------------------------------
Wistron Corp. (Computer Hardware)(b) 3,289,305 6,687,508
=========================================================================
52,936,146
=========================================================================
THAILAND-4.15%
Kasikornbank PCL (Diversified Banks)(b) 2,417,000 6,441,289
- -------------------------------------------------------------------------
Siam Commercial Bank PCL (Diversified
Banks)(b) 4,966,000 13,873,413
- -------------------------------------------------------------------------
Thai Oil PCL (Oil & Gas Refining &
Marketing)(b) 3,863,700 10,987,025
- -------------------------------------------------------------------------
</Table>
10
AIM Asia Pacific Growth Fund
<Table>
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------
THAILAND-(CONTINUED)
Thai Stanley Electric PCL-Class F (Auto Parts
& Equipment)(b) 1,065,300 $ 4,812,320
=========================================================================
36,114,047
=========================================================================
Total Foreign Common Stocks & Other
Equity Interests Cost $488,152,938) 794,729,269
=========================================================================
MONEY MARKET FUNDS-6.96%
Liquid Assets Portfolio-Institutional
Class(i) 30,268,670 30,268,670
- -------------------------------------------------------------------------
Premier Portfolio-Institutional Class(i) 30,268,670 30,268,670
=========================================================================
Total Money Market Funds (Cost
$60,537,340) 60,537,340
=========================================================================
TOTAL INVESTMENTS (excluding investments
purchased with cash collateral from
securities loaned)-98.31% (Cost
$548,690,278) 855,266,609
=========================================================================
</Table>
<Table>
SHARES VALUE
- -------------------------------------------------------------------------
<Caption>
INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES ON LOAN
MONEY MARKET FUNDS-5.92%
Liquid Assets Portfolio-Institutional
Class(i)(j) (Cost $51,548,164) 51,548,164 $ 51,548,164
=========================================================================
TOTAL INVESTMENTS-104.23% (Cost $600,238,442) 906,814,773
=========================================================================
OTHER ASSETS LESS LIABILITIES-(4.23)% (36,834,138)
=========================================================================
NET ASSETS-100.00% $869,980,635
_________________________________________________________________________
=========================================================================
</Table>
Investment Abbreviations:
<Table>
ADR - American Depositary Receipt
PDR - Philippine Deposit Receipts
REIT - Real Estate Investment Trust
Wts. - Warrants
</Table>
Notes to Schedule of Investments:
(a) Industry classifications used in this report are generally according to the
Global Industry Classification Standard, which was developed by and is the
exclusive property and a service mark of Morgan Stanley Capital
International Inc. and Standard & Poor's.
(b) In accordance with the procedures established by the Board of Trustees, the
foreign security is fair valued using adjusted closing market prices. The
aggregate value of these securities at October 31, 2007 was $752,564,988,
which represented 86.50% of the Fund's Net Assets. See Note 1A.
(c) All or a portion of this security was out on loan at October 31, 2007.
(d) Non-income producing security.
(e) 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 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 value of these securities at October 31, 2007 was $13,778,814,
which represented 1.58% of the Fund's Net Assets. Unless otherwise
indicated, these securities are not considered to be illiquid.
(f) Security fair valued in good faith in accordance with the procedures
established by the Board of Trustees. The value of this security at October
31, 2007 represented 0.01% of the Fund's Net Assets. See Note 1A.
(g) Security considered to be illiquid. The Fund is limited to investing 15% of
net assets in illiquid securities at the time of purchase. The value of this
security considered illiquid at October 31, 2007 represented 0.01% of the
Fund's Net Assets.
(h) Affiliated company. The Investment Company Act of 1940 defines affiliates as
those companies in which a fund holds 5% or more of the outstanding voting
securities. The Fund has not owned enough of the outstanding voting
securities of the issuer to have control (as defined in the Investment
Company Act of 1940) of that issuer. The aggregate value of these securities
as of October 31, 2007 was $9,499,447, which represented 1.09% of the Fund's
Net Assets. See Note 3.
(i) The money market fund and the Fund are affiliated by having the same
investment advisor. See Note 3.
(j) The security has been segregated to satisfy the commitment to return the
cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 7.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11
AIM Asia Pacific Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2007
<Table>
ASSETS:
Investments, at value (Cost $477,533,907)* $785,229,822
- -----------------------------------------------------------
Investments in affiliates (Cost $122,704,535) 121,584,951
===========================================================
Total investments (Cost $600,238,442) 906,814,773
===========================================================
Foreign currencies, at value (Cost
$23,694,921) 24,117,965
===========================================================
Receivables for:
Investments sold 1,240,404
- -----------------------------------------------------------
Fund shares sold 4,143,431
- -----------------------------------------------------------
Dividends 642,118
- -----------------------------------------------------------
Investment for trustee deferred compensation
and retirement plans 43,069
- -----------------------------------------------------------
Other assets 45,040
===========================================================
Total assets 937,046,800
___________________________________________________________
===========================================================
LIABILITIES:
Payables for:
Investments purchased 9,620,258
- -----------------------------------------------------------
Fund shares reacquired 1,828,002
- -----------------------------------------------------------
Trustee deferred compensation and
retirement plans 63,289
- -----------------------------------------------------------
Collateral upon return of securities loaned 51,548,164
- -----------------------------------------------------------
Accrued distribution fees 310,408
- -----------------------------------------------------------
Accrued trustees' and officer's fees and
benefits 2,295
- -----------------------------------------------------------
Accrued transfer agent fees 196,537
- -----------------------------------------------------------
Accrued operating expenses 3,497,212
===========================================================
Total liabilities 67,066,165
===========================================================
Net assets applicable to shares outstanding $869,980,635
___________________________________________________________
===========================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $474,477,734
- -----------------------------------------------------------
Undistributed net investment income 3,921,823
- -----------------------------------------------------------
Undistributed net realized gain 84,813,930
- -----------------------------------------------------------
Unrealized appreciation 306,767,148
===========================================================
$869,980,635
___________________________________________________________
===========================================================
NET ASSETS:
Class A $646,720,474
___________________________________________________________
===========================================================
Class B $ 92,295,476
___________________________________________________________
===========================================================
Class C $130,964,685
___________________________________________________________
===========================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 18,394,237
___________________________________________________________
===========================================================
Class B 2,780,990
___________________________________________________________
===========================================================
Class C 3,961,668
___________________________________________________________
===========================================================
Class A:
Net asset value per share $ 35.16
- -----------------------------------------------------------
Offering price per share
(Net asset value of $35.16 divided by
94.50%) $ 37.21
___________________________________________________________
===========================================================
Class B:
Net asset value and offering price per
share $ 33.19
___________________________________________________________
===========================================================
Class C:
Net asset value and offering price per
share $ 33.06
___________________________________________________________
===========================================================
</Table>
* At October 31, 2007, securities with an aggregate value of $50,348,714 were on
loan to brokers.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12
AIM Asia Pacific Growth Fund
STATEMENT OF OPERATIONS
For the year ended October 31, 2007
<Table>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $1,384,808) $ 12,610,999
- --------------------------------------------------------------------------
Dividends from affiliates (includes securities lending
income of $47,390) 2,256,174
- --------------------------------------------------------------------------
Interest 15,228
==========================================================================
Total investment income 14,882,401
==========================================================================
EXPENSES:
Advisory fees 5,666,245
- --------------------------------------------------------------------------
Administrative services fees 159,916
- --------------------------------------------------------------------------
Custodian fees 900,176
- --------------------------------------------------------------------------
Distribution fees:
Class A 1,127,916
- --------------------------------------------------------------------------
Class B 712,966
- --------------------------------------------------------------------------
Class C 858,667
- --------------------------------------------------------------------------
Transfer agent fees 1,322,428
- --------------------------------------------------------------------------
Trustees' and officer's fees and benefits 35,442
- --------------------------------------------------------------------------
Other 294,772
==========================================================================
Total expenses 11,078,528
==========================================================================
Less: Fees waived, expenses reimbursed and expense offset
arrangement(s) (216,698)
==========================================================================
Net expenses 10,861,830
==========================================================================
Net investment income 4,020,571
==========================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from:
Investment securities 85,099,459
==========================================================================
Foreign currencies (53,999)
==========================================================================
85,045,460
==========================================================================
Change in net unrealized appreciation of:
Investment securities (net of estimated tax on foreign
investments of $(2,746,107) -- Note 1J) 197,825,555
- --------------------------------------------------------------------------
Foreign currencies 339,848
==========================================================================
198,165,403
==========================================================================
Net realized and unrealized gain 283,210,863
==========================================================================
Net increase in net assets resulting from operations $287,231,434
__________________________________________________________________________
==========================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
13
AIM Asia Pacific Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2007 and 2006
<Table>
<Caption>
2007 2006
- ------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 4,020,571 $ 1,533,062
- ------------------------------------------------------------------------------------------
Net realized gain 85,045,460 44,446,959
- ------------------------------------------------------------------------------------------
Change in net unrealized appreciation 198,165,403 52,431,709
==========================================================================================
Net increase in net assets resulting from operations 287,231,434 98,411,730
==========================================================================================
Distributions to shareholders from net investment income:
Class A (1,443,028) (1,171,757)
- ------------------------------------------------------------------------------------------
Class B -- (78,079)
- ------------------------------------------------------------------------------------------
Class C -- (64,640)
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (11,106,619) --
- ------------------------------------------------------------------------------------------
Class B (2,104,538) --
- ------------------------------------------------------------------------------------------
Class C (2,181,651) --
==========================================================================================
Total distributions from net realized gains (15,392,808) --
==========================================================================================
Decrease in net assets resulting from distributions (16,835,836) (1,314,476)
==========================================================================================
Share transactions-net:
Class A 152,873,003 66,639,813
- ------------------------------------------------------------------------------------------
Class B 7,256,325 4,039,615
- ------------------------------------------------------------------------------------------
Class C 37,850,716 15,223,352
==========================================================================================
Net increase in net assets resulting from share
transactions 197,980,044 85,902,780
==========================================================================================
Net increase in net assets 468,375,642 183,000,034
==========================================================================================
NET ASSETS:
Beginning of year 401,604,993 218,604,959
==========================================================================================
End of year (including undistributed net investment income
of $3,921,823 and $1,398,279, respectively) $869,980,635 $401,604,993
__________________________________________________________________________________________
==========================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
14
AIM Asia Pacific Growth Fund
NOTES TO FINANCIAL STATEMENTS
October 31, 2007
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Asia Pacific Growth Fund (the "Fund") is a series portfolio of AIM
International Mutual Funds (the "Trust"). The Trust is a Delaware statutory
trust registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of six
separate portfolios, each authorized to issue an unlimited number of shares of
beneficial interest. The Fund currently consists of 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.
The Fund's investment objective is long-term growth of capital.
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 or official closing price as of the close of
the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on that
day. Securities traded in the over-the-counter market are valued based on
prices furnished by independent pricing services or market makers. When
such securities are valued by an independent pricing service they may be
considered fair valued. Futures contracts are valued at the final
settlement price set by an exchange on which they are principally traded.
Listed options are valued at the mean between the last bid and the ask
prices from the exchange on which they are principally traded. Options not
listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last sales
price or official closing price as of the close of the customary trading
session on the exchange where the security is principally traded.
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes 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 specific securities, dividend rate, yield, quality,
type of issue, coupon rate, maturity, individual trading characteristics
and other market data. Short-term obligations, including commercial paper,
having 60 days or less to maturity are recorded at amortized cost which
approximates value. Debt securities are subject to interest rate and credit
risks. In addition, all debt securities involve some risk of default with
respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued at
the market quotations. Because trading hours for certain foreign securities
end before the close of the NYSE, closing market quotations may become
unreliable. If between the time trading ends on a particular security and
the close of the customary trading session on the NYSE, events occur that
are significant and may make the closing price unreliable, the Fund may
fair value the security. If the event is likely to have affected the
closing price of the security, the security will be valued at fair value in
good faith using procedures approved by the Board of Trustees. Adjustments
to closing prices to reflect fair value may also be based on a screening
process of an independent pricing service to indicate the degree of
certainty, based on historical data, that the closing price in the
principal market where a foreign security trades is not the current value
as of the close of the NYSE. Foreign securities meeting the approved degree
of certainty that the price is not reflective of current value will be
priced at the indication of fair value from the independent pricing
service. Multiple factors may be considered by the independent pricing
service in determining adjustments to reflect fair value and may include
information relating to sector indices, ADRs and domestic and foreign index
futures. Foreign securities may have additional risks including exchange
rate changes, potential for sharply devalued currencies and high inflation,
political and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be 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
unreliable are valued at fair value as determined in good faith by or under
the supervision of the Trust's officers following procedures approved by
the Board of Trustees. Issuer specific events, market trends, bid/ask
quotes of brokers and information providers and other market data may be
reviewed in the course of making a good faith determination of a security's
fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity.
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.
15
AIM Asia Pacific Growth Fund
The Fund may periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds as received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
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. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, AIM may
determine the country in which an issuer is located and/or credit risk
exposure based on various factors. These factors include the laws of the
country under which the issuer is organized, where the issuer maintains a
principal office, the country in which the issuer derives 50% or more of
its total revenues and the country that has the primary market for the
issuer's securities, as well as other criteria. Among the other criteria
that may be evaluated for making this determination are the country in
which the issuer maintains 50% or more of its assets, the type of security,
financial guarantees and enhancements, the nature of the collateral and the
sponsor organization. Country of issuer and/or credit risk exposure has
been determined to be the United States of America unless otherwise noted.
D. 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 treat a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
E. 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 to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial statements.
F. 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.
G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to
taxation. Actual results could differ from those estimates.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust (including the
Trust's investment manager) is indemnified against certain liabilities that
may arise out of performance of their duties to the Fund. Additionally, in
the normal course of business, the Fund enters into contracts that contain
a variety of indemnification clauses. The Fund's maximum exposure under
these arrangements is unknown as this would involve future claims that may
be made against the Fund that have not yet occurred. The risk of material
loss as a result of such indemnification claims is considered remote.
I. REDEMPTION FEES -- The Fund has a 2% redemption fee that is to be retained
by the Fund to offset transaction costs and other expenses associated with
short-term redemptions and exchanges. The fee, subject to certain
exceptions, is imposed on certain redemptions, including exchanges of
shares held less than 30 days. The redemption fee is recorded as an
increase in shareholder capital and is allocated among the share classes
based on the relative net assets of each class.
J. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close of
the NYSE based on quotations posted by banks and major currency dealers.
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 (i) sales
of foreign currencies, (ii) currency gains or losses realized between the
trade and settlement dates on securities transactions, and (iii) 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.
The Fund may invest in foreign securities which may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion
of which may be recoverable. Taxes are accrued based on the Fund's current
interpretation of tax regulations and rates that exist in the foreign
markets in which the Fund invests.
16
AIM Asia Pacific Growth Fund
K. 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.
Fluctuations in the value of these contracts are recorded as unrealized
appreciation (depreciation) until the contracts are closed. When these
contracts are closed, realized gains (losses) are recorded. Realized and
unrealized gains and losses on these contracts are included in the
Statement of Operations. The Fund could be exposed to risk, which may be in
excess of the amount reflected in the Statement of Assets and Liabilities,
if counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust 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 based on the annual rate of the Fund's
average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $500 million 0.95%
- -------------------------------------------------------------------
Over $500 million 0.90%
__________________________________________________________________
===================================================================
</Table>
Effective July 1, 2007, the Trustees approved a reduced contractual advisory
fee schedule for the Fund. Prior to July 1, 2007 AIM had contractually waived
advisory fees to the same reduced advisory fee schedule. Under the terms of the
investment advisory agreement, the Fund will pay an advisory fee to AIM based on
the following annual rates of the Fund's average daily net assets:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- --------------------------------------------------------------------
First $250 million 0.935%
- --------------------------------------------------------------------
Next $250 million 0.91%
- --------------------------------------------------------------------
Next $500 million 0.885%
- --------------------------------------------------------------------
Next $1.5 billion 0.86%
- --------------------------------------------------------------------
Next $2.5 billion 0.835%
- --------------------------------------------------------------------
Next $2.5 billion 0.81%
- --------------------------------------------------------------------
Next $2.5 billion 0.785%
- --------------------------------------------------------------------
Over $10 billion 0.76%
___________________________________________________________________
====================================================================
</Table>
Further, effective July 1, 2007, AIM has contractually agreed, through at
least June 30, 2008, to waive 100% of the advisory fee AIM receives from the
affiliated money market funds on investments by the Fund in such affiliated
money market funds (excluding investments made in affiliated money market funds
with cash collateral from securities loaned by the fund). Prior to July 1, 2007,
AIM had voluntarily agreed to waive 25% of the advisory fee AIM receives from
the affiliated money market funds on investments by the Fund in such affiliated
money market funds.
For the year ended October 31, 2007, AIM waived advisory fees of $124,936.
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") agreed
to reimburse expenses incurred by the Fund in connection with market timing
matters in the AIM Funds, which may include legal, audit, shareholder reporting,
communications and trustee expenses. These expenses along with the related
expense reimbursement are included in the Statement of Operations. For the year
ended October 31, 2007, Invesco reimbursed expenses of the Fund in the amount of
$646.
The Trust has entered into a master administrative services agreement with
AIM pursuant to which the Fund has agreed to pay AIM for certain administrative
costs incurred in providing accounting services, to the Fund. For the year ended
October 31, 2007, expenses incurred under the agreement are shown in the
Statement of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with AIM
Investment Services, Inc. ("AIS") pursuant to which the Fund has agreed to pay
AIS a fee for providing transfer agency and shareholder services to the Fund and
reimburse AIS for certain expenses incurred by AIS in the course of providing
such services. AIS may make payments to intermediaries that provide omnibus
account services, sub-accounting services and/or networking services. All fees
payable by AIS to intermediaries that provide omnibus account services or
sub-accounting are charged back to the Fund, subject to certain limitations
approved by the Trust's Board of Trustees. For the year ended October 31, 2007,
the expenses incurred under the agreement are shown in the Statement of
Operations as transfer agent fees.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B
and Class C 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 and Class C
shares (collectively the "Plans"). The Fund, pursuant to the Plans, pays ADI
compensation at the annual rate of 0.25% of the Fund's average daily net assets
of Class A shares and 1.00% of the average daily net assets of each class of
Class B and Class C shares. Of the Plan payments, up to 0.25% of the average
daily net assets of each class of shares may be paid to furnish continuing
personal shareholder services to 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. Financial Industry
17
AIM Asia Pacific Growth Fund
Regulatory Authority ("FINRA"), formerly known as National Association of
Securities Dealers, rules 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.
For the year ended October 31, 2007, expenses incurred under the Plans are shown
in the Statement of Operations as distribution fees.
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, 2007, ADI advised the Fund that it retained $307,012 in
front-end sales commissions from the sale of Class A shares and $12,716,
$122,223 and $40,906 from Class A, Class B and Class C shares, respectively, for
CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
AIM, AIS and/or ADI.
NOTE 3--INVESTMENTS IN AFFILIATES
The Fund is permitted, pursuant to procedures approved by the Board of Trustees,
to invest daily available cash balances and cash collateral from securities
lending transactions in affiliated money market funds. The Fund and the money
market funds below have the same investment advisor and therefore, are
considered to be affiliated. The tables below show the transactions in and
earnings from investments in affiliated money market funds for the year ended
October 31, 2007. During the period each investment maintained a $1.00 net asset
value, as such there is no realized gain/(loss) and no change in unrealized
appreciation/(depreciation).
INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
<Table>
<Caption>
CHANGE IN
UNREALIZED REALIZED
VALUE PURCHASES PROCEEDS APPRECIATION VALUE DIVIDEND GAIN
FUND 10/31/06 AT COST FROM SALES (DEPRECIATION) 10/31/07 INCOME (LOSS)
- ----------------------------------------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-Institutional
Class $12,536,110 $122,492,473 $(104,759,913) $ -- $30,268,670 $1,106,347 $ --
- ----------------------------------------------------------------------------------------------------------------------------------
Premier
Portfolio-Institutional
Class 12,536,110 122,492,473 (104,759,913) -- 30,268,670 1,102,437 --
==================================================================================================================================
Subtotal $25,072,220 $244,984,946 $(209,519,826) $ -- $60,537,340 $2,208,784 $ --
==================================================================================================================================
</Table>
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
<Table>
<Caption>
CHANGE IN
UNREALIZED REALIZED
VALUE PURCHASES PROCEEDS APPRECIATION VALUE DIVIDEND GAIN
FUND 10/31/06 AT COST FROM SALES (DEPRECIATION) 10/31/07 INCOME* (LOSS)
- ----------------------------------------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-Institutional
Class $ 8,332,014 $166,671,618 $(123,455,468) $ -- $ 51,548,164 $ 37,515 $ --
- ----------------------------------------------------------------------------------------------------------------------------------
STIC Prime
Portfolio-Institutional
Class 8,332,013 36,918,533 (45,250,546) -- -- 9,875 --
==================================================================================================================================
Subtotal $16,664,027 $203,590,151 $(168,706,014) $ -- $ 51,548,164 $ 47,390 $ --
==================================================================================================================================
</Table>
* Net of compensation to counterparties.
INVESTMENTS IN OTHER AFFILIATES:
The Investment Company Act of 1940 defines affiliates as those issuances in
which a fund holds 5% or more of the outstanding voting securities. The Fund has
not owned enough of the outstanding voting securities of the issuer to have
control (as defined in the Investment Company Act of 1940) of that issuer. The
following is a summary of the transactions with affiliates for the year ended
October 31, 2007.
<Table>
<Caption>
CHANGE IN
UNREALIZED REALIZED
VALUE PURCHASES PROCEEDS APPRECIATION VALUE DIVIDEND GAIN
10/31/06 AT COST FROM SALES (DEPRECIATION) 10/31/07 INCOME (LOSS)
- ----------------------------------------------------------------------------------------------------------------------------------
GMA Network
Inc. $ -- $ 10,619,031 $ -- $(1,119,584) $ 9,499,447 $ -- $ --
==================================================================================================================================
Total
Investments
in
Affiliates $41,736,247 $459,194,128 $(378,225,840) $(1,119,584) $121,584,951 $2,256,174 $ --
__________________________________________________________________________________________________________________________________
==================================================================================================================================
</Table>
NOTE 4--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the transfer
agent for clearing shareholder transactions, (ii) custodian credits which result
from periodic overnight cash balances at the custodian and (iii) a one time
custodian fee credit used to offset custodian fees. For the year ended October
31, 2007, the Fund received credits from these arrangements, which resulted in
the reduction of the Fund's total expenses of $91,116.
18
AIM Asia Pacific Growth Fund
NOTE 5--TRUSTEES' AND OFFICER'S FEES AND BENEFITS
"Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officer's Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officer's
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended October 31, 2007, the Fund paid legal fees of $7,083
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 6--BORROWINGS
Pursuant to an exemptive order from the Securities and Exchange Commission, 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. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. 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.
The Fund is a party to an uncommitted unsecured revolving 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
credit facility, 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 year ended October 31, 2007, the Fund did not borrow or lend
under the interfund lending facility or borrow under the uncommitted unsecured
revolving credit facility.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with SSB, the custodian bank. To compensate the
custodian bank for such overdrafts, the overdrawn Fund may either (i) leave
funds as a compensating balance in the account so the custodian bank can be
compensated by earning the additional interest; or (ii) compensate by paying the
custodian bank at a rate agreed upon by the custodian bank and AIM, not to
exceed the contractually agreed upon rate.
NOTE 7--PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities having a market value up to 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 received in connection with these loans is
invested in short-term money market instruments or affiliated money market
funds. 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. 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. The Fund could also experience delays and costs in gaining
access to the collateral. The Fund bears the risk of any deficiency in the
amount of the collateral available for return to the borrower due to any loss on
the collateral invested.
At October 31, 2007, securities with an aggregate value of $50,348,714 were
on loan to brokers. The loans were secured by cash collateral of $51,548,164
received by the Fund and subsequently invested in affiliated money market funds.
For the year ended October 31, 2007, the Fund received dividends on cash
collateral investments of $47,390 for securities lending transactions, which are
net of compensation to counterparties.
NOTE 8--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
DISTRIBUTIONS TO SHAREHOLDERS:
The tax character of distributions paid during the years October 31, 2007 and
2006 was as follows:
<Table>
<Caption>
2007 2006
- ---------------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 1,443,028 $1,314,476
- ---------------------------------------------------------------------------------------
Long-term capital gain 15,392,808 --
=======================================================================================
Total distributions $16,835,836 $1,314,476
_______________________________________________________________________________________
=======================================================================================
</Table>
19
AIM Asia Pacific Growth Fund
TAX COMPONENTS OF NET ASSETS:
As of October 31, 2007, the components of net assets on a tax basis were as
follows:
<Table>
<Caption>
2007
- ----------------------------------------------------------------------------
Undistributed ordinary income $ 20,550,643
- ----------------------------------------------------------------------------
Undistributed long-term gain 68,572,460
- ----------------------------------------------------------------------------
Net unrealized appreciation -- investments 306,430,240
- ----------------------------------------------------------------------------
Temporary book/tax differences (50,442)
- ----------------------------------------------------------------------------
Shares of beneficial interest 474,477,734
============================================================================
Total net assets $869,980,635
____________________________________________________________________________
============================================================================
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation difference is attributable primarily to losses on wash sales and
the recognition of unrealized gains on passive foreign investment companies. The
tax-basis net unrealized appreciation on investments amount includes
appreciation on foreign currencies of $190,817.
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 trustee deferral of compensation and
retirement plan benefits.
The Fund does not have a capital loss carryforward as of October 31, 2007.
NOTE 9--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended October 31, 2007 was $370,939,223 and
$228,841,212, respectively.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $319,035,233
- ------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (12,795,810)
==============================================================================
Net unrealized appreciation of investment securities $306,239,423
______________________________________________________________________________
==============================================================================
Cost of investments for tax purposes is $600,575,350.
</Table>
NOTE 10--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of foreign currency
transactions on October 31, 2007, undistributed net investment income was
decreased by $53,999 and undistributed net realized gain was increased by
$53,999. This reclassification had no effect on the net assets of the Fund.
20
AIM Asia Pacific Growth Fund
NOTE 11--SHARE INFORMATION
The Fund currently offers three different classes of shares: Class A, Class B
and Class C. Class A shares are sold with a front-end sales charge unless
certain waiver criteria are met and under certain circumstances load waiver
shares may be subject to a CDSC. Class B shares and Class C shares are sold with
a CDSC. Generally, Class B shares will automatically convert to Class A shares
on or about the month-end which is at least eight years after the date of
purchase.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
- ----------------------------------------------------------------------------------------------------------------------
YEAR ENDED
OCTOBER 31, 2007(a) 2006
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------------
Sold:
Class A 10,858,212 $301,941,372 6,736,406 $136,891,336
- ----------------------------------------------------------------------------------------------------------------------
Class B 1,194,028 31,212,042 1,086,165 20,943,735
- ----------------------------------------------------------------------------------------------------------------------
Class C 2,298,857 61,390,243 1,830,093 34,886,344
======================================================================================================================
Issued as reinvestment of dividends:
Class A 454,156 10,877,024 57,543 1,028,861
- ----------------------------------------------------------------------------------------------------------------------
Class B 87,633 1,993,643 4,270 72,895
- ----------------------------------------------------------------------------------------------------------------------
Class C 91,497 2,073,315 3,486 59,266
======================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 308,975 8,171,565 273,040 5,558,140
- ----------------------------------------------------------------------------------------------------------------------
Class B (325,015) (8,171,565) (286,944) (5,558,140)
======================================================================================================================
Reacquired:(b)
Class A (6,057,329) (168,116,958) (3,768,936) (76,838,524)
- ----------------------------------------------------------------------------------------------------------------------
Class B (667,453) (17,777,795) (592,965) (11,418,875)
- ----------------------------------------------------------------------------------------------------------------------
Class C (974,472) (25,612,842) (1,000,372) (19,722,258)
======================================================================================================================
7,269,089 $197,980,044 4,341,786 $ 85,902,780
______________________________________________________________________________________________________________________
======================================================================================================================
</Table>
(a) There are two entities that are each record owners of more than 5% of
the outstanding shares of the Fund and in the aggregate they own 20% of
the outstanding shares of the Fund. ADI has an agreement with these
entities to sell Fund shares. The Fund, AIM and/or AIM affiliates may
make payments to these entities, which are considered to be related to
the Fund, for providing services to the Fund, AIM and/or AIM affiliates
including but not limited to services such as, securities brokerage,
distribution, third party record keeping and account servicing. The
Trust has no knowledge as to whether all or any portion of the shares
owned of record by these entities are also owned beneficially.
(b) Net of redemption fees of $95,566 and $46,053 which were allocated among
the classes based on relative net assets of each class for the years
ended October 31, 2007 and 2006, respectively.
NOTE 12--NEW ACCOUNTING STANDARD
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48").
FIN 48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement for a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The provisions for FIN 48 are effective for
fiscal years beginning after December 15, 2006. Management has assessed the
application of FIN 48 to the Fund and has determined that the adopting of FIN 48
is not expected to have a material impact on the Fund. Management intends for
the Fund to adopt FIN 48 provisions during the fiscal year ending October 31,
2008 as required.
21
AIM Asia Pacific Growth Fund
NOTE 13--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CLASS A
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 22.82 $ 16.41 $ 13.72 $ 12.07 $ 8.53
- ------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(a) 0.24 0.14 0.14 (0.01) (0.01)
- ------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 13.00 6.39 2.55 1.66 3.55
========================================================================================================================
Total from investment operations 13.24 6.53 2.69 1.65 3.54
========================================================================================================================
Less distributions:
Dividends from net investment income (0.10) (0.12) -- -- --
- ------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.80) -- -- -- --
========================================================================================================================
Total distributions (0.90) (0.12) -- -- --
========================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
========================================================================================================================
Net asset value, end of period $ 35.16 $ 22.82 $ 16.41 $ 13.72 $ 12.07
________________________________________________________________________________________________________________________
========================================================================================================================
Total return(b) 59.90% 39.97% 19.61% 13.67% 41.50%
________________________________________________________________________________________________________________________
========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $646,720 $292,771 $156,379 $106,129 $97,192
________________________________________________________________________________________________________________________
========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.61%(c) 1.83% 2.01% 2.23% 2.26%
- ------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.63%(c) 1.85% 2.03% 2.25% 2.41%
========================================================================================================================
Ratio of net investment income (loss) to average net assets 0.84%(c) 0.68% 0.85% (0.09)% (0.11)%
________________________________________________________________________________________________________________________
========================================================================================================================
Portfolio turnover rate 41% 58% 36% 68% 100%
________________________________________________________________________________________________________________________
========================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $451,166,520.
<Table>
<Caption>
CLASS B
------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------
2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 21.65 $ 15.61 $ 13.14 $ 11.64 $ 8.27
- --------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(a) 0.02 (0.01) 0.03 (0.09) (0.07)
- --------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 12.32 6.08 2.44 1.59 3.44
====================================================================================================================
Total from investment operations 12.34 6.07 2.47 1.50 3.37
====================================================================================================================
Less distributions:
Dividends from net investment income -- (0.03) -- -- --
- --------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.80) -- -- -- --
====================================================================================================================
Total distributions (0.80) (0.03) -- -- --
====================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
====================================================================================================================
Net asset value, end of period $ 33.19 $ 21.65 $ 15.61 $ 13.14 $ 11.64
____________________________________________________________________________________________________________________
====================================================================================================================
Total return(b) 58.70% 38.96% 18.80% 12.89% 40.75%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $92,295 $53,936 $35,600 $29,174 $24,599
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.36%(c) 2.58% 2.69% 2.88% 2.91%
- --------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.38%(c) 2.60% 2.71% 2.90% 3.06%
====================================================================================================================
Ratio of net investment income (loss) to average net assets 0.09%(c) (0.07)% 0.17% (0.74)% (0.76)%
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 41% 58% 36% 68% 100%
____________________________________________________________________________________________________________________
====================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $71,296,646.
22
AIM Asia Pacific Growth Fund
NOTE 13--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS C
------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------
2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 21.56 $ 15.55 $ 13.09 $ 11.60 $ 8.25
- --------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(a) 0.02 (0.01) 0.03 (0.09) (0.07)
- --------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 12.28 6.05 2.43 1.58 3.42
====================================================================================================================
Total from investment operations 12.30 6.04 2.46 1.49 3.35
====================================================================================================================
Less distributions:
Dividends from net investment income -- (0.03) -- -- --
- --------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.80) -- -- -- --
====================================================================================================================
Total distributions (0.80) (0.03) -- -- --
====================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
====================================================================================================================
Net asset value, end of period $ 33.06 $ 21.56 $ 15.55 $ 13.09 $11.60
____________________________________________________________________________________________________________________
====================================================================================================================
Total return(b) 58.77% 38.92% 18.79% 12.84% 40.61%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $130,965 $54,898 $26,626 $11,220 $8,763
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.36%(c) 2.58% 2.69% 2.88% 2.91%
- --------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.38%(c) 2.60% 2.71% 2.90% 3.06%
====================================================================================================================
Ratio of net investment income (loss) to average net assets 0.09%(c) (0.07)% 0.17% (0.74)% (0.76)%
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 41% 58% 36% 68% 100%
____________________________________________________________________________________________________________________
====================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $85,866,721.
NOTE 14--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On July 6, 2007, the Securities and Exchange Commission ("SEC") published notice
of two proposed distribution plans ("Distribution Plans") for the distribution
of monies placed into two separate Fair Funds created pursuant to a settlement
reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"), A I M
Advisors, Inc. ("AIM") and A I M Distributors, Inc. and the SEC (the "Order").
One of the Fair Funds consists of $325 million, plus interest and any
contributions by other settling parties, for distribution to shareholders of
certain mutual funds formerly advised by IFG who may have been harmed by market
timing and related activity. The second Fair Fund consists of $50 million, plus
interest and any contributions by other settling parties, for distribution to
shareholders of mutual funds advised by AIM who may have been harmed by market
timing and related activity. Comments on the Distribution Plans were due no
later than August 6, 2007 and the Distribution Plans are awaiting final approval
by the SEC. Distributions from the Fair Funds will begin after the SEC finally
approves the Distribution Plans. The proposed Distribution Plans provide for
distribution to all eligible investors, for the periods spanning January 1, 2000
through July 31, 2003 (for the IFG Fair Fund) and January 1, 2001 through
September 30, 2003 (for the AIM Fair Fund), their proportionate share of the
applicable Fair Fund to compensate such investors for injury they may have
suffered as a result of market timing in the affected funds. The Distribution
Plans include a provision for any residual amounts in the Fair Funds to be
distributed in the future to the affected funds. Because the Distribution Plans
have not received final approval from the SEC and distribution of the Fair Funds
has not yet commenced, management of AIM and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"),
the parent company of IFG and AIM, has agreed to reimburse expenses incurred by
the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
On August 30, 2005, the West Virginia Office of the State
Auditor -- Securities Commission ("WVASC") issued a Summary Order to Cease and
Desist and Notice of Right to Hearing to AIM and ADI (Order No. 05-1318). The
WVASC makes findings of fact that AIM and ADI entered into certain arrangements
permitting market timing of the AIM Funds and failed to disclose these
arrangements in the prospectuses for such Funds, and conclusions of law to the
effect that AIM and ADI violated the West Virginia securities laws. The WVASC
orders AIM and ADI to cease any further violations and seeks to impose monetary
sanctions, including restitution to affected investors, disgorgement of fees,
reimbursement of investigatory, administrative and legal costs and an
"administrative assessment," to be determined by the Commissioner. Initial
research indicates that these damages could be limited or capped by statute. By
agreement with the Commissioner of Securities, AIM's time to respond to that
Order has been indefinitely suspended.
23
AIM Asia Pacific Growth Fund
NOTE 14--LEGAL PROCEEDINGS--(CONTINUED)
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or
related entities and individuals, depending on the lawsuit, alleging:
- that the defendants permitted improper market timing and related activity
in the AIM Funds; and
- that certain AIM Funds inadequately employed fair value pricing.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
ERISA, negligence, breach of fiduciary duty and/or breach of contract. These
lawsuits seek remedies that include, depending on the lawsuit, damages,
restitution, injunctive relief, imposition of a constructive trust, removal of
certain directors and/or employees, various corrective measures under ERISA,
rescission of certain AIM Funds' advisory agreements and/or distribution plans
and recovery of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court,
plaintiffs in these lawsuits consolidated their claims for pre-trial purposes
into three amended complaints against various AIM- and IFG-related parties: (i)
a Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of the Employee
Retirement Income Securities Act ("ERISA") purportedly brought on behalf of
participants in Invesco's 401(k) plan. Based on orders issued by the MDL Court,
all claims asserted against the AIM Funds that have been transferred to the MDL
Court have been dismissed, although certain Funds remain nominal defendants in
the Consolidated Amended Fund Derivative Complaint. On September 15, 2006, the
MDL Court granted the Invesco defendants' motion to dismiss the Amended Class
Action Complaint for Violations of ERISA and dismissed such Complaint. The
plaintiff has commenced an appeal from that decision.
IFG, AIM, ADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, AIM and ADI have advised the Fund that they are providing full
cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, AIM and/or related entities and individuals in the future.
At the present time, management of AIM and the Fund are unable to estimate
the impact, if any, that the outcome of the Pending Litigation and Regulatory
Inquiries described above may have on AIM, ADI or the Fund.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
24
AIM Asia Pacific Growth Fund
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM International Mutual Funds
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 AIM Asia Pacific Growth Fund (one
of the funds constituting AIM International Mutual Funds, hereafter referred to
as the "Fund") at October 31, 2007, 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 five 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 the standards of the
Public Company Accounting Oversight Board (United States). Those standards
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, 2007 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PRICEWATERHOUSECOOPERS LLP
December 19, 2007
Houston, Texas
25
AIM Asia Pacific Growth Fund
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period May 1, 2007, through October 31, 2007.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
SHARE ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (5/1/07) (10/31/07)(1) PERIOD(2) (10/31/07) PERIOD(2) RATIO
A $1,000.00 $1,292.40 $ 9.07 $1,017.29 $ 7.98 1.57%
B 1,000.00 1,287.70 13.38 1,013.51 11.77 2.32
C 1,000.00 1,287.70 13.38 1,013.51 11.77 2.32
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period May 1, 2007, through October 31, 2007, after actual
expenses and will differ from the hypothetical ending account value which is
based on the Fund's expense ratio and a hypothetical annual return of 5%
before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
184/365 to reflect the most recent fiscal half year.
26
AIM Asia Pacific Growth Fund
Approval of Investment Advisory Agreement
The Board of Trustees (the Board) of AIM Sub-Committee's recommendations and A. Nature, Extent and Quality of
International Mutual Funds is required makes its own recommendations regarding Services Provided by AIM
under the Investment Company Act of 1940 to the performance, fees and expenses of
approve annually the renewal of the AIM the AIM Funds to the full Board. The Board reviewed the advisory services
Asia Pacific Growth Fund (the Fund) Moreover, the Investments Committee provided to the Fund by AIM under the
investment advisory agreement with A I M considers each Sub-Committee's Fund's advisory agreement, the
Advisors, Inc. (AIM). During contract recommendations in making its annual performance of AIM in providing these
renewal meetings held on June 25-27, 2007, recommendation to the Board whether to services, and the credentials and
the Board as a whole and the disinterested approve the continuance of each AIM experience of the officers and employees
or "independent" Trustees, voting Fund's investment advisory agreement and of AIM who provide these services. The
separately, approved the continuance of the sub-advisory agreement, if applicable Board's review of the qualifications of
Fund's investment advisory agreement for (advisory agreements), for another year. AIM to provide these services included
another year, effective July 1, 2007. In the Board's consideration of AIM's
doing so, the Board determined that the The independent Trustees, as portfolio and product review process,
Fund's advisory agreement is in the best mentioned above, are assisted in their various back office support functions
interests of the Fund and its shareholders annual evaluation of the advisory provided by AIM, and AIM's equity and
and that the compensation to AIM under the agreements by the independent Senior fixed income trading operations. The
Fund's advisory agreement is fair and Officer. One responsibility of the Board concluded that the nature, extent
reasonable. Senior Officer is to manage the process and quality of the advisory services
by which the AIM Funds' proposed provided to the Fund by AIM were
The independent Trustees met separately management fees are negotiated during appropriate and that AIM currently is
during their evaluation of the Fund's the annual contract renewal process to providing satisfactory advisory services
investment advisory agreement with ensure that they are negotiated in a in accordance with the terms of the
independent legal counsel from whom they manner which is at arms' length and Fund's advisory agreement. In addition,
received independent legal advice, and the reasonable. Accordingly, the Senior based on their ongoing meetings
independent Trustees also received Officer must either supervise a throughout the year with the Fund's
assistance during their deliberations from competitive bidding process or prepare portfolio managers, the Board concluded
the independent Senior Officer, a full-time an independent written evaluation. The that these individuals are competent and
officer of the AIM Funds who reports Senior Officer has recommended that an able to continue to carry out their
directly to the independent Trustees. The independent written evaluation be responsibilities under the Fund's
following discussion more fully describes provided and, upon the direction of the advisory agreement.
the process employed by the Board to Board, has prepared an independent
evaluate the performance of the AIM Funds written evaluation. In determining whether to continue
(including the Fund) throughout the year the Fund's advisory agreement, the Board
and, more specifically, during the annual During the annual contract renewal considered the prior relationship
contract renewal meetings. process, the Board considered the between AIM and the Fund, as well as the
factors discussed below under the Board's knowledge of AIM's operations,
THE BOARD'S FUND EVALUATION PROCESS heading "Factors and Conclusions and and concluded that it was beneficial to
Summary of Independent Written Fee maintain the current relationship, in
The Board's Investments Committee has Evaluation" in evaluating the fairness part, because of such knowledge. The
established three Sub-Committees which are and reasonableness of the Fund's Board also considered the steps that AIM
responsible for overseeing the management advisory agreement at the contract and its affiliates have taken over the
of a number of the series portfolios of the renewal meetings and at their meetings last several years to improve the
AIM Funds. This SubCommittee structure throughout the year as part of their quality and efficiency of the services
permits the Trustees to focus on the ongoing oversight of the Fund. The they provide to the Funds in the areas
performance of the AIM Funds that have been Fund's advisory agreement was considered of investment performance, product line
assigned to them. The Sub-Committees meet separately, although the Board also diversification, distribution, fund
throughout the year to review the considered the common interests of all operations, shareholder services and
performance of their assigned funds, and of the AIM Funds in their deliberations. compliance. The Board concluded that the
the Sub-Committees review monthly and The Board comprehensively considered all quality and efficiency of the services
quarterly comparative performance of the information provided to them and AIM and its affiliates provide to the
information and periodic asset flow data did not identify any particular factor AIM Funds in each of these areas have
for their assigned funds. These materials that was controlling. Furthermore, each generally improved, and support the
are prepared under the direction and Trustee may have evaluated the Board's approval of the continuance of
supervision of the independent Senior information provided differently from the Fund's advisory agreement.
Officer. Over the course of each year, the one another and attributed different
SubCommittees meet with portfolio managers weight to the various factors. The B. Fund Performance
for their assigned funds and other members Trustees recognized that the advisory
of management and review with these arrangements and resulting advisory fees The Board compared the Fund's
individuals the performance, investment for the Fund and the other AIM Funds are performance during the past one, three
objective(s), policies, strategies and the result of years of review and and five calendar years to the
limitations of these funds. negotiation between the Trustees and performance of funds in the Fund's
AIM, that the Trustees may focus to a Lipper peer group that are not managed
In addition to their meetings throughout greater extent on certain aspects of by AIM, and against the performance of
the year, the Sub-Committees meet at these arrangements in some years than all funds in the Lipper Pacific Ex Japan
designated contract renewal meetings each others, and that the Trustees' Funds Index. The Board also reviewed the
year to conduct an in-depth review of the deliberations and conclusions in a methodology used by Lipper to identify
performance, fees and expenses of their particular year may be based in part on the Fund's peers. The Board noted that
assigned funds. During the contract renewal their deliberations and conclusions of the Fund's performance was comparable to
process, the Trustees receive comparative these same arrangements throughout the the median performance of its peers for
performance and fee data regarding all the year and in prior years. the one, three and five year periods.
AIM Funds prepared by an independent The Board noted that the Fund's
company, Lipper, Inc., under the direction FACTORS AND CONCLUSIONS AND SUMMARY OF performance was above the performance of
and supervision of the independent Senior INDEPENDENT WRITTEN FEE EVALUATION the Index for the one year period, and
Officer who also prepares a separate The discussion below serves as a summary comparable to such Index for the three
analysis of this information for the of the Senior Officer's independent and five year periods. The Board also
Trustees. Each Sub-Committee then makes written evaluation, as well as a considered the steps AIM has taken over
recommendations to the Investments discussion of the material factors and the last several years to improve the
Committee regarding the performance, fees related conclusions that formed the basis quality and efficiency of the services
and expenses of their assigned funds. The for the Board's approval of the Fund's that AIM provides to the AIM Funds. The
Investments Committee considers each advisory agreement. Unless otherwise Board concluded that AIM continues to be
stated, information set forth below is responsive to the Board's focus on fund
as of June 27, 2007 and does not reflect performance. Although the independent
any changes that may have occurred since written evaluation of the Fund's Senior
that date, including but not limited to Officer (discussed below) only
changes to the Fund's performance, considered Fund performance through the
advisory fees, expense limitations most recent calendar year, the Board
and/or fee waivers. also reviewed more
(continued)
27
AIM Asia Pacific Growth Fund
recent Fund performance and this review did E. Profitability and Financial Resources used to pay for research and execution
not change their conclusions. of AIM services. The Board noted that soft
dollar arrangements shift the payment
C. Advisory Fees and Fee Waivers The Board reviewed information from AIM obligation for the research and
concerning the costs of the advisory and executions services from AIM to the
The Board compared the Fund's contractual other services that AIM and its funds and therefore may reduce AIM's
advisory fee rate to the contractual affiliates provide to the Fund and the expenses. The Board also noted that
advisory fee rates of funds in the Fund's profitability of AIM and its affiliates research obtained through soft dollar
Lipper peer group that are not managed by in providing these services. The Board arrangements may be used by AIM in
AIM, at a common asset level and as of the also reviewed information concerning the making investment decisions for the Fund
end of the past calendar year. The Board financial condition of AIM and its and may therefore benefit Fund
noted that the Fund's advisory fee rate was affiliates. The Board also reviewed with shareholders. The Board concluded that
at the median advisory fee rate of its AIM the methodology used to prepare the AIM's soft dollar arrangements were
peers. The Board also reviewed the profitability information. The Board appropriate. The Board also concluded
methodology used by Lipper and noted that considered the overall profitability of that, based on their review and
the contractual fee rates shown by Lipper AIM, as well as the profitability of AIM representations made by AIM, these
include any applicable long-term in connection with managing the Fund. arrangements were consistent with
contractual fee waivers. The Board noted The Board noted that AIM continues to regulatory requirements.
that AIM does not serve as an advisor to operate at a net profit, although
other mutual funds or other clients with increased expenses in recent years have The Board considered the fact that
investment strategies comparable to those reduced the profitability of AIM and its the Fund's uninvested cash and cash
of the Fund. affiliates. The Board concluded that the collateral from any securities lending
Fund's advisory fees were fair and arrangements may be invested in money
The Board noted that AIM has not reasonable, and that the level of market funds advised by AIM pursuant to
proposed any advisory fee waivers or profits realized by AIM and its procedures approved by the Board. The
expense limitations for the Fund. However, affiliates from providing services to Board noted that AIM will receive
the Board also noted that AIM has the Fund was not excessive in light of advisory fees from these affiliated
recommended that the Board approve an the nature, quality and extent of the money market funds attributable to such
amendment to the Fund's contractual services provided. The Board considered investments, although AIM has
advisory fee schedule that would implement whether AIM is financially sound and has contractually agreed to waive the
the contractual advisory fee waiver that the resources necessary to perform its advisory fees payable by the Fund with
had been formerly committed to by AIM, obligations under the Fund's advisory respect to its investment of uninvested
which waiver provided for lower effective agreement, and concluded that AIM has cash in these affiliated money market
fee rates at all asset levels than the the financial resources necessary to funds through at least June 30, 2008.
Fund's current contractual advisory fee fulfill these obligations. The Board considered the contractual
schedule. The Board noted that AIM's nature of this fee waiver and noted that
recommendation was made in response to the F. Independent Written Evaluation of the it remains in effect until at least June
recommendation of the independent Senior Fund's Senior Officer 30, 2008. The Board concluded that the
Officer that AIM consider whether the Fund's investment of uninvested cash and
advisory fee waivers for certain equity AIM The Board noted that, upon their cash collateral from any securities
Funds, including the Fund, should be direction, the Senior Officer of the lending arrangements in the affiliated
simplified. The Board concluded that it Fund, who is independent of AIM and money market funds is in the best
would be appropriate to approve the AIM's affiliates, had prepared an interests of the Fund and its
proposed amendment to the Fund's independent written evaluation to assist shareholders.
contractual advisory fee schedule and that the Board in determining the
it was not necessary at this time to reasonableness of the proposed
discuss with AIM whether to implement any management fees of the AIM Funds,
fee waivers or expense limitations for the including the Fund. The Board noted that
Fund. they had relied upon the Senior
Officer's written evaluation instead of
After taking account of the Fund's a competitive bidding process. In
contractual advisory fee rate, as well as determining whether to continue the
the comparative advisory fee information Fund's advisory agreement, the Board
discussed above, the Board concluded that considered the Senior Officer's written
the Fund's advisory fees were fair and evaluation.
reasonable.
G. Collateral Benefits to AIM and its
D. Economies of Scale and Breakpoints Affiliates
The Board considered the extent to which The Board considered various other
there are economies of scale in AIM's benefits received by AIM and its
provision of advisory services to the Fund. affiliates resulting from AIM's
The Board also considered whether the Fund relationship with the Fund, including
benefits from such economies of scale the fees received by AIM and its
through contractual breakpoints in the affiliates for their provision of
Fund's advisory fee schedule or through administrative, transfer agency and
advisory fee waivers or expense distribution services to the Fund. The
limitations. The Board noted that the Board considered the performance of AIM
Fund's contractual advisory fee schedule and its affiliates in providing these
currently includes only one breakpoint but services and the organizational
that the amendment to the Fund's structure employed by AIM and its
contractual advisory fee schedule discussed affiliates to provide these services.
above provides for seven breakpoints. Based The Board also considered that these
on this information, the Board concluded services are provided to the Fund
that the Fund's advisory fees will pursuant to written contracts which are
appropriately reflect economies of scale reviewed and approved on an annual basis
upon the Board's approval of the amendment by the Board. The Board concluded that
to the Fund's contractual advisory fee AIM and its affiliates were providing
schedule. The Board also noted that the these services in a satisfactory manner
Fund shares directly in economies of scale and in accordance with the terms of
through lower fees charged by third party their contracts, and were qualified to
service providers based on the combined continue to provide these services to
size of all of the AIM Funds and the Fund.
affiliates.
The Board considered the benefits
realized by AIM as a result of portfolio
brokerage transactions executed through
"soft dollar" arrangements. Under these
arrangements, portfolio brokerage
commissions paid by the Fund and/or
other funds advised by AIM are
28
AIM Asia Pacific Growth Fund
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year -- end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code or to meet a specific state's requirement.
The Fund designates the following amounts or, if subsequently determined to be
different, the maximum amount allowable for its fiscal year ended October 31,
2007:
FEDERAL AND STATE INCOME TAX
<Table>
Long-Term Capital Gain Dividends $15,392,808
Qualified Dividend Income* 99.88%
Corporate Dividends Received Deduction* 00.00%
</Table>
* The above percentages are based on ordinary income dividends paid to
shareholders during the fund's fiscal year.
NON-RESIDENT ALIEN SHAREHOLDERS
<Table>
Qualified Interest Income** 10.64%
</Table>
** The above percentage is based on income dividends paid to shareholders
during the fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended January 31, 2007, April 30, 2007, July 31, 2007 and
October 31, 2007 were 99.44%, 99.72%, 99.64%, and 99.64%, respectively.
FOREIGN TAX CREDIT
For the fiscal year ended 10/31/07, the amount of income received by the fund
from sources within foreign countries and possessions of the United States was
$0.5744 per share (representing a total of $14,330,544).
Of the foreign source income, $0.5546 per share is considered qualified
dividend income. Foreign source income with the required adjustments for
qualified dividends is $0.2582 per share. The amount of taxes paid by the fund
to such countries for the fiscal year end 10/31/07 was $0.0331 per share
(representing a total of $826,571). The following table provides a breakdown by
country of ordinary income received and foreign taxes paid by the Fund during
the fiscal year ended 10/31/07. The per share amount is based on shareholders of
record on December 13, 2007.
<Table>
<Caption>
ADJUSTED ADJUSTED
FOREIGN FOREIGN FOREIGN FOREIGN FOREIGN FOREIGN FOREIGN
SOURCE TAX TAX QUALIFIED QUALIFIED SOURCE SOURCE
COUNTRY INCOME % PAID PAID % DIVIDEND DIVIDEND % INCOME INCOME %
- ---------------------------------------------------------------------------------------------------------------------------------
Australia 11.72% $ -- 0.00% $ 1,187,324 8.58% $ 1,002,383 15.56%
- ---------------------------------------------------------------------------------------------------------------------------------
China 8.23% 0 0.00% 1,178,780 8.52% 506,876 7.87%
- ---------------------------------------------------------------------------------------------------------------------------------
Hong Kong 20.33% 0 0.00% 2,913,359 21.05% 1,252,744 19.46%
- ---------------------------------------------------------------------------------------------------------------------------------
India 1.73% 0 0.00% 247,825 1.79% 106,565 1.65%
- ---------------------------------------------------------------------------------------------------------------------------------
Indonesia 2.55% 46,496 5.63% 365,951 2.64% 157,359 2.44%
- ---------------------------------------------------------------------------------------------------------------------------------
Malaysia 12.61% 0 0.00 1,807,339 13.06% 777,156 12.06%
- ---------------------------------------------------------------------------------------------------------------------------------
The Philippines 5.69% 163,180 19.74% 815,901 5.90% 350,837 5.45%
- ---------------------------------------------------------------------------------------------------------------------------------
Singapore 5.99% 0 0.00% 857,759 6.20% 368,836 5.73%
- ---------------------------------------------------------------------------------------------------------------------------------
South Korea 10.28% 208,678 25.25% 1,473,397 10.65% 633,561 9.83%
- ---------------------------------------------------------------------------------------------------------------------------------
Taiwan 13.73% 321,621 38.90% 1,967,668 14.22% 846,097 13.13%
- ---------------------------------------------------------------------------------------------------------------------------------
Thailand 7.14% 86,596 10.48% 1,023,407 7.39% 440,065 6.82%
=================================================================================================================================
TOTAL 100.00% 826,571 100.00% 13,838,710 100.00% 6,442,479 100.00%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
</Table>
29
AIM Asia Pacific Growth Fund
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM International Mutual Funds (the
"Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each
trustee oversees 104 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. Each officer serves for a one year term or until their
successors are elected and qualified. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY
TRUST SINCE DURING PAST 5 YEARS TRUSTEE/ DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Interested Persons
- -------------------------------------------------------------------------------------------------------------------------
Martin L. Flanagan(1) -- 1960 2007 Director, Chief Executive Officer and None
Trustee President, Invesco Ltd. (ultimate parent
of AIM and a global investment
management firm) and, INVESCO PLC
(parent of AIM and a global investment
management firm); Chairman, A I M
Advisors, Inc. (registered investment
advisor); Director, Chairman, Chief
Executive Officer and President, IVZ
Inc. (holding company); and INVESCO
North American Holdings, Inc. (holding
company); Chairman and President,
INVESCO Group Services, Inc. (service
provider); Trustee, The AIM Family of
Funds(R); Vice Chairman, Investment
Company Institute; and Member of
Executive Board, SMU Cox School of
Business
Formerly: Chairman, Investment Company
Institute; President, Co-Chief Executive
Officer, Co-President, Chief Operating
Officer and Chief Financial Officer,
Franklin Resources, Inc. (global
investment management organization)
- -------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Director, Chief Executive Officer and None
Trustee, President and President, AIM Mutual Fund Dealer Inc.
Principal (registered broker dealer), A I M
Executive Officer Advisors, Inc., AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services
(registered investment advisor and
registered transfer agent) and 1371
Preferred Inc. (holding company);
Director, Chairman, Chief Executive
Officer and President, A I M Management
Group Inc. (financial services holding
company) and A I M Capital Management,
Inc. (registered investment advisor);
Director and President, INVESCO Funds
Group, Inc. (registered investment
advisor and register transfer agent) and
AIM GP Canada Inc. (general partner for
a limited partnership); Director, A I M
Distributors, Inc. (registered broker
dealer); Director and Chairman, AIM
Investment Services, Inc. (registered
transfer agent) and INVESCO
Distributors, Inc. (registered broker
dealer); Director, President and
Chairman, IVZ Callco Inc. (holding
company), INVESCO Inc. (holding company)
and AIM Canada Holdings Inc. (holding
company); Director and Chief Executive
Officer, AIM Trimark Corporate Class
Inc. (formerly AIM Trimark Global Fund
Inc.) (corporate mutual fund company)
and AIM Trimark Canada Fund Inc.
(corporate mutual fund company);
Trustee, President and Principal
Executive Officer of The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); Trustee and
Executive Vice President, The AIM Family
of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); and Manager,
PowerShares Capital Management LLC
Formerly: Director and Chairman, Fund
Management Company (registered broker
dealer); President and Principal
Executive Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); Chairman, AIM
Canada Holdings, Inc.; President, AIM
Trimark Global Fund Inc. and AIM Trimark
Canada Fund Inc.; and Director, Trimark
Trust (federally regulated Canadian
Trust Company)
- -------------------------------------------------------------------------------------------------------------------------
Independent Trustees
- -------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1992 Chairman, Crockett Technology Associates ACE Limited (insurance company);
Trustee and Chair (technology consulting company) and Captaris, Inc. (unified
messaging provider)
- -------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Retired Badgley Funds, Inc. (registered
Trustee investment company) (2 portfolios)
Formerly: Partner, law firm of Baker &
McKenzie
- -------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2003 Founder, Green, Manning & Bunch Ltd., None
Trustee (investment banking firm); and Director,
Policy Studies, Inc. and Van Gilder
Insurance Corporation
- -------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and None
Trustee private business corporations, including
the Boss Group Ltd. (private investment
and management); Reich & Tang Funds
(Chairman) (registered investment
company) (7 portfolios), Daily Income
Fund (4 portfolios), California Daily
Tax Free Income Fund, Inc., Connecticut
Daily Tax Free Income Fund, Inc. and New
Jersey Daily Municipal Fund, Inc.,
Annuity and Life Re (Holdings), Ltd.
(insurance company), and Homeowners of
America Holding Corporation (property
casualty company)
Formerly: Director, CompuDyne
Corporation (provider of product and
services to the public security market);
Director, President and Chief Executive
Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo;
Director of various affiliated Volvo
companies; and Director, Magellan
Insurance Company
- -------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Administaff
Trustee Century Group, Inc. (government affairs
company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P.
(cattle, hunting, corporate
entertainment), and Discovery Global
Education Fund (non-profit)
Formerly: Chief Executive Officer,
Texana Timber LP (sustainable forestry
company)
- -------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1991 Partner, law firm of Kramer Levin Director, Reich & Tang Funds) (7
Trustee Naftalis and Frankel LLP portfolios)
- -------------------------------------------------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired None
Trustee
Formerly: Partner, Deloitte & Touche;
and Director, Mainstay VP Series Funds,
Inc. (25 portfolios)
- -------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan was appointed as Trustee of the Trust on February 24, 2007. Mr.
Flanagan is considered an interested person of the Trust because he is an
officer of the advisor to the Trust, and an officer and a director of
INVESCO PLC, parent of the advisor to the Trust.
(2) Mr. Taylor 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.
30
TRUSTEES AND OFFICERS--(CONTINUED)
AIM Asia Pacific Growth Fund
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY TRUSTEE/
TRUST SINCE DURING PAST 5 YEARS DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Other Officers
- -------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer N/A
Senior Vice President and of The AIM Family of Funds--Registered
Senior Officer Trademark--
Formerly: Director of Compliance and
Assistant General Counsel, ICON
Advisers, Inc.; Financial Consultant,
Merrill Lynch; General Counsel and
Director of Compliance, ALPS Mutual
Funds, Inc.
- -------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, N/A
Senior Vice President, Chief Secretary and General Counsel, A I M
Legal Officer and Secretary Management Group Inc., A I M Advisors,
Inc. and A I M Capital Management, Inc.;
Director, Vice President and Secretary,
AIM Investment Services, Inc. and
INVESCO Distributors, Inc.; Director,
Senior Vice President and Secretary,
A I M Distributors, Inc.; Director and
Vice President, INVESCO Funds Group
Inc.; Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--; and
Manager, PowerShares Capital Management
LLC
Formerly: Director, Vice President and
Secretary, Fund Management Company; Vice
President, A I M Capital Management,
Inc.; Chief Operating Officer, Senior
Vice President, General Counsel and
Secretary, Liberty Ridge Capital, Inc.
(an investment adviser); Vice President
and Secretary, PBHG Funds (an investment
company); Vice President and Secretary,
PBHG Insurance Series Fund (an
investment company); General Counsel and
Secretary, Pilgrim Baxter Value
Investors (an investment adviser); Chief
Operating Officer, General Counsel and
Secretary, Old Mutual Investment
Partners (a broker-dealer); General
Counsel and Secretary, Old Mutual Fund
Services (an administrator); General
Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder
servicing center); Executive Vice
President, General Counsel and
Secretary, Old Mutual Capital, Inc. (an
investment adviser); and Vice President
and Secretary, Old Mutual Advisors Funds
(an investment company)
- -------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, INVESCO PLC; N/A
Vice President and Vice President of The AIM Family of
Funds--Registered Trademark--
Formerly: Senior Vice President, A I M
Management Group Inc. (financial
services holding company); Senior Vice
President and Chief Compliance Officer,
A I M Advisors, Inc. and The AIM Family
of Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc. and A I M
Distributors, Inc.; Vice President, AIM
Investment Services, Inc. and Fund
Management Company; Senior Vice
President and Chief Compliance Officer
of The AIM Family of Funds--Registered
Trademark--; and Senior Vice President
and Compliance Director, Delaware
Investments Family of Funds
- -------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 Senior Vice President and General
Vice President Counsel, INVESCO PLC; Director, INVESCO
Funds Group, Inc.; Director and
Secretary, IVZ, Inc. and INVESCO Group
Services, Inc.; Secretary, INVESCO North
American Holdings, Inc.; and Vice
President of The AIM Family of
Funds--Registered Trademark--
Formerly: Director, Senior Vice N/A
President, Secretary and General
Counsel, A I M Management Group Inc. and
A I M Advisors, Inc.; Senior Vice
President, A I M Distributors, Inc.;
Director, General Counsel and Vice
President, Fund Management Company; Vice
President, A I M Capital Management,
Inc. and AIM Investment Services, Inc.;
Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--;
Director and Vice President, INVESCO
Distributors, Inc.; Chief Executive
Officer and President, INVESCO Funds
Group, Inc.; and Senior Vice President
and General Counsel, Liberty Financial
Companies, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Sidney M. Dilgren -- 1961 2004 Vice President, A I M Advisors, Inc. and N/A
Vice President, Principal A I M Capital Management, Inc.; and Vice
Financial Officer and President, Treasurer and Principal
Treasurer Financial Officer of The AIM Family of
Funds--Registered Trademark--
Formerly: Fund Treasurer, A I M
Advisors, Inc.; Senior Vice President,
AIM Investment Services, Inc.; and Vice
President, A I M Distributors, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2004 Head of INVESCO's World Wide Fixed N/A
Vice President Income and Cash Management Group;
Director of Cash Management and Senior
Vice President, A I M Advisors, Inc. and
A I M Capital Management, Inc; Executive
Vice President, A I M Distributors,
Inc.; Senior Vice President, A I M
Management Group Inc.; Vice President,
The AIM Family of Funds--Registered
Trademark-- (other than AIM Treasurer's
Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust);
and President and Principal Executive
Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
Formerly: Director and President, Fund
Management Company; Chief Cash
Management Officer and Managing
Director, A I M Capital Management,
Inc.; Vice President, A I M Advisors,
Inc. and The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
- -------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance N/A
Anti-Money Laundering Officer, A I M Advisors, Inc., A I M
Compliance Officer Capital Management, Inc., A I M
Distributors, Inc., AIM Investment
Services, Inc., AIM Private Asset
Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering
Compliance Officer, Fund Management
Company; and Manager of the Fraud
Prevention Department, AIM Investment
Services, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, A I M Management N/A
Chief Compliance Officer Group Inc.; Senior Vice President and
Chief Compliance Officer, A I M
Advisors, Inc. and A I M Capital
Management, Inc.; Chief Compliance
Officer of The AIM Family of
Funds--Registered Trademark--, INVESCO
Global Asset Management (N.A.), Inc.,
(registered investment advisor), INVESCO
Institutional (N.A.), Inc., (registered
investment advisor), INVESCO Private
Capital Investments, Inc. (holding
company), INVESCO Private Capital, Inc.
(registered investment advisor) and
INVESCO Senior Secured Management, Inc.
(registered investment advisor); and
Vice President, A I M Distributors, Inc.
and AIM Investment Services, Inc.
Formerly: Vice President, A I M Capital
Management, Inc. and Fund Management
Company; Global Head of Product
Development, AIG-Global Investment
Group, Inc.; and Chief Compliance
Officer and Deputy General Counsel,
AIG-SunAmerica Asset Management
- -------------------------------------------------------------------------------------------------------------------------
</Table>
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 1.800.959.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, PricewaterhouseCoopers
Suite 100 11 Greenway Plaza Inc. LLP
Houston, TX 77046-1173 Suite 100 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Ballard Spahr INDEPENDENT TRUSTEES AIM Investment State Street Bank and
Andrews & Ingersoll, LLP Kramer, Levin, Naftalis Services, Inc. Trust
1735 Market Street, 51st & Frankel LLP P.O. Box 4739 Company
Floor 1177 Avenue of the Houston, TX 77210-4739 225 Franklin Street
Philadelphia, PA 19103-7599 Americas Boston, MA 02110-2801
New York, NY 10036-2714
</Table>
31
[EDELIVERY Fund holdings and proxy voting information
GO PAPERLESS
AIMINVESTMENTS.COM/EDELIVERY The Fund provides a complete list of its holdings four times in
GRAPHIC] each fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual
REGISTER FOR EDELIVERY reports to shareholders. For the first and third quarters, the
Fund files the lists with the Securities and Exchange
eDelivery is the process of receiving your fund and account Commission (SEC) on Form N-Q. The most recent list of portfolio
information via e-mail. Once your quarterly statements, tax holdings is available at AIMinvestments.com. From our home
forms, fund reports, and prospectuses are available, we will page, click on Products & Performance, then Mutual Funds, then
send you an e-mail notification containing links to these Fund Overview. Select your Fund from the drop-down menu and
documents. For security purposes, you will need to log in to click on Complete Quarterly Holdings. Shareholders can also
your account to view your statements and tax forms. look up the Fund's Forms N-Q on the SEC Web site at sec.gov.
Copies of the Fund's Forms N-Q may be reviewed and copied at
WHY SIGN UP? the SEC Public Reference Room in Washington, D.C. You can obtain
information on the operation of the Public Reference
Register for eDelivery to: Room,including information about duplicating fee charges,by
calling 202-942-8090 or 800-732-0330, or by electronic request
o save your Fund the cost of printing and postage. at the following e-mail address: publicinfo@sec.gov. The SEC
file numbers for the Fund are 811-06463 and 033-44611.
o reduce the amount of paper you receive.
A description of the policies and procedures that the Fund uses
o gain access to your documents faster by not waiting for the to determine how to vote proxies relating to portfolio
mail. securities is available without charge, upon request, from our
Client Services department at 800-959-4246 or on the AIM Web
o view your documents online anytime at your convenience. site, AIMinvestments.com. On the home page, scroll down and
click on Proxy Policy. The information is also available on the
o save the documents to your personal computer or print them out SEC Web site, sec.gov.
for your records.
Information regarding how the Fund voted proxies related to its
HOW DO I SIGN UP? portfolio securities during the 12 months ended June 30, 2007,
is available at our Web site. Go to AIMinvestments.com, access
It's easy. Just follow these simple steps: the About Us tab, click on Required Notices and then click on
Proxy Voting Activity. Next, select the Fund from the drop-down
1. Log in to your account. menu. The information is also available on the SEC Web
site, sec.gov.
2. Click on the "Service Center" tab.
IF USED AFTER JANUARY 20, 2008, THIS REPORT MUST BE ACCOMPANIED
3. Select "Register for eDelivery" and complete the consent BY A FUND FACT SHEET OR BY AN AIM QUARTERLY PERFORMANCE REVIEW
process. FOR THE MOST RECENT QUARTER-END. MUTUAL FUNDS AND
EXCHANGE-TRADED FUNDS DISTRIBUTED BY A I M DISTRIBUTORS, INC.
This AIM service is provided by AIM Investment Services,Inc.
APG-AR-1 A I M Distributors,Inc.
[AIM INVESTMENTS LOGO]
-- REGISTERED TRADEMARK --
INTERNATIONAL/ GLOBAL EQUITY
AIM European Growth Fund
Annual Report to Shareholders - October 31, 2007
International/ Global Growth
Table of Contents
Letters to Shareholders ......... 2
Performance Summary ............. 4
Management Discussion ........... 4
Long-term Fund Performance ...... 6
Supplemental Information ........ 8
Schedule of Investments ......... 9
Financial Statements ............ 12
Notes to Financial Statements ... 15
Financial Highlights ............ 22
Auditor's Report ................ 27
Fund Expenses ................... 28
Approval of Advisory Agreement .. 29 [COVER GLOBE IMAGE]
Tax Information ................. 31
Trustees and Officers ........... 33
[AIM INVESTMENT SOLUTIONS]
[GRAPHIC] [GRAPHIC]
[DOMESTIC [FIXED
EQUITY] INCOME]
[GRAPHIC] [GRAPHIC] [GRAPHIC]
[TARGET [TARGET [DIVERSIFIED
RISK] MATURITY] PORTFOLIOS]
[GRAPHIC] [GRAPHIC]
[SECTOR [INTERNATIONAL/
EQUITY] GLOBAL EQUITY]
[AIM INVESTMENTS LOGO]
- -- REGISTERED TRADEMARK --
AIM European Growth Fund
Dear Shareholders of the AIM Family of Funds:
I'm pleased to provide you with this report, which includes a discussion of how your Fund was managed
during the period under review and factors that affected its performance. The following pages contain
important informa- tion that answers questions you may have about your investment.
[TAYLOR
PHOTO] Despite notable volatility at points throughout the fiscal year ended October 31, 2007, major stock
market indexes in the U.S. and abroad generally performed well. Reasons for their favorable performance
included positive economic growth, particularly overseas; strong corporate profits; and action by the U.S.
Philip Taylor Federal Reserve Board (the Fed) to reassure skittish markets, among other factors.
At its September 18, 2007, meeting, the Fed cut the federal funds target rate for the first time since
June 2003.(1) The cut followed 17 rate increases from June 2004 to June 20061 and was intended to address
investor concerns about a weak housing market generally and problems in the subprime mortgage market
specifically. The Fed's action trig- gered an immediate and broad stock market rally. The Fed cut this key
interest rate again on October 31, 2007.(1)
At AIM Investments --REGISTERED TRADEMARK--, we know that market conditions change--often suddenly and
sometimes dramatically. We can help you deal with market volatility by offering a broad range of mutual
funds, including:
o Domestic, global and international equity funds
o Taxable and tax-exempt fixed-income funds
o Allocation portfolios, with risk/return characteristics to match your needs
o AIM Independence Funds--target-maturity funds that combine retail mutual funds and PowerShares
--REGISTERED TRADEMARK-- exchange-traded funds--with risk/return characteristics that change as your
target retirement date nears
I encourage you to talk with your financial advisor if you have concerns about your portfolio. We
believe in the value of working with a trusted financial advisor who can recommend AIM funds that are
appropriate for your portfolio and that address your long-term investment goals and risk tolerance
regardless of prevailing short-term market conditions.
IN CONCLUSION
My colleague, Bob Graham, recently announced his decision to step down as vice chair of the AIM Funds
board of directors. In 1976, Bob was one of three men who co-founded AIM. In the three decades since, he
has been instru- mental in transforming AIM from a small investment management firm into one of America's
most respected mutual fund companies--and, in 1997, into a global independent retail and institutional
investment manager.
In May, with shareholder approval, AIM Investments' parent company changed its name from AMVESCAP PLC to
Invesco Ltd., uniting our worldwide operations and global expertise under one new name. While the name of
our parent company may be new to you, I can assure you that our commitment to excellent customer service
remains unchanged. Our highly trained, courteous client service representatives are eager to answer your
ques- tions, provide you with product information or assist you with account transactions. I encourage you
to give us an opportunity to serve you by calling us at 800-959-4246.
We at AIM are committed to helping you achieve your financial goals. We work every day to earn your
trust, and we're grateful for the confidence you've placed in us.
Sincerely,
/S/ PHILIP TAYLOR
Philip Taylor
President - AIM Funds
CEO, AIM Investments
December 17, 2007
Source: (1)U.S. Federal Reserve Board
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
2
AIM European Growth Fund
Dear Fellow Shareholders:
In overseeing the management of the AIM family of funds on your behalf, your Board of Trustees of the AIM
Funds continues to focus on improved investment performance, reduced shareholder costs, and high ethical
standards.
[CROCKETT
PHOTO] Your Board welcomes two new members: Marty Flanagan, President and CEO of INVESCO, AIM's parent company,
and Phil Taylor, who was named CEO of AIM Investments --REGISTERED TRADEMARK-- in April 2006. Robert
Graham, who has given more than 30 years of leadership to the company and the mutual fund industry since
founding AIM in 1976, has retired, stepping down in the process from his most recent role as vice chairman
Bruce L. Crockett of the Board. We thank Bob for his many contributions and wish him a long and happy future.
Our review of fund performance has shown healthy progress, but the process is necessarily one of
continuous im- provement. In general, as of October 31, 2007, we have seen persistent investment discipline
and more consistently good results. While this statement may not apply to every AIM Fund all the time, as I
write this letter, the overall trend in fund management and performance has been positive.
The investment management talent at AIM has recently been enhanced by the promotion of Karen Dunn Kelley
to Head of INVESCO's Worldwide Fixed Income as well as Director of AIM Global and Cash Management, with
responsibility for all fixed income and money market funds that serve both institutional and individual
investors. Under Karen's direction, AIM's cash management organization grew to one of the world's largest
and most respected, with top-tier performance. The operations now combined under her charge represent more
than $150 billion in assets, 120 investment professionals, and products that span the entire yield curve
(as of October 31, 2007).
In other news, your Board took a more active role in preparing for "proxy season," the period when fund
managers must vote the shares held by their funds "for" or "against" various proposals on the ballots of
the issuing companies. Beginning in the 2007 proxy season, AIM implemented new proxy voting policies,
developed by management in conjunction with an ad hoc Board committee, which provided a solid framework for
properly evaluating and executing the many decisions the AIM Funds are required to make to vote shares.
In general, the AIM Funds voted for proposals that would allow shareholders a greater role in election
of directors, proxy access and "say for pay." The AIM Funds voted against directors whom AIM believed
failed to govern well in cases of corporate mismanagement, such as the backdating of options grants, and
against "poison pill" and "take under" proposals that would favor the financial interests of managers at
the expense of investors in the case of a merger or acquisition. You can view the proxy votes cast for your
fund by going to AIMinvestments.com. Click the "About Us" tab, then go to "Required Notices" and "Proxy
Voting Activity."
Additionally, your Board raised the amount its members are recommended to invest in the AIM Funds within
three years of joining the Board, with the goal of aligning our interests even more closely with yours.
Furthermore, at our June meeting we renewed the investment advisory contracts between the AIM Funds and
AIM for another year, applying the same rigorous evaluation process that was enhanced and formalized in
2005. For more information on this process, please visit AIMinvestments.com. Click on the "Products and
Performance" tab and go to "Investment Advisory Agreement Renewals."
Your Board's ability to best represent your interests depends on our knowledge of your opinions and
concerns. Please send me an email (bruce@brucecrockett.com) with your thoughts on the following:
1) How important is it to you to hear about your Board's decisions and activities in these letters?
2) What other information (on overall performance, specific funds, managers, etc.) would make the
letters more meaningful to you?
3) Would you prefer that communications from your Board continue to be delivered in paper form by
regular mail or be sent electronically by email?
If you would prefer to communicate through a quick online survey, please go to AIMinvestments.com and
provide your responses there. We need to hear from you to do our best job, and I look forward to your
responses.
Sincerely,
/S/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Directors
December 17, 2007
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
3
AIM European Growth Fund
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE o A more attractive opportunity becomes
available.
================================================================================
PERFORMANCE SUMMARY MARKET CONDITIONS AND YOUR FUND
We are pleased to once again have provided shareholders with double-digit Fund Upward momentum--driven by generally strong
performance at net asset value. As the table illustrates, excluding applicable corporate results and continued merger and
sales charges, your Fund significantly outperformed its broad market benchmark acquisition (M&A) activity--was punctu- ated by
while performing in line with its style-specific benchmark. small corrections during November, February and
June. July and August witnessed more severe
Your Fund's long-term performance appears later in this report. falls as credit-market concerns and their
potential effect on financial stocks and M&A
FUND VS. INDEXES activity shook investor confidence. However,
European equities ended October higher,
Total returns, 10/31/06-10/31/07, excluding applicable sales charges. If sales continuing the momentum created by September's
charges were included, returns would be lower. 50-basis-point cut in U.S. interest rates.(1)
Class A Shares 31.85% Within this environment, Fund performance was
Class B Shares 30.87 broad based with all sectors and all major
Class C Shares 30.84 markets registering double-digit positive
Class R Shares 31.53 returns for the period. Consistent with the
Investor Class Shares 31.84 Fund's bottom-up investment process, the pri-
MSCI EAFE Index* (Broad Market Index) 24.91 mary driver of performance was security selec-
MSCI Europe Growth Index* (Style-Specific Index) 32.19 tion rather than sector or country allocation.
Lipper European Funds Index* (Peer Group Index) 32.87 Applying the Fund's bottom-up EQV invest- ment
SOURCE: *LIPPER INC. process across Europe's extensive all-cap
================================================================================ universe enabled us to deliver double-digit
results for the reporting period.
HOW WE INVEST market capitalization, such as large-
or mid/small-cap, we select For example, key contributors to relative
When selecting stocks for your Fund, we investments for the Fund by using a outperformance came from holdings in Germany, a
employ a disciplined investment bottom-up investment approach, which market most U.S. investors may view as having
strategy that emphasizes fundamental means that we construct the Fund subdued growth. The reality is quite the
research, supported by both primarily on a stock-by-stock basis. contrary. By applying our disciplined EQV
quantitative analysis and portfolio We focus on the strengths of investment process, we were able to find several
construction techniques. Our EQV individual companies rather than strong-performing quality stocks across the
(Earnings, Quality, Valuation) strategy sectors, countries or market-cap German equity market. Leading contribu- tors to
focuses primarily on identifying trends. Fund performance included Porsche and Deutsche
quality companies that have Boerse. Top-10 holding Porsche, the German
experienced, or exhibit the potential We believe disciplined sell luxury automobile man-
for, accelerating or above-average decisions are key to successful
earnings growth but whose prices do not investing. We consider selling a stock
fully reflect these attributes. for one of the following reasons:
While research responsibilities
within the portfolio management team o A company's fundamentals
are focused by deteriorate, or it posts
disappointing earnings.
o A stock's price seems overvalued.
======================================= ====================================== ================================================
PORTFOLIO COMPOSITION TOP FIVE COUNTRIES* TOP 10 EQUITY HOLDINGS*
By sector 1. United Kingdom 21.2% 1. Porsche A.G.-Pfd. (Germany) 2.7%
2. Germany 17.9 2. Intralot S.A. (Greece) 2.2
Consumer Discretionary 21.3% 3. Switzerland 10.7 3. Vimpel-Communications-ADR (Russia) 1.9
Industrials 19.2 4. Netherlands 7.4 4. Sygenta A.G. (Switzerland) 1.8
Financials 17.6 5. France 6.8 5. DaimlerChrysler A.G. (Germany) 1.7
Consumer Staples 12.9 6. Puma A.G. Rudolf Dassler Sport
Materials 8.6 Total Net Assets $1.86 billion (Germany) 1.7
Health Care 6.7 7. Roche Holding A.G. (Switzerland) 1.7
Energy 5.2 Total Number of Holdings* 87 8. USG People N.V. (Netherlands) 1.7
Telecommunication Services 1.9 9. InBev N.V. (Belgium) 1.6
Utilities 1.4 The Fund's holdings are subject to 10. WPP Group PLC (United Kingdom) 1.6
Information Technology 0.8 change, and there is no assurance that
Money Market Funds Plus Other the Fund will continue to hold any
Assets Less Liabilities 4.4 particular security.
* Excluding money market fund
holdings.
======================================= ====================================== ================================================
(continued)
4
AIM European Growth Fund
ufacturer, was up more than 125% over the back into dollars--foreign currency Jason T. Holzer
period. Strong brand recognition, expanding appreciation boosted Fund performance. [HOLZER Chartered Financial
margins and growth in new markets supported PHOTO] Analyst, senior portfolio
the stock. Despite volatility in the IN CLOSING manager, is lead manager of AIM
financials markets, German stock exchange European Growth Fund with respect to the
monopoly Deutsche Boerse was up 100% for European markets once again outperformed Fund's small- and mid-cap investments. He
the period. U.S. markets during the reporting joined AIM in 1996. He earned a B.A. in
period.2 In our opinion, better relative quantitative economics and an M.S. in
The Fund's actively managed bottom-up valuations than U.S. markets, low engineering economic systems from
investment strategy also enabled us to interest rates in the euro zone, Stanford University.
identify several overlooked, but rewarding, structured reform efforts throughout
discounted quality growth opportunities not Europe and increased private equity Clas G. Olsson
represented in the style index. Examples takeovers continued to support European [OLSSON Senior portfolio manager
included Vimple Communications, Intralot markets, making Europe a compelling PHOTO] and head of AIM's International
and Tom Tom. Each performed favorably over investment arena. Over the past 12 Investment Management Unit, is
the period and contributed to relative months, the Fund experienced strong lead manager of AIM European Growth Fund
results. Russian wireless operator Vimpel double-digit returns. It would be impru- with respect to the Fund's large-cap
Com benefited from increased operations and dent for us to suggest that such a level investments. Mr. Olsson joined AIM in
margins in Russia and other Commonwealth of of performance is sustainable over the 1994. Mr. Olsson became a commissioned
Independent States markets. Intralot, a long term. Today, however, the Fund naval officer at the Royal Swedish Naval
Greek lottery and sports gaming operator trades at an attractive absolute Academy in 1988. He also earned a B.B.A.
and technology provider, benefited from new valuation with little premium paid for from The University of Texas at Austin.
contract awards. New purchase Tom Tom, a quality growth.
Dutch navigation solutions provider, Borge Endresen
benefited from continued marketshare We welcome new shareholders who ENDRESEN Chartered Financial Analyst,
growth and new product roll out. invested in the Fund during the reporting PHOTO] portfolio manager, is manager of
period and thank all our shareholders for AIM European Growth Fund.
Performance from a sector perspective your continued investment in AIM European He joined AIM in 1999 and graduated summa
was strong as well, with the Fund Growth Fund. cum laude from the University of Oregon
outperforming its style-specific index with a B.S. in finance. He also earned an
across seven of the 10 market sectors. Top Sources: (1)U.S. Federal Reserve Board; M.B.A. from The University of Texas at
contributions came from holdings in the (2)Lipper Inc. Austin.
health care, consumer discretionary and
financials sectors. In contrast, although The views and opinions expressed in Richard Nield
we benefited from the performance of our management's discussion of Fund [NIELD Chartered Financial
U.K-based materials stock Vedanta, we performance are those of A I M Advisors, PHOTO] Analyst, portfolio manager,
missed out on strong-performing metals and Inc. These views and opinions are subject is manager of AIM European
mining index heavyweights, such as Rio to change at any time based on factors Growth Fund. Mr. Nield joined AIM in
Tinto and BHP Billiton. Communications such as market and economic conditions. 2000. He earned a bachelor of commerce
equipment manufacturer Nokia and software These views and opinions may not be degree in finance and interna- tional
giant SAP, neither a Fund holding, also relied upon as investment advice or business from McGill University in
performed well, benefiting the index and recommendations, or as an offer for a Montreal, Canada.
detracting from our relative results. particular security. The information is
not a complete analysis of every aspect Matthew W. Dennis
The Fund also benefited from its all-cap of any market, country, industry, [DENNIS Chartered Financial
flexibility, which enables it to invest security or the Fund. Statements of fact PHOTO] Analyst, portfolio manager,
across a wide range of the market-cap are from sources considered reliable, but is manager of AIM European
spectrum. We believe that the small/mid-cap A I M Advisors, Inc. makes no Growth Fund. He joined AIM in 2000. Mr.
universe remained less efficient, representation or warranty as to their Dennis graduated with a B.A. in economics
consequently allowing us to identify completeness or accuracy. Although from The University of Texas at Austin.
attractive investment opportunities that historical performance is no guarantee of He also earned an M.S. in finance from
the market may not follow closely. While future results, these insights may help Texas A&M University.
overall valuations for the mid-and you understand our investment
small-cap areas of the market appear fully management philosophy. Assisted by the Europe/Canada Team
val- ued, we continue to find
stock-specific opportunities that meet See important Fund and index disclosures
our investment criteria. Foreign exchange later in this report.
was another contributor, with our exposure
to the euro adding greatest value to
overall return. Because we do not typi-
cally hedge currencies--we buy stocks in
their local currency and then translate
that value
5
AIM European Growth Fund
YOUR FUND'S LONG-TERM PERFORMANCE
Past performance cannot guarantee compa- of funds reflects fund expenses and value during the early years shown in the
rable future results. management fees; performance of a chart. The vertical axis, the one that
market index does not. Performance shown indicates the dollar value of an
The data shown in the chart include in the chart and table(s) does not investment, is con- structed with each
rein- vested distributions, applicable reflect deduction of taxes a shareholder segment representing a percent change in
sales charges, Fund expenses and management would pay on Fund distributions or sale the value of the invest- ment. In this
fees. Results for Class B shares are of Fund shares. Performance of the chart, each segment represents a
calculated as if a hypothetical shareholder indexes does not reflect the effects of doubling, or 100% change, in the value of
had liquidated his entire investment in the taxes. the investment. In other words, the space
Fund at the close of the reporting period between $5,000 and $10,000 is the same
and paid the applicable contingent deferred This chart, which is a logarithmic size as the space between $10,000 and
sales charges. Index results include chart, presents the fluctuations in the $20,000.
reinvested dividends, but they do not value of the Fund and its indexes. We
reflect sales charges. Performance of an believe that a logarithmic chart is more
index effective than other types of charts in
illustrating changes in
6
====================================================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT
INDEX DATA FROM 10/31/97, FUND DATA FROM 11/3/97
AIM AIM AIM
EUROPEAN GROWTH EUROPEAN GROWTH EUROPEAN GROWTH MSCI
FUND FUND FUND MSCI EAFE EUROPE GROWTH LIPPER EUROPEAN
DATE -CLASS A SHARES -CLASS B SHARES -CLASS C SHARES INDEX(1) INDEX(1) FUNDS INDEX(1)
10/31/97 $10000 $ 10000 $10000
11/97 $ 9233 $ 9770 $ 9770 9898 10139 10075
12/97 9592 10150 10150 9984 10508 10309
1/98 10026 10600 10600 10441 10964 10694
2/98 10972 11590 11590 11111 11898 11575
3/98 12172 12850 12850 11453 12431 12451
4/98 12910 13609 13609 11544 12652 12738
5/98 13789 14529 14538 11488 12882 13058
6/98 13855 14599 14608 11575 13172 13097
7/98 14535 15298 15308 11692 13270 13346
8/98 12551 13197 13198 10244 11889 11419
9/98 11842 12457 12458 9929 11415 10779
10/98 12248 12867 12878 10965 12436 11533
11/98 12900 13546 13558 11526 13065 12190
12/98 13489 14156 14168 11981 13940 12758
1/99 14322 15025 15038 11946 14004 12985
2/99 13593 14245 14257 11661 13455 12605
3/99 13063 13685 13697 12148 13166 12640
4/99 13195 13815 13818 12640 13029 13002
5/99 12797 13386 13388 11989 12536 12530
6/99 13185 13786 13788 12456 12737 12849
7/99 13904 14526 14538 12827 12607 13065
8/99 14244 14876 14878 12873 12802 13171
9/99 14528 15167 15169 13003 12748 13027
10/99 15530 16196 16209 13490 13456 13468
11/99 18594 19385 19399 13959 14279 14404
12/99 22473 23404 23419 15212 16049 16266
1/00 23676 24644 24669 14245 15279 15741
2/00 29521 30712 30728 14628 16493 17911
3/00 26852 27914 27929 15196 16722 17924
4/00 24130 25064 25088 14396 15939 16952
5/00 23307 24194 24218 14044 15194 16609
6/00 24043 24944 24968 14594 15410 17002
7/00 24375 25284 25308 13982 14788 16872
8/00 25038 25954 25979 14103 14519 16936
9/00 23921 24775 24799 13416 13709 16062
10/00 22323 23115 23140 13099 13389 15574
11/00 20082 20785 20810 12608 12682 14740
12/00 21737 22475 22500 13056 13378 15847
1/01 21528 22246 22270 13050 13230 15799
2/01 19164 19805 19821 12071 11777 14466
3/01 17064 17617 17640 11267 10773 13196
4/01 18001 18577 18600 12050 11602 14070
5/01 17841 18397 18419 11624 10917 13528
6/01 17377 17917 17939 11149 10446 12977
7/01 16970 17487 17508 10946 10416 12845
8/01 17036 17537 17559 10669 9959 12516
9/01 15135 15568 15589 9588 9054 11112
10/01 15627 16068 16089 9834 9453 11501
11/01 15996 16437 16450 10196 9896 11999
12/01 16365 16807 16830 10257 10142 12254
1/02 15958 16377 16400 9712 9665 11717
2/02 16148 16577 16591 9780 9735 11725
3/02 16753 17187 17201 10356 10079 12312
4/02 17028 17446 17471 10377 9962 12279
5/02 17350 17776 17791 10509 9777 12286
6/02 17350 17765 17780 10090 9601 11957
7/02 15401 15767 15780 9094 8467 10708
8/02 15515 15866 15879 9074 8406 10636
9/02 14001 14306 14320 8099 7581 9318
10/02 14759 15076 15091 8534 8263 10032
11/02 14863 15176 15190 8922 8450 10506
12/02 14779 15075 15090 8622 8261 10119
1/03 14211 14486 14500 8262 7833 9677
2/03 14097 14366 14369 8072 7599 9308
3/03 14286 14555 14569 7914 7546 9194
4/03 15459 15734 15739 8689 8457 10350
5/03 16793 17084 17099 9216 8895 11112
====================================================================================================================================
SOURCE: (1)LIPPER INC.
====================================================================================================================================
[MOUNTAIN CHART]
6/03 16728 17014 17029 9439 8915 11201
7/03 16842 17115 17129 9667 8938 11415
8/03 16870 17144 17158 9900 8856 11502
9/03 17825 18094 18109 10206 9132 11758
10/03 18952 19223 19248 10842 9681 12502
11/03 19725 20003 20018 11083 10123 13052
12/03 21163 21453 21467 11949 10853 13979
1/04 22062 22352 22367 12118 11049 14387
2/04 23095 23383 23398 12397 11363 14835
3/04 22838 23111 23129 12467 10971 14357
4/04 22489 22742 22759 12185 10820 14128
5/04 22754 23001 23018 12226 10965 14274
6/04 23218 23461 23478 12494 11060 14549
7/04 22508 22722 22748 12088 10689 14040
8/04 22963 23172 23199 12142 10638 14079
9/04 24079 24291 24308 12459 11047 14696
10/04 24825 25029 25047 12884 11424 15216
11/04 26709 26909 26925 13764 12224 16309
12/04 28133 28327 28355 14368 12696 17067
1/05 28029 28208 28224 14104 12401 16871
2/05 29470 29647 29664 14714 12973 17829
3/05 28618 28766 28795 14344 12678 17313
4/05 27719 27857 27873 14007 12468 16867
5/05 27747 27868 27884 14014 12532 16857
6/05 28324 28429 28453 14200 12608 17232
7/05 29650 29748 29773 14635 13076 18074
8/05 30625 30708 30723 15005 13283 18663
9/05 30824 30877 30901 15673 13540 19068
10/05 29480 29519 29532 15215 13135 18258
11/05 30079 30097 30111 15587 13168 18625
12/05 31811 31807 31822 16313 13651 19438
1/06 34385 34355 34380 17314 14494 20931
2/06 34987 34942 34968 17276 14396 21139
3/06 36379 36312 36339 17845 15039 22039
4/06 38453 38367 38392 18698 15821 23298
5/06 37322 37201 37225 17971 15385 22325
6/06 37292 37145 37173 17970 15446 22159
7/06 37770 37605 37634 18148 15604 22384
8/06 38990 38805 38830 18647 16057 23038
9/06 38561 38355 38380 18676 16041 23172
10/06 40504 40261 40283 19402 16642 24198
11/06 42537 42250 42273 19982 17276 25241
12/06 44332 44012 44036 20609 17838 26235
1/07 45188 44822 44855 20749 18002 26722
2/07 44971 44584 44618 20916 17989 26565
3/07 47053 46635 46657 21450 18822 27753
4/07 49373 48888 48919 22402 19948 29339
5/07 50632 50120 50138 22795 20302 29987
6/07 49938 49403 49421 22823 20277 29975
7/07 49144 48583 48600 22487 19968 29285
8/07 48766 48175 48202 22135 19876 29035
9/07 51014 50357 50385 23320 21035 30722
10/07 53396 53463 52724 24236 22000 32152
AIM European Growth Fund
=========================================== =========================================
AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
THE TOTAL ANNUAL FUND OPERATING
As of 10/31/07, including applicable As of 9/30/07, the most recent calendar EXPENSE RATIO SET FORTH IN THE MOST
sales charges quarter-end, including applicable sales RECENT FUND PROSPECTUS AS OF THE DATE OF
charges THIS REPORT FOR CLASS A, CLASS B, CLASS
CLASS A SHARES C, CLASS R AND INVESTOR CLASS SHARES WAS
Inception (11/3/97) 18.25% CLASS A SHARES 1.59%, 2.34%, 2.34%, 1.84% AND 1.56%,
5 Years 27.87 Inception (11/3/97) 17.88% RESPECTIVELY. THE EXPENSE RATIOS
1 Year 24.58 5 Years 28.05 PRESENTED ABOVE MAY VARY FROM THE EXPENSE
1 Year 25.00 RATIOS PRESENTED IN OTHER SECTIONS OF
CLASS B SHARES THIS REPORT THAT ARE BASED ON EXPENSES
Inception (11/3/97) 18.27% CLASS B SHARES INCURRED DURING THE PERIOD COVERED BY
5 Years 28.29 Inception (11/3/97) 17.89% THIS REPORT.
1 Year 25.87 5 Years 28.47
1 Year 26.28 CLASS A SHARE PERFORMANCE REFLECTS THE
CLASS C SHARES MAXIMUM 5.50% SALES CHARGE, AND CLASS B
Inception (11/3/97) 18.10% CLASS C SHARES AND CLASS C SHARE PERFORMANCE REFLECTS
5 Years 28.43 Inception (11/3/97) 17.73% THE APPLICABLE CONTINGENT DEFERRED SALES
1 Year 29.84 5 Years 28.62 CHARGE (CDSC) FOR THE PERIOD INVOLVED.
1 Year 30.29 THE CDSC ON CLASS B SHARES DECLINES FROM
CLASS R SHARES 5% BEGINNING AT THE TIME OF PURCHASE TO
Inception 18.71% CLASS R SHARES 0% AT THE BEGINNING OF THE SEVENTH YEAR.
5 Years 29.06 Inception 18.34% THE CDSC ON CLASS C SHARES IS 1% FOR THE
1 Year 31.53 5 Years 29.25 FIRST YEAR AFTER PURCHASE. CLASS R SHARES
1 Year 31.93 DO NOT HAVE A FRONT-END SALES CHARGE;
INVESTOR CLASS SHARES RETURNS SHOWN ARE AT NET ASSET VALUE AND
Inception 18.94% INVESTOR CLASS SHARES DO NOT REFLECT A 0.75% CDSC THAT MAY BE
5 Years 29.37 Inception 18.57% IMPOSED ON A TOTAL REDEMPTION OF
1 Year 31.84 5 Years 29.55 RETIREMENT PLAN ASSETS WITHIN THE FIRST
1 Year 32.29 YEAR. INVESTOR CLASS SHARES DO NOT HAVE A
======================================================================================= FRONT-END SALES CHARGE OR A CDSC;
THEREFORE, PERFORMANCE IS AT NET ASSET
CLASS R SHARES' INCEPTION DATE IS JUNE 3, VALUE, WHICH RESTATED PERFORMANCE WILL VALUE.
2002. RETURNS SINCE THAT DATE ARE REFLECT THE HIGHER RULE 12B-1 FEES
HISTORICAL RETURNS. ALL OTHER RETURNS ARE APPLICABLE TO CLASS A SHARES FOR THE THE PERFORMANCE OF THE FUND'S SHARE
BLENDED RETURNS OF HISTORICAL CLASS R SHARE PERIOD USING BLENDED RETURNS. CLASS A CLASSES WILL DIFFER PRIMARILY DUE TO
PERFORMANCE AND RESTATED CLASS A SHARE PER- SHARES' INCEPTION DATE IS NOVEMBER 3, DIFFERENT SALES CHARGE STRUCTURES AND
FORMANCE (FOR PERIODS PRIOR TO THE 1997. CLASS EXPENSES.
INCEPTION DATE OF CLASS R SHARES) AT NET
ASSET VALUE, ADJUSTED TO REFLECT THE HIGHER THE PERFORMANCE DATA QUOTED REPRESENT A REDEMPTION FEE OF 2% WILL BE IMPOSED
RULE 12B-1 FEES APPLICABLE TO CLASS R PAST PERFORMANCE AND CANNOT GUARANTEE ON CERTAIN REDEMPTIONS OR EXCHANGES OUT
SHARES. CLASS A SHARES' INCEPTION DATE IS COMPARABLE FUTURE RESULTS; CURRENT OF THE FUND WITHIN 30 DAYS OF PURCHASE.
NOVEMBER 3, 1997. PERFORMANCE MAY BE LOWER OR HIGHER. EXCEPTIONS TO THE REDEMPTION FEE ARE
PLEASE VISIT AIMINVESTMENTS.COM FOR THE LISTED IN THE FUND'S PROSPECTUS.
INVESTOR CLASS SHARES' INCEPTION DATE IS MOST RECENT MONTH-END PERFORMANCE.
SEPTEMBER 30, 2003. RETURNS SINCE THAT DATE PERFORMANCE FIGURES REFLECT REINVESTED =========================================
ARE HISTORICAL RETURNS. ALL OTHER RETURNS DISTRIBUTIONS, CHANGES IN NET ASSET VALUE
ARE BLENDED RETURNS OF HISTORICAL INVESTOR AND THE EFFECT OF THE MAXIMUM SALES FOR A DISCUSSION OF THE RISKS OF
CLASS SHARE PERFORMANCE AND RESTATED CLASS CHARGE UNLESS OTHERWISE STATED. INVESTING IN YOUR FUND AND INDEXES USED
A SHARE PERFORMANCE (FOR PERIODS PRIOR TO INVESTMENT RETURN AND PRINCIPAL VALUE IN THIS REPORT, PLEASE TURN THE PAGE.
THE INCEPTION DATE OF INVESTOR CLASS WILL FLUCTUATE SO THAT YOU MAY HAVE A
SHARES) AT NET ASSET GAIN OR LOSS WHEN YOU SELL SHARES. =========================================
7
AIM European Growth Fund
AIM EUROPEAN GROWTH FUND'S INVESTMENT OBJECTIVE IS LONG-TERM GROWTH OF CAPITAL.
o Unless otherwise stated, information presented in this report is as of
October 31, 2007, and is based on total net assets.
o Unless otherwise noted, all data in this report are from A I M Management
Group Inc.
About share classes o Investing in a fund that invests in OTHER INFORMATION
smaller companies involves risks not
o Class B shares are not available as an associated with investing in more o The returns shown in the management's
investment for retirement plans maintained established companies, such as business discussion of Fund performance are based
pursuant to Section 401 of the Internal risk, stock price fluctuations and on net asset values calculated for
Revenue Code, including 401(k) plans, money illiquidity. shareholder transactions. Generally
purchase pension plans and profit sharing accepted accounting principles require
plans. Plans that had existing accounts About indexes used in this report adjustments to be made to the net assets
invested in Class B shares prior to of the Fund at period end for financial
September 30, 2003, will continue to be o The MSCI EAFE --REGISTERED TRADEMARK-- reporting purposes, and as such, the net
allowed to make additional purchases. Index is a free float-adjusted market asset values for shareholder transactions
capitalization index that is designed and the returns based on those net asset
o Class R shares are available only to to measure developed market equity values may differ from the net asset
certain retirement plans. Please see the performance, excluding the U.S. and values and returns reported in the
prospectus for more information. Canada. Financial Highlights.
o Investor Class shares are closed to most o The MSCI Europe Growth Index is a free o Industry classifications used in this
investors. For more information on who may float-adjusted market capitalization report are generally according to the
continue to invest in Investor Class index that represents the growth segment Global Industry Classification Standard,
shares, please see the prospectus. in developed equity markets in Europe. which was developed by and is the
exclusive property and a service mark of
PRINCIPAL RISKS OF INVESTING IN o The Lipper European Funds Index is an Morgan Stanley Capital International Inc.
THE FUND equally weighted representation of the and Standard & Poor's.
largest funds in the Lipper European
o Investing in developing countries can add Funds category. These funds concentrate o The Chartered Financial Analyst
additional risk, such as high rates of their investments in equity securities --REGISTERED TRADEMARK-- (CFA
inflation or sharply devalued currencies whose primary trading markets or --REGISTERED TRADEMARK--) designation
against the U.S. dollar. Transaction costs operations are concentrated in the is a globally recognized standard for
are often higher, and there may be delays European region or a single country measuring the competence and integrity of
in settlement procedures. within this region. investment professionals
o Prices of equity securities change in o The Fund is not managed to track the
response to many factors including the his- performance of any particular index,
torical and prospective earnings of the including the indexes defined here, and
issuer, the value of its assets, general consequently, the performance of the Fund
economic conditions, interest rates, may deviate significantly from the
investor perceptions and market liquidity. performance of the indexes.
o Foreign securities have additional risks,
including exchange rate changes, political o A direct investment cannot be made in
and economic upheaval, the relative lack of an index. Unless otherwise indicated,
information, relatively low market index results include reinvested
liquidity, and the potential lack of strict dividends, and they do not reflect sales
financial and accounting controls and charges. Performance of an index of funds
standards. reflects fund expenses; performance of
a market index does not.
=======================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, =========================================
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FUND NASDAQ SYMBOLS
======================================================================================= Class A Shares AEDAX
Class B Shares AEDBX
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Class C Shares AEDRX
Class R Shares AEDRX
AIMINVESTMENTS.COM Investor class Shares EGINX
=========================================
8
AIM European Growth Fund
SCHEDULE OF INVESTMENTS(A)
October 31, 2007
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------
FOREIGN COMMON STOCKS & OTHER EQUITY
INTERESTS-91.66%
BELGIUM-3.25%
Colruyt S.A. (Food Retail)(b) 68,300 $ 14,647,396
- --------------------------------------------------------------------------
InBev N.V. (Brewers)(b) 316,586 29,932,982
- --------------------------------------------------------------------------
KBC Groep N.V. (Diversified Banks)(b) 112,324 15,786,092
==========================================================================
60,366,470
==========================================================================
CYPRUS-1.08%
Bank of Cyprus (Diversified Banks)(b) 1,019,090 19,976,990
==========================================================================
DENMARK-1.11%
Novo Nordisk A.S.-Class B
(Pharmaceuticals)(b) 165,033 20,552,213
==========================================================================
FINLAND-1.05%
Nokia Renkaat Oyj (Tires & Rubber)(b)(c) 517,950 19,569,535
==========================================================================
FRANCE-6.77%
Axa (Multi-Line Insurance)(b)(c) 439,967 19,755,927
- --------------------------------------------------------------------------
BNP Paribas (Diversified Banks)(b) 231,496 25,646,151
- --------------------------------------------------------------------------
Cap Gemini S.A. (IT Consulting & Other
Services)(b) 237,883 15,233,736
- --------------------------------------------------------------------------
Rhodia S.A. (Specialty Chemicals)(b)(d) 353,439 13,765,582
- --------------------------------------------------------------------------
Schneider Electric S.A. (Electrical
Components & Equipment)(b) 127,264 17,585,158
- --------------------------------------------------------------------------
Societe Generale (Diversified Banks)(b) 63,015 10,623,983
- --------------------------------------------------------------------------
Total S.A. (Integrated Oil & Gas)(b) 286,292 23,108,076
==========================================================================
125,718,613
==========================================================================
GERMANY-14.03%
Bayer A.G. (Diversified Chemicals)(b)(c) 307,929 25,785,256
- --------------------------------------------------------------------------
Commerzbank A.G. (Diversified Banks)(b) 471,052 20,078,227
- --------------------------------------------------------------------------
Continental A.G. (Tires & Rubber)(b) 126,852 19,220,523
- --------------------------------------------------------------------------
Daimler A.G. (Automobile Manufacturers)(b) 291,550 32,238,937
- --------------------------------------------------------------------------
Deutsche Boerse A.G. (Specialized Finance)(b) 185,000 29,358,997
- --------------------------------------------------------------------------
MAN A.G. (Industrial Machinery)(b) 117,276 21,068,195
- --------------------------------------------------------------------------
Merck KGaA (Pharmaceuticals)(b)(c) 123,319 15,473,768
- --------------------------------------------------------------------------
MTU Aero Engines Holding A.G. (Aerospace &
Defense)(b) 396,753 24,325,221
- --------------------------------------------------------------------------
Puma A.G. Rudolf Dassler Sport
(Footwear)(b)(c) 72,448 31,135,656
- --------------------------------------------------------------------------
Siemens A.G. (Industrial Conglomerates)(b) 185,981 25,343,190
- --------------------------------------------------------------------------
Symrise A.G. (Specialty Chemicals)(b)(d) 553,859 16,587,625
==========================================================================
260,615,595
==========================================================================
</Table>
<Table>
SHARES VALUE
- --------------------------------------------------------------------------
<Caption>
GREECE-4.97%
Intralot S.A. Integrated Lottery (Casinos &
Gaming)(b) 955,649 $ 41,323,291
- --------------------------------------------------------------------------
OPAP S.A. (Casinos & Gaming) 341,160 13,937,862
- --------------------------------------------------------------------------
OPAP S.A. (Casinos & Gaming) (Acquired
7/14/2003; Cost $1,109,094)(e) 104,000 4,248,850
- --------------------------------------------------------------------------
Piraeus Bank S.A. (Diversified Banks)(b) 242,875 9,780,053
- --------------------------------------------------------------------------
Titan Cement Co. (Construction Materials)(b) 470,593 22,978,808
==========================================================================
92,268,864
==========================================================================
HUNGARY-1.41%
OTP Bank Nyrt. (Diversified Banks)(b) 238,919 12,994,621
- --------------------------------------------------------------------------
Richter Gedeon Nyrt. (Pharmaceuticals)(b) 60,418 13,157,877
==========================================================================
26,152,498
==========================================================================
IRELAND-3.98%
Anglo Irish Bank Corp. PLC (Diversified
Banks)(b) 1,748,726 29,532,852
- --------------------------------------------------------------------------
CRH PLC (Construction Materials)(b) 396,332 15,202,546
- --------------------------------------------------------------------------
IAWS Group PLC (Packaged Foods & Meats)(b) 664,789 15,669,660
- --------------------------------------------------------------------------
Smurfit Kappa Group PLC (Paper Packaging)(b) 670,558 13,556,903
==========================================================================
73,961,961
==========================================================================
ITALY-1.14%
Eni S.p.A. (Integrated Oil & Gas)(b)(c) 577,877 21,120,622
==========================================================================
NETHERLANDS-7.39%
Aalberts Industries N.V. (Industrial
Machinery)(b) 1,009,744 24,562,786
- --------------------------------------------------------------------------
Heineken Holding N.V. (Brewers)(b) 294,869 17,503,879
- --------------------------------------------------------------------------
Koninklijke BAM Groep N.V. (Construction &
Engineering)(b)(c) 824,592 21,828,038
- --------------------------------------------------------------------------
TNT N.V. (Air Freight & Logistics)(b) 398,710 16,394,624
- --------------------------------------------------------------------------
TomTom N.V. (Consumer Electronics)(b)(c)(d) 327,508 26,243,181
- --------------------------------------------------------------------------
USG People N.V. (Human Resource & Employment
Services)(b) 1,002,164 30,722,507
==========================================================================
137,255,015
==========================================================================
NORWAY-2.93%
Cermaq A.S.A. (Packaged Foods & Meats)(c) 993,585 15,229,804
- --------------------------------------------------------------------------
Petroleum Geo-Services A.S.A. (Oil & Gas
Equipment & Services) 902,682 26,579,405
- --------------------------------------------------------------------------
TGS Nopec Geophysical Co. A.S.A. (Oil & Gas
Equipment & Services)(c)(d) 754,576 12,656,070
==========================================================================
54,465,279
==========================================================================
</Table>
9
AIM European Growth Fund
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------
RUSSIA-1.87%
Vimpel-Communications-ADR (Wireless
Telecommunication Services) 1,052,000 $ 34,789,640
==========================================================================
SPAIN-1.92%
Banco Santander S.A. (Diversified Banks)(b) 943,046 20,615,660
- --------------------------------------------------------------------------
Industria de Diseno Textil, S.A. (Apparel
Retail)(b) 201,597 15,067,681
==========================================================================
35,683,341
==========================================================================
SWEDEN-4.71%
Assa Abloy A.B.-Class B (Building
Products)(b) 890,311 18,764,047
- --------------------------------------------------------------------------
Atlas Copco A.B.-Class A (Industrial
Machinery)(b) 781,860 13,102,094
- --------------------------------------------------------------------------
Intrum Justitia A.B. (Diversified Commercial
& Professional Services) 987,725 15,782,826
- --------------------------------------------------------------------------
Oriflame Cosmetics S.A.-SDR (Personal
Products)(b)(c) 358,150 21,684,539
- --------------------------------------------------------------------------
Swedish Match A.B. (Tobacco)(b) 807,385 18,100,776
==========================================================================
87,434,282
==========================================================================
SWITZERLAND-10.69%
Bucher Industries A.G. (Construction & Farm
Machinery & Heavy Trucks)(b) 71,700 17,071,005
- --------------------------------------------------------------------------
Compagnie Financiere Richemont S.A.-Class A
(Apparel, Accessories & Luxury Goods)(b)(f) 226,225 16,184,161
- --------------------------------------------------------------------------
Credit Suisse Group (Diversified Capital
Markets)(b) 357,560 24,143,707
- --------------------------------------------------------------------------
Nestle S.A. (Packaged Foods & Meats)(b) 61,277 28,330,471
- --------------------------------------------------------------------------
Rieter Holding A.G. (Auto Parts &
Equipment)(b) 28,139 16,398,528
- --------------------------------------------------------------------------
Roche Holding A.G. (Pharmaceuticals)(b) 180,409 30,844,713
- --------------------------------------------------------------------------
Sonova Holding A.G. (Health Care
Equipment)(b) 155,000 17,458,798
- --------------------------------------------------------------------------
Syngenta A.G. (Fertilizers & Agricultural
Chemicals)(b) 136,500 32,964,733
- --------------------------------------------------------------------------
UBS A.G. (Diversified Capital Markets)(b) 282,581 15,168,847
==========================================================================
198,564,963
==========================================================================
TURKEY-2.16%
Akbank T.A.S. (Diversified Banks)(b) 2,904,347 26,601,900
- --------------------------------------------------------------------------
Tupras-Turkiye Petrol Rafinerileri A.S. (Oil
& Gas Refining & Marketing)(b) 475,398 13,529,461
==========================================================================
40,131,361
==========================================================================
UNITED KINGDOM-21.20%
Amlin PLC (Multi-Line Insurance)(b) 2,873,758 19,263,971
- --------------------------------------------------------------------------
Aviva PLC (Multi-Line Insurance)(b) 1,021,046 16,096,589
- --------------------------------------------------------------------------
Balfour Beatty PLC (Construction &
Engineering)(b) 1,766,700 18,363,265
- --------------------------------------------------------------------------
</Table>
<Table>
SHARES VALUE
- --------------------------------------------------------------------------
<Caption>
UNITED KINGDOM-(CONTINUED)
Bunzl PLC (Trading Companies &
Distributors)(b) 1,360,864 $ 20,599,055
- --------------------------------------------------------------------------
Capita Group PLC (Human Resource & Employment
Services)(b) 1,364,129 21,356,506
- --------------------------------------------------------------------------
Enterprise Inns PLC (Restaurants)(b) 982,226 12,899,701
- --------------------------------------------------------------------------
Homeserve PLC (Diversified Commercial &
Professional Services)(b) 469,902 17,716,068
- --------------------------------------------------------------------------
IG Group Holdings PLC (Specialized
Finance)(b) 1,270,811 11,025,045
- --------------------------------------------------------------------------
Imperial Tobacco Group PLC (Tobacco)(b) 520,261 26,379,089
- --------------------------------------------------------------------------
Inchcape PLC (Distributors)(b) 1,371,180 13,470,823
- --------------------------------------------------------------------------
Informa PLC (Publishing)(b) 2,073,141 23,127,168
- --------------------------------------------------------------------------
International Power PLC (Independent Power
Producers & Energy Traders)(b) 2,511,089 25,622,301
- --------------------------------------------------------------------------
Mitie Group PLC (Environmental & Facilities
Services)(b) 2,919,500 16,948,778
- --------------------------------------------------------------------------
Punch Taverns PLC (Restaurants)(b) 524,640 10,996,628
- --------------------------------------------------------------------------
Reckitt Benckiser PLC (Household Products)(b) 257,245 14,946,315
- --------------------------------------------------------------------------
Shire PLC (Pharmaceuticals)(b) 1,105,300 27,651,599
- --------------------------------------------------------------------------
Tesco PLC (Food Retail)(b) 1,308,319 13,307,119
- --------------------------------------------------------------------------
Ultra Electronics Holdings PLC (Aerospace &
Defense)(b) 547,110 14,310,151
- --------------------------------------------------------------------------
United Business Media PLC (Publishing)(b) 1,337,221 20,308,630
- --------------------------------------------------------------------------
Vedanta Resources PLC (Diversified Metals &
Mining) 428,725 19,609,024
- --------------------------------------------------------------------------
WPP Group PLC (Advertising)(b) 2,164,780 29,635,108
==========================================================================
393,632,933
==========================================================================
Total Foreign Common Stocks & Other
Equity Interests (Cost $978,778,124) 1,702,260,175
==========================================================================
FOREIGN PREFERRED STOCKS-3.90%
GERMANY-3.90%
Porsche A.G.-Pfd. (Automobile
Manufacturers)(b) 18,451 49,322,412
- --------------------------------------------------------------------------
Henkel KGaA-Pfd. (Household Products)(b) 452,346 23,165,223
==========================================================================
Total Foreign Preferred Stocks (Cost
$33,486,014) 72,487,635
==========================================================================
MONEY MARKET FUNDS-4.11%
Liquid Assets Portfolio-Institutional
Class(g) 38,203,361 38,203,361
- --------------------------------------------------------------------------
Premier Portfolio-Institutional Class(g) 38,203,361 38,203,361
==========================================================================
Total Money Market Funds (Cost
$76,406,722) 76,406,722
==========================================================================
TOTAL INVESTMENTS (excluding investments
purchased with cash collateral from
securities loaned)-99.67% (Cost
$1,088,670,860) 1,851,154,532
==========================================================================
</Table>
10
AIM European Growth Fund
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES ON LOAN
MONEY MARKET FUNDS-5.19%
Liquid Assets Portfolio-Institutional Class
(Cost $96,295,345)(g)(h) 96,295,345 $ 96,295,345
==========================================================================
TOTAL INVESTMENTS-104.86% (Cost
$1,184,966,205) 1,947,449,877
==========================================================================
OTHER ASSETS LESS LIABILITIES-(4.86)% (90,266,969)
==========================================================================
NET ASSETS-100.00% $1,857,182,908
__________________________________________________________________________
==========================================================================
</Table>
Investment Abbreviations:
<Table>
ADR - American Depositary Receipt
Pfd. - Preferred
SDR - Swedish Depositary Receipt
</Table>
Notes to Schedule of Investments:
(a) Industry classifications used in this report are generally according to the
Global Industry Classification Standard, which was developed by and is the
exclusive property and a service mark of Morgan Stanley Capital
International Inc. and Standard & Poor's.
(b) In accordance with the procedures established by the Board of Trustees, the
foreign security is fair valued using adjusted closing market prices. The
aggregate value of these securities at October 31, 2007 was $1,631,914,329,
which represented 87.87% of the Fund's Net Assets. See Note 1A.
(c) All or a portion of this security was out on loan at October 31, 2007.
(d) Non-income producing security.
(e) 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 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 value of this security at October 31, 2007 represented 0.23% of the
Fund's Net Assets. Unless otherwise indicated, this security is not
considered to be illiquid.
(f) Each unit represents one A bearer share in the company and one bearer share
participation certificate in Richemont S.A.
(g) The money market fund and the Fund are affiliated by having the same
investment advisor. See Note 3.
(h) The security has been segregated to satisfy the commitment to return the
cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 8.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11
AIM European Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2007
<Table>
ASSETS:
Investments, at value (Cost $1,012,264,138)* $1,774,747,810
- ------------------------------------------------------------
Investments in affiliated money market funds
(Cost $172,702,067) 172,702,067
- ------------------------------------------------------------
Total investments (Cost $1,184,966,205) 1,947,449,877
- ------------------------------------------------------------
Foreign currencies, at value (Cost
$9,746,081) 9,736,477
- ------------------------------------------------------------
Receivables for:
Investments sold 1,217,746
- ------------------------------------------------------------
Fund shares sold 4,344,679
- ------------------------------------------------------------
Dividends 1,774,078
- ------------------------------------------------------------
Investment for trustee deferred compensation
and retirement plans 112,185
- ------------------------------------------------------------
Other assets 56,162
============================================================
Total assets 1,964,691,204
____________________________________________________________
============================================================
LIABILITIES:
Payables for:
Investments purchased 6,834,738
- ------------------------------------------------------------
Fund shares reacquired 2,590,648
- ------------------------------------------------------------
Trustee deferred compensation and
retirement plans 187,773
- ------------------------------------------------------------
Collateral upon return of securities
loaned 96,295,345
- ------------------------------------------------------------
Accrued distribution fees 611,477
- ------------------------------------------------------------
Accrued trustees' and officer's fees and
benefits 2,777
- ------------------------------------------------------------
Accrued transfer agent fees 612,062
- ------------------------------------------------------------
Accrued operating expenses 373,476
============================================================
Total liabilities 107,508,296
============================================================
Net assets applicable to shares outstanding $1,857,182,908
____________________________________________________________
============================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 980,390,952
- ------------------------------------------------------------
Undistributed net investment income 19,476,052
- ------------------------------------------------------------
Undistributed net realized gain 94,839,791
- ------------------------------------------------------------
Unrealized appreciation 762,476,113
============================================================
$1,857,182,908
____________________________________________________________
============================================================
NET ASSETS:
Class A $1,095,988,399
____________________________________________________________
============================================================
Class B $ 177,052,756
____________________________________________________________
============================================================
Class C $ 182,177,511
____________________________________________________________
============================================================
Class R $ 25,128,930
____________________________________________________________
============================================================
Investor Class $ 376,835,312
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 22,267,003
____________________________________________________________
============================================================
Class B 3,825,206
____________________________________________________________
============================================================
Class C 3,933,776
____________________________________________________________
============================================================
Class R 513,882
____________________________________________________________
============================================================
Investor Class 7,668,459
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 49.22
- ------------------------------------------------------------
Offering price per share:
(Net asset value of $49.22 divided by
94.50%) $ 52.08
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per
share $ 46.29
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per
share $ 46.31
____________________________________________________________
============================================================
Class R:
Net asset value and offering price per
share $ 48.90
____________________________________________________________
============================================================
Investor Class:
Net asset value and offering price per
share $ 49.14
____________________________________________________________
============================================================
</Table>
* At October 31, 2007, securities with an aggregate value of $88,887,577 were on
loan to brokers.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12
AIM European Growth Fund
STATEMENT OF OPERATIONS
For the year ended October 31, 2007
<Table>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $3,612,785) $ 38,539,480
- --------------------------------------------------------------------------
Dividends from affiliated money market funds (includes
securities lending income of $1,390,374) 6,947,224
- --------------------------------------------------------------------------
Interest 23,443
==========================================================================
Total investment income 45,510,147
==========================================================================
EXPENSES:
Advisory fees 14,989,508
- --------------------------------------------------------------------------
Administrative services fees 405,474
- --------------------------------------------------------------------------
Custodian fees 1,171,891
- --------------------------------------------------------------------------
Distribution fees:
Class A 2,464,359
- --------------------------------------------------------------------------
Class B 1,724,712
- --------------------------------------------------------------------------
Class C 1,445,793
- --------------------------------------------------------------------------
Class R 89,605
- --------------------------------------------------------------------------
Investor Class 841,950
- --------------------------------------------------------------------------
Transfer agent fees 3,396,903
- --------------------------------------------------------------------------
Trustees' and officer's fees and benefits 69,398
- --------------------------------------------------------------------------
Other 526,189
==========================================================================
Total expenses 27,125,782
==========================================================================
Less: Fees waived, expenses reimbursed and expense offset
arrangement(s) (476,301)
==========================================================================
Net expenses 26,649,481
==========================================================================
Net investment income 18,860,666
==========================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain from:
Investment securities 144,475,718
- --------------------------------------------------------------------------
Foreign currencies 734,626
==========================================================================
145,210,344
==========================================================================
Change in net unrealized appreciation (depreciation) of:
Investment securities 269,769,414
- --------------------------------------------------------------------------
Foreign currencies (61,605)
==========================================================================
269,707,809
==========================================================================
Net realized and unrealized gain 414,918,153
==========================================================================
Net increase in net assets resulting from operations $433,778,819
__________________________________________________________________________
==========================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
13
AIM European Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2007 and 2006
<Table>
<Caption>
2007 2006
- ----------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 18,860,666 $ 7,886,571
- ----------------------------------------------------------------------------------------------
Net realized gain 145,210,344 102,006,300
- ----------------------------------------------------------------------------------------------
Change in net unrealized appreciation 269,707,809 224,587,450
==============================================================================================
Net increase in net assets resulting from operations 433,778,819 334,480,321
==============================================================================================
Distributions to shareholders from net investment income:
Class A (5,963,573) (3,358,722)
- ----------------------------------------------------------------------------------------------
Class B (219,022) (38,352)
- ----------------------------------------------------------------------------------------------
Class C (147,072) (17,313)
- ----------------------------------------------------------------------------------------------
Class R (64,684) (25,405)
- ----------------------------------------------------------------------------------------------
Investor Class (2,147,850) (1,509,105)
==============================================================================================
Total distributions from net investment income (8,542,201) (4,948,897)
==============================================================================================
Distributions to shareholders from net realized gains:
Class A (46,910,607) (32,547,505)
- ----------------------------------------------------------------------------------------------
Class B (10,134,545) (9,964,891)
- ----------------------------------------------------------------------------------------------
Class C (6,805,293) (4,498,118)
- ----------------------------------------------------------------------------------------------
Class R (701,284) (334,636)
- ----------------------------------------------------------------------------------------------
Investor Class (16,336,816) (13,291,640)
==============================================================================================
Total distributions from net realized gains (80,888,545) (60,636,790)
==============================================================================================
Decrease in net assets resulting from distributions (89,430,746) (65,585,687)
==============================================================================================
Share transactions-net:
Class A 121,519,072 120,909,916
- ----------------------------------------------------------------------------------------------
Class B (19,627,696) (21,307,049)
- ----------------------------------------------------------------------------------------------
Class C 49,127,497 20,498,296
- ----------------------------------------------------------------------------------------------
Class R 10,250,242 4,551,131
- ----------------------------------------------------------------------------------------------
Investor Class 40,125,267 6,458,081
==============================================================================================
Net increase in net assets resulting from share
transactions 201,394,382 131,110,375
==============================================================================================
Net increase in net assets 545,742,455 400,005,009
==============================================================================================
NET ASSETS:
Beginning of year 1,311,440,453 911,435,444
==============================================================================================
End of year (including undistributed net investment income
of $19,476,052 and $8,422,961, respectively) $1,857,182,908 $1,311,440,453
______________________________________________________________________________________________
==============================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
14
AIM European Growth Fund
NOTES TO FINANCIAL STATEMENTS
October 31, 2007
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM European Growth Fund (the "Fund") is a series portfolio of AIM International
Mutual Funds (the "Trust"). The Trust is a Delaware statutory trust registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end series management investment company consisting of six separate
portfolios, each authorized to issue an unlimited number of shares of beneficial
interest. The Fund currently consists of 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.
The Fund's investment objective is long-term growth of capital.
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 or official closing price as of the close of
the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on that
day. Securities traded in the over-the-counter market are valued based on
prices furnished by independent pricing services or market makers. When
such securities are valued by an independent pricing service they may be
considered fair valued. Futures contracts are valued at the final
settlement price set by an exchange on which they are principally traded.
Listed options are valued at the mean between the last bid and the ask
prices from the exchange on which they are principally traded. Options not
listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last sales
price or official closing price as of the close of the customary trading
session on the exchange where the security is principally traded.
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes 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 specific securities, dividend rate, yield, quality,
type of issue, coupon rate, maturity, individual trading characteristics
and other market data. Short-term obligations, including commercial paper,
having 60 days or less to maturity are recorded at amortized cost which
approximates value. Debt securities are subject to interest rate and credit
risks. In addition, all debt securities involve some risk of default with
respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued at
the market quotations. Because trading hours for certain foreign securities
end before the close of the NYSE, closing market quotations may become
unreliable. If between the time trading ends on a particular security and
the close of the customary trading session on the NYSE, events occur that
are significant and may make the closing price unreliable, the Fund may
fair value the security. If the event is likely to have affected the
closing price of the security, the security will be valued at fair value in
good faith using procedures approved by the Board of Trustees. Adjustments
to closing prices to reflect fair value may also be based on a screening
process of an independent pricing service to indicate the degree of
certainty, based on historical data, that the closing price in the
principal market where a foreign security trades is not the current value
as of the close of the NYSE. Foreign securities meeting the approved degree
of certainty that the price is not reflective of current value will be
priced at the indication of fair value from the independent pricing
service. Multiple factors may be considered by the independent pricing
service in determining adjustments to reflect fair value and may include
information relating to sector indices, ADRs and domestic and foreign index
futures. Foreign securities may have additional risks including exchange
rate changes, potential for sharply devalued currencies and high inflation,
political and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be 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
unreliable are valued at fair value as determined in good faith by or under
the supervision of the Trust's officers following procedures approved by
the Board of Trustees. Issuer specific events, market trends, bid/ask
quotes of brokers and information providers and other market data may be
reviewed in the course of making a good faith determination of a security's
fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity.
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.
15
AIM European Growth Fund
The Fund may periodically participate in litigation related to fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds as received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
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. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, AIM may
determine the country in which an issuer is located and/or credit risk
exposure based on various factors. These factors include the laws of the
country under which the issuer is organized, where the issuer maintains a
principal office, the country in which the issuer derives 50% or more of
its total revenues and the country that has the primary market for the
issuer's securities, as well as other criteria. Among the other criteria
that may be evaluated for making this determination are the country in
which the issuer maintains 50% or more of its assets, the type of security,
financial guarantees and enhancements, the nature of the collateral and the
sponsor organization. Country of issuer and/or credit risk exposure has
been determined to be the United States of America unless otherwise noted.
D. 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 treat a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
E. 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 to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial statements.
F. 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.
G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to
taxation. Actual results could differ from those estimates.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust (including the
Trust's investment manager) is indemnified against certain liabilities that
may arise out of performance of their duties to the Fund. Additionally, in
the normal course of business, the Fund enters into contracts that contain
a variety of indemnification clauses. The Fund's maximum exposure under
these arrangements is unknown as this would involve future claims that may
be made against the Fund that have not yet occurred. The risk of material
loss as a result of such indemnification claims is considered remote.
I. REDEMPTION FEES -- The Fund has a 2% redemption fee that is to be retained
by the Fund to offset transaction costs and other expenses associated with
short-term redemptions and exchanges. The fee, subject to certain
exceptions, is imposed on certain redemptions, including exchanges of
shares held less than 30 days. The redemption fee is recorded as an
increase in shareholder capital and is allocated among the share classes
based on the relative net assets of each class.
J. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close of
the NYSE based on quotations posted by banks and major currency dealers.
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 (i) sales
of foreign currencies, (ii) currency gains or losses realized between the
trade and settlement dates on securities transactions, and (iii) 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.
The Fund may invest in foreign securities which may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion
of which may be recoverable. Taxes are accrued based on the Fund's current
interpretation of tax regulations and rates that exist in the foreign
markets in which the Fund invests.
K. 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
16
AIM European Growth Fund
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. Fluctuations in the value of these contracts are recorded as
unrealized appreciation (depreciation) until the contracts are closed. When
these contracts are closed, realized gains (losses) are recorded. Realized
and unrealized gains and losses on these contracts are included in the
Statement of Operations. The Fund could be exposed to risk, which may be in
excess of the amount reflected in the Statement of Assets and Liabilities,
if counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust 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 based on the annual rate of the Fund's
average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $500 million 0.95%
- -------------------------------------------------------------------
Over $500 million 0.90%
__________________________________________________________________
===================================================================
</Table>
Effective July 1, 2007, the Trustees approved a reduced contractual advisory
fee schedule for the Fund. Prior to July 1, 2007 AIM had contractually waived
advisory fees to the same reduced advisory fee schedule. Under the terms of the
investment advisory agreement, the Fund will pay an advisory fee to AIM based on
the following annual rates of the Fund's average daily net assets:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- --------------------------------------------------------------------
First $250 million 0.935%
- --------------------------------------------------------------------
Next $250 million 0.91%
- --------------------------------------------------------------------
Next $500 million 0.885%
- --------------------------------------------------------------------
Next $1.5 billion 0.86%
- --------------------------------------------------------------------
Next $2.5 billion 0.835%
- --------------------------------------------------------------------
Next $2.5 billion 0.81%
- --------------------------------------------------------------------
Next $2.5 billion 0.785%
- --------------------------------------------------------------------
Over $10 billion 0.76%
___________________________________________________________________
====================================================================
</Table>
Further, effective July 1, 2007, AIM has contractually agreed, through at
least June 30, 2008, to waive 100% of the advisory fee AIM receives from the
affiliated money market funds on investments by the Fund in such affiliated
money market funds (excluding investments made in affiliated money market funds
with cash collateral from securities loaned by the fund). Prior to July 1, 2007,
AIM had voluntarily agreed to waive 25% of the advisory fee AIM receives from
the affiliated money market funds on investments by the Fund in such affiliated
money market funds.
For the year ended October 31, 2007, AIM waived advisory fees of $371,438.
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") agreed
to reimburse expenses incurred by the Fund in connection with market timing
matters in the AIM Funds, which may include legal, audit, shareholder reporting,
communications and trustee expenses. These expenses along with the related
expense reimbursement are included in the Statement of Operations. For the year
ended October 31, 2007, Invesco reimbursed expenses of the Fund in the amount of
$842.
The Trust has entered into a master administrative services agreement with
AIM pursuant to which the Fund has agreed to pay AIM for certain administrative
costs incurred in providing accounting services, to the Fund. For the year ended
October 31, 2007, expenses incurred under the agreement are shown in the
Statement of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with AIM
Investment Services, Inc. ("AIS") pursuant to which the Fund has agreed to pay
AIS a fee for providing transfer agency and shareholder services to the Fund and
reimburse AIS for certain expenses incurred by AIS in the course of providing
such services. AIS may make payments to intermediaries that provide omnibus
account services, sub-accounting services and/or networking services. All fees
payable by AIS to intermediaries that provide omnibus account services or
sub-accounting are charged back to the Fund, subject to certain limitations
approved by the Trust's Board of Trustees. For the year ended October 31, 2007,
expenses incurred under the agreement are shown in the Statement of Operations
as transfer agent fees.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B,
Class C, Class R and 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 Investor Class shares (collectively the
"Plans"). The Fund, pursuant to the Plans, pays ADI compensation at the annual
rate of 0.25% 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. The Fund, pursuant to the Investor
Class Plan, reimburses ADI for its allocated share of expenses incurred pursuant
to the Investor Class Plan for the period, up to a maximum annual rate of 0.25%
of the average daily net assets of Investor Class shares. Of the Plan payments,
up to 0.25% of the average daily net assets of each class of shares may be paid
to furnish continuing personal shareholder services to 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
17
AIM European Growth Fund
sales charge. Financial Industry Regulatory Authority ("FINRA"), formerly known
as National Association of Securities Dealers, 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. For the year ended October 31, 2007, expenses
incurred under the Plans are shown in the Statement of Operations as
distribution fees.
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, 2007, ADI advised the Fund that it retained $403,830 in
front-end sales commissions from the sale of Class A shares and $8,756,
$114,089, $35,580 and $0 from Class A, Class B, Class C and Class R shares,
respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
AIM, AIS and/or ADI.
NOTE 3--INVESTMENTS IN AFFILIATES
The Fund is permitted, pursuant to procedures approved by the Board of Trustees,
to invest daily available cash balances and cash collateral from securities
lending transactions in affiliated money market funds. The Fund and the money
market funds below have the same investment advisor and therefore, are
considered to be affiliated. The tables below show the transactions in and
earnings from investments in affiliated money market funds for the year ended
October 31, 2007. During the period each investment maintained a $1.00 net asset
value, as such there is no realized gain/(loss) and no change in unrealized
appreciation/(depreciation).
INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
<Table>
<Caption>
VALUE PURCHASES PROCEEDS VALUE DIVIDEND
FUND 10/31/06 AT COST FROM SALES 10/31/07 INCOME
- --------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-Institutional
Class $36,994,298 $ 192,996,816 $ (191,787,753) $ 38,203,361 $2,784,240
- --------------------------------------------------------------------------------------------------
Premier
Portfolio-Institutional
Class 36,994,298 192,996,816 (191,787,753) 38,203,361 2,772,610
==================================================================================================
Subtotal $73,988,596 $ 385,993,632 $ (383,575,506) $ 76,406,722 $5,556,850
==================================================================================================
</Table>
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
<Table>
<Caption>
VALUE PURCHASES PROCEEDS VALUE DIVIDEND
FUND 10/31/06 AT COST FROM SALES 10/31/07 INCOME*
- --------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-Institutional
Class $21,417,700 $ 948,457,029 $ (873,579,384) $ 96,295,345 $1,390,374
==================================================================================================
Total
Investments
in
Affiliates $95,406,296 $1,334,450,661 $(1,257,154,890) $172,702,067 $6,947,224
__________________________________________________________________________________________________
==================================================================================================
</Table>
* Net of compensation to counterparties.
NOTE 4--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain
other AIM Funds under specified conditions outlined in procedures adopted by the
Board of Trustees of the Trust. The procedures have been designed to ensure that
any purchase or sale of securities by the Fund from or to another fund or
portfolio that is or could be considered an affiliate by virtue of having a
common investment advisor (or affiliated investment advisors), common Trustees
and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as
defined under the procedures, each transaction is effected at the current market
price. Pursuant to these procedures, for the year ended October 31, 2007, the
Fund engaged in securities purchases of $1,348,297.
NOTE 5--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the transfer
agent for clearing shareholder transactions, (ii) custodian credits which result
from periodic overnight cash balances at the custodian and (iii) a one time
custodian fee credit used to offset custodian fees. For the year ended October
31, 2007, the Fund received credits from these arrangements, which resulted in
the reduction of the Fund's total expenses of $104,021.
NOTE 6--TRUSTEES' AND OFFICER'S FEES AND BENEFITS
"Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officer's Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officer's
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
18
AIM European Growth Fund
During the year ended October 31, 2007, the Fund paid legal fees of $11,389
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7--BORROWINGS
Pursuant to an exemptive order from the Securities and Exchange Commission, 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. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. 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.
The Fund is a party to an uncommitted unsecured revolving 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
credit facility, 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 year ended October 31, 2007, the Fund did not borrow or lend
under the interfund lending facility or borrow under the uncommitted unsecured
revolving credit facility.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with SSB, the custodian bank. To compensate the
custodian bank for such overdrafts, the overdrawn Fund may either (i) leave
funds as a compensating balance in the account so the custodian bank can be
compensated by earning the additional interest; or (ii) compensate by paying the
custodian bank at a rate agreed upon by the custodian bank and AIM, not to
exceed the contractually agreed upon rate.
NOTE 8--PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities having a market value up to 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 received in connection with these loans is
invested in short-term money market instruments or affiliated money market
funds. 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. 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. The Fund could also experience delays and costs in gaining
access to the collateral. The Fund bears the risk of any deficiency in the
amount of the collateral available for return to the borrower due to any loss on
the collateral invested.
At October 31, 2007, securities with an aggregate value of $88,887,577 were
on loan to brokers. The loans were secured by cash collateral of $96,295,345
received by the Fund and subsequently invested in affiliated money market funds.
For the year ended October 31, 2007, the Fund received dividends on cash
collateral investments of $1,390,374 for securities lending transactions, which
are net of compensation to counterparties.
NOTE 9--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
DISTRIBUTIONS TO SHAREHOLDERS:
The tax character of distributions paid during the years ended October 31, 2007
and 2006 was as follows:
<Table>
<Caption>
2007 2006
- ----------------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 8,542,201 $ 4,948,897
- ----------------------------------------------------------------------------------------
Long-term capital gain 80,888,545 60,636,790
========================================================================================
Total distributions $89,430,746 $65,585,687
________________________________________________________________________________________
========================================================================================
</Table>
19
AIM European Growth Fund
TAX COMPONENTS OF NET ASSETS:
As of October 31, 2007, the components of net assets on a tax basis were as
follows:
<Table>
<Caption>
2007
- ----------------------------------------------------------------------------
Undistributed ordinary income $ 19,616,118
- ----------------------------------------------------------------------------
Undistributed long-term gain 128,651,971
- ----------------------------------------------------------------------------
Net unrealized appreciation -- investments 762,314,322
- ----------------------------------------------------------------------------
Temporary book/tax differences (140,066)
- ----------------------------------------------------------------------------
Capital loss carryover (33,650,389)
- ----------------------------------------------------------------------------
Shares of beneficial interest 980,390,952
============================================================================
Total net assets $1,857,182,908
____________________________________________________________________________
============================================================================
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation difference is attributable primarily to losses on wash sales. The
tax-basis net unrealized appreciation on investments amount includes
appreciation (depreciation) on foreign currencies of $(7,559).
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 trustee deferral of compensation and
retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions. Under these limitation rules, the Fund is limited as of October
31, 2007 to utilizing $15,589,322 of capital loss carryforward in the fiscal
year ended October 31, 2008.
The Fund utilized $15,856,287 of capital loss carryforward in the current
period to offset net realized capital gain for federal income tax purposes. The
Fund has a capital loss carryforward as of October 31, 2007 which expires as
follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- ---------------------------------------------------------------------------
October 31, 2009 $33,650,389
___________________________________________________________________________
===========================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code. To
the extent that unrealized gains as of November 24, 2003, the date of the
reorganization of INVESCO European Growth Fund into the Fund, are realized on
securities held on such date, the capital loss carryforward may be further
limited for up to five years from the date of the reorganization.
NOTE 10--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended October 31, 2007 was $447,463,942 and
$306,606,647, respectively.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $775,647,285
- ------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (13,325,404)
==============================================================================
Net unrealized appreciation of investment securities $762,321,881
______________________________________________________________________________
==============================================================================
Cost of investments for tax purposes is $1,185,127,996.
</Table>
NOTE 11--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of capital loss
carryforward and foreign currency transactions, on October 31, 2007,
undistributed net investment income was increased by $734,626, undistributed net
realized gain was increased by $79,408 and shares of beneficial interest
decreased by $814,034. This reclassification had no effect on the net assets of
the Fund.
20
AIM European Growth Fund
NOTE 12--SHARE INFORMATION
The Fund currently consists of five different classes of shares: Class A, Class
B, Class C, Class R and Investor Class. Investor Class shares of the Fund are
offered only to certain grandfathered investors. Class A shares are sold with a
front-end sales charge unless certain waiver criteria are met and under certain
circumstances load waiver shares may be subject to a CDSC. Class B shares and
Class C shares are sold with a CDSC. Class R shares and Investor Class shares
are sold at net asset value. Under certain circumstances, Class R shares are
subject to a CDSC. Generally, Class B shares will automatically convert to Class
A shares on or about the month-end which is at least eight years after the date
of purchase.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
------------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 2007(A) OCTOBER 31, 2006
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 7,429,428 $ 326,433,361 5,572,165 $ 202,386,197
------------------------------------------------------------------------------------------------------------------------
Class B 805,068 33,359,939 781,731 26,941,782
------------------------------------------------------------------------------------------------------------------------
Class C 1,737,422 72,577,972 1,034,010 35,583,322
------------------------------------------------------------------------------------------------------------------------
Class R 330,881 14,633,542 173,556 6,277,323
------------------------------------------------------------------------------------------------------------------------
Investor Class 2,049,154 89,305,816 1,003,262 36,730,269
========================================================================================================================
Issued as reinvestment of dividends:
Class A 1,142,498 46,054,107 1,049,283 32,748,127
------------------------------------------------------------------------------------------------------------------------
Class B 256,770 9,795,785 316,706 9,399,848
------------------------------------------------------------------------------------------------------------------------
Class C 167,911 6,410,837 140,406 4,170,065
------------------------------------------------------------------------------------------------------------------------
Class R 18,964 761,034 11,497 357,559
------------------------------------------------------------------------------------------------------------------------
Investor Class 441,910 17,782,444 461,058 14,366,553
========================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 635,482 27,596,460 713,578 26,180,891
------------------------------------------------------------------------------------------------------------------------
Class B (673,170) (27,596,460) (753,318) (26,180,891)
========================================================================================================================
Reacquired:(b)
Class A (6,243,240) (278,564,856) (3,987,665) (140,405,299)
------------------------------------------------------------------------------------------------------------------------
Class B (852,461) (35,186,960) (940,293) (31,467,788)
------------------------------------------------------------------------------------------------------------------------
Class C (725,001) (29,861,312) (580,844) (19,255,091)
------------------------------------------------------------------------------------------------------------------------
Class R (115,806) (5,144,334) (59,186) (2,083,751)
------------------------------------------------------------------------------------------------------------------------
Investor Class (1,523,014) (66,962,993) (1,273,793) (44,638,741)
========================================================================================================================
4,882,796 $ 201,394,382 3,662,153 $ 131,110,375
________________________________________________________________________________________________________________________
========================================================================================================================
</Table>
(a) There are three entities that are each record owners of more than 5% of
the outstanding shares of the Fund and in the aggregate they own 21% of
the outstanding shares of the Fund. ADI has an agreement with these
entities to sell Fund shares. The Fund, AIM and/or AIM affiliates may
make payments to these entities, which are considered to be related to
the Fund, for providing services to the Fund, AIM and/or AIM affiliates
including but not limited to services such as securities brokerage,
distribution, third party record keeping and account servicing. The
Trust has no knowledge as to whether all or any portion of the shares
owned of record by these entities are also owned beneficially.
(b) Net of redemption fees of $92,948 and $54,231 which were allocated among
the classes based on relative net assets of each class for the years
ended October 31, 2007 and 2006, respectively.
NOTE 13--NEW ACCOUNTING STANDARD
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48").
FIN 48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement for a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The provisions for FIN 48 are effective for
fiscal years beginning after December 15, 2006. Management has assessed the
application of FIN 48 to the Fund and has determined that the adopting of FIN 48
is not expected to have a material impact on the Fund. Management intends for
the Fund to adopt FIN 48 provisions during the fiscal year ending October 31,
2008 as required.
21
AIM European Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CLASS A
-------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-------------------------------------------------------------
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 39.83 $ 31.11 $ 26.23 $ 20.02 $ 15.60
- ---------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(a) 0.56 0.31 0.21 0.05 (0.01)
- ---------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 11.52 10.70 4.70 6.17 4.43
===========================================================================================================================
Total from investment operations 12.08 11.01 4.91 6.22 4.42
===========================================================================================================================
Less distributions:
Dividends from net investment income (0.31) (0.21) (0.03) (0.01) --
- ---------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (2.38) (2.08) -- -- --
===========================================================================================================================
Total distributions (2.69) (2.29) (0.03) (0.01) --
===========================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
===========================================================================================================================
Net asset value, end of period $ 49.22 $ 39.83 $ 31.11 $ 26.23 $ 20.02
___________________________________________________________________________________________________________________________
===========================================================================================================================
Total return(b) 31.84% 37.44% 18.74% 31.06% 28.33%
___________________________________________________________________________________________________________________________
===========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,095,988 $768,769 $496,328 $407,566 $301,659
___________________________________________________________________________________________________________________________
===========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.47%(c) 1.58% 1.70% 1.87% 2.01%
- ---------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.49%(c) 1.60% 1.72% 1.87% 2.02%
===========================================================================================================================
Ratio of net investment income (loss) to average net assets 1.28%(c) 0.87% 0.71% 0.19% (0.04)%
___________________________________________________________________________________________________________________________
===========================================================================================================================
Portfolio turnover rate 20% 28% 48% 60% 81%
___________________________________________________________________________________________________________________________
===========================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $985,743,579.
22
AIM European Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS B
-----------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------
2007 2006 2005 2004 2003
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 37.63 $ 29.53 $ 25.03 $ 19.23 $ 15.08
- -------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(a) 0.22 0.04 0.01 (0.10) (0.11)
- -------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 10.87 10.15 4.49 5.90 4.26
=========================================================================================================================
Total from investment operations 11.09 10.19 4.50 5.80 4.15
=========================================================================================================================
Less distributions:
Dividends from net investment income (0.05) (0.01) -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (2.38) (2.08) -- -- --
=========================================================================================================================
Total distributions (2.43) (2.09) -- -- --
=========================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=========================================================================================================================
Net asset value, end of period $ 46.29 $ 37.63 $ 29.53 $ 25.03 $ 19.23
_________________________________________________________________________________________________________________________
=========================================================================================================================
Total return(b) 30.87% 36.39% 17.98% 30.16% 27.52%
=========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $177,053 $161,405 $144,211 $130,863 $107,959
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.22%(c) 2.33% 2.39% 2.52% 2.66%
- -------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.24%(c) 2.35% 2.41% 2.52% 2.67%
=========================================================================================================================
Ratio of net investment income (loss) to average net assets 0.53%(c) 0.12% 0.02% (0.46)% (0.69)%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Portfolio turnover rate 20% 28% 48% 60% 81%
_________________________________________________________________________________________________________________________
=========================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $172,471,231.
<Table>
<Caption>
CLASS C
--------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 37.65 $ 29.54 $ 25.05 $ 19.24 $ 15.09
- ----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(a) 0.22 0.04 0.01 (0.10) (0.11)
- ----------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 10.87 10.16 4.48 5.91 4.26
======================================================================================================================
Total from investment operations 11.09 10.20 4.49 5.81 4.15
======================================================================================================================
Less distributions:
Dividends from net investment income (0.05) (0.01) -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (2.38) (2.08) -- -- --
======================================================================================================================
Total distributions (2.43) (2.09) -- -- --
======================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
======================================================================================================================
Net asset value, end of period $ 46.31 $ 37.65 $ 29.54 $ 25.05 $ 19.24
______________________________________________________________________________________________________________________
======================================================================================================================
Total return(b) 30.84% 36.41% 17.92% 30.20% 27.50%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $182,178 $103,675 $63,806 $45,222 $31,509
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.22%(c) 2.33% 2.39% 2.52% 2.66%
- ----------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.24%(c) 2.35% 2.41% 2.52% 2.67%
======================================================================================================================
Ratio of net investment income (loss) to average net assets 0.53%(c) 0.12% 0.02% (0.46)% (0.69)%
______________________________________________________________________________________________________________________
======================================================================================================================
Portfolio turnover rate 20% 28% 48% 60% 81%
______________________________________________________________________________________________________________________
======================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $144,579,301.
23
AIM European Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS R
---------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------
2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 39.60 $ 30.96 $26.13 $19.98 $15.59
- -----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(a) 0.45 0.22 0.16 0.01 (0.03)
- -----------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 11.45 10.66 4.68 6.14 4.42
=================================================================================================================
Total from investment operations 11.90 10.88 4.84 6.15 4.39
=================================================================================================================
Less distributions:
Dividends from net investment income (0.22) (0.16) (0.01) -- --
- -----------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (2.38) (2.08) -- -- --
=================================================================================================================
Total distributions (2.60) (2.24) (0.01) -- --
=================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=================================================================================================================
Net asset value, end of period $ 48.90 $ 39.60 $30.96 $26.13 $19.98
_________________________________________________________________________________________________________________
=================================================================================================================
Total return(b) 31.53% 37.11% 18.52% 30.78% 28.16%
_________________________________________________________________________________________________________________
=================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $25,129 $11,081 $4,767 $2,131 $ 660
_________________________________________________________________________________________________________________
=================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.72%(c) 1.83% 1.89% 2.02% 2.16%
- -----------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.74%(c) 1.85% 1.91% 2.02% 2.17%
=================================================================================================================
Ratio of net investment income (loss) to average net assets 1.03%(c) 0.62% 0.52% 0.04% (0.19)%
_________________________________________________________________________________________________________________
=================================================================================================================
Portfolio turnover rate 20% 28% 48% 60% 81%
_________________________________________________________________________________________________________________
=================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions.
(c) Ratios are based on average daily net assets of $17,920,972.
24
AIM European Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
INVESTOR CLASS
---------------------------------------------------------------------
SEPTEMBER 30, 2003
(COMMENCEMENT
YEAR ENDED OCTOBER 31, DATE) TO
----------------------------------------------- OCTOBER 31,
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 39.78 $ 31.08 $ 26.22 $ 20.01 $18.84
- ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income(a) 0.56 0.32 0.24 0.09 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 11.50 10.69 4.69 6.15 1.17
=================================================================================================================================
Total from investment operations 12.06 11.01 4.93 6.24 1.17
=================================================================================================================================
Less distributions:
Dividends from net investment income (0.32) (0.23) (0.07) (0.03) --
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (2.38) (2.08) -- -- --
=================================================================================================================================
Total distributions (2.70) (2.31) (0.07) (0.03) --
=================================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=================================================================================================================================
Net asset value, end of period $ 49.14 $ 39.78 $ 31.08 $ 26.22 $20.01
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) 31.80% 37.50% 18.82% 31.20% 6.21%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $376,835 $266,510 $202,323 $184,832 $ 163
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.47%(c) 1.55% 1.63% 1.71% 1.79%(d)
- ---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.49%(c) 1.57% 1.65% 1.74% 1.79%(d)
=================================================================================================================================
Ratio of net investment income to average net assets 1.28%(c) 0.91% 0.78% 0.35% 0.18%(d)
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate(e) 20% 28% 48% 60% 81%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Not annualized for periods less than one year.
(c) Ratios are based on average daily net assets of $336,779,833.
(d) Annualized.
(e) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year.
NOTE 15--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On July 6, 2007, the Securities and Exchange Commission ("SEC") published notice
of two proposed distribution plans ("Distribution Plans") for the distribution
of monies placed into two separate Fair Funds created pursuant to a settlement
reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"), A I M
Advisors, Inc. ("AIM") and A I M Distributors, Inc. and the SEC (the "Order").
One of the Fair Funds consists of $325 million, plus interest and any
contributions by other settling parties, for distribution to shareholders of
certain mutual funds formerly advised by IFG who may have been harmed by market
timing and related activity. The second Fair Fund consists of $50 million, plus
interest and any contributions by other settling parties, for distribution to
shareholders of mutual funds advised by AIM who may have been harmed by market
timing and related activity. Comments on the Distribution Plans were due no
later than August 6, 2007 and the Distribution Plans are awaiting final approval
by the SEC. Distributions from the Fair Funds will begin after the SEC finally
approves the Distribution Plans. The proposed Distribution Plans provide for
distribution to all eligible investors, for the periods spanning January 1, 2000
through July 31, 2003 (for the IFG Fair Fund) and January 1, 2001 through
September 30, 2003 (for the AIM Fair Fund), their proportionate share of the
applicable Fair Fund to compensate such investors for injury they may have
suffered as a result of market timing in the affected funds. The Distribution
Plans include a provision for any residual amounts in the Fair Funds to be
distributed in the future to the affected funds. Because the Distribution Plans
have not received final approval from the SEC and distribution of the Fair Funds
has not yet commenced, management of AIM and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco")
the parent company of IFG and AIM, has agreed to reimburse expenses incurred by
the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
On August 30, 2005, the West Virginia Office of the State
Auditor -- Securities Commission ("WVASC") issued a Summary Order to Cease and
Desist and Notice of Right to Hearing to AIM and ADI (Order No. 05-1318). The
WVASC makes findings of fact that AIM and ADI entered into certain arrangements
permitting market timing of the AIM Funds and failed to disclose these
arrangements in the prospectuses for such Funds, and conclusions of law to the
effect that AIM and ADI violated the West Virginia securities laws. The WVASC
orders AIM and ADI to cease any further violations and seeks to
25
AIM European Growth Fund
NOTE 15--LEGAL PROCEEDINGS--(CONTINUED)
impose monetary sanctions, including restitution to affected investors,
disgorgement of fees, reimbursement of investigatory, administrative and legal
costs and an "administrative assessment," to be determined by the Commissioner.
Initial research indicates that these damages could be limited or capped by
statute. By agreement with the Commissioner of Securities, AIM's time to respond
to that Order has been indefinitely suspended.
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or
related entities and individuals, depending on the lawsuit, alleging:
- that the defendants permitted improper market timing and related activity
in the AIM Funds; and
- that certain AIM Funds inadequately employed fair value pricing.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
ERISA, negligence, breach of fiduciary duty and/or breach of contract. These
lawsuits seek remedies that include, depending on the lawsuit, damages,
restitution, injunctive relief, imposition of a constructive trust, removal of
certain directors and/or employees, various corrective measures under ERISA,
rescission of certain AIM Funds' advisory agreements and/or distribution plans
and recovery of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court,
plaintiffs in these lawsuits consolidated their claims for pre-trial purposes
into three amended complaints against various AIM- and IFG-related parties: (i)
a Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of the Employee
Retirement Income Securities Act ("ERISA") purportedly brought on behalf of
participants in Invesco's 401(k) plan. Based on orders issued by the MDL Court,
all claims asserted against the AIM Funds that have been transferred to the MDL
Court have been dismissed, although certain Funds remain nominal defendants in
the Consolidated Amended Fund Derivative Complaint. On September 15, 2006, the
MDL Court granted the Invesco defendants' motion to dismiss the Amended Class
Action Complaint for Violations of ERISA and dismissed such Complaint. The
plaintiff has commenced an appeal from that decision.
IFG, AIM, ADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, AIM and ADI have advised the Fund that they are providing full
cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, AIM and/or related entities and individuals in the future.
At the present time, management of AIM and the Fund are unable to estimate
the impact, if any, that the outcome of the Pending Litigation and Regulatory
Inquiries described above may have on AIM, ADI or the Fund.
26
AIM European Growth Fund
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM International Mutual Funds
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 AIM European Growth Fund (one of
the funds constituting AIM International Mutual Funds, hereafter referred to as
the "Fund") at October 31, 2007, 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 periods indicated, 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 the standards of the Public Company Accounting Oversight Board
(United States). Those standards 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, 2007 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PRICEWATERHOUSECOOPERS LLP
December 19, 2007
Houston, Texas
27
AIM European Growth Fund
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period May 1, 2007, through October 31, 2007.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
SHARE ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (05/01/07) (10/31/07)(1) PERIOD(2) (10/31/07) PERIOD(2) RATIO
A $1,000.00 $1,081.50 $ 7.61 $1,017.90 $ 7.38 1.45%
B 1,000.00 1,077.80 11.52 1,014.12 11.17 2.20
C 1,000.00 1,077.50 11.52 1,014.12 11.17 2.20
R 1,000.00 1,080.20 8.91 1,016.64 8.64 1.70
Investor 1,000.00 1,081.70 7.61 1,017.90 7.38 1.45
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period May 1, 2007, through October 31, 2007, after actual
expenses and will differ from the hypothetical ending account value which is
based on the Fund's expense ratio and a hypothetical annual return of 5%
before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
184/365 to reflect the most recent fiscal half year.
28
AIM EUROPEAN GROWTH FUND
APPROVAL OF INVESTMENT ADVISORY AGREEMENT and expenses of their assigned funds. The may have occurred since that date,
Investments Committee considers each including but not limited to changes to
The Board of Trustees (the Board) of AIM Sub-Committee's recom-mendations and the Fund's performance, advisory fees,
International Mutual Funds is required makes its own recommendations regarding expense limitations and/or fee waivers.
under the Investment Company Act of 1940 to the performance, fees and expenses of the
approve annually the renewal of the AIM AIM Funds to the full Board. Moreover, A. Nature, Extent and Quality of Services
European Growth Fund (the Fund) invest- the Investments Committee considers each Provided by AIM
ment advisory agreement with A I M Sub- Committee's recommendations in
Advisors, Inc. (AIM). During contract making its annual recommendation to the The Board reviewed the advisory
renewal meetings held on June 25-27, 2007, Board whether to approve the continuance services provided to the Fund by AIM
the Board as a whole and the disinterested of each AIM Fund's investment advisory under the Fund's advisory agreement,
or "independent" Trustees, voting agreement and sub-advisory agreement, if the performance of AIM in providing these
separately, approved the continuance of the applicable (advisory agreements), for services, and the credentials and
Fund's investment advisory agreement for another year. experience of the officers and employees
another year, effective July 1, 2007. In of AIM who provide these services. The
doing so, the Board determined that the The independent Trustees, as mentioned Board's review of the qualifications of
Fund's advisory agreement is in the best above, are assisted in their annual AIM to provide these services included
interests of the Fund and its shareholders evaluation of the advisory agreements by the Board's consideration of AIM's
and that the compensation to AIM under the the independent Senior Officer. One portfolio and product review process,
Fund's advisory agreement is fair and responsibility of the Senior Officer is various back office support functions
reasonable. to manage the process by which the AIM provided by AIM, and AIM's equity and
Funds' proposed manage- ment fees are fixed income trading oper- ations. The
The independent Trustees met separately negotiated during the annual contract Board concluded that the nature, extent
during their evaluation of the Fund's renewal process to ensure that they are and quality of the advisory services
investment advisory agreement with negotiated in a manner which is at arms' provided to the Fund by AIM were
independent legal counsel from whom they length and reasonable. Accordingly, the appropriate and that AIM currently is
received independent legal advice, and the Senior Officer must either supervise a providing satisfactory advisory services
independent Trustees also received competitive bidding process or prepare an in accor- dance with the terms of the
assistance during their deliberations from independent written evaluation. The Fund's advisory agreement. In addition,
the independent Senior Officer, a full-time Senior Officer has recommended that an based on their ongoing meetings
officer of the AIM Funds who reports independent written evaluation be throughout the year with the Fund's
directly to the independent Trustees. The provided and, upon the direction of the portfolio man- agers, the Board concluded
following discussion more fully describes Board, has prepared an independent that these individuals are competent and
the process employed by the Board to written evaluation. able to continue to carry out their
evaluate the performance of the AIM Funds responsibilities under the Fund's
(including the Fund) throughout the year During the annual contract renewal advisory agreement.
and, more specifically, during the annual process, the Board considered the factors
contract renewal meetings. discussed below under the heading In determining whether to continue the
"Factors and Conclusions and Summary of Fund's advisory agreement, the Board
THE BOARD'S FUND EVALUATION PROCESS Independent Written Fee Evaluation" in considered the prior relationship between
evaluating the fairness and AIM and the Fund, as well as the Board's
The Board's Investments Committee has reasonableness of the Fund's adviso- ry knowledge of AIM's operations, and con-
established three Sub-Committees which are agreement at the contract renewal cluded that it was beneficial to maintain
responsible for overseeing the management meetings and at their meetings throughout the current relationship, in part,
of a number of the series portfolios of the the year as part of their ongoing because of such knowledge. The Board also
AIM Funds. This Sub- Committee structure oversight of the Fund. The Fund's considered the steps that AIM and its
permits the Trustees to focus on the advisory agreement was considered affiliates have taken over the last
performance of the AIM Funds that have been separately, although the Board also several years to improve the quality and
assigned to them. The Sub-Committees meet considered the common interests of all of efficiency of the services they provide
throughout the year to review the the AIM Funds in their deliberations. The to the Funds in the areas of investment
performance of their assigned funds, and Board com- prehensively considered all of performance, product line
the Sub-Committees review monthly and the information provid- ed to them and diversification, distribution, fund
quarterly comparative performance did not identify any particular factor operations, shareholder services and com-
information and periodic asset flow data that was controlling. Furthermore, each pliance. The Board concluded that the
for their assigned funds. These materials Trustee may have evaluated the quality and efficiency of the services
are prepared under the direction and information provided differently from one AIM and its affiliates provide to the AIM
supervision of the independent Senior another and attributed different weight Funds in each of these areas have gener-
Officer. Over the course of each year, the to the various factors. The Trustees ally improved, and support the Board's
Sub-Committees meet with portfolio recognized that the advisory arrangements approval of the continuance of the Fund's
managers for their assigned funds and other and resulting advisory fees for the Fund advisory agreement.
members of management and review with these and the other AIM Funds are the result of
individuals the performance, investment years of review and negotiation between B. Fund Performance
objective(s), policies, strategies and the Trustees and AIM, that the Trustees
limitations of these funds. may focus to a greater extent on certain The Board compared the Fund's performance
aspects of these arrangements in some during the past one, three and five
years than others, and that the Trustees' calendar years to the performance of
In addition to their meetings throughout delib- erations and conclusions in a funds in the Fund's Lipper peer group
the year, the Sub-Committees meet at particular year may be based in part on that are not managed by AIM, and against
designated contract renewal meetings each their deliberations and conclusions of the performance of all funds in the
year to conduct an in-depth review of the these same arrangements throughout the Lipper European Region Funds Index. The
performance, fees and expenses of their year and in prior years. Board also reviewed the methodology
assigned funds. During the contract renewal used by Lipper to identify the Fund's
process, the Trustees receive comparative FACTORS AND CONCLUSIONS AND SUMMARY OF peers. The Board noted that the Fund's
performance and fee data regarding all the INDEPENDENT WRITTEN FEE EVALUATION performance was above the median
AIM Funds prepared by an independent performance of its peers for the one,
company, Lipper, Inc., under the direc- The discussion below serves as a three and five year periods. The Board
tion and supervision of the independent summary of the Senior Officer's noted that the Fund's performance was
Senior Officer who also prepares a separate independent written evaluation, as well above the performance of the Index for
analysis of this information for the as a discussion of the material factors the one, three and five year periods. The
Trustees. Each Sub-Committee then makes and relat- ed conclusions that formed the Board also considered the steps AIM has
recommendations to the Investments basis for the Board's approval of the taken over the last several years to
Committee regarding the performance, fees Fund's advisory agreement. Unless improve the quality and efficiency of the
otherwise stated, information set forth services that AIM provides to the AIM
below is as of June 27, 2007 and does not Funds. The Board concluded that AIM
reflect any changes that continues to be responsive to the Board's
focus on fund perform- ance. Although the
independent written evaluation
(continued)
29
of the Fund's Senior Officer (discussed Fund's contractual advisory fee schedule affiliates to provide these services. The
below) only considered Fund performance includes one breakpoint and that the Board also considered that these services
through the most recent calendar year, the level of the Fund's advisory fees, as a are provided to the Fund pursuant to
Board also reviewed more recent Fund percentage of the Fund's net assets, has written contracts which are reviewed and
performance and this review did not change decreased as net assets increased because approved on an annual basis by the Board.
their conclusions. of the breakpoint. The Board noted that The Board concluded that AIM and its
the amendment to the Fund's contractual affiliates were providing these
C. ADVISORY FEES AND FEE WAIVERS advisory fee schedule discussed above services in a satisfactory manner and in
provides for seven breakpoints. Based on accordance with the terms of their
The Board compared the Fund's contractual this information, the Board concluded contracts, and were qualified to continue
advisory fee rate to the contractual that the Fund's advisory fees to provide these services to the Fund.
advisory fee rates of funds in the Fund's appropriately reflect economies of scale
Lipper peer group that are not managed by at current asset levels. The Board also The Board considered the benefits
AIM, at a common asset level and as of the noted that the Fund shares directly in realized by AIM as a result of portfolio
end of the past calendar year. The Board economies of scale through lower fees brokerage transactions executed through
noted that the Fund's advisory fee rate was charged by third party service providers "soft dollar" arrangements. Under these
above the median advisory fee rate of its based on the combined size of all of the arrangements, portfolio brokerage
peers. The Board also reviewed the AIM Funds and affiliates. commissions paid by the Fund and/or other
methodology used by Lipper and noted that funds advised by AIM are used to pay for
the contractual fee rates shown by Lipper E. Profitability and Financial Resources research and execution services. The
include any applicable long-term of AIM Board noted that soft dollar arrangements
contractual fee waivers. The Board also shift the payment obligation for the
compared the Fund's contractual advisory The Board reviewed information from AIM research and executions services from AIM
fee rate to the contractual advisory fee concerning the costs of the advisory to the funds and therefore may reduce
rates of other clients of AIM and its and other services that AIM and its AIM's expenses. The Board also noted that
affiliates with investment strategies com- affiliates provide to the Fund and the research obtained through soft dollar
parable to those of the Fund, including one profitability of AIM and its affiliates arrangements may be used by AIM in making
mutual fund advised by AIM, two Canadian in providing these services. The Board investment decisions for the Fund and may
funds advised by an AIM affiliate and also reviewed information concerning the therefore benefit Fund shareholders. The
sub-advised by AIM, and one off-shore fund financial condition of AIM and its Board concluded that AIM's soft dollar
advised and sub-advised by AIM affiliates. affiliates. The Board also reviewed with arrangements were appropriate. The Board
AIM the methodology used to prepare the also concluded that, based on their
The Board noted that the Fund's rate profitability information. The Board review and representations made by AIM,
was: (i) comparable to the rate for the considered the overall profitability of these arrangements were consistent with
mutual fund; (ii) above the sub-advisory AIM, as well as the profitability of AIM regulatory requirements.
fee rates for the two Canadian funds, in connection with managing the Fund. The
although the advisory fee rates for such Board noted that AIM continues to operate The Board considered the fact that the
Canadian funds were comparable to the at a net profit, although increased Fund's uninvested cash and cash
Fund's; and (iii) below the advisory fee expenses in recent years have reduced the collateral from any securities lending
rate for the offshore fund. The Board noted profitability of AIM and its affiliates. arrangements may be invested in money
that AIM has not proposed any advisory fee The Board concluded that the Fund's market funds advised by AIM pursuant to
waivers or expense limitations for the advisory fees were fair and reasonable, procedures approved by the Board. The
Fund. However, the Board also noted that and that the level of profits realized Board noted that AIM will receive
AIM has recommended that the Board approve by AIM and its affiliates from providing advisory fees from these affiliated money
an amendment to the Fund's contractual services to the Fund was not excessive in market funds attributable to such
advisory fee schedule that would implement light of the nature, quality and extent investments, although AIM has
the contractual advisory fee waiver that of the services provided. The Board contractually agreed to waive the
had been formerly committed to by AIM, considered whether AIM is financially advisory fees payable by the Fund with
which waiver provided for lower effective sound and has the resources necessary to respect to its investment of uninvested
fee rates at all asset levels than the perform its obligations under the cash in these affiliated money market
Fund's current contractual advisory fee Fund's advisory agreement, and concluded funds through at least June 30, 2008.
schedule. The Board noted that AIM's that AIM has the financial resources nec-
recommendation was made in response to the essary to fulfill these obligations. The Board considered the contractual
recommendation of the independent Senior nature of this fee waiver and noted that
Officer that AIM consider whether the F. Independent Written Evaluation of the it remains in effect until at least June
advisory fee waivers for certain equity AIM Fund's Senior Officer 30, 2008. The Board concluded that the
Funds, including the Fund, should be Fund's investment of uninvested cash and
simplified. The Board concluded that it The Board noted that, upon their cash collateral from any securities
would be appropriate to approve the direction, the Senior Officer of the lending arrangements in the affiliated
proposed amendment to the Fund's Fund, who is independent of AIM and AIM's money market funds is in the best
contractual advisory fee schedule and that affiliates, had prepared an independent interests of the Fund and its
it was not necessary at this time to written evaluation to assist the Board in shareholders.
discuss with AIM whether to implement any determining the reasonableness of the
fee waivers or expense limitations for the proposed management fees of the AIM
Fund. Funds, including the Fund. The Board
noted that they had relied upon the
After taking account of the Fund's Senior Officer's written evaluation
contractual advisory fee rate, as well as instead of a competitive bidding process.
the comparative advisory fee information In determining whether to continue the
discussed above, the Board concluded that Fund's advisory agreement, the Board
the Fund's advisory fees were fair and considered the Senior Officer's written
reasonable. evaluation.
D. Economies of Scale and Breakpoints G. Collateral Benefits to AIM and its
Affiliates
The Board considered the extent to which
there are economies of scale in AIM's The Board considered various other
provision of advisory services to the Fund. benefits received by AIM and its
The Board also considered whether the Fund affiliates resulting from AIM's rela-
benefits from such economies of scale tionship with the Fund, including the
through contractual breakpoints in the fees received by AIM and its affiliates
Fund's advisory fee schedule or through for their provision of administrative,
advisory fee waivers or expense transfer agency and distribution services
limitations. The Board noted that the to the Fund. The Board considered the
performance of AIM and its affiliates in
providing these services and the
organizational structure employed by AIM
and its
30
AIM European Growth Fund
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year-end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code or to meet a specific state's requirement.
The Fund designates the following amounts or, if subsequently determined to
be different, the maximum amount allowable for its fiscal year ended October 31,
2007:
FEDERAL AND STATE INCOME TAX
<Table>
Long-Term Capital Gain Dividends $80,888,546
Qualified Dividend Income* 100%
Corporate Dividends Received Deduction* 0%
</Table>
* The above percentages are based on ordinary income dividends paid to
shareholders during the fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended January 31, 2007, April 30, 2007, July 31, 2007 and
October 31, 2007 were 99.74%, 99.64%, 99.84%, and 99.84%, respectively.
DISTRIBUTION INFORMATION
Shareholders were sent a notice from the Fund that set forth an estimate on a
per share basis of the source or sources from which the distribution was paid in
December of 2006. Subsequently, this estimate has been corrected in part. Listed
below is a written statement of the sources of this distribution, as corrected,
on generally accepted accounting principles ("GAAP").
<Table>
<Caption>
GAIN FROM SALE RETURN OF TOTAL
NET INCOME OF SECURITIES PRINCIPAL DISTRIBUTION
- --------------------------------------------------------------------------------
12/15/06 Class A $0.2970 $0.8968 $1.4923 $2.6861
12/15/06 Class B $0.0456 $0.8968 $1.4921 $2.4345
12/15/06 Class C $0.0456 $0.8968 $1.4921 $2.4345
12/15/06 Class R $0.2139 $0.8968 $1.4921 $2.6028
12/15/06 Investor Class $0.3067 $0.8968 $1.4928 $2.6963
</Table>
Please note that the information in the preceding chart is for financial
accounting purposes only. Shareholders should be aware that the tax treatment of
distributions may differ from their GAAP treatment. The tax treatment of
distributions was set forth in a Form 1099-DIV for the 2006 calendar year. This
information is being provided to comply with certain U.S. Securities and
Exchange Commission requirements.
31
AIM European Growth Fund
FOREIGN TAX CREDIT
For the fiscal year ended October 31, 2007, the amount of income received by the
fund from sources within foreign countries and possessions of the United States
was $1.1646 per share (representing a total of $44,244,750). Of the foreign
source income, $0.8887 per share is considered qualified dividend income.
Foreign source income with the required adjustments for qualified dividends is
$0.6580 per share. The amount of taxes paid by the fund to such countries for
the fiscal year end October 31, 2007 was $0.0543 per share (representing a total
of $2,063,145). The following table provides a breakdown by country of ordinary
income received and foreign taxes paid by the Fund during the fiscal year ended
October 31, 2007. The per share amount is based on shareholders of record on
December 13, 2007.
<Table>
<Caption>
FOREIGN SOURCE FOREIGN TAX FOREIGN QUALIFIED ADJUSTED FOREIGN
COUNTRY INCOME % PAID % DIVIDEND % SOURCE INCOME %
- -----------------------------------------------------------------------------------
Belgium 2.77% 4.45% 2.08% 3.30%
Cyprus 0.94% 1.16% 1.23% 0.72%
Denmark 0.47% 0.24% 0.11% 0.75%
Finland 0.51% 0.56% 0.26% 0.70%
France 11.15% 13.32% 6.24% 14.93%
Germany 8.49% 8.46% 3.96% 11.97%
Hungary 1.50% 0.00% 1.96% 1.14%
Greece 5.94% 0.00% 7.79% 4.52%
Ireland 4.92% 0.00% 6.45% 3.75%
Italy 2.97% 4.66% 2.18% 3.58%
The
Netherlands 5.63% 13.05% 6.11% 5.25%
Norway 7.88% 10.97% 7.94% 7.84%
Russia 1.16% 3.28% 1.52% 0.88%
Spain 2.55% 5.19% 2.43% 2.63%
Sweden 10.18% 23.30% 10.92% 9.61%
Switzerland 7.95% 9.48% 6.67% 8.94%
Turkey 3.36% 1.88% 4.40% 2.55%
United Kingdom 21.63% 0.00% 27.75% 16.94%
-------------------------------------------------------------------
TOTAL 100.00% 100.00% 100.00% 100.00%
_______________________________________________________________
===================================================================
</Table>
32
AIM European Growth Fund
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM International Mutual Funds (the
"Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each
trustee oversees 104 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. Each officer serves for a one year term or until their
successors are elected and qualified. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY
TRUST SINCE DURING PAST 5 YEARS TRUSTEE/ DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Interested Persons
- -------------------------------------------------------------------------------------------------------------------------
Martin L. Flanagan(1) -- 1960 2007 Director, Chief Executive Officer and None
Trustee President, Invesco Ltd. (ultimate parent
of AIM and a global investment
management firm) and, INVESCO PLC
(parent of AIM and a global investment
management firm); Chairman, A I M
Advisors, Inc. (registered investment
advisor); Director, Chairman, Chief
Executive Officer and President, IVZ
Inc. (holding company); and INVESCO
North American Holdings, Inc. (holding
company); Chairman and President,
INVESCO Group Services, Inc. (service
provider); Trustee, The AIM Family of
Funds(R); Vice Chairman, Investment
Company Institute; and Member of
Executive Board, SMU Cox School of
Business
Formerly: Chairman, Investment Company
Institute; President, Co-Chief Executive
Officer, Co-President, Chief Operating
Officer and Chief Financial Officer,
Franklin Resources, Inc. (global
investment management organization)
- -------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Director, Chief Executive Officer and None
Trustee, President and President, AIM Mutual Fund Dealer Inc.
Principal (registered broker dealer), A I M
Executive Officer Advisors, Inc., AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services
(registered investment advisor and
registered transfer agent) and 1371
Preferred Inc. (holding company);
Director, Chairman, Chief Executive
Officer and President, A I M Management
Group Inc. (financial services holding
company) and A I M Capital Management,
Inc. (registered investment advisor);
Director and President, INVESCO Funds
Group, Inc. (registered investment
advisor and register transfer agent) and
AIM GP Canada Inc. (general partner for
a limited partnership); Director, A I M
Distributors, Inc. (registered broker
dealer); Director and Chairman, AIM
Investment Services, Inc. (registered
transfer agent) and INVESCO
Distributors, Inc. (registered broker
dealer); Director, President and
Chairman, IVZ Callco Inc. (holding
company), INVESCO Inc. (holding company)
and AIM Canada Holdings Inc. (holding
company); Director and Chief Executive
Officer, AIM Trimark Corporate Class
Inc. (formerly AIM Trimark Global Fund
Inc.) (corporate mutual fund company)
and AIM Trimark Canada Fund Inc.
(corporate mutual fund company);
Trustee, President and Principal
Executive Officer of The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); Trustee and
Executive Vice President, The AIM Family
of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); and Manager,
PowerShares Capital Management LLC
Formerly: Director and Chairman, Fund
Management Company (registered broker
dealer); President and Principal
Executive Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); Chairman, AIM
Canada Holdings, Inc.; President, AIM
Trimark Global Fund Inc. and AIM Trimark
Canada Fund Inc.; and Director, Trimark
Trust (federally regulated Canadian
Trust Company)
- -------------------------------------------------------------------------------------------------------------------------
Independent Trustees
- -------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1992 Chairman, Crockett Technology Associates ACE Limited (insurance company);
Trustee and Chair (technology consulting company) and Captaris, Inc. (unified
messaging provider)
- -------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Retired Badgley Funds, Inc. (registered
Trustee investment company) (2 portfolios)
Formerly: Partner, law firm of Baker &
McKenzie
- -------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2003 Founder, Green, Manning & Bunch Ltd., None
Trustee (investment banking firm); and Director,
Policy Studies, Inc. and Van Gilder
Insurance Corporation
- -------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and None
Trustee private business corporations, including
the Boss Group Ltd. (private investment
and management); Reich & Tang Funds
(Chairman) (registered investment
company) (7 portfolios), Daily Income
Fund (4 portfolios), California Daily
Tax Free Income Fund, Inc., Connecticut
Daily Tax Free Income Fund, Inc. and New
Jersey Daily Municipal Fund, Inc.,
Annuity and Life Re (Holdings), Ltd.
(insurance company), and Homeowners of
America Holding Corporation (property
casualty company)
Formerly: Director, CompuDyne
Corporation (provider of product and
services to the public security market);
Director, President and Chief Executive
Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo;
Director of various affiliated Volvo
companies; and Director, Magellan
Insurance Company
- -------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Administaff
Trustee Century Group, Inc. (government affairs
company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P.
(cattle, hunting, corporate
entertainment), and Discovery Global
Education Fund (non-profit)
Formerly: Chief Executive Officer,
Texana Timber LP (sustainable forestry
company)
- -------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1991 Partner, law firm of Kramer Levin Director, Reich & Tang Funds) (7
Trustee Naftalis and Frankel LLP portfolios)
- -------------------------------------------------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired None
Trustee Formerly: Partner, Deloitte & Touche;
and Director, Mainstay VP Series Funds,
Inc. (25 portfolios)
- -------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan was appointed as Trustee of the Trust on February 24, 2007. Mr.
Flanagan is considered an interested person of the Trust because he is an
officer of the advisor to the Trust, and an officer and a director of
INVESCO PLC, parent of the advisor to the Trust.
(2) Mr. Taylor 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.
33
TRUSTEES AND OFFICERS--(CONTINUED)
AIM European Growth Fund
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY TRUSTEE/
TRUST SINCE DURING PAST 5 YEARS DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Other Officers
- -------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer N/A
Senior Vice President and of The AIM Family of Funds--Registered
Senior Officer Trademark--
Formerly: Director of Compliance and
Assistant General Counsel, ICON
Advisers, Inc.; Financial Consultant,
Merrill Lynch; General Counsel and
Director of Compliance, ALPS Mutual
Funds, Inc.
- -------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, N/A
Senior Vice President, Chief Secretary and General Counsel, A I M
Legal Officer and Secretary Management Group Inc., A I M Advisors,
Inc. and A I M Capital Management, Inc.;
Director, Vice President and Secretary,
AIM Investment Services, Inc. and
INVESCO Distributors, Inc.; Director,
Senior Vice President and Secretary,
A I M Distributors, Inc.; Director and
Vice President, INVESCO Funds Group
Inc.; Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--; and
Manager, PowerShares Capital Management
LLC
Formerly: Director, Vice President and
Secretary, Fund Management Company; Vice
President, A I M Capital Management,
Inc.; Chief Operating Officer, Senior
Vice President, General Counsel and
Secretary, Liberty Ridge Capital, Inc.
(an investment adviser); Vice President
and Secretary, PBHG Funds (an investment
company); Vice President and Secretary,
PBHG Insurance Series Fund (an
investment company); General Counsel and
Secretary, Pilgrim Baxter Value
Investors (an investment adviser); Chief
Operating Officer, General Counsel and
Secretary, Old Mutual Investment
Partners (a broker-dealer); General
Counsel and Secretary, Old Mutual Fund
Services (an administrator); General
Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder
servicing center); Executive Vice
President, General Counsel and
Secretary, Old Mutual Capital, Inc. (an
investment adviser); and Vice President
and Secretary, Old Mutual Advisors Funds
(an investment company)
- -------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, INVESCO PLC; N/A
Vice President and Vice President of The AIM Family of
Funds--Registered Trademark--
Formerly: Senior Vice President, A I M
Management Group Inc. (financial
services holding company); Senior Vice
President and Chief Compliance Officer,
A I M Advisors, Inc. and The AIM Family
of Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc. and A I M
Distributors, Inc.; Vice President, AIM
Investment Services, Inc. and Fund
Management Company; Senior Vice
President and Chief Compliance Officer
of The AIM Family of Funds--Registered
Trademark--; and Senior Vice President
and Compliance Director, Delaware
Investments Family of Funds
- -------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 Senior Vice President and General
Vice President Counsel, INVESCO PLC; Director, INVESCO
Funds Group, Inc.; Director and
Secretary, IVZ, Inc. and INVESCO Group
Services, Inc.; Secretary, INVESCO North
American Holdings, Inc.; and Vice
President of The AIM Family of
Funds--Registered Trademark--
Formerly: Director, Senior Vice N/A
President, Secretary and General
Counsel, A I M Management Group Inc. and
A I M Advisors, Inc.; Senior Vice
President, A I M Distributors, Inc.;
Director, General Counsel and Vice
President, Fund Management Company; Vice
President, A I M Capital Management,
Inc. and AIM Investment Services, Inc.;
Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--;
Director and Vice President, INVESCO
Distributors, Inc.; Chief Executive
Officer and President, INVESCO Funds
Group, Inc.; and Senior Vice President
and General Counsel, Liberty Financial
Companies, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Sidney M. Dilgren -- 1961 2004 Vice President, A I M Advisors, Inc. and N/A
Vice President, Principal A I M Capital Management, Inc.; and Vice
Financial Officer and President, Treasurer and Principal
Treasurer Financial Officer of The AIM Family of
Funds--Registered Trademark--
Formerly: Fund Treasurer, A I M
Advisors, Inc.; Senior Vice President,
AIM Investment Services, Inc.; and Vice
President, A I M Distributors, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2004 Head of INVESCO's World Wide Fixed N/A
Vice President Income and Cash Management Group;
Director of Cash Management and Senior
Vice President, A I M Advisors, Inc. and
A I M Capital Management, Inc; Executive
Vice President, A I M Distributors,
Inc.; Senior Vice President, A I M
Management Group Inc.; Vice President,
The AIM Family of Funds--Registered
Trademark-- (other than AIM Treasurer's
Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust);
and President and Principal Executive
Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
Formerly: Director and President, Fund
Management Company; Chief Cash
Management Officer and Managing
Director, A I M Capital Management,
Inc.; Vice President, A I M Advisors,
Inc. and The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
- -------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance N/A
Anti-Money Laundering Officer, A I M Advisors, Inc., A I M
Compliance Officer Capital Management, Inc., A I M
Distributors, Inc., AIM Investment
Services, Inc., AIM Private Asset
Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering
Compliance Officer, Fund Management
Company; and Manager of the Fraud
Prevention Department, AIM Investment
Services, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, A I M Management N/A
Chief Compliance Officer Group Inc.; Senior Vice President and
Chief Compliance Officer, A I M
Advisors, Inc. and A I M Capital
Management, Inc.; Chief Compliance
Officer of The AIM Family of
Funds--Registered Trademark--, INVESCO
Global Asset Management (N.A.), Inc.,
(registered investment advisor), INVESCO
Institutional (N.A.), Inc., (registered
investment advisor), INVESCO Private
Capital Investments, Inc. (holding
company), INVESCO Private Capital, Inc.
(registered investment advisor) and
INVESCO Senior Secured Management, Inc.
(registered investment advisor); and
Vice President, A I M Distributors, Inc.
and AIM Investment Services, Inc.
Formerly: Vice President, A I M Capital
Management, Inc. and Fund Management
Company; Global Head of Product
Development, AIG-Global Investment
Group, Inc.; and Chief Compliance
Officer and Deputy General Counsel,
AIG-SunAmerica Asset Management
- -------------------------------------------------------------------------------------------------------------------------
</Table>
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 1.800.959.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, PricewaterhouseCoopers
Suite 100 11 Greenway Plaza Inc. LLP
Houston, TX 77046-1173 Suite 100 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Ballard Spahr INDEPENDENT TRUSTEES AIM Investment State Street Bank and
Andrews & Ingersoll, LLP Kramer, Levin, Naftalis Services, Inc. Trust
1735 Market Street, 51st & Frankel LLP P.O. Box 4739 Company
Floor 1177 Avenue of the Houston, TX 77210-4739 225 Franklin Street
Philadelphia, PA 19103-7599 Americas Boston, MA 02110-2801
New York, NY 10036-2714
</Table>
34
[EDELIVERY FUND HOLDINGS AND PROXY VOTING INFORMATION
GO PAPERLESS
AIMINVESTMENTS.COM/EDELIVERY The Fund provides a complete list of its holdings four times in
GRAPHIC] each fiscal year, at the quarter-ends. For the second and
fourth quarters, the lists appear in the Fund's semiannual and
REGISTER FOR EDELIVERY annual reports to shareholders. For the first and third
quarters, the Fund files the lists with the Securities and
eDelivery is the process of receiving your fund and account Exchange Commission (SEC) on Form N-Q. The most recent list of
information via e-mail. Once your quarterly statements, tax portfolio holdings is available at AIMinvestments.com. From our
forms, fund reports, and prospectuses are available, we will send home page, click on Products & Performance, then Mutual Funds,
you an e-mail notification containing links to these documents. then Fund Overview. Select your Fund from the drop-down menu
For security purposes, you will need to log in to your account to and click on Complete Quarterly Holdings. Shareholders can also
view your statements and tax forms. look up the Fund's Forms N-Q on the SEC Web site at sec.gov.
Copies of the Fund's Forms N-Q may be reviewed and copied at
WHY SIGN UP? the SEC Public Reference Room in Washington, D.C. You can
obtain information on the operation of the Public Reference
Register for eDelivery to: Room, including information about duplicating fee charges, by
calling 202-942-8090 or 800-732-0330, or by elec- tronic
o save your Fund the cost of printing and postage. request at the following e-mail address: publicinfo@sec.gov.
The SEC file numbers for the Fund are 811-06463 and 033-44611.
o reduce the amount of paper you receive.
A description of the policies and procedures that the Fund uses
o gain access to your documents faster by not waiting for the to determine how to vote proxies relating to portfolio
mail. securities is available without charge, upon request, from our
Client Services depart- ment at 800-959-4246 or on the AIM Web
o view your documents online anytime at your convenience. site, AIMinvestments.com. On the home page, scroll down and
click on Proxy Policy. The infor- mation is also available on
o save the documents to your personal computer or print them out the SEC Web site, sec.gov.
for your records.
Information regarding how the Fund voted proxies related to its
HOW DO I SIGN UP? portfolio securities during the 12 months ended June 30, 2007,
is available at our Web site. Go to AIMinvestments.com, access
It's easy. Just follow these simple steps: the About Us tab, click on Required Notices and then click on
Proxy Voting Activity. Next, select the Fund from the drop-down
1. Log in to your account. menu. The information is also available on the SEC Web site,
sec.gov.
2. Click on the "Service Center" tab.
If used after January 20, 2008, this report must be accompanied
3. Select "Register for eDelivery" and complete the consent by a Fund fact sheet or by an AIM Quarterly Performance Review
process. for the most recent quarter-end. Mutual funds and
exchange-traded funds distributed by A I M Distributors, Inc.
This AIM service is provided by AIM
Investment Services, Inc. EGR-AR-1 A I M Distributors, Inc.
[AIM INVESTMENTS LOGO]
-- REGISTERED TRADEMARK --
AIM Global Aggressive
Growth Fund
Annual Report to Shareholders o October 31, 2007
INTERNATIONAL/
GLOBAL EQUITY
International/
Global Growth
Table of Contents
Letters to Shareholders ......... 2
Performance Summary ............. 4
Management Discussion ........... 4
Long-term Fund Performance ...... 6
Supplemental Information ........ 8
Schedule of Investments ......... 9
Financial Statements ............ 13
Notes to Financial Statements ... 15
Financial Highlights ............ 22
Auditor's Report ................ 25
Fund Expenses ................... 26
Approval of Advisory Agreement .. 27 [COVER GLOBE IMAGE]
Tax Information ................. 29
Trustees and Officers ........... 30
[AIM INVESTMENT SOLUTIONS]
[GRAPHIC] [GRAPHIC]
[DOMESTIC [FIXED
EQUITY] INCOME]
[GRAPHIC] [GRAPHIC] [GRAPHIC]
[TARGET [TARGET [DIVERSIFIED
RISK] MATURITY] PORTFOLIOS]
[GRAPHIC] [GRAPHIC]
[SECTOR [INTERNATIONAL/
EQUITY] GLOBAL EQUITY]
[AIM INVESTMENTS LOGO]
- -- REGISTERED TRADEMARK --
AIM Global Aggressive Growth Fund
Dear Shareholders of the AIM Family of Funds:
I'm pleased to provide you with this report, which includes a discussion of how your Fund was managed
during the period under review and factors that affected its performance. The following pages contain
important information that answers questions you may have about your investment.
[TAYLOR
PHOTO] Despite notable volatility at points throughout the fiscal year ended October 31, 2007, major stock
market indexes in the U.S. and abroad generally performed well. Reasons for their favorable performance
included positive economic growth, particularly overseas; strong corporate profits; and action by the U.S.
Federal Reserve Board (the Fed) to reassure skittish markets, among other factors.
Philip Taylor
At its September 18, 2007, meeting, the Fed cut the federal funds target rate for the first time since
June 2003.(1) The cut followed 17 rate increases from June 2004 to June 2006(1) and was intended to address
investor concerns about a weak housing market generally and problems in the subprime mortgage market
specifically. The Fed's action triggered an immediate and broad stock market rally. The Fed cut this key
interest rate again on October 31, 2007.(1)
At AIM Investments --REGISTERED TRADEMARK--, we know that market conditions change--often suddenly and
sometimes dramatically. We can help you deal with market volatility by offering a broad range of mutual
funds, including:
o Domestic, global and international equity funds
o Taxable and tax-exempt fixed-income funds
o Allocation portfolios, with risk/return characteristics to match your needs
o AIM Independence Funds--target-maturity funds that combine retail mutual funds and PowerShares
--REGISTERED TRADEMARK-- exchange-traded funds--with risk/return characteristics that change as your
target retirement date nears
I encourage you to talk with your financial advisor if you have concerns about your portfolio. We
believe in the value of working with a trusted financial advisor who can recommend AIM funds that are
appropriate for your portfolio and that address your long-term investment goals and risk tolerance
regardless of prevailing short-term market conditions.
In conclusion
My colleague, Bob Graham, recently announced his decision to step down as vice chair of the AIM Funds
board of directors. In 1976, Bob was one of three men who co-founded AIM. In the three decades since, he
has been instrumental in transforming AIM from a small investment management firm into one of America's
most respected mutual fund companies--and, in 1997, into a global independent retail and institutional
investment manager.
In May, with shareholder approval, AIM Investments' parent company changed its name from AMVESCAP PLC
to Invesco Ltd., uniting our worldwide operations and global expertise under one new name. While the name
of our parent company may be new to you, I can assure you that our commitment to excellent customer
service remains unchanged. Our highly trained, courteous client service representatives are eager to
answer your questions, provide you with product information or assist you with account transactions. I
encourage you to give us an opportunity to serve you by calling us at 800-959-4246.
We at AIM are committed to helping you achieve your financial goals. We work every day to earn your
trust, and we're grateful for the confidence you've placed in us.
Sincerely,
/S/ PHILIP TAYLOR
Philip Taylor
President - AIM Funds
CEO, AIM Investments
December 17, 2007
Source: (1)U.S. Federal Reserve Board
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
2
AIM Global Aggressive Growth Fund
Dear Fellow Shareholders:
In overseeing the management of the AIM family of funds on your behalf, your Board of Trustees of the AIM
Funds continues to focus on improved investment performance, reduced shareholder costs, and high ethical
standards.
[CROCKETT
PHOTO] Your Board welcomes two new members: Marty Flanagan, President and CEO of INVESCO, AIM's parent
company, and Phil Taylor, who was named CEO of AIM Investments --REGISTERED TRADEMARK-- in April 2006.
Robert Graham, who has given more than 30 years of leadership to the company and the mutual fund industry
since founding AIM in 1976, has retired, stepping down in the process from his most recent role as vice
Bruce L. Crockett chairman of the Board. We thank Bob for his many contributions and wish him a long and happy future.
Our review of fund performance has shown healthy progress, but the process is necessarily one of
continuous improvement. In general, as of October 31, 2007, we have seen persistent investment discipline
and more consistently good results. While this statement may not apply to every AIM Fund all the time, as
I write this letter, the overall trend in fund management and performance has been positive.
The investment management talent at AIM has recently been enhanced by the promotion of Karen Dunn
Kelley to Head of INVESCO's Worldwide Fixed Income as well as Director of AIM Global and Cash Management,
with responsibility for all fixed income and money market funds that serve both institutional and
individual investors. Under Karen's direction, AIM's cash management organization grew to one of the
world's largest and most respected, with top-tier performance. The operations now combined under her
charge represent more than $150 billion in assets, 120 investment professionals, and products that span
the entire yield curve (as of October 31, 2007).
In other news, your Board took a more active role in preparing for "proxy season," the period when fund
managers must vote the shares held by their funds "for" or "against" various proposals on the ballots of
the issuing companies. Beginning in the 2007 proxy season, AIM implemented new proxy voting policies,
developed by management in conjunction with an ad hoc Board committee, which provided a solid framework
for properly evaluating and executing the many decisions the AIM Funds are required to make to vote
shares.
In general, the AIM Funds voted for proposals that would allow shareholders a greater role in election
of directors, proxy access and "say for pay." The AIM Funds voted against directors whom AIM believed
failed to govern well in cases of corporate mismanagement, such as the backdating of options grants, and
against "poison pill" and "take under" proposals that would favor the financial interests of managers at
the expense of investors in the case of a merger or acquisition. You can view the proxy votes cast for
your fund by going to AIMinvestments.com. Click the "About Us" tab, then go to "Required Notices" and
"Proxy Voting Activity."
Additionally, your Board raised the amount its members are recommended to invest in the AIM Funds
within three years of joining the Board, with the goal of aligning our interests even more closely with
yours.
Furthermore, at our June meeting we renewed the investment advisory contracts between the AIM Funds and
AIM for another year, applying the same rigorous evaluation process that was enhanced and formalized in
2005. For more information on this process, please visit AIMinvestments.com. Click on the "Products and
Performance" tab and go to "Investment Advisory Agreement Renewals."
Your Board's ability to best represent your interests depends on our knowledge of your opinions and
concerns. Please send me an email (bruce@brucecrockett.com) with your thoughts on the following:
1) How important is it to you to hear about your Board's decisions and activities in these letters?
2) What other information (on overall performance, specific funds, managers, etc.) would make the
letters more meaningful to you?
3) Would you prefer that communications from your Board continue to be delivered in paper form by
regular mail or be sent electronically by email?
If you would prefer to communicate through a quick online survey, please go to AIMinvestments.com and
provide your responses there.
We need to hear from you to do our best job, and I look forward to your responses.
Sincerely,
/S/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Directors
December 17, 2007
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
3
AIM Global Aggressive Growth Fund
Management's discussion of Fund performance geographic region, we select investments for the
Fund by using a bottom-up investment approach,
================================================================================ which means that we construct the Fund primarily
on a stock-by-stock basis. We focus on the
PERFORMANCE SUMMARY strengths of individual companies rather than
sectors, countries or market-cap trends.
Steady market gains over the first half of the fiscal year were aided by
improving corporate earnings and record levels of merger and acquisition We believe disciplined sell decisions are key
activity. The second half of the fiscal year was characterized by a more uneven to successful investing. We consider selling a
climb by markets. Market volatility increased due to negative news in areas of stock for one of the following reasons:
the U.S. economy, as well as problems emanating from the U.S. subprime mortgage
market which spread out globally. o A company's fundamentals deteriorate or it
posts disappointing earnings.
Within this environment, AIM Global Aggressive Growth Fund, excluding
applicable sales charges, significantly outperformed both its broad market and o A stock's price seems overvalued.
style-specific indexes.o We attribute our comparative success to strong stock
selection across Asia, North America and Europe. Our relatively larger exposure o A more attractive opportunity becomes
to both mid-cap and emerging market stocks, which performed strongly during the available
fiscal year, also provided a competitive advantage.
Market conditions and your Fund
Your Fund's long-term performance appears later in this report.
Although the U.S. market delivered positive
FUND VS. INDEXES results over the fiscal year, international
markets continued their ongoing rally (now 5
Total returns, 10/31/06-10/31/07, excluding applicable sales charges. If sales years old) with particular strength in Europe,
charges were included, returns would be lower. as positive economic data and a strong currency
drove returns higher in the region.1 While all
Class A Shares 34.62% benchmark countries finished the period in
Class B Shares 33.58 positive territory, Japan stood out as it
Class C Shares 33.62 significantly lagged. Recent economic data
MSCI World Index--SERVICE MARK--* (Broad Market Index) 20.39 pointed to a lack of consumer and investor
MSCI World Growth Index* (Style-Specific Index) 24.05 confidence, and leading indicators suggested a
Lipper Global Small/Mid-Cap Growth Category Average(o) (Peer Group Index) 29.59 recession in Japan is not out of the question.
SOURCE: *LIPPER INC. Emerging markets enjoyed strong investor
optimism as many local markets hit record highs,
================================================================================ particularly China and India as well as
commodity related companies within the asset
How we invest marily on identifying quality class.
companies that have experienced, or
When selecting stocks for your Fund, we exhibit the potential for, (continued)
employ a disciplined investment accelerating or above average earnings
strategy that emphasizes fundamental growth but whose prices do not fully
research, supported by both reflect these attributes.
quantitative analysis and portfolio
construction techniques. Our EQV While research responsibilities
(Earnings, Quality and Valuation) within the portfolio management team
strategy focuses pri- are focused by
======================================= ====================================== =================================================
PORTFOLIO COMPOSITION TOP FIVE COUNTRIES* TOP 10 EQUITY HOLDINGS*
By Sector 1. U.S.A. 29.3% 1. Syngenta A.G. (Switzerland) 3.0%
Consumer Discretionary 22.5% 2. United Kingdom 9.7 2. Vimpel-Communications-ADR (Russia) 2.6
Financials 19.8 3. Germany 5.1 3. Intralot S.A. (Greece) 2.2
Industrials 13.9 4. Switzerland 4.9 4. Standard Bank Group Ltd. (South Africa) 2.0
Health Care 8.7 5. Canada 4.8 5. Deutsche Boerse A.G. (Germany) 2.0
Materials 7.8 6. Anglo Irish Bank Corp. PLC (Ireland) 1.9
Information Technology 6.0 7. Shire PLC (United Kingdom) 1.6
Energy 5.2 Total Net Assets $1.20 billion 8. USG People N.V. (Netherlands) 1.6
Telecommunication Services 4.4 9. McDermott International, Inc. 1.6
Consumer Staples 3.8 Total Number of Holdings* 101 10. International Power PLC
Utilities 3.3 (United Kingdom) 1.6
Money Market Funds Plus Other
Assets Less Liabilities 4.6
The Fund's portfolio is subject to change, and there is no assurance that the Fund will continue to hold any particular security.
*Excluding money market fund holdings.
======================================= ====================================== =================================================
4
AIM Global Aggressive Growth Fund
Within this environment, Fund Holdings in the consumer discretionary James G. Birdsall
performance was broad-based, with the Fund and consumer staples segments of the [BIRDSALL Portfolio manager, is lead
delivering double-digit returns and market were big contributors to both PHOTO] manager of AIM Global
outperforming its style-specific index, the absolute and relative results as well. Aggressive Growth Fund with
MSCI World Growth Index, across all regions Our exposure across these segments was respect to the domestic portion of the
and almost all sectors.(1) From an allocation dominated by foreign holdings since we Fund's portfolio. He joined AIM in 1997.
perspective, the Fund's underweight continued to believe that the consumer Mr. Birdsall earned his B.B.A. with a
position versus the style-specific index abroad, with lower debt and a higher concentration in finance from Stephen F.
across both the U.S. and Japan helped savings rate, is financially healthier Austin State University. He also earned
relative results. However, consistent with than the U.S. consumer. Strong stock an M.B.A. with a concentration in finance
the Fund's bottom-up investment process, contributors included Greek operator and and international business from the
security selection--rather than allocation technology provider to lottery systems University of St. Thomas.
decisions--was the primary driver of Intralot and German sports shoe and
absolute and relative performance results. apparel manufacturer Puma. Jason T. Holzer
The Fund's global "off the beaten path" [HOLZER Chartered Financial Analyst,
mandate enabled us to identify and invest In contrast, although we benefited PHOTO] senior portfolio manager, is
in several strong performing high quality from the performance of our Canada-based lead manager of AIM Global
growth companies not represented in the materials stock Sherritt and Swiss Aggressive Growth Fund with respect to
MSCI World Growth Index. fertilizer/chemical manufacture Syngenta, the Fund's investments in Europe and
we missed out on strong performing metals Canada. Mr. Holzer joined AIM in 1996. He
From a sector perspective, strong stock and mining index heavyweights, such as earned a B.A. in quantitative economics
selection across telecommunication services Rio Tinto and BHP Billiton (not Fund and an M.S. in engineering economic
was a key driver of both absolute and holdings). Similarly, in the information systems from Stanford University.
relative results. Vimpel Communications, technology sector, Apple, Research In
one of the leading wireless operators in Motion and Google, none of which were Shuxin Cao
Russia was a top performer. The stock, held in the Fund, performed extremely [CAO Chartered Financial Analyst,
which benefited from increased operations well, benefiting the index and detracting PHOTO] portfolio manager, is lead
and profit margins in Russia and other from our relative results. We were manager of AIM Global
eastern European markets, was the Fund's cautious from a valuation perspective and Aggressive Growth Fund with respect to
largest contributor. The stock was up over stayed out of these stocks. the Fund's investments in Asia Pacific
150% for the period. and Latin America. He joined AIM in 1997.
Over the past 12 months, the Fund has Mr. Cao graduated from Tianjin Foreign
Holdings in the energy sector were a experienced strong double-digit returns. Language Institute with a B.A. in
source of absolute and relative success as It would be imprudent for us to suggest English. He also earned an M.B.A. from
well. Our bottom-up stock selection process that such a level of performance is Texas A&M University and is a Certified
enabled us to identify several strong sustainable over the long term. Public Accountant.
performing opportunities in the oil Regardless of macro-economic trends, the
services industry, a segment of the market Fund maintains a disciplined strategy of Borge Endresen
that has seen huge demand over the past selecting attractive investment [ENDRESEN Chartered Financial Analyst,
year. Top performers included Petroleum Geo opportunities based on its EQV (Earnings, PHOTO] portfolio manager, is
Services (Norway) and U.S. based National Quality and Valuation) investment manager of AIM Global
Oilwell Varco and McDermott, each of which strategy. Aggressive Growth Fund. He joined AIM in
was up more than 100% for the period. We 1999 and graduated summa cum laude from
trimmed back our position in some of these We welcome new shareholders who the University of Oregon with a B.S. in
stocks due to valuations, taking profits invested in the Fund during the reporting finance. He also earned an M.B.A. from
and moving assets into other attractively period and thank all our shareholders for The University of Texas at Austin.
valued opportunities. your continued investment in AIM Global
Aggressive Growth Fund. Assisted by the Asia Pacific/Latin
Although the financials segment of the America Team, Europe/Canada Team and
market was hard hit by U.S. subprime Source: (1)Lipper Inc. Large/Multi-Cap Growth Team.
lending issues, holdings in the portfolio
held up well, delivering results that The views and opinions expressed in
significantly outperformed the management's discussion of Fund
style-specific index. This success was performance are those of A I M Advisors,
driven by the Fund's lack of exposure to Inc. These views and opinions are subject
large global banking stocks. Instead, solid to change at any time based on factors
stock selection across insurance related such as market and economic conditions.
stocks and smaller banking stocks in faster These views and opinions may not be
growing emerging markets, which are relied upon as investment advice or
relatively inexpensive and less exposed to recommendations, or as an offer for a
U.S. events, enabled the Fund to more than particular security. The information is
double index sector returns. not a complete analysis of every aspect
of any market, country, industry,
security or the Fund. Statements of fact
are from sources considered reliable, but
A I M Advisors, Inc. makes no
representation or warranty as to their
completeness or accuracy. Although
historical performance is no guarantee of
future results, these insights may help
you understand our investment management
philosophy.
See important Fund and index
disclosures later in this report.
5
AIM Global Aggressive Growth Fund
Your Fund's long-term performance
Past performance cannot guarantee of funds reflects fund expenses and types of charts in illustrating changes
comparable future results. management fees; performance of a market in value during the early years shown in
index does not. Performance shown in the the chart. The vertical axis, the one
The data shown in the chart include chart and table(s) does not reflect that indicates the dollar value of an
reinvested distributions, applicable sales deduction of taxes a shareholder would investment, is constructed with each
charges, Fund expenses and management fees. pay on Fund distributions or sale of segment representing a percent change in
Results for Class B shares are calculated Fund shares. Performance of the indexes the value of the investment. In this
as if a hypothetical shareholder had does not reflect the effects of taxes. chart, each segment represents a
liquidated his entire investment in the doubling, or 100% change, in the value of
Fund at the close of the reporting period This chart, which is a logarithmic the investment. In other words, the space
and paid the applicable contingent deferred chart, presents the fluctuations in the between $5,000 and $10,000 is the same
sales charges. Index results include value of the Fund and its indexes. We size as the space between $10,000 and
reinvested dividends, but they do not believe that a logarithmic chart is more $20,000, and so on.
reflect sales charges. Performance of an effective than other
index
6
====================================================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT
INDEX DATA FROM 8/31/94, FUND DATA FROM 9/15/94
LIPPER
AIM GLOBAL AGGRESSIVE AIM GLOBAL AGGRESSIVE GLOBAL SMALL/MID-CAP
GROWTH FUND GROWTH FUND MSCI WORLD GROWTH GROWTH FUNDS CATEGORY
DATE -CLASS A SHARES -CLASS B SHARES MSCI WORLD INDEX(1) INDEX(1) AVERAGE(1)
8/31/94 $10000 $10000 $10000
9/94 $ 9459 $10010 9735 9770 9985
10/94 9658 10210 10010 10004 10105
11/94 9431 9970 9573 9605 9667
12/94 9516 10060 9664 9749 9704
1/95 9185 9710 9516 9600 9304
2/95 9516 10050 9653 9747 9352
3/95 9865 10420 10116 10222 9523
4/95 10224 10789 10466 10601 9813
5/95 10592 11169 10553 10685 9958
6/95 11320 11939 10548 10698 10291
7/95 12415 13079 11073 11222 11079
8/95 12255 12909 10824 10906 11045
9/95 12576 13239 11137 11288 11215
10/95 12369 13020 10959 11165 10940
11/95 12426 13069 11337 11520 10983
12/95 12575 13217 11666 11782 11184
1/96 12754 13407 11875 11991 11379
2/96 13400 14079 11945 12077 11741
3/96 13684 14360 12141 12253 11986
4/96 14584 15304 12424 12508 12696
5/96 15248 15996 12432 12581 12975
6/96 14945 15674 12493 12667 12786
7/96 13901 14571 12049 12195 12047
8/96 14621 15314 12185 12296 12429
9/96 15171 15886 12659 12856 12654
10/96 14944 15635 12745 12894 12424
11/96 15380 16097 13457 13547 12663
12/96 15532 16237 13239 13281 12755
1/97 15893 16609 13396 13466 12891
2/97 15475 16167 13547 13615 12619
3/97 14925 15585 13277 13296 12133
4/97 14716 15363 13708 13906 12043
5/97 16187 16889 14552 14717 13076
6/97 17078 17813 15275 15528 13640
7/97 17770 18515 15976 16245 14032
8/97 16963 17672 14905 15036 13697
9/97 18102 18846 15712 15901 14438
10/97 16386 17059 14883 14884 13487
11/97 15930 16568 15144 15261 13073
12/97 16158 16798 15326 15400 13070
1/98 15712 16336 15750 16002 12924
2/98 17248 17922 16813 17131 14107
3/98 18225 18915 17520 17722 14978
4/98 18575 19286 17689 17824 15333
5/98 18157 18835 17465 17624 14877
6/98 17948 18614 17876 18377 14859
7/98 17645 18292 17845 18345 14455
8/98 14222 14731 15463 16195 11913
9/98 14222 14731 15734 16556 11812
10/98 15046 15574 17153 17994 12340
11/98 15900 16447 18171 19152 13112
12/98 16790 17360 19055 20549 13986
1/99 17216 17791 19470 21271 14418
2/99 16051 16586 18949 20423 13743
3/99 16611 17158 19735 21175 14392
4/99 17294 17852 20511 21137 15210
5/99 16905 17439 19758 20398 15085
6/99 18260 18834 20677 21649 16428
7/99 18478 19045 20612 21407 16797
8/99 18677 19236 20573 21668 17021
9/99 19180 19747 20371 21702 17234
10/99 20810 21424 21427 23121 18171
11/99 24167 24865 22027 24474 21690
12/99 28640 29450 23807 27274 26154
====================================================================================================================================
Source: (1)Lipper Inc.
====================================================================================================================================
[MOUNTAIN CHART]
1/00 29250 30065 22441 25562 26348
2/00 36758 37759 22499 26448 32757
3/00 33579 34485 24051 28022 30850
4/00 29589 30374 23031 26140 27316
5/00 26651 27343 22445 24588 25233
6/00 28919 29665 23198 26089 27897
7/00 28269 28985 22543 24775 26580
8/00 30708 31466 23273 25652 29086
9/00 27868 28540 22033 23378 28079
10/00 25858 26474 21661 22395 25751
11/00 21690 22203 20343 20666 22660
12/00 22343 22865 20670 20275 23978
1/01 23851 24386 21068 20887 24484
2/01 20056 20499 19285 18221 21896
3/01 18033 18428 18015 16745 19464
4/01 19578 20002 19343 18095 21303
5/01 19641 20056 19091 17730 21557
6/01 19226 19625 18490 17110 21144
7/01 18371 18738 18243 16856 20060
8/01 17340 17675 17365 15816 19200
9/01 15091 15376 15832 14501 16372
10/01 15808 16102 16134 15118 17339
11/01 16323 16626 17086 16266 18565
12/01 16625 16922 17192 16345 19269
1/02 16361 16640 16670 15811 18786
2/02 16109 16384 16523 15853 18230
3/02 16837 17124 17284 16244 19420
4/02 16750 17016 16664 15548 19199
5/02 16662 16923 16692 15464 18997
6/02 15909 16156 15677 14570 17879
7/02 14477 14689 14354 13542 15945
8/02 14427 14635 14378 13538 15833
9/02 13496 13679 12795 12194 14646
10/02 13823 14016 13738 13142 14919
11/02 14275 14460 14477 13619 15701
12/02 13872 14043 13773 13093 14983
1/03 13584 13747 13354 12620 14655
2/03 13320 13478 13120 12484 14268
3/03 13332 13478 13077 12591 14238
4/03 14175 14339 14235 13489 15476
5/03 15180 15334 15046 14044 16968
6/03 15506 15656 15304 14241 17522
7/03 15996 16154 15613 14516 18332
8/03 16586 16745 15949 14807 19412
9/03 16776 16919 16045 14891 19514
10/03 17945 18090 16995 15777 21063
11/03 18372 18521 17252 16000 21526
12/03 19314 19461 18333 16769 22279
1/04 20056 20187 18627 17112 23070
2/04 20710 20845 18939 17320 23525
3/04 20722 20858 18814 17146 23658
4/04 20119 20238 18428 16804 22916
5/04 20395 20508 18582 16970 22851
6/04 20733 20830 18978 17200 23369
7/04 19440 19526 18358 16376 22079
8/04 19665 19740 18439 16324 22004
9/04 20495 20562 18788 16652 23041
10/04 21350 21423 19248 17060 23658
11/04 22857 22916 20259 17922 25382
12/04 24025 24074 21032 18597 26534
1/05 23722 23766 20558 18096 26314
2/05 24690 24721 21210 18557 27239
3/05 23962 23994 20800 18202 26593
4/05 23121 23121 20345 17802 25480
5/05 23687 23671 20706 18264 26346
6/05 24353 24329 20885 18349 27142
7/05 25471 25431 21615 19110 28503
8/05 26135 26090 21778 19280 28903
9/05 26927 26857 22344 19706 29648
10/05 25885 25793 21801 19287 28411
11/05 27016 26910 22528 19913 29649
12/05 28200 28073 23027 20347 30890
1/06 30334 30178 24055 21285 33281
2/06 30677 30504 24019 21067 33134
3/06 31809 31605 24548 21591 34503
4/06 33008 32778 25293 22091 35706
====================================================================================================================================
====================================================================================================================================
[MOUNTAIN CHART]
5/06 31282 31041 24429 21240 33514
6/06 30728 30476 24422 21205 32960
7/06 30664 30390 24574 21034 32136
8/06 31467 31168 25212 21592 32982
9/06 31599 31281 25513 21782 33356
10/06 33062 32707 26449 22558 34935
11/06 34497 34107 27097 23127 36435
12/06 35580 35157 27648 23429 37236
1/07 36093 35632 27974 23799 38065
2/07 36230 35746 27828 23650 38254
3/07 37436 36908 28338 24105 39286
4/07 38990 38428 29588 25163 40585
5/07 40889 40277 30417 25896 42198
6/07 40468 39834 30182 25790 41977
7/07 40059 39407 29514 25475 41600
8/07 39759 39080 29491 25536 40983
9/07 41989 41253 30894 26928 42873
10/07 44532 45106 31841 27984 45211
====================================================================================================================================
AIM Global Aggressive Growth Fund
=========================================== =========================================
AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/07, including applicable sales As of 9/30/07, the most recent calendar
charges quarter-end, including applicable sales
charges
CLASS A SHARES
Inception (9/15/94) 12.05% CLASS A SHARES
10 Years 9.89 Inception (9/15/94) 11.64%
5 Years 24.92 10 Years 8.17
1 Year 27.22 5 Years 24.06
1 Year 25.55
CLASS B SHARES
Inception (9/15/94) 12.16% CLASS B SHARES
10 Years 10.02 Inception (9/15/94) 11.74%
5 Years 25.37 10 Years 8.31
1 Year 28.58 5 Years 24.54
1 Year 26.88
CLASS C SHARES
Inception (8/4/97) 8.78% CLASS C SHARES
10 Years 9.86 Inception (8/4/97) 8.24%
5 Years 25.54 10 Years 8.15
1 Year 32.62 5 Years 24.69
1 Year 30.93
=========================================== =========================================
THE PERFORMANCE DATA QUOTED REPRESENT PAST CLASS A SHARE PERFORMANCE REFLECTS THE
PERFORMANCE AND CANNOT GUARANTEE COMPARABLE MAXIMUM 5.50% SALES CHARGE, AND CLASS B
FUTURE RESULTS; CURRENT PERFORMANCE MAY BE AND CLASS C SHARE PERFORMANCE REFLECTS
LOWER OR HIGHER. PLEASE VISIT THE APPLICABLE CONTINGENT DEFERRED SALES
AIMINVESTMENTS.COM FOR THE MOST RECENT CHARGE (CDSC) FOR THE PERIOD INVOLVED.
MONTH-END PERFORMANCE. PERFORMANCE FIGURES THE CDSC ON CLASS B SHARES DECLINES FROM
REFLECT REINVESTED DISTRIBUTIONS, CHANGES 5% BEGINNING AT THE TIME OF PURCHASE TO
IN NET ASSET VALUE AND THE EFFECT OF THE 0% AT THE BEGINNING OF THE SEVENTH YEAR.
MAXIMUM SALES CHARGE UNLESS OTHERWISE THE CDSC ON CLASS C SHARES IS 1% FOR THE
STATED. INVESTMENT RETURN AND PRINCIPAL FIRST YEAR AFTER PURCHASE.
VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE A
GAIN OR LOSS WHEN YOU SELL SHARES. THE PERFORMANCE OF THE FUND'S SHARE
CLASSES WILL DIFFER PRIMARILY DUE TO
THE TOTAL ANNUAL FUND OPERATING EXPENSE DIFFERENT SALES CHARGE STRUCTURES AND
RATIO SET FORTH IN THE MOST RECENT FUND CLASS EXPENSES.
PROSPECTUS AS OF THE DATE OF THIS REPORT
FOR CLASS A, CLASS B AND CLASS C SHARES WAS A REDEMPTION FEE OF 2% WILL BE IMPOSED
1.51%, 2.26% AND 2.26%, RESPECTIVELY. THE ON CERTAIN REDEMPTION OR EXCHANGES OUT OF
EXPENSE RATIOS PRESENTED ABOVE MAY VARY THE FUND WITHIN 30 DAYS OF PURCHASE.
FROM THE EXPENSE RATIOS PRESENTED IN OTHER EXCEPTIONS TO THE REDEMPTION FEE ARE
SECTIONS OF THIS REPORT THAT ARE BASED ON LISTED IN THE FUND'S PROSPECTUS.
EXPENSES INCURRED DURING THE PERIOD COVERED
BY THIS REPORT.
==========================================
FOR A DISCUSSION OF THE RISKS OF
INVESTING IN YOUR FUND AND INDEXES USED
IN THIS REPORT, PLEASE TURN THE PAGE.
==========================================
7
AIM Global Aggressive Growth Fund
AIM GLOBAL AGGRESSIVE GROWTH FUND'S INVESTMENT OBJECTIVE IS ABOVE-AVERAGE LONG-TERM GROWTH OF CAPITAL.
o Unless otherwise stated, information presented in this report is as of October 31, 2007, and is based on total net assets.
o Unless otherwise noted, all data in this report are from A I M Management Group Inc.
About share classes
o Class B shares are not available as an About indexes used in this report transactions. Generally accepted
investment for retirement plans maintained accounting principles require adjustments
pursuant to Section 401 of the Internal o The MSCI WORLD INDEX(SM) is a free to be made to the net assets of the Fund
Revenue Code, including 401(k) plans, money float-adjusted market capitalization at period end for financial reporting
purchase pension plans and profit sharing index that is designed to measure global purposes, and as such, the net asset
plans, except for plans that have existing developed market equity performance. values for shareholder transactions and
accounts invested in Class B shares. the returns based on those net asset
o The MSCI WORLD GROWTH INDEX is a free values may differ from the net asset
Principal risks of investing in the Fund float-adjusted market capitalization values and returns reported in the
index that represents the growth segment Financial Highlights.
o Investing in developing countries can add in global developed market equity
additional risk, such as high rates of performance. o Industry classifications used in this
inflation or sharply devalued currencies report are generally according to the
against the U.S. dollar. Transaction costs o The LIPPER GLOBAL SMALL/MID-CAP GROWTH Global Industry Classification Standard,
are often higher, and there may be delays Category Average represents an average of which was developed by and is the
in settlement procedures. all of the funds in the Lipper Global exclusive property and a service mark of
Small/Mid-Cap Growth Funds category. Morgan Stanley Capital International Inc.
o Prices of equity securities change in These funds typically have an and Standard & Poor's.
response to many factors including the above-average price-to-cash flow ratio,
historical and prospective earnings of the price-to-book ratio, and three-year
issuer, the value of its assets, general sales-per-share growth value, compared to
economic conditions, interest rates, the S&P/Citigroup World BMI.
investor perceptions and market liquidity.
o The Fund is not managed to track the
o Foreign securities have additional risks, performance of any particular index,
including exchange rate changes, political including the indexes defined here, and
and economic upheaval, the relative lack of consequently, the performance of the Fund
information, relatively low market may deviate significantly from the
liquidity, and the potential lack of strict performance of the indexes.
financial and accounting controls and
standards. o A direct investment cannot be made in
an index. Unless otherwise indicated,
o Small- and mid-capitalization companies index results include reinvested
tend to be more vulnerable to adverse dividends, and they do not reflect sales
developments and more volatile than larger charges. Performance of an index of funds
companies. Investments in these sized reflects fund expenses; performance of a
companies may involve special risks, market index does not.
including those associated with dependence
on a small management group, little or no Other information
operating history, little or no track
record of success, limited product lines, o The Chartered Financial Analyst
less publicly available information, --REGISTERED TRADEMARK-- (CFA
illiquidity, restricted resale or less --REGISTERED TRADEMARK--) designation
frequent trading. is a globally recognized standard for
measuring the competence and integrity of
investment professionals.
o The returns shown in the management's
discussion of Fund performance are based
on net asset values calculated for
shareholder
=======================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, ==========================================
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FUND NASDAQ SYMBOLS
======================================================================================= Class A Shares AGAAX
Class B Shares AGABX
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Class C Shares AGACX
AIMINVESTMENTS.COM
==========================================
8
AIM Global Aggressive Growth Fund
SCHEDULE OF INVESTMENTS(A)
October 31, 2007
<Table>
<Caption>
SHARES VALUE
- ---------------------------------------------------------------------------
FOREIGN COMMON STOCKS & OTHER EQUITY
INTERESTS-66.02%
BRAZIL-2.31%
Gafisa S.A. (Homebuilding) 636,400 $ 11,435,198
- ---------------------------------------------------------------------------
Unibanco-Uniao de Bancos Brasileiros S.A.-GDR
(Diversified Banks) 103,200 16,309,728
===========================================================================
27,744,926
===========================================================================
CANADA-4.78%
Astral Media Inc. (Broadcasting & Cable TV) 158,400 7,555,881
- ---------------------------------------------------------------------------
Onex Corp. (Multi-Sector Holdings) 243,300 10,239,734
- ---------------------------------------------------------------------------
Power Financial Corp. (Life & Health
Insurance)(b) 263,200 11,707,381
- ---------------------------------------------------------------------------
Sherritt International Corp. (Diversified
Metals & Mining) 823,684 15,382,997
- ---------------------------------------------------------------------------
Shoppers Drug Mart Corp. (Drug Retail)
(Acquired 05/16/03; Cost $3,592,970)(c)(d) 216,000 12,669,407
===========================================================================
57,555,400
===========================================================================
CYPRUS-1.14%
Bank of Cyprus PCL (Diversified Banks)(e) 699,400 13,710,179
===========================================================================
FINLAND-1.24%
Nokian Renkaat Oyj (Tires & Rubber)(e) 393,500 14,867,482
===========================================================================
FRANCE-0.69%
Rhodia S.A. (Specialty Chemicals)(b)(e)(f) 212,845 8,289,790
===========================================================================
GERMANY-5.14%
Continental A.G. (Tires & Rubber)(e) 90,140 13,657,948
- ---------------------------------------------------------------------------
Deutsche Boerse A.G. (Specialized Finance)(e) 150,400 23,868,071
- ---------------------------------------------------------------------------
Puma A.G. Rudolf Dassler Sport (Footwear)
(Acquired 6/02/03; Cost $398,309)(d)(e) 3,935 1,691,127
- ---------------------------------------------------------------------------
Puma A.G. Rudolf Dassler Sport
(Footwear)(b)(e) 38,700 16,631,928
- ---------------------------------------------------------------------------
Symrise A.G. (Specialty Chemicals)(e)(f) 200,000 5,989,837
===========================================================================
61,838,911
===========================================================================
GREECE-4.07%
Intralot S.A. (Casinos & Gaming)(e) 616,786 26,670,490
- ---------------------------------------------------------------------------
OPAP S.A. (Casinos & Gaming) (Acquired
7/14/03; Cost $2,090,216)(d) 196,000 8,007,448
- ---------------------------------------------------------------------------
OPAP S.A. (Casinos & Gaming) 133,630 5,459,364
- ---------------------------------------------------------------------------
Titan Cement Co. (Construction Materials)(e) 179,800 8,779,539
===========================================================================
48,916,841
===========================================================================
</Table>
<Table>
SHARES VALUE
- ---------------------------------------------------------------------------
<Caption>
HONG KONG-2.79%
Esprit Holdings Ltd. (Apparel Retail)(e) 682,800 $ 11,610,547
- ---------------------------------------------------------------------------
Hongkong Land Holdings Ltd. (Real Estate
Management & Development)(e) 2,226,000 11,162,103
- ---------------------------------------------------------------------------
Regal Hotels International Holdings Ltd.
(Hotels, Resorts & Cruise Lines)(e) 126,242,000 10,828,484
===========================================================================
33,601,134
===========================================================================
HUNGARY-2.01%
OTP Bank Nyrt. (Diversified Banks)(e) 291,974 15,880,241
- ---------------------------------------------------------------------------
Richter Gedeon Nyrt. (Pharmaceuticals)(e) 37,934 8,261,295
===========================================================================
24,141,536
===========================================================================
INDIA-1.02%
Grasim Industries Ltd. (Construction
Materials)(e) 129,300 12,306,368
===========================================================================
INDONESIA-0.97%
PT Astra International Tbk (Automobile
Manufacturers)(e) 4,071,000 11,614,640
===========================================================================
IRELAND-2.59%
Anglo Irish Bank Corp. PLC (Diversified
Banks)(e) 1,381,762 23,335,487
- ---------------------------------------------------------------------------
Smurfit Kappa Group PLC (Paper Packaging)(e) 388,907 7,862,667
===========================================================================
31,198,154
===========================================================================
ISRAEL-1.06%
Israel Discount Bank-Class A (Diversified
Banks)(e)(f) 5,015,187 12,790,192
===========================================================================
JAPAN-2.25%
EXEDY Corp. (Auto Parts & Equipment)(e) 441,600 14,477,314
- ---------------------------------------------------------------------------
Suzuki Motor Corp. (Automobile
Manufacturers)(b)(e) 386,600 12,634,099
===========================================================================
27,111,413
===========================================================================
MALAYSIA-0.85%
YTL Corp. Berhad (Multi-Utilities)(e) 4,516,600 10,227,489
===========================================================================
MEXICO-0.94%
America Movil S.A.B de C.V.-Series L-ADR
(Wireless Telecommunication Services) 173,500 11,345,165
===========================================================================
</Table>
9
AIM Global Aggressive Growth Fund
<Table>
<Caption>
SHARES VALUE
- ---------------------------------------------------------------------------
NETHERLANDS-3.38%
Koninklijke BAM Groep N.V. (Construction &
Engineering)(e) 414,530 $ 10,973,156
- ---------------------------------------------------------------------------
TomTom N.V. (Consumer Electronics)(b)(e)(f) 134,532 10,780,035
- ---------------------------------------------------------------------------
USG People N.V. (Human Resource & Employment
Services)(b)(e) 618,316 18,955,198
===========================================================================
40,708,389
===========================================================================
NORWAY-1.55%
Petroleum Geo-Services A.S.A. (Oil & Gas
Equipment & Services) 631,180 18,585,048
===========================================================================
PHILIPPINES-0.84%
PNOC Energy Development Corp. (Independent
Power Producers & Energy Traders) (Acquired
12/04/06; Cost $343,121)(d)(e) 5,262,000 926,318
- ---------------------------------------------------------------------------
PNOC Energy Development Corp. (Independent
Power Producers & Energy Traders)(e) 52,181,000 9,185,902
===========================================================================
10,112,220
===========================================================================
RUSSIA-2.58%
Vimpel-Communications-ADR (Wireless
Telecommunication Services) 939,350 31,064,304
===========================================================================
SOUTH AFRICA-2.85%
Standard Bank Group Ltd. (Diversified
Banks)(e) 1,338,442 24,319,492
- ---------------------------------------------------------------------------
Telkom South Africa Ltd. (Integrated
Telecommunication Services) (Acquired
06/18/04; Cost $727,409)(d)(e) 64,700 1,771,950
- ---------------------------------------------------------------------------
Telkom South Africa Ltd. (Integrated
Telecommunication Services)(e) 299,900 8,213,412
===========================================================================
34,304,854
===========================================================================
SOUTH KOREA-2.81%
Daegu Bank (Regional Banks)(e) 707,840 12,659,137
- ---------------------------------------------------------------------------
Hyundai Development Co. (Construction &
Engineering)(e) 89,200 9,992,090
- ---------------------------------------------------------------------------
Hyundai Mipo Dockyard Co., Ltd. (Construction
& Farm Machinery & Heavy Trucks)(e) 24,900 11,129,425
===========================================================================
33,780,652
===========================================================================
SWEDEN-1.67%
Oriflame Cosmetics S.A.-SDR (Personal
Products)(e) 149,350 9,042,540
- ---------------------------------------------------------------------------
Swedish Match A.B. (Tobacco)(e) 493,700 11,068,268
===========================================================================
20,110,808
===========================================================================
</Table>
<Table>
SHARES VALUE
- ---------------------------------------------------------------------------
<Caption>
SWITZERLAND-4.90%
Baloise Holding A.G. (Multi-Line
Insurance)(e) 93,300 $ 9,945,480
- ---------------------------------------------------------------------------
Sonova Holding A.G. (Health Care
Equipment)(e) 119,000 13,403,852
- ---------------------------------------------------------------------------
Syngenta A.G. (Fertilizers & Agricultural
Chemicals)(e) 147,600 35,645,381
===========================================================================
58,994,713
===========================================================================
THAILAND-1.02%
Siam Commercial Bank PCL (Diversified
Banks)(e) 4,410,400 12,321,245
===========================================================================
TURKEY-0.87%
Tupras-Turkiye Petrol Rafinerileri A.S. (Oil
& Gas Refining & Marketing)(e) 367,305 10,453,217
===========================================================================
UNITED KINGDOM-9.70%
Bunzl PLC (Trading Companies &
Distributors)(e) 799,533 12,102,330
- ---------------------------------------------------------------------------
Capita Group PLC (Human Resource & Employment
Services)(e) 856,451 13,408,410
- ---------------------------------------------------------------------------
Enterprise Inns PLC (Restaurants)(e) 899,685 11,815,679
- ---------------------------------------------------------------------------
IG Group Holdings PLC (Specialized
Finance)(e) 632,453 5,486,908
- ---------------------------------------------------------------------------
Inchcape PLC (Distributors)(e) 1,200,600 11,795,001
- ---------------------------------------------------------------------------
Informa PLC (Publishing)(e) 1,187,305 13,245,120
- ---------------------------------------------------------------------------
International Power PLC (Independent Power
Producers & Energy Traders)(e) 1,845,000 18,825,755
- ---------------------------------------------------------------------------
Shire PLC (Pharmaceuticals)(e) 789,500 19,751,142
- ---------------------------------------------------------------------------
United Business Media PLC (Publishing)(e) 674,325 10,241,102
===========================================================================
116,671,447
===========================================================================
Total Foreign Common Stocks & Other
Equity Interests (Cost $391,337,647) 794,366,517
===========================================================================
DOMESTIC COMMON STOCKS & OTHER EQUITY
INTERESTS-29.33%
AEROSPACE & DEFENSE-3.80%
Moog Inc.-Class A(f) 181,700 8,385,455
- ---------------------------------------------------------------------------
Precision Castparts Corp. 105,000 15,730,050
- ---------------------------------------------------------------------------
Rockwell Collins, Inc. 136,500 10,211,565
- ---------------------------------------------------------------------------
Spirit AeroSystems Holdings Inc.-Class A(f) 327,024 11,354,273
===========================================================================
45,681,343
===========================================================================
APPAREL RETAIL-0.79%
Aeropostale, Inc.(f) 414,686 9,496,309
===========================================================================
APPAREL, ACCESSORIES & LUXURY GOODS-0.60%
Phillips-Van Heusen Corp. 150,768 7,206,710
===========================================================================
</Table>
10
AIM Global Aggressive Growth Fund
<Table>
<Caption>
SHARES VALUE
- ---------------------------------------------------------------------------
APPLICATION SOFTWARE-1.51%
Amdocs Ltd.(f) 276,899 $ 9,525,326
- ---------------------------------------------------------------------------
Autodesk, Inc.(f) 176,355 8,623,759
===========================================================================
18,149,085
===========================================================================
ASSET MANAGEMENT & CUSTODY BANKS-2.35%
Affiliated Managers Group, Inc.(b)(f) 75,000 9,866,250
- ---------------------------------------------------------------------------
AllianceBernstein Holding L.P.(b) 157,500 13,455,225
- ---------------------------------------------------------------------------
Waddell & Reed Financial, Inc.-Class A 150,000 4,983,000
===========================================================================
28,304,475
===========================================================================
CONSTRUCTION & ENGINEERING-0.58%
Chicago Bridge & Iron Co. N.V.-New York
Shares 140,000 7,000,000
===========================================================================
DATA PROCESSING & OUTSOURCED SERVICES-1.01%
VeriFone Holdings, Inc.(f) 246,606 12,189,735
===========================================================================
DIVERSIFIED COMMERCIAL & PROFESSIONAL
SERVICES-0.41%
Equifax Inc. 128,392 4,943,092
===========================================================================
EDUCATION SERVICES-1.17%
Apollo Group, Inc.-Class A(f) 178,195 14,123,736
===========================================================================
ELECTRICAL COMPONENTS & EQUIPMENT-1.22%
Acuity Brands, Inc. 116,711 5,578,786
- ---------------------------------------------------------------------------
Thomas & Betts Corp.(f) 162,145 9,081,741
===========================================================================
14,660,527
===========================================================================
ELECTRONIC EQUIPMENT MANUFACTURERS-0.94%
Amphenol Corp.-Class A 255,000 11,288,850
===========================================================================
ELECTRONIC MANUFACTURING SERVICES-0.54%
Trimble Navigation Ltd.(f) 157,025 6,547,943
===========================================================================
GENERAL MERCHANDISE STORES-0.63%
Family Dollar Stores, Inc. 300,000 7,605,000
===========================================================================
HEALTH CARE DISTRIBUTORS-0.63%
AmerisourceBergen Corp. 160,000 7,537,600
===========================================================================
HEALTH CARE FACILITIES-1.52%
Manor Care, Inc. 135,000 8,988,300
- ---------------------------------------------------------------------------
VCA Antech, Inc.(f) 200,897 9,251,307
===========================================================================
18,239,607
===========================================================================
</Table>
<Table>
SHARES VALUE
- ---------------------------------------------------------------------------
<Caption>
HEALTH CARE SERVICES-0.35%
Pediatrix Medical Group, Inc.(f) 65,000 $ 4,257,500
===========================================================================
HOUSEHOLD PRODUCTS-1.10%
Clorox Co. (The) 72,017 4,506,104
- ---------------------------------------------------------------------------
Church & Dwight Co., Inc.(b) 185,000 8,752,350
===========================================================================
13,258,454
===========================================================================
INDUSTRIAL CONGLOMERATES-1.57%
McDermott International, Inc.(f) 308,546 18,839,819
===========================================================================
LIFE SCIENCES TOOLS & SERVICES-0.81%
Invitrogen Corp.(f) 54,290 4,933,332
- ---------------------------------------------------------------------------
Varian Inc.(f) 65,000 4,802,850
===========================================================================
9,736,182
===========================================================================
MANAGED HEALTH CARE-1.91%
Health Net Inc.(f) 220,000 11,794,200
- ---------------------------------------------------------------------------
Humana Inc.(f) 149,733 11,222,488
===========================================================================
23,016,688
===========================================================================
MULTI-LINE INSURANCE-0.47%
Assurant, Inc.(b) 96,965 5,666,635
===========================================================================
OIL & GAS EQUIPMENT & SERVICES-2.83%
Cameron International Corp.(f) 115,000 11,196,400
- ---------------------------------------------------------------------------
Grant Prideco, Inc.(f) 208,950 10,271,982
- ---------------------------------------------------------------------------
National-Oilwell Varco Inc.(f) 172,000 12,597,280
===========================================================================
34,065,662
===========================================================================
RESTAURANTS-0.62%
Darden Restaurants, Inc. 175,000 7,525,000
===========================================================================
SEMICONDUCTORS-1.19%
Microchip Technology Inc. 200,000 6,634,000
- ---------------------------------------------------------------------------
National Semiconductor Corp. 305,000 7,667,700
===========================================================================
14,301,700
===========================================================================
SYSTEMS SOFTWARE-0.78%
MICROS Systems, Inc.(b)(f) 130,000 9,336,600
===========================================================================
Total Domestic Common Stocks & Other
Equity Interests (Cost $261,502,701) 352,978,252
===========================================================================
</Table>
11
AIM Global Aggressive Growth Fund
<Table>
<Caption>
SHARES VALUE
- ---------------------------------------------------------------------------
MONEY MARKET FUNDS-3.48%
Liquid Assets Portfolio-Institutional
Class(g) 20,944,381 $ 20,944,381
- ---------------------------------------------------------------------------
Premier Portfolio-Institutional Class(g) 20,944,381 20,944,381
===========================================================================
Total Money Market Funds (Cost
$41,888,762) 41,888,762
===========================================================================
TOTAL INVESTMENTS (excluding investments
purchased with cash collateral from
securities loaned)-98.83% (Cost
$694,729,110) 1,189,233,531
===========================================================================
</Table>
<Table>
SHARES VALUE
- ---------------------------------------------------------------------------
<Caption>
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES
ON LOAN
MONEY MARKET FUNDS-3.33%
Liquid Assets Portfolio-Institutional
Class(g)(h) 40,069,982 $ 40,069,982
===========================================================================
Total Money Market Funds (purchased with
cash collateral from securities on
loan) (Cost $40,069,982) 40,069,982
===========================================================================
TOTAL INVESTMENTS-102.16% (Cost $734,799,092) 1,229,303,513
===========================================================================
OTHER ASSETS LESS LIABILITIES-(2.16)% (26,033,680)
===========================================================================
NET ASSETS-100.00% $1,203,269,833
___________________________________________________________________________
===========================================================================
</Table>
Investment Abbreviations:
<Table>
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
SDR - Swedish Depositary Receipt
</Table>
Notes to Schedule of Investments:
(a) Industry classifications used in this report are generally according to the
Global Industry Classification Standard, which was developed by and is the
exclusive property and a service mark of Morgan Stanley Capital
International Inc. and Standard & Poor's.
(b) All or a portion of this security was out on loan at October 31, 2007.
(c) Security fair valued in good faith in accordance with the procedures
established by the Board of Trustees. The value of this security at October
31, 2007 represented 1.05% of the Fund's Net Assets. See Note 1A.
(d) 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 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 value of these securities at October 31, 2007 was $25,066,250,
which represented 2.08% of the Fund's Net Assets. Unless otherwise
indicated, these securities are not considered to be illiquid.
(e) In accordance with the procedures established by the Board of Trustees, the
foreign security is fair valued using adjusted closing market prices. The
aggregate value of these securities at October 31, 2007 was $634,604,862,
which represented 52.74% of the Fund's Net Assets. See Note 1A.
(f) Non-income producing security.
(g) The money market fund and the Fund are affiliated by having the same
investment advisor. See Note 3.
(h) The security has been segregated to satisfy the commitment to return the
cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 8.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12
AIM Global Aggressive Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2007
<Table>
ASSETS:
Investments, at value (Cost $652,840,348)* $1,147,344,769
- ------------------------------------------------------------
Investments in affiliated money market funds
(Cost $81,958,744) 81,958,744
============================================================
Total investments (Cost $734,799,092) 1,229,303,513
============================================================
Foreign currencies, at value (Cost
$8,363,158) 8,398,469
- ------------------------------------------------------------
Receivables for:
Investments sold 13,623,737
- ------------------------------------------------------------
Fund shares sold 1,220,799
- ------------------------------------------------------------
Dividends 625,238
- ------------------------------------------------------------
Investment for trustee deferred compensation
and retirement plans 83,689
- ------------------------------------------------------------
Other assets 31,838
============================================================
Total assets 1,253,287,283
____________________________________________________________
============================================================
LIABILITIES:
Payables for:
Investments purchased 6,165,203
- ------------------------------------------------------------
Fund shares reacquired 1,505,942
- ------------------------------------------------------------
Trustee deferred compensation and
retirement plans 191,573
- ------------------------------------------------------------
Collateral upon return of securities
loaned 40,069,982
- ------------------------------------------------------------
Accrued distribution fees 359,611
- ------------------------------------------------------------
Accrued trustees' and officer's fees and
benefits 2,507
- ------------------------------------------------------------
Accrued transfer agent fees 436,740
- ------------------------------------------------------------
Accrued operating expenses 1,285,892
============================================================
Total liabilities 50,017,450
============================================================
Net assets applicable to shares outstanding $1,203,269,833
____________________________________________________________
============================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 556,499,505
- ------------------------------------------------------------
Undistributed net investment income 3,677,140
- ------------------------------------------------------------
Undistributed net realized gain 148,541,257
- ------------------------------------------------------------
Unrealized appreciation 494,551,931
============================================================
$1,203,269,833
____________________________________________________________
============================================================
NET ASSETS:
Class A $1,022,681,778
____________________________________________________________
============================================================
Class B $ 136,817,817
____________________________________________________________
============================================================
Class C $ 43,759,624
____________________________________________________________
============================================================
Institutional Class $ 10,614
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 34,651,802
____________________________________________________________
============================================================
Class B 5,118,607
____________________________________________________________
============================================================
Class C 1,636,777
____________________________________________________________
============================================================
Institutional Class 359.45
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 29.51
- ------------------------------------------------------------
Offering price per share:
(Net asset value of $29.51 divided by
94.50%) $ 31.23
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per
share $ 26.73
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per
share $ 26.74
____________________________________________________________
============================================================
Institutional Class:
Net asset value and offering price per
share $ 29.53
____________________________________________________________
============================================================
</Table>
* At October 31, 2007, securities with an aggregate value of $37,517,731 were on
loan to brokers.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
13
AIM Global Aggressive Growth Fund
STATEMENT OF OPERATIONS
For the year ended October 31, 2007
<Table>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $916,613) $ 17,962,012
- --------------------------------------------------------------------------
Dividends from affiliated money market funds (includes
securities lending income of $134,582) 2,307,843
- --------------------------------------------------------------------------
Interest 17,266
==========================================================================
Total investment income 20,287,121
==========================================================================
EXPENSES:
Advisory fees 9,141,077
- --------------------------------------------------------------------------
Administrative services fees 267,314
- --------------------------------------------------------------------------
Custodian fees 792,148
- --------------------------------------------------------------------------
Distribution fees:
Class A 2,257,365
- --------------------------------------------------------------------------
Class B 1,332,837
- --------------------------------------------------------------------------
Class C 349,967
- --------------------------------------------------------------------------
Transfer agent fees -- A, B & C 2,826,079
- --------------------------------------------------------------------------
Transfer agent fees -- Institutional 1
- --------------------------------------------------------------------------
Trustees' and officer's fees and benefits 52,249
- --------------------------------------------------------------------------
Other 395,603
==========================================================================
Total expenses 17,414,640
==========================================================================
Less: Fees waived, expenses reimbursed and expense offset
arrangement(s) (1,041,231)
==========================================================================
Net expenses 16,373,409
==========================================================================
Net investment income 3,913,712
==========================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain from:
Investment securities (includes net gains (losses) from
securities sold to affiliates of $(37,163) and net of
tax on sale of foreign investments of $(284,312) -- Note
1J) 148,320,313
- --------------------------------------------------------------------------
Foreign currencies 6,797
==========================================================================
148,327,110
==========================================================================
Change in net unrealized appreciation of:
Investment securities (net of estimated tax on foreign
investments held of $(588,557) -- Note 1J) 164,769,043
- --------------------------------------------------------------------------
Foreign currencies 139,891
==========================================================================
164,908,934
==========================================================================
Net realized and unrealized gain 313,236,044
==========================================================================
Net increase in net assets resulting from operations $317,149,756
__________________________________________________________________________
==========================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
14
AIM Global Aggressive Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2007 and 2006
<Table>
<Caption>
2006 2007
- --------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 3,913,712 $ 3,960,706
- --------------------------------------------------------------------------------------------
Net realized gain 148,327,110 129,688,490
- --------------------------------------------------------------------------------------------
Change in net unrealized appreciation 164,908,934 90,682,111
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 317,149,756 224,331,307
============================================================================================
Distributions to shareholders from net investment income:
Class A (1,205,150) (2,378,111)
- --------------------------------------------------------------------------------------------
Class B -- (367,177)
- --------------------------------------------------------------------------------------------
Class C -- (56,652)
============================================================================================
Total distributions from net investment income (1,205,150) (2,801,940)
============================================================================================
Distributions to shareholders from net realized gains:
Class A (106,746,300) (30,928,472)
- --------------------------------------------------------------------------------------------
Class B (18,600,411) (7,262,436)
- --------------------------------------------------------------------------------------------
Class C (4,153,281) (1,120,528)
============================================================================================
Total distributions from net realized gains (129,499,992) (39,311,436)
============================================================================================
Decrease in net assets resulting from distributions (130,705,142) (42,113,376)
============================================================================================
Share transactions-net:
Class A 52,827,687 (15,873,539)
- --------------------------------------------------------------------------------------------
Class B (15,509,574) (48,985,987)
- --------------------------------------------------------------------------------------------
Class C 9,179,068 1,302,802
- --------------------------------------------------------------------------------------------
Institutional Class 10,000 --
============================================================================================
Net increase (decrease) in net assets resulting from
share transactions 46,507,181 (63,556,724)
============================================================================================
Net increase in net assets 232,951,795 118,661,207
____________________________________________________________________________________________
============================================================================================
NET ASSETS:
Beginning of year 970,318,038 851,656,831
============================================================================================
End of year (including undistributed net investment income
of $3,677,140 and $1,202,879, respectively) $1,203,269,833 $970,318,038
____________________________________________________________________________________________
============================================================================================
</Table>
NOTES TO FINANCIAL STATEMENTS
October 31, 2007
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Global Aggressive Growth Fund (the "Fund") is a series portfolio of AIM
International Mutual Funds (the "Trust"). The Trust is a Delaware statutory
trust registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of six
separate portfolios, each authorized to issue an unlimited number of shares of
beneficial interest. The Fund currently consists of 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.
The Fund's investment objective is above-average long-term growth of
capital.
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 or official closing price as of the close of
the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on that
day. Securities traded in the over-the-counter market are valued based on
prices furnished by independent pricing services or market makers. When
such securities are valued by an independent pricing service they may be
considered fair valued. Futures contracts are valued at the final
settlement price set by an exchange on which they are principally traded.
Listed options are valued at the mean between the last bid and the ask
prices from the exchange on which they are principally traded. Options not
listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last sales
price or official closing price as of the close of the customary trading
session on the exchange where the security is principally traded.
15
AIM Global Aggressive Growth Fund
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes 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 specific securities, dividend rate, yield, quality,
type of issue, coupon rate, maturity, individual trading characteristics
and other market data. Short-term obligations, including commercial paper,
having 60 days or less to maturity are recorded at amortized cost which
approximates value. Debt securities are subject to interest rate and credit
risks. In addition, all debt securities involve some risk of default with
respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued at
the market quotations. Because trading hours for certain foreign securities
end before the close of the NYSE, closing market quotations may become
unreliable. If between the time trading ends on a particular security and
the close of the customary trading session on the NYSE, events occur that
are significant and may make the closing price unreliable, the Fund may
fair value the security. If the event is likely to have affected the
closing price of the security, the security will be valued at fair value in
good faith using procedures approved by the Board of Trustees. Adjustments
to closing prices to reflect fair value may also be based on a screening
process of an independent pricing service to indicate the degree of
certainty, based on historical data, that the closing price in the
principal market where a foreign security trades is not the current value
as of the close of the NYSE. Foreign securities meeting the approved degree
of certainty that the price is not reflective of current value will be
priced at the indication of fair value from the independent pricing
service. Multiple factors may be considered by the independent pricing
service in determining adjustments to reflect fair value and may include
information relating to sector indices, ADRs and domestic and foreign index
futures. Foreign securities may have additional risks including exchange
rate changes, potential for sharply devalued currencies and high inflation,
political and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be 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
unreliable are valued at fair value as determined in good faith by or under
the supervision of the Trust's officers following procedures approved by
the Board of Trustees. Issuer specific events, market trends, bid/ask
quotes of brokers and information providers and other market data may be
reviewed in the course of making a good faith determination of a security's
fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity.
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 Funds may periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds as received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
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. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, AIM may
determine the country in which an issuer is located and/or credit risk
exposure based on various factors. These factors include the laws of the
country under which the issuer is organized, where the issuer maintains a
principal office, the country in which the issuer derives 50% or more of
its total revenues and the country that has the primary market for the
issuer's securities, as well as other criteria. Among the other criteria
that may be evaluated for making this determination are the country in
which the issuer maintains 50% or more of its assets, the type of security,
financial guarantees and enhancements, the nature of the collateral and the
sponsor organization. Country of issuer and/or credit risk exposure has
been determined to be the United States of America unless otherwise noted.
D. 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 treat a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
E. 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 to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial statements.
F. 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.
16
AIM Global Aggressive Growth Fund
G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to
taxation. Actual results could differ from those estimates.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust (including the
Trust's investment manager) is indemnified against certain liabilities that
may arise out of performance of their duties to the Fund. Additionally, in
the normal course of business, the Fund enters into contracts that contain
a variety of indemnification clauses. The Fund's maximum exposure under
these arrangements is unknown as this would involve future claims that may
be made against the Fund that have not yet occurred. The risk of material
loss as a result of such indemnification claims is considered remote.
I. REDEMPTION FEES -- The Fund has a 2% redemption fee that is to be retained
by the Fund to offset transaction costs and other expenses associated with
short-term redemptions and exchanges. The fee, subject to certain
exceptions, is imposed on certain redemptions, including exchanges of
shares held less than 30 days. The redemption fee is recorded as an
increase in shareholder capital and is allocated among the share classes
based on the relative net assets of each class.
J. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close of
the NYSE based on quotations posted by banks and major currency dealers.
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 (i) sales
of foreign currencies, (ii) currency gains or losses realized between the
trade and settlement dates on securities transactions, and (iii) 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.
The Fund may invest in foreign securities which may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion
of which may be recoverable. Taxes are accrued based on the Fund's current
interpretation of tax regulations and rates that exist in the foreign
markets in which the Fund invests.
K. 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.
Fluctuations in the value of these contracts are recorded as unrealized
appreciation (depreciation) until the contracts are closed. When these
contracts are closed, realized gains (losses) are recorded. Realized and
unrealized gains and losses on these contracts are included in the
Statement of Operations. The Fund could be exposed to risk, which may be in
excess of the amount reflected in the Statement of Assets and Liabilities,
if counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust 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 based on the annual rate of the Fund's
average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $1 billion 0.90%
- -------------------------------------------------------------------
Over $1 billion 0.85%
__________________________________________________________________
===================================================================
</Table>
Effective July 1, 2007, the Trustees approved a reduced contractual advisory
fee schedule for the Fund. Prior to July 1, 2007 AIM had contractually waived
advisory fees to the same reduced advisory fee schedule. Under the terms of the
investment advisory agreement, the Fund will pay an advisory fee to AIM based on
the following annual rates of the Fund's average daily net assets:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $250 million 0.80%
- -------------------------------------------------------------------
Next $250 million 0.78%
- -------------------------------------------------------------------
Next $500 million 0.76%
- -------------------------------------------------------------------
Next $1.5 billion 0.74%
- -------------------------------------------------------------------
Next $2.5 billion 0.72%
- -------------------------------------------------------------------
Next $2.5 billion 0.70%
- -------------------------------------------------------------------
Next $2.5 billion 0.68%
- -------------------------------------------------------------------
Over $10 billion 0.66%
__________________________________________________________________
===================================================================
</Table>
17
AIM Global Aggressive Growth Fund
Further, effective July 1, 2007, AIM has contractually agreed, through at
least June 30, 2008, to waive 100% of the advisory fee AIM receives from the
affiliated money market funds on investments by the Fund in such affiliated
money market funds (excluding investments made in affiliated money market funds
with cash collateral from securities loaned by the fund). Prior to July 1, 2007,
AIM had voluntarily agreed to waive 25% of the advisory fee AIM receives from
the affiliated money market funds on investments by the Fund in such affiliated
money market funds.
For the year ended October 31, 2007, AIM waived advisory fees of $892,592.
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") agreed
to reimburse expenses incurred by the Fund in connection with market timing
matters in the AIM Funds, which may include legal, audit, shareholder reporting,
communications and trustee expenses. These expenses along with the related
expense reimbursement are included in the Statement of Operations. For the year
ended October 31, 2007, Invesco reimbursed expenses of the Fund in the amount of
$1,096.
The Trust has entered into a master administrative services agreement with
AIM pursuant to which the Fund has agreed to pay AIM for certain administrative
costs incurred in providing accounting services, to the Fund. For the year ended
October 31, 2007, expenses incurred under the agreement are shown in the
Statement of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with AIM
Investment Services, Inc. ("AIS") pursuant to which the Fund has agreed to pay
AIS a fee for providing transfer agency and shareholder services to the Fund and
reimburse AIS for certain expenses incurred by AIS in the course of providing
such services. AIS may make payments to intermediaries that provide omnibus
account services, sub-accounting services and/or networking services. All fees
payable by AIS to intermediaries that provide omnibus account services or
sub-accounting are charged back to the Fund, subject to certain limitations
approved by the Trust's Board of Trustees. For the year ended October 31, 2007,
the expenses incurred under the agreement are shown in the Statement of
Operations as transfer agent fees.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B,
Class C and Institutional 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 and Class C shares (collectively the "Plans"). The Fund, pursuant to the
Plans, pays ADI compensation at the annual rate of 0.25% of the Fund's average
daily net assets of Class A shares and 1.00% of the average daily net assets of
each class of Class B and Class C shares. Of the Plan payments, up to 0.25% of
the average daily net assets of each class of shares may be paid to furnish
continuing personal shareholder services to 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. Financial Industry Regulatory
Authority ("FINRA"), formerly known as National Association of Securities
Dealers, rules 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. For the year
ended October 31, 2007, expenses incurred under the Plans are shown in the
Statement of Operations as distribution fees.
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, 2007, ADI advised the Fund that it retained $136,234 in
front-end sales commissions from the sale of Class A shares and $266, $70,104
and $6,277 from Class A, Class B and Class C shares, respectively, for CDSC
imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
AIM, AIS and/or ADI.
NOTE 3--INVESTMENTS IN AFFILIATES
The Fund is permitted, pursuant to procedures approved by the Board of Trustees,
to invest daily available cash balances and cash collateral from securities
lending transactions in affiliated money market funds. The Fund and the money
market funds below have the same investment advisor and therefore, are
considered to be affiliated. The tables below show the transactions in and
earnings from investments in affiliated money market funds for the year ended
October 31, 2007. During the period each investment maintained a $1.00 net asset
value, as such there is no realized gain/(loss) and no change in unrealized
appreciation/(depreciation).
INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
<Table>
<Caption>
VALUE PURCHASES PROCEEDS VALUE DIVIDEND
FUND 10/31/06 AT COST FROM SALES 10/31/07 INCOME
- --------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-Institutional
Class $18,202,851 $120,974,925 $(118,233,395) $20,944,381 $1,088,804
- --------------------------------------------------------------------------------------------------
Premier
Portfolio-Institutional
Class 18,202,851 120,974,925 (118,233,395) 20,944,381 1,084,457
==================================================================================================
Subtotal $36,405,702 $241,949,850 $(236,466,790) $41,888,762 $2,173,261
==================================================================================================
</Table>
18
AIM Global Aggressive Growth Fund
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
<Table>
<Caption>
VALUE PURCHASES PROCEEDS VALUE DIVIDEND
FUND 10/31/06 AT COST FROM SALES 10/31/07 INCOME*
- --------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-Institutional
Class $28,104,584 $413,086,373 $(401,120,975) $40,069,982 $ 84,880
- --------------------------------------------------------------------------------------------------
STIC Prime
Portfolio-Institutional
Class 28,104,585 181,268,142 (209,372,727) -- 49,702
==================================================================================================
Subtotal $56,209,169 $594,354,515 $(610,493,702) $40,069,982 $ 134,582
==================================================================================================
Total
Investments
in
Affiliates $92,614,871 $836,304,365 $(846,960,492) $81,958,744 $2,307,843
__________________________________________________________________________________________________
==================================================================================================
</Table>
* Net of compensation to counterparties.
NOTE 4--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM Funds under specified conditions outlined in procedures adopted by the Board
of Trustees of the Trust. The procedures have been designed to ensure that any
purchase or sale of securities by the Fund from or to another fund or portfolio
that is or could be considered an affiliate by virtue of having a common
investment advisor (or affiliated investment advisors), common Trustees and/or
common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined
under the procedures, each transaction is effected at the current market price.
Pursuant to these procedures, for the year ended October 31, 2007, the Fund
engaged in securities sales of $199,492, which resulted in net realized gains
(losses) of $(37,163), and securities purchases of $39,234.
NOTE 5--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the transfer
agent for clearing shareholder transactions, (ii) custodian credits which result
from periodic overnight cash balances at the custodian and (iii) a one time
custodian fee credit used to offset custodian fees. For the year ended October
31, 2007, the Fund received credits from these arrangements, which resulted in
the reduction of the Fund's total expenses of $147,543.
NOTE 6--TRUSTEES' AND OFFICER'S FEES AND BENEFITS
"Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officer's Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officer's
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended October 31, 2007, the Fund paid legal fees of $9,437
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7--BORROWINGS
Pursuant to an exemptive order from the Securities and Exchange Commission, 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. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. 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.
The Fund is a party to an uncommitted unsecured revolving 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
credit facility, 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 year ended October 31, 2007, the Fund did not borrow or lend
under the interfund lending facility or borrow under the uncommitted unsecured
revolving credit facility.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with SSB, the custodian bank. To compensate the
custodian bank for such overdrafts, the overdrawn Fund may either (i) leave
funds as a compensating balance in the account so the custodian bank can be
compensated by earning the additional interest; or (ii) compensate by paying the
custodian bank at a rate agreed upon by the custodian bank and AIM, not to
exceed the contractually agreed upon rate.
19
AIM Global Aggressive Growth Fund
NOTE 8--PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities having a market value up to 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 received in connection with these loans is
invested in short-term money market instruments or affiliated money market
funds. 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. 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. The Fund could also experience delays and costs in gaining
access to the collateral. The Fund bears the risk of any deficiency in the
amount of the collateral available for return to the borrower due to any loss on
the collateral invested.
At October 31, 2007, securities with an aggregate value of $37,517,731 were
on loan to brokers. The loans were secured by cash collateral of $40,069,982
received by the Fund and subsequently invested in affiliated money market funds.
For the year ended October 31, 2007, the Fund received dividends on cash
collateral investments of $134,582 for securities lending transactions, which
are net of compensation to counterparties.
NOTE 9--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
DISTRIBUTIONS TO SHAREHOLDERS:
The tax character of distributions paid during the years October 31, 2007 and
2006 was as follows:
<Table>
<Caption>
2007 2006
- -----------------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 18,919,147 $ 2,801,940
- -----------------------------------------------------------------------------------------
Long-term capital gain 111,785,995 39,311,436
=========================================================================================
Total distributions $130,705,142 $42,113,376
_________________________________________________________________________________________
=========================================================================================
</Table>
TAX COMPONENTS OF NET ASSETS:
As of October 31, 2007, the components of net assets on a tax basis were as
follows:
<Table>
<Caption>
2007
- ------------------------------------------------------------------------------
Undistributed ordinary income $ 13,066,256
- ------------------------------------------------------------------------------
Undistributed long-term gain 138,810,850
- ------------------------------------------------------------------------------
Net unrealized appreciation -- investments 495,059,833
- ------------------------------------------------------------------------------
Temporary book/tax differences (166,611)
- ------------------------------------------------------------------------------
Shares of beneficial interest 556,499,505
==============================================================================
Total net assets $1,203,269,833
______________________________________________________________________________
==============================================================================
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation difference is attributable primarily to losses on wash sales and
the recognition of income for tax purposes on certain partnership investments.
The tax-basis net unrealized appreciation on investments amount includes
appreciation on foreign currencies of $47,510.
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 trustee deferral of compensation and
retirement plan benefits.
The Fund does not have a capital loss carryforward as of October 31, 2007.
NOTE 10--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended October 31, 2007 was $437,459,066 and
$528,071,481, respectively.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax
Basis
<Table>
Aggregate unrealized appreciation of investment securities $507,004,816
- ----------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (11,992,493)
============================================================================
Net unrealized appreciation of investment securities $495,012,323
____________________________________________________________________________
============================================================================
Cost of investments for tax purposes is $734,291,190.
</Table>
20
AIM Global Aggressive Growth Fund
NOTE 11--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of partnership
investments, foreign capital gain taxes and foreign currency transactions, on
October 31, 2007, undistributed net investment income was decreased by $234,301,
undistributed net realized gain was increased by $291,561 and shares of
beneficial interest decreased by $57,260. This reclassification had no effect on
the net assets of the Fund.
NOTE 12--SHARE INFORMATION
The Fund currently offers four different classes of shares: Class A, Class B,
Class C and Institutional Class. Class A shares are sold with a front-end sales
charge unless certain waiver criteria are met and under certain circumstances
load waiver shares may be subject to a CDSC. Class B shares and Class C shares
are sold with a CDSC. Institutional Class shares are sold at net asset value.
Generally, Class B shares will automatically convert to Class A shares on or
about the month-end which is at least eight years after the date of purchase.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
- --------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------
2007(A) 2006
----------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 3,294,830 $ 85,718,374 2,487,493 $ 58,384,812
- --------------------------------------------------------------------------------------------------------------------------
Class B 574,427 13,604,361 674,033 14,535,268
- --------------------------------------------------------------------------------------------------------------------------
Class C 554,747 13,179,399 296,198 6,421,861
- --------------------------------------------------------------------------------------------------------------------------
Institutional Class(b) 359.45 10,000 -- --
==========================================================================================================================
Issued as reinvestment of dividends:
Class A 4,430,561 103,852,344 1,502,663 31,916,560
- --------------------------------------------------------------------------------------------------------------------------
Class B 838,662 17,922,196 371,106 7,318,215
- --------------------------------------------------------------------------------------------------------------------------
Class C 186,184 3,980,622 57,317 1,130,865
- --------------------------------------------------------------------------------------------------------------------------
Institutional Class(b) -- -- -- --
==========================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 851,037 21,773,304 1,776,939 41,306,299
- --------------------------------------------------------------------------------------------------------------------------
Class B (934,951) (21,773,304) (1,918,853) (41,306,299)
==========================================================================================================================
Reacquired:(c)
Class A (6,164,601) (158,516,335) (6,359,614) (147,481,210)
- --------------------------------------------------------------------------------------------------------------------------
Class B (1,078,502) (25,262,827) (1,377,064) (29,533,171)
- --------------------------------------------------------------------------------------------------------------------------
Class C (340,093) (7,980,953) (289,576) (6,249,924)
- --------------------------------------------------------------------------------------------------------------------------
Institutional Class(b) -- -- -- --
==========================================================================================================================
2,212,660.45 $ 46,507,181 (2,779,358) $ (63,556,724)
__________________________________________________________________________________________________________________________
==========================================================================================================================
</Table>
(a) There are three entities that are each record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate they own 21% of the
outstanding shares of the Fund. ADI has an agreement with these entities to
sell Fund shares. The Fund, AIM and/or AIM affiliates may make payments to
these entities, which are considered to be related to the Fund, for
providing services to the Fund, AIM and/or AIM affiliates including but not
limited to services such as, securities brokerage, distribution, third party
record keeping and account servicing. The Trust has no knowledge as to
whether all or any portion of the shares owned of record by these entities
are also owned beneficially.
(b) Commencement date of Institutional Class was on September 28, 2007.
(c) Net of redemption fees of $25,122 and $11,417 which were allocated among the
classes based on relative net assets of each class for the years ended
October 31, 2007 and 2006, respectively.
NOTE 13--NEW ACCOUNTING STANDARD
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48").
FIN 48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement for a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The provisions for FIN 48 are effective for
fiscal years beginning after December 15, 2006. Management has assessed the
application of FIN 48 to the Fund and has determined that the adopting of FIN 48
is not expected to have a material impact on the Fund. Management intends for
the Fund to adopt FIN 48 provisions during the fiscal year ending October 31,
2008 as required.
21
AIM Global Aggressive Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CLASS A
-----------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------
2007 2006 2005 2004 2003
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 25.10 $ 20.60 $ 16.99 $ 14.28 $ 11.00
- -------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.12 0.13(a) (0.00)(a) (0.13)(a) (0.13)
- -------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 7.68 5.39 3.61 2.84 3.41
===============================================================================================================================
Total from investment operations 7.80 5.52 3.61 2.71 3.28
===============================================================================================================================
Less distributions:
Dividends from net investment income (0.04) (0.07) -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.35) (0.95) -- -- --
===============================================================================================================================
Total distributions (3.39) (1.02) -- -- --
===============================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
===============================================================================================================================
Net asset value, end of period $ 29.51 $ 25.10 $ 20.60 $ 16.99 $ 14.28
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Total return(b) 34.57% 27.71% 21.25% 18.98% 29.82%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,022,682 $809,309 $676,291 $566,573 $465,855
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.42%(c) 1.51% 1.65% 2.02% 2.10%
- -------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.50%(c) 1.64% 1.76% 2.03% 2.11%
===============================================================================================================================
Ratio of net investment income (loss) to average net assets 0.47%(c) 0.56% (0.02)% (0.81)% (0.97)%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
Portfolio turnover rate 43% 64% 67% 68% 64%
_______________________________________________________________________________________________________________________________
===============================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $902,945,941.
<Table>
<Caption>
CLASS B
---------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 23.15 $ 19.18 $ 15.93 $ 13.45 $ 10.42
- ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.07) (0.04)(a) (0.12)(a) (0.19)(a) (0.19)
- ---------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 7.00 5.01 3.37 2.67 3.22
=================================================================================================================================
Total from investment operations 6.93 4.97 3.25 2.48 3.03
=================================================================================================================================
Less distributions:
Dividends from net investment income -- (0.05) -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.35) (0.95) -- -- --
=================================================================================================================================
Total distributions (3.35) (1.00) -- -- --
=================================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=================================================================================================================================
Net asset value, end of period $ 26.73 $ 23.15 $ 19.18 $ 15.93 $ 13.45
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) 33.58% 26.80% 20.40% 18.44% 29.08%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $136,818 $132,391 $152,878 $257,230 $374,027
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.17%(c) 2.26% 2.31% 2.52% 2.60%
- ---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.25%(c) 2.39% 2.42% 2.53% 2.61%
=================================================================================================================================
Ratio of net investment income (loss) to average net
assets (0.28)%(c) (0.19)% (0.68)% (1.31)% (1.47)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 43% 64% 67% 68% 64%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $133,283,701.
22
AIM Global Aggressive Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS C
---------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 23.16 $ 19.19 $ 15.93 $ 13.46 $ 10.42
- -----------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.07) (0.04)(a) (0.12)(a) (0.19)(a) (0.19)
- -----------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 7.00 5.01 3.38 2.66 3.23
=============================================================================================================================
Total from investment operations 6.93 4.97 3.26 2.47 3.04
=============================================================================================================================
Less distributions:
Dividends from net investment income -- (0.05) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.35) (0.95) -- -- --
=============================================================================================================================
Total distributions (3.35) (1.00) -- -- --
=============================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=============================================================================================================================
Net asset value, end of period $ 26.74 $ 23.16 $ 19.19 $ 15.93 $ 13.46
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Total return(b) 33.56% 26.79% 20.47% 18.35% 29.17%
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $43,760 $28,619 $22,488 $21,059 $20,153
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.17%(c) 2.26% 2.31% 2.52% 2.60%
- -----------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.25%(c) 2.39% 2.42% 2.53% 2.61%
=============================================================================================================================
Ratio of net investment income (loss) to average net assets (0.28)%(c) (0.19)% (0.68)% (1.31)% (1.47)%
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Portfolio turnover rate 43% 64% 67% 68% 64%
_____________________________________________________________________________________________________________________________
=============================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $34,996,696.
<Table>
<Caption>
INSTITUTIONAL CLASS
-------------------
SEPTEMBER 28, 2007
(COMMENCEMENT
DATE) THROUGH
OCTOBER 31,
2007
- -----------------------------------------------------------------------------------
Net asset value, beginning of period $ 27.82
- -----------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.02
- -----------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 1.69
===================================================================================
Total from investment operations 1.71
===================================================================================
Net asset value, end of period $ 29.53
___________________________________________________________________________________
===================================================================================
Total return(a) 6.15%
___________________________________________________________________________________
===================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 11
___________________________________________________________________________________
===================================================================================
Ratio of expenses to average net assets 1.00%(b)
===================================================================================
Ratio of net investment income to average net assets 0.90%(b)
___________________________________________________________________________________
===================================================================================
Portfolio turnover rate(c) 43%
___________________________________________________________________________________
===================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Not annualized for periods less than one year.
(b) Ratios are annualized and based on average daily net assets of $10,233.
(c) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year.
23
AIM Global Aggressive Growth Fund
NOTE 15--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On July 6, 2007, the Securities and Exchange Commission ("SEC") published notice
of two proposed distribution plans ("Distribution Plans") for the distribution
of monies placed into two separate Fair Funds created pursuant to a settlement
reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"), A I M
Advisors, Inc. ("AIM") and A I M Distributors, Inc. and the SEC (the "Order").
One of the Fair Funds consists of $325 million, plus interest and any
contributions by other settling parties, for distribution to shareholders of
certain mutual funds formerly advised by IFG who may have been harmed by market
timing and related activity. The second Fair Fund consists of $50 million, plus
interest and any contributions by other settling parties, for distribution to
shareholders of mutual funds advised by AIM who may have been harmed by market
timing and related activity. Comments on the Distribution Plans were due no
later than August 6, 2007 and the Distribution Plans are awaiting final approval
by the SEC. Distributions from the Fair Funds will begin after the SEC finally
approves the Distribution Plans. The proposed Distribution Plans provide for
distribution to all eligible investors, for the periods spanning January 1, 2000
through July 31, 2003 (for the IFG Fair Fund) and January 1, 2001 through
September 30, 2003 (for the AIM Fair Fund), their proportionate share of the
applicable Fair Fund to compensate such investors for injury they may have
suffered as a result of market timing in the affected funds. The Distribution
Plans include a provision for any residual amounts in the Fair Funds to be
distributed in the future to the affected funds. Because the Distribution Plans
have not received final approval from the SEC and distribution of the Fair Funds
has not yet commenced, management of AIM and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"),
the parent company of IFG and AIM, has agreed to reimburse expenses incurred by
the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
On August 30, 2005, the West Virginia Office of the State
Auditor -- Securities Commission ("WVASC") issued a Summary Order to Cease and
Desist and Notice of Right to Hearing to AIM and ADI (Order No. 05-1318). The
WVASC makes findings of fact that AIM and ADI entered into certain arrangements
permitting market timing of the AIM Funds and failed to disclose these
arrangements in the prospectuses for such Funds, and conclusions of law to the
effect that AIM and ADI violated the West Virginia securities laws. The WVASC
orders AIM and ADI to cease any further violations and seeks to impose monetary
sanctions, including restitution to affected investors, disgorgement of fees,
reimbursement of investigatory, administrative and legal costs and an
"administrative assessment," to be determined by the Commissioner. Initial
research indicates that these damages could be limited or capped by statute. By
agreement with the Commissioner of Securities, AIM's time to respond to that
Order has been indefinitely suspended.
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or
related entities and individuals, depending on the lawsuit, alleging:
- that the defendants permitted improper market timing and related activity
in the AIM Funds; and
- that certain AIM Funds inadequately employed fair value pricing.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
ERISA, negligence, breach of fiduciary duty and/or breach of contract. These
lawsuits seek remedies that include, depending on the lawsuit, damages,
restitution, injunctive relief, imposition of a constructive trust, removal of
certain directors and/or employees, various corrective measures under ERISA,
rescission of certain AIM Funds' advisory agreements and/or distribution plans
and recovery of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court,
plaintiffs in these lawsuits consolidated their claims for pre-trial purposes
into three amended complaints against various AIM- and IFG-related parties: (i)
a Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of the Employee
Retirement Income Securities Act ("ERISA") purportedly brought on behalf of
participants in Invesco's 401(k) plan. Based on orders issued by the MDL Court,
all claims asserted against the AIM Funds that have been transferred to the MDL
Court have been dismissed, although certain Funds remain nominal defendants in
the Consolidated Amended Fund Derivative Complaint. On September 15, 2006, the
MDL Court granted the Invesco defendants' motion to dismiss the Amended Class
Action Complaint for Violations of ERISA and dismissed such Complaint. The
plaintiff has commenced an appeal from that decision.
IFG, AIM, ADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, AIM and ADI have advised the Fund that they are providing full
cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, AIM and/or related entities and individuals in the future.
At the present time, management of AIM and the Fund are unable to estimate
the impact, if any, that the outcome of the Pending Litigation and Regulatory
Inquiries described above may have on AIM, ADI or the Fund.
24
AIM Global Aggressive Growth Fund
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM International Mutual Funds
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 AIM Global Aggressive Growth Fund
(one of the funds constituting AIM International Mutual Funds, hereafter
referred to as the "Fund") at October 31, 2007, 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 periods
indicated, 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards 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, 2007 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
PRICEWATERHOUSECOOPERS LLP
December 19, 2007
Houston, Texas
25
AIM Global Aggressive Growth Fund
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period May 1, 2007, through October 31, 2007.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
SHARE ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (05/01/07) (10/31/07)(1) PERIOD(2) (10/31/07) PERIOD(2) RATIO
A $1,000.00 $1,141.50 $ 7.61 $1,018.10 $7.17 1.41%
B 1,000.00 1,137.00 11.63 1,014.32 10.97 2.16
C 1,000.00 1,136.90 11.63 1,014.32 10.97 2.16
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period May 1, 2007, through October 31, 2007, after actual
expenses and will differ from the hypothetical ending account value which is
based on the Fund's expense ratio and a hypothetical annual return of 5%
before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
184/365 to reflect the most recent fiscal half year.
26
Supplement to Annual Report dated 10/31/07
AIM Global Aggressive Growth Fund
==========================================
Institutional Class Shares AVERAGE ANNUAL TOTAL RETURNS A REDEMPTION FEE OF 2% WILL BE IMPOSED
For periods ended 10/31/07 ON CERTAIN REDEMPTIONS OR EXCHANGES OUT OF
The following information has been THE FUND WITHIN 30 DAYS OF PURCHASE.
prepared to provide Institutional Class 10 Years 10.53% EXCEPTIONS TO THE REDEMPTION FEE ARE
shareholders with a performance overview 5 Years 26.38 LISTED IN THE FUND'S PROSPECTUS.
specific to their holdings. Institutional 1 Year 34.81
Class shares are offered exclusively to PLEASE NOTE THAT PAST PERFORMANCE IS
institutional investors, including defined AVERAGE ANNUAL TOTAL RETURNS NOT INDICATIVE OF FUTURE RESULTS. MORE
contribution plans that meet certain For periods ended 9/30/07, most recent RECENT RETURNS MAY BE MORE OR LESS THAN
criteria. calendar quarter-end THOSE SHOWN. ALL RETURNS ASSUME
REINVESTMENT OF DISTRIBUTIONS AT NAV.
10 Years 8.78% INVESTMENT RETURN AND PRINCIPAL VALUE WILL
5 Years 25.48 FLUCTUATE SO YOUR SHARES, WHEN REDEEMED,
1 Year 32.88 MAY BE WORTH MORE OR LESS THAN THEIR
========================================== ORIGINAL COST. SEE FULL REPORT FOR
INFORMATION ON COMPARATIVE BENCHMARKS.
INSTITUTIONAL CLASS SHARES' INCEPTION DATE PLEASE CONSULT YOUR FUND PROSPECTUS FOR
IS SEPTEMBER 28, 2007. RETURNS SINCE THAT MORE INFORMATION. FOR THE MOST CURRENT
DATE ARE HISTORICAL RETURNS. ALL OTHER MONTH-END PERFORMANCE, PLEASE CALL
RETURNS ARE BLENDED RETURNS OF HISTORICAL 800-451-4246 OR VISIT AIMINVESTMENTS.COM.
INSTITUTIONAL CLASS SHARE PERFORMANCE AND
RESTATED CLASS A SHARE PERFORMANCE (FOR
PERIODS PRIOR TO THE INCEPTION DATE OF
INSTITUTIONAL CLASS SHARES) AT NET ASSET
VALUE (NAV) AND REFLECT THE HIGHER RULE
12B-1 FEES APPLICABLE TO CLASS A SHARES.
CLASS A SHARES' INCEPTION DATE IS
SEPTEMBER 15, 1994.
INSTITUTIONAL CLASS SHARES HAVE NO
SALES CHARGE; THEREFORE, PERFORMANCE IS AT
NAV. PERFORMANCE OF INSTITUTIONAL CLASS
SHARES WILL DIFFER FROM PERFORMANCE OF
OTHER SHARE CLASSES PRIMARILY DUE TO
DIFFERING SALES CHARGES AND CLASS
EXPENSES.
==========================================
NASDAQ SYMBOL GAIIX
==========================================
Over for information on your Fund's expenses.
=======================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS,
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
=======================================================================================
FOR INSTITUTIONAL INVESTOR USE ONLY
This material is for institutional investor use only and may not be quoted, reproduced
or shown to the public, nor used in written form as sales literature for public use.
AIMinvestments.com GLA-INS-1 A I M Distributors, Inc.
[AIM INVESTMENTS LOGO]
-- REGISTERED TRADEMARK --
AIM Global Aggressive Growth Fund
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur ongoing costs, including management fees
and other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with ongoing costs of investing in other mutual funds. The actual ending account
value and expenses in the below example are based on an investment of $1,000
invested on September 28, 2007 (commencement date) and held through October 31,
2007. The hypothetical ending account value and expenses in the below example
are based on an investment of $1,000 invested at the beginning of the period and
held for the entire six month period May 1, 2007, through October 31, 2007.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during the period, September 28, 2007, through
October 31, 2007. Because the actual ending account value and expense
information in the example is not based upon a six month period, the ending
account value and expense information may not provide a meaningful comparison to
mutual funds that provide such information for a full six month period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
<Table>
<Caption>
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
SHARE CLASS (5/01/07) (10/31/07)(1) PERIOD(2) (10/31/07) PERIOD(3) RATIO
Institutional (1) $1,000.00 $1,061.50 $ 0.96 $1,020.16 $5.09 1.00%
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period September 28, 2007 (commencement date), through October
31, 2007, after actual expenses and will differ from the hypothetical ending
account value which is based on the Fund's expense ratio and a hypothetical
annual return of 5% before expenses over the six month period May 1, 2007,
through October 31, 2007.
(2) Actual expenses are equal to the annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by 34
(September 28, 2007, through October 31, 2007)/365. Because the share class
has not been in existence for a full six month period, the actual ending
account value and expense information shown may not provide a meaningful
comparison to fund expense information of classes that show such data for a
full six month period and, because the actual ending account value and
expense information in the expense example covers a short time period,
return and expense data may not be indicative of return and expense data for
longer time periods.
(3) Hypothetical expenses are equal to the annualized as indicated above
multiplied by the average account value over the period, multiplied by
184/365 to reflect the most recent fiscal half year. The hypothetical ending
account value and expenses may be used to compare ongoing costs of investing
the Institutional Class shares of the Fund and other funds because such data
is based on a full six month period.
AIMinvestments.com GLA-INS-1 A I M Distributors, Inc.
AIM Global Aggressive Growth Fund
APPROVAL OF INVESTMENT ADVISORY AGREEMENT
The Board of Trustees (the Board) of AIM Sub-Committee's recommendations and makes A. NATURE, EXTENT AND QUALITY OF SERVICES
International Mutual Funds is required its own recommendations regarding the PROVIDED BY AIM
under the Investment Company Act of 1940 to performance, fees and expenses of the AIM
approve annually the renewal of the AIM Funds to the full Board. Moreover, the The Board reviewed the advisory services
Global Aggressive Growth Fund (the Fund) Investments Committee considers each provided to the Fund by AIM under the
investment advisory agreement with A I M Sub-Committee's recommendations in making Fund's advisory agreement, the
Advisors, Inc. (AIM). During contract its annual recommendation to the Board performance of AIM in providing these
renewal meetings held on June 25-27, 2007, whether to approve the continuance of services, and the credentials and
the Board as a whole and the disinterested each AIM Fund's investment advisory experience of the officers and employees
or "independent" Trustees, voting agreement and sub-advisory agreement, if of AIM who provide these services. The
separately, approved the continuance of the applicable (advisory agreements), for Board's review of the qualifications of
Fund's investment advisory agreement for another year. AIM to provide these services included
another year, effective July 1, 2007. In the Board's consideration of AIM's
doing so, the Board determined that the The independent Trustees, as mentioned portfolio and product review process,
Fund's advisory agreement is in the best above, are assisted in their annual various back office support functions
interests of the Fund and its shareholders evaluation of the advisory agreements by provided by AIM, and AIM's equity and
and that the compensation to AIM under the the independent Senior Officer. One fixed income trading operations. The
Fund's advisory agreement is fair and responsibility of the Senior Officer is Board concluded that the nature, extent
reasonable. to manage the process by which the AIM and quality of the advisory services
Funds' proposed management fees are provided to the Fund by AIM were
The independent Trustees met separately negotiated during the annual contract appropriate and that AIM currently is
during their evaluation of the Fund's renewal process to ensure that they are providing satisfactory advisory services
investment advisory agreement with negotiated in a manner which is at arms' in accordance with the terms of the
independent legal counsel from whom they length and reasonable. Accordingly, the Fund's advisory agreement. In addition,
received independent legal advice, and the Senior Officer must either supervise a based on their ongoing meetings
independent Trustees also received competitive bidding process or prepare an throughout the year with the Fund's
assistance during their deliberations from independent written evaluation. The portfolio managers, the Board concluded
the independent Senior Officer, a full-time Senior Officer has recommended that an that these individuals are competent and
officer of the AIM Funds who reports independent written evaluation be able to continue to carry out their
directly to the independent Trustees. The provided and, upon the direction of the responsibilities under the Fund's
following discussion more fully describes Board, has prepared an independent advisory agreement.
the process employed by the Board to written evaluation.
evaluate the performance of the AIM Funds In determining whether to continue the
(including the Fund) throughout the year During the annual contract renewal Fund's advisory agreement, the Board
and, more specifically, during the annual process, the Board considered the factors considered the prior relationship between
contract renewal meetings. discussed below under the heading AIM and the Fund, as well as the Board's
"Factors and Conclusions and Summary of knowledge of AIM's operations, and
THE BOARD'S FUND EVALUATION PROCESS Independent Written Fee Evaluation" in concluded that it was beneficial to
evaluating the fairness and maintain the current relationship, in
The Board's Investments Committee has reasonableness of the Fund's advisory part, because of such knowledge. The
established three Sub-Committees which are agreement at the contract renewal Board also considered the steps that AIM
responsible for overseeing the management meetings and at their meetings throughout and its affiliates have taken over the
of a number of the series portfolios of the the year as part of their ongoing last several years to improve the quality
AIM Funds. This Sub-Committee structure oversight of the Fund. The Fund's and efficiency of the services they
permits the Trustees to focus on the advisory agreement was considered provide to the Funds in the areas of
performance of the AIM Funds that have been separately, although the Board also investment performance, product line
assigned to them. The Sub-Committees meet considered the common interests of all of diversification, distribution, fund
throughout the year to review the the AIM Funds in their deliberations. The operations, shareholder services and
performance of their assigned funds, and Board comprehensively considered all of compliance. The Board concluded that the
the Sub-Committees review monthly and the information provided to them and did quality and efficiency of the services
quarterly comparative performance not identify any particular factor that AIM and its affiliates provide to the AIM
information and periodic asset flow data was controlling. Furthermore, each Funds in each of these areas have
for their assigned funds. These materials Trustee may have evaluated the generally improved, and support the
are prepared under the direction and information provided differently from one Board's approval of the continuance of
supervision of the independent Senior another and attributed different weight the Fund's advisory agreement.
Officer. Over the course of each year, the to the various factors. The Trustees
Sub-Committees meet with portfolio managers recognized that the advisory arrangements B. FUND PERFORMANCE
for their assigned funds and other members and resulting advisory fees for the Fund
of management and review with these and the other AIM Funds are the result of The Board compared the Fund's performance
individuals the performance, investment years of review and negotiation between during the past one, three and five
objective(s), policies, strategies and the Trustees and AIM, that the Trustees calendar years to the performance of
limitations of these funds. may focus to a greater extent on certain funds in the Fund's Lipper peer group
aspects of these arrangements in some that are not managed by AIM, and against
In addition to their meetings throughout years than others, and that the Trustees' the performance of all funds in the MSCI
the year, the Sub-Committees meet at deliberations and conclusions in a World Index. The Board also reviewed the
designated contract renewal meetings each particular year may be based in part on methodology used by Lipper to identify
year to conduct an in-depth review of the their deliberations and conclusions of the Fund's peers. The Board noted that
performance, fees and expenses of their these same arrangements throughout the the Fund's performance was above the
assigned funds. During the contract renewal year and in prior years. median performance of its peers for the
process, the Trustees receive comparative past one, three and five year periods.
performance and fee data regarding all the FACTORS AND CONCLUSIONS AND SUMMARY OF The Board noted that the Fund's
AIM Funds prepared by an independent INDEPENDENT WRITTEN FEE EVALUATION performance was above the performance of
company, Lipper, Inc., under the direction the Index for the one, three and five
and supervision of the independent Senior The discussion below serves as a summary year periods. The Board also considered
Officer who also prepares a separate of the Senior Officer's independent the steps AIM has taken over the last
analysis of this information for the written evaluation, as well as a several years to improve the quality and
Trustees. Each Sub-Committee then makes discussion of the material factors and efficiency of the services that AIM
recommendations to the Investments related conclusions that formed the basis provides to the AIM Funds. The Board
Committee regarding the performance, fees for the Board's approval of the Fund's concluded that AIM continues to be
and expenses of their assigned funds. The advisory agreement. Unless otherwise responsive to the Board's focus on fund
Investments Committee considers each stated, information set forth below is as performance. Although the independent
of June 27, 2007 and does not reflect any written evaluation of the Fund's Senior
changes that may have occurred since that Officer (discussed below) only considered
date, including but not limited to Fund performance through the most recent
changes to the Fund's performance, calendar year, the Board also reviewed
advisory fees, expense limitations and/or more recent Fund performance and this
fee waivers. review did not change their conclusions.
(continued)
27
AIM Global Aggressive Growth Fund
C. ADVISORY FEES AND FEE WAIVERS E. PROFITABILITY AND FINANCIAL RESOURCES by the Fund and/or other funds advised by
OF AIM AIM are used to pay for research and
The Board compared the Fund's contractual execution services. The Board noted that
advisory fee rate to the contractual The Board reviewed information from AIM soft dollar arrangements shift the
advisory fee rates of funds in the Fund's concerning the costs of the advisory and payment obligation for the research and
Lipper peer group that are not managed by other services that AIM and its executions services from AIM to the funds
AIM, at a common asset level and as of the affiliates provide to the Fund and the and therefore may reduce AIM's expenses.
end of the past calendar year. The Board profitability of AIM and its affiliates The Board also noted that research
noted that the Fund's advisory fee rate was in providing these services. The Board obtained through soft dollar arrangements
below the median advisory fee rate of its also reviewed information concerning the may be used by AIM in making investment
peers. The Board also reviewed the financial condition of AIM and its decisions for the Fund and may therefore
methodology used by Lipper and noted that affiliates. The Board also reviewed with benefit Fund shareholders. The Board
the contractual fee rates shown by Lipper AIM the methodology used to prepare the concluded that AIM's soft dollar
include any applicable long-term profitability information. The Board arrangements were appropriate. The Board
contractual fee waivers. The Board noted considered the overall profitability of also concluded that, based on their
that AIM does not serve as an advisor to AIM, as well as the profitability of AIM review and representations made by AIM,
other mutual funds or other clients with in connection with managing the Fund. The these arrangements were consistent with
investment strategies comparable to those Board noted that AIM continues to operate regulatory requirements.
of the Fund. at a net profit, although increased
expenses in recent years have reduced the The Board considered the fact that the
The Board noted that AIM has not profitability of AIM and its affiliates. Fund's uninvested cash and cash
proposed any advisory fee waivers or The Board concluded that the Fund's collateral from any securities lending
expense limitations for the Fund. However, advisory fees were fair and reasonable, arrangements may be invested in money
the Board also noted that AIM has and that the level of profits realized by market funds advised by AIM pursuant to
recommended that the Board approve an AIM and its affiliates from providing procedures approved by the Board. The
amendment to the Fund's contractual services to the Fund was not excessive in Board noted that AIM will receive
advisory fee schedule that would implement light of the nature, quality and extent advisory fees from these affiliated money
the contractual advisory fee waiver that of the services provided. The Board market funds attributable to such
had been formerly committed to by AIM, considered whether AIM is financially investments, although AIM has
which waiver provided for lower effective sound and has the resources necessary to contractually agreed to waive the
fee rates at all asset levels than the perform its obligations under the Fund's advisory fees payable by the Fund with
Fund's current contractual advisory fee advisory agreement, and concluded that respect to its investment of uninvested
schedule. The Board noted that AIM's AIM has the financial resources necessary cash in these affiliated money market
recommendation was made in response to the to fulfill these obligations. funds through at least June 30, 2008. The
recommendation of the independent Senior Board considered the contractual nature
Officer that AIM consider whether the F. INDEPENDENT WRITTEN EVALUATION OF THE of this fee waiver and noted that it
advisory fee waivers for certain equity AIM FUND'S SENIOR OFFICER remains in effect until at least June 30,
Funds, including the Fund, should be 2008. The Board concluded that the Fund's
simplified. The Board concluded that it The Board noted that, upon their investment of uninvested cash and cash
would be appropriate to approve the direction, the Senior Officer of the collateral from any securities lending
proposed amendment to the Fund's Fund, who is independent of AIM and AIM's arrangements in the affiliated money
contractual advisory fee schedule and that affiliates, had prepared an independent market funds is in the best interests of
it was not necessary at this time to written evaluation to assist the Board in the Fund and its shareholders.
discuss with AIM whether to implement any determining the reasonableness of the
fee waivers or expense limitations for the proposed management fees of the AIM
Fund. Funds, including the Fund. The Board
noted that they had relied upon the
After taking account of the Fund's Senior Officer's written evaluation
contractual advisory fee rate, as well as instead of a competitive bidding process.
the comparative advisory fee information In determining whether to continue the
discussed above, the Board concluded that Fund's advisory agreement, the Board
the Fund's advisory fees were fair and considered the Senior Officer's written
reasonable. evaluation.
D. ECONOMIES OF SCALE AND BREAKPOINTS G. COLLATERAL BENEFITS TO AIM AND ITS
AFFILIATES
The Board considered the extent to which
there are economies of scale in AIM's The Board considered various other
provision of advisory services to the Fund. benefits received by AIM and its
The Board also considered whether the Fund affiliates resulting from AIM's
benefits from such economies of scale relationship with the Fund, including the
through contractual breakpoints in the fees received by AIM and its affiliates
Fund's advisory fee schedule or through for their provision of administrative,
advisory fee waivers or expense transfer agency and distribution services
limitations. The Board noted that the to the Fund. The Board considered the
Fund's contractual advisory fee schedule performance of AIM and its affiliates in
includes one breakpoint and that the level providing these services and the
of the Fund's advisory fees, as a organizational structure employed by AIM
percentage of the Fund's net assets, has and its affiliates to provide these
decreased as net assets increased because services. The Board also considered that
of the breakpoint. The Board noted that the these services are provided to the Fund
amendment to the Fund's contractual pursuant to written contracts which are
advisory fee schedule discussed above reviewed and approved on an annual basis
provides for seven breakpoints. Based on by the Board. The Board concluded that
this information, the Board concluded that AIM and its affiliates were providing
the Fund's advisory fees appropriately these services in a satisfactory manner
reflect economies of scale at current asset and in accordance with the terms of their
levels. The Board also noted that the Fund contracts, and were qualified to continue
shares directly in economies of scale to provide these services to the Fund.
through lower fees charged by third party
service providers based on the combined The Board considered the benefits
size of all of the AIM Funds and realized by AIM as a result of portfolio
affiliates. brokerage transactions executed through
"soft dollar" arrangements. Under these
arrangements, portfolio brokerage
commissions paid
28
AIM Global Aggressive Growth Fund
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year-end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code or to meet a specific state's requirement.
The Fund designates the following amounts or, if subsequently determined to be
different, the maximum amount allowable for its fiscal year ended October 31,
2007:
FEDERAL AND STATE INCOME TAX
<Table>
Long-Term Capital Gain Dividends $111,785,995
Qualified Dividend Income* 72.50%
Corporate Dividends Received Deduction* 6.50%
</Table>
* The above percentages are based on ordinary income dividends paid to
shareholders during the fund's fiscal year.
NON-RESIDENT ALIEN SHAREHOLDERS
<Table>
Qualified Short-Term Gains $17,713,996
Qualified Interest Income** 3.40%
</Table>
** The above percentage is based on income dividends paid to shareholders
during the fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended January 31, 2007, April 30, 2007, July 31, 2007 and
October 31, 2007 were 66.47%, 67.92%, 63.09%, and 70.80%, respectively.
29
AIM Global Aggressive Growth Fund
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM International Mutual Funds (the
"Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each
trustee oversees 104 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. Each officer serves for a one year term or until their
successors are elected and qualified. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY
TRUST SINCE DURING PAST 5 YEARS TRUSTEE/ DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Interested Persons
- -------------------------------------------------------------------------------------------------------------------------
Martin L. Flanagan(1) -- 1960 2007 Director, Chief Executive Officer and None
Trustee President, Invesco Ltd. (ultimate parent
of AIM and a global investment
management firm) and, INVESCO PLC
(parent of AIM and a global investment
management firm); Chairman, A I M
Advisors, Inc. (registered investment
advisor); Director, Chairman, Chief
Executive Officer and President, IVZ
Inc. (holding company); and INVESCO
North American Holdings, Inc. (holding
company); Chairman and President,
INVESCO Group Services, Inc. (service
provider); Trustee, The AIM Family of
Funds(R); Vice Chairman, Investment
Company Institute; and Member of
Executive Board, SMU Cox School of
Business
Formerly: Chairman, Investment Company
Institute; President, Co-Chief Executive
Officer, Co-President, Chief Operating
Officer and Chief Financial Officer,
Franklin Resources, Inc. (global
investment management organization)
- -------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Director, Chief Executive Officer and None
Trustee, President and President, AIM Mutual Fund Dealer Inc.
Principal (registered broker dealer), A I M
Executive Officer Advisors, Inc., AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services
(registered investment advisor and
registered transfer agent) and 1371
Preferred Inc. (holding company);
Director, Chairman, Chief Executive
Officer and President, A I M Management
Group Inc. (financial services holding
company) and A I M Capital Management,
Inc. (registered investment advisor);
Director and President, INVESCO Funds
Group, Inc. (registered investment
advisor and register transfer agent) and
AIM GP Canada Inc. (general partner for
a limited partnership); Director, A I M
Distributors, Inc. (registered broker
dealer); Director and Chairman, AIM
Investment Services, Inc. (registered
transfer agent) and INVESCO
Distributors, Inc. (registered broker
dealer); Director, President and
Chairman, IVZ Callco Inc. (holding
company), INVESCO Inc. (holding company)
and AIM Canada Holdings Inc. (holding
company); Director and Chief Executive
Officer, AIM Trimark Corporate Class
Inc. (formerly AIM Trimark Global Fund
Inc.) (corporate mutual fund company)
and AIM Trimark Canada Fund Inc.
(corporate mutual fund company);
Trustee, President and Principal
Executive Officer of The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); Trustee and
Executive Vice President, The AIM Family
of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); and Manager,
PowerShares Capital Management LLC
Formerly: Director and Chairman, Fund
Management Company (registered broker
dealer); President and Principal
Executive Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); Chairman, AIM
Canada Holdings, Inc.; President, AIM
Trimark Global Fund Inc. and AIM Trimark
Canada Fund Inc.; and Director, Trimark
Trust (federally regulated Canadian
Trust Company)
- -------------------------------------------------------------------------------------------------------------------------
Independent Trustees
- -------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1992 Chairman, Crockett Technology Associates ACE Limited (insurance company);
Trustee and Chair (technology consulting company) and Captaris, Inc. (unified
messaging provider)
- -------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Retired Badgley Funds, Inc. (registered
Trustee investment company) (2 portfolios)
Formerly: Partner, law firm of Baker &
McKenzie
- -------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2003 Founder, Green, Manning & Bunch Ltd., None
Trustee (investment banking firm); and Director,
Policy Studies, Inc. and Van Gilder
Insurance Corporation
- -------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and None
Trustee private business corporations, including
the Boss Group Ltd. (private investment
and management); Reich & Tang Funds
(Chairman) (registered investment
company) (7 portfolios), Daily Income
Fund (4 portfolios), California Daily
Tax Free Income Fund, Inc., Connecticut
Daily Tax Free Income Fund, Inc. and New
Jersey Daily Municipal Fund, Inc.,
Annuity and Life Re (Holdings), Ltd.
(insurance company), and Homeowners of
America Holding Corporation (property
casualty company)
Formerly: Director, CompuDyne
Corporation (provider of product and
services to the public security market);
Director, President and Chief Executive
Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo;
Director of various affiliated Volvo
companies; and Director, Magellan
Insurance Company
- -------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Administaff
Trustee Century Group, Inc. (government affairs
company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P.
(cattle, hunting, corporate
entertainment), and Discovery Global
Education Fund (non-profit)
Formerly: Chief Executive Officer,
Texana Timber LP (sustainable forestry
company)
- -------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1991 Partner, law firm of Kramer Levin Director, Reich & Tang Funds) (7
Trustee Naftalis and Frankel LLP portfolios)
- -------------------------------------------------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired None
Trustee
Formerly: Partner, Deloitte & Touche;
and Director, Mainstay VP Series Funds,
Inc. (25 portfolios)
- -------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan was appointed as Trustee of the Trust on February 24, 2007. Mr.
Flanagan is considered an interested person of the Trust because he is an
officer of the advisor to the Trust, and an officer and a director of
INVESCO PLC, parent of the advisor to the Trust.
(2) Mr. Taylor 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.
30
TRUSTEES AND OFFICERS--(CONTINUED)
AIM Global Aggressive Growth Fund
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY TRUSTEE/
TRUST SINCE DURING PAST 5 YEARS DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Other Officers
- -------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer N/A
Senior Vice President and of The AIM Family of Funds--Registered
Senior Officer Trademark--
Formerly: Director of Compliance and
Assistant General Counsel, ICON
Advisers, Inc.; Financial Consultant,
Merrill Lynch; General Counsel and
Director of Compliance, ALPS Mutual
Funds, Inc.
- -------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, N/A
Senior Vice President, Chief Secretary and General Counsel, A I M
Legal Officer and Secretary Management Group Inc., A I M Advisors,
Inc. and A I M Capital Management, Inc.;
Director, Vice President and Secretary,
AIM Investment Services, Inc. and
INVESCO Distributors, Inc.; Director,
Senior Vice President and Secretary,
A I M Distributors, Inc.; Director and
Vice President, INVESCO Funds Group
Inc.; Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--; and
Manager, PowerShares Capital Management
LLC
Formerly: Director, Vice President and
Secretary, Fund Management Company; Vice
President, A I M Capital Management,
Inc.; Chief Operating Officer, Senior
Vice President, General Counsel and
Secretary, Liberty Ridge Capital, Inc.
(an investment adviser); Vice President
and Secretary, PBHG Funds (an investment
company); Vice President and Secretary,
PBHG Insurance Series Fund (an
investment company); General Counsel and
Secretary, Pilgrim Baxter Value
Investors (an investment adviser); Chief
Operating Officer, General Counsel and
Secretary, Old Mutual Investment
Partners (a broker-dealer); General
Counsel and Secretary, Old Mutual Fund
Services (an administrator); General
Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder
servicing center); Executive Vice
President, General Counsel and
Secretary, Old Mutual Capital, Inc. (an
investment adviser); and Vice President
and Secretary, Old Mutual Advisors Funds
(an investment company)
- -------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, INVESCO PLC; N/A
Vice President and Vice President of The AIM Family of
Funds--Registered Trademark--
Formerly: Senior Vice President, A I M
Management Group Inc. (financial
services holding company); Senior Vice
President and Chief Compliance Officer,
A I M Advisors, Inc. and The AIM Family
of Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc. and A I M
Distributors, Inc.; Vice President, AIM
Investment Services, Inc. and Fund
Management Company; Senior Vice
President and Chief Compliance Officer
of The AIM Family of Funds--Registered
Trademark--; and Senior Vice President
and Compliance Director, Delaware
Investments Family of Funds
- -------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 Senior Vice President and General
Vice President Counsel, INVESCO PLC; Director, INVESCO
Funds Group, Inc.; Director and
Secretary, IVZ, Inc. and INVESCO Group
Services, Inc.; Secretary, INVESCO North
American Holdings, Inc.; and Vice
President of The AIM Family of
Funds--Registered Trademark--
Formerly: Director, Senior Vice N/A
President, Secretary and General
Counsel, A I M Management Group Inc. and
A I M Advisors, Inc.; Senior Vice
President, A I M Distributors, Inc.;
Director, General Counsel and Vice
President, Fund Management Company; Vice
President, A I M Capital Management,
Inc. and AIM Investment Services, Inc.;
Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--;
Director and Vice President, INVESCO
Distributors, Inc.; Chief Executive
Officer and President, INVESCO Funds
Group, Inc.; and Senior Vice President
and General Counsel, Liberty Financial
Companies, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Sidney M. Dilgren -- 1961 2004 Vice President, A I M Advisors, Inc. and N/A
Vice President, Principal A I M Capital Management, Inc.; and Vice
Financial Officer and President, Treasurer and Principal
Treasurer Financial Officer of The AIM Family of
Funds--Registered Trademark--
Formerly: Fund Treasurer, A I M
Advisors, Inc.; Senior Vice President,
AIM Investment Services, Inc.; and Vice
President, A I M Distributors, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2004 Head of INVESCO's World Wide Fixed N/A
Vice President Income and Cash Management Group;
Director of Cash Management and Senior
Vice President, A I M Advisors, Inc. and
A I M Capital Management, Inc; Executive
Vice President, A I M Distributors,
Inc.; Senior Vice President, A I M
Management Group Inc.; Vice President,
The AIM Family of Funds--Registered
Trademark-- (other than AIM Treasurer's
Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust);
and President and Principal Executive
Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
Formerly: Director and President, Fund
Management Company; Chief Cash
Management Officer and Managing
Director, A I M Capital Management,
Inc.; Vice President, A I M Advisors,
Inc. and The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
- -------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance N/A
Anti-Money Laundering Officer, A I M Advisors, Inc., A I M
Compliance Officer Capital Management, Inc., A I M
Distributors, Inc., AIM Investment
Services, Inc., AIM Private Asset
Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering
Compliance Officer, Fund Management
Company; and Manager of the Fraud
Prevention Department, AIM Investment
Services, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, A I M Management N/A
Chief Compliance Officer Group Inc.; Senior Vice President and
Chief Compliance Officer, A I M
Advisors, Inc. and A I M Capital
Management, Inc.; Chief Compliance
Officer of The AIM Family of
Funds--Registered Trademark--, INVESCO
Global Asset Management (N.A.), Inc.,
(registered investment advisor), INVESCO
Institutional (N.A.), Inc., (registered
investment advisor), INVESCO Private
Capital Investments, Inc. (holding
company), INVESCO Private Capital, Inc.
(registered investment advisor) and
INVESCO Senior Secured Management, Inc.
(registered investment advisor); and
Vice President, A I M Distributors, Inc.
and AIM Investment Services, Inc.
Formerly: Vice President, A I M Capital
Management, Inc. and Fund Management
Company; Global Head of Product
Development, AIG-Global Investment
Group, Inc.; and Chief Compliance
Officer and Deputy General Counsel,
AIG-SunAmerica Asset Management
- -------------------------------------------------------------------------------------------------------------------------
</Table>
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 1.800.959.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, PricewaterhouseCoopers
Suite 100 11 Greenway Plaza Inc. LLP
Houston, TX 77046-1173 Suite 100 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Ballard Spahr INDEPENDENT TRUSTEES AIM Investment State Street Bank and
Andrews & Ingersoll, LLP Kramer, Levin, Naftalis Services, Inc. Trust
1735 Market Street, 51st & Frankel LLP P.O. Box 4739 Company
Floor 1177 Avenue of the Houston, TX 77210-4739 225 Franklin Street
Philadelphia, PA 19103-7599 Americas Boston, MA 02110-2801
New York, NY 10036-2714
</Table>
31
[EDELIVERY Fund holdings and proxy voting information
GO PAPERLESS
AIMINVESTMENTS.COM/EDELIVERY The Fund provides a complete list of its holdings four times in
GRAPHIC] each fiscal year, at the quarter-ends. For the second and
fourth quarters, the lists appear in the Fund's semiannual and
REGISTER FOR EDELIVERY annual reports to shareholders. For the first and third
quarters, the Fund files the lists with the Securities and
eDelivery is the process of receiving your fund and account Exchange Commission (SEC) on Form N-Q. The most recent list of
information via e-mail. Once your quarterly statements, tax portfolio holdings is available at AIMinvestments.com. From our
forms, fund reports, and prospectuses are available, we will send home page, click on Products & Performance, then Mutual Funds,
you an e-mail notification containing links to these documents. then Fund Overview. Select your Fund from the drop-down menu
For security purposes, you will need to log in to your account to and click on Complete Quarterly Holdings. Shareholders can also
view your statements and tax forms. look up the Fund's Forms N-Q on the SEC Web site at sec.gov.
Copies of the Fund's Forms N-Q may be reviewed and copied at
WHY SIGN UP? the SEC Public Reference Room in Washington, D.C. You can
obtain information on the operation of the Public Reference
Register for eDelivery to: Room, including information about duplicating fee charges, by
calling 202-942-8090 or 800-732-0330, or by electronic request
o save your Fund the cost of printing and postage. at the following e-mail address: publicinfo@sec.gov. The SEC
file numbers for the Fund are 811-06463 and 033-44611.
o reduce the amount of paper you receive.
A description of the policies and procedures that the Fund uses
o gain access to your documents faster by not waiting for the to determine how to vote proxies relating to portfolio
mail. securities is available without charge, upon request, from our
Client Services department at 800-959-4246 or on the AIM Web
o view your documents online anytime at your convenience. site, AIMinvestments.com. On the home page, scroll down and
click on Proxy Policy. The information is also available on the
o save the documents to your personal computer or print them out SEC Web site, sec.gov.
for your records.
Information regarding how the Fund voted proxies related to its
HOW DO I SIGN UP? portfolio securities during the 12 months ended June 30, 2007,
is available at our Web site. Go to AIMinvestments.com, access
It's easy. Just follow these simple steps: the About Us tab, click on Required Notices and then click on
Proxy Voting Activity. Next, select the Fund from the drop-down
1. Log in to your account. menu. The information is also available on the SEC Web site,
sec.gov.
2. Click on the "Service Center" tab.
If used after January 20, 2008, this report must be accompanied
3. Select "Register for eDelivery" and complete the consent by a Fund fact sheet or by an AIM Quarterly Performance Review
process. for the most recent quarter-end. Mutual funds and
exchange-traded funds distributed by A I M Distributors, Inc.
This AIM service is provided by AIM Investment Services, Inc.
GLA-AR-1 A I M Distributors, Inc.
[AIM INVESTMENTS LOGO]
-- REGISTERED TRADEMARK --
INTERNATIONAL/
GLOBAL EQUITY
AIM Global Growth Fund
Annual Report to Shareholders - October 31,2007
International/
Global Growth
Table of Contents
Letters to Shareholders ......... 2
Performance Summary ............. 4
Management Discussion ........... 4
Long-term Fund Performance ...... 6
Supplemental Information ........ 8
Schedule of Investments ......... 9
Financial Statements ............ 12
Notes to Financial Statements ... 15
Financial Highlights ............ 22
Auditor's Report ................ 25
Fund Expenses ................... 26
Approval of Advisory Agreement .. 27 [COVER GLOBE IMAGE]
Tax Information ................. 29
Trustees and Officers ........... 30
[AIM INVESTMENT SOLUTIONS]
[GRAPHIC] [GRAPHIC]
[DOMESTIC [FIXED
EQUITY] INCOME]
[GRAPHIC] [GRAPHIC] [GRAPHIC]
[TARGET [TARGET [DIVERSIFIED
RISK] MATURITY] PORTFOLIOS]
[GRAPHIC] [GRAPHIC]
[SECTOR [INTERNATIONAL/
EQUITY] GLOBAL EQUITY]
[AIM INVESTMENTS LOGO]
- -- REGISTERED TRADEMARK --
AIM Global Growth Fund
Dear Shareholders of the AIM Family of Funds:
I'm pleased to provide you with this report, which includes a discussion of how your Fund was managed
during the period under review and factors that affected its performance. The following pages contain
important information that answers questions you may have about your investment.
[TAYLOR
PHOTO] Despite notable volatility at points throughout the fiscal year ended October 31, 2007, major stock
market indexes in the U.S. and abroad generally performed well. Reasons for their favorable performance
included positive economic growth, particularly overseas; strong corporate profits; and action by the U.S.
Federal Reserve Board (the Fed) to reassure skittish markets, among other factors.
Philip Taylor
At its September 18, 2007, meeting, the Fed cut the federal funds target rate for the first time since
June 2003.(1) The cut followed 17 rate increases from June 2004 to June 20061 and was intended to address
investor concerns about a weak housing market generally and problems in the subprime mortgage market
specifically. The Fed's action trig- gered an immediate and broad stock market rally. The Fed cut this key
interest rate again on October 31, 2007.(1)
At AIM Investments --REGISTERED TRADEMARK--, we know that market conditions change--often suddenly and
sometimes dramatically. We can help you deal with market volatility by offering a broad range of mutual
funds, including:
o Domestic, global and international equity funds
o Taxable and tax-exempt fixed-income funds
o Allocation portfolios, with risk/return characteristics to match your needs
o AIM Independence Funds--target-maturity funds that combine retail mutual funds and PowerShares
--REGISTERED TRADEMARK-- exchange-traded funds--with risk/return characteristics that change as your
target retirement date nears
I encourage you to talk with your financial advisor if you have concerns about your portfolio. We
believe in the value of working with a trusted financial advisor who can recommend AIM funds that are
appropriate for your portfolio and that address your long-term investment goals and risk tolerance
regardless of prevailing short-term market conditions.
In conclusion
My colleague, Bob Graham, recently announced his decision to step down as vice chair of the AIM Funds board
of directors. In 1976, Bob was one of three men who co-founded AIM. In the three decades since, he has been
instru- mental in transforming AIM from a small investment management firm into one of America's most
respected mutual fund companies--and, in 1997, into a global independent retail and institutional
investment manager.
In May, with shareholder approval, AIM Investments' parent company changed its name from AMVESCAP PLC to
Invesco Ltd., uniting our worldwide operations and global expertise under one new name. While the name of
our parent company may be new to you, I can assure you that our commitment to excellent customer service
remains unchanged. Our highly trained, courteous client service representatives are eager to answer your
ques- tions, provide you with product information or assist you with account transactions. I encourage you
to give us an opportunity to serve you by calling us at 800-959-4246.
We at AIM are committed to helping you achieve your financial goals. We work every day to earn your
trust, and we're grateful for the confidence you've placed in us.
Sincerely,
/S/ PHILIP TAYLOR
Philip Taylor
President - AIM Funds
CEO, AIM Investments
December 17, 2007
Source: (1)U.S. Federal Reserve Board
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
2
AIM Global Growth Fund
Dear Fellow Shareholders:
In overseeing the management of the AIM family of funds on your behalf, your Board of Trustees of the AIM
Funds continues to focus on improved investment performance, reduced shareholder costs, and high ethical
standards.
[CROCKETT
PHOTO] Your Board welcomes two new members: Marty Flanagan, President and CEO of INVESCO, AIM's parent company,
and Phil Taylor, who was named CEO of AIM Investments --REGISTERED TRADEMARK-- in April 2006. Robert
Graham, who has given more than 30 years of leadership to the company and the mutual fund industry since
founding AIM in 1976, has retired, stepping down in the process from his most recent role as vice chairman
of the Board. We thank Bob for his many contributions and wish him a long and happy future.
Bruce L. Crockett
Our review of fund performance has shown healthy progress, but the process is necessarily one of
continuous improvement. In general, as of October 31, 2007, we have seen persistent investment discipline
and more consistently good results. While this statement may not apply to every AIM Fund all the time, as I
write this letter, the overall trend in fund management and performance has been positive.
The investment management talent at AIM has recently been enhanced by the promotion of Karen Dunn Kelley
to Head of INVESCO's Worldwide Fixed Income as well as Director of AIM Global and Cash Management, with
responsibility for all fixed income and money market funds that serve both institutional and individual
investors. Under Karen's direction, AIM's cash management organization grew to one of the world's largest
and most respected, with top-tier performance. The operations now combined under her charge represent more
than $150 billion in assets, 120 investment professionals, and products that span the entire yield curve
(as of October 31, 2007).
In other news, your Board took a more active role in preparing for "proxy season," the period when fund
managers must vote the shares held by their funds "for" or "against" various proposals on the ballots of
the issuing companies. Beginning in the 2007 proxy season, AIM implemented new proxy voting policies,
developed by management in conjunction with an ad hoc Board committee, which provided a solid framework for
properly evaluating and executing the many decisions the AIM Funds are required to make to vote shares.
In general, the AIM Funds voted for proposals that would allow shareholders a greater role in election
of directors, proxy access and "say for pay." The AIM Funds voted against directors whom AIM believed
failed to govern well in cases of corporate mismanagement, such as the backdating of options grants, and
against "poison pill" and "take under" proposals that would favor the financial interests of managers at
the expense of investors in the case of a merger or acquisition. You can view the proxy votes cast for your
fund by going to AIMinvestments.com. Click the "About Us" tab, then go to "Required Notices" and "Proxy
Voting Activity."
Additionally, your Board raised the amount its members are recommended to invest in the AIM Funds within
three years of joining the Board, with the goal of aligning our interests even more closely with yours.
Furthermore, at our June meeting we renewed the investment advisory contracts between the AIM Funds and
AIM for another year, applying the same rigorous evaluation process that was enhanced and formalized in
2005. For more information on this process, please visit AIMinvestments.com. Click on the "Products and
Performance" tab and go to "Investment Advisory Agreement Renewals."
Your Board's ability to best represent your interests depends on our knowledge of your opinions and
concerns. Please send me an email (bruce@brucecrockett.com) with your thoughts on the following:
1) How important is it to you to hear about your Board's decisions and activities in these letters?
2) What other information (on overall performance, specific funds, managers, etc.) would make the
letters more meaningful to you?
3) Would you prefer that communications from your Board continue to be delivered in paper form by
regular mail or be sent electronically by email?
If you would prefer to communicate through a quick online survey, please go to AIMinvestments.com and
provide your responses there.
We need to hear from you to do our best job, and I look forward to your responses.
Sincerely,
/S/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Directors
December 17, 2007
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
3
AIM Global Growth Fund
Management's discussion of Fund performance have experienced, or exhibit the potential
for, accelerating or above average earnings
================================================================================ growth but whose prices do not fully reflect
PERFORMANCE SUMMARY these attributes.
Steady market gains over the first half of the fiscal year were aided by While research responsibilities within the
improving corporate earnings and record levels of merger and acquisition portfolio management team are focused by
activity. The second half of the fiscal year was characterized by a more uneven geographic region, we select investments for
climb by markets. Market volatility increased due to negative news in areas of the Fund by using a bottom-up investment
the U.S. economy, as well as problems emanating from the U.S. subprime mortgage approach, which means that we construct the
market which spread out globally. Fund primarily on a stock-by-stock basis. We
focus on the strengths of individual
Within this environment, Class A shares of AIM Global Growth Fund, excluding companies rather than sectors, countries or
applicable sales charges, outperformed its broad market index while slightly market-cap trends.
lagging its style-specific index.* Strong stock selection across the consumer
discretionary, consumer staples and industrials sectors enabled the Fund to We believe disciplined sell decisions are
deliver solid double-digit absolute returns. In contrast, lack of exposure to key to successful investing. We consider
certain strongly performing style index holdings, predominantly in the selling a stock for one of the following
information technology (IT) sector,detract-ed from relative results. reasons:
Your Fund's long-term performance appears later in this report. o A company's fundamentals deteriorate or it
posts disappointing earnings.
FUND VS. INDEXES
o A stock's price seems overvalued.
Total returns, 10/31/06-10/31/07, excluding applicable sales charges. If sales
charges were included, returns would be lower. o A more attractive opportunity becomes
available
Class A Shares 23.35%
Class B Shares 22.42 Market conditions and your Fund
Class C Shares 22.41
MSCI World Index* (Broad Market Index) 20.39 Although the U.S. market delivered positive
MSCI World Growth Index* (Style-Specific Index) 24.05 results over the fiscal year, international
Lipper Global Large-Cap Growth Funds Index* (Peer Group Index) 28.40 markets continued their ongoing rally (now 5
SOURCE: *LIPPER INC. years old) with particular strength in
================================================================================ Europe, as positive economic data and a
strong currency drove returns higher in the
How we invest by both quantitative analysis and region. While all benchmark countries
portfolio construction techniques. finished the period in positive territory,
When selecting stocks for your Fund, we Our EQV (Earnings, Quality and Japan stood out as it significantly lagged.
employ a disciplined investment Valuation) strategy focuses primarily Recent economic data pointed to a lack of
strategy that emphasizes fundamental on identifying quality companies that consumer and investor confidence, and
research, supported leading indicators suggested a recession in
Japan is not out of the question. Emerging
======================================= ====================================== markets enjoyed strong investor optimism as
PORTFOLIO COMPOSITION TOP FIVE COUNTRIES* TOP 10 EQUITY HOLDINGS*
By sector 1. U.S.A. 24.2% 1. Porsche A.G.-Pfd. (Germany) 2.9%
Financials 19.0% 2. Germany 14.1 2. Syngenta A.G. (Switzerland) 2.3
Consumer Discretionary 15.8 3. Switzerland 10.1 3. InBev N.V. (Belgium) 2.3
Industrials 14.7 4. France 7.9 4. BHP Billiton Ltd. (Australia) 1.9
Consumer Staples 12.8 5. United Kingdom 7.1 5. BNP Paribas (France) 1.9
Information Technology 9.8 Total Net Assets $462.76 million 6. Imperial Tobacco Group PLC
Health Care 9.0 (United Kingdom) 1.8
Energy 7.5 Total Number of Holdings* 84 7. Roche Holding A.G. (Switzerland) 1.8
Materials 6.9 8. Total S.A. (France) 1.8
Money Market Funds Plus Other 9. General Dynamics Corp. 1.7
Assets Less Liabilities 4.5 10. Henkel KGaA-Pfd. (Germany) 1.7
The Fund's holdings are subject to
change, and there is no assurance that
the Fund will continue to hold any
particular security.
*Excluding money market fund holdings.
======================================= ======================================
(continued)
4
AIM Global Growth Fund
many local markets posted very strong the Fund, also performed well, Barrett K. Sides
gains, particularly China and India as well benefiting the Fund's style-specific [SIDES Senior portfolio manager, is
as commodity related companies within the index and detracting from relative PHOTO] lead manager of AIM Global
asset class. results for the Fund. Caution on Nokia's Growth Fund with respect to
valuation kept us out of the stock, the Fund's investments in Asia Pacific
Within this environment Fund performance while a combination of lower quality and Latin America. He joined AIM in 1990.
was broad-based with all regions and almost earnings and high valuations kept us out Mr. Sides graduated with a B.S. in
all sectors registering double-digit of Nintendo. economics from Bucknell University. He
results for the period. Consistent with the also earned a master's in international
Fund's bottom- up investment process, When building the portfolio, our business from the University of St.
security selection was the primary driver primary focus was on identifying Thomas.
of absolute and relative performance attractive, individual investment
results. opportunities rather than making Kirk L. Anderson
allocation decisions based on [ANDERSON Portfolio manager, is lead
For example, key contributors to macro-economic projections. Thus, the PHOTO] manager of AIM Global Growth
relative outperformance came from holdings Fund's positioning (sector, region or Fund with respect to the
in France, Germany and Belgium, markets country) was driven by bottom-up stock domestic portion of the Fund's portfolio.
most U.S. investors may view as having selection as opposed to top-down He joined AIM in 1994. Mr. Anderson earned
subdued growth. The reality was quite the allocations. The bottom-up investment a B.A. in political science from Texas A&M
contrary. Applying our disciplined EQV strategy tends to lead to "evolutionary" University. He also earned an M.S. in
investment process, we were able to find rather than "revolutionary" changes in finance from the University of Houston.
several strong performing quality stocks the Fund's portfolio. Recent market
across these mar- kets. Leading volatility provided us an opportunity to Matthew W. Dennis
contributors to Fund perform- ance included sell out of certain holdings, taking [DENNIS Chartered Financial
automobile manufacturer Porsche, Belgium profits and moving into stronger PHOTO] Analyst, portfolio manager,
brewer InBev and French construction opportunities that we believe were is lead manager of AIM Global
company Vinci. unfairly hurt due to market volatility. Growth Fund with respect to the Fund's
A notable sale was VINCI, the French investments in Europe and Canada. He has
Over the period, international equities construction company. After several been in the investment business since
con- tinued to generally outperform U.S. years of strong performance, stretched 1994. Mr. Dennis earned a B.A. in
equities. This favored the Fund, from a valuations led us to move out of this economics from The University of Texas at
relative perspective. Our underweight in position. Notable purchases included Austin. He also earned an M.S. in finance
domestic equities combined with an U.S. infrastructure construction firm from Texas A&M University.
overweight in stronger performing FOSTER WHEELER which benefited from
European holdings contributed favorably strong balance sheet/cash flow Clas G. Olsson
to relative results. Our rationale for this generation, and German automobile [OLSSON Senior portfolio manager and
regional exposure was based on results of manufacturer DAIMLERCHRYSLER. PHOTO] head of AIM's International
our bottom-up fundamental research that led Restructuring of the company's trucking Investment Management Unit,
us to find more attractive valuation and business drove profit margins higher. is manager of AIM Global Growth Fund. He
growth opportunities in Europe. Foreign joined AIM in 1994. Mr. Olsson became a
exchange was another positive contributor, The performance of international commissioned naval officer at the Royal
with our exposure to the euro adding the stocks over the last several years Swedish Naval Academy in 1988. He earned a
greatest value to overall return. Because underscores the investment opportunities B.B.A. from The University of Texas at
we do not typically hedge currencies--we beyond U.S. borders. Over the past 12 Austin.
instead buy stocks in their local currency months, the Fund has experienced strong
and then translate that value back into double-digit returns. It would be Assisted by the Asia Pacific/Latin
dollars--foreign currency appreciation imprudent for us to suggest that such a American Team,Europe/Canada Team and
provided a boost to Fund performance. level of performance is sustainable over Large/Multi-Cap Growth Team
the long term. We thank you for your
In contrast, detractors from relative continued participation in AIM Global
performance came from our exposure in Growth Fund.
finan- cials, a sector negatively affected
by U.S. subprime mortgage problems. THE VIEWS AND OPINIONS EXPRESSED IN
Although hold- ings like STANDARD BANK MANAGEMENT'S DISCUSSION OF FUND
(South Africa) did well over the period, PERFORMANCE ARE THOSE OF A I M ADVISORS,
select holdings including ORIX (Japan) and INC. THESE VIEWS AND OPINIONS ARE
COMMERZBANK (Germany) were a drag on SUBJECT TO CHANGE AT ANY TIME BASED ON
relative results. The Fund's financials FACTORS SUCH AS MARKET AND ECONOMIC
stocks remained, however, liquid high CONDITIONS. THESE VIEWS AND OPINIONS MAY
quality investments in global growth NOT BE RELIED UPON AS INVESTMENT ADVICE
opportunities. Communications equipment OR RECOMMENDATIONS, OR AS AN OFFER FOR A
manufacturer Nokia and software gaming PARTICULAR SECURITY. THE INFORMATION IS
giant Nintendo, neither of which were held NOT A COMPLETE ANALYSIS OF EVERY ASPECT
in OF ANY MARKET, COUNTRY, INDUSTRY,
SECURITY OR THE FUND. STATEMENTS OF FACT
ARE FROM SOURCES CONSIDERED RELIABLE,
BUT A I M ADVISORS, INC. MAKES NO
REPRESENTATION OR WARRANTY AS TO THEIR
COMPLETENESS OR ACCURACY. ALTHOUGH
HISTORICAL PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS, THESE INSIGHTS MAY
HELP YOU UNDERSTAND OUR INVESTMENT
MANAGEMENT PHILOSOPHY.
See important Fund and index
disclosures later in this report.
5
AIM Global Growth Fund
Your Fund's long-term performance
Past performance cannot guarantee of funds reflects fund expenses and value during the early years shown in the
comparable future results. management fees; performance of a market chart. The vertical axis, the one that
index does not. Performance shown in the indicates the dollar value of an
The data shown in the chart include chart and table(s) does not reflect investment, is constructed with each
reinvested distributions, applicable sales deduction of taxes a shareholder would segment representing a percent change in
charges, Fund expenses and management fees. pay on Fund distributions or sale of the value of the investment. In this
Results for Class B shares are calculated Fund shares. Performance of the indexes chart, each segment represents a doubling,
as if a hypothetical shareholder had does not reflect the effects of taxes. or 100% change, in the value of the
liquidated his entire investment in the investment. In other words, the space
Fund at the close of the reporting period This chart, which is a logarithmic between $5,000 and $10,000 is the same
and paid the applicable contingent deferred chart, presents the fluctuations in the size as the space between $10,000 and
sales charges. Index results include value of the Fund and its indexes. We $20,000, and so on.
reinvested dividends, but they do not believe that a logarithmic chart is more
reflect sales charges. Performance of an effective than other types of charts in
index illustrating changes in
6
====================================================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT
INDEX DATA FROM 8/31/94, FUND DATA FROM 9/15/94
AIM GLOBAL AIM GLOBAL
GROWTH FUND GROWTH FUND MSCI
DATE -CLASS A SHARES -CLASS B SHARES MSCI WORLD INDEX(1) WORLD GROWTH INDEX(1)
8/31/94 $10000 $10000
9/94 $ 9289 $ 9830 9735 9770
10/94 9667 10220 10010 10004
11/94 9261 9790 9573 9605
12/94 9227 9750 9664 9749
1/95 8991 9490 9516 9600
2/95 9332 9849 9653 9747
3/95 9710 10239 10116 10222
4/95 10013 10549 10466 10601
5/95 10287 10840 10553 10685
6/95 10750 11330 10548 10698
7/95 11487 12109 11073 11222
8/95 11384 11989 10824 10906
9/95 11658 12270 11137 11288
10/95 11649 12260 10959 11165
11/95 11876 12490 11337 11520
12/95 12005 12616 11666 11782
1/96 12217 12840 11875 11991
2/96 12477 13104 11945 12077
3/96 12698 13339 12141 12253
4/96 13141 13796 12424 12508
5/96 13391 14050 12432 12581
6/96 13429 14081 12493 12667
7/96 12746 13359 12049 12195
8/96 13093 13715 12185 12296
9/96 13612 14254 12659 12856
10/96 13660 14296 12745 12894
11/96 14353 15018 13457 13547
12/96 14391 15048 13239 13281
1/97 14681 15343 13396 13466
2/97 14691 15343 13547 13615
3/97 14325 14967 13277 13296
4/97 14517 15149 13708 13906
5/97 15459 16127 14552 14717
6/97 16190 16880 15275 15528
7/97 17191 17918 15976 16245
8/97 16094 16767 14905 15036
9/97 17287 18008 15712 15901
10/97 16016 16676 14883 14884
11/97 16199 16859 15144 15261
12/97 16383 17044 15326 15400
1/98 16580 17232 15750 16002
2/98 17834 18538 16813 17131
3/98 18772 19498 17520 17722
4/98 19029 19760 17689 17824
5/98 18939 19655 17465 17624
6/98 19284 19999 17876 18377
7/98 19531 20249 17845 18345
8/98 16640 17242 15463 16195
9/98 16897 17502 15734 16556
10/98 17686 18306 17153 17994
11/98 18694 19340 18171 19152
12/98 20002 20682 19055 20549
1/99 20804 21509 19470 21271
2/99 20003 20673 18949 20423
3/99 20663 21338 19735 21175
4/99 20907 21575 20511 21137
5/99 20178 20814 19758 20398
6/99 21538 22210 20677 21649
7/99 21589 22252 20612 21407
8/99 21620 22275 20573 21668
9/99 22056 22716 20371 21702
10/99 23781 24476 21427 23121
11/99 26216 26968 22027 24474
12/99 30450 31310 23807 27274
====================================================================================================================================
SOURCES: (1)LIPPER INC.
====================================================================================================================================
[MOUNTAIN CHART]
1/00 28848 29657 22441 25562
2/00 31774 32646 22499 26448
3/00 31624 32476 24051 28022
4/00 29126 29894 23031 26140
5/00 27140 27847 22445 24588
6/00 29276 30019 23198 26089
7/00 28400 29100 22543 24775
8/00 30814 31568 23273 25652
9/00 28540 29225 22033 23378
10/00 26511 27142 21661 22395
11/00 22614 23135 20343 20666
12/00 23706 24237 20670 20275
1/01 23417 23931 21068 20887
2/01 19459 19882 19285 18221
3/01 17566 17944 18015 16745
4/01 18882 19282 19343 18095
5/01 18689 19078 19091 17730
6/01 18315 18692 18490 17110
7/01 17845 18193 18243 16856
8/01 17042 17366 17365 15816
9/01 15063 15358 15832 14501
10/01 15598 15880 16134 15118
11/01 16379 16674 17086 16266
12/01 16582 16868 17192 16345
1/02 16111 16380 16670 15811
2/02 15929 16198 16523 15853
3/02 16700 16970 17284 16244
4/02 16380 16628 16664 15548
5/02 16219 16470 16692 15464
6/02 15567 15802 15677 14570
7/02 14133 14339 14354 13542
8/02 14070 14271 14378 13538
9/02 12808 12978 12795 12194
10/02 13545 13727 13738 13142
11/02 13803 13977 14477 13619
12/02 13289 13455 13773 13093
1/03 12893 13046 13354 12620
2/03 12776 12921 13120 12484
3/03 12786 12921 13077 12591
4/03 13524 13669 14235 13489
5/03 14306 14453 15046 14044
6/03 14542 14691 15304 14241
7/03 14702 14838 15613 14516
8/03 14927 15065 15949 14807
9/03 15034 15167 16045 14891
10/03 15954 16087 16995 15777
11/03 16243 16370 17252 16000
12/03 16863 16982 18333 16769
1/04 17120 17243 18627 17112
2/04 17387 17504 18939 17320
3/04 17387 17493 18814 17146
4/04 17130 17220 18428 16804
5/04 17344 17436 18582 16970
6/04 17644 17730 18978 17200
7/04 16851 16925 18358 16376
8/04 16841 16903 18439 16324
9/04 17409 17471 18788 16652
10/04 17827 17880 19248 17060
11/04 18864 18924 20259 17922
12/04 19496 19549 21032 18597
1/05 19079 19117 20558 18096
2/05 19764 19786 21210 18557
3/05 19347 19366 20800 18202
4/05 18759 18754 20345 17802
5/05 19036 19026 20706 18264
6/05 19432 19413 20885 18349
7/05 20223 20195 21615 19110
8/05 20458 20411 21778 19280
9/05 20812 20752 22344 19706
10/05 20352 20275 21801 19287
11/05 20983 20899 22528 19913
12/05 21765 21660 23027 20347
1/06 23047 22931 24055 21285
2/06 22854 22727 24019 21067
3/06 23478 23329 24548 21591
4/06 24102 23931 25293 22091
====================================================================================================================================
====================================================================================================================================
[MOUNTAIN CHART]
5/06 23015 22842 24429 21240
6/06 23004 22820 24422 21205
7/06 23112 22911 24574 21034
8/06 23844 23614 25212 21592
9/06 24059 23820 25513 21782
10/06 24706 24444 26449 22558
11/06 25623 25329 27097 23127
12/06 26281 25964 27648 23429
1/07 26736 26406 27974 23799
2/07 26271 25930 27828 23650
3/07 27201 26828 28338 24105
4/07 28509 28099 29588 25163
5/07 29213 28779 30417 25896
6/07 29105 28656 30182 25790
7/07 28209 27747 29514 25475
8/07 28121 27645 29491 25536
9/07 29364 28847 30894 26928
10/07 30461 30874 31841 27984
====================================================================================================================================
AIM Global Growth Fund
=========================================== =========================================
AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/07,including applicable As of 9/30/07,the most recent calendar
sales charges quarter-end,including applicable sales
charges
CLASS A SHARES CLASS A SHARES
Inception (9/15/94) 8.86% Inception (9/15/94) 8.61%
10 Years 6.04 10 Years 4.84
5 Years 16.28 5 Years 16.71
1 Year 16.54 1 Year 15.32
CLASS B SHARES CLASS B SHARES
Inception (9/15/94) 8.97% Inception (9/15/94) 8.72%
10 Years 6.17 10 Years 4.98
5 Years 16.64 5 Years 17.10
1 Year 17.42 1 Year 16.11
CLASS C SHARES CLASS C SHARES
Inception (8/4/97) 5.26% Inception (8/4/97) 4.93%
10 Years 6.02 10 Years 4.82
5 Years 16.87 5 Years 17.30
1 Year 21.41 1 Year 20.10
=========================================== =========================================
THE PERFORMANCE DATA QUOTED REPRESENT PAST CLASS A SHARE PERFORMANCE REFLECTS
PERFORMANCE AND CANNOT GUARANTEE COMPARABLE THE MAXIMUM 5.50% SALES CHARGE, AND
FUTURE RESULTS; CURRENT PERFORMANCE MAY BE CLASS B AND CLASS C SHARE PERFORMANCE
LOWER OR HIGHER. PLEASE VISIT REFLECTS THE APPLICABLE CONTINGENT
AIMINVESTMENTS.COM FOR THE MOST RECENT DEFERRED SALES CHARGE (CDSC) FOR THE
MONTH-END PERFORMANCE. PERFORMANCE FIGURES PERIOD INVOLVED. THE CDSC ON CLASS B
REFLECT REINVESTED DISTRIBUTIONS,CHANGES IN SHARES DECLINES FROM 5% BEGINNING AT THE
NET ASSET VALUE AND THE EFFECT OF THE TIME OF PURCHASE TO 0% AT THE BEGINNING
MAXIMUM SALES CHARGE UNLESS OTHERWISE OF THE SEVENTH YEAR. THE CDSC ON CLASS C
STATED. INVESTMENT RETURN AND PRINCIPAL SHARES IS 1% FOR THE FIRST YEAR AFTER
VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE A PURCHASE.
GAIN OR LOSS WHEN YOU SELL SHARES.
THE PERFORMANCE OF THE FUND'S SHARE
THE TOTAL ANNUAL FUND OPERATING EXPENSE CLASSES WILL DIFFER PRIMARILY DUE TO
RATIO SET FORTH IN THE MOST RECENT FUND DIFFERENT SALES CHARGE STRUCTURES AND
PROSPECTUS AS OF THE DATE OF THIS REPORT CLASS EXPENSES.
FOR CLASS A,CLASS B AND CLASS C SHARES WAS
1.62%, 2.37% AND 2.37%,RESPECTIVELY. THE A REDEMPTION FEE OF 2% WILL BE
EXPENSE RATIOS PRESENTED ABOVE MAY VARY IMPOSED ON CERTAIN REDEMPTIONS OR
FROM THE EXPENSE RATIOS PRESENTED IN OTHER EXCHANGES OUT OF THE FUND WITHIN 30 DAYS ==========================================
SECTIONS OF THIS REPORT THAT ARE BASED ON OF PURCHASE. EXCEPTIONS TO THE
EXPENSES INCURRED DURING THE PERIOD COVERED REDEMPTION FEE ARE LISTED IN THE FUND'S FOR A DISCUSSION OF THE RISKS OF INVESTING
BY THIS REPORT. PROSPECTUS. IN YOUR FUND AND INDEXES USED IN THIS
REPORT,PLEASE TURN THE PAGE.
==========================================
7
AIM Global Growth Fund
AIM GLOBAL GROWTH FUND'S INVESTMENT OBJECTIVE IS LONG-TERM GROWTH OF CAPITAL.
o Unless otherwise stated, information presented in this report is as of
October 31, 2007, and is based on total net assets.
o Unless otherwise noted, all data in this report are from A I M Management
Group Inc.
About share classes About indexes used in this report Other information
o Class B shares are not available as an o The MSCI WORLD INDEX(SM) is a free o The Chartered Financial Analyst
investment for retirement plans maintained float-adjusted market capitalization --REGISTERED TRADEMARK-- (CFA --REGISTERED
pursuant to Section 401 of the Internal index that is designed to measure global TRADEMARK--) designation is a globally
Revenue Code, including 401(k) plans, money developed market equity performance. recognized standard for measuring the
purchase pension plans and profit sharing competence and integrity of investment
plans, except for plans that have existing o The MSCI WORLD GROWTH INDEX is a free professionals.
accounts invested in Class B shares. float-adjusted market capitalization
index that represents the growth segment o The returns shown in the management's
Principal risks of investing in the Fund in global developed market equity discussion of Fund performance are based
performance. on net asset values calculated for
o Investing in developing countries can add shareholder transactions. Generally
additional risk, such as high rates of o The LIPPER GLOBAL LARGE-CAP GROWTH accepted accounting principles require
inflation or sharply devalued currencies FUNDS INDEX is an equally weighted adjustments to be made to the net assets
against the U.S. dollar. Transaction costs representation of the largest funds in of the Fund at period end for financial
are often higher, and there may be delays the Lipper Global Large-Cap Growth Funds reporting purposes, and as such, the net
in settlement procedures. category. These funds typically have an asset values for shareholder transactions
above-average price-to-cash flow ratio, and the returns based on those net asset
o Prices of equity securities change in price-to-book ratio, and three-year values may differ from the net asset
response to many factors including the sales-per-share growth value, compared values and returns reported in the
historical and prospective earnings of the to the S&P/Citigroup World BMI. Financial Highlights.
issuer, the value of its assets, general
economic conditions, interest rates, o The Fund is not managed to track the o Industry classifications used in this
investor perceptions and market liquidity. performance of any particular index, report are generally according to the
including the indexes defined here, and Global Industry Classification Standard,
o Foreign securities have additional risks, consequently, the performance of the which was developed by and is the
including exchange rate changes, political Fund may deviate significantly from the exclusive property and a service mark of
and economic upheaval, the relative lack of performance of the indexes. Morgan Stanley Capital International Inc.
information, relatively low market and Standard & Poor's.
liquidity, and the potential lack of strict o A direct investment cannot be made in
financial and accounting controls and an index. Unless otherwise indicated,
standards. index results include reinvested
dividends, and they do not reflect sales
charges. Performance of an index of
funds reflects fund expenses;
performance of a market index does not.
=======================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, ==========================================
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FUND NASDAQ SYMBOLS
======================================================================================= Class A Shares AGGAX
Class B Shares AGGBX
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Class C Shares AGGCX
AIMINVESTMENTS.COM ==========================================
8
AIM Global Growth Fund
SCHEDULE OF INVESTMENTS(A)
October 31, 2007
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------------------
FOREIGN COMMON STOCKS & OTHER EQUITY
INTERESTS-65.70%(A)
AUSTRALIA-1.89%
BHP Billiton Ltd. (Diversified Metals &
Mining)(b) 200,931 $ 8,746,278
=======================================================================
BELGIUM-3.13%
InBev N.V. (Brewers)(b) 111,640 10,555,483
- -----------------------------------------------------------------------
KBC Groep N.V. (Diversified Banks)(b) 28,136 3,954,253
=======================================================================
14,509,736
=======================================================================
CANADA-2.01%
Manulife Financial Corp. (Life & Health
Insurance) 72,993 3,416,908
- -----------------------------------------------------------------------
Suncor Energy, Inc. (Integrated Oil & Gas) 53,700 5,881,970
=======================================================================
9,298,878
=======================================================================
DENMARK-1.20%
Novo Nordisk A.S.-Class B
(Pharmaceuticals)(b) 44,449 5,535,410
=======================================================================
FRANCE-7.92%
Axa (Multi-Line Insurance)(b) 131,105 5,887,034
- -----------------------------------------------------------------------
BNP Paribas (Diversified Banks)(b) 77,388 8,573,385
- -----------------------------------------------------------------------
Cap Gemini S.A. (IT Consulting & Other
Services)(b) 70,330 4,503,847
- -----------------------------------------------------------------------
Schneider Electric S.A. (Electrical
Components & Equipment)(b) 30,553 4,221,770
- -----------------------------------------------------------------------
Societe Generale (Diversified Banks)(b) 31,048 5,234,523
- -----------------------------------------------------------------------
Total S.A. (Integrated Oil & Gas)(b) 101,800 8,216,793
=======================================================================
36,637,352
=======================================================================
GERMANY-9.47%
Bayer A.G. (Diversified Chemicals)(b) 84,726 7,094,758
- -----------------------------------------------------------------------
Commerzbank A.G. (Diversified Banks)(b) 138,038 5,883,763
- -----------------------------------------------------------------------
DaimlerChrysler A.G. (Automobile
Manufacturers)(b) 66,215 7,321,904
- -----------------------------------------------------------------------
MAN A.G. (Industrial Machinery)(b) 38,539 6,923,387
- -----------------------------------------------------------------------
Merck KGaA (Pharmaceuticals)(b) 31,180 3,912,391
- -----------------------------------------------------------------------
Puma A.G. Rudolf Dassler Sport (Footwear)(b) 11,301 4,856,781
- -----------------------------------------------------------------------
Siemens A.G. (Industrial Conglomerates)(b) 57,625 7,852,422
=======================================================================
43,845,406
=======================================================================
GREECE-0.98%
OPAP S.A. (Casinos & Gaming) 110,790 4,526,251
=======================================================================
HONG KONG-2.06%
Cheung Kong (Holdings) Ltd. (Real Estate
Management & Development)(b) 258,000 5,068,557
- -----------------------------------------------------------------------
Li & Fung Ltd. (Distributors)(b) 946,000 4,479,056
=======================================================================
9,547,613
=======================================================================
HUNGARY-0.66%
OTP Bank Nyrt. (Diversified Banks)(b) 56,451 3,070,326
=======================================================================
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------------------
INDIA-0.94%
Infosys Technologies Ltd.-ADR (IT Consulting
& Other Services) 85,573 $ 4,359,089
=======================================================================
IRELAND-2.23%
Anglo Irish Bank Corp. PLC (Diversified
Banks)(b) 363,622 6,140,924
- -----------------------------------------------------------------------
CRH PLC (Construction Materials)(b) 108,508 4,162,162
=======================================================================
10,303,086
=======================================================================
ISRAEL-1.64%
Teva Pharmaceutical Industries Ltd.-ADR
(Pharmaceuticals) 172,800 7,604,928
=======================================================================
ITALY-1.54%
Eni S.p.A. (Integrated Oil & Gas)(b) 195,585 7,148,367
=======================================================================
JAPAN-5.81%
Canon Inc. (Office Electronics)(b) 120,100 6,068,831
- -----------------------------------------------------------------------
Keyence Corp. (Electronic Equipment
Manufacturers)(b) 20,600 4,744,053
- -----------------------------------------------------------------------
Komatsu Ltd. (Construction & Farm Machinery &
Heavy Trucks)(b) 168,600 5,648,497
- -----------------------------------------------------------------------
Mizuho Financial Group, Inc. (Diversified
Banks)(b)(c) 273 1,534,378
- -----------------------------------------------------------------------
Mizuho Financial Group, Inc. (Diversified
Banks) (Acquired 10/24/05; Cost
$1,604,902)(b)(c) 267 1,500,655
- -----------------------------------------------------------------------
ORIX Corp. (Consumer Finance)(b) 13,330 2,712,972
- -----------------------------------------------------------------------
Toyota Motor Corp. (Automobile
Manufacturers)(b) 82,000 4,684,778
=======================================================================
26,894,164
=======================================================================
MEXICO-0.51%
Grupo Televisa S.A.-ADR (Broadcasting & Cable
TV) 94,294 2,343,206
=======================================================================
NETHERLANDS-1.10%
TNT N.V. (Air Freight & Logistics)(b) 123,378 5,073,201
=======================================================================
SOUTH AFRICA-0.85%
Standard Bank Group Ltd. (Diversified
Banks)(b) 216,600 3,935,622
=======================================================================
SPAIN-2.27%
Banco Santander S.A. (Diversified Banks)(b) 237,056 5,182,214
- -----------------------------------------------------------------------
Industria de Diseno Textil, S.A. (Apparel
Retail)(b) 71,060 5,311,137
=======================================================================
10,493,351
=======================================================================
SWEDEN-1.79%
Assa Abloy A.B.-Class B (Building
Products)(b) 227,466 4,794,036
- -----------------------------------------------------------------------
Atlas Copco A.B.-Class A (Industrial
Machinery)(b) 207,800 3,482,228
=======================================================================
8,276,264
=======================================================================
</Table>
9
AIM Global Growth Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------------------
SWITZERLAND-10.08%
Adecco S.A. (Human Resource & Employment
Services)(b) 51,431 $ 3,104,105
- -----------------------------------------------------------------------
Compagnie Financiere Richemont S.A.- Class A
(Apparel, Accessories & Luxury Goods)(b)(d) 76,752 5,490,846
- -----------------------------------------------------------------------
Credit Suisse Group (Diversified Capital
Markets)(b) 78,873 5,325,782
- -----------------------------------------------------------------------
Nestle S.A. (Packaged Foods & Meats)(b) 16,893 7,810,217
- -----------------------------------------------------------------------
Roche Holding A.G. (Pharmaceuticals)(b) 49,254 8,421,007
- -----------------------------------------------------------------------
Syngenta A.G. (Fertilizers & Agricultural
Chemicals)(b) 44,623 10,776,449
- -----------------------------------------------------------------------
UBS A.G. (Diversified Capital Markets)(b) 106,872 5,736,851
=======================================================================
46,665,257
=======================================================================
TAIWAN-0.49%
Taiwan Semiconductor Manufacturing Co. Ltd.
(Semiconductors)(b) 1,126,015 2,247,137
=======================================================================
UNITED KINGDOM-7.13%
Aviva PLC (Multi-Line Insurance)(b) 336,685 5,307,773
- -----------------------------------------------------------------------
Imperial Tobacco Group PLC (Tobacco)(b) 168,650 8,551,157
- -----------------------------------------------------------------------
Reckitt Benckiser PLC (Household Products)(b) 107,411 6,240,738
- -----------------------------------------------------------------------
Tesco PLC (Food Retail)(b) 506,648 5,153,196
- -----------------------------------------------------------------------
WPP Group PLC (Advertising)(b) 564,889 7,733,140
=======================================================================
32,986,004
=======================================================================
Total Foreign Common Stocks & Other
Equity Interests (Cost $178,380,443) 304,046,926
=======================================================================
DOMESTIC COMMON STOCKS-24.23%
AEROSPACE & DEFENSE-3.14%
General Dynamics Corp. 86,510 7,868,949
- -----------------------------------------------------------------------
Precision Castparts Corp. 44,527 6,670,590
=======================================================================
14,539,539
=======================================================================
APPAREL RETAIL-0.65%
TJX Cos., Inc. (The) 104,229 3,015,345
=======================================================================
APPAREL, ACCESSORIES & LUXURY GOODS-0.57%
Coach, Inc.(e) 71,862 2,627,275
=======================================================================
APPLICATION SOFTWARE-0.46%
Amdocs Ltd.(e) 61,591 2,118,730
=======================================================================
BIOTECHNOLOGY-1.28%
Gilead Sciences, Inc.(e) 128,404 5,930,981
=======================================================================
COMMUNICATIONS EQUIPMENT-1.20%
Cisco Systems, Inc.(e) 168,691 5,576,924
=======================================================================
COMPUTER HARDWARE-0.87%
Dell Inc.(e) 131,113 4,012,058
=======================================================================
CONSTRUCTION & ENGINEERING-1.08%
Foster Wheeler Ltd.(e) 33,812 5,012,629
=======================================================================
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------------------
DEPARTMENT STORES-0.68%
JCPenney Co., Inc. 55,827 $ 3,139,710
=======================================================================
DIVERSIFIED COMMERCIAL & PROFESSIONAL
SERVICES-0.77%
Equifax Inc. 93,079 3,583,541
=======================================================================
DIVERSIFIED METALS & MINING-0.27%
Titanium Metals Corp.(e) 34,903 1,228,586
=======================================================================
EDUCATION SERVICES-1.17%
Apollo Group, Inc.-Class A(e) 68,100 5,397,606
=======================================================================
ELECTRICAL COMPONENTS & EQUIPMENT-0.78%
Emerson Electric Co. 68,970 3,605,062
=======================================================================
GENERAL MERCHANDISE STORES-0.69%
Family Dollar Stores, Inc. 126,031 3,194,886
=======================================================================
INTEGRATED OIL & GAS-0.67%
Occidental Petroleum Corp. 44,600 3,079,630
=======================================================================
INTERNET SOFTWARE & SERVICES-0.75%
eBay Inc.(e) 95,749 3,456,539
=======================================================================
INVESTMENT BANKING & BROKERAGE-1.48%
Goldman Sachs Group, Inc. (The) 27,616 6,846,559
=======================================================================
MANAGED HEALTH CARE-0.83%
UnitedHealth Group Inc. 78,225 3,844,759
=======================================================================
OIL & GAS EQUIPMENT & SERVICES-1.44%
Grant Prideco, Inc.(e) 55,581 2,732,362
- -----------------------------------------------------------------------
National-Oilwell Varco Inc.(e) 53,618 3,926,982
=======================================================================
6,659,344
=======================================================================
OIL & GAS REFINING & MARKETING-0.85%
Valero Energy Corp. 56,079 3,949,644
=======================================================================
PERSONAL PRODUCTS-0.86%
Estee Lauder Cos. Inc. (The)-Class A 91,188 4,003,153
=======================================================================
PHARMACEUTICALS-1.36%
Merck & Co. Inc. 108,176 6,302,334
=======================================================================
REAL ESTATE MANAGEMENT & DEVELOPMENT-0.60%
CB Richard Ellis Group, Inc.-Class A(e) 113,947 2,778,028
=======================================================================
SYSTEMS SOFTWARE-1.78%
Microsoft Corp. 96,771 3,562,141
- -----------------------------------------------------------------------
Oracle Corp.(e) 210,196 4,660,045
=======================================================================
8,222,186
=======================================================================
Total Domestic Common Stocks (Cost
$90,731,238) 112,125,048
=======================================================================
</Table>
10
AIM Global Growth Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------------------
FOREIGN PREFERRED STOCKS-5.54%
BRAZIL-0.96%
Companhia de Bebidas das Americas-Pfd.-ADR
(Brewers) 54,177 $ 4,426,803
=======================================================================
GERMANY-4.58%
Henkel KGaA-Pfd. (Household Products)(b) 153,539 7,862,931
- -----------------------------------------------------------------------
Porsche A.G.-Pfd. (Automobile
Manufacturers)(b) 4,991 13,341,724
=======================================================================
21,204,655
=======================================================================
Total Foreign Preferred Stocks (Cost
$10,291,022) 25,631,458
=======================================================================
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------------------
MONEY MARKET FUNDS-4.30%
Liquid Assets Portfolio-Institutional
Class(f) 9,938,470 $ 9,938,470
- -----------------------------------------------------------------------
Premier Portfolio-Institutional Class(f) 9,938,470 9,938,470
=======================================================================
Total Money Market Funds (Cost
$19,876,940) 19,876,940
=======================================================================
TOTAL INVESTMENTS-99.77% (Cost $299,279,643) 461,680,372
=======================================================================
OTHER ASSETS LESS LIABILITIES-0.23% 1,078,612
=======================================================================
NET ASSETS-100.00% $462,758,984
_______________________________________________________________________
=======================================================================
</Table>
Investment Abbreviations:
<Table>
ADR - American Depositary Receipt
Pfd. - Preferred
</Table>
Notes to Schedule of Investments:
(a) Industry classifications used in this report are generally according to the
Global Industry Classification Standard, which was developed by and is the
exclusive property and a service mark of Morgan Stanley Capital
International Inc. and Standard & Poor's.
(b) In accordance with the procedures established by the Board of Trustees, the
foreign security is fair valued using adjusted closing market prices. The
aggregate value of these securities at October 31, 2007 was $297,119,629,
which represented 64.21% of the Fund's Net Assets. See Note 1A.
(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 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 value of these securities at October 31, 2007 was $3,035,433,
which represented 0.66% of the Fund's Net Assets. Unless otherwise
indicated, these securities are not considered to be illiquid.
(d) Each unit represents one A bearer share in the company and one bearer share
participation certificate in Richemont S.A.
(e) Non-income producing security.
(f) The money market fund and the Fund are affiliated by having the same
investment advisor. See Note 3.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11
AIM Global Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2007
<Table>
ASSETS:
Investments, at value (Cost $279,402,703) $ 441,803,432
- ------------------------------------------------------------
Investments in affiliated money market funds
(Cost $19,876,940) 19,876,940
- ------------------------------------------------------------
Total investments (Cost $299,279,643) 461,680,372
- ------------------------------------------------------------
Foreign currencies, at value (Cost $949,256) 961,290
- ------------------------------------------------------------
Cash 9,652
- ------------------------------------------------------------
Receivables for:
Investments sold 1,542,206
- ------------------------------------------------------------
Fund shares sold 134,374
- ------------------------------------------------------------
Dividends 590,029
- ------------------------------------------------------------
Investment for trustee deferred compensation
and retirement plans 63,944
- ------------------------------------------------------------
Other assets 24,253
============================================================
Total assets 465,006,120
____________________________________________________________
============================================================
LIABILITIES:
Payables for:
Investments purchased 540,115
- ------------------------------------------------------------
Fund shares reacquired 1,054,337
- ------------------------------------------------------------
Trustee deferred compensation and
retirement plans 112,260
- ------------------------------------------------------------
Accrued distribution fees 164,424
- ------------------------------------------------------------
Accrued trustees' and officer's fees and
benefits 1,738
- ------------------------------------------------------------
Accrued transfer agent fees 233,921
- ------------------------------------------------------------
Accrued operating expenses 140,341
============================================================
Total liabilities 2,247,136
============================================================
Net assets applicable to shares outstanding $ 462,758,984
____________________________________________________________
============================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 514,320,777
- ------------------------------------------------------------
Undistributed net investment income (loss) (203,635)
- ------------------------------------------------------------
Undistributed net realized gain (loss) (213,788,680)
- ------------------------------------------------------------
Unrealized appreciation 162,430,522
============================================================
$ 462,758,984
____________________________________________________________
============================================================
NET ASSETS:
Class A $ 355,537,551
____________________________________________________________
============================================================
Class B $ 79,333,116
____________________________________________________________
============================================================
Class C $ 27,877,919
____________________________________________________________
============================================================
Institutional Class $ 10,398
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 12,617,661
____________________________________________________________
============================================================
Class B 3,008,767
____________________________________________________________
============================================================
Class C 1,056,945
____________________________________________________________
============================================================
Institutional Class 368.9
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 28.18
- ------------------------------------------------------------
Offering price per share
(Net asset value of $28.18 divided by
94.50%) $ 29.82
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per
share $ 26.37
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per
share $ 26.38
____________________________________________________________
============================================================
Institutional Class:
Net asset value and offering price per
share $ 28.19
____________________________________________________________
============================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12
AIM Global Growth Fund
STATEMENT OF OPERATIONS
For the year ended October 31, 2007
<Table>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $843,927) $ 7,878,664
- -------------------------------------------------------------------------
Dividends from affiliated money market funds (includes
securities lending income of $346,219) 1,088,407
=========================================================================
Total investment income 8,967,071
=========================================================================
EXPENSES:
Advisory fees 3,739,804
- -------------------------------------------------------------------------
Administrative services fees 124,515
- -------------------------------------------------------------------------
Custodian fees 223,437
- -------------------------------------------------------------------------
Distribution fees:
Class A 843,504
- -------------------------------------------------------------------------
Class B 867,802
- -------------------------------------------------------------------------
Class C 261,796
- -------------------------------------------------------------------------
Transfer agent fees 1,548,597
- -------------------------------------------------------------------------
Transfer agent fees -- Institutional 1
- -------------------------------------------------------------------------
Trustees' and officer's fees and benefits 31,390
- -------------------------------------------------------------------------
Other 255,604
=========================================================================
Total expenses 7,896,450
=========================================================================
Less: Fees waived, expenses reimbursed and expense offset
arrangement(s) (257,778)
=========================================================================
Net expenses 7,638,672
=========================================================================
Net investment income 1,328,399
=========================================================================
REALIZED AND UNREALIZED GAIN FROM:
Net realized gain from:
Investment securities (includes net gains from securities
sold to affiliates of $344,180) 64,376,897
- -------------------------------------------------------------------------
Foreign currencies 203,179
=========================================================================
64,580,076
=========================================================================
Change in net unrealized appreciation of:
Investment securities 26,295,382
- -------------------------------------------------------------------------
Foreign currencies 17,037
=========================================================================
26,312,419
=========================================================================
Net realized and unrealized gain 90,892,495
=========================================================================
Net increase in net assets resulting from operations $92,220,894
_________________________________________________________________________
=========================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
13
AIM Global Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2007 and 2006
<Table>
<Caption>
2007 2006
- ------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 1,328,399 $ 268,465
- ------------------------------------------------------------------------------------------
Net realized gain 64,580,076 50,186,335
- ------------------------------------------------------------------------------------------
Change in net unrealized appreciation 26,312,419 31,391,028
==========================================================================================
Net increase in net assets resulting from operations 92,220,894 81,845,828
==========================================================================================
Distributions to shareholders from net investment
income -- Class A (1,365,758) (1,936,684)
==========================================================================================
Share transactions-net:
Class A (22,677,884) (30,264,870)
- ------------------------------------------------------------------------------------------
Class B (28,690,594) (34,026,563)
- ------------------------------------------------------------------------------------------
Class C (1,902,382) (3,561,784)
- ------------------------------------------------------------------------------------------
Institutional Class 10,000 --
==========================================================================================
Net increase (decrease) in net assets resulting from
share transactions (53,260,860) (67,853,217)
==========================================================================================
Net increase in net assets 37,594,276 12,055,927
==========================================================================================
NET ASSETS:
Beginning of year 425,164,708 413,108,781
==========================================================================================
End of year (including undistributed net investment income
of $(203,635) and $(593,935), respectively) $462,758,984 $425,164,708
__________________________________________________________________________________________
==========================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
14
AIM Global Growth Fund
NOTES TO FINANCIAL STATEMENTS
October 31, 2007
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM Global Growth Fund (the "Fund") is a series portfolio of AIM International
Mutual Funds (the "Trust"). The Trust is a Delaware statutory trust registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end series management investment company consisting of six separate
portfolios, each authorized to issue an unlimited number of shares of beneficial
interest. The Fund currently consists of 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.
The Fund's investment objective is long-term growth of capital.
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 or official closing price as of the close of
the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on that
day. Securities traded in the over-the-counter market are valued based on
prices furnished by independent pricing services or market makers. When
such securities are valued by an independent pricing service they may be
considered fair valued. Futures contracts are valued at the final
settlement price set by an exchange on which they are principally traded.
Listed options are valued at the mean between the last bid and the ask
prices from the exchange on which they are principally traded. Options not
listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last sales
price or official closing price as of the close of the customary trading
session on the exchange where the security is principally traded.
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes 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 specific securities, dividend rate, yield, quality,
type of issue, coupon rate, maturity, individual trading characteristics
and other market data. Short-term obligations, including commercial paper,
having 60 days or less to maturity are recorded at amortized cost which
approximates value. Debt securities are subject to interest rate and credit
risks. In addition, all debt securities involve some risk of default with
respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued at
the market quotations. Because trading hours for certain foreign securities
end before the close of the NYSE, closing market quotations may become
unreliable. If between the time trading ends on a particular security and
the close of the customary trading session on the NYSE, events occur that
are significant and may make the closing price unreliable, the Fund may
fair value the security. If the event is likely to have affected the
closing price of the security, the security will be valued at fair value in
good faith using procedures approved by the Board of Trustees. Adjustments
to closing prices to reflect fair value may also be based on a screening
process of an independent pricing service to indicate the degree of
certainty, based on historical data, that the closing price in the
principal market where a foreign security trades is not the current value
as of the close of the NYSE. Foreign securities meeting the approved degree
of certainty that the price is not reflective of current value will be
priced at the indication of fair value from the independent pricing
service. Multiple factors may be considered by the independent pricing
service in determining adjustments to reflect fair value and may include
information relating to sector indices, ADRs and domestic and foreign index
futures. Foreign securities may have additional risks including exchange
rate changes, potential for sharply devalued currencies and high inflation,
political and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be 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
unreliable are valued at fair value as determined in good faith by or under
the supervision of the Trust's officers following procedures approved by
the Board of Trustees. Issuer specific events, market trends, bid/ask
quotes of brokers and information providers and other market data may be
reviewed in the course of making a good faith determination of a security's
fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity.
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.
15
AIM Global Growth Fund
The Fund may periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds as received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
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. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, AIM may
determine the country in which an issuer is located and/or credit risk
exposure based on various factors. These factors include the laws of the
country under which the issuer is organized, where the issuer maintains a
principal office, the country in which the issuer derives 50% or more of
its total revenues and the country that has the primary market for the
issuer's securities, as well as other criteria. Among the other criteria
that may be evaluated for making this determination are the country in
which the issuer maintains 50% or more of its assets, the type of security,
financial guarantees and enhancements, the nature of the collateral and the
sponsor organization. Country of issuer and/or credit risk exposure has
been determined to be the United States of America unless otherwise noted.
D. 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 treat a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
E. 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 to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial statements.
F. 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.
G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to
taxation. Actual results could differ from those estimates.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust (including the
Trust's investment manager) is indemnified against certain liabilities that
may arise out of performance of their duties to the Fund. Additionally, in
the normal course of business, the Fund enters into contracts that contain
a variety of indemnification clauses. The Fund's maximum exposure under
these arrangements is unknown as this would involve future claims that may
be made against the Fund that have not yet occurred. The risk of material
loss as a result of such indemnification claims is considered remote.
I. REDEMPTION FEES -- The Fund has a 2% redemption fee that is to be retained
by the Fund to offset transaction costs and other expenses associated with
short-term redemptions and exchanges. The fee, subject to certain
exceptions, is imposed on certain redemptions, including exchanges of
shares held less than 30 days. The redemption fee is recorded as an
increase in shareholder capital and is allocated among the share classes
based on the relative net assets of each class.
J. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close of
the NYSE based on quotations posted by banks and major currency dealers.
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 (i) sales
of foreign currencies, (ii) currency gains or losses realized between the
trade and settlement dates on securities transactions, and (iii) 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.
The Fund may invest in foreign securities which may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion
of which may be recoverable. Taxes are accrued based on the Fund's current
interpretation of tax regulations and rates that exist in the foreign
markets in which the Fund invests.
K. 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
16
AIM Global Growth Fund
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. Fluctuations in the value of these contracts are recorded as
unrealized appreciation (depreciation) until the contracts are closed. When
these contracts are closed, realized gains (losses) are recorded. Realized
and unrealized gains and losses on these contracts are included in the
Statement of Operations. The Fund could be exposed to risk, which may be in
excess of the amount reflected in the Statement of Assets and Liabilities,
if counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust 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 based on the annual rate of the Fund's
average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $1 billion 0.85%
- -------------------------------------------------------------------
Over $1 billion 0.80%
__________________________________________________________________
===================================================================
</Table>
Effective July 1, 2007, the Trustees approved a reduced contractual advisory
fee schedule for the Fund. Prior to July 1, 2007 AIM had contractually waived
advisory fees to the same reduced advisory fee schedule. Under the terms of the
investment advisory agreement, the Fund will pay an advisory fee to AIM based on
the following annual rates of the Fund's average daily net assets:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $250 million 0.80%
- -------------------------------------------------------------------
Next $250 million 0.78%
- -------------------------------------------------------------------
Next $500 million 0.76%
- -------------------------------------------------------------------
Next $1.5 billion 0.74%
- -------------------------------------------------------------------
Next $2.5 billion 0.72%
- -------------------------------------------------------------------
Next $2.5 billion 0.70%
- -------------------------------------------------------------------
Next $2.5 billion 0.68%
- -------------------------------------------------------------------
Over $10 billion 0.66%
__________________________________________________________________
===================================================================
</Table>
Further, effective July 1, 2007, AIM has contractually agreed, through at
least June 30, 2008, to waive 100% of the advisory fee AIM receives from the
affiliated money market funds on investments by the Fund in such affiliated
money market funds (excluding investments made in affiliated money market funds
with cash collateral from securities loaned by the fund). Prior to July 1, 2007,
AIM had voluntarily agreed to waive 25% of the advisory fee AIM receives from
the affiliated money market funds on investments by the Fund in such affiliated
money market funds.
For the year ended October 31, 2007, AIM waived advisory fees of $186,587.
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") agreed
to reimburse expenses incurred by the Fund in connection with market timing
matters in the AIM Funds, which may include legal, audit, shareholder reporting,
communications and trustee expenses. These expenses along with the related
expense reimbursement are included in the Statement of Operations. For the year
ended October 31, 2007, Invesco reimbursed expenses of the Fund in the amount of
$910.
The Trust has entered into a transfer agency and service agreement with AIM
Investment Services, Inc. ("AIS") pursuant to which the Fund has agreed to pay
AIS a fee for providing transfer agency and shareholder services to the Fund and
reimburse AIS for certain expenses incurred by AIS in the course of providing
such services. AIS may make payments to intermediaries that provide omnibus
account services, sub-accounting services and/or networking services. All fees
payable by AIS to intermediaries that provide omnibus account services or
sub-accounting are charged back to the Fund, subject to certain limitations
approved by the Trust's Board of Trustees. For the year ended October 31, 2007,
expenses incurred under the agreement are shown in the Statement of Operations
as transfer agent fees.
The Trust has entered into a master administrative services agreement with
AIM pursuant to which the Fund has agreed to pay AIM for certain administrative
costs incurred in providing accounting services, to the Fund. For the year ended
October 31, 2007, expenses incurred under the agreement are shown in the
Statement of Operations as administrative services fees.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B,
Class C and Institutional 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 and Class C shares (collectively the "Plans"). The Fund, pursuant to the
Plans, pays ADI compensation at the annual rate of 0.25% 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 the Plan payments, up to 0.25% of the average
daily net assets of each class of shares may be paid to furnish continuing
personal shareholder services to 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. Financial Industry Regulatory Authority ("FINRA"),
formerly known as National Association of Securities Dealers, rules impose a cap
on the total sales charges, including
17
AIM Global Growth Fund
asset-based sales charges that may be paid by any class of shares of the Fund.
For the year ended October 31, 2007, expenses incurred under the Plans are shown
in the Statement of Operations as distribution fees.
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, 2007, ADI advised the Fund that it retained $68,704 in
front-end sales commissions from the sale of Class A shares and $43, $42,894 and
$600 from Class A, Class B and Class C shares, respectively, for CDSC imposed on
redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
AIM, AIS and/or ADI.
NOTE 3--INVESTMENTS IN AFFILIATES
The Fund is permitted, pursuant to procedures approved by the Board of Trustees,
to invest daily available cash balances and cash collateral from securities
lending transactions in affiliated money market funds. The Fund and the money
market funds below have the same investment advisor and therefore, are
considered to be affiliated. The tables below show the transactions in and
earnings from investments in affiliated money market funds for the year ended
October 31, 2007. During the period each investment maintained a $1.00 net asset
value, as such there is no realized gain/(loss) and no change in unrealized
appreciation/(depreciation).
INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
<Table>
<Caption>
VALUE PURCHASES PROCEEDS VALUE DIVIDEND
FUND 10/31/06 AT COST FROM SALES 10/31/07 INCOME
- --------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-
Institutional
Class $ 8,342,502 $ 65,880,951 $ (64,284,983) $ 9,938,470 $ 371,848
- --------------------------------------------------------------------------------------------------
Premier
Portfolio-
Institutional
Class 8,342,502 65,880,951 (64,284,983) 9,938,470 370,340
==================================================================================================
Subtotal $16,685,004 $ 131,761,902 $ (128,569,966) $19,876,940 $ 742,188
==================================================================================================
</Table>
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
<Table>
<Caption>
VALUE PURCHASES PROCEEDS VALUE DIVIDEND
FUND 10/31/06 AT COST FROM SALES 10/31/07 INCOME*
- --------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-Institutional
Class $28,377,970 $ 29,912,354 $ (58,290,324) $ -- $ 214,855
- --------------------------------------------------------------------------------------------------
STIC Prime
Portfolio-Institutional
Class 20,347,646 955,093,209 (975,440,855) -- 131,364
==================================================================================================
Subtotal $48,725,616 $ 985,005,563 $(1,033,731,179) $ -- $ 346,219
==================================================================================================
Total
Investments
in
Affiliates $65,410,620 $1,116,767,465 $(1,162,301,145) $19,876,940 $1,088,407
__________________________________________________________________________________________________
==================================================================================================
</Table>
* Net of compensation to counterparties.
NOTE 4--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM Funds under specified conditions outlined in procedures adopted by the Board
of Trustees of the Trust. The procedures have been designed to ensure that any
purchase or sale of securities by the Fund from or to another fund or portfolio
that is or could be considered an affiliate by virtue of having a common
investment advisor (or affiliated investment advisors), common Trustees and/or
common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined
under the procedures, each transaction is effected at the current market price.
Pursuant to these procedures, for the year ended October 31, 2007, the Fund
engaged in securities sales of $665,313, which resulted in net realized gains of
$344,180, and securities purchases of $4,388,050.
NOTE 5--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the transfer
agent for clearing shareholder transactions, (ii) custodian credits which result
from periodic overnight cash balances at the custodian and (iii) a one time
custodian fee credit used to offset custodian fees. For the year ended October
31, 2007, the Fund received credits from these arrangements, which resulted in
the reduction of the Fund's total expenses of $70,281.
NOTE 6--TRUSTEES' AND OFFICER'S FEES AND BENEFITS
"Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officer's Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officer's
Fees and Benefits" include amounts accrued by the
18
AIM Global Growth Fund
Fund to fund such retirement benefits. Obligations under the deferred
compensation and retirement plans represent unsecured claims against the general
assets of the Fund.
During the year ended October 31, 2007, the Fund paid legal fees of $6,892
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7--BORROWINGS
Pursuant to an exemptive order from the Securities and Exchange Commission, 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. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. 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.
The Fund is a party to an uncommitted unsecured revolving 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
credit facility, 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 year ended October 31, 2007, the Fund did not borrow or lend
under the interfund lending facility or borrow under the uncommitted unsecured
revolving credit facility.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with SSB, the custodian bank. To compensate the
custodian bank for such overdrafts, the overdrawn Fund may either (i) leave
funds as a compensating balance in the account so the custodian bank can be
compensated by earning the additional interest; or (ii) compensate by paying the
custodian bank at a rate agreed upon by the custodian bank and AIM, not to
exceed the contractually agreed upon rate.
NOTE 8--PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities having a market value up to 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 received in connection with these loans is
invested in short-term money market instruments or affiliated money market
funds. 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. 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. The Fund could also experience delays and costs in gaining
access to the collateral. The Fund bears the risk of any deficiency in the
amount of the collateral available for return to the borrower due to any loss on
the collateral invested.
At October 31, 2007, there were no securities out on loan. For the year
ended October 31, 2007, the Fund received dividends on cash collateral
investments of $346,219 for securities lending transactions during the period,
which are net of compensation to counterparties.
NOTE 9--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
DISTRIBUTIONS TO SHAREHOLDERS:
The tax character of distributions paid during the years ended October 31, 2007
and 2006 was as follows:
<Table>
<Caption>
2007 2006
- --------------------------------------------------------------------------------------
Distributions paid from ordinary income $1,365,758 $1,936,684
______________________________________________________________________________________
======================================================================================
</Table>
TAX COMPONENTS OF NET ASSETS:
As of October 31, 2007, the components of net assets on a tax basis were as
follows:
<Table>
<Caption>
2007
- ---------------------------------------------------------------------------
Undistributed ordinary income $ 720,661
- ---------------------------------------------------------------------------
Net unrealized appreciation -- investments 161,543,063
- ---------------------------------------------------------------------------
Temporary book/tax differences (93,190)
- ---------------------------------------------------------------------------
Capital Loss Carryover (213,732,327)
- ---------------------------------------------------------------------------
Shares of beneficial interest 514,320,777
===========================================================================
Total net assets $ 462,758,984
___________________________________________________________________________
===========================================================================
</Table>
19
AIM Global Growth Fund
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation difference is attributable primarily to losses on wash sales and
the recognition of income on certain passive foreign investment companies. The
tax-basis net unrealized appreciation on investments amount includes
appreciation on foreign currencies of $29,793.
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 trustee deferral of compensation,
retirement plan benefits, and passive foreign investment companies.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions.
The Fund utilized $64,200,869 of capital loss carryforward in the current
period to offset net realized capital gain for federal income tax purposes. The
Fund has a capital loss carryforward as of October 31, 2007 which expires as
follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------
October 31, 2009 $101,368,450
- -----------------------------------------------------------------------------
October 31, 2010 101,042,257
- -----------------------------------------------------------------------------
October 31, 2011 11,321,620
=============================================================================
Total capital loss carryforward $213,732,327
_____________________________________________________________________________
=============================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
NOTE 10--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended October 31, 2007 was $162,664,644 and
$217,381,681, respectively.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $168,107,327
- ------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (6,594,057)
==============================================================================
Net unrealized appreciation of investment securities $161,513,270
______________________________________________________________________________
==============================================================================
Cost of investments for tax purposes is $300,167,102.
</Table>
NOTE 11--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of foreign currency
transactions and passive foreign investment companies, on October 31, 2007,
undistributed net investment income was increased by $427,659, and undistributed
net realized gain was decreased by $427,659. This reclassification had no effect
on the net assets of the Fund.
20
AIM Global Growth Fund
NOTE 12--SHARE INFORMATION
The Fund currently offers four different classes of shares: Class A, Class B,
Class C and Institutional Class. Class A shares are sold with a front-end sales
charge unless certain waiver criteria are met and under certain circumstances
load waiver shares may be subject to a CDSC. Class B shares and Class C shares
are sold with a CDSC. Institutional Class shares are sold at net asset value.
Generally, Class B shares will automatically convert to Class A shares on or
about the month-end which is at least eight years after the date of purchase.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
- ----------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 2007(A) OCTOBER 31, 2006
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------------
Sold:
Class A 1,492,884 $ 38,189,676 852,695 $ 18,221,986
- ----------------------------------------------------------------------------------------------------------------------
Class B 318,141 7,617,739 340,221 6,833,268
- ----------------------------------------------------------------------------------------------------------------------
Class C 179,687 4,375,879 239,434 4,855,978
- ----------------------------------------------------------------------------------------------------------------------
Institutional Class(b) 369 10,000 -- --
======================================================================================================================
Issued as reinvestment of dividends:
Class A 52,921 1,281,756 89,660 1,817,402
======================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 607,071 15,540,256 785,511 16,845,277
- ----------------------------------------------------------------------------------------------------------------------
Class B (646,541) (15,540,256) (833,972) (16,845,277)
======================================================================================================================
Reacquired:(c)
Class A (3,047,532) (77,689,572) (3,156,593) (67,149,535)
- ----------------------------------------------------------------------------------------------------------------------
Class B (866,955) (20,768,077) (1,197,180) (24,014,554)
- ----------------------------------------------------------------------------------------------------------------------
Class C (262,395) (6,278,261) (420,536) (8,417,762)
- ----------------------------------------------------------------------------------------------------------------------
Institutional Class(b) -- -- -- --
======================================================================================================================
(2,172,350) $(53,260,860) (3,300,760) $(67,853,217)
______________________________________________________________________________________________________________________
======================================================================================================================
</Table>
(a) There are three entities that are each record owners of more than 5% of
the outstanding shares of the Fund and in the aggregate they own 20% of
the outstanding shares of the Fund. ADI has an agreement with these
entities to sell Fund shares. The Fund, AIM and/or AIM affiliates may
make payments to these entities, which are considered to be related to
the Fund, for providing services to the Fund, AIM and/or AIM affiliates
including but not limited to services such as securities brokerage,
distribution, third party record keeping and account servicing. The
Trust has no knowledge as to whether all or any portion of the shares
owned of record by these entities are also owned beneficially.
(b) Commencement date of Institutional Class shares was September 28, 2007.
(c) Net of redemption fees of $8,957 and $7,793 which were allocated among
the classes based on relative net assets of each class for the years
ended October 31, 2007 and 2006, respectively.
NOTE 13--NEW ACCOUNTING STANDARD
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48").
FIN 48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement for a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The provisions for FIN 48 are effective for
fiscal years beginning after December 15, 2006. Management has assessed the
application of FIN 48 to the Fund and has determined that the adopting of FIN 48
is not expected to have a material impact on the Fund. Management intends for
the Fund to adopt FIN 48 provisions during the fiscal year ending October 31,
2008 as required.
21
AIM Global Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CLASS A
-----------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------------
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 22.94 $ 19.02 $ 16.65 $ 14.91 $ 12.66
- ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.12(a) 0.06(a) 0.08(a)(b) (0.04)(a) (0.08)
- ---------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 5.22 3.99 2.29 1.78 2.33
=================================================================================================================================
Total from investment operations 5.34 4.05 2.37 1.74 2.25
=================================================================================================================================
Less dividends from net investment income (0.10) (0.13) -- -- --
=================================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=================================================================================================================================
Net asset value, end of period $ 28.18 $ 22.94 $ 19.02 $ 16.65 $ 14.91
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) 23.35% 21.39% 14.23% 11.67% 17.77%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $355,538 $310,028 $284,122 $286,068 $329,739
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.53%(d) 1.62% 1.77% 1.96% 2.04%
- ---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.57%(d) 1.68% 1.82% 1.97% 2.04%
=================================================================================================================================
Ratio of net investment income (loss) to average net
assets 0.47%(d) 0.28% 0.44%(b) (0.24)% (0.58)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 38% 42% 51% 56% 75%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Net investment income (loss) per share and the ratio of net investment
income (loss) to average net assets include a special cash dividend
received of $3.00 per share owned of Microsoft Corp. on December 2,
2004. Net investment income (loss) per share and the ratio of net
investment income (loss) to average net assets excluding the special
dividend are $0.05 and 0.27%, respectively.
(c) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(d) Ratios are based on average daily net assets of $337,401,714.
<Table>
<Caption>
CLASS B
---------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 21.54 $ 17.87 $ 15.76 $ 14.18 $ 12.09
- ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.07)(a) (0.09)(a) (0.04)(a)(b) (0.11)(a) (0.15)
- ---------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 4.90 3.76 2.15 1.69 2.24
=================================================================================================================================
Total from investment operations 4.83 3.67 2.11 1.58 2.09
=================================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=================================================================================================================================
Net asset value, end of period $ 26.37 $ 21.54 $ 17.87 $ 15.76 $ 14.18
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) 22.42% 20.54% 13.39% 11.14% 17.29%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $79,333 $90,571 $105,368 $139,061 $181,891
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.28%(d) 2.37% 2.43% 2.46% 2.54%
- ---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.32%(d) 2.43% 2.48% 2.47% 2.54%
=================================================================================================================================
Ratio of net investment income (loss) to average net
assets (0.28)%(d) (0.47)% (0.22)%(b) (0.74)% (1.08)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 38% 42% 51% 56% 75%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Net investment income (loss) per share and the ratio of net investment
income (loss) to average net assets include a special cash dividend
received of $3.00 per share owned of Microsoft Corp. on December 2,
2004. Net investment income (loss) per share and the ratio of net
investment income (loss) to average net assets excluding the special
dividend are $(0.07) and (0.39)%, respectively.
(c) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(d) Ratios are based on average daily net assets of $86,780,203.
22
AIM Global Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS C
------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------
2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 21.55 $ 17.88 $ 15.77 $ 14.18 $ 12.10
- --------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.07)(a) (0.09)(a) (0.04)(a)(b) (0.11)(a) (0.15)
- --------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 4.90 3.76 2.15 1.70 2.23
====================================================================================================================
Total from investment operations 4.83 3.67 2.11 1.59 2.08
====================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
====================================================================================================================
Net asset value, end of period $ 26.38 $ 21.55 $ 17.88 $ 15.77 $ 14.18
____________________________________________________________________________________________________________________
====================================================================================================================
Total return(c) 22.41% 20.52% 13.38% 11.21% 17.19%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $27,878 $24,565 $23,619 $27,649 $32,844
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.28%(d) 2.37% 2.43% 2.46% 2.54%
- --------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.32%(d) 2.43% 2.48% 2.47% 2.54%
====================================================================================================================
Ratio of net investment income (loss) to average net assets (0.28)%(d) (0.47)% (0.22)%(b) (0.74)% (1.08)%
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 38% 42% 51% 56% 75%
____________________________________________________________________________________________________________________
====================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Net investment income (loss) per share and the ratio of net investment
income (loss) to average net assets include a special cash dividend
received of $3.00 per share owned of Microsoft Corp. on December 2,
2004. Net investment income (loss) per share and the ratio of net
investment income (loss) to average net assets excluding the special
dividend are $(0.07) and (0.39)%, respectively.
(c) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(d) Ratios are based on average daily net assets of $26,179,596.
<Table>
<Caption>
INSTITUTIONAL
CLASS
------------------
SEPTEMBER 28, 2007
(COMMENCEMENT
DATE) TO
OCTOBER 31,
2007
- --------------------------------------------------------------------------------
Net asset value, beginning of period $27.11
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.02(a)
- --------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 1.06
================================================================================
Total from investment operations 1.08
================================================================================
Redemption fees added to shares of beneficial interest 0.00
================================================================================
Net asset value, end of period $28.19
________________________________________________________________________________
================================================================================
Total return(b) 3.98%
________________________________________________________________________________
================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 10
________________________________________________________________________________
================================================================================
Ratio of expenses to average net assets: 1.05%(c)
================================================================================
Ratio of net investment income to average net assets 0.94%(c)
________________________________________________________________________________
================================================================================
Portfolio turnover rate(d) 38%
________________________________________________________________________________
================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Not annualized for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $10,181.
(d) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year.
23
AIM Global Growth Fund
NOTE 15--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On July 6, 2007, the Securities and Exchange Commission ("SEC") published notice
of two proposed distribution plans ("Distribution Plans") for the distribution
of monies placed into two separate Fair Funds created pursuant to a settlement
reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"), A I M
Advisors, Inc. ("AIM") and A I M Distributors, Inc. and the SEC (the "Order").
One of the Fair Funds consists of $325 million, plus interest and any
contributions by other settling parties, for distribution to shareholders of
certain mutual funds formerly advised by IFG who may have been harmed by market
timing and related activity. The second Fair Fund consists of $50 million, plus
interest and any contributions by other settling parties, for distribution to
shareholders of mutual funds advised by AIM who may have been harmed by market
timing and related activity. Comments on the Distribution Plans were due no
later than August 6, 2007 and the Distribution Plans are awaiting final approval
by the SEC. Distributions from the Fair Funds will begin after the SEC finally
approves the Distribution Plans. The proposed Distribution Plans provide for
distribution to all eligible investors, for the periods spanning January 1, 2000
through July 31, 2003 (for the IFG Fair Fund) and January 1, 2001 through
September 30, 2003 (for the AIM Fair Fund), their proportionate share of the
applicable Fair Fund to compensate such investors for injury they may have
suffered as a result of market timing in the affected funds. The Distribution
Plans include a provision for any residual amounts in the Fair Funds to be
distributed in the future to the affected funds. Because the Distribution Plans
have not received final approval from the SEC and distribution of the Fair Funds
has not yet commenced, management of AIM and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"),
the parent company of IFG and AIM, has agreed to reimburse expenses incurred by
the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
On August 30, 2005, the West Virginia Office of the State
Auditor -- Securities Commission ("WVASC") issued a Summary Order to Cease and
Desist and Notice of Right to Hearing to AIM and ADI (Order No. 05-1318). The
WVASC makes findings of fact that AIM and ADI entered into certain arrangements
permitting market timing of the AIM Funds and failed to disclose these
arrangements in the prospectuses for such Funds, and conclusions of law to the
effect that AIM and ADI violated the West Virginia securities laws. The WVASC
orders AIM and ADI to cease any further violations and seeks to impose monetary
sanctions, including restitution to affected investors, disgorgement of fees,
reimbursement of investigatory, administrative and legal costs and an
"administrative assessment," to be determined by the Commissioner. Initial
research indicates that these damages could be limited or capped by statute. By
agreement with the Commissioner of Securities, AIM's time to respond to that
Order has been indefinitely suspended.
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or
related entities and individuals, depending on the lawsuit, alleging:
- that the defendants permitted improper market timing and related activity
in the AIM Funds; and
- that certain AIM Funds inadequately employed fair value pricing.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
ERISA, negligence, breach of fiduciary duty and/or breach of contract. These
lawsuits seek remedies that include, depending on the lawsuit, damages,
restitution, injunctive relief, imposition of a constructive trust, removal of
certain directors and/or employees, various corrective measures under ERISA,
rescission of certain AIM Funds' advisory agreements and/or distribution plans
and recovery of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court,
plaintiffs in these lawsuits consolidated their claims for pre-trial purposes
into three amended complaints against various AIM- and IFG-related parties: (i)
a Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of the Employee
Retirement Income Securities Act ("ERISA") purportedly brought on behalf of
participants in Invesco's 401(k) plan. Based on orders issued by the MDL Court,
all claims asserted against the AIM Funds that have been transferred to the MDL
Court have been dismissed, although certain Funds remain nominal defendants in
the Consolidated Amended Fund Derivative Complaint. On September 15, 2006, the
MDL Court granted the Invesco defendants' motion to dismiss the Amended Class
Action Complaint for Violations of ERISA and dismissed such Complaint. The
plaintiff has commenced an appeal from that decision.
IFG, AIM, ADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, AIM and ADI have advised the Fund that they are providing full
cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, AIM and/or related entities and individuals in the future.
At the present time, management of AIM and the Fund are unable to estimate
the impact, if any, that the outcome of the Pending Litigation and Regulatory
Inquiries described above may have on AIM, ADI or the Fund.
24
AIM Global Growth Fund
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM International Mutual Funds
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 AIM Global Growth Fund (one of the
funds constituting AIM International Mutual Funds, hereafter referred to as the
"Fund") at October 31, 2007, 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 periods indicated, 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 the standards of the Public Company Accounting Oversight Board
(United States). Those standards 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, 2007 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PRICEWATERHOUSECOOPERS LLP
December 19, 2007
Houston, Texas
25
AIM Global Growth Fund
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period May 1, 2007, through October 31, 2007.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
SHARE ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (05/01/07) (10/31/07)(1) PERIOD(2) (10/31/07) PERIOD(2) RATIO
A $1,000.00 $1,069.00 $ 7.82 $1,017.64 $ 7.63 1.50%
B 1,000.00 1,065.00 11.71 1,013.86 11.42 2.25
C 1,000.00 1,065.00 11.71 1,013.86 11.42 2.25
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period May 1, 2007, through October 31, 2007, after actual
expenses and will differ from the hypothetical ending account value which is
based on the Fund's expense ratio and a hypothetical annual return of 5%
before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
184/365 to reflect the most recent fiscal half year.
26
Supplement to Annual Report dated 10/31/07
AIM Global Growth Fund
==========================================
Institutional Class Shares AVERAGE ANNUAL TOTAL RETURNS A REDEMPTION FEE OF 2% WILL BE IMPOSED
For periods ended 10/31/07 ON CERTAIN REDEMPTIONS OR EXCHANGES OUT OF
The following information has been THE FUND WITHIN 30 DAYS OF PURCHASE.
prepared to provide Institutional Class 10 Years 6.66% EXCEPTIONS TO THE REDEMPTION FEE ARE
shareholders with a performance overview 5 Years 17.65 LISTED IN THE FUND'S PROSPECTUS.
specific to their holdings. Institutional 1 Year 23.58
Class shares are offered exclusively to PLEASE NOTE THAT PAST PERFORMANCE IS
institutional investors, including defined AVERAGE ANNUAL TOTAL RETURNS NOT INDICATIVE OF FUTURE RESULTS. MORE
contribution plans that meet certain For periods ended 9/30/07, most recent RECENT RETURNS MAY BE MORE OR LESS THAN
criteria. calendar quarter-end THOSE SHOWN. ALL RETURNS ASSUME
REINVESTMENT OF DISTRIBUTIONS AT NAV.
10 Years 5.44% INVESTMENT RETURN AND PRINCIPAL VALUE WILL
5 Years 18.05 FLUCTUATE SO YOUR SHARES, WHEN REDEEMED,
1 Year 22.03 MAY BE WORTH MORE OR LESS THAN THEIR
========================================== ORIGINAL COST. SEE FULL REPORT FOR
INFORMATION ON COMPARATIVE BENCHMARKS.
INSTITUTIONAL CLASS SHARES' INCEPTION DATE PLEASE CONSULT YOUR FUND PROSPECTUS FOR
IS SEPTEMBER 28, 2007. RETURNS SINCE THAT MORE INFORMATION. FOR THE MOST CURRENT
DATE ARE HISTORICAL RETURNS. ALL OTHER MONTH-END PERFORMANCE, PLEASE CALL
RETURNS ARE BLENDED RETURNS OF HISTORICAL 800-451-4246 OR VISIT AIMINVESTMENTS.COM.
INSTITUTIONAL CLASS SHARE PERFORMANCE AND
RESTATED CLASS A SHARE PERFORMANCE (FOR
PERIODS PRIOR TO THE INCEPTION DATE OF
INSTITUTIONAL CLASS SHARES) AT NET ASSET
VALUE (NAV) AND REFLECT THE HIGHER RULE
12B-1 FEES APPLICABLE TO CLASS A SHARES.
CLASS A SHARES' INCEPTION DATE IS
SEPTEMBER 15, 1994.
INSTITUTIONAL CLASS SHARES HAVE NO
SALES CHARGE; THEREFORE, PERFORMANCE IS AT
NAV. PERFORMANCE OF INSTITUTIONAL CLASS
SHARES WILL DIFFER FROM PERFORMANCE OF
OTHER SHARE CLASSES PRIMARILY DUE TO
DIFFERING SALES CHARGES AND CLASS
EXPENSES.
==========================================
NASDAQ SYMBOL GGAIX
==========================================
Over for information on your Fund's expenses.
=======================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS,
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
=======================================================================================
FOR INSTITUTIONAL INVESTOR USE ONLY
This material is for institutional investor use only and may not be quoted, reproduced
or shown to the public, nor used in written form as sales literature for public use.
AIMinvestments.com GLG-INS-1 A I M Distributors, Inc.
[AIM INVESTMENTS LOGO]
-- REGISTERED TRADEMARK --
AIM Global Growth Fund
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur ongoing costs, including management fees
and other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with ongoing costs of investing in other mutual funds. The actual ending account
value and expenses in the below example are based on an investment of $1,000
invested on September 28, 2007 (commencement date) and held through October 31,
2007. The hypothetical ending account value and expenses in the below example
are based on an investment of $1,000 invested at the beginning of the period and
held for the entire six month period May 1, 2007, through October 31, 2007.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during the period, September 28, 2007
(commencement date), through October 31, 2007. Because the actual ending account
value and expense information in the example is not based upon a six month
period, the ending account value and expense information may not provide a
meaningful comparison to mutual funds that provide such information for a full
six month period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
<Table>
<Caption>
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
SHARE CLASS (05/01/07) (10/31/07)(1) PERIOD(2) (10/31/07) PERIOD(3) RATIO
Institutional $1,000.00 $1,039.80 $1.00 $1,019.11 $5.35 1.05%
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period September 28, 2007 (commencement date), through October
31, 2007, after actual expenses and will differ from the hypothetical ending
account value which is based on the Fund's expense ratio and a hypothetical
annual return of 5% before expenses over the six month period May 1, 2007,
through October 31, 2007.
(2) Actual expenses are equal to the annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by 34
(September 28, 2007 (commencement date), through October 31, 2007)/365.
Because the share class has not been in existence for a full six month
period, the actual ending account value and expense information shown may
not provide a meaningful comparison to fund expense information of classes
that show such data for a full six month period and, because the actual
ending account value and expense information in the expense example covers a
short time period, return and expense data may not be indicative of return
and expense data for longer time periods.
(3) Hypothetical expenses are equal to the annualized Expense Ratio as indicated
above multiplied by the average account value over the period, multiplied by
184/365 to reflect the most recent fiscal half year. The hypothetical ending
account value and expenses may be used to compare ongoing costs of investing
the Institutional Class shares of the Fund and other funds because such data
is based on a full six month period.
AIMinvestments.com GLG-INS-1 A I M Distributors, Inc.
AIM Global Growth Fund
Approval of Investment Advisory Agreement
The Board of Trustees (the Board) of AIM own recommendations regarding the A. NATURE, EXTENT AND QUALITY OF
International Mutual Funds is required performance, fees and expenses of the SERVICES PROVIDED BY AIM
under the Investment Company Act of 1940 to AIM Funds to the full Board. Moreover,
approve annually the renewal of the AIM the Investments Committee considers each The Board reviewed the advisory services
Global Growth Fund (the Fund) investment Sub-Committee's recommendations in provided to the Fund by AIM under the
advisory agreement with A I M Advisors, making its annual recommendation to the Fund's advisory agreement, the
Inc. (AIM). During contract renewal Board whether to approve the continuance performance of AIM in providing these
meetings held on June 25-27, 2007, the of each AIM Fund's investment advisory services, and the credentials and
Board as a whole and the disinterested or agreement and sub-advisory agreement, if experience of the officers and employees
"independent" Trustees, voting separately, applicable (advisory agreements), for of AIM who provide these services. The
approved the continuance of the Fund's another year. Board's review of the qualifications of
investment advisory agreement for another AIM to provide these services included
year, effective July 1, 2007. In doing so, The independent Trustees, as the Board's consideration of AIM's
the Board determined that the Fund's mentioned above, are assisted in their portfolio and product review process,
advisory agreement is in the best interests annual evaluation of the advisory various back office support functions
of the Fund and its shareholders and that agreements by the independent Senior provided by AIM, and AIM's equity and
the compensation to AIM under the Fund's Officer. One responsibility of the fixed income trading operations. The
advisory agreement is fair and reasonable. Senior Officer is to manage the process Board concluded that the nature, extent
by which the AIM Funds' proposed and quality of the advisory services
The independent Trustees met separately management fees are negotiated during provided to the Fund by AIM were
during their evaluation of the Fund's the annual contract renewal process to appropriate and that AIM currently is
investment advisory agreement with ensure that they are negotiated in a providing satisfactory advisory services
independent legal counsel from whom they manner which is at arms' length and in accordance with the terms of the
received independent legal advice, and the reasonable. Accordingly, the Senior Fund's advisory agreement. In addition,
independent Trustees also received Officer must either supervise a based on their ongoing meetings
assistance during their deliberations from competitive bidding process or prepare throughout the year with the Fund's
the independent Senior Officer, a full-time an independent written evaluation. The portfolio managers, the Board concluded
officer of the AIM Funds who reports Senior Officer has recommended that an that these individuals are competent and
directly to the independent Trustees. The independent written evaluation be able to continue to carry out their
following discussion more fully describes provided and, upon the direction of the responsibilities under the Fund's
the process employed by the Board to Board, has prepared an independent advisory agreement.
evaluate the performance of the AIM Funds written evaluation.
(including the Fund) throughout the year In determining whether to continue
and, more specifically, during the annual During the annual contract renewal the Fund's advisory agreement, the Board
contract renewal meetings. process, the Board considered the considered the prior relationship
factors discussed below under the between AIM and the Fund, as well as the
THE BOARD'S FUND EVALUATION PROCESS heading "Factors and Conclusions and Board's knowledge of AIM's operations,
Summary of Independent Written Fee and concluded that it was beneficial to
The Board's Investments Committee has Evaluation" in evaluating the fairness maintain the current relationship, in
established three Sub-Committees which are and reasonableness of the Fund's part, because of such knowledge. The
responsible for overseeing the management advisory agreement at the contract Board also considered the steps that AIM
of a number of the series portfolios of the renewal meetings and at their meetings and its affiliates have taken over the
AIM Funds. This Sub-Committee structure throughout the year as part of their last several years to improve the
permits the Trustees to focus on the ongoing oversight of the Fund. The quality and efficiency of the services
performance of the AIM Funds that have been Fund's advisory agreement was considered they provide to the Funds in the areas
assigned to them. The Sub-Committees meet separately, although the Board also of investment performance, product line
throughout the year to review the considered the common interests of all diversification, distribution, fund
performance of their assigned funds, and of the AIM Funds in their deliberations. operations, shareholder services and
the Sub-Committees review monthly and The Board comprehensively considered all compliance. The Board concluded that the
quarterly comparative performance of the information provided to them and quality and efficiency of the services
information and periodic asset flow data did not identify any particular factor AIM and its affiliates provide to the
for their assigned funds. These materials that was controlling. Furthermore, each AIM Funds in each of these areas have
are prepared under the direction and Trustee may have evaluated the generally improved, and support the
supervision of the independent Senior information provided differently from Board's approval of the continuance of
Officer. Over the course of each year, the one another and attributed different the Fund's advisory agreement.
Sub-Committees meet with portfolio managers weight to the various factors. The
for their assigned funds and other members Trustees recognized that the advisory B. FUND PERFORMANCE
of management and review with these arrangements and resulting advisory fees
individuals the performance, investment for the Fund and the other AIM Funds are The Board compared the Fund's
objective(s), policies, strategies and the result of years of review and performance during the past one, three
limitations of these funds. negotiation between the Trustees and and five calendar years to the
AIM, that the Trustees may focus to a performance of funds in the Fund's
In addition to their meetings throughout greater extent on certain aspects of Lipper peer group that are not managed
the year, the Sub-Committees meet at these arrangements in some years than by AIM, and against the performance of
designated contract renewal meetings each others, and that the Trustees' all funds in the Lipper Global Large-Cap
year to conduct an in-depth review of the deliberations and conclusions in a Growth Funds Index. The Board also
performance, fees and expenses of their particular year may be based in part on reviewed the methodology used by Lipper
assigned funds. During the contract renewal their deliberations and conclusions of to identify the Fund's peers. The Board
process, the Trustees receive comparative these same arrangements throughout the noted that the Fund's performance was
performance and fee data regarding all the year and in prior years. above the median performance of its
AIM Funds prepared by an independent peers for the one year period, and
company, Lipper, Inc., under the direction FACTORS AND CONCLUSIONS AND SUMMARY OF comparable to such performance for the
and supervision of the independent Senior INDEPENDENT WRITTEN FEE EVALUATION three and five year periods. The Board
Officer who also prepares a separate noted that the Fund's performance was
analysis of this information for the The discussion below serves as a summary above the performance of the Index for
Trustees. Each Sub-Committee then makes of the Senior Officer's independent the one, three and five year periods.
recommendations to the Investments written evaluation, as well as a The Board also considered the steps AIM
Committee regarding the performance, fees discussion of the material factors and has taken over the last several years to
and expenses of their assigned funds. The related conclusions that formed the improve the quality and efficiency of
Investments Committee considers each basis for the Board's approval of the the services that AIM provides to the
Sub-Committee's recommendations and makes Fund's advisory agreement. Unless AIM Funds. The Board concluded that AIM
its otherwise stated, information set forth continues to be responsive to the
below is as of June 27, 2007 and does Board's focus on fund performance.
not reflect any changes that may have Although the independent written
occurred since that date, including but evaluation of the Fund's Senior Officer
not limited to changes to the Fund's (discussed below) only considered Fund
performance, advisory fees, expense performance through the most recent
limitations and/or fee waivers. calendar year, the Board
(continued)
27
AIM Global Growth Fund
also reviewed more recent Fund performance E. PROFITABILITY AND FINANCIAL RESOURCES used to pay for research and execution
and this review did not change their OF AIM services. The Board noted that soft
conclusions. dollar arrangements shift the payment
The Board reviewed information from AIM obligation for the research and
C. ADVISORY FEES AND FEE WAIVERS concerning the costs of the advisory and executions services from AIM to the
other services that AIM and its funds and therefore may reduce AIM's
The Board compared the Fund's contractual affiliates provide to the Fund and the expenses. The Board also noted that
advisory fee rate to the contractual profitability of AIM and its affiliates research obtained through soft dollar
advisory fee rates of funds in the Fund's in providing these services. The Board arrangements may be used by AIM in
Lipper peer group that are not managed by also reviewed information concerning the making investment decisions for the Fund
AIM, at a common asset level and as of the financial condition of AIM and its and may therefore benefit Fund
end of the past calendar year. The Board affiliates. The Board also reviewed with shareholders. The Board concluded that
noted that the Fund's advisory fee rate was AIM the methodology used to prepare the AIM's soft dollar arrangements were
below the median advisory fee rate of its profitability information. The Board appropriate. The Board also concluded
peers. The Board also reviewed the considered the overall profitability of that, based on their review and
methodology used by Lipper and noted that AIM, as well as the profitability of AIM representations made by AIM, these
the contractual fee rates shown by Lipper in connection with managing the Fund. arrangements were consistent with
include any applicable long-term The Board noted that AIM continues to regulatory requirements.
contractual fee waivers. The Board noted operate at a net profit, although
that AIM does not serve as an advisor to increased expenses in recent years have The Board considered the fact that
other mutual funds or other clients with reduced the profitability of AIM and its the Fund's uninvested cash and cash
investment strategies comparable to those affiliates. The Board concluded that the collateral from any securities lending
of the Fund. Fund's advisory fees were fair and arrangements may be invested in money
reasonable, and that the level of market funds advised by AIM pursuant to
The Board noted that AIM has not profits realized by AIM and its procedures approved by the Board. The
proposed any advisory fee waivers or affiliates from providing services to Board noted that AIM will receive
expense limitations for the Fund. However, the Fund was not excessive in light of advisory fees from these affiliated
the Board also noted that AIM has the nature, quality and extent of the money market funds attributable to such
recommended that the Board approve an services provided. The Board considered investments, although AIM has
amendment to the Fund's contractual whether AIM is financially sound and has contractually agreed to waive the
advisory fee schedule that would implement the resources necessary to perform its advisory fees payable by the Fund with
the contractual advisory fee waiver that obligations under the Fund's advisory respect to its investment of uninvested
had been formerly committed to by AIM, agreement, and concluded that AIM has cash in these affiliated money market
which waiver provided for lower effective the financial resources necessary to funds through at least June 30, 2008.
fee rates at all asset levels than the fulfill these obligations. The Board considered the contractual
Fund's current contractual advisory fee nature of this fee waiver and noted that
schedule. The Board noted that AIM's F. INDEPENDENT WRITTEN EVALUATION OF THE it remains in effect until at least June
recommendation was made in response to the FUND'S SENIOR OFFICER 30, 2008. The Board concluded that the
recommendation of the independent Senior Fund's investment of uninvested cash and
Officer that AIM consider whether the The Board noted that, upon their cash collateral from any securities
advisory fee waivers for certain equity AIM direction, the Senior Officer of the lending arrangements in the affiliated
Funds, including the Fund, should be Fund, who is independent of AIM and money market funds is in the best
simplified. The Board concluded that it AIM's affiliates, had prepared an interests of the Fund and its
would be appropriate to approve the independent written evaluation to assist shareholders.
proposed amendment to the Fund's the Board in determining the
contractual advisory fee schedule and that reasonableness of the proposed
it was not necessary at this time to management fees of the AIM Funds,
discuss with AIM whether to implement any including the Fund. The Board noted that
fee waivers or expense limitations for the they had relied upon the Senior
Fund. Officer's written evaluation instead of
a competitive bidding process. In
After taking account of the Fund's determining whether to continue the
contractual advisory fee rate, as well as Fund's advisory agreement, the Board
the comparative advisory fee information considered the Senior Officer's written
discussed above, the Board concluded that evaluation.
the Fund's advisory fees were fair and
reasonable. G. COLLATERAL BENEFITS TO AIM AND ITS
AFFILIATES
D.ECONOMIES OF SCALE AND BREAKPOINTS
The Board considered various other
The Board considered the extent to which benefits received by AIM and its
there are economies of scale in AIM's affiliates resulting from AIM's
provision of advisory services to the Fund. relationship with the Fund, including
The Board also considered whether the Fund the fees received by AIM and its
benefits from such economies of scale affiliates for their provision of
through contractual breakpoints in the administrative, transfer agency and
Fund's advisory fee schedule or through distribution services to the Fund. The
advisory fee waivers or expense Board considered the performance of AIM
limitations. The Board noted that the and its affiliates in providing these
Fund's contractual advisory fee schedule services and the organizational
currently does not include any breakpoints structure employed by AIM and its
but that the amendment to the Fund's affiliates to provide these services.
contractual advisory fee schedule discussed The Board also considered that these
above provides for seven breakpoints. Based services are provided to the Fund
on this information, the Board concluded pursuant to written contracts which are
that the Fund's advisory fees will reviewed and approved on an annual basis
appropriately reflect economies of scale by the Board. The Board concluded that
upon the Board's approval of the amendment AIM and its affiliates were providing
to the Fund's contractual advisory fee these services in a satisfactory manner
schedule. The Board also noted that the and in accordance with the terms of
Fund shares directly in economies of scale their contracts, and were qualified to
through lower fees charged by third party continue to provide these services to
service providers based on the combined the Fund.
size of all of the AIM Funds and
affiliates. The Board considered the benefits
realized by AIM as a result of portfolio
brokerage transactions executed through
"soft dollar" arrangements. Under these
arrangements, portfolio brokerage
commissions paid by the Fund and/or other
funds advised by AIM are
28
AIM Global Growth Fund
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year -- end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code or to meet a specific state's requirement.
The Fund designates the following amounts or, if subsequently determined to
be different, the maximum amount allowable for its fiscal year ended October 31,
2007:
FEDERAL AND STATE INCOME TAX
<Table>
Qualified Dividend Income* 100.00%
Corporate Dividends Received Deduction* 88.55%
</Table>
* The above percentages are based on ordinary income dividends paid to
shareholders during the fund's fiscal year.
NON-RESIDENT ALIEN SHAREHOLDERS
<Table>
Qualified Interest Income** 4.91%
</Table>
** The above percentage is based on income dividends paid to shareholders
during the fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended January 31, 2007, April 30, 2007, July 31, 2007 and
October 31, 2007 were 76.57%, 76.85%, 75.71%, and 75.83%, respectively.
29
AIM Global Growth Fund
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM International Mutual Funds (the
"Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each
trustee oversees 104 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. Each officer serves for a one year term or until their
successors are elected and qualified. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY
TRUST SINCE DURING PAST 5 YEARS TRUSTEE/ DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Interested Persons
- -------------------------------------------------------------------------------------------------------------------------
Martin L. Flanagan(1) -- 1960 2007 Director, Chief Executive Officer and None
Trustee President, Invesco Ltd. (ultimate parent
of AIM and a global investment
management firm) and, INVESCO PLC
(parent of AIM and a global investment
management firm); Chairman, A I M
Advisors, Inc. (registered investment
advisor); Director, Chairman, Chief
Executive Officer and President, IVZ
Inc. (holding company); and INVESCO
North American Holdings, Inc. (holding
company); Chairman and President,
INVESCO Group Services, Inc. (service
provider); Trustee, The AIM Family of
Funds(R); Vice Chairman, Investment
Company Institute; and Member of
Executive Board, SMU Cox School of
Business
Formerly: Chairman, Investment Company
Institute; President, Co-Chief Executive
Officer, Co-President, Chief Operating
Officer and Chief Financial Officer,
Franklin Resources, Inc. (global
investment management organization)
- -------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Director, Chief Executive Officer and None
Trustee, President and President, AIM Mutual Fund Dealer Inc.
Principal (registered broker dealer), A I M
Executive Officer Advisors, Inc., AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services
(registered investment advisor and
registered transfer agent) and 1371
Preferred Inc. (holding company);
Director, Chairman, Chief Executive
Officer and President, A I M Management
Group Inc. (financial services holding
company) and A I M Capital Management,
Inc. (registered investment advisor);
Director and President, INVESCO Funds
Group, Inc. (registered investment
advisor and register transfer agent) and
AIM GP Canada Inc. (general partner for
a limited partnership); Director, A I M
Distributors, Inc. (registered broker
dealer); Director and Chairman, AIM
Investment Services, Inc. (registered
transfer agent) and INVESCO
Distributors, Inc. (registered broker
dealer); Director, President and
Chairman, IVZ Callco Inc. (holding
company), INVESCO Inc. (holding company)
and AIM Canada Holdings Inc. (holding
company); Director and Chief Executive
Officer, AIM Trimark Corporate Class
Inc. (formerly AIM Trimark Global Fund
Inc.) (corporate mutual fund company)
and AIM Trimark Canada Fund Inc.
(corporate mutual fund company);
Trustee, President and Principal
Executive Officer of The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); Trustee and
Executive Vice President, The AIM Family
of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); and Manager,
PowerShares Capital Management LLC
Formerly: Director and Chairman, Fund
Management Company (registered broker
dealer); President and Principal
Executive Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); Chairman, AIM
Canada Holdings, Inc.; President, AIM
Trimark Global Fund Inc. and AIM Trimark
Canada Fund Inc.; and Director, Trimark
Trust (federally regulated Canadian
Trust Company)
- -------------------------------------------------------------------------------------------------------------------------
Independent Trustees
- -------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1992 Chairman, Crockett Technology Associates ACE Limited (insurance company);
Trustee and Chair (technology consulting company) and Captaris, Inc. (unified
messaging provider)
- -------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Retired Badgley Funds, Inc. (registered
Trustee investment company) (2 portfolios)
Formerly: Partner, law firm of Baker &
McKenzie
- -------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2003 Founder, Green, Manning & Bunch Ltd., None
Trustee (investment banking firm); and Director,
Policy Studies, Inc. and Van Gilder
Insurance Corporation
- -------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and None
Trustee private business corporations, including
the Boss Group Ltd. (private investment
and management); Reich & Tang Funds
(Chairman) (registered investment
company) (7 portfolios), Daily Income
Fund (4 portfolios), California Daily
Tax Free Income Fund, Inc., Connecticut
Daily Tax Free Income Fund, Inc. and New
Jersey Daily Municipal Fund, Inc.,
Annuity and Life Re (Holdings), Ltd.
(insurance company), and Homeowners of
America Holding Corporation (property
casualty company)
Formerly: Director, CompuDyne
Corporation (provider of product and
services to the public security market);
Director, President and Chief Executive
Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo;
Director of various affiliated Volvo
companies; and Director, Magellan
Insurance Company
- -------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Administaff
Trustee Century Group, Inc. (government affairs
company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P.
(cattle, hunting, corporate
entertainment), and Discovery Global
Education Fund (non-profit)
Formerly: Chief Executive Officer,
Texana Timber LP (sustainable forestry
company)
- -------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1991 Partner, law firm of Kramer Levin Director, Reich & Tang Funds) (7
Trustee Naftalis and Frankel LLP portfolios)
- -------------------------------------------------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired None
Trustee Formerly: Partner, Deloitte & Touche;
and Director, Mainstay VP Series Funds,
Inc. (25 portfolios)
- -------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan was appointed as Trustee of the Trust on February 24, 2007. Mr.
Flanagan is considered an interested person of the Trust because he is an
officer of the advisor to the Trust, and an officer and a director of
INVESCO PLC, parent of the advisor to the Trust.
(2) Mr. Taylor 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.
30
TRUSTEES AND OFFICERS--(CONTINUED)
AIM Global Growth Fund
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY TRUSTEE/
TRUST SINCE DURING PAST 5 YEARS DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Other Officers
- -------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer N/A
Senior Vice President and of The AIM Family of Funds--Registered
Senior Officer Trademark--
Formerly: Director of Compliance and
Assistant General Counsel, ICON
Advisers, Inc.; Financial Consultant,
Merrill Lynch; General Counsel and
Director of Compliance, ALPS Mutual
Funds, Inc.
- -------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, N/A
Senior Vice President, Chief Secretary and General Counsel, A I M
Legal Officer and Secretary Management Group Inc., A I M Advisors,
Inc. and A I M Capital Management, Inc.;
Director, Vice President and Secretary,
AIM Investment Services, Inc. and
INVESCO Distributors, Inc.; Director,
Senior Vice President and Secretary,
A I M Distributors, Inc.; Director and
Vice President, INVESCO Funds Group
Inc.; Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--; and
Manager, PowerShares Capital Management
LLC
Formerly: Director, Vice President and
Secretary, Fund Management Company; Vice
President, A I M Capital Management,
Inc.; Chief Operating Officer, Senior
Vice President, General Counsel and
Secretary, Liberty Ridge Capital, Inc.
(an investment adviser); Vice President
and Secretary, PBHG Funds (an investment
company); Vice President and Secretary,
PBHG Insurance Series Fund (an
investment company); General Counsel and
Secretary, Pilgrim Baxter Value
Investors (an investment adviser); Chief
Operating Officer, General Counsel and
Secretary, Old Mutual Investment
Partners (a broker-dealer); General
Counsel and Secretary, Old Mutual Fund
Services (an administrator); General
Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder
servicing center); Executive Vice
President, General Counsel and
Secretary, Old Mutual Capital, Inc. (an
investment adviser); and Vice President
and Secretary, Old Mutual Advisors Funds
(an investment company)
- -------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, INVESCO PLC; N/A
Vice President and Vice President of The AIM Family of
Funds--Registered Trademark--
Formerly: Senior Vice President, A I M
Management Group Inc. (financial
services holding company); Senior Vice
President and Chief Compliance Officer,
A I M Advisors, Inc. and The AIM Family
of Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc. and A I M
Distributors, Inc.; Vice President, AIM
Investment Services, Inc. and Fund
Management Company; Senior Vice
President and Chief Compliance Officer
of The AIM Family of Funds--Registered
Trademark--; and Senior Vice President
and Compliance Director, Delaware
Investments Family of Funds
- -------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 Senior Vice President and General
Vice President Counsel, INVESCO PLC; Director, INVESCO
Funds Group, Inc.; Director and
Secretary, IVZ, Inc. and INVESCO Group
Services, Inc.; Secretary, INVESCO North
American Holdings, Inc.; and Vice
President of The AIM Family of
Funds--Registered Trademark--
Formerly: Director, Senior Vice N/A
President, Secretary and General
Counsel, A I M Management Group Inc. and
A I M Advisors, Inc.; Senior Vice
President, A I M Distributors, Inc.;
Director, General Counsel and Vice
President, Fund Management Company; Vice
President, A I M Capital Management,
Inc. and AIM Investment Services, Inc.;
Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--;
Director and Vice President, INVESCO
Distributors, Inc.; Chief Executive
Officer and President, INVESCO Funds
Group, Inc.; and Senior Vice President
and General Counsel, Liberty Financial
Companies, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Sidney M. Dilgren -- 1961 2004 Vice President, A I M Advisors, Inc. and N/A
Vice President, Principal A I M Capital Management, Inc.; and Vice
Financial Officer and President, Treasurer and Principal
Treasurer Financial Officer of The AIM Family of
Funds--Registered Trademark--
Formerly: Fund Treasurer, A I M
Advisors, Inc.; Senior Vice President,
AIM Investment Services, Inc.; and Vice
President, A I M Distributors, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2004 Head of INVESCO's World Wide Fixed N/A
Vice President Income and Cash Management Group;
Director of Cash Management and Senior
Vice President, A I M Advisors, Inc. and
A I M Capital Management, Inc; Executive
Vice President, A I M Distributors,
Inc.; Senior Vice President, A I M
Management Group Inc.; Vice President,
The AIM Family of Funds--Registered
Trademark-- (other than AIM Treasurer's
Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust);
and President and Principal Executive
Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
Formerly: Director and President, Fund
Management Company; Chief Cash
Management Officer and Managing
Director, A I M Capital Management,
Inc.; Vice President, A I M Advisors,
Inc. and The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
- -------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance N/A
Anti-Money Laundering Officer, A I M Advisors, Inc., A I M
Compliance Officer Capital Management, Inc., A I M
Distributors, Inc., AIM Investment
Services, Inc., AIM Private Asset
Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering
Compliance Officer, Fund Management
Company; and Manager of the Fraud
Prevention Department, AIM Investment
Services, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, A I M Management N/A
Chief Compliance Officer Group Inc.; Senior Vice President and
Chief Compliance Officer, A I M
Advisors, Inc. and A I M Capital
Management, Inc.; Chief Compliance
Officer of The AIM Family of
Funds--Registered Trademark--, INVESCO
Global Asset Management (N.A.), Inc.,
(registered investment advisor), INVESCO
Institutional (N.A.), Inc., (registered
investment advisor), INVESCO Private
Capital Investments, Inc. (holding
company), INVESCO Private Capital, Inc.
(registered investment advisor) and
INVESCO Senior Secured Management, Inc.
(registered investment advisor); and
Vice President, A I M Distributors, Inc.
and AIM Investment Services, Inc.
Formerly: Vice President, A I M Capital
Management, Inc. and Fund Management
Company; Global Head of Product
Development, AIG-Global Investment
Group, Inc.; and Chief Compliance
Officer and Deputy General Counsel,
AIG-SunAmerica Asset Management
- -------------------------------------------------------------------------------------------------------------------------
</Table>
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 1.800.959.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, PricewaterhouseCoopers
Suite 100 11 Greenway Plaza Inc. LLP
Houston, TX 77046-1173 Suite 100 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Ballard Spahr INDEPENDENT TRUSTEES AIM Investment State Street Bank and
Andrews & Ingersoll, LLP Kramer, Levin, Naftalis Services, Inc. Trust
1735 Market Street, 51st & Frankel LLP P.O. Box 4739 Company
Floor 1177 Avenue of the Houston, TX 77210-4739 225 Franklin Street
Philadelphia, PA 19103-7599 Americas Boston, MA 02110-2801
New York, NY 10036-2714
</Table>
31
[EDELIVERY Fund holdings and proxy voting information
GO PAPERLESS
AIMINVESTMENTS.COM/EDELIVERY The Fund provides a complete list of its holdings four times in
GRAPHIC] each fiscal year,at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual
REGISTER FOR EDELIVERY reports to shareholders. For the first and third quarters,the
Fund files the lists with the Securities and Exchange
eDelivery is the process of receiving your fund and account Commission (SEC) on Form N-Q. The most recent list of portfolio
information via e-mail. Once your quarterly statements,tax holdings is available at AIMinvestments.com. From our home
forms,fund reports,and prospectuses are available,we will send page,click on Products & Performance,then Mutual Funds,then
you an e-mail notification containing links to these documents. Fund Overview. Select your Fund from the drop-down menu and
For security purposes,you will need to log in to your account to click on Complete Quarterly Holdings. Shareholders can also
view your statements and tax forms. look up the Fund's Forms N-Q on the SEC Web site at sec.gov.
Copies of the Fund's Forms N-Q may be reviewed and copied at
WHY SIGN UP? the SEC Public Reference Room in Washington,D.C. You can obtain
information on the operation of the Public Reference
Register for eDelivery to: Room,including information about duplicating fee charges,by
calling 202-942-8090 or 800-732-0330,or by electronic request
o save your Fund the cost of printing and postage. at the following e-mail address: publicinfo@sec.gov. The SEC
file numbers for the Fund are 811-06463 and 033-44611.
o reduce the amount of paper you receive.
A description of the policies and procedures that the Fund uses
o gain access to your documents faster by not waiting for the to determine how to vote proxies relating to portfolio
mail. securities is available without charge,upon request,from our
Client Services department at 800-959-4246 or on the AIM Web
o view your documents online anytime at your convenience. site,AIMinvestments.com. On the home page,scroll down and click
on Proxy Policy. The information is also available on the SEC
o save the documents to your personal computer or print them out Web site,sec.gov.
for your records.
Information regarding how the Fund voted proxies related to its
HOW DO I SIGN UP? portfolio securities during the 12 months ended June 30,2007,
is available at our Web site. Go to AIMinvestments.com,access
It's easy. Just follow these simple steps: the About Us tab,click on Required Notices and then click on
Proxy Voting Activity. Next,select the Fund from the drop-down
1. Log in to your account. menu. The information is also available on the SEC Web
site,sec.gov.
2. Click on the "Service Center" tab.
If used after January 20, 2008, this report must be accompanied
3. Select "Register for eDelivery" and complete the consent by a Fund fact sheet or by an AIM Quarterly Performance Review
process. for the most recent quarter-end. Mutual funds and
exchange-traded funds distributed by A I M Distributors, Inc.
This AIM service is provided by AIM Investment Services,Inc.
GLG-AR-1 A I M Distributors,Inc.
[AIM INVESTMENTS LOGO]
-- REGISTERED TRADEMARK --
INTERNATIONAL/
GLOBAL EQUITY
AIM International Core Equity Fund
Annual Report to Shareholders - October 31, 2007
International/Global Blend
Table of Contents
Letters to Shareholders ......... 2
Performance Summary ............. 4
Management Discussion ........... 4
Long-term Fund Performance ...... 6
Supplemental Information ........ 8
Schedule of Investments ......... 9
Financial Statements ............ 12
Notes to Financial Statements ... 15
Financial Highlights ............ 22
Auditor's Report ................ 27
Fund Expenses ................... 28
Approval of Advisory Agreement .. 29 [COVER GLOBE IMAGE]
Tax Information ................. 31
Trustees and Officers ........... 32
[AIM INVESTMENT SOLUTIONS]
[GRAPHIC] [GRAPHIC]
[DOMESTIC [FIXED
EQUITY] INCOME]
[GRAPHIC] [GRAPHIC] [GRAPHIC]
[TARGET [TARGET [DIVERSIFIED
RISK] MATURITY] PORTFOLIOS]
[GRAPHIC] [GRAPHIC]
[SECTOR [INTERNATIONAL/
EQUITY] GLOBAL EQUITY]
[AIM INVESTMENTS LOGO]
- -- REGISTERED TRADEMARK --
AIM International Core Equity Fund
Dear Shareholders of the AIM Family of Funds:
I'm pleased to provide you with this report, which includes a discussion of how your Fund was managed
during the period under review and factors that affected its performance. The following pages contain
important information that answers questions you may have about your investment.
[TAYLOR
PHOTO] Despite notable volatility at points throughout the fiscal year ended October 31, 2007, major stock
market indexes in the U.S. and abroad generally performed well. Reasons for their favorable performance
included positive economic growth, particularly overseas; strong corporate profits; and action by the U.S.
Federal Reserve Board (the Fed) to reassure skittish markets, among other factors.
Philip Taylor
At its September 18, 2007, meeting, the Fed cut the federal funds target rate for the first time since
June 2003.(1) The cut followed 17 rate increases from June 2004 to June 2006(1) and was intended to address
investor concerns about a weak housing market generally and problems in the subprime mortgage market
specifically. The Fed's action triggered an immediate and broad stock market rally. The Fed cut this key
interest rate again on October 31, 2007.(1)
At AIM Investments --REGISTERED TRADEMARK--, we know that market conditions change--often suddenly and
sometimes dramatically. We can help you deal with market volatility by offering a broad range of mutual
funds, including:
o Domestic, global and international equity funds
o Taxable and tax-exempt fixed-income funds
o Allocation portfolios, with risk/return characteristics to match your needs
o AIM Independence Funds--target-maturity funds that combine retail mutual funds and PowerShares
--REGISTERED TRADEMARK-- exchange-traded funds--with risk/return characteristics that change as your
target retirement date nears
I encourage you to talk with your financial advisor if you have concerns about your portfolio. We
believe in the value of working with a trusted financial advisor who can recommend AIM funds that are
appropriate for your portfolio and that address your long-term investment goals and risk tolerance
regardless of prevailing short-term market conditions.
In conclusion
My colleague, Bob Graham, recently announced his decision to step down as vice chair of the AIM Funds board
of directors. In 1976, Bob was one of three men who co-founded AIM. In the three decades since, he has been
instrumental in transforming AIM from a small investment management firm into one of America's most
respected mutual fund companies--and, in 1997, into a global independent retail and institutional
investment manager.
In May, with shareholder approval, AIM Investments' parent company changed its name from AMVESCAP PLC to
Invesco Ltd., uniting our worldwide operations and global expertise under one new name. While the name of
our parent company may be new to you, I can assure you that our commitment to excellent customer service
remains unchanged. Our highly trained, courteous client service representatives are eager to answer your
questions, provide you with product information or assist you with account transactions. I encourage you to
give us an opportunity to serve you by calling us at 800-959-4246.
We at AIM are committed to helping you achieve your financial goals. We work every day to earn your
trust, and we're grateful for the confidence you've placed in us.
Sincerely,
/S/ PHILIP TAYLOR
Philip Taylor
President - AIM Funds
CEO, AIM Investments
December 17, 2007
Source: (1)U.S. Federal Reserve Board
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
2
AIM International Core Equity Fund
Dear Fellow Shareholders:
In overseeing the management of the AIM family of funds on your behalf, your Board of Trustees of the AIM
Funds continues to focus on improved investment performance, reduced shareholder costs, and high ethical
standards.
[CROCKETT
PHOTO] Your Board welcomes two new members: Marty Flanagan, President and CEO of INVESCO, AIM's parent company,
and Phil Taylor, who was named CEO of AIM Investments --REGISTERED TRADEMARK-- in April 2006. Robert
Graham, who has given more than 30 years of leadership to the company and the mutual fund industry since
founding AIM in 1976, has retired, stepping down in the process from his most recent role as vice chairman
of the Board. We thank Bob for his many contributions and wish him a long and happy future.
Bruce L. Crockett
Our review of fund performance has shown healthy progress, but the process is necessarily one of
continuous improvement. In general, as of October 31, 2007, we have seen persistent investment discipline
and more consistently good results. While this statement may not apply to every AIM Fund all the time, as I
write this letter, the overall trend in fund management and performance has been positive.
The investment management talent at AIM has recently been enhanced by the promotion of Karen Dunn Kelley
to Head of INVESCO's Worldwide Fixed Income as well as Director of AIM Global and Cash Management, with
responsibility for all fixed income and money market funds that serve both institutional and individual
investors. Under Karen's direction, AIM's cash management organization grew to one of the world's largest
and most respected, with top-tier performance. The operations now combined under her charge represent more
than $150 billion in assets, 120 investment professionals, and products that span the entire yield curve
(as of October 31, 2007).
In other news, your Board took a more active role in preparing for "proxy season," the period when fund
managers must vote the shares held by their funds "for" or "against" various proposals on the ballots of
the issuing companies. Beginning in the 2007 proxy season, AIM implemented new proxy voting policies,
developed by management in conjunction with an ad hoc Board committee, which provided a solid framework for
properly evaluating and executing the many decisions the AIM Funds are required to make to vote shares.
In general, the AIM Funds voted for proposals that would allow shareholders a greater role in election
of directors, proxy access and "say for pay." The AIM Funds voted against directors whom AIM believed
failed to govern well in cases of corporate mismanagement, such as the backdating of options grants, and
against "poison pill" and "take under" proposals that would favor the financial interests of managers at
the expense of investors in the case of a merger or acquisition. You can view the proxy votes cast for your
fund by going to AIMinvestments.com. Click the "About Us" tab, then go to "Required Notices" and "Proxy
Voting Activity."
Additionally, your Board raised the amount its members are recommended to invest in the AIM Funds within
three years of joining the Board, with the goal of aligning our interests even more closely with yours.
Furthermore, at our June meeting we renewed the investment advisory contracts between the AIM Funds and
AIM for another year, applying the same rigorous evaluation process that was enhanced and formalized in
2005. For more information on this process, please visit AIMinvestments.com. Click on the "Products and
Performance" tab and go to "Investment Advisory Agreement Renewals."
Your Board's ability to best represent your interests depends on our knowledge of your opinions and
concerns. Please send me an email (bruce@brucecrockett.com) with your thoughts on the following:
1) How important is it to you to hear about your Board's decisions and activities in these letters?
2) What other information (on overall performance, specific funds, managers, etc.) would make the
letters more meaningful to you?
3) Would you prefer that communications from your Board continue to be delivered in paper form by
regular mail or be sent electronically by email?
If you would prefer to communicate through a quick online survey, please go to AIMinvestments.com and
provide your responses there.
We need to hear from you to do our best job, and I look forward to your responses.
Sincerely,
/S/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Directors
December 17, 2007
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
3
AIM International Core Equity Fund
Management's discussion of Fund performance portfolio diversification. However,
individual holdings are selected based on
================================================================================ their own merits, not on projections of
PERFORMANCE SUMMARY country or sector performance.
For the fiscal year ended October 31,2007,AIM International Core Equity Market conditions and your Fund
Fund,excluding applicable sales charges,underperformed the MSCI EAFE Index and
the Lipper International Large-Cap Core Funds Index.* International markets continued their
ongoing rally (now 5 years old) with
Our focus on investing in what we believe are well-established large cap particular strength in Europe, as positive
companies with superior financial attributes contributed to the Fund's economic data and a strong currency drove
underperformance as heavily indebted companies outperformed and the larger cap returns higher in the region. While all
companies that we favor lagged the broader market for the period. countries within the MSCI EAFE Index
finished the period in positive territory,
Your Fund's long-term performance appears later in this report. Japan stood out as it significantly lagged.
Recent economic data pointed to a lack of
FUND VS. INDEXES consumer and investor confidence, and
leading indicators suggested a recession is
Total returns,10/31/06-10/31/07,excluding applicable sales charges. If sales not out of the question. The recent strength
charges were included,returns would be lower. in the Yen also created headwinds for export
driven businesses, including many of Japan's
Class A Shares 21.26% largest companies. Emerging markets enjoyed
Class B Shares 20.25 strong investor optimism as many local
Class C Shares 20.36 markets posted very strong gains,
Class R Shares 20.97 particularly China and India, as well as
Investor Class Shares 21.29 commodity related companies within the asset
MSCI EAFE Index* (Broad Market/Style-Specific Index) 24.91 class. While emerging markets are not
Lipper International Large-Cap Core Funds Indexo (Peer Group Index) 26.89 included within the MSCI EAFE Index, they
SOURCE: *LIPPER INC. are representative of the heightened
================================================================================ investor risk appetite of the past few
years, which has also included small cap and
How we invest price associated with the embedded lower risk stocks.
growth of the underlying business, in
The Fund invests primarily in the addition to the prospect of valuation- As always, the cornerstone of our strategy
stocks of larger cap foreign companies based multiple expansion. continued to be our security selection
with a record of stable earnings and process. On an absolute basis, all industry
strong balance sheets. Our research We strive to maintain a consistent sectors had
efforts target a long time horizon that investment discipline through varying
permits return potential from market conditions and an appropriate
individual investments to be driven by level of overall
a higher share (continued)
======================================= ====================================== =================================================
PORTFOLIO COMPOSITION TOP 10 EQUITY HOLDINGS* TOTAL NET ASSETS
By sector 1. Vodafone Group PLC
Financials 23.6% (United Kingdom) 3.2% Total Net Assets $634.01 million
Consumer Discretionary 15.1 2. Aegon N.V. (Netherlands) 2.8
Consumer Staples 11.1 3. BP PLC (United Kingdom) 2.7 Total Number of Holdings* 97
Energy 11.1 4. HSBC Holdings PLC-ADR
Industrials 9.0 (United Kingdom) 2.7 The Fund's holdings are subject to change,
Information Technology 7.4 5. Novartis A.G. (Switzerland) 2.6 and there is no assurance that the Fund will
Materials 7.3 6. Nokia Oyj (Finland) 2.5 continue to hold any particular security.
Health Care 6.7 7. Telefonaktiebolaget LM *Excluding money market fund holdings.
Telecommunication Services 5.5 Ericsson-Class B (Sweden) 2.3
Utilities 0.1 8. FUJIFILM Holdings Corp.
(Japan) 2.3
Money Market Funds 9. Heineken N.V. (Netherlands) 2.3
Plus Other Assets Less 10. Hutchison Whampoa Ltd.
Liabilities 3.1 (Hong Kong) 2.2
======================================= ====================================== =================================================
4
AIM International Core Equity Fund
positive returns during the period. Our ciation provided a boost to Fund Ingrid E. Baker
stock selection within the energy and performance. [BAKER Chartered Financial
financials sectors of the market made the PHOTO] Analyst,portfolio manager, is
largest contribution to the Fund's relative The performance of international manager of AIM International
results. The largest contributor to overall stocks over the last several years Core Equity Fund. She began her investment
performance was Nokia, the world's largest underscores the investment opportunities career in 1990 and joined InvescoLtd.in
provider of mobile phone handsets. The beyond U.S. borders. Over the past 1999. Ms. Baker graduated with a B.A. in
company reported solid gains in earnings fiscal year, the Fund has experienced international politics from Oberlin
and market share during the period, as well strong double-digit returns. It would be College and earned an M.B.A. in finance
as expanded their emerging market presence. imprudent for us to suggest that such a from the University of Navarra in Spain.
Vodafone, the British telecommunications level of performance is sustainable over
services giant, also outperformed during the long term. However, we remain W. Lindsay Davidson
the period following better than expected committed to our disciplined strategy of [LINDSAY Portfolio manager,is
earnings and improving fundamentals. selecting holdings based on the PHOTO] manager of AIM International
strengths of the individual companies Core Equity Fund. He began his
The Fund's underweight positions in and holding our course through market investment career in 1974 and has served
utilities and industrials hurt relative fluctuations. as a portfolio manager with Invesco Ltd.
performance, as utilities and industrials and its affiliates since 1984. A native of
stocks within the MSCI EAFE Index performed We welcome any new investors who St. Andrews,Scotland,Mr. Davidson earned
well during the period. Our holdings in the have joined the Fund during the his degree in economics with honors from
materials, consumer discretionary and reporting period, and to all of our Edinburgh University.
health care sectors also detracted from shareholders we would like to say thank
relative returns. In addition, our small you for your continued investment in AIM Michele T. Garren
cash position hurt the Fund's performance International Core Equity Fund. [GARREN Chartered Financial
versus the MSCI EAFE Index in a rising PHOTO] Analyst, portfolio manager, is
market environment. Source: (1)Lipper Inc. manager of AIM International
Core Equity Fund. She began her investment
While only a few holdings declined The views and opinions expressed in career in 1987 and joined Invesco Ltd. in
during the period, Ericsson, the Swedish management's discussion of Fund 1997. Ms. Garren graduated with a B.B.A.
telecom network provider, was among the performance are those of A I M Advisors, in finance from Southern Methodist
largest detractors from the Fund's overall Inc. These views and opinions are University and earned an M.B.A. in finance
performance after the company's announced subject to change at any time based on from New York University.
earnings and forecast disappointed factors such as market and economic
investors. conditions. These views and opinions may Erik B. Granade
not be relied upon as investment advice [GRANADE Chartered Financial
From a geographical perspective, all or recommendations, or as an offer for a PHOTO] Analyst,portfolio manager, is
international regions contributed particular security. The information is manager of AIM International
positively to the absolute results of the not a complete analysis of every aspect Core Equity Fund. He began his investment
Fund during the period. The Fund's exposure of any market, country, industry, career in 1986 and has been a portfolio
to non-benchmark countries benefited security or the Fund. Statements of fact manager with Invesco Ltd. and its
relative returns as well. Holdings in are from sources considered reliable, affiliates since 1996. Mr. Granade earned
Canada as well as several emerging but A I M Advisors, Inc. makes no a B.A. in economics from Trinity College
economies provided returns in excess of the representation or warranty as to their in Hartford,Connecticut.
Fund's style-specific index, the MSCI EAFE completeness or accuracy. Although
Index.(1) Conversely, the portfolio's historical performance is no guarantee Kent A. Starke
underweight position in Australia hurt of future results, these insights may [STARKE Portfolio manager, is
relative returns as this market benefited help you understand our investment PHOTO] manager of AIM International
significantly from robust commodity related management philosophy. Core Equity Fund. He began his
stocks as well as currency strength. investment career in 1983 and joined
See important Fund and index Invesco Ltd. in 1992. Mr. Starke has been
Foreign exchange was another disclosures later in this report. with the international equity product
contributor to Fund performance. Our since its inception. He earned a B.B.A.
exposure to the appreciating euro, compared from the University of Georgia and an M.S.
with the U.S. dollar, added greater value in finance from Georgia State University.
to the Fund's overall return. As we do not
typically hedge currencies--we instead buy
stocks in their local currency and then
translate that value back into dollars for
the Fund--foreign currency appre-
5
AIM International Core Equity Fund
Your Fund's long-term performance
Past performance cannot guarantee This chart, which is a logarithmic
comparable future results. chart, presents the fluctuations in the
value of the Fund and its indexes. We
The data shown in the chart include believe that a logarithmic chart is more
reinvested distributions, Fund expenses and effective than other types of charts in
management fees. Index results include illustrating changes in value during the
reinvested dividends. Performance of an early years shown in the chart. The
index of funds reflects fund expenses and vertical axis, the one that indicates
management fees; performance of a market the dollar value of an investment, is
index does not. Performance shown in the constructed with each segment
chart and table(s) does not reflect representing a percent change in the
deduction of taxes a shareholder would pay value of the investment. In this chart,
on Fund distributions or sale of Fund each segment represents a doubling, or
shares. Performance of the indexes does not 100% change, in the value of the
reflect the effects of taxes. investment. In other words, the space
between $5,000 and $10,000 is the same
size as the space between $10,000 and
$20,000, and so on.
6
====================================================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT
FUND DATA FROM 10/28/98, INDEX DATA FROM 10/31/98
AIM INTERNATIONAL LIPPER INTERNATIONAL
CORE EQUITY FUND LARGE-CAP CORE
DATE -INVESTOR CLASS SHARES MSCI EAFE INDEX(1) FUNDS INDEX(1)
10/28/98 $10000 2/04 11492 11307 12554
10/98 10020 $10000 $10000 3/04 11436 11370 12575
11/98 10340 10512 10509 4/04 11220 11113 12183
12/98 10650 10927 10790 5/04 11311 11151 12161
1/99 10429 10895 10876 6/04 11696 11395 12325
2/99 10109 10635 10578 7/04 11322 11025 11873
3/99 10379 11079 10977 8/04 11356 11074 11971
4/99 10589 11528 11495 9/04 11663 11363 12332
5/99 10329 10934 11014 10/04 12083 11751 12703
6/99 10680 11361 11557 11/04 12741 12553 13523
7/99 10780 11698 11860 12/04 13251 13104 14097
8/99 10850 11741 11945 1/05 12919 12864 13797
9/99 10840 11859 11993 2/05 13537 13419 14422
10/99 11199 12303 12428 3/05 13205 13082 14037
11/99 11686 12731 13333 4/05 12920 12775 13713
12/99 13146 13873 14993 5/05 12885 12781 13758
1/00 12043 12992 14125 6/05 12988 12950 13914
2/00 12486 13342 15065 7/05 13274 13347 14398
3/00 12682 13859 15218 8/05 13594 13685 14854
4/00 12002 13130 14298 9/05 14120 14294 15387
5/00 11919 12809 14039 10/05 13766 13877 14944
6/00 12620 13310 14700 11/05 14005 14216 15290
7/00 12126 12752 14252 12/05 14616 14878 16049
8/00 12424 12862 14441 1/06 15293 15791 17118
9/00 11672 12236 13600 2/06 15305 15756 17013
10/00 11497 11947 13213 3/06 15863 16275 17649
11/00 11103 11499 12778 4/06 16647 17053 18475
12/00 11555 11908 13318 5/06 16076 16391 17614
1/01 11950 11902 13288 6/06 16028 16389 17559
2/01 11239 11009 12430 7/06 16348 16552 17701
3/01 10540 10276 11542 8/06 16752 17007 18195
4/01 11273 10990 12271 9/06 16824 17033 18211
5/01 11070 10602 11910 10/06 17359 17696 18895
6/01 10686 10168 11529 11/06 17693 18224 19464
7/01 10392 9983 11210 12/06 18191 18797 20078
8/01 10200 9730 10982 1/07 18377 18924 20308
9/01 9208 8745 9859 2/07 18340 19076 20244
10/01 9228 8969 10073 3/07 18812 19563 20806
11/01 9623 9299 10450 4/07 19494 20431 21572
12/01 9668 9354 10610 5/07 19904 20790 22192
1/02 9352 8857 10105 6/07 19954 20815 22239
2/02 9566 8920 10275 7/07 19557 20509 21818
3/02 10120 9445 10815 8/07 19557 20188 21659
4/02 10391 9464 10836 9/07 20339 21268 22895
5/02 10572 9584 10963 10/07 21050 22104 23976
6/02 10154 9203 10571
7/02 9092 8294 9477
8/02 9160 8275 9492
9/02 8054 7387 8488
10/02 8303 7784 8992
11/02 8720 8137 9399
12/02 8529 7863 9066
1/03 8156 7535 8652
2/03 7930 7362 8438
3/03 7783 7218 8255
4/03 8461 7925 9024
5/03 8913 8405 9548
6/03 9026 8608 9758
7/03 9218 8817 9996
8/03 9388 9030 10240
9/03 9523 9308 10437
10/03 9998 9888 11040
11/03 10311 10108 11248
12/03 11106 10898 12031
1/04 11220 11052 12277
====================================================================================================================================
SOURCE: (1)LIPPER INC.
AIM International Core Equity Fund
=========================================== =========================================
AVERAGE ANNUAL TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/07, including applicable As of 9/30/07, the most recent calendar
sales charges quarter-end, including applicable sales
charges
CLASS A SHARES
Inception (3/28/02) 12.64% CLASS A SHARES
5 Years 18.97 Inception (3/28/02) 12.12%
1 Year 14.60 5 Years 18.85
1 Year 14.14
CLASS B SHARES
Inception (3/28/02) 13.01% CLASS B SHARES
5 Years 19.35 Inception (3/28/02) 12.53%
1 Year 15.25 5 Years 19.24
1 Year 14.96
CLASS C SHARES
Inception (2/14/00) 6.17% CLASS C SHARES
5 Years 19.53 Inception (2/14/00) 5.77%
1 Year 19.36 5 Years 19.39
1 Year 18.96
CLASS R SHARES
Inception (11/24/03) 20.00% CLASS R SHARES
1 Year 20.97 Inception (11/24/03) 19.41%
1 Year 20.52
INVESTOR CLASS SHARES
Inception (10/28/98) 8.61% INVESTOR CLASS SHARES
5 Years 20.46 Inception (10/28/98) 8.28%
1 Year 21.29 5 Years 20.35
1 Year 20.87
=========================================== =========================================
THE PERFORMANCE DATA QUOTED REPRESENT PAST CLASS A SHARE PERFORMANCE REFLECTS THE A REDEMPTION FEE OF 2% WILL BE IMPOSED
PERFORMANCE AND CANNOT GUARANTEE COMPARABLE MAXIMUM 5.50% SALES CHARGE, AND CLASS B ON CERTAIN REDEMPTIONS OR EXCHANGES OUT OF
FUTURE RESULTS; CURRENT PERFORMANCE MAY BE AND CLASS C SHARE PERFORMANCE REFLECTS THE FUND WITHIN 30 DAYS OF PURCHASE.
LOWER OR HIGHER. PLEASE VISIT THE APPLICABLE CONTINGENT DEFERRED SALES EXCEPTIONS TO THE REDEMPTION FEE ARE
AIMINVESTMENTS.COM FOR THE MOST RECENT CHARGE (CDSC) FOR THE PERIOD INVOLVED. LISTED IN THE FUND'S PROSPECTUS.
MONTH-END PERFORMANCE. PERFORMANCE FIGURES THE CDSC ON CLASS B SHARES DECLINES FROM
REFLECT REINVESTED DISTRIBUTIONS, CHANGES 5% BEGINNING AT THE TIME OF PURCHASE TO
IN NET ASSET VALUE AND THE EFFECT OF THE 0% AT THE BEGINNING OF THE SEVENTH YEAR.
MAXIMUM SALES CHARGE UNLESS OTHERWISE THE CDSC ON CLASS C SHARES IS 1% FOR THE
STATED. INVESTMENT RETURN AND PRINCIPAL FIRST YEAR AFTER PURCHASE. CLASS R SHARES
VALUE WILL FLUCTUATE SO THAT YOU MAY HAVE A DO NOT HAVE A FRONT-END SALES CHARGE;
GAIN OR LOSS WHEN YOU SELL SHARES. RETURNS SHOWN ARE AT NET ASSET VALUE AND
DO NOT REFLECT A 0.75% CDSC THAT MAY BE
THE TOTAL ANNUAL FUND OPERATING EXPENSE IMPOSED ON A TOTAL REDEMPTION OF
RATIO SET FORTH IN THE MOST RECENT FUND RETIREMENT PLAN ASSETS WITHIN THE FIRST
PROSPECTUS AS OF THE DATE OF THIS REPORT YEAR. INVESTOR CLASS SHARES DO NOT HAVE A
FOR CLASS A, CLASS B, CLASS C, CLASS R AND FRONT-END SALES CHARGE OR CDSC;
INVESTOR CLASS SHARES WAS 1.53% 2.28%, THEREFORE, PERFORMANCE SHOWN IS AT NET
2.28%, 1.78%, AND 1.53%, RESPECTIVELY. THE ASSET VALUE. THE PERFORMANCE OF THE
EXPENSE RATIOS PRESENTED ABOVE MAY VARY FUND'S SHARE CLASSES WILL DIFFER ==========================================
FROM THE EXPENSE RATIOS PRESENTED IN OTHER PRIMARILY DUE TO DIFFERENT SALES CHARGE
SECTIONS OF THIS REPORT THAT ARE BASED ON STRUCTURES AND CLASS EXPENSES. FOR A DISCUSSION OF THE RISKS OF INVESTING
EXPENSES INCURRED DURING THE PERIOD COVERED IN YOUR FUND AND INDEXES USED IN THIS
BY THIS REPORT. HAD THE ADVISOR NOT WAIVED FEES AND/OR REPORT, PLEASE TURN THE PAGE.
REIMBURSED EXPENSES IN THE PAST,
PERFORMANCE WOULD HAVE BEEN LOWER. ==========================================
7
AIM International Core Equity Fund
AIM INTERNATIONAL CORE EQUITY FUND'S INVESTMENT OBJECTIVE IS TOTAL RETURN.
o Unless otherwise stated, information presented in this report is as of
October 31, 2007, and is based on total net assets.
o Unless otherwise noted, all data in this report are from A I M Management
Group Inc.
About share classes About indexes used in this report Other information
o Class B shares are not available as an o The MSCI EAFE --REGISTERED TRADEMARK-- o The Chartered Financial Analyst
investment for retirement plans maintained Index is a free float-adjusted market --REGISTERED TRADEMARK-- (CFA --REGISTERED
pursuant to Section 401 of the Internal capitalization index that is designed to TRADEMARK--) designation is a globally
Revenue Code, including 401(k) plans, money measure developed market equity recognized standard for measuring the
purchase pension plans and profit sharing performance, excluding the U.S. and competence and integrity of investment
plans. Plans that had existing accounts Canada. professionals.
invested in Class B shares prior to
September 30, 2003, will continue to be o The Lipper International Large-Cap Core o The returns shown in the management's
allowed to make additional purchases. Funds Index is an equally weighted discussion of Fund performance are based
representation of the largest funds in on net asset values calculated for
o Class R shares are available only to the Lipper International Large-Cap Core shareholder transactions. Generally
certain retirement plans. Please see the Funds category. These funds typically accepted accounting principles require
prospectus for more information. have an average price-to-cash flow ratio, adjustments to be made to the net assets
price-to-book ratio, and three-year of the Fund at period end for financial
o Investor Class shares are closed to most sales-per-share growth value, compared to reporting purposes, and as such, the net
investors. For more information on who may the S&P/Citigroup World ex-U.S. BMI. asset values for shareholder transactions
continue to invest in Investor Class and the returns based on those net asset
shares, please see the prospectus. o The Fund is not managed to track the values may differ from the net asset
performance of any particular index, values and returns reported in the
Principal risks of investing in the Fund including the indexes defined here, and Financial Highlights.
consequently, the performance of the Fund
o Investing in developing countries can add may deviate significantly from the o Industry classifications used in this
additional risk, such as high rates of performance of the indexes. report are generally according to the
inflation or sharply devalued currencies Global Industry Classification Standard,
against the U.S. dollar. Transaction costs o A direct investment cannot be made in which was developed by and is the
are often higher, and there may be delays an index. Unless otherwise indicated, exclusive property and a service mark of
in settlement procedures. index results include reinvested Morgan Stanley Capital International Inc.
dividends, and they do not reflect sales and Standard & Poor's.
o Prices of equity securities change in charges. Performance of an index of funds
response to many factors including the reflects fund expenses; performance of a
historical and prospective earnings of the market index does not.
issuer, the value of its assets, general
economic conditions, interest rates,
investor perceptions and market liquidity.
o Foreign securities have additional risks,
including exchange rate changes, political
and economic upheaval, the relative lack of
information, relatively low market
liquidity, and the potential lack of strict
financial and accounting controls and
standards.
=======================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS, =========================================
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. FUND NASDAQ SYMBOLS
======================================================================================= Class A Shares IBVAX
Class B Shares IBVBX
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Class C Shares IBVCX
Class R Shares IIBRX
AIMINVESTMENTS.COM Investor Class Shares IIBCX
=========================================
8
AIM International Core Equity Fund
SCHEDULE OF INVESTMENTS(a)
October 31, 2007
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------------------
FOREIGN COMMON STOCKS & OTHER EQUITY
INTERESTS-96.68%
BRAZIL-1.23%
Companhia Energetica de Minas Gerais S.A.-ADR
(Electric Utilities)(b) 32,100 $ 693,360
- ------------------------------------------------------------------------
Companhia Vale do Rio Doce-ADR (Diversified
Metals & Mining)(b) 51,000 1,921,680
- ------------------------------------------------------------------------
Empresa Brasileira de Aeronautica S.A.-ADR
(Aerospace & Defense)(b) 41,100 2,004,447
- ------------------------------------------------------------------------
Natura Cosmeticos S.A. (Personal Products) 99,500 1,195,748
- ------------------------------------------------------------------------
Petroleo Brasileiro S.A.-ADR (Integrated Oil
& Gas) 20,700 1,979,541
========================================================================
7,794,776
========================================================================
CANADA-1.86%
Barrick Gold Corp. (Gold)(c) 156,800 6,919,584
- ------------------------------------------------------------------------
EnCana Corp. (Oil & Gas Exploration &
Production) 70,100 4,905,515
========================================================================
11,825,099
========================================================================
CHINA-0.43%
China Life Insurance Co., Ltd.-ADR (Life &
Health Insurance)(b) 5,431 552,387
- ------------------------------------------------------------------------
CNOOC Ltd. (Oil & Gas Exploration &
Production)(d) 1,006,000 2,187,021
========================================================================
2,739,408
========================================================================
DENMARK-1.50%
Danske Bank A.S. (Diversified Banks)(b)(d) 214,400 9,480,377
========================================================================
EGYPT-0.12%
Orascom Telecom Holding S.A.E.-GDR (Wireless
Telecommunication Services)(d) 10,800 775,402
========================================================================
FINLAND-3.93%
Nokia Oyj (Communications Equipment)(d) 395,500 15,710,302
- ------------------------------------------------------------------------
UPM-Kymmene Oyj (Paper Products)(d) 409,700 9,198,853
========================================================================
24,909,155
========================================================================
FRANCE-7.53%
Credit Agricole S.A. (Diversified
Banks)(b)(d) 226,560 8,989,437
- ------------------------------------------------------------------------
Publicis Groupe (Advertising)(b)(d) 125,400 5,108,966
- ------------------------------------------------------------------------
Sanofi-Aventis (Pharmaceuticals)(d) 99,800 8,781,907
- ------------------------------------------------------------------------
Societe Generale-ADR (Diversified
Banks)(b)(c) 151,900 5,092,341
- ------------------------------------------------------------------------
Thomson (Consumer Electronics)(d) 541,800 9,479,893
- ------------------------------------------------------------------------
Total S.A.-ADR (Integrated Oil & Gas) 127,700 10,293,897
========================================================================
47,746,441
========================================================================
GERMANY-3.05%
BASF A.G. (Diversified Chemicals) 63,600 8,799,327
- ------------------------------------------------------------------------
</Table>
<Table>
SHARES VALUE
- ------------------------------------------------------------------------
<Caption>
GERMANY-(CONTINUED)
Bayerische Motoren Werke A.G. (Automobile
Manufacturers)(d) 156,600 $ 10,510,397
========================================================================
19,309,724
========================================================================
HONG KONG-3.91%
Cheung Kong (Holdings) Ltd. (Real Estate
Management & Development)(d) 419,000 8,231,494
- ------------------------------------------------------------------------
China Resources Enterprise Ltd.
(Distributors)(d) 170,000 747,924
- ------------------------------------------------------------------------
Denway Motors Ltd. (Automobile
Manufacturers)(d) 2,222,000 1,566,002
- ------------------------------------------------------------------------
Hutchison Whampoa Ltd. (Industrial
Conglomerates)(d) 1,131,100 14,254,464
========================================================================
24,799,884
========================================================================
INDIA-0.79%
Reliance Communications Ltd. (Wireless
Telecommunication Services)(d) 78,400 1,564,043
- ------------------------------------------------------------------------
Reliance Industries Ltd. (Oil & Gas Refining
& Marketing)(c)(d) 18,400 1,305,456
- ------------------------------------------------------------------------
State Bank of India-GDR (Diversified
Banks)(b)(d) 17,400 2,169,773
========================================================================
5,039,272
========================================================================
INDONESIA-0.60%
PT Astra International Tbk (Automobile
Manufacturers)(d) 751,000 2,142,617
- ------------------------------------------------------------------------
PT Telekomunikasi Indonesia-Series B
(Integrated Telecommunication Services)(d) 1,348,500 1,634,274
========================================================================
3,776,891
========================================================================
ISRAEL-0.44%
Makhteshim-Agan Industries Ltd. (Fertilizers
& Agricultural Chemicals)(c)(d) 163,000 1,570,948
- ------------------------------------------------------------------------
Teva Pharmaceutical Industries Ltd.-ADR
(Pharmaceuticals) 27,300 1,201,473
========================================================================
2,772,421
========================================================================
ITALY-1.17%
Eni S.p.A-ADR (Integrated Oil & Gas)(b) 101,483 7,416,378
========================================================================
JAPAN-19.83%
Canon Inc. (Office Electronics)(d) 232,700 11,758,676
- ------------------------------------------------------------------------
East Japan Railway Co. (Railroads)(d) 879 7,236,481
- ------------------------------------------------------------------------
FUJIFILM Holdings Corp. (Electronic Equipment
Manufacturers)(d) 304,600 14,555,564
- ------------------------------------------------------------------------
Mitsubishi UFJ Financial Group, Inc.
(Diversified Banks)(d) 1,182,700 11,782,264
- ------------------------------------------------------------------------
Nippon Telegraph and Telephone Corp.
(Integrated Telecommunication Services) 1,155 5,286,545
- ------------------------------------------------------------------------
NOK Corp. (Auto Parts & Equipment)(b)(d) 258,200 5,742,683
- ------------------------------------------------------------------------
</Table>
9
AIM International Core Equity Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------------------
JAPAN-(CONTINUED)
Nomura Holdings, Inc. (Investment Banking &
Brokerage)(d) 279,500 $ 4,980,120
- ------------------------------------------------------------------------
NTT DoCoMo, Inc. (Wireless Telecommunication
Services)(b)(d) 4,029 5,839,456
- ------------------------------------------------------------------------
Seven & I Holdings Co., Ltd. (Food Retail)(d) 287,400 7,399,953
- ------------------------------------------------------------------------
Shin-Etsu Chemical Co., Ltd. (Specialty
Chemicals)(d) 74,400 4,766,118
- ------------------------------------------------------------------------
SMC Corp. (Industrial Machinery)(d) 94,700 12,686,151
- ------------------------------------------------------------------------
Sony Corp.-ADR (Consumer Electronics) 257,150 12,718,639
- ------------------------------------------------------------------------
Sumitomo Chemical Co., Ltd. (Diversified
Chemicals)(d) 816,000 7,237,589
- ------------------------------------------------------------------------
Takeda Pharmaceutical Co. Ltd.
(Pharmaceuticals)(d) 107,200 6,691,516
- ------------------------------------------------------------------------
Toyota Motor Corp. (Automobile
Manufacturers)(d) 123,600 7,061,446
========================================================================
125,743,201
========================================================================
MEXICO-0.49%
Cemex S.A.B. de C.V.-CPO (Construction
Materials)(b)(c)(f) 569,700 1,744,907
- ------------------------------------------------------------------------
Fomento Economico Mexicano, S.A.B. de
C.V.-ADR (Soft Drinks) 37,900 1,349,619
========================================================================
3,094,526
========================================================================
NETHERLANDS-10.39%
Aegon N.V. (Life & Health Insurance)(d) 859,200 17,816,529
- ------------------------------------------------------------------------
Heineken N.V. (Brewers)(d) 204,900 14,370,113
- ------------------------------------------------------------------------
ING Groep N.V.-ADR (Other Diversified
Financial Services) 119,065 5,356,734
- ------------------------------------------------------------------------
Koninklijke (Royal) Philips Electronics
N.V.-New York Shares (Consumer Electronics) 136,000 5,622,240
- ------------------------------------------------------------------------
TNT N.V. (Air Freight & Logistics)(d) 273,450 11,244,037
- ------------------------------------------------------------------------
Unilever N.V. (Packaged Foods & Meats)(b)(d) 352,251 11,474,429
========================================================================
65,884,082
========================================================================
NORWAY-1.07%
StatoilHydro A.S.A. (Integrated Oil & Gas) 201,000 6,802,449
========================================================================
RUSSIA-0.60%
Evraz Group S.A.-GDR, REGS (Steel) (Acquired
03/28/07-08/20/07; Cost $984,472)(b)(d)(g) 28,900 2,188,701
- ------------------------------------------------------------------------
LUKOIL-ADR (Integrated Oil & Gas)(e) 17,700 1,601,850
========================================================================
3,790,551
========================================================================
SINGAPORE-0.14%
DBS Group Holdings Ltd. (Diversified
Banks)(d) 55,000 859,243
========================================================================
SOUTH AFRICA-0.96%
Barloworld Ltd. (Industrial Conglomerates)(d) 43,200 842,842
- ------------------------------------------------------------------------
Massmart Holdings Ltd. (Hypermarkets & Super
Centers)(d) 119,300 1,501,393
- ------------------------------------------------------------------------
Sasol Ltd. (Integrated Oil & Gas)(d) 29,700 1,536,556
- ------------------------------------------------------------------------
</Table>
<Table>
SHARES VALUE
- ------------------------------------------------------------------------
<Caption>
SOUTH AFRICA-(CONTINUED)
Standard Bank Group Ltd. (Diversified
Banks)(d) 119,783 $ 2,176,457
========================================================================
6,057,248
========================================================================
SOUTH KOREA-1.73%
Daelim Industrial Co., Ltd. (Construction &
Engineering)(d) 10,285 2,263,621
- ------------------------------------------------------------------------
Hyundai Motor Co. (Automobile
Manufacturers)(d) 24,500 1,945,269
- ------------------------------------------------------------------------
Kookmin Bank (Diversified Banks)(d) 13,800 1,137,802
- ------------------------------------------------------------------------
LG Electronics Inc. (Consumer Electronics)(d) 8,200 861,113
- ------------------------------------------------------------------------
Lotte Shopping Co., Ltd. (Department
Stores)(d) 4,150 1,948,943
- ------------------------------------------------------------------------
POSCO (Steel)(d) 2,238 1,631,640
- ------------------------------------------------------------------------
Samsung Electronics Co., Ltd.
(Semiconductors)(d) 1,900 1,177,818
========================================================================
10,966,206
========================================================================
SPAIN-0.76%
Repsol YPF, S.A.-ADR (Integrated Oil &
Gas)(b) 122,525 4,832,386
========================================================================
SWEDEN-3.65%
Nordea Bank A.B. (Diversified Banks)(d) 469,200 8,421,486
- ------------------------------------------------------------------------
Telefonaktiebolaget LM Ericsson-Class B
(Communications Equipment)(d) 4,906,300 14,739,253
========================================================================
23,160,739
========================================================================
SWITZERLAND-7.23%
Credit Suisse Group (Diversified Capital
Markets)(d) 121,500 8,204,107
- ------------------------------------------------------------------------
Nestle S.A. (Packaged Foods & Meats)(d) 22,526 10,414,547
- ------------------------------------------------------------------------
Novartis A.G. (Pharmaceuticals)(d) 305,700 16,289,157
- ------------------------------------------------------------------------
Zurich Financial Services A.G. (Multi-Line
Insurance)(d) 36,100 10,911,066
========================================================================
45,818,877
========================================================================
TAIWAN-0.68%
AU Optronics Corp.-ADR (Electronic Equipment
Manufacturers)(b) 42,085 914,507
- ------------------------------------------------------------------------
Chinatrust Financial Holding Co. Ltd.
(Diversified Banks)(c)(d) 1,266,000 936,086
- ------------------------------------------------------------------------
High Tech Computer Corp. (Computer
Hardware)(d) 35,000 726,885
- ------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing Co. Ltd.-
ADR (Semiconductors) 165,261 1,760,029
========================================================================
4,337,507
========================================================================
THAILAND-0.47%
PTT PCL (Integrated Oil & Gas)(d) 239,300 2,979,470
========================================================================
TURKEY-0.15%
Turkiye Is Bankasi-Class C (Diversified
Banks)(d) 137,800 948,136
========================================================================
UNITED KINGDOM-21.97%
BAE Systems PLC (Aerospace & Defense)(d) 641,900 6,668,244
- ------------------------------------------------------------------------
BP PLC (Integrated Oil & Gas) 1,349,600 17,536,365
- ------------------------------------------------------------------------
Diageo PLC (Distillers & Vintners)(d) 532,900 12,215,237
- ------------------------------------------------------------------------
GlaxoSmithKline PLC (Pharmaceuticals)(d) 375,100 9,673,215
- ------------------------------------------------------------------------
</Table>
10
AIM International Core Equity Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------------------
UNITED KINGDOM-(CONTINUED)
HSBC Holdings PLC-ADR (Diversified Banks)(b) 171,900 $ 17,107,488
- ------------------------------------------------------------------------
Kingfisher PLC (Home Improvement Retail)(d) 1,892,900 7,785,862
- ------------------------------------------------------------------------
Lloyds TSB Group PLC (Diversified Banks)(d) 983,318 11,186,627
- ------------------------------------------------------------------------
Morrison (William) Supermarkets PLC (Food
Retail)(d) 1,692,400 10,439,001
- ------------------------------------------------------------------------
Reed Elsevier PLC (Publishing)(d) 625,200 8,198,806
- ------------------------------------------------------------------------
Royal Bank of Scotland Group PLC (Diversified
Banks)(d) 1,081,200 11,663,927
- ------------------------------------------------------------------------
Royal Dutch Shell PLC-ADR (Integrated Oil &
Gas) 77,150 6,751,396
- ------------------------------------------------------------------------
Vodafone Group PLC (Wireless
Telecommunication Services)(d) 5,089,950 20,073,811
========================================================================
139,299,979
========================================================================
Total Foreign Common Stocks & Other
Equity Interests (Cost $459,014,214) 612,959,828
========================================================================
PREFERRED STOCKS-0.21%
BRAZIL-0.21%
Banco Bradesco S.A., Pfd. (Diversified Banks)
(Cost $761,039) 38,200 1,297,758
========================================================================
</Table>
<Table>
SHARES VALUE
- ------------------------------------------------------------------------
<Caption>
MONEY MARKET FUNDS-2.76%
Liquid Assets Portfolio-Institutional
Class(h) 8,745,661 $ 8,745,661
- ------------------------------------------------------------------------
Premier Portfolio-Institutional Class(h) 8,745,662 8,745,662
========================================================================
Total Money Market Funds (Cost
$17,491,323) 17,491,323
========================================================================
TOTAL INVESTMENTS (excluding investments
purchased with cash collateral from
securities on loan)-99.65% (Cost
$477,266,576) 631,748,909
========================================================================
INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES ON LOAN
MONEY MARKET FUNDS-7.41%
Liquid Assets Portfolio-Institutional Class
(Cost $46,991,261)(h)(i) 46,991,261 46,991,261
========================================================================
TOTAL INVESTMENTS-107.06% (Cost $524,257,837) 678,740,170
========================================================================
OTHER ASSETS LESS LIABILITIES-(7.06)% (44,732,542)
========================================================================
NET ASSETS-100.00% $634,007,628
________________________________________________________________________
========================================================================
</Table>
Investment Abbreviations:
<Table>
ADR - American Depositary Receipt
CPO - Certificates of Ordinary Participation
Pfd. - Preferred
GDR - Global Depositary Receipt
REGS - Regulation S
</Table>
Notes to Schedule of Investments:
(a) Industry classifications used in this report are generally according to the
Global Industry Classification Standard, which was developed by and is the
exclusive property and a service mark of Morgan Stanley Capital
International Inc. and Standard & Poor's.
(b) All or a portion of this security was out on loan at October 31, 2007.
(c) Non-income producing security.
(d) In accordance with the procedures established by the Board of Trustees, the
foreign security is fair valued using adjusted closing market prices. The
aggregate value of these securities at October 31, 2007 was $470,598,996,
which represented 74.23% of the Fund's Net Assets. See Note 1A.
(e) In accordance with the procedures established by the Board of Trustees,
security fair valued based on an evaluated quote provided by an independent
pricing service. The aggregate value of these securities at October 31, 2007
was $6,694,191, which represented 1.06% of the Fund's Net Assets. See Note
1A.
(f) Each unit represents two Series A shares and one Series B share.
(g) 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 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 value of this security at October 31, 2007 represented 0.35% of the
Fund's Net Assets. Unless otherwise indicated, this security is not
considered to be illiquid.
(h) The money market fund and the Fund are affiliated by having the same
investment advisor. See Note 3.
(i) The security has been segregated to satisfy the commitment to return the
cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 7.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11
AIM International Core Equity Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2007
<Table>
ASSETS:
Investments, at value (Cost $459,775,253)* $614,257,586
- -----------------------------------------------------------
Investments in affiliated money market funds
(Cost $64,482,584) 64,482,584
===========================================================
Total investments (Cost $524,257,837) 678,740,170
===========================================================
Foreign currencies, at value (Cost $118,966) 119,807
- -----------------------------------------------------------
Cash 384,902
- -----------------------------------------------------------
Receivables for:
Investments sold 885,825
- -----------------------------------------------------------
Fund shares sold 1,152,103
- -----------------------------------------------------------
Dividends 1,553,128
- -----------------------------------------------------------
Investment for trustee deferred compensation
and retirement plans 56,489
- -----------------------------------------------------------
Other assets 55,100
===========================================================
Total assets 682,947,524
___________________________________________________________
===========================================================
LIABILITIES:
Payables for:
Investments purchased 937,115
- -----------------------------------------------------------
Fund shares reacquired 340,394
- -----------------------------------------------------------
Trustee deferred compensation and
retirement plans 80,169
- -----------------------------------------------------------
Collateral upon return of securities loaned 46,991,261
- -----------------------------------------------------------
Accrued distribution fees 98,808
- -----------------------------------------------------------
Accrued trustees' and officer's fees and
benefits 2,153
- -----------------------------------------------------------
Accrued transfer agent fees 99,797
- -----------------------------------------------------------
Accrued operating expenses 390,199
===========================================================
Total liabilities 48,939,896
===========================================================
Net assets applicable to shares outstanding $634,007,628
___________________________________________________________
===========================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $427,972,951
- -----------------------------------------------------------
Undistributed net investment income 8,208,638
- -----------------------------------------------------------
Undistributed net realized gain 43,351,645
- -----------------------------------------------------------
Unrealized appreciation 154,474,394
===========================================================
$634,007,628
___________________________________________________________
===========================================================
NET ASSETS:
Class A $ 96,960,591
___________________________________________________________
===========================================================
Class B $ 32,591,981
___________________________________________________________
===========================================================
Class C $ 50,234,361
___________________________________________________________
===========================================================
Class R $ 4,285,653
___________________________________________________________
===========================================================
Investor Class $ 44,427,967
___________________________________________________________
===========================================================
Institutional Class $405,507,075
___________________________________________________________
===========================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 5,782,915
___________________________________________________________
===========================================================
Class B 1,965,334
___________________________________________________________
===========================================================
Class C 3,099,068
___________________________________________________________
===========================================================
Class R 256,371
___________________________________________________________
===========================================================
Investor Class 2,616,983
___________________________________________________________
===========================================================
Institutional Class 24,007,252
___________________________________________________________
===========================================================
Class A:
Net asset value per share $ 16.77
- -----------------------------------------------------------
Offering price per share
(Net asset value of $16.77 divided by
94.50%) $ 17.75
___________________________________________________________
===========================================================
Class B:
Net asset value and offering price per
share $ 16.58
___________________________________________________________
===========================================================
Class C:
Net asset value and offering price per
share $ 16.21
___________________________________________________________
===========================================================
Class R:
Net asset value and offering price per
share $ 16.72
___________________________________________________________
===========================================================
Investor Class:
Net asset value and offering price per
share $ 16.98
___________________________________________________________
===========================================================
Institutional Class:
Net asset value and offering price per
share $ 16.89
___________________________________________________________
===========================================================
</Table>
* At October 31, 2007, securities with an aggregate value of $48,026,992 were on
loan to brokers.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12
AIM International Core Equity Fund
STATEMENT OF OPERATIONS
For the year ended October 31, 2007
<Table>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $1,323,489) $ 14,134,082
- --------------------------------------------------------------------------
Dividends from affiliated money market funds (includes
securities lending income of $377,478) 1,203,528
==========================================================================
Total investment income 15,337,610
==========================================================================
EXPENSES:
Advisory fees 3,974,963
- --------------------------------------------------------------------------
Administrative services fees 172,960
- --------------------------------------------------------------------------
Custodian fees 203,688
- --------------------------------------------------------------------------
Distribution fees:
Class A 260,666
- --------------------------------------------------------------------------
Class B 320,299
- --------------------------------------------------------------------------
Class C 458,163
- --------------------------------------------------------------------------
Class R 19,297
- --------------------------------------------------------------------------
Investor Class 110,979
- --------------------------------------------------------------------------
Transfer agent fees -- A, B, C, R and Investor 655,663
- --------------------------------------------------------------------------
Transfer agent fees -- Institutional 4,575
- --------------------------------------------------------------------------
Trustees' and officer's fees and benefits 33,873
- --------------------------------------------------------------------------
Other 291,577
==========================================================================
Total expenses 6,506,703
==========================================================================
Less: Fees waived, expenses reimbursed and expense offset
arrangement(s) (44,089)
==========================================================================
Net expenses 6,462,614
==========================================================================
Net investment income 8,874,996
==========================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from:
Investment securities 48,332,989
- --------------------------------------------------------------------------
Foreign currencies (195,137)
==========================================================================
48,137,852
==========================================================================
Change in net unrealized appreciation of:
Investment securities (net of estimated tax on foreign
investments of $2,516,673) -- Note 1J) 46,535,766
- --------------------------------------------------------------------------
Foreign currencies 14,239
==========================================================================
46,550,005
==========================================================================
Net realized and unrealized gain 94,687,857
==========================================================================
Net increase in net assets resulting from operations $103,562,853
__________________________________________________________________________
==========================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
13
AIM International Core Equity Fund
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2007 and 2006
<Table>
<Caption>
OCTOBER 31, OCTOBER 31,
2007 2006
- ------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 8,874,996 $ 6,938,191
- ------------------------------------------------------------------------------------------
Net realized gain 48,137,852 16,137,747
- ------------------------------------------------------------------------------------------
Change in net unrealized appreciation 46,550,005 56,765,026
==========================================================================================
Net increase in net assets resulting from operations 103,562,853 79,840,964
==========================================================================================
Distributions to shareholders from net investment income:
Class A (1,798,478) (731,123)
- ------------------------------------------------------------------------------------------
Class B (254,290) (35,039)
- ------------------------------------------------------------------------------------------
Class C (355,963) (49,960)
- ------------------------------------------------------------------------------------------
Class R (47,445) (16,148)
- ------------------------------------------------------------------------------------------
Investor Class (650,769) (374,945)
- ------------------------------------------------------------------------------------------
Institutional Class (4,195,321) (1,065,839)
==========================================================================================
Total distributions from net investment income (7,302,266) (2,273,054)
==========================================================================================
Distributions to shareholders from net realized gains:
Class A (3,441,389) (2,971,061)
- ------------------------------------------------------------------------------------------
Class B (918,917) (925,031)
- ------------------------------------------------------------------------------------------
Class C (1,286,326) (1,298,901)
- ------------------------------------------------------------------------------------------
Class R (107,574) (86,696)
- ------------------------------------------------------------------------------------------
Investor Class (1,245,248) (1,442,500)
- ------------------------------------------------------------------------------------------
Institutional Class (5,950,013) (2,602,060)
==========================================================================================
Total distributions from net realized gains (12,949,467) (9,326,249)
==========================================================================================
Decrease in net assets resulting from distributions (20,251,733) (11,599,303)
==========================================================================================
Share transactions-net:
Class A (36,808,747) 9,027,954
- ------------------------------------------------------------------------------------------
Class B (3,979,276) (2,838,085)
- ------------------------------------------------------------------------------------------
Class C 483,898 (3,200,313)
- ------------------------------------------------------------------------------------------
Class R 136,060 327,397
- ------------------------------------------------------------------------------------------
Investor Class (6,878,996) (11,306,234)
- ------------------------------------------------------------------------------------------
Institutional Class 161,884,459 96,065,128
==========================================================================================
Net increase in net assets resulting from share
transactions 114,837,398 88,075,847
==========================================================================================
Net increase in net assets 198,148,518 156,317,508
==========================================================================================
NET ASSETS:
Beginning of year 435,859,110 279,541,602
==========================================================================================
End of year (including undistributed net investment income
of $8,208,638 and $6,836,461, respectively) $634,007,628 $435,859,110
__________________________________________________________________________________________
==========================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
14
AIM International Core Equity Fund
NOTES TO FINANCIAL STATEMENTS
October 31, 2007
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM International Core Equity Fund (the "Fund") is a series portfolio of AIM
International Mutual Funds (the "Trust"). The Trust is a Delaware statutory
trust registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of six
separate portfolios, each authorized to issue an unlimited number of shares of
beneficial interest. The Fund currently consists of 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.
The Fund's investment objective is total return.
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 or official closing price as of the close of
the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on that
day. Securities traded in the over-the-counter market are valued based on
prices furnished by independent pricing services or market makers. When
such securities are valued by an independent pricing service they may be
considered fair valued. Futures contracts are valued at the final
settlement price set by an exchange on which they are principally traded.
Listed options are valued at the mean between the last bid and the ask
prices from the exchange on which they are principally traded. Options not
listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last sales
price or official closing price as of the close of the customary trading
session on the exchange where the security is principally traded.
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes 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 specific securities, dividend rate, yield, quality,
type of issue, coupon rate, maturity, individual trading characteristics
and other market data. Short-term obligations, including commercial paper,
having 60 days or less to maturity are recorded at amortized cost which
approximates value. Debt securities are subject to interest rate and credit
risks. In addition, all debt securities involve some risk of default with
respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued at
the market quotations. Because trading hours for certain foreign securities
end before the close of the NYSE, closing market quotations may become
unreliable. If between the time trading ends on a particular security and
the close of the customary trading session on the NYSE, events occur that
are significant and may make the closing price unreliable, the Fund may
fair value the security. If the event is likely to have affected the
closing price of the security, the security will be valued at fair value in
good faith using procedures approved by the Board of Trustees. Adjustments
to closing prices to reflect fair value may also be based on a screening
process of an independent pricing service to indicate the degree of
certainty, based on historical data, that the closing price in the
principal market where a foreign security trades is not the current value
as of the close of the NYSE. Foreign securities meeting the approved degree
of certainty that the price is not reflective of current value will be
priced at the indication of fair value from the independent pricing
service. Multiple factors may be considered by the independent pricing
service in determining adjustments to reflect fair value and may include
information relating to sector indices, ADRs and domestic and foreign index
futures. Foreign securities may have additional risks including exchange
rate changes, potential for sharply devalued currencies and high inflation,
political and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be 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
unreliable are valued at fair value as determined in good faith by or under
the supervision of the Trust's officers following procedures approved by
the Board of Trustees. Issuer specific events, market trends, bid/ask
quotes of brokers and information providers and other market data may be
reviewed in the course of making a good faith determination of a security's
fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity.
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.
15
AIM International Core Equity Fund
The Fund may periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds as received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
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. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, AIM may
determine the country in which an issuer is located and/or credit risk
exposure based on various factors. These factors include the laws of the
country under which the issuer is organized, where the issuer maintains a
principal office, the country in which the issuer derives 50% or more of
its total revenues and the country that has the primary market for the
issuer's securities, as well as other criteria. Among the other criteria
that may be evaluated for making this determination are the country in
which the issuer maintains 50% or more of its assets, the type of security,
financial guarantees and enhancements, the nature of the collateral and the
sponsor organization. Country of issuer and/or credit risk exposure has
been determined to be the United States of America unless otherwise noted.
D. 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 treat a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
E. 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 to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial statements.
F. 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 and other shareholder recordkeeping 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.
G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to
taxation. Actual results could differ from those estimates.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust (including the
Trust's investment manager) is indemnified against certain liabilities that
may arise out of performance of their duties to the Fund. Additionally, in
the normal course of business, the Fund enters into contracts that contain
a variety of indemnification clauses. The Fund's maximum exposure under
these arrangements is unknown as this would involve future claims that may
be made against the Fund that have not yet occurred. The risk of material
loss as a result of such indemnification claims is considered remote.
I. REDEMPTION FEES -- The Fund has a 2% redemption fee that is to be retained
by the Fund to offset transaction costs and other expenses associated with
short-term redemptions and exchanges. The fee, subject to certain
exceptions, is imposed on certain redemptions, including exchanges of
shares held less than 30 days. The redemption fee is recorded as an
increase in shareholder capital and is allocated among the share classes
based on the relative net assets of each class.
J. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close of
the NYSE based on quotations posted by banks and major currency dealers.
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 (i) sales
of foreign currencies, (ii) currency gains or losses realized between the
trade and settlement dates on securities transactions, and (iii) 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.
16
AIM International Core Equity Fund
The Fund may invest in foreign securities which may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion
of which may be recoverable. Taxes are accrued based on the Fund's current
interpretation of tax regulations and rates that exist in the foreign
markets in which the Fund invests.
K. 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.
Fluctuations in the value of these contracts are recorded as unrealized
appreciation (depreciation) until the contracts are closed. When these
contracts are closed, realized gains (losses) are recorded. Realized and
unrealized gains and losses on these contracts are included in the
Statement of Operations. The Fund could be exposed to risk, which may be in
excess of the amount reflected in the Statement of Assets and Liabilities,
if counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust 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 based on the annual rate of the Fund's
average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- --------------------------------------------------------------------
First $500 million 0.75%
- --------------------------------------------------------------------
Next $500 million 0.65%
- --------------------------------------------------------------------
Next $1 billion 0.55%
- --------------------------------------------------------------------
Next $2 billion 0.45%
- --------------------------------------------------------------------
Next $4 billion 0.40%
- --------------------------------------------------------------------
Next $6 billion 0.375%
- --------------------------------------------------------------------
Over $8 billion 0.35%
___________________________________________________________________
====================================================================
</Table>
Under the terms of a master sub-advisory agreement between AIM and Invesco
Asset Management Limited, AIM pays Invesco Asset Management Limited 40% of the
amount of AIM's compensation on the sub-advised assets.
Effective July 1, 2007, AIM has contractually agreed, through at least June
30, 2008, to waive 100% of the advisory fee AIM receives from the affiliated
money market funds on investments by the Fund in such affiliated money market
funds (excluding investments made in affiliated money market funds with cash
collateral from securities loaned by the fund). Prior to July 1, 2007, AIM had
voluntarily agreed to waive 25% of the advisory fee AIM receives from the
affiliated money market funds on investments by the Fund in such affiliated
money market funds.
For the year ended October 31, 2007, AIM waived advisory fees of $9,279.
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") agreed
to reimburse expenses incurred by the Fund in connection with market timing
matters in the AIM Funds, which may include legal, audit, shareholder reporting,
communications and trustee expenses. These expenses along with the related
expense reimbursement are included in the Statement of Operations. For the year
ended October 31, 2007, Invesco reimbursed expenses of the Fund in the amount of
$605.
The Trust has entered into a master administrative services agreement with
AIM pursuant to which the Fund has agreed to pay AIM for certain administrative
costs incurred in providing accounting services, to the Fund. For the year ended
October 31, 2007, expenses incurred under the agreement are shown in the
Statement of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with AIM
Investment Services, Inc. ("AIS") pursuant to which the Fund has agreed to pay
AIS a fee for providing transfer agency and shareholder services to the Fund and
reimburse AIS for certain expenses incurred by AIS in the course of providing
such services. AIS may make payments to intermediaries that provide omnibus
account services, sub-accounting services and/or networking services. All fees
payable by AIS to intermediaries that provide omnibus account services or
sub-accounting are charged back to the Fund, subject to certain limitations
approved by the Trust's Board of Trustees. For the year ended October 31, 2007,
expenses incurred under the agreement are shown in the Statement of Operations
as transfer agent fees.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B,
Class C, Class R, Investor Class and Institutional 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 Investor Class shares
(collectively the "Plans"). The Fund, pursuant to the Plans, pays ADI
compensation at the annual rate of 0.25% 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 Investor Class shares. Of the Plan payments, up to
0.25% of the average daily net assets of each class of shares may be paid to
furnish continuing personal shareholder services to 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. Financial Industry
Regulatory Authority ("FINRA"), formerly known as National Association of
Securities Dealers, 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. For the year ended October 31, 2007, expenses incurred under the Plans
are shown in the Statement of Operations as distribution fees.
17
AIM International Core Equity Fund
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, 2007, ADI advised the Fund that it retained $31,506 in
front-end sales commissions from the sale of Class A shares and $3, $14,919,
$2,913 and $0 from Class A, Class B, Class C and Class R shares, respectively,
for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
AIM, AIS, IGAM and/or ADI.
NOTE 3--INVESTMENTS IN AFFILIATES
The Fund is permitted, pursuant to procedures approved by the Board of Trustees,
to invest daily available cash balances and cash collateral from securities
lending transactions in an affiliated money market funds. The Fund and the money
market funds below have the same investment advisor and therefore, are
considered to be affiliated. The tables below show the transactions in and
earnings from investments in affiliated money market funds for the year ended
October 31, 2007. During the period each investment maintained a $1.00 net asset
value, as such there is no realized gain/(loss) and no change in unrealized
appreciation/(depreciation).
INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
<Table>
<Caption>
VALUE PURCHASES PROCEEDS VALUE DIVIDEND
FUND 10/31/06 AT COST FROM SALES 10/31/07 INCOME
- -------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-Institutional
Class $ 9,805,775 $ 64,395,810 $ (65,455,924) $ 8,745,661 $413,856
- -------------------------------------------------------------------------------------------------
Premier
Portfolio-Institutional
Class 9,805,776 64,395,810 (65,455,924) 8,745,662 412,194
=================================================================================================
Subtotal $19,611,551 $128,791,620 $(130,911,848) $17,491,323 $826,050
=================================================================================================
</Table>
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
<Table>
<Caption>
VALUE PURCHASES PROCEEDS VALUE DIVIDEND
FUND 10/31/06 AT COST FROM SALES 10/31/07 INCOME*
- --------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-Institutional
Class $ -- $190,304,704 $(143,313,443) $46,991,261 $ 60,748
- --------------------------------------------------------------------------------------------------
Premier
Portfolio-Institutional
Class 42,344,459 292,044,927 (334,389,386) -- 316,730
==================================================================================================
Subtotal $42,344,459 $482,349,631 $(477,702,829) $46,991,261 $ 377,478
==================================================================================================
Total
Investments
in
Affiliates $61,956,010 $611,141,251 $(608,614,677) $64,482,584 $1,203,528
__________________________________________________________________________________________________
==================================================================================================
</Table>
* Net of compensation to counterparties.
NOTE 4--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the transfer
agent for clearing shareholder transactions, (ii) custodian credits which result
from periodic overnight cash balances at the custodian and (iii) a one time
custodian fee credit used to offset custodian fees. For the year ended October
31, 2007, the Fund received credits from these arrangements, which resulted in
the reduction of the Fund's total expenses of $34,205.
NOTE 5--TRUSTEES' AND OFFICER'S FEES AND BENEFITS
"Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officer's Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who also participate in a
retirement plan and receive benefits under such plan. "Trustees' and Officer's
Fees and Benefits" include amounts accrued by the Fund to fund such retirement
benefits. Obligations under the deferred compensation and retirement plans
represent unsecured claims against the general assets of the Fund.
During the year ended October 31, 2007, the Fund paid legal fees of $7,020
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
18
AIM International Core Equity Fund
NOTE 6--BORROWINGS
Pursuant to an exemptive order from the Securities and Exchange Commission, 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. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. 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.
The Fund is a party to an uncommitted unsecured revolving 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
credit facility, 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 year ended October 31, 2007, the Fund did not borrow or lend
under the interfund lending facility or borrow under the uncommitted unsecured
revolving credit facility.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with SSB, the custodian bank. To compensate the
custodian bank for such overdrafts, the overdrawn Fund may either (i) leave
funds as a compensating balance in the account so the custodian bank can be
compensated by earning the additional interest; or (ii) compensate by paying the
custodian bank at a rate agreed upon by the custodian bank and AIM, not to
exceed the contractually agreed upon rate.
NOTE 7--PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities having a market value up to 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 received in connection with these loans is
invested in short-term money market instruments or affiliated money market
funds. 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. 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. The Fund could also experience delays and costs in gaining
access to the collateral. The Fund bears the risk of any deficiency in the
amount of the collateral available for return to the borrower due to any loss on
the collateral invested.
At October 31, 2007, securities with an aggregate value of $48,026,992 were
on loan to brokers. The loans were secured by cash collateral of $46,991,261
received by the Fund and subsequently invested in an affiliated money market
fund. For the year ended October 31, 2007, the Fund received dividends on cash
collateral investments of $377,478 for securities lending transactions, which
are net of compensation to counterparties.
NOTE 8--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
DISTRIBUTIONS TO SHAREHOLDERS:
The tax character of distributions paid during the years ended October 31, 2007
and 2006 was as follows:
<Table>
<Caption>
2007 2006
- ----------------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 7,302,266 $ 2,273,053
- ----------------------------------------------------------------------------------------
Long-term capital gain 12,949,467 9,326,249
========================================================================================
Total distributions $20,251,733 $11,599,302
________________________________________________________________________________________
========================================================================================
</Table>
TAX COMPONENTS OF NET ASSETS:
As of October 31, 2007, the components of net assets on a tax basis were as
follows:
<Table>
<Caption>
2007
- ----------------------------------------------------------------------------
Undistributed ordinary income $ 13,453,587
- ----------------------------------------------------------------------------
Undistributed long-term gain 41,747,467
- ----------------------------------------------------------------------------
Net unrealized appreciation-investments 150,892,626
- ----------------------------------------------------------------------------
Temporary book/tax differences (59,003)
- ----------------------------------------------------------------------------
Shares of beneficial interest 427,972,951
============================================================================
Total net assets $634,007,628
____________________________________________________________________________
============================================================================
</Table>
19
AIM International Core Equity Fund
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation difference is attributable primarily to losses on wash sales and
corporate actions. The tax-basis net unrealized appreciation on investments
amount includes appreciation (depreciation) on foreign currencies of $(7,939).
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 trustee deferral of compensation and
retirement plan benefits.
The Fund does not have a capital loss carryforward as of October 31, 2007.
NOTE 9--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended October 31, 2007 was $217,579,991 and
$126,022,830, respectively.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $161,621,214
- ------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (10,720,649)
==============================================================================
Net unrealized appreciation of investment securities $150,900,565
______________________________________________________________________________
==============================================================================
Cost of investments for tax purposes is $527,839,605.
</Table>
NOTE 10--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of foreign currency
transactions and foreign capital gain tax reclassification on October 31, 2007,
undistributed net investment income was decreased by $200,553 and undistributed
net realized gain was increased by $200,553. This reclassification had no effect
on the net assets of the Fund.
20
AIM International Core Equity Fund
NOTE 11--SHARE INFORMATION
The Fund currently consists of six different classes of shares: Class A, Class
B, Class C, Class R, Investor Class and Institutional Class. Investor Class
shares of the Fund are offered only to certain grandfathered investors.
Class A shares are sold with a front-end sales charge unless certain waiver
criteria are met and under certain circumstances load waiver shares may be
subject to a CDSC. Class B shares and Class C shares are sold with a CDSC. Class
R shares, Investor Class and Institutional Class shares are sold at net asset
value. Under certain circumstances, Class R shares are subject to a CDSC.
Generally, Class B shares will automatically convert to Class A shares on or
about the month-end which is at least eight years after the date of purchase.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
- ----------------------------------------------------------------------------------------------------------------------
YEAR ENDED
--------------------------------------------------------
OCTOBER 31, 2007(A) OCTOBER 31, 2006
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------------
Sold:
Class A 1,666,371 $ 25,586,988 2,476,080 $ 32,810,606
- ----------------------------------------------------------------------------------------------------------------------
Class B 417,879 6,375,636 530,328 6,955,718
- ----------------------------------------------------------------------------------------------------------------------
Class C 609,993 9,091,270 515,105 6,479,610
- ----------------------------------------------------------------------------------------------------------------------
Class R 90,603 1,370,606 89,852 1,172,231
- ----------------------------------------------------------------------------------------------------------------------
Investor Class 503,651 7,714,028 909,006 12,172,868
- ----------------------------------------------------------------------------------------------------------------------
Institutional Class 10,754,022 164,159,007 8,082,609 107,556,717
======================================================================================================================
Issued as reinvestment of dividends:
Class A 347,103 5,005,221 288,276 3,493,900
- ----------------------------------------------------------------------------------------------------------------------
Class B 76,591 1,099,843 75,293 909,546
- ----------------------------------------------------------------------------------------------------------------------
Class C 104,895 1,471,676 103,472 1,223,041
- ----------------------------------------------------------------------------------------------------------------------
Class R 10,757 155,018 8,484 102,828
- ----------------------------------------------------------------------------------------------------------------------
Investor Class 127,008 1,854,317 142,263 1,745,569
- ----------------------------------------------------------------------------------------------------------------------
Institutional Class 701,614 10,145,334 301,885 3,667,899
======================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 240,372 3,684,068 210,167 2,787,360
- ----------------------------------------------------------------------------------------------------------------------
Class B (242,298) (3,684,068) (211,697) (2,787,360)
======================================================================================================================
Reacquired:(b)
Class A (4,707,002) (71,085,024) (2,305,587) (30,063,912)
- ----------------------------------------------------------------------------------------------------------------------
Class B (512,615) (7,770,687) (609,499) (7,915,989)
- ----------------------------------------------------------------------------------------------------------------------
Class C (683,859) (10,079,048) (851,815) (10,902,964)
- ----------------------------------------------------------------------------------------------------------------------
Class R (92,184) (1,389,564) (71,945) (947,662)
- ----------------------------------------------------------------------------------------------------------------------
Investor Class (1,070,467) (16,447,341) (1,897,509) (25,224,671)
- ----------------------------------------------------------------------------------------------------------------------
Institutional Class (785,070) (12,419,882) (1,147,534) (15,159,488)
======================================================================================================================
7,557,364 $114,837,398 6,637,234 $ 88,075,847
______________________________________________________________________________________________________________________
======================================================================================================================
</Table>
(a) There is one entity that is a record owner of more than 5% of the
outstanding shares of the Fund and it owns 6% of the outstanding shares
of the Fund. ADI has an agreement with this entity to sell Fund shares.
The Fund, AIM and/or AIM affiliates may make payments to this entity,
which is considered to be related to the Fund, for providing services to
the Fund, AIM and/or AIM affiliates including but not limited to
services such as, securities brokerage, distribution, third party record
keeping and account servicing. The Trust has no knowledge as to whether
all or any portion of the shares owned of record by this entity are
owned beneficially.
In addition, 60% of the outstanding shares of the Fund are owned by
affiliated mutual funds. Affiliated mutual funds are other mutual funds
that are also advised by AIM.
(b) Net of redemption fees of $10,733 and $12,975 which were allocated among
the classes based on relative net assets of each class for the years
ended October 31, 2007 and 2006, respectively.
21
AIM International Core Equity Fund
NOTE 12--NEW ACCOUNTING STANDARD
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48").
FIN 48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement for a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The provisions for FIN 48 are effective for
fiscal years beginning after December 15, 2006. Management has assessed the
application of FIN 48 to the Fund and has determined that the adopting of FIN 48
is not expected to have a material impact on the Fund. Management intends for
the Fund to adopt FIN 48 provisions during the fiscal year ending October 31,
2008 as required.
NOTE 13--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CLASS A
---------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------
2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.44 $ 11.90 $ 10.52 $ 8.74 $ 7.31
- -----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income(a) 0.22 0.25 0.14 0.09 0.07
- -----------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 2.75 2.77 1.32 1.72 1.39
=======================================================================================================================
Total from investment operations 2.97 3.02 1.46 1.81 1.46
=======================================================================================================================
Less distributions:
Dividends from net investment income (0.22) (0.10) (0.08) (0.03) (0.03)
- -----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.42) (0.38) -- -- --
=======================================================================================================================
Total distributions (0.64) (0.48) (0.08) (0.03) (0.03)
=======================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 0.00
=======================================================================================================================
Net asset value, end of period $ 16.77 $ 14.44 $ 11.90 $ 10.52 $ 8.74
_______________________________________________________________________________________________________________________
=======================================================================================================================
Total return(b) 21.26% 26.12% 13.89% 20.78% 19.96%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $96,961 $118,943 $90,022 $60,603 $2,033
=======================================================================================================================
Ratio of expenses to average net assets 1.41%(c) 1.52% 1.56% 1.84%(d) 1.87%
=======================================================================================================================
Ratio of net investment income to average net assets 1.46%(c) 1.88% 1.20% 0.94% 0.91%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Portfolio turnover rate 27% 21% 21% 69% 51%
_______________________________________________________________________________________________________________________
=======================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $104,266,532.
(d) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements
was 1.86% for the year ended October 31, 2004.
22
AIM International Core Equity Fund
NOTE 13--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS B
---------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------
2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.30 $ 11.79 $ 10.43 $ 8.72 $ 7.31
- -----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income(a) 0.11 0.14 0.06 0.02 0.00
- -----------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 2.71 2.76 1.31 1.71 1.43
=======================================================================================================================
Total from investment operations 2.82 2.90 1.37 1.73 1.43
=======================================================================================================================
Less distributions:
Dividends from net investment income (0.12) (0.01) (0.01) (0.02) (0.02)
- -----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.42) (0.38) -- -- --
=======================================================================================================================
Total distributions (0.54) (0.39) (0.01) (0.02) (0.02)
=======================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 0.00
=======================================================================================================================
Net asset value, end of period $ 16.58 $ 14.30 $ 11.79 $ 10.43 $ 8.72
_______________________________________________________________________________________________________________________
=======================================================================================================================
Total return(b) 20.25% 25.28% 13.11% 19.92% 19.50%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $32,592 $31,818 $28,785 $23,812 $ 573
=======================================================================================================================
Ratio of expenses to average net assets: 2.16%(c) 2.27% 2.25% 2.53%(d) 2.75%(d)
=======================================================================================================================
Ratio of net investment income to average net assets 0.71%(c) 1.13% 0.51% 0.25% 0.03%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Portfolio turnover rate 27% 21% 21% 69% 51%
_______________________________________________________________________________________________________________________
=======================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $32,029,932.
(d) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements
was 2.57% and 4.13% for the years ended October 31, 2004 and October 31,
2003, respectively.
23
AIM International Core Equity Fund
NOTE 13--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS C
--------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.98 $ 11.54 $ 10.22 $ 8.53 $ 7.16
- ----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income(a) 0.11 0.14 0.06 0.04 0.00
- ----------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 2.66 2.69 1.28 1.67 1.37
======================================================================================================================
Total from investment operations 2.77 2.83 1.34 1.71 1.37
======================================================================================================================
Less distributions:
Dividends from net investment income (0.12) (0.01) (0.02) (0.02) --
- ----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.42) (0.38) -- -- --
======================================================================================================================
Total distributions (0.54) (0.39) (0.02) (0.02) --
======================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 0.00
======================================================================================================================
Net asset value, end of period $ 16.21 $ 13.98 $ 11.54 $ 10.22 $ 8.53
______________________________________________________________________________________________________________________
======================================================================================================================
Total return(b) 20.36% 25.22% 13.11% 20.13% 19.13%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $50,234 $42,906 $38,108 $36,490 $2,608
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.16%(c) 2.27% 2.25% 2.41% 2.75%
- ----------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.16%(c) 2.27% 2.25% 2.46% 4.14%
======================================================================================================================
Ratio of net investment income to average net assets 0.71%(c) 1.13% 0.51% 0.37% 0.03%
______________________________________________________________________________________________________________________
======================================================================================================================
Portfolio turnover rate 27% 21% 21% 69% 51%
______________________________________________________________________________________________________________________
======================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $45,816,282
<Table>
<Caption>
CLASS R
--------------------------------------------------
NOVEMBER 24, 2003
(COMMENCEMENT
YEAR ENDED OCTOBER 31, DATE) TO
----------------------------- OCTOBER 31,
2007 2006 2005 2004
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $14.40 $11.87 $10.51 $ 8.90
- ----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income(a) 0.18 0.21 0.12 0.08
- ----------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 2.74 2.77 1.31 1.56
================================================================================================================
Total from investment operations 2.92 2.98 1.43 1.64
================================================================================================================
Less distributions:
Dividends from net investment income (0.18) (0.07) (0.07) (0.03)
- ----------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.42) (0.38) -- --
================================================================================================================
Total distributions (0.60) (0.45) (0.07) (0.03)
================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00
================================================================================================================
Net asset value, end of period $16.72 $14.40 $11.87 $ 10.51
________________________________________________________________________________________________________________
================================================================================================================
Total return(b) 20.97% 25.86% 13.64% 18.49%
________________________________________________________________________________________________________________
================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $4,286 $3,560 $2,622 $ 2,118
================================================================================================================
Ratio of expenses to average net assets 1.66%(c) 1.77% 1.75% 1.91%(d)(e)
================================================================================================================
Ratio of net investment income to average net assets 1.21%(c) 1.63% 1.01% 0.87%(d)
________________________________________________________________________________________________________________
================================================================================================================
Portfolio turnover rate(f) 27% 21% 21% 69%
________________________________________________________________________________________________________________
================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Not annualized for periods less than one year.
(c) Ratios are based on average daily net assets of $3,859,343.
(d) Annualized.
(e) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements
was 1.93% (annualized) for the period ended October 31, 2004.
(f) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year.
24
AIM International Core Equity Fund
NOTE 13--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
INVESTOR CLASS
---------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------
2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.61 $ 12.04 $ 10.64 $ 8.83 $ 7.35
- -----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income(a) 0.23 0.25 0.15 0.09 0.06
- -----------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 2.78 2.80 1.33 1.75 1.44
=======================================================================================================================
Total from investment operations 3.01 3.05 1.48 1.84 1.50
=======================================================================================================================
Less distributions:
Dividends from net investment income (0.22) (0.10) (0.08) (0.03) (0.02)
- -----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.42) (0.38) -- -- --
=======================================================================================================================
Total distributions (0.64) (0.48) (0.08) (0.03) (0.02)
=======================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 0.00
=======================================================================================================================
Net asset value, end of period $ 16.98 $ 14.61 $ 12.04 $ 10.64 $ 8.83
_______________________________________________________________________________________________________________________
=======================================================================================================================
Total return(b) 21.29% 26.11% 13.92% 20.84% 20.42%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $44,428 $44,674 $46,988 $44,345 $46,920
=======================================================================================================================
Ratio of expenses to average net assets 1.41%(c) 1.52% 1.50% 1.84%(d) 2.00%(d)
=======================================================================================================================
Ratio of net investment income to average net assets 1.46%(c) 1.88% 1.26% 0.94% 0.78%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Portfolio turnover rate 27% 21% 21% 69% 51%
_______________________________________________________________________________________________________________________
=======================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions.
(c) Ratio are based on average daily net assets of $44,391,679
(d) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements
was 1.89% and 2.26% for the years ended October 31, 2004 and October 31,
2003, respectively.
<Table>
<Caption>
INSTITUTIONAL CLASS
----------------------------------------------------
APRIL 30, 2004
(COMMENCEMENT
YEAR ENDED OCTOBER 31, DATE) TO
---------------------------------- OCTOBER 31,
2007 2006 2005 2004
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.54 $ 11.97 $ 10.56 $ 9.78
- ------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income(a) 0.31 0.33 0.21 0.09
- ------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 2.75 2.78 1.32 0.69
==================================================================================================================
Total from investment operations 3.06 3.11 1.53 0.78
==================================================================================================================
Less distributions:
Dividends from net investment income (0.29) (0.16) (0.12) --
- ------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.42) (0.38) -- --
==================================================================================================================
Total distributions (0.71) (0.54) (0.12) --
==================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00
==================================================================================================================
Net asset value, end of period $ 16.89 $ 14.54 $ 11.97 $ 10.56
__________________________________________________________________________________________________________________
==================================================================================================================
Total return(b) 21.89% 26.86% 14.53% 7.97%
__________________________________________________________________________________________________________________
==================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $405,507 $193,959 $73,018 $16,421
==================================================================================================================
Ratio of expenses to average net assets 0.88%(c) 0.95% 0.98% 1.07%(d)
==================================================================================================================
Ratio of net investment income to average net assets 1.99%(c) 2.45% 1.78% 1.71%(d)
__________________________________________________________________________________________________________________
==================================================================================================================
Portfolio turnover rate(e) 27% 21% 21% 69%
__________________________________________________________________________________________________________________
==================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns of
shareholder transactions. Not annualized for periods less than one year.
(c) Ratios are based on average daily net assets of $304,245,877.
(d) Annualized.
(e) Portfolio turnover is calculated at the fund level and is not annualized
for periods less than one year.
25
AIM International Core Equity Fund
NOTE 14--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On July 6, 2007, the Securities and Exchange Commission ("SEC") published notice
of two proposed distribution plans ("Distribution Plans") for the distribution
of monies placed into two separate Fair Funds created pursuant to a settlement
reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"), A I M
Advisors, Inc. ("AIM") and A I M Distributors, Inc. and the SEC (the "Order").
One of the Fair Funds consists of $325 million, plus interest and any
contributions by other settling parties, for distribution to shareholders of
certain mutual funds formerly advised by IFG who may have been harmed by market
timing and related activity. The second Fair Fund consists of $50 million, plus
interest and any contributions by other settling parties, for distribution to
shareholders of mutual funds advised by AIM who may have been harmed by market
timing and related activity. Comments on the Distribution Plans were due no
later than August 6, 2007 and the Distribution Plans are awaiting final approval
by the SEC. Distributions from the Fair Funds will begin after the SEC finally
approves the Distribution Plans. The proposed Distribution Plans provide for
distribution to all eligible investors, for the periods spanning January 1, 2000
through July 31, 2003 (for the IFG Fair Fund) and January 1, 2001 through
September 30, 2003 (for the AIM Fair Fund), their proportionate share of the
applicable Fair Fund to compensate such investors for injury they may have
suffered as a result of market timing in the affected funds. The Distribution
Plans include a provision for any residual amounts in the Fair Funds to be
distributed in the future to the affected funds. Because the Distribution Plans
have not received final approval from the SEC and distribution of the Fair Funds
has not yet commenced, management of AIM and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"),
the parent company of IFG and AIM, has agreed to reimburse expenses incurred by
the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
On August 30, 2005, the West Virginia Office of the State
Auditor -- Securities Commission ("WVASC") issued a Summary Order to Cease and
Desist and Notice of Right to Hearing to AIM and ADI (Order No. 05-1318). The
WVASC makes findings of fact that AIM and ADI entered into certain arrangements
permitting market timing of the AIM Funds and failed to disclose these
arrangements in the prospectuses for such Funds, and conclusions of law to the
effect that AIM and ADI violated the West Virginia securities laws. The WVASC
orders AIM and ADI to cease any further violations and seeks to impose monetary
sanctions, including restitution to affected investors, disgorgement of fees,
reimbursement of investigatory, administrative and legal costs and an
"administrative assessment," to be determined by the Commissioner. Initial
research indicates that these damages could be limited or capped by statute. By
agreement with the Commissioner of Securities, AIM's time to respond to that
Order has been indefinitely suspended.
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or
related entities and individuals, depending on the lawsuit, alleging:
- that the defendants permitted improper market timing and related activity
in the AIM Funds; and
- that certain AIM Funds inadequately employed fair value pricing.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
ERISA, negligence, breach of fiduciary duty and/or breach of contract. These
lawsuits seek remedies that include, depending on the lawsuit, damages,
restitution, injunctive relief, imposition of a constructive trust, removal of
certain directors and/or employees, various corrective measures under ERISA,
rescission of certain AIM Funds' advisory agreements and/or distribution plans
and recovery of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court,
plaintiffs in these lawsuits consolidated their claims for pre-trial purposes
into three amended complaints against various AIM- and IFG-related parties: (i)
a Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of the Employee
Retirement Income Securities Act ("ERISA") purportedly brought on behalf of
participants in Invesco's 401(k) plan. Based on orders issued by the MDL Court,
all claims asserted against the AIM Funds that have been transferred to the MDL
Court have been dismissed, although certain Funds remain nominal defendants in
the Consolidated Amended Fund Derivative Complaint. On September 15, 2006, the
MDL Court granted the Invesco defendants' motion to dismiss the Amended Class
Action Complaint for Violations of ERISA and dismissed such Complaint. The
plaintiff has commenced an appeal from that decision.
IFG, AIM, ADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, AIM and ADI have advised the Fund that they are providing full
cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, AIM and/or related entities and individuals in the future.
At the present time, management of AIM and the Fund are unable to estimate
the impact, if any, that the outcome of the Pending Litigation and Regulatory
Inquiries described above may have on AIM, ADI or the Fund.
26
AIM International Core Equity Fund
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM International Mutual Funds
and Shareholders of AIM International Core Equity 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 AIM International Core Equity Fund
(one of the funds constituting AIM International Mutual Funds, hereafter
referred to as the "Fund") at October 31, 2007, 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 periods
indicated, 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards 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, 2007 by correspondence with the custodian provide a reasonable basis for our
opinion.
PRICEWATERHOUSECOOPERS LLP
December 19, 2007
Houston, Texas
27
AIM International Core Equity Fund
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period May 1, 2007, through October 31, 2007.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
SHARE ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
CLASS (5/1/07) (10/31/07)(1) PERIOD(2) (10/31/07) PERIOD(2) RATIO
A $1,000.00 $1,079.90 $ 7.44 $1,018.05 $ 7.22 1.42%
B 1,000.00 1,075.20 11.35 1,014.27 11.02 2.17
C 1,000.00 1,075.60 11.35 1,014.27 11.02 2.17
R 1,000.00 1,078.70 8.75 1,016.79 8.49 1.67
Investor 1,000.00 1,080.10 7.45 1,018.05 7.22 1.42
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period May 1, 2007, through October 31, 2007, after actual
expenses and will differ from the hypothetical ending account value which is
based on the Fund's expense ratio and a hypothetical annual return of 5%
before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
184/365 to reflect the most recent fiscal half year.
28
Supplement to Annual Report dated 10/31/07
AIM International Core Equity Fund
==========================================
Institutional Class Shares AVERAGE ANNUAL TOTAL RETURNS PLEASE NOTE THAT PAST PERFORMANCE IS
For periods ended 10/31/07 NOT INDICATIVE OF FUTURE RESULTS. MORE
The following information has been RECENT RETURNS MAY BE MORE OR LESS THAN
prepared to provide Institutional Class Inception (4/30/04) 20.32% THOSE SHOWN. ALL RETURNS ASSUME
shareholders with a performance overview 1 Year 21.89 REINVESTMENT OF DISTRIBUTIONS AT NAV.
specific to their holdings. Institutional INVESTMENT RETURN AND PRINCIPAL VALUE WILL
Class shares are offered exclusively to AVERAGE ANNUAL TOTAL RETURNS FLUCTUATE SO YOUR SHARES, WHEN REDEEMED,
institutional investors, including defined MAY BE WORTH MORE OR LESS THAN THEIR
contribution plans that meet certain For periods ended 9/30/07, most recent ORIGINAL COST. SEE FULL REPORT FOR
criteria. calendar quarter-end INFORMATION ON COMPARATIVE BENCHMARKS.
PLEASE CONSULT YOUR FUND PROSPECTUS FOR
Inception (4/30/04) 19.65% MORE INFORMATION. FOR THE MOST CURRENT
1 Year 21.46 MONTH-END PERFORMANCE, PLEASE CALL
========================================== 800-451-4246 OR VISIT AIMINVESTMENTS.COM.
INSTITUTIONAL CLASS SHARES HAVE NO SALES
CHARGE; THEREFORE, PERFORMANCE IS AT NAV.
PERFORMANCE OF INSTITUTIONAL CLASS SHARES
WILL DIFFER FROM PERFORMANCE OF OTHER
SHARE CLASSES PRIMARILY DUE TO DIFFERING
SALES CHARGES AND CLASS EXPENSES.
A REDEMPTION FEE OF 2% WILL BE IMPOSED
ON CERTAIN REDEMPTIONS OR EXCHANGES OUT OF
THE FUND WITHIN 30 DAYS OF PURCHASE.
EXCEPTIONS TO THE REDEMPTION FEE ARE
LISTED IN THE FUND'S PROSPECTUS.
========================================== HAD THE ADVISOR NOT WAIVED FEES AND/OR
NASDAQ SYMBOL IBVIX REIMBURSED EXPENSES IN THE PAST,
========================================== PERFORMANCE WOULD HAVE BEEN LOWER.
Over for information on your Fund's expenses.
=======================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS,
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
=======================================================================================
FOR INSTITUTIONAL INVESTOR USE ONLY
This material is for institutional investor use only and may not be quoted, reproduced
or shown to the public, nor used in written form as sales literature for public use.
AIMinvestments.com I-ICE-INS-1 A I M Distributors, Inc.
[AIM INVESTMENTS LOGO]
-- REGISTERED TRADEMARK --
AIM International Core Equity Fund
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur ongoing costs, including management fees
and other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with ongoing costs of investing in other mutual funds. The example is based on
an investment of $1,000 invested at the beginning of the period and held for the
entire period May 1, 2007, through October 31, 2007.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
<Table>
<Caption>
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
SHARE CLASS (5/1/07) (10/31/07)(1) PERIOD(2) (10/31/07) PERIOD(2) RATIO
Institutional $1,000.00 $1,082.70 $4.62 $1,020.77 $4.48 0.88%
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period May 1, 2007, through October 31, 2007, after actual
expenses and will differ from the hypothetical ending account value which is
based on the Fund's expense ratio and a hypothetical annual return of 5%
before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
184/365 to reflect the most recent fiscal half year.
AIMinvestments.com I-ICE-INS-1 A I M Distributors, Inc.
AIM International Core Equity Fund
Approval of Investment Advisory Agreement
The Board of Trustees (the Board) of AIM The independent Trustees, as mentioned in accordance with the terms of the Fund's
International Mutual Funds is required above, are assisted in their annual advisory agreement. In addition, based on
under the Investment Company Act of 1940 to evaluation of the advisory agreements by their ongoing meetings throughout the year
approve annually the renewal of the AIM the independent Senior Officer. One with the Fund's portfolio managers, the
International Core Equity Fund (the Fund) responsibility of the Senior Officer is Board concluded that these individuals are
investment advisory agreement with A I M to manage the process by which the AIM competent and able to continue to carry
Advisors, Inc. (AIM). During contract Funds' proposed management fees are out their responsibilities under the
renewal meetings held on June 25-27, 2007, negotiated during the annual contract Fund's advisory agreement.
the Board as a whole and the disinterested renewal process to ensure that they are
or "independent" Trustees, voting negotiated in a manner which is at arms' In determining whether to continue the
separately, approved the continuance of the length and reasonable. Accordingly, the Fund's advisory agreement, the Board
Fund's investment advisory agreement for Senior Officer must either supervise a considered the prior relationship between
another year, effective July 1, 2007. In competitive bidding process or prepare an AIM and the Fund, as well as the Board's
doing so, the Board determined that the independent written evaluation. The knowledge of AIM's operations, and
Fund's advisory agreement is in the best Senior Officer has recommended that an concluded that it was beneficial to
interests of the Fund and its shareholders independent written evaluation be maintain the current relationship, in
and that the compensation to AIM under the provided and, upon the direction of the part, because of such knowledge. The Board
Fund's advisory agreement is fair and Board, has prepared an independent also considered the steps that AIM and its
reasonable. written evaluation. affiliates have taken over the last
several years to improve the quality and
The independent Trustees met separately During the annual contract renewal efficiency of the services they provide to
during their evaluation of the Fund's process, the Board considered the factors the Funds in the areas of investment
investment advisory agreement with discussed below under the heading performance, product line diversification,
independent legal counsel from whom they "Factors and Conclusions and Summary of distribution, fund operations, shareholder
received independent legal advice, and the Independent Written Fee Evaluation" in services and compliance. The Board
independent Trustees also received evaluating the fairness and concluded that the quality and efficiency
assistance during their deliberations from reasonableness of the Fund's advisory of the services AIM and its affiliates
the independent Senior Officer, a full-time agreement at the contract renewal provide to the AIM Funds in each of these
officer of the AIM Funds who reports meetings and at their meetings throughout areas have generally improved, and support
directly to the independent Trustees. The the year as part of their ongoing the Board's approval of the continuance of
following discussion more fully describes oversight of the Fund. The Fund's the Fund's advisory agreement.
the process employed by the Board to advisory agreement was considered
evaluate the performance of the AIM Funds separately, although the Board also B. FUND PERFORMANCE
(including the Fund) throughout the year considered the common interests of all of
and, more specifically, during the annual the AIM Funds in their deliberations. The The Board compared the Fund's performance
contract renewal meetings. Board comprehensively considered all of during the past one, three and five
the information provided to them and did calendar years to the performance of funds
THE BOARD'S FUND EVALUATION PROCESS not identify any particular factor that in the Fund's Lipper peer group that are
was controlling. Furthermore, each not managed by AIM, and against the
The Board's Investments Committee has Trustee may have evaluated the performance of all funds in the Lipper
established three Sub-Committees which are information provided differently from one International Large-Cap Core Funds Index.
responsible for overseeing the management another and attributed different weight The Board also reviewed the methodology
of a number of the series portfolios of the to the various factors. The Trustees used by Lipper to identify the Fund's
AIM Funds. This Sub-Committee structure recognized that the advisory arrangements peers. The Board noted that the Fund's
permits the Trustees to focus on the and resulting advisory fees for the Fund performance was comparable to the median
performance of the AIM Funds that have been and the other AIM Funds are the result of performance of its peers for the one,
assigned to them. The Sub-Committees meet years of review and negotiation between three and five year periods. The Board
throughout the year to review the the Trustees and AIM, that the Trustees noted that the Fund's performance was
performance of their assigned funds, and may focus to a greater extent on certain comparable to the performance of the Index
the Sub-Committees review monthly and aspects of these arrangements in some for the one, three and five year periods.
quarterly comparative performance years than others, and that the Trustees' The Board also considered the steps AIM
information and periodic asset flow data deliberations and conclusions in a has taken over the last several years to
for their assigned funds. These materials particular year may be based in part on improve the quality and efficiency of the
are prepared under the direction and their deliberations and conclusions of services that AIM provides to the AIM
supervision of the independent Senior these same arrangements throughout the Funds. The Board concluded that AIM
Officer. Over the course of each year, the year and in prior years. continues to be responsive to the Board's
Sub-Committees meet with portfolio managers focus on fund performance. Although the
for their assigned funds and other members FACTORS AND CONCLUSIONS AND SUMMARY OF independent written evaluation of the
of management and review with these INDEPENDENT WRITTEN FEE EVALUATION Fund's Senior Officer (discussed below)
individuals the performance, investment only considered Fund performance through
objective(s), policies, strategies and The discussion below serves as a summary the most recent calendar year, the Board
limitations of these funds. of the Senior Officer's independent also reviewed more recent Fund performance
written evaluation, as well as a and this review did not change their
In addition to their meetings throughout discussion of the material factors and conclusions.
the year, the Sub-Committees meet at related conclusions that formed the basis
designated contract renewal meetings each for the Board's approval of the Fund's C. ADVISORY FEES AND FEE WAIVERS
year to conduct an in-depth review of the advisory agreement. Unless otherwise
performance, fees and expenses of their stated, information set forth below is as The Board compared the Fund's contractual
assigned funds. During the contract renewal of June 27, 2007 and does not reflect any advisory fee rate to the contractual
process, the Trustees receive comparative changes that may have occurred since that advisory fee rates of funds in the Fund's
performance and fee data regarding all the date, including but not limited to Lipper peer group that are not managed by
AIM Funds prepared by an independent changes to the Fund's performance, AIM, at a common asset level and as of the
company, Lipper, Inc., under the direction advisory fees, expense limitations and/or end of the past calendar year. The Board
and supervision of the independent Senior fee waivers. noted that the Fund's advisory fee rate
Officer who also prepares a separate was below the median advisory fee rate of
analysis of this information for the I. INVESTMENT ADVISORY AGREEMENT its peers. The Board also reviewed the
Trustees. Each Sub-Committee then makes methodology used by Lipper and noted that
recommendations to the Investments A. NATURE, EXTENT AND QUALITY OF the contractual fee rates shown by Lipper
Committee regarding the performance, fees SERVICES PROVIDED BY AIM include any applicable long-term
and expenses of their assigned funds. The contractual fee waivers. The Board also
Investments Committee considers each The Board reviewed the advisory services compared the Fund's contractual advisory
Sub-Committee's recommendations and makes provided to the Fund by AIM under the fee rate to the contractual advisory fees
its own recommendations regarding the Fund's advisory agreement, the fee rates of other clients of AIM and its
performance, fees and expenses of the AIM performance of AIM in providing these affiliates with investment strategies
Funds to the full Board. Moreover, the services, and the credentials and comparable to those of the Fund, including
Investments Committee considers each experience of the officers and employees two mutual funds sub-advised by an AIM
Sub-Committee's recommendations in making of AIM who provide these services. The affiliate and one Canadian fund advised
its annual recommendation to the Board Board's review of the qualifications of and sub-advised by AIM affiliates. The
whether to approve the continuance of each AIM to provide these services included Board noted that the Fund's rate was: (i)
AIM Fund's investment advisory agreement the Board's consideration of AIM's above the sub-advisory fee rates for the
and sub-advisory agreement, if applicable portfolio and product review process, two sub-advised mutual funds, although the
(advisory agreements), for another year. various back office support functions advisory fee rate for one such sub-advised
provided by AIM, and AIM's equity and fund was above the Fund's; and (ii) below
fixed income trading operations. The the advisory fee rate for the Canadian
Board concluded that the nature, extent fund.
and quality of the advisory services
provided to the Fund by AIM were Additionally, the Board compared the
appropriate and that AIM currently is Fund's contractual advisory fee rate to
providing satisfactory advisory services the total advisory fees paid by
(continued)
29
AIM International Core Equity Fund
numerous separately managed accounts/wrap Officer of the Fund, who is independent Advisor were appropriate and that the
accounts advised by an AIM affiliate. The of AIM and AIM's affiliates, had prepared Sub-Advisor currently is providing
Board noted that the Fund's rate was an independent written evaluation to satisfactory services in accordance with
generally above the rates for the assist the Board in determining the the terms of the Fund's sub-advisory
separately managed accounts/wrap accounts. reasonableness of the proposed management agreement. In addition, based on their
The Board considered that management of the fees of the AIM Funds, including the ongoing meetings throughout the year with
separately managed accounts/wrap accounts Fund. The Board noted that they had the Fund's portfolio managers, the Board
by the AIM affiliate involves different relied upon the Senior Officer's written concluded that these individuals are
levels of services and different evaluation instead of a competitive competent and able to continue to carry
operational and regulatory requirements bidding process. In determining whether out their responsibilities under the
than AIM's management of the Fund. The to continue the Fund's advisory Fund's sub-advisory agreement.
Board concluded that these differences are agreement, the Board considered the
appropriately reflected in the fee Senior Officer's written evaluation. B. FUND PERFORMANCE
structure for the Fund and the separately
managed accounts/wrap accounts. G. COLLATERAL BENEFITS TO AIM AND ITS The Board compared the Fund's performance
AFFILIATES during the past one, three and five
The Board noted that AIM has not calendar years to the performance of funds
proposed any advisory fee waivers or The Board considered various other in the Fund's Lipper peer group that are
expense limitations for the Fund. The Board benefits received by AIM and its not managed by AIM, and against the
concluded that it was not necessary at this affiliates resulting from AIM's performance of all funds in the Lipper
time to discuss with AIM whether to relationship with the Fund, including the International Large-Cap Core Funds Index.
implement any such waivers or expense fees received by AIM and its affiliates The Board also reviewed the methodology
limitations because the Fund's overall for their provision of administrative, used by Lipper to identify the Fund's
expense ratio was comparable to the median transfer agency and distribution services peers. The Board noted that the Fund's
expense ratio of the funds in the Fund's to the Fund. The Board considered the performance was comparable to the median
Lipper peer group that are not managed by performance of AIM and its affiliates in performance of its peers for the one,
AIM. providing these services and the three and five year periods. The Board
organizational structure employed by AIM noted that the Fund's performance was
After taking account of the Fund's and its affiliates to provide these comparable to the performance of the Index
contractual advisory fee rate, as well as services. The Board also considered that for the one, three and five year periods.
the comparative advisory fee information these services are provided to the Fund The Board also considered the steps AIM
discussed above, the Board concluded that pursuant to written contracts which are has taken over the last several years to
the Fund's advisory fees were fair and reviewed and approved on an annual basis improve the quality and efficiency of the
reasonable. by the Board. The Board concluded that services that AIM provides to the AIM
AIM and its affiliates were providing Funds. The Board concluded that AIM
D. ECONOMIES OF SCALE AND BREAKPOINTS these services in a satisfactory manner continues to be responsive to the Board's
and in accordance with the terms of their focus on fund performance. Although the
The Board considered the extent to which contracts, and were qualified to continue independent written evaluation of the
there are economies of scale in AIM's to provide these services to the Fund. Fund's Senior Officer (discussed below)
provision of advisory services to the Fund. only considered Fund performance through
The Board also considered whether the Fund The Board considered the benefits the most recent calendar year, the Board
benefits from such economies of scale realized by AIM as a result of portfolio also reviewed more recent Fund performance
through contractual breakpoints in the brokerage transactions executed through and this review did not change their
Fund's advisory fee schedule or through "soft dollar" arrangements. Under these conclusions.
advisory fee waivers or expense arrangements, portfolio brokerage
limitations. The Board noted that the commissions paid by the Fund and/or other C. SUB-ADVISORY FEES
Fund's contractual advisory fee schedule funds advised by AIM are used to pay for
includes six breakpoints but that, due to research and execution services. The The Board compared the Fund's contractual
the Fund's asset level at the end of the Board noted that soft dollar arrangements sub-advisory fee rate to the sub-advisory
past calendar year and the way in which the shift the payment obligation for the fees paid by other sub-advisory clients of
breakpoints have been structured, the Fund research and executions services from AIM the Sub-Advisor with investment strategies
has yet to benefit from the breakpoints. to the funds and therefore may reduce comparable to those of the Fund, including
The Board also noted that AIM's contractual AIM's expenses. The Board also noted that one mutual fund sub-advised by the
advisory fee waiver discussed above research obtained through soft dollar Sub-Advisor and one Canadian fund
includes breakpoints based on net asset arrangements may be used by AIM in making sub-advised by the Sub-Advisor. The Board
levels. Based on this information, the investment decisions for the Fund and may noted that the Fund's sub-advisory fee
Board concluded that the Fund's advisory therefore benefit Fund shareholders. The rate was: (i) below the sub-advisory fee
fees would reflect economies of scale at Board concluded that AIM's soft dollar rate for the sub-advised mutual fund; and
higher asset levels. The Board also noted arrangements were appropriate. The Board (ii) below the sub-advisory fee rate for
that the Fund shares directly in economies also concluded that, based on their the Canadian fund. Additionally, the Board
of scale through lower fees charged by review and representations made by AIM, compared the Fund's contractual
third party service providers based on the these arrangements were consistent with sub-advisory fee rate to the total
combined size of all of the AIM Funds and regulatory requirements. advisory fees paid by numerous separately
affiliates. managed accounts/wrap accounts sub-advised
The Board considered the fact that the by the Sub-Advisor with investment
E. PROFITABILITY AND FINANCIAL RESOURCES OF Fund's uninvested cash and cash strategies comparable to those of the
AIM collateral from any securities lending Fund. The Board noted that the Fund's
arrangements may be invested in money sub-advisory fee rate was generally below
The Board reviewed information from AIM market funds advised by AIM pursuant to the rates for the separately managed
concerning the costs of the advisory and procedures approved by the Board. The accounts/wrap accounts. The Board
other services that AIM and its affiliates Board noted that AIM will receive considered the services to be provided by
provide to the Fund and the profitability advisory fees from these affiliated money the Sub-Advisor pursuant to the Fund's
of AIM and its affiliates in providing market funds attributable to such sub-advisory agreement and the services to
these services. The Board also reviewed investments, although AIM has be provided by AIM pursuant to the Fund's
information concerning the financial contractually agreed to waive the advisory agreement, as well as the
condition of AIM and its affiliates. The advisory fees payable by the Fund with allocation of fees between AIM and the
Board also reviewed with AIM the respect to its investment of uninvested Sub-Advisor pursuant to the sub-advisory
methodology used to prepare the cash in these affiliated money market agreement. The Board noted that the
profitability information. The Board funds through at least June 30, 2008. The sub-advisory fees have no direct effect on
considered the overall profitability of Board considered the contractual nature the Fund or its shareholders, as they are
AIM, as well as the profitability of AIM in of this fee waiver and noted that it paid by AIM to the Sub-Advisor, and that
connection with managing the Fund. The remains in effect until at least June 30, AIM and the Sub-Advisor are affiliates.
Board noted that AIM continues to operate 2008. The Board concluded that the Fund's After taking account of the Fund's
at a net profit, although increased investment of uninvested cash and cash contractual sub-advisory fee rate, as well
expenses in recent years have reduced the collateral from any securities lending as the comparative sub-advisory fee
profitability of AIM and its affiliates. arrangements in the affiliated money information, the Board concluded that the
The Board concluded that the Fund's market funds is in the best interests of Fund's sub-advisory fees were fair and
advisory fees were fair and reasonable, and the Fund and its shareholders. reasonable.
that the level of profits realized by AIM
and its affiliates from providing services II. SUB-ADVISORY AGREEMENT D. FINANCIAL RESOURCES OF THE SUB-ADVISOR
to the Fund was not excessive in light of
the nature, quality and extent of the A. NATURE, EXTENT AND QUALITY OF SERVICES The Board considered whether the
services provided. The Board considered PROVIDED BY THE SUB-ADVISOR Sub-Advisor is financially sound and has
whether AIM is financially sound and has the resources necessary to perform its
the resources necessary to perform its The Board reviewed the services provided obligations under the Fund's sub-advisory
obligations under the Fund's advisory by INVESCO Global Asset Management agreement, and concluded that the
agreement, and concluded that AIM has the (N.A.), Inc. (the Sub-Advisor) under the Sub-Advisor has the financial resources
financial resources necessary to fulfill Fund's sub-advisory agreement, the necessary to fulfill these obligations.
these obligations. performance of the Sub-Advisor in
providing these services, and the
F. INDEPENDENT WRITTEN EVALUATION OF THE credentials and experience of the
FUND'S SENIOR OFFICER officers and employees of the Sub-Advisor
who provide these services. The Board
The Board noted that, upon their direction, concluded that the nature, extent and
the Senior quality of the services provided by the
Sub-
30
AIM International Core Equity Fund
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year-end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the
Internal Revenue Code or to meet a specific state's requirement.
The Fund designates the following amounts or, if subsequently determined to
be different, the maximum amount allowable for its fiscal year ended October 31,
2007:
FEDERAL AND STATE INCOME TAX
<Table>
Long-Term Capital Gain Dividends $12,949,468
Qualified Dividend Income* 98.88%
Corporate Dividends Received Deduction* 0%
</Table>
* The above percentage is based on ordinary income dividends paid to
shareholders during the fund's fiscal year.
NON-RESIDENT ALIEN SHAREHOLDERS
<Table>
Qualified Interest Income** 4.65%
</Table>
** The above percentage is based on income dividends paid to shareholders
during the fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended January 31, 2007, April 30, 2007, July 31, 2007 and
October 31, 2007 were 99.81%, 99.86%, 99.90%, and 99.89%, respectively.
DISTRIBUTION INFORMATION
Shareholders were sent a notice from the Fund that set forth an estimate on a
per share basis of the source or sources from which the distribution was paid in
December of 2006. Subsequently, this estimate has been corrected in part. Listed
below is a written statement of the sources of this distribution, as corrected,
on generally accepted accounting principles ("GAAP") basis.
<Table>
<Caption>
GAIN FROM SALE OF RETURN OF TOTAL
NET INCOME SECURITIES PRINCIPAL DISTRIBUTION
12/15/06 Class A $0.2102 $0.2571 $0.1693 $0.6366
12/15/06 Class B $0.1073 $0.2571 $0.1694 $0.5338
12/15/06 Class C $0.1073 $0.2571 $0.1694 $0.5338
12/15/06 Class R $0.1760 $0.2571 $0.1694 $0.6025
12/15/06 Investor Class $0.2102 $0.2571 $0.1693 $0.6366
12/15/06 Institutional Class $0.2863 $0.2571 $0.1695 $0.7129
</Table>
Please note that the information in the preceding chart is for financial
accounting purposes only. Shareholders should be aware that the tax treatment of
distributions may differ from their GAAP treatment. The tax treatment of
distributions was set forth in a Form 1099-DIV for the 2006 calendar year. This
information is being provided to comply with certain U. S. Securities and
Exchange Commissions requirements.
31
AIM International Core Equity Fund
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM International Mutual Funds (the
"Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each
trustee oversees 104 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. Each officer serves for a one year term or until their
successors are elected and qualified. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY
TRUST SINCE DURING PAST 5 YEARS TRUSTEE/ DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Interested Persons
- -------------------------------------------------------------------------------------------------------------------------
Martin L. Flanagan(1) -- 1960 2007 Director, Chief Executive Officer and None
Trustee President, Invesco Ltd. (ultimate parent
of AIM and a global investment
management firm) and, INVESCO PLC
(parent of AIM and a global investment
management firm); Chairman, A I M
Advisors, Inc. (registered investment
advisor); Director, Chairman, Chief
Executive Officer and President, IVZ
Inc. (holding company); and INVESCO
North American Holdings, Inc. (holding
company); Chairman and President,
INVESCO Group Services, Inc. (service
provider); Trustee, The AIM Family of
Funds(R); Vice Chairman, Investment
Company Institute; and Member of
Executive Board, SMU Cox School of
Business
Formerly: Chairman, Investment Company
Institute; President, Co-Chief Executive
Officer, Co-President, Chief Operating
Officer and Chief Financial Officer,
Franklin Resources, Inc. (global
investment management organization)
- -------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Director, Chief Executive Officer and None
Trustee, President and President, AIM Mutual Fund Dealer Inc.
Principal (registered broker dealer), A I M
Executive Officer Advisors, Inc., AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services
(registered investment advisor and
registered transfer agent) and 1371
Preferred Inc. (holding company);
Director, Chairman, Chief Executive
Officer and President, A I M Management
Group Inc. (financial services holding
company) and A I M Capital Management,
Inc. (registered investment advisor);
Director and President, INVESCO Funds
Group, Inc. (registered investment
advisor and register transfer agent) and
AIM GP Canada Inc. (general partner for
a limited partnership); Director, A I M
Distributors, Inc. (registered broker
dealer); Director and Chairman, AIM
Investment Services, Inc. (registered
transfer agent) and INVESCO
Distributors, Inc. (registered broker
dealer); Director, President and
Chairman, IVZ Callco Inc. (holding
company), INVESCO Inc. (holding company)
and AIM Canada Holdings Inc. (holding
company); Director and Chief Executive
Officer, AIM Trimark Corporate Class
Inc. (formerly AIM Trimark Global Fund
Inc.) (corporate mutual fund company)
and AIM Trimark Canada Fund Inc.
(corporate mutual fund company);
Trustee, President and Principal
Executive Officer of The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); Trustee and
Executive Vice President, The AIM Family
of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); and Manager,
PowerShares Capital Management LLC
Formerly: Director and Chairman, Fund
Management Company (registered broker
dealer); President and Principal
Executive Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); Chairman, AIM
Canada Holdings, Inc.; President, AIM
Trimark Global Fund Inc. and AIM Trimark
Canada Fund Inc.; and Director, Trimark
Trust (federally regulated Canadian
Trust Company)
- -------------------------------------------------------------------------------------------------------------------------
Independent Trustees
- -------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1992 Chairman, Crockett Technology Associates ACE Limited (insurance company);
Trustee and Chair (technology consulting company) and Captaris, Inc. (unified
messaging provider)
- -------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Retired Badgley Funds, Inc. (registered
Trustee investment company) (2 portfolios)
Formerly: Partner, law firm of Baker &
McKenzie
- -------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2003 Founder, Green, Manning & Bunch Ltd., None
Trustee (investment banking firm); and Director,
Policy Studies, Inc. and Van Gilder
Insurance Corporation
- -------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and None
Trustee private business corporations, including
the Boss Group Ltd. (private investment
and management); Reich & Tang Funds
(Chairman) (registered investment
company) (7 portfolios), Daily Income
Fund (4 portfolios), California Daily
Tax Free Income Fund, Inc., Connecticut
Daily Tax Free Income Fund, Inc. and New
Jersey Daily Municipal Fund, Inc.,
Annuity and Life Re (Holdings), Ltd.
(insurance company), and Homeowners of
America Holding Corporation (property
casualty company)
Formerly: Director, CompuDyne
Corporation (provider of product and
services to the public security market);
Director, President and Chief Executive
Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo;
Director of various affiliated Volvo
companies; and Director, Magellan
Insurance Company
- -------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Administaff
Trustee Century Group, Inc. (government affairs
company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P.
(cattle, hunting, corporate
entertainment), and Discovery Global
Education Fund (non-profit)
Formerly: Chief Executive Officer,
Texana Timber LP (sustainable forestry
company)
- -------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1991 Partner, law firm of Kramer Levin Director, Reich & Tang Funds) (7
Trustee Naftalis and Frankel LLP portfolios)
- -------------------------------------------------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired None
Trustee
Formerly: Partner, Deloitte & Touche;
and Director, Mainstay VP Series Funds,
Inc. (25 portfolios)
- -------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan was appointed as Trustee of the Trust on February 24, 2007. Mr.
Flanagan is considered an interested person of the Trust because he is an
officer of the advisor to the Trust, and an officer and a director of
INVESCO PLC, parent of the advisor to the Trust.
(2) Mr. Taylor 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.
32
TRUSTEES AND OFFICERS--(CONTINUED)
AIM International Core Equity Fund
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY TRUSTEE/
TRUST SINCE DURING PAST 5 YEARS DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Other Officers
- -------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer N/A
Senior Vice President and of The AIM Family of Funds--Registered
Senior Officer Trademark--
Formerly: Director of Compliance and
Assistant General Counsel, ICON
Advisers, Inc.; Financial Consultant,
Merrill Lynch; General Counsel and
Director of Compliance, ALPS Mutual
Funds, Inc.
- -------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, N/A
Senior Vice President, Chief Secretary and General Counsel, A I M
Legal Officer and Secretary Management Group Inc., A I M Advisors,
Inc. and A I M Capital Management, Inc.;
Director, Vice President and Secretary,
AIM Investment Services, Inc. and
INVESCO Distributors, Inc.; Director,
Senior Vice President and Secretary,
A I M Distributors, Inc.; Director and
Vice President, INVESCO Funds Group
Inc.; Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--; and
Manager, PowerShares Capital Management
LLC
Formerly: Director, Vice President and
Secretary, Fund Management Company; Vice
President, A I M Capital Management,
Inc.; Chief Operating Officer, Senior
Vice President, General Counsel and
Secretary, Liberty Ridge Capital, Inc.
(an investment adviser); Vice President
and Secretary, PBHG Funds (an investment
company); Vice President and Secretary,
PBHG Insurance Series Fund (an
investment company); General Counsel and
Secretary, Pilgrim Baxter Value
Investors (an investment adviser); Chief
Operating Officer, General Counsel and
Secretary, Old Mutual Investment
Partners (a broker-dealer); General
Counsel and Secretary, Old Mutual Fund
Services (an administrator); General
Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder
servicing center); Executive Vice
President, General Counsel and
Secretary, Old Mutual Capital, Inc. (an
investment adviser); and Vice President
and Secretary, Old Mutual Advisors Funds
(an investment company)
- -------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, INVESCO PLC; N/A
Vice President and Vice President of The AIM Family of
Funds--Registered Trademark--
Formerly: Senior Vice President, A I M
Management Group Inc. (financial
services holding company); Senior Vice
President and Chief Compliance Officer,
A I M Advisors, Inc. and The AIM Family
of Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc. and A I M
Distributors, Inc.; Vice President, AIM
Investment Services, Inc. and Fund
Management Company; Senior Vice
President and Chief Compliance Officer
of The AIM Family of Funds--Registered
Trademark--; and Senior Vice President
and Compliance Director, Delaware
Investments Family of Funds
- -------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 Senior Vice President and General
Vice President Counsel, INVESCO PLC; Director, INVESCO
Funds Group, Inc.; Director and
Secretary, IVZ, Inc. and INVESCO Group
Services, Inc.; Secretary, INVESCO North
American Holdings, Inc.; and Vice
President of The AIM Family of
Funds--Registered Trademark--
Formerly: Director, Senior Vice N/A
President, Secretary and General
Counsel, A I M Management Group Inc. and
A I M Advisors, Inc.; Senior Vice
President, A I M Distributors, Inc.;
Director, General Counsel and Vice
President, Fund Management Company; Vice
President, A I M Capital Management,
Inc. and AIM Investment Services, Inc.;
Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--;
Director and Vice President, INVESCO
Distributors, Inc.; Chief Executive
Officer and President, INVESCO Funds
Group, Inc.; and Senior Vice President
and General Counsel, Liberty Financial
Companies, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Sidney M. Dilgren -- 1961 2004 Vice President, A I M Advisors, Inc. and N/A
Vice President, Principal A I M Capital Management, Inc.; and Vice
Financial Officer and President, Treasurer and Principal
Treasurer Financial Officer of The AIM Family of
Funds--Registered Trademark--
Formerly: Fund Treasurer, A I M
Advisors, Inc.; Senior Vice President,
AIM Investment Services, Inc.; and Vice
President, A I M Distributors, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2004 Head of INVESCO's World Wide Fixed N/A
Vice President Income and Cash Management Group;
Director of Cash Management and Senior
Vice President, A I M Advisors, Inc. and
A I M Capital Management, Inc; Executive
Vice President, A I M Distributors,
Inc.; Senior Vice President, A I M
Management Group Inc.; Vice President,
The AIM Family of Funds--Registered
Trademark-- (other than AIM Treasurer's
Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust);
and President and Principal Executive
Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
Formerly: Director and President, Fund
Management Company; Chief Cash
Management Officer and Managing
Director, A I M Capital Management,
Inc.; Vice President, A I M Advisors,
Inc. and The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
- -------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance N/A
Anti-Money Laundering Officer, A I M Advisors, Inc., A I M
Compliance Officer Capital Management, Inc., A I M
Distributors, Inc., AIM Investment
Services, Inc., AIM Private Asset
Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering
Compliance Officer, Fund Management
Company; and Manager of the Fraud
Prevention Department, AIM Investment
Services, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, A I M Management N/A
Chief Compliance Officer Group Inc.; Senior Vice President and
Chief Compliance Officer, A I M
Advisors, Inc. and A I M Capital
Management, Inc.; Chief Compliance
Officer of The AIM Family of
Funds--Registered Trademark--, INVESCO
Global Asset Management (N.A.), Inc.,
(registered investment advisor), INVESCO
Institutional (N.A.), Inc., (registered
investment advisor), INVESCO Private
Capital Investments, Inc. (holding
company), INVESCO Private Capital, Inc.
(registered investment advisor) and
INVESCO Senior Secured Management, Inc.
(registered investment advisor); and
Vice President, A I M Distributors, Inc.
and AIM Investment Services, Inc.
Formerly: Vice President, A I M Capital
Management, Inc. and Fund Management
Company; Global Head of Product
Development, AIG-Global Investment
Group, Inc.; and Chief Compliance
Officer and Deputy General Counsel,
AIG-SunAmerica Asset Management
- -------------------------------------------------------------------------------------------------------------------------
</Table>
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 1.800.959.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS SUB-ADVISOR
11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, PricewaterhouseCoopers INVESCO Global Asset
Suite 100 11 Greenway Plaza Inc. LLP Management (N.A.), Inc
Houston, TX 77046-1173 Suite 100 11 Greenway Plaza 1201 Louisiana Street One Midtown Plaza
Houston, TX 77046-1173 Suite 100 Suite 2900 1360 Peachtree Street,
Houston, TX 77046-1173 Houston, TX 77002-5678 N.E.
Suite 100
Atlanta, GA 30309-3362
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Ballard Spahr INDEPENDENT TRUSTEES AIM Investment State Street Bank and
Andrews & Ingersoll, LLP Kramer, Levin, Naftalis Services, Inc. Trust
1735 Market Street, 51st & Frankel LLP P.O. Box 4739 Company
Floor 1177 Avenue of the Houston, TX 77210-4739 225 Franklin Street
Philadelphia, PA 19103-7599 Americas Boston, MA 02110-2801
New York, NY 10036-2714
</Table>
33
[EDELIVERY FUND HOLDINGS AND PROXY VOTING INFORMATION
GO PAPERLESS
AIMINVESTMENTS.COM/EDELIVERY The Fund provides a complete list of its holdings four times in
GRAPHIC] each fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual
REGISTER FOR EDELIVERY reports to shareholders. For the first and third quarters, the
Fund files the lists with the Securities and Exchange Commission
eDelivery is the process of receiving your fund and account (SEC) on Form N-Q. The most recent list of portfolio holdings is
information via e-mail. Once your quarterly statements, tax available at AIMinvestments.com. From our home page, click on
forms, fund reports, and prospectuses are available, we will send Products & Performance, then Mutual Funds, then Fund Overview.
you an e-mail notification containing links to these documents. Select your Fund from the drop-down menu and click on Complete
For security purposes, you will need to log in to your account to Quarterly Holdings. Shareholders can also look up the Fund's
view your statements and tax forms. Forms N-Q on the SEC Web site at sec.gov. Copies of the Fund's
Forms N-Q may be reviewed and copied at the SEC Public Reference
WHY SIGN UP? Room in Washington, D.C. You can obtain information on the
operation of the Public Reference Room, including information
Register for eDelivery to: about duplicating fee charges, by calling 202-942-8090 or
800-732-0330, or by electronic request at the following e-mail
- - save your Fund the cost of printing and postage. address: publicinfo@sec.gov. The SEC file numbers for the Fund
are 811-06463 and 033-44611.
- - reduce the amount of paper you receive.
A description of the policies and procedures that the Fund uses
- - gain access to your documents faster by not waiting for the to determine how to vote proxies relating to portfolio
mail. securities is available without charge, upon request, from our
Client Services department at 800-959-4246 or on the AIM Web
- - view your documents online anytime at your convenience. site, AIMinvestments.com. On the home page, scroll down and
click on Proxy Policy. The information is also available on the
- - save the documents to your personal computer or print them out SEC Web site, sec.gov.
for your records.
Information regarding how the Fund voted proxies related to its
HOW DO I SIGN UP? portfolio securities during the 12 months ended June 30, 2007,
is available at our Web site. Go to AIMinvestments.com, access
It's easy. Just follow these simple steps: the About Us tab, click on Required Notices and then click on
Proxy Voting Activity. Next, select the Fund from the drop-down
1. Log in to your account. menu. The information is also available on the SEC Web site,
sec.gov.
2. Click on the "Service Center" tab.
If used after January 20, 2008, this report must be accompanied
3. Select "Register for eDelivery" and complete the consent by a Fund fact sheet or by an AIM Quarterly Performance Review
process. for the most recent quarter-end. Mutual funds and
exchange-traded funds distributed by A I M Distributors, Inc.
This AIM service is provided by AIM Investment Services, Inc.
I-ICE-AR-1 A I M Distributors, Inc.
[AIM INVESTMENTS LOGO]
-- REGISTERED TRADEMARK --
INTERNATIONAL/
GLOBAL EQUITY
AIM International Growth Fund
Annual Report to Shareholders - October 31, 2007
International/Global
Table of Contents
Letters to Shareholders ......... 2
Performance Summary ............. 4
Management Discussion ........... 4
Long-term Fund Performance ...... 6
Supplemental Information ........ 8
Schedule of Investments ......... 9
Financial Statements ............ 13
Notes to Financial Statements ... 15
Financial Highlights ............ 22
Auditor's Report ................ 28
Fund Expenses ................... 29
Approval of Advisory Agreement .. 30 [COVER GLOBE IMAGE]
Tax Information ................. 32
Trustees and Officers ........... 33
[AIM INVESTMENT SOLUTIONS]
[GRAPHIC] [GRAPHIC]
[DOMESTIC [FIXED
EQUITY] INCOME]
[GRAPHIC] [GRAPHIC] [GRAPHIC]
[TARGET [TARGET [DIVERSIFIED
RISK] MATURITY] PORTFOLIOS]
[GRAPHIC] [GRAPHIC]
[SECTOR [INTERNATIONAL/
EQUITY] GLOBAL EQUITY]
[AIM INVESTMENTS LOGO]
- -- REGISTERED TRADEMARK --
AIM International Growth Fund
Dear Shareholders of the AIM Family of Funds:
I'm pleased to provide you with this report, which includes a discussion of how your Fund was managed
during the period under review and factors that affected its performance. The following pages contain
important information that answers questions you may have about your investment.
[TAYLOR
PHOTO] Despite notable volatility at points throughout the fiscal year ended October 31, 2007, major stock
market indexes in the U.S. and abroad generally performed well. Reasons for their favorable performance
included positive economic growth, particularly overseas; strong corporate profits; and action by the U.S.
Federal Reserve Board (the Fed) to reassure skittish markets, among other factors.
Philip Taylor
At its September 18, 2007, meeting, the Fed cut the federal funds target rate for the first time since
June 2003.1 The cut followed 17 rate increases from June 2004 to June 20061 and was intended to address
investor concerns about a weak housing market generally and problems in the subprime mortgage market
specifically. The Fed's action triggered an immediate and broad stock market rally. The Fed cut this key
interest rate again on October 31, 2007.(1)
At AIM Investments -- registered trademark --, we know that market conditions change -- often suddenly
and sometimes dramatically. We can help you deal with market volatility by offering a broad range of mutual
funds, including:
o Domestic, global and international equity funds
o Taxable and tax-exempt fixed-income funds
o Allocation portfolios, with risk/return characteristics to match your needs
o AIM Independence Funds--target-maturity funds that combine retail mutual funds and PowerShares
--registered trademark-- exchange-traded funds--with risk/return characteristics that change as your
target retirement date nears
I encourage you to talk with your financial advisor if you have concerns about your portfolio. We
believe in the value of working with a trusted financial advisor who can recommend AIM funds that are
appropriate for your portfolio and that address your long-term investment goals and risk tolerance
regardless of prevailing short-term market conditions.
In conclusion
My colleague, Bob Graham, recently announced his decision to step down as vice chair of the AIM Funds
board of directors. In 1976, Bob was one of three men who co-founded AIM. In the three decades since, he
has been instrumental in transforming AIM from a small investment management firm into one of America's
most respected mutual fund companies--and, in 1997, into a global independent retail and institutional
investment manager.
In May, with shareholder approval, AIM Investments' parent company changed its name from AMVESCAP PLC
to Invesco Ltd., uniting our worldwide operations and global expertise under one new name. While the name
of our parent company may be new to you, I can assure you that our commitment to excellent customer service
remains unchanged. Our highly trained, courteous client service representatives are eager to answer your
questions, provide you with product information or assist you with account transactions. I encourage you to
give us an opportunity to serve you by calling us at 800-959-4246.
We at AIM are committed to helping you achieve your financial goals. We work every day to earn your
trust, and we're grateful for the confidence you've placed in us.
Sincerely,
/s/ PHILIP TAYLOR
Philip Taylor
President - AIM Funds
CEO, AIM Investments
December 17, 2007
Source: (1) U.S. Federal Reserve Board
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
2
AIM International Growth Fund
Dear Fellow Shareholders:
In overseeing the management of the AIM family of funds on your behalf, your Board of Trustees of the AIM
Funds continues to focus on improved investment performance, reduced shareholder costs, and high ethical
standards.
[CROCKETT
PHOTO] Your Board welcomes two new members: Marty Flanagan, President and CEO of INVESCO, AIM's parent
company, and Phil Taylor, who was named CEO of AIM Investments --registered trademark-- in April 2006.
Robert Graham, who has given more than 30 years of leadership to the company and the mutual fund industry
since founding AIM in 1976, has retired, stepping down in the process from his most recent role as vice
chairman of the Board. We thank Bob for his many contributions and wish him a long and happy future.
Bruce L. Crockett
Our review of fund performance has shown healthy progress, but the process is necessarily one of
continuous improvement. In general, as of October 31, 2007, we have seen persistent investment discipline
and more consistently good results. While this statement may not apply to every AIM Fund all the time, as I
write this letter, the overall trend in fund management and performance has been positive.
The investment management talent at AIM has recently been enhanced by the promotion of Karen Dunn
Kelley to Head of INVESCO's Worldwide Fixed Income as well as Director of AIM Global and Cash Management,
with responsibility for all fixed income and money market funds that serve both institutional and
individual investors. Under Karen's direction, AIM's cash management organization grew to one of the
world's largest and most respected, with top-tier performance. The operations now combined under her charge
represent more than $150 billion in assets, 120 investment professionals, and products that span the entire
yield curve (as of October 31, 2007).
In other news, your Board took a more active role in preparing for "proxy season," the period when
fund managers must vote the shares held by their funds "for" or "against" various proposals on the ballots
of the issuing companies. Beginning in the 2007 proxy season, AIM implemented new proxy voting policies,
developed by management in conjunction with an ad hoc Board committee, which provided a solid framework for
properly evaluating and executing the many decisions the AIM Funds are required to make to vote shares.
In general, the AIM Funds voted for proposals that would allow shareholders a greater role in election
of directors, proxy access and "say for pay." The AIM Funds voted against directors whom AIM believed
failed to govern well in cases of corporate mismanagement, such as the backdating of options grants, and
against "poison pill" and "take under" proposals that would favor the financial interests of managers at
the expense of investors in the case of a merger or acquisition. You can view the proxy votes cast for your
fund by going to AIMinvestments.com. Click the "About Us" tab, then go to "Required Notices" and "Proxy
Voting Activity."
Additionally, your Board raised the amount its members are recommended to invest in the AIM Funds
within three years of joining the Board, with the goal of aligning our interests even more closely with
yours.
Furthermore, at our June meeting we renewed the investment advisory contracts between the AIM Funds
and AIM for another year, applying the same rigorous evaluation process that was enhanced and formalized in
2005. For more information on this process, please visit AIMinvestments.com. Click on the "Products and
Performance" tab and go to "Investment Advisory Agreement Renewals."
Your Board's ability to best represent your interests depends on our knowledge of your opinions and
concerns. Please send me an email (bruce@brucecrockett.com) with your thoughts on the following:
1) How important is it to you to hear about your Board's decisions and activities in these letters?
2) What other information (on overall performance, specific funds, managers, etc.) would make the
letters more meaningful to you?
3) Would you prefer that communications from your Board continue to be delivered in paper form by
regular mail or be sent electronically by email?
If you would prefer to communicate through a quick online survey, please go to AIMinvestments.com and
provide your responses there.
We need to hear from you to do our best job, and I look forward to your responses.
Sincerely,
/s/ BRUCE L. CROCKETT
Bruce L. Crockett
Independent Chair
AIM Funds Board of Directors
December 17, 2007
AIM Investments is a registered service mark of A I M Management Group Inc. A I M Advisors, Inc. and A I M
Capital Management, Inc. are the investment advisors. A I M Distributors, Inc. is the distributor for the
retail mutual funds represented by AIM Investments and the PowerShares Exchange-Traded Fund Trust.
3
AIM International Growth Fund
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE the Fund primarily on a stock-by-stock basis. We
focus on the strengths of individual companies
================================================================================ rather than sectors, countries or market-cap
PERFORMANCE SUMMARY trends.
Steady market gains over the first half of the year under review, aided by We believe disciplined sell decisions are key
improving corporate earnings and record levels of merger and acquisition to successful investing. We consider selling a
activity, were followed by a more uneven climb by markets over the second half stock for one of the following reasons:
of the review period. Market volatility increased during the year due to
negative news in areas of the U.S. economy, as well as problems emanating from o A company's fundamentals deteriorate, or it
the U.S. subprime mortgage market, which spread globally. posts disappointing earnings.
Within this environment, we are pleased to once again have provided o A stock's price seems overvalued.
shareholders with double-digit Fund performance at net asset value. As the table
illustrates, your Fund outperformed both its broad market and style-specific o A more attractive opportunity becomes
benchmarks, excluding applicable sales charges. We attribute our comparative available.
success to strong stock selection in Asia. Our exposure to emerging market
stocks, which outperformed over the period, provided a competitive advantage as MARKET CONDITIONS AND YOUR FUND
well.
International markets continued their rally with
Your Fund's long-term performance appears later in this report. particular strength in Europe, as positive
economic data and a strong currency drove
FUND VS. INDEXES returns higher. While all benchmark countries
finished the period in positive territory, Japan
Total returns, 10/31/06-10/31/07, excluding applicable sales charges. If sales stood out because it lagged significantly.
charges were included, returns would be lower. Recent economic data point to a lack of consumer
and investor confidence, and leading indicators
Class A Shares 32.58% suggest a recession is not out of the question.
Class B Shares 31.59 But strong investor optimism in emerging markets
Class C Shares 31.61 drove many local markets to significant highs,
Class R Shares 32.26 particularly China and India.
MSCI EAFE Index* (Broad Market Index) 24.91
MSCI EAFE Growth Index* (Style-Specific Index) 28.52 Within this environment, Fund performance was
Lipper International Multi-Cap Growth Funds Index* (Peer Group Index) 34.96 broad based, with all regions registering
Source: *Lipper Inc. double-digit positive returns for the period.
================================================================================ Consistent with the Fund's bottom-up investment
process, security selection--rather than
How we invest experienced, or exhibit the potential allocation decisions--was the primary driver of
for, accelerating or above-average both absolute and relative performance.
When selecting stocks for your Fund, we earnings growth but whose prices do
employ a disciplined investment not fully reflect these attributes. Solid stock selection helped the Fund perform
strategy that emphasizes fundamental While research responsibilities in line with the benchmark in Europe, although
research, supported by both within the portfolio management team we continued to have an underweight exposure to
quantitative analysis and portfolio are focused by geographic region, we the region. This allocation
construction techniques. Our select investments for the Fund by
EQV(Earnings, Quality, Valuation) using a bottom-up investment approach,
strategy focuses primarily on which means that we construct
identifying quality companies that have (continued)
======================================= ====================================== ================================================
PORTFOLIO COMPOSITION TOP FIVE COUNTRIES* TOP 10 EQUITY HOLDINGS*
By sector 1. Germany 13.9% 1. Porsche A.G.-Pfd. (Germany) 2.4%
Industrials 18.5% 2. Japan 10.4 2. Syngenta A.G. (Switzerland) 1.8
Consumer Discretionary 17.4 3. United Kingdom 9.7 3. Komatsu Ltd. (Japan) 1.7
Financials 17.1 4. Switzerland 8.0 4. BHP Billiton Ltd. (Australia) 1.6
Consumer Staples 10.0 5. France 6.1 5. Daimler Chrysler A.G. (Germany) 1.6
Information Technology 8.3 6. WPP Group PL (United Kingdom) 1.6
Energy 5.9 Total Net Assets $4.31 billion 7. InBev N.V. (Belgium) 1.6
Health Care 5.8 8. Bharat Heavy Electricals Ltd. (India) 1.6
Materials 5.7 Total Number of Holdings* 91 9. Teva Pharamaceutical
Telecommunication Services 1.7 Industries Ltd.-ADR (Israel) 1.5
Utilities 1.1 The Fund's holdings are subject to 10. Keppel Corp. Ltd. (Singapore) 1.5
Money Market Funds Plus Other change, and there is no assurance that
Assets Less Liabilities 8.5 the Fund will continue to hold any
particular security.
* Excluding money market fund
holdings.
======================================= ====================================== =================================================
4
AIM International Growth Fund
should not be construed as a bias ORIX CORP. declined due to concerns Clas G. Olsson
against European stocks--indeed we over the impact of the subprime [OLSSON Senior portfolio manager
continue to find very compelling mortgage problems in the U.S. However, PHOTO] and head of AIM's International
investment opportunities there--but the portfolio's financial stocks Investment Management Unit,
rather as an indication of our remain a liquid, high-quality is lead manager of AIM International Growth Fund
flexibility in seeking investment investment in global growth with respect to the Fund's investments in Europe
opportunities across international opportunities. and Canada. Mr. Olsson joined AIM in 1994. Mr.
markets, both developed and emerging. Olsson became a commissioned naval officer at
The Fund also benefited from its the Royal Swedish Naval Academy in 1988. He also
Holdings in emerging markets such as large/midcap flexibility, which earned a B.B.A. from The University of Texas at
Brazil, India, Korea, South Africa and enabled us to invest in several Austin.
Taiwan--countries not represented in attractive, under-followed mid-cap
the EAFE benchmarks--gave the Fund a names. Foreign exchange was another Barrett K. Sides
competitive edge. Over the 12-month contributor to Fund performance. Our [SIDES Senior portfolio manager
period, emerging markets accounted for exposure to the appreciating euro, PHOTO] is lead manager of AIM
a larger proportion of relative Fund compared with the U.S. dollar, added International Growth Fund
outperformance. Despite very strong value to the Fund's overall returns as with respect to the Fund's investments in the
emerging market returns, however, the well. As we do not typically hedge Asia Pacific region and Latin America. He joined
Fund's exposure to these markets currencies--we buy stocks in their AIM in 1990. Mr. Sides graduated with a B.S. in
remained 19.5%. This reflects the local currency and then translate that economics from Bucknell University. He also
Fund's valuation discipline, which led value back into dollars for the earned an M.B.A. in international business from
to the sale of several emerging-markets Fund--foreign currency appreciation the University of St. Thomas.
stocks because we perceived their boosted Fund performance.
valuations had become stretched. We Shuxin Cao
selected our emerging-market holdings IN CLOSING [CAO Chartered Financial
using the same rigorous EQV investment PHOTO] Analyst, senior portfolio
discipline that we use for selecting The performance of international manager, is manager of AIM
developed-market stocks. We believe stocks over the last several years
that many emerging-market companies are underscores the investment International Growth Fund. He joined AIM in 1997
higher quality investments than many opportunities beyond U.S. borders. Mr. Cao graduated from Tianjin Foreign Language
stocks in developed markets and that, Although the Fund has experienced Institute with a B.A. in English. He also earned
emergingmarkets exposure should not strong double-digit returns over the an M.B.A. from Texas A&M University and is a
necessarily be viewed as low quality. past 12 months, it would be imprudent certified public accountant.
for us to suggest that such a level of
A nearly 50% underweight exposure in performance is sustainable over the Matthew W. Dennis
Japan favored relative results as well. long term. [DENNIS Chartered Financial
We continue to believe that the PHOTO] Analyst, portfolio manager, is
Japanese market is fairly valued and We welcome new investors who have manager of AIM International
offers limited growth prospects joined the Fund during the reporting Growth Fund. He joined AIM in 2000. Mr. Dennis
relative to non-Japan Asia. Although period and want to thank all of our graduated with a B.A. in economics from The
the Fund delivered solid positive shareholders for your continued University of Texas at Austin. He also earned an
results across all major markets, an investment in AIM International Growth M.S. in finance from Texas A&M University.
underweight exposure to the strong Fund.
Australian market and select holdings Jason T. Holzer
in France detracted from relative THE VIEWS AND OPINIONS EXPRESSED IN [HOLZER Chartered Financial
results. MANAGEMENT'S DISCUSSION OF FUND PHOTO] Analyst, senior portfolio
PERFORMANCE ARE THOSE OF A I M manager, is manager of AIM
Sector performance was also ADVISORS, INC. THESE VIEWS AND International Growth Fund. He joined AIM in
broad-based, with every sector OPINIONS ARE SUBJECT TO CHANGE AT ANY 1996. He earned a B.A. in quantitative economics
producing double-digit returns for the TIME BASED ON FACTORS SUCH AS MARKET and an M.S. in engineering economic systems from
period. Portfolio holdings outperformed AND ECONOMIC CONDITIONS. THESE VIEWS Stanford University.
their corresponding sector index in AND OPINIONS MAY NOT BE RELIED UPON AS
nine of the 10 sectors. German INVESTMENT ADVICE OR RECOMMENDATIONS, Assisted by the Asia Pacific/Latin
automobile manufacturer PORSCHE, OR AS AN OFFER FOR A PARTICULAR America and Europe/Canada Teams
Chinese insurance provider PING AN SECURITY. THE INFORMATION IS NOT A
INSURANCE and Korean shipbuilder COMPLETE ANALYSIS OF EVERY ASPECT OF
HYUNDAI HEAVY were all tripledigit ANY MARKET, COUNTRY, INDUSTRY,
performers for the period. SECURITY OR THE FUND. STATEMENTS OF
FACT ARE FROM SOURCES CONSIDERED
In contrast, while Fund holdings in RELIABLE, BUT A I M ADVISORS, INC.
the materials sector delivered positive MAKES NO REPRESENTATION OR WARRANTY AS
results, an underweight position in TO THEIR COMPLETENESS OR ACCURACY.
this strong sector was a drag on ALTHOUGH HISTORICAL PERFORMANCE IS NO
relative returns. In addition, although GUARANTEE OF FUTURE RESULTS, THESE
holdings in the financials sector did INSIGHTS MAY HELP YOU UNDERSTAND OUR
well over the period, select holdings INVESTMENT MANAGEMENT PHILOSOPHY.
SUCH as COMMERZBANK, MIZUHO FINANCIAL
and See important Fund and index
disclosures later in this report.
5
AIM International Growth Fund
YOUR FUND'S LONG-TERM PERFORMANCE
Past performance cannot guarantee This chart, which is a logarithmic
comparable future results. chart, presents the fluctuations in
the value of the Fund and its indexes.
The data shown in the chart include We believe that a logarithmic chart is
reinvested distributions, applicable more effective than other types of
sales charges, Fund expenses and charts in illustrating changes in
management fees. Index results include value during the early years shown in
reinvested dividends, but they do not the chart. The vertical axis, the one
reflect sales charges. Performance of that indicates the dollar value of an
an index of funds reflects fund investment, is constructed with each
expenses and management fees; segment representing a percent change
performance of a market index does not. in the value of the investment. In
Performance shown in the chart and this chart, each segment represents a
table(s) does not reflect deduction of doubling, or 100% change, in the value
taxes a shareholder would pay on Fund of the investment. In other words, the
distributions or sale of Fund shares. space between $5,000 and $10,000 is
Performance of the indexes does not the same size as the space between
reflect the effects of taxes. $10,000 and $20,000, and so on.
6
====================================================================================================================================
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT
INDEX DATA FROM 3/31/92, FUND DATA FROM 4/7/92
AIM INTERNATIONAL
GROWTH FUND MSCI EAFE MSCI EAFE
DATE -CLASS A SHARES INDEX(1) GROWTH INDEX(1)
3/31/92 $10000 $10000 8/97 20007 17558 15849
4/92 $ 9710 10047 9777 9/97 21726 18541 16897
5/92 10293 10720 10508 10/97 19864 17116 15298
6/92 10185 10211 10042 11/97 19876 16942 15265
7/92 9796 9950 9884 12/97 20011 17089 15461
8/92 9959 10574 10658 1/98 20203 17871 16160
9/92 9775 10365 10437 2/98 21581 19018 17232
10/92 9602 9822 9895 3/98 22960 19603 17465
11/92 9634 9914 10034 4/98 23295 19758 17640
12/92 9702 9965 10046 5/98 23715 19662 17516
1/93 9723 9964 9955 6/98 23739 19811 17758
2/93 9940 10265 10239 7/98 24147 20012 17838
3/93 10524 11160 10966 8/98 20802 17533 15922
4/93 11034 12219 11852 9/98 20264 16995 15474
5/93 11369 12477 12201 10/98 21078 18767 17044
6/93 11142 12282 12091 11/98 21953 19728 17868
7/93 11445 12712 12444 12/98 22697 20507 18894
8/93 12289 13399 13079 1/99 22965 20446 18993
9/93 12420 13097 12760 2/99 21916 19959 18376
10/93 13189 13501 13163 3/99 22282 20792 18625
11/93 12810 12320 11872 4/99 23001 21634 18815
12/93 14144 13210 12572 5/99 22159 20520 17998
1/94 14739 14327 13517 6/99 23573 21320 18695
2/94 14284 14287 13415 7/99 24049 21954 19054
3/94 13525 13672 12755 8/99 24073 22034 19161
4/94 13981 14252 13281 9/99 24598 22256 19465
5/94 13851 14170 13126 10/99 26502 23090 20508
6/94 13633 14370 13251 11/99 30003 23892 22010
7/94 14154 14509 13367 12/99 35200 26036 24460
8/94 14555 14852 13670 1/00 32771 24382 23084
9/94 14197 14384 13214 2/00 36074 25038 24364
10/94 14630 14863 13584 3/00 34959 26009 24821
11/94 13762 14149 12973 4/00 32138 24640 23181
12/94 13670 14238 13140 5/00 30200 24038 21745
1/95 12892 13691 12636 6/00 31580 24978 22521
2/95 13220 13651 12632 7/00 30794 23931 21110
3/95 13705 14503 13426 8/00 31998 24139 21334
4/95 14134 15048 14020 9/00 29352 22963 19922
5/95 14460 14869 13859 10/00 27338 22421 19001
6/95 14709 14608 13572 11/00 25034 21580 18124
7/95 15521 15518 14437 12/00 26153 22347 18464
8/95 15204 14926 13830 1/01 26535 22336 18412
9/95 15486 15217 14146 2/01 23536 20661 16542
10/95 15396 14808 13764 3/01 21886 19284 15397
11/95 15453 15220 14143 4/01 23140 20624 16452
12/95 15913 15833 14635 5/01 22800 19896 15789
1/96 16295 15898 14645 6/01 22554 19083 15022
2/96 16631 15952 14696 7/01 22035 18735 14658
3/96 16920 16291 15049 8/01 21244 18261 13989
4/96 17465 16764 15413 9/01 19228 16411 12665
5/96 17545 16456 15091 10/01 19691 16831 13169
6/96 17905 16549 15144 11/01 19910 17452 13845
7/96 17024 16065 14654 12/01 20304 17555 13926
8/96 17419 16100 14668 1/02 19486 16623 13175
9/96 17895 16528 15070 2/02 19732 16739 13352
10/96 17825 16359 14945 3/02 20562 17726 13922
11/96 18659 17010 15423 4/02 20589 17762 13933
12/96 18929 16791 15142 5/02 20820 17987 13961
1/97 18882 16203 14511 6/02 20384 17271 13601
2/97 19097 16468 14735 7/02 18395 15566 12151
3/97 18943 16528 14823 8/02 18408 15530 12057
4/97 18895 16615 14971 9/02 16473 13863 11008
5/97 20029 17697 15851 10/02 17290 14608 11630
6/97 21069 18673 16773 11/02 17589 15271 11972
7/97 21892 18975 17174 12/02 17412 14757 11694
====================================================================================================================================
Source: (1) Lipper Inc.
====================================================================================================================================
[MOUNTAIN CHART]
1/03 16745 14141 11115
2/03 16514 13816 10876
3/03 16268 13545 10761
4/03 17236 14873 11693
5/03 18258 15774 12297
6/03 18639 16155 12511
7/03 18747 16546 12675
8/03 19047 16946 12907
9/03 19483 17468 13344
10/03 20750 18557 14111
11/03 21132 18969 14441
12/03 22252 20451 15435
1/04 22962 20740 15736
2/04 23588 21219 16034
3/04 23520 21339 16047
4/04 23014 20856 15648
5/04 23191 20926 15608
6/04 23532 21385 15817
7/04 22782 20691 15174
8/04 22959 20782 15191
9/04 23846 21325 15566
10/04 24788 22052 16087
11/04 26314 23559 17195
12/04 27459 24592 17924
1/05 27009 24141 17510
2/05 28222 25184 18212
3/05 27581 24551 17765
4/05 26748 23974 17422
5/05 26967 23986 17474
6/05 27636 24304 17614
7/05 28808 25049 18151
8/05 29776 25682 18672
9/05 30484 26826 19458
10/05 29503 26042 18926
11/05 30580 26679 19283
12/05 32268 27921 20303
1/06 34739 29635 21554
2/06 34479 29569 21309
3/06 35482 30544 22133
4/06 37090 32003 23140
5/06 35205 30760 22161
6/06 35149 30758 22190
7/06 35494 31062 22293
8/06 36633 31916 22831
9/06 36812 31966 22703
10/06 38270 33209 23476
11/06 39824 34201 24159
12/06 41270 35275 24837
1/07 41604 35514 25036
2/07 41034 35800 25229
3/07 42700 36713 26066
4/07 44865 38343 27186
5/07 46152 39016 27731
6/07 46568 39064 27802
7/07 46000 38489 27576
8/07 45848 37887 27305
9/07 48301 39914 29005
10/07 50771 41482 30171
====================================================================================================================================
AIM International Growth Fund
=========================================== =========================================
Average Annual Total Returns Average Annual Total Returns
As of 10/31/07, including applicable sales As of 9/30/07, the most recent calendar
charges quarter-end, including applicable sales
charges
Class A Shares
Inception (4/7/92) 11.00% Class A Shares
10 Years 9.22 Inception (4/7/92) 10.71%
5 Years 22.64 10 Years 7.71
1 Year 25.29 5 Years 22.62
1 Year 23.98
Class B Shares
Inception (9/15/94) 9.49% Class B Shares
10 Years 9.20 Inception (9/15/94) 9.14%
5 Years 22.97 10 Years 7.69
1 Year 26.59 5 Years 22.94
1 Year 25.23
Class C Shares
Inception (8/4/97) 7.97% Class C Shares
10 Years 9.05 Inception (8/4/97) 7.52%
5 Years 23.14 10 Years 7.54
1 Year 30.61 5 Years 23.12
1 Year 29.24
Class R Shares
10 Years 9.57% Class R Shares
5 Years 23.64 10 Years 8.05%
1 Year 32.26 5 Years 23.63
1 Year 30.87
=========================================== =========================================
Class R shares' inception date is June 3, The total annual Fund operating that may be imposed on a total redemption
2002. Returns since that date are expense ratio set forth in the most of retirement plan assets within the first
historical returns. All other returns are recent Fund prospectus as of the date of year.
blended returns of historical Class R share this report for Class A, Class B, Class C
performance and restated Class A share and Class R shares was 1.55%, 2.30%, The performance of the Fund's share
performance (for periods prior to the 2.30% and 1.80%, respectively. The classes will differ primarily due to
inception date of Class R shares) at net expense ratios presented above may vary different sales charge structures and
asset value, adjusted to reflect the higher from the expense ratios presented in class expenses.
Rule 12b-1 fees applicable to Class R other sections of this report that are
shares. Class A shares' inception date is based on expenses incurred during the A redemption fee of 2% will be
April 7, 1992. period covered by this report. imposed on certain redemptions or
exchanges out of the Fund within 30 days
The performance data quoted represent Class A share performance reflects of purchase. Exceptions to the redemption
past performance and cannot guarantee the maximum 5.50% sales charge, and Class fee are listed in the Fund's prospectus.
comparable future results; current B and Class C share performance reflects
performance may be lower or higher. Please the applicable contingent deferred sales ==========================================
visit AIMinvestments.com for the most charge (CDSC) for the period involved.
recent month-end performance. Performance The CDSC on Class B shares declines from For a discussion of the risks of investing
figures reflect reinvested distributions, 5% beginning at the time of purchase to in your Fund and indexes used in this
changes in net asset value and the effect 0% at the beginning of the seventh year. report, please turn the page.
of the maximum sales charge unless The CDSC on Class C shares is 1% for the
otherwise stated. Investment return and first year after purchase. Class R shares ==========================================
principal value will fluctuate so that you do not have a front-end sales charge;
may have a gain or loss when you sell returns shown are at net asset value and
shares. do not reflect a 0.75% CDSC
7
AIM International Growth Fund
AIM INTERNATIONAL GROWTH FUND's investment objective is long-term growth of
capital.
o Unless otherwise stated, information presented in this report is as of
October 31, 2007, and is based on total net assets.
o Unless otherwise noted, all data in this report are from A I M Management
Group Inc.
About share classes Other information
o Class B shares are not available as an o The MSCI EAFE --REGISTERED TRADEMARK-- o The returns shown in the management's
investment for retirement plans maintained Growth Index is an unmanaged index discussion of Fund performance are based
pursuant to Section 401 of the Internal considered representative of growth on net asset values calculated for
Revenue Code, including 401(k) plans, money stocks of Europe, Australasia and the Far shareholder transactions. Generally
purchase pension plans and profit sharing East. accepted accounting principles require
plans. Plans that had existing accounts adjustments to be made to the net assets
invested in Class B shares prior to o The Lipper International Multi-Cap of the Fund at period end for financial
September 30, 2003, will continue to be Growth Funds Index is an equally weighted reporting purposes, and as such, the net
allowed to make additional purchases. representation of the largest funds in asset values for shareholder transactions
the Lipper International Multi-Cap Growth and the returns based on those net asset
o Class R shares are available only to Funds category. These funds typically values may differ from the net asset
certain retirement plans. Please see the have an above-average price-to-cash flow values and returns reported in the
prospectus for more information. ratio, priceto- book ratio, and Financial Highlights.
three-year sales-per-share growth value,
Principal risks of investing in the Fund compared to the S&P/Citigroup World o Industry classifications used in this
ex-U.S. BMI. report are generally according to the
o Investing in developing countries can add Global Industry Classification Standard,
additional risk, such as high rates of o The Fund is not managed to track the which was developed by and is the
inflation or sharply devalued currencies performance of any particular index, exclusive property and a service mark of
against the U.S. dollar. Transaction costs including the indexes defined here, and Morgan Stanley Capital International Inc.
are often higher, and there may be delays consequently, the performance of the Fund and Standard & Poor's.
in settlement procedures. may deviate significantly from the
performance of the indexes. o The Chartered Financial Analyst
o Prices of equity securities change in --REGISTERED TRADEMARK-- (CFA --REGISTERED
response to many factors including the o A direct investment cannot be made in TRADEMARK--) designation is a globally
historical and prospective earnings of the an index. Unless otherwise indicated, recognized standard for measuring the
issuer, the value of its assets, general index results include reinvested competence and integrity of investment
economic conditions, interest rates, dividends, and they do not reflect sales professionals.
investor perceptions and market liquidity. charges. Performance of an index of funds
reflects fund expenses; performance of a
o Foreign securities have additional risks, market index does not.
including exchange rate changes, political
and economic upheaval, the relative lack of
information, relatively low market
liquidity, and the potential lack of strict
financial and accounting controls and
standards.
About indexes used in this report
o The MSCI EAFE --REGISTERED TRADEMARK--
Index is a free float-adjusted market
capitalization index that is designed to
measure developed market equity
performance, excluding the U.S. and Canada.
=======================================================================================
This report must be accompanied or preceded by a currently effective Fund prospectus, =========================================
which contains more complete information, including sales charges and expenses.
Investors should read it carefully before investing. FUND NASDAQ SYMBOLS
======================================================================================= Class A Shares AIIEX
Class B Shares AIEBX
Not FDIC Insured May lose value No bank guarantee Class C Shares AIECX
Class R Shares AIERX
AIMINVESTMENTS.COM
=========================================
8
AIM International Growth Fund
SCHEDULE OF INVESTMENTS(a)
October 31, 2007
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
FOREIGN COMMON STOCKS & OTHER EQUITY
INTERESTS-86.39%
AUSTRALIA-2.01%
BHP Billiton Ltd. (Diversified Metals &
Mining)(b) 1,611,179 $ 70,132,632
- ----------------------------------------------------------------------------
Brambles Ltd. (Diversified Commercial &
Professional Services)(b)(c) 1,246,339 16,600,659
============================================================================
86,733,291
============================================================================
BELGIUM-2.30%
InBev N.V. (Brewers)(b) 708,780 67,014,646
- ----------------------------------------------------------------------------
KBC Groep N.V. (Diversified Banks)(b) 228,027 32,047,072
============================================================================
99,061,718
============================================================================
BRAZIL-0.79%
All America Latina Logistica (Railroads)(d) 2,142,600 34,042,928
============================================================================
CANADA-3.41%
Canadian National Railway Co. (Railroads) 545,600 30,632,203
- ----------------------------------------------------------------------------
Canadian Natural Resources Ltd. (Oil & Gas
Exploration & Production) 429,900 35,771,870
- ----------------------------------------------------------------------------
Manulife Financial Corp. (Life & Health
Insurance) 646,804 30,277,827
- ----------------------------------------------------------------------------
Suncor Energy, Inc. (Integrated Oil & Gas) 456,900 50,046,038
============================================================================
146,727,938
============================================================================
DENMARK-1.03%
Novo Nordisk A.S.-Class B
(Pharmaceuticals)(b) 356,806 44,434,464
============================================================================
FRANCE-6.13%
Axa (Multi-Line Insurance)(b)(c) 1,047,135 47,019,714
- ----------------------------------------------------------------------------
BNP Paribas (Diversified Banks)(b) 486,913 53,942,377
- ----------------------------------------------------------------------------
Cap Gemini S.A. (IT Consulting & Other
Services)(b) 539,284 34,535,087
- ----------------------------------------------------------------------------
Schneider Electric S.A. (Electrical
Components & Equipment)(b) 267,746 36,996,760
- ----------------------------------------------------------------------------
Societe Generale (Diversified Banks)(b) 225,966 38,096,629
- ----------------------------------------------------------------------------
Total S.A. (Integrated Oil & Gas)(b) 663,901 53,586,809
============================================================================
264,177,376
============================================================================
GERMANY-10.21%
Bayer A.G. (Diversified Chemicals)(b)(c) 758,107 63,482,111
- ----------------------------------------------------------------------------
Commerzbank A.G. (Diversified Banks)(b) 933,565 39,792,486
- ----------------------------------------------------------------------------
Continental A.G. (Tires & Rubber)(b) 225,430 34,156,991
- ----------------------------------------------------------------------------
Daimler A.G. (Automobile Manufacturers)(b) 619,341 68,485,321
- ----------------------------------------------------------------------------
Deutsche Boerse A.G. (Specialized Finance)(b) 158,244 25,112,892
- ----------------------------------------------------------------------------
MAN A.G. (Industrial Machinery)(b) 333,703 59,948,497
- ----------------------------------------------------------------------------
Merck KGaA (Pharmaceuticals)(b)(c) 258,808 32,474,598
- ----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
GERMANY-(CONTINUED)
Puma A.G. Rudolf Dassler Sport
(Footwear)(b)(c) 128,530 $ 55,237,769
- ----------------------------------------------------------------------------
Siemens A.G. (Industrial Conglomerates)(b) 450,016 61,322,614
============================================================================
440,013,279
============================================================================
GREECE-0.73%
OPAP S.A. (Casinos & Gaming) 766,840 31,328,732
============================================================================
HONG KONG-3.52%
Esprit Holdings Ltd. (Apparel Retail)(b) 3,153,500 53,623,112
- ----------------------------------------------------------------------------
Hutchison Whampoa Ltd. (Industrial
Conglomerates)(b) 4,829,000 60,856,519
- ----------------------------------------------------------------------------
Li & Fung Ltd. (Distributors)(b) 7,840,000 37,120,291
============================================================================
151,599,922
============================================================================
HUNGARY-0.59%
OTP Bank Nyrt. (Diversified Banks)(b) 465,064 25,294,474
============================================================================
INDIA-3.59%
Bharat Heavy Electricals Ltd. (Heavy
Electrical Equipment)(b) 1,000,585 66,910,449
- ----------------------------------------------------------------------------
Housing Development Finance Corp. Ltd.
(Thrifts & Mortgage Finance)(b) 494,766 35,084,575
- ----------------------------------------------------------------------------
Infosys Technologies Ltd. (IT Consulting &
Other Services)(b) 1,116,501 52,712,874
============================================================================
154,707,898
============================================================================
INDONESIA-0.77%
PT Telekomunikasi Indonesia-Series B
(Integrated Telecommunication Services)(b) 27,291,000 33,074,502
============================================================================
IRELAND-1.77%
Anglo Irish Bank Corp. PLC (Diversified
Banks)(b)(c) 2,580,426 43,578,776
- ----------------------------------------------------------------------------
CRH PLC (Construction Materials)(b) 854,233 32,766,763
============================================================================
76,345,539
============================================================================
ISRAEL-1.54%
Teva Pharmaceutical Industries Ltd.-ADR
(Pharmaceuticals) 1,508,063 66,369,853
============================================================================
ITALY-1.14%
Eni S.p.A. (Integrated Oil & Gas)(b)(c) 1,343,483 49,102,485
============================================================================
JAPAN-10.45%
Canon Inc. (Office Electronics)(b) 1,155,900 58,409,341
- ----------------------------------------------------------------------------
Denso Corp. (Auto Parts & Equipment)(b) 554,800 22,421,826
- ----------------------------------------------------------------------------
FANUC Ltd. (Industrial Machinery)(b) 566,600 62,020,899
- ----------------------------------------------------------------------------
Hitachi High-Technologies Corp. (Trading
Companies & Distributors)(b) 545,400 12,251,198
- ----------------------------------------------------------------------------
IBIDEN Co., Ltd. (Electronic Equipment
Manufacturers)(b)(c) 667,900 56,760,708
- ----------------------------------------------------------------------------
</Table>
9
AIM International Growth Fund
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
JAPAN-(CONTINUED)
Keyence Corp. (Electronic Equipment
Manufacturers)(b)(c) 125,100 $ 28,809,760
- ----------------------------------------------------------------------------
Komatsu Ltd. (Construction & Farm Machinery &
Heavy Trucks)(b)(c) 2,118,400 70,971,379
- ----------------------------------------------------------------------------
Mizuho Financial Group, Inc. (Diversified
Banks) (Acquired 10/24/05; Cost
$9,401,000)(b)(e) 1,564 8,790,356
- ----------------------------------------------------------------------------
Mizuho Financial Group, Inc. (Diversified
Banks)(b) 1,701 9,560,355
- ----------------------------------------------------------------------------
ORIX Corp. (Consumer Finance)(b) 139,370 28,365,106
- ----------------------------------------------------------------------------
Suzuki Motor Corp. (Automobile
Manufacturers)(b)(c) 1,222,300 39,944,798
- ----------------------------------------------------------------------------
Toyota Motor Corp. (Automobile
Manufacturers)(b) 908,200 51,886,774
============================================================================
450,192,500
============================================================================
MEXICO-2.09%
America Movil S.A.B de C.V.-Series L-ADR
(Wireless Telecommunication Services) 648,933 42,433,729
- ----------------------------------------------------------------------------
Desarrolladora Homex S.A. de C.V.-ADR
(Homebuilding)(f) 306,742 17,333,990
- ----------------------------------------------------------------------------
Grupo Televisa S.A.-ADR (Broadcasting & Cable
TV) 655,293 16,284,031
- ----------------------------------------------------------------------------
Urbi, Desarrollos Urbanos, S.A. de C.V.
(Homebuilding)(c)(f) 3,635,200 14,046,331
============================================================================
90,098,081
============================================================================
NETHERLANDS-2.12%
Heineken Holding N.V. (Brewers)(b) 698,610 41,470,568
- ----------------------------------------------------------------------------
TNT N.V. (Air Freight & Logistics)(b) 1,211,558 49,818,259
============================================================================
91,288,827
============================================================================
NORWAY-0.82%
Petroleum Geo-Services A.S.A. (Oil & Gas
Equipment & Services) 1,202,400 35,404,579
============================================================================
SINGAPORE-2.49%
Keppel Corp. Ltd. (Industrial
Conglomerates)(b) 6,322,000 65,237,468
- ----------------------------------------------------------------------------
United Overseas Bank Ltd. (Diversified
Banks)(b) 2,790,000 41,845,844
============================================================================
107,083,312
============================================================================
SOUTH AFRICA-0.96%
Standard Bank Group Ltd. (Diversified
Banks)(b)(c) 2,266,407 41,180,618
============================================================================
SOUTH KOREA-2.05%
Hana Financial Group Inc. (Diversified
Banks)(b) 850,090 43,249,267
- ----------------------------------------------------------------------------
Hyundai Heavy Industries Co., Ltd.
(Construction & Farm Machinery & Heavy
Trucks)(b) 79,699 45,061,166
============================================================================
88,310,433
============================================================================
</Table>
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
SPAIN-1.73%
Banco Santander S.A. (Diversified Banks)(b) 1,602,744 $ 35,037,131
- ----------------------------------------------------------------------------
Industria de Diseno Textil, S.A. (Apparel
Retail)(b) 527,670 39,438,896
============================================================================
74,476,027
============================================================================
SWEDEN-2.37%
Assa Abloy A.B.-Class B (Building
Products)(b) 1,822,591 38,412,625
- ----------------------------------------------------------------------------
Atlas Copco A.B.-Class A (Industrial
Machinery)(b) 1,757,700 29,454,827
- ----------------------------------------------------------------------------
Swedish Match A.B. (Tobacco)(b) 1,524,648 34,181,106
============================================================================
102,048,558
============================================================================
SWITZERLAND-8.04%
Adecco S.A. (Human Resource & Employment
Services)(b)(c) 285,625 17,238,826
- ----------------------------------------------------------------------------
Compagnie Financiere Richemont S.A.-Class A
(Apparel, Accessories & Luxury Goods)(b)(g) 585,244 41,868,420
- ----------------------------------------------------------------------------
Credit Suisse Group (Diversified Capital
Markets)(b) 598,659 40,423,558
- ----------------------------------------------------------------------------
Nestle S.A. (Packaged Foods & Meats)(b) 136,374 63,050,406
- ----------------------------------------------------------------------------
Roche Holding A.G. (Pharmaceuticals)(b) 367,631 62,854,252
- ----------------------------------------------------------------------------
Syngenta A.G. (Fertilizers & Agricultural
Chemicals)(b)(c) 329,356 79,539,432
- ----------------------------------------------------------------------------
UBS A.G. (Diversified Capital Markets)(b) 774,974 41,600,326
============================================================================
346,575,220
============================================================================
TAIWAN-2.89%
Hon Hai Precision Industry Co., Ltd.
(Electronic Manufacturing Services)(b) 6,039,088 46,410,782
- ----------------------------------------------------------------------------
MediaTek Inc. (Semiconductors)(b) 3,087,315 61,251,137
- ----------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing Co. Ltd.
(Semiconductors)(b) 8,556,139 17,075,099
============================================================================
124,737,018
============================================================================
TURKEY-1.11%
Akbank T.A.S. (Diversified Banks)(b) 5,232,457 47,925,850
============================================================================
UNITED KINGDOM-9.74%
Aviva PLC (Multi-Line Insurance)(b) 2,286,416 36,044,898
- ----------------------------------------------------------------------------
Capita Group PLC (Human Resource & Employment
Services)(b) 1,899,993 29,745,876
- ----------------------------------------------------------------------------
Enterprise Inns PLC (Restaurants)(b) 1,296,743 17,030,294
- ----------------------------------------------------------------------------
Imperial Tobacco Group PLC (Tobacco)(b) 1,112,927 56,429,370
- ----------------------------------------------------------------------------
Informa PLC (Publishing)(b) 3,192,069 35,609,501
- ----------------------------------------------------------------------------
International Power PLC (Independent Power
Producers & Energy Traders)(b) 4,885,633 49,851,343
- ----------------------------------------------------------------------------
Reckitt Benckiser PLC (Household Products)(b) 754,791 43,854,474
- ----------------------------------------------------------------------------
Shire PLC (Pharmaceuticals)(b) 1,698,552 42,493,150
- ----------------------------------------------------------------------------
</Table>
10
AIM International Growth Fund
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
UNITED KINGDOM-(CONTINUED)
Tesco PLC (Food Retail)(b) 3,940,841 $ 40,082,915
- ----------------------------------------------------------------------------
WPP Group PLC (Advertising)(b) 4,995,404 68,385,396
============================================================================
419,527,217
============================================================================
Total Foreign Common Stocks & Other
Equity Interests (Cost $2,184,153,141) 3,721,862,639
============================================================================
FOREIGN PREFERRED STOCKS-5.10%
BRAZIL-1.46%
Companhia de Bebidas das Americas-Pfd.-ADR
(Brewers) 410,483 33,540,566
- ----------------------------------------------------------------------------
Petroleo Brasileiro S.A.-Pfd.-ADR (Integrated
Oil & Gas) 351,783 29,264,828
============================================================================
62,805,394
============================================================================
GERMANY-3.64%
Henkel KGaA-Pfd. (Household Products)(b)(c) 1,012,917 51,872,789
- ----------------------------------------------------------------------------
Porsche A.G.-Pfd. (Automobile
Manufacturers)(b) 39,237 104,886,644
============================================================================
156,759,433
============================================================================
Total Foreign Preferred Stocks (Cost
$94,127,154) 219,564,827
============================================================================
</Table>
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
MONEY MARKET FUNDS-8.02%
Liquid Assets Portfolio-Institutional
Class(h) 172,824,331 $ 172,824,331
- ----------------------------------------------------------------------------
Premier Portfolio-Institutional Class(h) 172,824,331 172,824,331
============================================================================
Total Money Market Funds (Cost
$345,648,662) 345,648,662
============================================================================
TOTAL INVESTMENTS (excluding investments
purchased with cash collateral from
securities on loan)-99.51%
(Cost $2,623,928,957) 4,287,076,128
============================================================================
INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES ON LOAN
MONEY MARKET FUNDS-4.13%
Liquid Assets Portfolio-Institutional Class
(Cost $178,106,614)(h)(i) 178,106,614 178,106,614
============================================================================
TOTAL INVESTMENTS-103.64% (Cost
$2,802,035,571) 4,465,182,742
- ----------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-(3.64)% (156,749,299)
- ----------------------------------------------------------------------------
NET ASSETS-100.00% $4,308,433,443
____________________________________________________________________________
============================================================================
</Table>
Investment Abbreviations:
<Table>
ADR - American Depositary Receipt
Pfd. - Preferred
</Table>
Notes to Schedule of Investments:
(a) Industry classifications used in this report are generally according to the
Global Industry Classification Standard, which was developed by and is the
exclusive property and a service mark of Morgan Stanley Capital
International Inc. and Standard & Poor's.
(b) In accordance with the procedures established by the Board of Trustees, the
foreign security is fair valued using adjusted closing market prices. The
aggregate value of these securities at October 31, 2007 was $3,474,649,961,
which represented 80.65% of the Fund's Net Assets. See Note 1A.
(c) All or a portion of this security was out on loan at October 31, 2007.
(d) Each unit represents one common share and four preferred shares.
(e) 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 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 value of this security at October 31, 2007 represented 0.20% of the
Fund's Net Assets. Unless otherwise indicated, this security is not
considered to be illiquid.
(f) Non-income producing security.
(g) Each unit represents one A bearer share in the company and one bearer share
participation certificate in Richemont S.A.
(h) The money market fund and the Fund are affiliated by having the same
investment advisor. See Note 3.
(i) The security has been segregated to satisfy the commitment to return the
cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 8.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
11
AIM International Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2007
<Table>
ASSETS:
Investments, at value (Cost $2,278,280,295)* $3,941,427,466
- ------------------------------------------------------------
Investments in affiliated money market funds
(Cost $523,755,276) 523,755,276
============================================================
Total investments (Cost $2,802,035,571) 4,465,182,742
============================================================
Foreign currencies, at value (Cost
$62,204,078) 62,387,211
- ------------------------------------------------------------
Receivables for:
Investments sold 14,596,483
- ------------------------------------------------------------
Fund shares sold 10,149,880
- ------------------------------------------------------------
Dividends 5,950,820
- ------------------------------------------------------------
Investment for trustee deferred compensation
and retirement plans 117,775
- ------------------------------------------------------------
Other assets 85,936
============================================================
Total assets 4,558,470,847
____________________________________________________________
============================================================
LIABILITIES:
Payables for:
Investments purchased 54,357,603
- ------------------------------------------------------------
Fund shares reacquired 10,666,518
- ------------------------------------------------------------
Trustee deferred compensation and
retirement plans 317,976
- ------------------------------------------------------------
Collateral upon return of securities
loaned 178,106,614
- ------------------------------------------------------------
Accrued distribution fees 1,050,581
- ------------------------------------------------------------
Accrued trustees' and officer's fees and
benefits 5,067
- ------------------------------------------------------------
Accrued transfer agent fees 1,432,063
- ------------------------------------------------------------
Accrued operating expenses 4,100,982
============================================================
Total liabilities 250,037,404
============================================================
Net assets applicable to shares outstanding $4,308,433,443
____________________________________________________________
============================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $2,416,524,454
- ------------------------------------------------------------
Undistributed net investment income 15,135,779
- ------------------------------------------------------------
Undistributed net realized gain 213,557,151
- ------------------------------------------------------------
Unrealized appreciation 1,663,216,059
============================================================
$4,308,433,443
____________________________________________________________
============================================================
NET ASSETS:
Class A $2,899,666,248
____________________________________________________________
============================================================
Class B $ 252,203,070
____________________________________________________________
============================================================
Class C $ 274,266,187
____________________________________________________________
============================================================
Class R $ 48,320,692
____________________________________________________________
============================================================
Institutional Class $ 833,977,246
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE, UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Class A 79,284,032
____________________________________________________________
============================================================
Class B 7,444,294
____________________________________________________________
============================================================
Class C 8,088,387
____________________________________________________________
============================================================
Class R 1,335,714
____________________________________________________________
============================================================
Institutional Class 22,452,300
____________________________________________________________
============================================================
Class A:
Net asset value per share $ 36.57
- ------------------------------------------------------------
Offering price per share:
(Net asset value of $36.57 divided by
94.50%) $ 38.70
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per
share $ 33.88
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per
share $ 33.91
____________________________________________________________
============================================================
Class R:
Net asset value and offering price per
share $ 36.18
____________________________________________________________
============================================================
Institutional Class:
Net asset value and offering price per
share $ 37.14
____________________________________________________________
============================================================
</Table>
* At October 31, 2007, securities with an aggregate value of $174,674,995 were
on loan to brokers.
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
12
AIM International Growth Fund
STATEMENT OF OPERATIONS
For the year ended October 31, 2007
<Table>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $6,947,562) $ 63,257,015
- --------------------------------------------------------------------------
Dividends from affiliated money market funds (includes
securities lending income of $2,475,133) 13,097,630
- --------------------------------------------------------------------------
Interest 21,850
==========================================================================
Total investment income 76,376,495
==========================================================================
EXPENSES:
Advisory fees 29,613,472
- --------------------------------------------------------------------------
Administrative services fees 589,116
- --------------------------------------------------------------------------
Custodian fees 2,325,410
- --------------------------------------------------------------------------
Distribution fees:
Class A 5,787,780
- --------------------------------------------------------------------------
Class B 2,499,215
- --------------------------------------------------------------------------
Class C 2,224,802
- --------------------------------------------------------------------------
Class R 157,334
- --------------------------------------------------------------------------
Transfer agent fees -- A, B, C and R 6,077,025
- --------------------------------------------------------------------------
Transfer agent fees -- Institutional 176,508
- --------------------------------------------------------------------------
Trustees' and officer's fees and benefits 121,183
- --------------------------------------------------------------------------
Other 784,206
==========================================================================
Total expenses 50,356,051
==========================================================================
Less: Fees waived, expenses reimbursed and expense offset
arrangement(s) (1,404,350)
==========================================================================
Net expenses 48,951,701
==========================================================================
Net investment income 27,424,794
==========================================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from:
Investment securities 223,206,127
- --------------------------------------------------------------------------
Foreign currencies (747,375)
==========================================================================
222,458,752
==========================================================================
Change in net unrealized appreciation (depreciation) of:
Investment securities (net of estimated tax on foreign
investments of $3,379,600 -- Note 1J) 684,397,293
- --------------------------------------------------------------------------
Foreign currencies (50,810)
==========================================================================
684,346,483
==========================================================================
Net realized and unrealized gain 906,805,235
==========================================================================
Net increase in net assets resulting from operations $934,230,029
__________________________________________________________________________
==========================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
13
AIM International Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2007 and 2006
<Table>
<Caption>
OCTOBER 31, OCTOBER 31,
2007 2006
- ----------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 27,424,794 $ 10,053,852
- ----------------------------------------------------------------------------------------------
Net realized gain 222,458,752 204,916,556
- ----------------------------------------------------------------------------------------------
Change in net unrealized appreciation 684,346,483 364,049,420
==============================================================================================
Net increase in net assets resulting from operations 934,230,029 579,019,828
==============================================================================================
Distributions to shareholders from net investment income:
Class A (12,740,974) (11,764,093)
- ----------------------------------------------------------------------------------------------
Class B -- (247,654)
- ----------------------------------------------------------------------------------------------
Class C -- (134,689)
- ----------------------------------------------------------------------------------------------
Class R (100,532) (52,557)
- ----------------------------------------------------------------------------------------------
Institutional Class (3,274,673) (1,745,195)
==============================================================================================
Total distributions from net investment income (16,116,179) (13,944,188)
==============================================================================================
Distributions to shareholders from net realized gains:
Class A (6,281,149) --
- ----------------------------------------------------------------------------------------------
Class B (852,746) --
- ----------------------------------------------------------------------------------------------
Class C (647,599) --
- ----------------------------------------------------------------------------------------------
Class R (66,584) --
- ----------------------------------------------------------------------------------------------
Institutional Class (1,013,220) --
==============================================================================================
Total distributions from net realized gains (8,861,298) --
==============================================================================================
Decrease in net assets resulting from distributions (24,977,477) (13,944,188)
==============================================================================================
Share transactions-net:
Class A 356,453,495 48,312,933
- ----------------------------------------------------------------------------------------------
Class B (63,077,874) (67,603,740)
- ----------------------------------------------------------------------------------------------
Class C 30,168,251 11,602,717
- ----------------------------------------------------------------------------------------------
Class R 20,631,701 7,287,308
- ----------------------------------------------------------------------------------------------
Institutional Class 407,775,574 145,451,503
==============================================================================================
Net increase in net assets resulting from share
transactions 751,951,147 145,050,721
==============================================================================================
Net increase in net assets 1,661,203,699 710,126,361
==============================================================================================
NET ASSETS:
Beginning of year 2,647,229,744 1,937,103,383
==============================================================================================
End of year (including undistributed net investment income
of $15,135,779 and $4,574,538, respectively) $4,308,433,443 $2,647,229,744
______________________________________________________________________________________________
==============================================================================================
</Table>
See accompanying Notes to Financial Statements which are an integral part of the
financial statements.
14
AIM International Growth Fund
NOTES TO FINANCIAL STATEMENTS
October 31, 2007
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
AIM International Growth Fund (the "Fund") is a series portfolio of AIM
International Mutual Funds (the "Trust"). The Trust is a Delaware statutory
trust registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of six
separate portfolios, each authorized to issue an unlimited number of shares of
beneficial interest. The Fund currently consists of 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.
The Fund's investment objective is long-term growth of capital.
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 or official closing price as of the close of
the customary trading session on the exchange where the security is
principally traded, or lacking any sales or official closing price on a
particular day, the security may be valued at the closing bid price on that
day. Securities traded in the over-the-counter market are valued based on
prices furnished by independent pricing services or market makers. When
such securities are valued by an independent pricing service they may be
considered fair valued. Futures contracts are valued at the final
settlement price set by an exchange on which they are principally traded.
Listed options are valued at the mean between the last bid and the ask
prices from the exchange on which they are principally traded. Options not
listed on an exchange are valued by an independent source at the mean
between the last bid and ask prices. For purposes of determining net asset
value per share, futures and option contracts generally are valued 15
minutes after the close of the customary trading session of the New York
Stock Exchange ("NYSE").
Investments in open-end and closed-end registered investment companies
that do not trade on an exchange are valued at the end of day net asset
value per share. Investments in open-end and closed-end registered
investment companies that trade on an exchange are valued at the last sales
price or official closing price as of the close of the customary trading
session on the exchange where the security is principally traded.
Debt obligations (including convertible bonds) and unlisted equities are
fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes 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 specific securities, dividend rate, yield, quality,
type of issue, coupon rate, maturity, individual trading characteristics
and other market data. Short-term obligations, including commercial paper,
having 60 days or less to maturity are recorded at amortized cost which
approximates value. Debt securities are subject to interest rate and credit
risks. In addition, all debt securities involve some risk of default with
respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted
into U.S. dollar amounts using the applicable exchange rates as of the
close of the NYSE. If market quotations are available and reliable for
foreign exchange traded equity securities, the securities will be valued at
the market quotations. Because trading hours for certain foreign securities
end before the close of the NYSE, closing market quotations may become
unreliable. If between the time trading ends on a particular security and
the close of the customary trading session on the NYSE, events occur that
are significant and may make the closing price unreliable, the Fund may
fair value the security. If the event is likely to have affected the
closing price of the security, the security will be valued at fair value in
good faith using procedures approved by the Board of Trustees. Adjustments
to closing prices to reflect fair value may also be based on a screening
process of an independent pricing service to indicate the degree of
certainty, based on historical data, that the closing price in the
principal market where a foreign security trades is not the current value
as of the close of the NYSE. Foreign securities meeting the approved degree
of certainty that the price is not reflective of current value will be
priced at the indication of fair value from the independent pricing
service. Multiple factors may be considered by the independent pricing
service in determining adjustments to reflect fair value and may include
information relating to sector indices, ADRs and domestic and foreign index
futures. Foreign securities may have additional risks including exchange
rate changes, potential for sharply devalued currencies and high inflation,
political and economical upheaval, the relative lack of issuer information,
relatively low market liquidity and the potential lack of strict financial
and accounting controls and standards.
Securities for which market prices are not provided by any of the above
methods may be 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
unreliable are valued at fair value as determined in good faith by or under
the supervision of the Trust's officers following procedures approved by
the Board of Trustees. Issuer specific events, market trends, bid/ask
quotes of brokers and information providers and other market data may be
reviewed in the course of making a good faith determination of a security's
fair value.
Valuations change in response to many factors including the historical
and prospective earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and
market liquidity.
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.
15
AIM International Growth Fund
The Fund may periodically participate in litigation related to Fund
investments. As such, the Fund may receive proceeds from litigation
settlements. Any proceeds as received are included in the Statement of
Operations as realized gain/loss for investments no longer held and as
unrealized gain/loss for investments still held.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities. Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
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. COUNTRY DETERMINATION -- For the purposes of making investment selection
decisions and presentation in the Schedule of Investments, AIM may
determine the country in which an issuer is located and/or credit risk
exposure based on various factors. These factors include the laws of the
country under which the issuer is organized, where the issuer maintains a
principal office, the country in which the issuer derives 50% or more of
its total revenues and the country that has the primary market for the
issuer's securities, as well as other criteria. Among the other criteria
that may be evaluated for making this determination are the country in
which the issuer maintains 50% or more of its assets, the type of security,
financial guarantees and enhancements, the nature of the collateral and the
sponsor organization. Country of issuer and/or credit risk exposure has
been determined to be the United States of America unless otherwise noted.
D. 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 treat a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
E. 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 to distribute substantially all of the
Fund's taxable earnings to shareholders. As such, the Fund will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gain) that is distributed to shareholders.
Therefore, no provision for federal income taxes is recorded in the
financial statements.
F. 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 and other shareholder recordkeeping 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.
G. ACCOUNTING ESTIMATES -- 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 including estimates and assumptions related to
taxation. Actual results could differ from those estimates.
H. INDEMNIFICATIONS -- Under the Trust's organizational documents, each
Trustee, officer, employee or other agent of the Trust (including the
Trust's investment manager) is indemnified against certain liabilities that
may arise out of performance of their duties to the Fund.
Additionally, in the normal course of business, the Fund enters into
contracts that contain a variety of indemnification clauses. The Fund's
maximum exposure under these arrangements is unknown as this would involve
future claims that may be made against the Fund that have not yet occurred.
The risk of material loss as a result of such indemnification claims is
considered remote.
I. REDEMPTION FEES -- The Fund has a 2% redemption fee that is to be retained
by the Fund to offset transaction costs and other expenses associated with
short-term redemptions and exchanges. The fee, subject to certain
exceptions, is imposed on certain redemptions, including exchanges of
shares held less than 30 days. The redemption fee is recorded as an
increase in shareholder capital and is allocated among the share classes
based on the relative net assets of each class.
J. FOREIGN CURRENCY TRANSLATIONS -- Foreign currency is valued at the close of
the NYSE based on quotations posted by banks and major currency dealers.
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 (i) sales
of foreign currencies, (ii) currency gains or losses realized between the
trade and settlement dates on securities transactions, and (iii) 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.
16
AIM International Growth Fund
The Fund may invest in foreign securities which may be subject to foreign
taxes on income, gains on investments or currency repatriation, a portion
of which may be recoverable. Taxes are accrued based on the Fund's current
interpretation of tax regulations and rates that exist in the foreign
markets in which the Fund invests.
K. 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.
Fluctuations in the value of these contracts are recorded as unrealized
appreciation (depreciation) until the contracts are closed. When these
contracts are closed, realized gains (losses) are recorded. Realized and
unrealized gains and losses on these contracts are included in the
Statement of Operations. The Fund could be exposed to risk, which may be in
excess of the amount reflected in the Statement of Assets and Liabilities,
if counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust 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 based on the annual rate of the Fund's
average daily net assets as follows:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $1 billion 0.95%
- -------------------------------------------------------------------
Over $1 billion 0.90%
__________________________________________________________________
===================================================================
</Table>
Effective July 1, 2007, the Trustees approved a reduced contractual advisory
fee schedule for the Fund. Prior to July 1, 2007 AIM had contractually waived
advisory fees to the same reduced advisory fee schedule. Under the terms of the
investment advisory agreement, the Fund will pay an advisory fee to AIM based on
the following annual rates of the Fund's average daily net assets:
<Table>
<Caption>
AVERAGE NET ASSETS RATE
- -------------------------------------------------------------------
First $250 million 0.935%
- -------------------------------------------------------------------
Next $250 million 0.91%
- -------------------------------------------------------------------
Next $500 million 0.885%
- -------------------------------------------------------------------
Next $1.5 billion 0.86%
- -------------------------------------------------------------------
Next $2.5 billion 0.835%
- -------------------------------------------------------------------
Next $2.5 billion 0.81%
- -------------------------------------------------------------------
Next $2.5 billion 0.785%
- -------------------------------------------------------------------
Over $10 billion 0.76%
__________________________________________________________________
===================================================================
</Table>
Further, effective July 1, 2007, AIM has contractually agreed, through at
least June 30, 2008, to waive 100% of the advisory fee AIM receives from the
affiliated money market funds on investments by the Fund in such affiliated
money market funds (excluding investments made in affiliated money market funds
with cash collateral from securities loaned by the fund). Prior to July 1, 2007,
AIM had voluntarily agreed to waive 25% of the advisory fee AIM receives from
the affiliated money market funds on investments by the Fund in such affiliated
money market funds.
For the year ended October 31, 2007, AIM waived advisory fees of $1,099,718.
At the request of the Trustees of the Trust, Invesco Ltd. ("Invesco") agreed
to reimburse expenses incurred by the Fund in connection with market timing
matters in the AIM Funds, which may include legal, audit, shareholder reporting,
communications and trustee expenses. These expenses along with the related
expense reimbursement are included in the Statement of Operations. For the year
ended October 31, 2007, Invesco reimbursed expenses of the Fund in the amount of
$1,556.
The Trust has entered into a master administrative services agreement with
AIM pursuant to which the Fund has agreed to pay AIM for certain administrative
costs incurred in providing accounting services, to the Fund. For the year ended
October 31, 2007, expenses incurred under the agreement are shown in the
Statement of Operations as administrative services fees.
The Trust has entered into a transfer agency and service agreement with AIM
Investment Services, Inc. ("AIS") pursuant to which the Fund has agreed to pay
AIS a fee for providing transfer agency and shareholder services to the Fund and
reimburse AIS for certain expenses incurred by AIS in the course of providing
such services. AIS may make payments to intermediaries that provide omnibus
account services, sub-accounting services and/or networking services. All fees
payable by AIS to intermediaries that provide omnibus account services or
sub-accounting are charged back to the Fund, subject to certain limitations
approved by the Trust's Board of Trustees. For the year ended October 31, 2007,
expenses incurred under the agreement are shown in the Statement of Operations
as transfer agent fees.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("ADI") to serve as the distributor for the Class A, Class B,
Class C, Class R and Institutional 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 and Class R shares (collectively the "Plans").
The Fund, pursuant to the Plans, pays ADI compensation at the annual
17
AIM International Growth Fund
rate of 0.25% 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 the Plan payments, up to 0.25% of
the average daily net assets of each class of shares may be paid to furnish
continuing personal shareholder services to 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. Financial Industry Regulatory
Authority ("FINRA"), formerly known as National Association of Securities
Dealers, rules 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. For the year
ended October 31, 2007, expenses incurred under the Plans are shown in the
Statement of Operations as distribution fees.
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, 2007, ADI advised the Fund that it retained $305,376 in
front-end sales commissions from the sale of Class A shares and $6,654,
$132,833, $23,464 and $0 from Class A, Class B, Class C and Class R shares,
respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of
AIM, AIS and/or ADI.
NOTE 3--INVESTMENTS IN AFFILIATES
The Fund is permitted, pursuant to procedures approved by the Board of Trustees,
to invest daily available cash balances and cash collateral from securities
lending transactions in affiliated money market funds. The Fund and the money
market funds below have the same investment advisor and therefore, are
considered to be affiliated. The tables below show the transactions in and
earnings from investments in affiliated money market funds for the year ended
October 31, 2007. During the period each investment maintained a $1.00 net asset
value, as such there is no realized gain/(loss) and no change in unrealized
appreciation/(depreciation).
INVESTMENTS OF DAILY AVAILABLE CASH BALANCES:
<Table>
<Caption>
VALUE PURCHASES PROCEEDS VALUE DIVIDEND
FUND 10/31/06 AT COST FROM SALES 10/31/07 INCOME
- ---------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-Institutional
Class $ 77,178,022 $444,655,759 $(349,009,450) $172,824,331 $ 5,321,510
- ---------------------------------------------------------------------------------------------------
Premier
Portfolio-Institutional
Class 77,178,022 444,655,759 (349,009,450) 172,824,331 5,300,987
===================================================================================================
Subtotal $154,356,044 $889,311,518 $(698,018,900) $345,648,662 $10,622,497
===================================================================================================
</Table>
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LENDING TRANSACTIONS:
<Table>
<Caption>
VALUE PURCHASES PROCEEDS VALUE DIVIDEND
FUND 10/31/06 AT COST FROM SALES 10/31/07 INCOME*
- ---------------------------------------------------------------------------------------------------
Liquid Assets
Portfolio-Institutional
Class $ 71,397,200 $1,847,276,049 $(1,740,566,635) $178,106,614 $ 2,475,133
===================================================================================================
Total
Investments
in
Affiliates $225,753,244 $2,736,587,567 $(2,438,585,535) $523,755,276 $13,097,630
___________________________________________________________________________________________________
===================================================================================================
</Table>
* Net of compensation to counterparties.
NOTE 4--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM Funds under specified conditions outlined in procedures adopted by the Board
of Trustees of the Trust. The procedures have been designed to ensure that any
purchase or sale of securities by the Fund from or to another fund or portfolio
that is or could be considered an affiliate by virtue of having a common
investment advisor (or affiliated investment advisors), common Trustees and/or
common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined
under the procedures, each transaction is effected at the current market price.
Pursuant to these procedures, for the year ended October 31, 2007, the Fund
engaged in securities purchases of $4,623,606.
NOTE 5--EXPENSE OFFSET ARRANGEMENTS
The expense offset arrangements are comprised of (i) transfer agency credits
which result from balances in Demand Deposit Accounts (DDA) used by the transfer
agent for clearing shareholder transactions, (ii) custodian credits which result
from periodic overnight cash balances at the custodian and (iii) a one time
custodian fee credit used to offset custodian fees. For the year ended October
31, 2007, the Fund received credits from these arrangements, which resulted in
the reduction of the Fund's total expenses of $303,076.
NOTE 6--TRUSTEES' AND OFFICER'S FEES AND BENEFITS
"Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund
to pay remuneration to certain Trustees and Officers of the Fund. Trustees have
the option to defer compensation payable by the Fund, and "Trustees' and
Officer's Fees and Benefits" also include amounts accrued by the Fund to fund
such deferred compensation amounts. Those Trustees who defer compensation have
the option to select various AIM Funds in which their deferral accounts shall be
deemed to be invested. Finally, certain current Trustees are eligible to
participate in a retirement plan that provides for benefits to be paid upon
retirement to Trustees over a period of time based on the number of years of
service. The Fund may have certain former Trustees who
18
AIM International Growth Fund
also participate in a retirement plan and receive benefits under such plan.
"Trustees' and Officer's Fees and Benefits" include amounts accrued by the Fund
to fund such retirement benefits. Obligations under the deferred compensation
and retirement plans represent unsecured claims against the general assets of
the Fund.
During the year ended October 31, 2007, the Fund paid legal fees of $17,723
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Independent Trustees. A member of that firm is a Trustee of the Trust.
NOTE 7--BORROWINGS
Pursuant to an exemptive order from the Securities and Exchange Commission, 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. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. 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.
The Fund is a party to an uncommitted unsecured revolving 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
credit facility, 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 year ended October 31, 2007, the Fund did not borrow or lend
under the interfund lending facility or borrow under the uncommitted unsecured
revolving credit facility.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with SSB, the custodian bank. To compensate the
custodian bank for such overdrafts, the overdrawn Fund may either (i) leave
funds as a compensating balance in the account so the custodian bank can be
compensated by earning the additional interest; or (ii) compensate by paying the
custodian bank at a rate agreed upon by the custodian bank and AIM, not to
exceed the contractually agreed upon rate.
NOTE 8--PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities having a market value up to 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 received in connection with these loans is
invested in short-term money market instruments or affiliated money market
funds. 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. 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. The Fund could also experience delays and costs in gaining
access to the collateral. The Fund bears the risk of any deficiency in the
amount of the collateral available for return to the borrower due to any loss on
the collateral invested.
At October 31, 2007, securities with an aggregate value of $174,674,995 were
on loan to brokers. The loans were secured by cash collateral of $178,106,614
received by the Fund and subsequently invested in an affiliated money market
fund. For the year ended October 31, 2007, the Fund received dividends on cash
collateral investments of $2,475,133 for securities lending transactions, which
are net of compensation to counterparties.
NOTE 9--DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
DISTRIBUTIONS TO SHAREHOLDERS:
The tax character of distributions paid during the years ended October 31, 2007
and 2006 was as follows:
<Table>
<Caption>
2007 2006
- ----------------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $16,116,179 $13,944,188
- ----------------------------------------------------------------------------------------
Long-term capital gain 8,861,298 --
========================================================================================
Total distributions $24,977,477 $13,944,188
________________________________________________________________________________________
========================================================================================
</Table>
19
AIM International Growth Fund
TAX COMPONENTS OF NET ASSETS:
As of October 31, 2007, the components of net assets on a tax basis were as
follows:
<Table>
<Caption>
2007
- ----------------------------------------------------------------------------
Undistributed ordinary income $ 20,992,440
- ----------------------------------------------------------------------------
Undistributed long-term gain 220,593,265
- ----------------------------------------------------------------------------
Net unrealized appreciation -- investments 1,656,601,208
- ----------------------------------------------------------------------------
Temporary book/tax differences (282,848)
- ----------------------------------------------------------------------------
Capital loss carryover (5,995,076)
- ----------------------------------------------------------------------------
Shares of beneficial interest 2,416,524,454
============================================================================
Total net assets $4,308,433,443
____________________________________________________________________________
============================================================================
</Table>
The difference between book-basis and tax-basis unrealized appreciation
(depreciation) is due to differences in the timing of recognition of gains and
losses on investments for tax and book purposes. The Fund's net unrealized
appreciation difference is attributable primarily to losses on wash sales and
the recognition of unrealized gains for tax on passive foreign investment
companies. The tax-basis net unrealized appreciation on investments amount
includes appreciation on foreign currencies of $68,889.
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 trustee deferral of compensation and
retirement plan benefits.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions. Under these limitation rules, the Fund is limited as of October
31, 2007 to utilizing $2,997,538 of capital loss carryforward in the fiscal year
ended October 31, 2008.
The Fund utilized $2,997,538 of capital loss carryforward in the current
period to offset net realized capital gain for federal income tax purposes. The
Fund has a capital loss carryforward as of October 31, 2007 which expires as
follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------
October 31, 2009 $5,995,076
_____________________________________________________________________________
=============================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
NOTE 10--INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities,
U.S. Treasury obligations and money market funds, if any) purchased and sold by
the Fund during the year ended October 31, 2007 was $1,263,303,419 and
$682,532,997, respectively.
<Table>
<Caption>
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENT SECURITIES ON A TAX BASIS
- ------------------------------------------------------------------------------
Aggregate unrealized appreciation of investment securities $1,673,703,131
- ------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (17,170,812)
==============================================================================
Net unrealized appreciation of investment securities $1,656,532,319
______________________________________________________________________________
==============================================================================
Cost of investments for tax purposes is $2,808,650,423.
</Table>
NOTE 11--RECLASSIFICATION OF PERMANENT DIFFERENCES
Primarily as a result of differing book/tax treatment of foreign currency
transactions on October 31, 2007, undistributed net investment income was
decreased by $747,374 and undistributed net realized gain was increased by
$747,374. This reclassification had no effect on the net assets of the Fund.
20
AIM International Growth Fund
NOTE 12--SHARE INFORMATION
The Fund currently offers five different classes of shares: Class A, Class B,
Class C, Class R and Institutional Class. Class A shares are sold with a
front-end sales charge unless certain waiver criteria are met and under certain
circumstances load waiver shares may be subject to a CDSC. Class B shares and
Class C shares are sold with a CDSC. Class R shares and Institutional Class
shares are sold at net asset value. Under certain circumstances, Class R shares
are subject to a CDSC. Generally, Class B shares will automatically convert to
Class A shares on or about the month-end which is at least eight years after the
date of purchase.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING
- --------------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 2007(A) OCTOBER 31, 2006
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------------
Sold:
Class A 27,708,568 $ 890,397,567 20,023,461 $ 508,901,335
- --------------------------------------------------------------------------------------------------------------------------
Class B 1,297,473 38,416,797 1,759,658 41,010,698
- --------------------------------------------------------------------------------------------------------------------------
Class C 2,814,402 83,803,226 2,223,947 52,255,874
- --------------------------------------------------------------------------------------------------------------------------
Class R 1,036,987 33,005,271 526,544 13,301,803
- --------------------------------------------------------------------------------------------------------------------------
Institutional Class 14,835,547 493,838,031 7,388,888 188,974,656
==========================================================================================================================
Issued as reinvestment of dividends:
Class A 606,077 17,824,739 474,942 11,104,143
- --------------------------------------------------------------------------------------------------------------------------
Class B 29,097 797,850 10,471 228,576
- --------------------------------------------------------------------------------------------------------------------------
Class C 22,276 611,267 5,781 126,326
- --------------------------------------------------------------------------------------------------------------------------
Class R 5,731 167,060 2,275 52,557
- --------------------------------------------------------------------------------------------------------------------------
Institutional Class 143,556 4,270,787 73,779 1,743,391
==========================================================================================================================
Automatic conversion of Class B shares to Class A shares:
Class A 1,444,005 45,912,636 1,897,188 48,211,014
- --------------------------------------------------------------------------------------------------------------------------
Class B (1,553,917) (45,912,636) (2,039,154) (48,211,014)
==========================================================================================================================
Reacquired:(b)
Class A (18,995,511) (597,681,447) (20,780,282) (519,903,559)
- --------------------------------------------------------------------------------------------------------------------------
Class B (1,924,093) (56,379,885) (2,587,157) (60,632,000)
- --------------------------------------------------------------------------------------------------------------------------
Class C (1,838,519) (54,246,242) (1,725,709) (40,779,483)
- --------------------------------------------------------------------------------------------------------------------------
Class R (398,545) (12,540,630) (243,304) (6,067,052)
- --------------------------------------------------------------------------------------------------------------------------
Institutional Class (2,731,045) (90,333,244) (1,760,837) (45,266,544)
==========================================================================================================================
22,502,089 $ 751,951,147 5,250,491 $ 145,050,721
__________________________________________________________________________________________________________________________
==========================================================================================================================
</Table>
(a) There is one entity that is a record owner of more than 5% of the
outstanding shares of the Fund and it owns 28% of the outstanding shares
of the Fund. ADI has an agreement with this entity to sell Fund shares.
The Fund, AIM and/or AIM affiliates may make payments to this entity,
which is considered to be related to the Fund, for providing services to
the Fund, AIM and/or AIM affiliates including but not limited to
services such as, securities brokerage, distribution, third party record
keeping and account servicing. The Trust has no knowledge as to whether
all or any portion of the shares owned of record by this entity are
owned beneficially.
In addition, 7% of the outstanding shares of the Fund are owned by
affiliated mutual funds. Affiliated mutual funds are other mutual funds
that are also advised by AIM.
(b) Net of redemption fees of $221,782 and $48,974 which were allocated
among the classes based on relative net assets of each class for the
years ended October 31, 2007 and 2006, respectively.
NOTE 13--NEW ACCOUNTING STANDARD
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48").
FIN 48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement for a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The provisions for FIN 48 are effective for
fiscal years beginning after December 15, 2006. Management has assessed the
application of FIN 48 to the Fund and has determined that the adopting of FIN 48
is not expected to have a material impact on the Fund. Management intends for
the Fund to adopt FIN 48 provisions during the fiscal year ending October 31,
2008 as required.
21
AIM International Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CLASS A
---------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 27.85 $ 21.63 $ 18.16 $ 15.23 $ 12.69
- ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income(a) 0.28 0.14 0.11 0.05 0.01
- ---------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 8.72 6.26 3.36 2.90 2.53
=================================================================================================================================
Total from investment operations 9.00 6.40 3.47 2.95 2.54
=================================================================================================================================
Less distributions:
Dividends from net investment income (0.19) (0.18) -- (0.02) --
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.09) -- -- -- --
=================================================================================================================================
Total distributions (0.28) (0.18) -- (0.02) --
=================================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=================================================================================================================================
Net asset value, end of period $ 36.57 $ 27.85 $ 21.63 $ 18.16 $ 15.23
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) 32.55% 29.73% 19.11% 19.40% 20.02%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $2,899,666 $1,908,453 $1,447,049 $1,288,548 $1,117,420
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.44%(c) 1.54% 1.69% 1.70% 1.74%
- ---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.47%(c) 1.58% 1.74% 1.74% 1.82%
=================================================================================================================================
Ratio of net investment income to average net assets 0.87%(c) 0.53% 0.54% 0.27% 0.09%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 22% 37% 37% 54% 77%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $2,315,111,849.
22
AIM International Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS B
-----------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------
2007 2006 2005 2004 2003
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 25.84 $ 20.08 $ 16.99 $ 14.32 $ 12.02
- -------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(a) 0.03 (0.05) (0.03) (0.07) (0.08)
- -------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 8.10 5.83 3.12 2.74 2.38
=========================================================================================================================
Total from investment operations 8.13 5.78 3.09 2.67 2.30
=========================================================================================================================
Less distributions:
Dividends from net investment income -- (0.02) -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.09) -- -- -- --
=========================================================================================================================
Total distributions (0.09) (0.02) -- -- --
=========================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=========================================================================================================================
Net asset value, end of period $ 33.88 $ 25.84 $ 20.08 $ 16.99 $ 14.32
_________________________________________________________________________________________________________________________
=========================================================================================================================
Total return(b) 31.55% 28.80% 18.19% 18.64% 19.14%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $252,203 $247,939 $250,056 $301,380 $360,671
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.19%(c) 2.29% 2.41% 2.40% 2.44%
- -------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.22%(c) 2.33% 2.46% 2.44% 2.52%
=========================================================================================================================
Ratio of net investment income (loss) to average net assets 0.12%(c) (0.22)% (0.18)% (0.43)% (0.61)%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Portfolio turnover rate 22% 37% 37% 54% 77%
_________________________________________________________________________________________________________________________
=========================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $249,921,455.
23
AIM International Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS C
-----------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------
2007 2006 2005 2004 2003
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 25.86 $ 20.10 $ 17.00 $ 14.33 $ 12.03
- -------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(a) 0.03 (0.05) (0.03) (0.07) (0.08)
- -------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 8.11 5.83 3.13 2.74 2.38
=========================================================================================================================
Total from investment operations 8.14 5.78 3.10 2.67 2.30
=========================================================================================================================
Less distributions:
Dividends from net investment income -- (0.02) -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.09) -- -- -- --
=========================================================================================================================
Total distributions (0.09) (0.02) -- -- --
=========================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=========================================================================================================================
Net asset value, end of period $ 33.91 $ 25.86 $ 20.10 $ 17.00 $ 14.33
_________________________________________________________________________________________________________________________
=========================================================================================================================
Total return(b) 31.57% 28.78% 18.24% 18.63% 19.12%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $274,266 $183,360 $132,387 $116,136 $113,965
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 2.19%(c) 2.29% 2.41% 2.40% 2.44%
- -------------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 2.22%(c) 2.33% 2.46% 2.44% 2.52%
=========================================================================================================================
Ratio of net investment income (loss) to average net assets 0.12%(c) (0.22)% (0.18)% (0.43)% (0.61)%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Portfolio turnover rate 22% 37% 37% 54% 77%
_________________________________________________________________________________________________________________________
=========================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions. Does not include sales charges.
(c) Ratios are based on average daily net assets of $222,480,198.
24
AIM International Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
CLASS R
---------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------
2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 27.58 $ 21.43 $18.04 $15.14 $12.69
- -----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss)(a) 0.20 0.07 0.07 0.01 (0.01)
- -----------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 8.63 6.21 3.32 2.89 2.46
=================================================================================================================
Total from investment operations 8.83 6.28 3.39 2.90 2.45
=================================================================================================================
Less distributions:
Dividends from net investment income (0.14) (0.13) -- -- --
- -----------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.09) -- -- -- --
=================================================================================================================
Total distributions (0.23) (0.13) -- -- --
=================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=================================================================================================================
Net asset value, end of period $ 36.18 $ 27.58 $21.43 $18.04 $15.14
_________________________________________________________________________________________________________________
=================================================================================================================
Total return(b) 32.21% 29.41% 18.79% 19.15% 19.31%
_________________________________________________________________________________________________________________
=================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $48,321 $19,070 $8,700 $2,450 $ 867
_________________________________________________________________________________________________________________
=================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.69%(c) 1.79% 1.91% 1.90% 1.94%
- -----------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.72%(c) 1.83% 1.96% 1.94% 2.02%
=================================================================================================================
Ratio of net investment income (loss) to average net assets 0.62%(c) 0.28% 0.32% 0.07% (0.11)%
_________________________________________________________________________________________________________________
=================================================================================================================
Portfolio turnover rate 22% 37% 37% 54% 77%
_________________________________________________________________________________________________________________
=================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions.
(c) Ratios are based on average daily net assets of $31,466,888.
25
AIM International Growth Fund
NOTE 14--FINANCIAL HIGHLIGHTS--(CONTINUED)
<Table>
<Caption>
INSTITUTIONAL CLASS
-------------------------------------------------------
YEAR ENDED OCTOBER 31,
-------------------------------------------------------
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 28.26 $ 21.97 $ 18.34 $ 15.37 $12.73
- ---------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income(a) 0.42 0.25 0.25 0.15 0.09
- ---------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 8.84 6.35 3.38 2.93 2.55
=====================================================================================================================
Total from investment operations 9.26 6.60 3.63 3.08 2.64
=====================================================================================================================
Less distributions:
Dividends from net investment income (0.29) (0.31) -- (0.11) --
- ---------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (0.09) -- -- -- --
=====================================================================================================================
Total distributions (0.38) (0.31) -- (0.11) --
=====================================================================================================================
Redemption fees added to shares of beneficial interest 0.00 0.00 0.00 0.00 --
=====================================================================================================================
Net asset value, end of period $ 37.14 $ 28.26 $ 21.97 $ 18.34 $15.37
_____________________________________________________________________________________________________________________
=====================================================================================================================
Total return(b) 33.13% 30.32% 19.79% 20.15% 20.74%
_____________________________________________________________________________________________________________________
=====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $833,977 $288,408 $98,912 $13,345 $ 79
_____________________________________________________________________________________________________________________
=====================================================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.02%(c) 1.08% 1.07% 1.13% 1.17%
- ---------------------------------------------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements 1.05%(c) 1.12% 1.12% 1.17% 1.21%
=====================================================================================================================
Ratio of net investment income to average net assets 1.30%(c) 0.99% 1.16% 0.84% 0.66%
_____________________________________________________________________________________________________________________
=====================================================================================================================
Portfolio turnover rate 22% 37% 37% 54% 77%
_____________________________________________________________________________________________________________________
=====================================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and as such, the net asset
value for financial reporting purposes and the returns based upon those
net asset values may differ from the net asset value and returns for
shareholder transactions.
(c) Ratios are based on average daily net assets of $484,885,379.
26
AIM International Growth Fund
NOTE 15--LEGAL PROCEEDINGS
Terms used in the Legal Proceedings Note are defined terms solely for the
purpose of this note.
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS RELATED TO MARKET TIMING
On July 6, 2007, the Securities and Exchange Commission ("SEC") published notice
of two proposed distribution plans ("Distribution Plans") for the distribution
of monies placed into two separate Fair Funds created pursuant to a settlement
reached on October 8, 2004 between Invesco Funds Group, Inc. ("IFG"), A I M
Advisors, Inc. ("AIM") and A I M Distributors, Inc. and the SEC (the "Order").
One of the Fair Funds consists of $325 million, plus interest and any
contributions by other settling parties, for distribution to shareholders of
certain mutual funds formerly advised by IFG who may have been harmed by market
timing and related activity. The second Fair Fund consists of $50 million, plus
interest and any contributions by other settling parties, for distribution to
shareholders of mutual funds advised by AIM who may have been harmed by market
timing and related activity. Comments on the Distribution Plans were due no
later than August 6, 2007 and the Distribution Plans are awaiting final approval
by the SEC. Distributions from the Fair Funds will begin after the SEC finally
approves the Distribution Plans. The proposed Distribution Plans provide for
distribution to all eligible investors, for the periods spanning January 1, 2000
through July 31, 2003 (for the IFG Fair Fund) and January 1, 2001 through
September 30, 2003 (for the AIM Fair Fund), their proportionate share of the
applicable Fair Fund to compensate such investors for injury they may have
suffered as a result of market timing in the affected funds. The Distribution
Plans include a provision for any residual amounts in the Fair Funds to be
distributed in the future to the affected funds. Because the Distribution Plans
have not received final approval from the SEC and distribution of the Fair Funds
has not yet commenced, management of AIM and the Fund are unable to estimate the
amount of distribution to be made to the Fund, if any.
At the request of the trustees of the AIM Funds, Invesco Ltd. ("Invesco"),
the parent company of IFG and AIM, has agreed to reimburse expenses incurred by
the AIM Funds related to market timing matters.
PENDING LITIGATION AND REGULATORY INQUIRIES
On August 30, 2005, the West Virginia Office of the State
Auditor -- Securities Commission ("WVASC") issued a Summary Order to Cease and
Desist and Notice of Right to Hearing to AIM and ADI (Order No. 05-1318). The
WVASC makes findings of fact that AIM and ADI entered into certain arrangements
permitting market timing of the AIM Funds and failed to disclose these
arrangements in the prospectuses for such Funds, and conclusions of law to the
effect that AIM and ADI violated the West Virginia securities laws. The WVASC
orders AIM and ADI to cease any further violations and seeks to impose monetary
sanctions, including restitution to affected investors, disgorgement of fees,
reimbursement of investigatory, administrative and legal costs and an
"administrative assessment," to be determined by the Commissioner. Initial
research indicates that these damages could be limited or capped by statute. By
agreement with the Commissioner of Securities, AIM's time to respond to that
Order has been indefinitely suspended.
Civil lawsuits, including purported class action and shareholder derivative
suits, have been filed against certain of the AIM Funds, IFG, AIM, ADI and/or
related entities and individuals, depending on the lawsuit, alleging:
- that the defendants permitted improper market timing and related activity
in the AIM Funds; and
- that certain AIM Funds inadequately employed fair value pricing.
These lawsuits allege as theories of recovery, depending on the lawsuit,
violations of various provisions of the Federal and state securities laws and
ERISA, negligence, breach of fiduciary duty and/or breach of contract. These
lawsuits seek remedies that include, depending on the lawsuit, damages,
restitution, injunctive relief, imposition of a constructive trust, removal of
certain directors and/or employees, various corrective measures under ERISA,
rescission of certain AIM Funds' advisory agreements and/or distribution plans
and recovery of all fees paid.
All lawsuits based on allegations of market timing, late trading and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court"). Pursuant to an Order of the MDL Court,
plaintiffs in these lawsuits consolidated their claims for pre-trial purposes
into three amended complaints against various AIM- and IFG-related parties: (i)
a Consolidated Amended Class Action Complaint purportedly brought on behalf of
shareholders of the AIM Funds; (ii) a Consolidated Amended Fund Derivative
Complaint purportedly brought on behalf of the AIM Funds and fund registrants;
and (iii) an Amended Class Action Complaint for Violations of the Employee
Retirement Income Securities Act ("ERISA") purportedly brought on behalf of
participants in Invesco's 401(k) plan. Based on orders issued by the MDL Court,
all claims asserted against the AIM Funds that have been transferred to the MDL
Court have been dismissed, although certain Funds remain nominal defendants in
the Consolidated Amended Fund Derivative Complaint. On September 15, 2006, the
MDL Court granted the Invesco defendants' motion to dismiss the Amended Class
Action Complaint for Violations of ERISA and dismissed such Complaint. The
plaintiff has commenced an appeal from that decision.
IFG, AIM, ADI and/or related entities and individuals have received
inquiries from numerous regulators in the form of subpoenas or other oral or
written requests for information and/or documents related to one or more of the
following issues, among others, some of which concern one or more AIM Funds:
market timing activity, late trading, fair value pricing, excessive or improper
advisory and/or distribution fees, mutual fund sales practices, including
revenue sharing and directed-brokerage arrangements, investments in securities
of other registered investment companies, contractual plans, issues related to
Section 529 college savings plans and procedures for locating lost security
holders. IFG, AIM and ADI have advised the Fund that they are providing full
cooperation with respect to these inquiries. Regulatory actions and/or
additional civil lawsuits related to these or other issues may be filed against
the AIM Funds, IFG, AIM and/or related entities and individuals in the future.
At the present time, management of AIM and the Fund are unable to estimate
the impact, if any, that the outcome of the Pending Litigation and Regulatory
Inquiries described above may have on AIM, ADI or the Fund.
27
AIM International Growth Fund
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of AIM International Mutual Funds
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 AIM International Growth Fund (one
of the funds constituting AIM International Mutual Funds, hereafter referred to
as the "Fund") at October 31, 2007, 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 five 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 the standards of the
Public Company Accounting Oversight Board (United States). Those standards
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, 2007 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PRICEWATERHOUSECOOPERS LLP
December 19, 2007
Houston, Texas
28
AIM International Growth Fund
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments or
contingent deferred sales charges on redemptions, and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and/or service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period May 1, 2007, through October 31, 2007.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) on purchase payments, contingent deferred sales charges on
redemptions, and redemption fees, if any. Therefore, the hypothetical
information is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
<Table>
<Caption>
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
ENDING EXPENSES
BEGINNING ACCOUNT EXPENSES ENDING PAID ANNUALIZED
SHARE ACCOUNT VALUE VALUE PAID DURING ACCOUNT VALUE DURING EXPENSE
CLASS (5/1/07) (10/31/07)(1) PERIOD(2) (10/31/07) PERIOD(2) RATIO
A $1,000.00 $1,131.10 $ 7.74 $1,017.95 $7.32 1.44%
B 1,000.00 1,127.00 11.74 1,014.17 11.12 2.19
C 1,000.00 1,127.30 11.74 1,014.17 11.12 2.19
R 1,000.00 1,129.60 9.07 1,016.69 8.59 1.69
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period May 1, 2007, through October 31, 2007, after actual
expenses and will differ from the hypothetical ending account value which is
based on the Fund's expense ratio and a hypothetical annual return of 5%
before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
184/365 to reflect the most recent fiscal half year.
29
Supplement to Annual Report dated 10/31/07
AIM International Growth Fund
==========================================
Institutional Class Shares AVERAGE ANNUAL TOTAL RETURNS PLEASE NOTE THAT PAST PERFORMANCE IS
For periods ended 10/31/07 NOT 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) 18.04% THOSE SHOWN. ALL RETURNS ASSUME
shareholders with a performance overview 5 Years 24.68 REINVESTMENT OF DISTRIBUTIONS AT NAV.
specific to their holdings. Institutional 1 Year 33.17 INVESTMENT RETURN AND PRINCIPAL VALUE WILL
Class shares are offered exclusively to FLUCTUATE SO YOUR SHARES, WHEN REDEEMED,
institutional investors, including defined AVERAGE ANNUAL TOTAL RETURNS MAY BE WORTH MORE OR LESS THAN THEIR
contribution plans that meet certain For periods ended 9/30/07, most recent ORIGINAL COST. SEE FULL REPORT FOR
criteria. calendar quarter-end INFORMATION ON COMPARATIVE BENCHMARKS.
PLEASE CONSULT YOUR FUND PROSPECTUS FOR
Inception (3/15/02) 17.28% MORE INFORMATION. FOR THE MOST CURRENT
5 Years 24.67 MONTH-END PERFORMANCE, PLEASE CALL
1 Year 31.75 800-451-4246 OR VISIT AIMINVESTMENTS.COM.
==========================================
INSTITUTIONAL CLASS SHARES HAVE NO SALES
CHARGE; THEREFORE, PERFORMANCE IS AT NAV.
PERFORMANCE OF INSTITUTIONAL CLASS SHARES
WILL DIFFER FROM PERFORMANCE OF OTHER
SHARE CLASSES PRIMARILY DUE TO DIFFERING
SALES CHARGES AND CLASS EXPENSES.
A REDEMPTION FEE OF 2% WILL BE IMPOSED
ON CERTAIN REDEMPTIONS OR EXCHANGES OUT OF
THE FUND WITHIN 30 DAYS OF PURCHASE.
EXCEPTIONS TO THE REDEMPTION FEE ARE
LISTED IN THE FUND'S PROSPECTUS.
==========================================
NASDAQ SYMBOL AIEVX
==========================================
Over for information on your Fund's expenses.
=======================================================================================
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENTLY EFFECTIVE FUND PROSPECTUS,
WHICH CONTAINS MORE COMPLETE INFORMATION, INCLUDING SALES CHARGES AND EXPENSES.
INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING.
=======================================================================================
FOR INSTITUTIONAL INVESTOR USE ONLY
This material is for institutional investor use only and may not be quoted, reproduced
or shown to the public, nor used in written form as sales literature for public use.
AIMinvestments.com IGR-INS-1 A I M Distributors, Inc.
[AIM INVESTMENTS LOGO]
-- REGISTERED TRADEMARK --
AIM International Growth Fund
CALCULATING YOUR ONGOING FUND EXPENSES
EXAMPLE
As a shareholder of the Fund, you incur ongoing costs, including management fees
and other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with ongoing costs of investing in other mutual funds. The example is based on
an investment of $1,000 invested at the beginning of the period and held for the
entire period May 1, 2007, through October 31, 2007.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
<Table>
<Caption>
HYPOTHETICAL
(5% ANNUAL RETURN BEFORE
ACTUAL EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING EXPENSE
SHARE CLASS (5/1/07) (10/31/07)(1) PERIOD(2) (10/31/07) PERIOD(2) RATIO
Institutional $1,000.00 $1,133.70 $5.43 $1,020.11 $5.14 1.01%
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period May 1, 2007, through October 31, 2007, after actual
expenses and will differ from the hypothetical ending account value which is
based on the Fund's expense ratio and a hypothetical annual return of 5%
before expenses.
(2) Expenses are equal to the Fund's annualized expense ratio as indicated above
multiplied by the average account value over the period, multiplied by
184/365 to reflect the most recent fiscal half year.
AIMinvestments.com IGR-INS-1 A I M Distributors, Inc.
AIM International Growth Fund
Approval of Investment Advisory Agreement
The Board of Trustees (the Board) of AIM Committee considers each Sub-Committee's sory fees, expense limitations and/or
International Mutual Funds is required recommendations and makes its own fee waivers.
under the Investment Company Act of 1940 to recommendations regarding the
approve annually the renewal of the AIM performance, fees and expenses of the A. Nature, Extent and Quality of
International Growth Fund (the Fund) AIM Funds to the full Board. Moreover, Services Provided by AIM
investment advisory agreement with A I M the Investments Committee considers each
Advisors, Inc. (AIM). During contract SubCommittee's recommendations in making The Board reviewed the advisory services
renewal meetings held on June 25-27, 2007, its annual recommendation to the Board provided to the Fund by AIM under the
the Board as a whole and the disinterested whether to approve the continuance of Fund's advisory agreement, the
or "independent" Trustees, voting each AIM Fund's investment advisory performance of AIM in providing these
separately, approved the continuance of the agreement and sub-advisory agreement, if services, and the credentials and
Fund's investment advisory agreement for applicable (advisory agreements), for experience of the officers and employees
another year, effective July 1, 2007. In another year. of AIM who provide these services. The
doing so, the Board determined that the Board's review of the qualifications of
Fund's advisory agreement is in the best The independent Trustees, as AIM to provide these services included
interests of the Fund and its shareholders mentioned above, are assisted in their the Board's consideration of AIM's
and that the compensation to AIM under the annual evaluation of the advisory portfolio and product review process,
Fund's advisory agreement is fair and agreements by the independent Senior various back office support functions
reasonable. Officer. One responsibility of the provided by AIM, and AIM's equity and
Senior Officer is to manage the process fixed income trading operations. The
The independent Trustees met separately by which the AIM Funds' proposed Board concluded that the nature, extent
during their evaluation of the Fund's management fees are negotiated during and quality of the advisory services
investment advisory agreement with the annual contract renewal process to provided to the Fund by AIM were
independent legal counsel from whom they ensure that they are negotiated in a appropriate and that AIM currently is
received independent legal advice, and the manner which is at arms' length and providing satisfactory advisory services
independent Trustees also received reasonable. Accordingly, the Senior in accordance with the terms of the
assistance during their deliberations from Officer must either supervise a Fund's advisory agreement. In addition,
the independent Senior Officer, a full-time competitive bidding process or prepare based on their ongoing meetings
officer of the AIM Funds who reports an independent written evaluation. The throughout the year with the Fund's
directly to the independent Trustees. The Senior Officer has recommended that an portfolio managers, the Board concluded
following discussion more fully describes independent written evaluation be that these individuals are competent and
the process employed by the Board to provided and, upon the direction of the able to continue to carry out their
evaluate the performance of the AIM Funds Board, has prepared an independent responsibilities under the Fund's
(including the Fund) throughout the year written evaluation. advisory agreement.
and, more specifically, during the annual
contract renewal meetings. During the annual contract renewal In determining whether to continue
process, the Board considered the the Fund's advisory agreement, the Board
THE BOARD'S FUND EVALUATION PROCESS factors discussed below under the considered the prior relationship
heading "Factors and Conclusions and between AIM and the Fund, as well as the
The Board's Investments Committee has Summary of Independent Written Fee Board's knowledge of AIM's operations,
established three Sub-Committees which are Evaluation" in evaluating the fairness and concluded that it was beneficial to
responsible for overseeing the management and reasonableness of the Fund's maintain the current relationship, in
of a number of the series portfolios of the advisory agreement at the contract part, because of such knowledge. The
AIM Funds. This Sub-Committee structure renewal meetings and at their meetings Board also considered the steps that AIM
permits the Trustees to focus on the throughout the year as part of their and its affiliates have taken over the
performance of the AIM Funds that have been ongoing oversight of the Fund. The last several years to improve the
assigned to them. The Sub-Committees meet Fund's advisory agreement was considered quality and efficiency of the services
throughout the year to review the separately, although the Board also they provide to the Funds in the areas
performance of their assigned funds, and considered the common interests of all of investment performance, product line
the Sub-Committees review monthly and of the AIM Funds in their deliberations. diversification, distribution, fund
quarterly comparative performance The Board comprehensively considered all operations, shareholder services and
information and periodic asset flow data of the information provided to them and compliance. The Board concluded that the
for their assigned funds. These materials did not identify any particular factor quality and efficiency of the services
are prepared under the direction and that was controlling. Furthermore, each AIM and its affiliates provide to the
supervision of the independent Senior Trustee may have evaluated the AIM Funds in each of these areas have
Officer. Over the course of each year, the information provided differently from generally improved, and support the
SubCommittees meet with portfolio managers one another and attributed different Board's approval of the continuance of
for their assigned funds and other members weight to the various factors. The the Fund's advisory agreement.
of management and review with these Trustees recognized that the advisory
individuals the performance, investment arrangements and resulting advisory fees B. Fund Performance
objective(s), policies, strategies and for the Fund and the other AIM Funds are
limitations of these funds. the result of years of review and The Board compared the Fund's
negotiation between the Trustees and performance during the past one, three
In addition to their meetings throughout AIM, that the Trustees may focus to a and five calendar years to the
the year, the Sub-Committees meet at greater extent on certain aspects of performance of funds in the Fund's
designated contract renewal meetings each these arrangements in some years than Lipper peer group that are not managed
year to conduct an in-depth review of the others, and that the Trustees' by AIM, and against the performance of
performance, fees and expenses of their deliberations and conclusions in a all funds in the Lipper International
assigned funds. During the contract renewal particular year may be based in part on Multi-Cap Growth Funds Index and the
process, the Trustees receive comparative their deliberations and conclusions of Lipper International Large-Cap Growth
performance and fee data regarding all the these same arrangements throughout the Funds Index. The Board also reviewed the
AIM Funds prepared by an independent year and in prior years. methodology used by Lipper to identify
company, Lipper, Inc., under the direction the Fund's peers. The Board noted that
and supervision of the independent Senior FACTORS AND CONCLUSIONS AND SUMMARY OF the Fund's performance was above the
Officer who also prepares a separate INDEPENDENT WRITTEN FEE EVALUATION median performance of its peers for the
analysis of this information for the one and three year period, and
Trustees. Each Sub-Committee then makes The discussion below serves as a summary comparable to such performance for the
recommendations to the Investments of the Senior Officer's independent five year period. The Board noted that
Committee regarding the performance, fees written evaluation, as well as a the Fund's performance was comparable to
and expenses of their assigned funds. The discussion of the material factors and the performance of the Lipper
Investments related conclusions that formed the International Multi-Cap Growth Funds
basis for the Board's approval of the Index for the one, three and five year
Fund's advisory agreement. Unless periods. The Board also noted that the
otherwise stated, information set forth Fund's performance was above the
below is as of June 27, 2007 and does performance of the Lipper International
not reflect any changes that may have Large-Cap Growth Funds Index for the
occurred since that date, including but one, three and five year periods. The
not limited to changes to the Fund's Board also considered the steps AIM has
performance, advi- taken over the last several years to
improve
(continued)
AIM International Growth Fund
the quality and efficiency of the services should be simplified. The Board concluded ent written evaluation to assist the Board
that AIM provides to the AIM Funds. The that it would be appropriate to approve in determining the reasonableness of the
Board concluded that AIM continues to be the proposed amendment to the Fund's proposed management fees of the AIM Funds,
responsive to the Board's focus on fund contractual advisory fee schedule and including the Fund. The Board noted that
performance. Although the independent that it was not necessary at this time to they had relied upon the Senior Officer's
written evaluation of the Fund's Senior discuss with AIM whether to implement any written evaluation instead of a
Officer (discussed below) only considered fee waivers or expense limitations for competitive bidding process. In
Fund performance through the most recent the Fund. determining whether to continue the Fund's
calendar year, the Board also reviewed more advisory agreement, the Board considered
recent Fund performance and this review did After taking account of the Fund's the Senior Officer's written evaluation.
not change their conclusions. contractual advisory fee rate, as well
as the comparative advisory fee G. Collateral Benefits to AIM and its
C. Advisory Fees and Fee Waivers information discussed above, the Board Affiliates
concluded that the Fund's advisory fees
The Board compared the Fund's contractual were fair and reasonable. The Board considered various other
advisory fee rate to the contractual benefits received by AIM and its
advisory fee rates of funds in the Fund's D. Economies of Scale and Breakpoints affiliates resulting from AIM's
Lipper peer group that are not managed by relationship with the Fund, including the
AIM, at a common asset level and as of the The Board considered the extent to which fees received by AIM and its affiliates
end of the past calendar year. The Board there are economies of scale in AIM's for their provision of administrative,
noted that the Fund's advisory fee rate was provision of advisory services to the transfer agency and distribution services
comparable to the median advisory fee rate Fund. The Board also considered whether to the Fund. The Board considered the
of its peers. The Board also reviewed the the Fund benefits from such economies of performance of AIM and its affiliates in
methodology used by Lipper and noted that scale through contractual breakpoints in providing these services and the
the contractual fee rates shown by Lipper the Fund's advisory fee schedule or organizational structure employed by AIM
include any applicable long-term through advisory fee waivers or expense and its affiliates to provide these
contractual fee waivers. The Board also limitations. The Board noted that the services. The Board also considered that
compared the Fund's contractual advisory Fund's contractual advisory fee schedule these services are provided to the Fund
fee rate to the contractual advisory fee includes one breakpoint and that the pursuant to written contracts which are
rates of other clients of AIM and its level of the Fund's advisory fees, as a reviewed and approved on an annual basis
affiliates with investment strategies percentage of the Fund's net assets, has by the Board. The Board concluded that AIM
comparable to those of the Fund, including decreased as net assets increased and its affiliates were providing these
one mutual fund advised by AIM, one because of the breakpoint. The Board services in a satisfactory manner and in
Canadian fund advised by an AIM affiliate noted that the amendment to the Fund's accordance with the terms of their
and sub-advised by AIM, and two mutual contractual advisory fee schedule contracts, and were qualified to continue
funds sub-advised by an AIM affiliate. The discussed above provides for seven to provide these services to the Fund.
Board noted that the Fund's rate was: (i) breakpoints. Based on this information,
above the rate for the mutual fund; (ii) the Board concluded that the Fund's The Board considered the benefits
above the sub-advisory fee rate for the advisory fees appropriately reflect realized by AIM as a result of portfolio
Canadian fund, although the advisory fee economies of scale at current asset brokerage transactions executed through
rate for such Canadian fund was above the levels. The Board also noted that the "soft dollar" arrangements. Under these
Fund's; and (iii) above the sub-advisory Fund shares directly in economies of arrangements, portfolio brokerage
fee rates for the two sub-advised funds, scale through lower fees charged by commissions paid by the Fund and/or other
although the advisory fee rate for one such third party service providers based on funds advised by AIM are used to pay for
sub-advised fund was comparable to the the combined size of all of the AIM research and execution services. The Board
Fund's. Funds and affiliates. noted that soft dollar arrangements shift
the payment obligation for the research
Additionally, the Board compared the E. Profitability and Financial Resources and executions services from AIM to the
Fund's contractual advisory fee rate to the of AIM funds and therefore may reduce AIM's
total advisory fees paid by numerous expenses. The Board also noted that
separately managed accounts/wrap accounts The Board reviewed information from AIM research obtained through soft dollar
advised by an AIM affiliate. The Board concerning the costs of the advisory and arrangements may be used by AIM in making
noted that the Fund's rate was above the other services that AIM and its investment decisions for the Fund and may
rates for the separately managed affiliates provide to the Fund and the therefore benefit Fund shareholders. The
accounts/wrap accounts. The Board profitability of AIM and its affiliates Board concluded that AIM's soft dollar
considered that management of the in providing these services. The Board arrangements were appropriate. The Board
separately managed accounts/wrap accounts also reviewed information concerning the also concluded that, based on their review
by the AIM affiliate involves different financial condition of AIM and its and representations made by AIM, these
levels of services and different affiliates. The Board also reviewed with arrangements were consistent with
operational and regulatory requirements AIM the methodology used to prepare the regulatory requirements.
than AIM's management of the Fund. The profitability information. The Board
Board concluded that these differences are considered the overall profitability of The Board considered the fact that the
appropriately reflected in the fee AIM, as well as the profitability of AIM Fund's uninvested cash and cash collateral
structure for the Fund and the separately in connection with managing the Fund. from any securities lending arrangements
managed accounts/wrap accounts. The Board noted that AIM continues to may be invested in money market funds
operate at a net profit, although advised by AIM pursuant to procedures
The Board noted that AIM has not increased expenses in recent years have approved by the Board. The Board noted
proposed any advisory fee waivers or reduced the profitability of AIM and its that AIM will receive advisory fees from
expense limitations for the Fund. However, affiliates. The Board concluded that the these affiliated money market funds
the Board also noted that AIM has Fund's advisory fees were fair and attributable to such investments, although
recommended that the Board approve an reasonable, and that the level of AIM has contractually agreed to waive the
amendment to the Fund's contractual profits realized by AIM and its advisory fees payable by the Fund with
advisory fee schedule that would implement affiliates from providing services to respect to its investment of uninvested
the contractual advisory fee waiver that the Fund was not excessive in light of cash in these affiliated money market
had been formerly committed to by AIM, the nature, quality and extent of the funds through at least June 30, 2008. The
which waiver provided for lower effective services provided. The Board considered Board considered the contractual nature of
fee rates at all asset levels than the whether AIM is financially sound and has this fee waiver and noted that it remains
Fund's current contractual advisory fee the resources necessary to perform its in effect until at least June 30, 2008.
schedule. The Board noted that AIM's obligations under the Fund's advisory The Board concluded that the Fund's
recommendation was made in response to the agreement, and concluded that AIM has investment of uninvested cash and cash
recommendation of the independent Senior the financial resources necessary to collateral from any securities lending
Officer that AIM consider whether the fulfill these obligations. arrangements in the affiliated money
advisory fee waivers for certain equity AIM market funds is in the best interests of
Funds, including the Fund, F. Independent Written Evaluation of the the Fund and its shareholders.
Fund's Senior Officer
The Board noted that, upon their
direction, the Senior Officer of the
Fund, who is independent of AIM and AIM's
affiliates, had prepared an independ-
AIM International Growth Fund
TAX INFORMATION
Form 1099-DIV, Form 1042-S and other year-end tax information provide
shareholders with actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The Fund designates the following amounts or, if subsequently determined to be
different, the maximum amount allowable for its fiscal year ended October 31,
2007:
FEDERAL AND STATE INCOME TAX
<Table>
Long-Term Capital Gain Dividends $8,861,298
Qualified Dividend Income* 100%
Corporate Dividends Received Deduction* 0%
</Table>
* The above percentage is based on ordinary income dividends paid to
shareholders during the fund's fiscal year.
NON-RESIDENT ALIEN SHAREHOLDERS
<Table>
Qualified Interest Income** 7.02%
</Table>
** The above percentage is based on income dividends paid to shareholders
during the fund's fiscal year.
ADDITIONAL NON-RESIDENT ALIEN SHAREHOLDER INFORMATION
The percentages of qualifying assets not subject to the U.S. estate tax for the
fiscal quarters ended January 31, 2007, April 30, 2007, July 31, 2007 and
October 31, 2007 were 99.77%, 99.79%, 99.82%, and 99.86%, respectively.
DISTRIBUTION INFORMATION
Shareholders were sent a notice from the Fund that set forth an estimate on a
per share basis of the source or sources from which the distribution was paid in
December of 2006. Subsequently, this estimate has been corrected in part. Listed
below is a written statement of the sources of this distribution, as corrected,
on a generally accepted accounting principles ("GAAP") basis.
<Table>
<Caption>
GAIN FROM SALE RETURN OF TOTAL
NET INCOME OF SECURITIES PRINCIPAL DISTRIBUTION
- --------------------------------------------------------------------------------------
12/15/06 Class A $0.0320 $0.000 $0.2448 $0.2768
- --------------------------------------------------------------------------------------
12/15/06 Class B $ 0.000 $0.000 $0.0914 $0.0914
- --------------------------------------------------------------------------------------
12/15/06 Class C $ 0.000 $0.000 $0.0914 $0.0914
- --------------------------------------------------------------------------------------
12/15/06 Class R $ 0.000 $0.000 $0.2294 $0.2294
- --------------------------------------------------------------------------------------
12/15/06 Institutional Class $0.1426 $0.000 $0.2442 $0.3868
______________________________________________________________________________________
======================================================================================
</Table>
Please note that the information in the preceding chart is for financial
accounting purposes only. Shareholders should be aware that the tax treatment of
distributions may differ from their GAAP treatment. The tax treatment of
distributions was set forth in a Form 1099-DIV for the 2006 calendar year. This
information is being provided to comply with certain U.S. Securities and
Exchange Commission requirements.
32
AIM International Growth Fund
TRUSTEES AND OFFICERS
The address of each trustee and officer of AIM International Mutual Funds (the
"Trust"), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each
trustee oversees 104 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. Each officer serves for a one year term or until their
successors are elected and qualified. Column two below includes length of time
served with predecessor entities, if any.
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY
TRUST SINCE DURING PAST 5 YEARS TRUSTEE/ DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Interested Persons
- -------------------------------------------------------------------------------------------------------------------------
Martin L. Flanagan(1) -- 1960 2007 Director, Chief Executive Officer and None
Trustee President, Invesco Ltd. (ultimate parent
of AIM and a global investment
management firm) and, INVESCO PLC
(parent of AIM and a global investment
management firm); Chairman, A I M
Advisors, Inc. (registered investment
advisor); Director, Chairman, Chief
Executive Officer and President, IVZ
Inc. (holding company); and INVESCO
North American Holdings, Inc. (holding
company); Chairman and President,
INVESCO Group Services, Inc. (service
provider); Trustee, The AIM Family of
Funds(R); Vice Chairman, Investment
Company Institute; and Member of
Executive Board, SMU Cox School of
Business
Formerly: Chairman, Investment Company
Institute; President, Co-Chief Executive
Officer, Co-President, Chief Operating
Officer and Chief Financial Officer,
Franklin Resources, Inc. (global
investment management organization)
- -------------------------------------------------------------------------------------------------------------------------
Philip A. Taylor(2) -- 1954 2006 Director, Chief Executive Officer and None
Trustee, President and President, AIM Mutual Fund Dealer Inc.
Principal (registered broker dealer), A I M
Executive Officer Advisors, Inc., AIM Funds Management
Inc. d/b/a INVESCO Enterprise Services
(registered investment advisor and
registered transfer agent) and 1371
Preferred Inc. (holding company);
Director, Chairman, Chief Executive
Officer and President, A I M Management
Group Inc. (financial services holding
company) and A I M Capital Management,
Inc. (registered investment advisor);
Director and President, INVESCO Funds
Group, Inc. (registered investment
advisor and register transfer agent) and
AIM GP Canada Inc. (general partner for
a limited partnership); Director, A I M
Distributors, Inc. (registered broker
dealer); Director and Chairman, AIM
Investment Services, Inc. (registered
transfer agent) and INVESCO
Distributors, Inc. (registered broker
dealer); Director, President and
Chairman, IVZ Callco Inc. (holding
company), INVESCO Inc. (holding company)
and AIM Canada Holdings Inc. (holding
company); Director and Chief Executive
Officer, AIM Trimark Corporate Class
Inc. (formerly AIM Trimark Global Fund
Inc.) (corporate mutual fund company)
and AIM Trimark Canada Fund Inc.
(corporate mutual fund company);
Trustee, President and Principal
Executive Officer of The AIM Family of
Funds--Registered Trademark-- (other
than AIM Treasurer's Series Trust,
Short-Term Investments Trust and
Tax-Free Investments Trust); Trustee and
Executive Vice President, The AIM Family
of Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); and Manager,
PowerShares Capital Management LLC
Formerly: Director and Chairman, Fund
Management Company (registered broker
dealer); President and Principal
Executive Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only); Chairman, AIM
Canada Holdings, Inc.; President, AIM
Trimark Global Fund Inc. and AIM Trimark
Canada Fund Inc.; and Director, Trimark
Trust (federally regulated Canadian
Trust Company)
- -------------------------------------------------------------------------------------------------------------------------
Independent Trustees
- -------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett -- 1944 1992 Chairman, Crockett Technology Associates ACE Limited (insurance company);
Trustee and Chair (technology consulting company) and Captaris, Inc. (unified
messaging provider)
- -------------------------------------------------------------------------------------------------------------------------
Bob R. Baker -- 1936 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Frank S. Bayley -- 1939 2001 Retired Badgley Funds, Inc. (registered
Trustee investment company) (2 portfolios)
Formerly: Partner, law firm of Baker &
McKenzie
- -------------------------------------------------------------------------------------------------------------------------
James T. Bunch -- 1942 2003 Founder, Green, Manning & Bunch Ltd., None
Trustee (investment banking firm); and Director,
Policy Studies, Inc. and Van Gilder
Insurance Corporation
- -------------------------------------------------------------------------------------------------------------------------
Albert R. Dowden -- 1941 2000 Director of a number of public and None
Trustee private business corporations, including
the Boss Group Ltd. (private investment
and management); Reich & Tang Funds
(Chairman) (registered investment
company) (7 portfolios), Daily Income
Fund (4 portfolios), California Daily
Tax Free Income Fund, Inc., Connecticut
Daily Tax Free Income Fund, Inc. and New
Jersey Daily Municipal Fund, Inc.,
Annuity and Life Re (Holdings), Ltd.
(insurance company), and Homeowners of
America Holding Corporation (property
casualty company)
Formerly: Director, CompuDyne
Corporation (provider of product and
services to the public security market);
Director, President and Chief Executive
Officer, Volvo Group North America,
Inc.; Senior Vice President, AB Volvo;
Director of various affiliated Volvo
companies; and Director, Magellan
Insurance Company
- -------------------------------------------------------------------------------------------------------------------------
Jack M. Fields -- 1952 1997 Chief Executive Officer, Twenty First Administaff
Trustee Century Group, Inc. (government affairs
company); and Owner and Chief Executive
Officer, Dos Angelos Ranch, L.P.
(cattle, hunting, corporate
entertainment), and Discovery Global
Education Fund (non-profit)
Formerly: Chief Executive Officer,
Texana Timber LP (sustainable forestry
company)
- -------------------------------------------------------------------------------------------------------------------------
Carl Frischling -- 1937 1991 Partner, law firm of Kramer Levin Director, Reich & Tang Funds) (7
Trustee Naftalis and Frankel LLP portfolios)
- -------------------------------------------------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------------------------------------------------
Larry Soll -- 1942 2003 Retired None
Trustee
- -------------------------------------------------------------------------------------------------------------------------
Raymond Stickel, Jr. -- 1944 2005 Retired None
Trustee Formerly: Partner, Deloitte & Touche;
and Director, Mainstay VP Series Funds,
Inc. (25 portfolios)
- -------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Mr. Flanagan was appointed as Trustee of the Trust on February 24, 2007. Mr.
Flanagan is considered an interested person of the Trust because he is an
officer of the advisor to the Trust, and an officer and a director of
INVESCO PLC, parent of the advisor to the Trust.
(2) Mr. Taylor 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.
33
TRUSTEES AND OFFICERS--(CONTINUED)
AIM International Growth Fund
<Table>
<Caption>
OTHER
TRUSTEE TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND AND/OR DIRECTORSHIP(S)
POSITION(S) HELD WITH THE OFFICER PRINCIPAL OCCUPATION(S) HELD BY TRUSTEE/
TRUST SINCE DURING PAST 5 YEARS DIRECTOR
- -------------------------------------------------------------------------------------------------------------------------
Other Officers
- -------------------------------------------------------------------------------------------------------------------------
Russell C. Burk -- 1958 2005 Senior Vice President and Senior Officer N/A
Senior Vice President and of The AIM Family of Funds--Registered
Senior Officer Trademark--
Formerly: Director of Compliance and
Assistant General Counsel, ICON
Advisers, Inc.; Financial Consultant,
Merrill Lynch; General Counsel and
Director of Compliance, ALPS Mutual
Funds, Inc.
- -------------------------------------------------------------------------------------------------------------------------
John M. Zerr -- 1962 2006 Director, Senior Vice President, N/A
Senior Vice President, Chief Secretary and General Counsel, A I M
Legal Officer and Secretary Management Group Inc., A I M Advisors,
Inc. and A I M Capital Management, Inc.;
Director, Vice President and Secretary,
AIM Investment Services, Inc. and
INVESCO Distributors, Inc.; Director,
Senior Vice President and Secretary,
A I M Distributors, Inc.; Director and
Vice President, INVESCO Funds Group
Inc.; Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--; and
Manager, PowerShares Capital Management
LLC
Formerly: Director, Vice President and
Secretary, Fund Management Company; Vice
President, A I M Capital Management,
Inc.; Chief Operating Officer, Senior
Vice President, General Counsel and
Secretary, Liberty Ridge Capital, Inc.
(an investment adviser); Vice President
and Secretary, PBHG Funds (an investment
company); Vice President and Secretary,
PBHG Insurance Series Fund (an
investment company); General Counsel and
Secretary, Pilgrim Baxter Value
Investors (an investment adviser); Chief
Operating Officer, General Counsel and
Secretary, Old Mutual Investment
Partners (a broker-dealer); General
Counsel and Secretary, Old Mutual Fund
Services (an administrator); General
Counsel and Secretary, Old Mutual
Shareholder Services (a shareholder
servicing center); Executive Vice
President, General Counsel and
Secretary, Old Mutual Capital, Inc. (an
investment adviser); and Vice President
and Secretary, Old Mutual Advisors Funds
(an investment company)
- -------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley -- 1959 2004 Global Compliance Director, INVESCO PLC; N/A
Vice President and Vice President of The AIM Family of
Funds--Registered Trademark--
Formerly: Senior Vice President, A I M
Management Group Inc. (financial
services holding company); Senior Vice
President and Chief Compliance Officer,
A I M Advisors, Inc. and The AIM Family
of Funds--Registered Trademark--; Vice
President and Chief Compliance Officer,
A I M Capital Management, Inc. and A I M
Distributors, Inc.; Vice President, AIM
Investment Services, Inc. and Fund
Management Company; Senior Vice
President and Chief Compliance Officer
of The AIM Family of Funds--Registered
Trademark--; and Senior Vice President
and Compliance Director, Delaware
Investments Family of Funds
- -------------------------------------------------------------------------------------------------------------------------
Kevin M. Carome -- 1956 2003 Senior Vice President and General
Vice President Counsel, INVESCO PLC; Director, INVESCO
Funds Group, Inc.; Director and
Secretary, IVZ, Inc. and INVESCO Group
Services, Inc.; Secretary, INVESCO North
American Holdings, Inc.; and Vice
President of The AIM Family of
Funds--Registered Trademark--
Formerly: Director, Senior Vice N/A
President, Secretary and General
Counsel, A I M Management Group Inc. and
A I M Advisors, Inc.; Senior Vice
President, A I M Distributors, Inc.;
Director, General Counsel and Vice
President, Fund Management Company; Vice
President, A I M Capital Management,
Inc. and AIM Investment Services, Inc.;
Senior Vice President, Chief Legal
Officer and Secretary of The AIM Family
of Funds--Registered Trademark--;
Director and Vice President, INVESCO
Distributors, Inc.; Chief Executive
Officer and President, INVESCO Funds
Group, Inc.; and Senior Vice President
and General Counsel, Liberty Financial
Companies, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Sidney M. Dilgren -- 1961 2004 Vice President, A I M Advisors, Inc. and N/A
Vice President, Principal A I M Capital Management, Inc.; and Vice
Financial Officer and President, Treasurer and Principal
Treasurer Financial Officer of The AIM Family of
Funds--Registered Trademark--
Formerly: Fund Treasurer, A I M
Advisors, Inc.; Senior Vice President,
AIM Investment Services, Inc.; and Vice
President, A I M Distributors, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Karen Dunn Kelley -- 1960 2004 Head of INVESCO's World Wide Fixed N/A
Vice President Income and Cash Management Group;
Director of Cash Management and Senior
Vice President, A I M Advisors, Inc. and
A I M Capital Management, Inc; Executive
Vice President, A I M Distributors,
Inc.; Senior Vice President, A I M
Management Group Inc.; Vice President,
The AIM Family of Funds--Registered
Trademark-- (other than AIM Treasurer's
Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust);
and President and Principal Executive
Officer, The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
Formerly: Director and President, Fund
Management Company; Chief Cash
Management Officer and Managing
Director, A I M Capital Management,
Inc.; Vice President, A I M Advisors,
Inc. and The AIM Family of
Funds--Registered Trademark-- (AIM
Treasurer's Series Trust, Short-Term
Investments Trust and Tax-Free
Investments Trust only)
- -------------------------------------------------------------------------------------------------------------------------
Lance A. Rejsek -- 1967 2005 Anti-Money Laundering Compliance N/A
Anti-Money Laundering Officer, A I M Advisors, Inc., A I M
Compliance Officer Capital Management, Inc., A I M
Distributors, Inc., AIM Investment
Services, Inc., AIM Private Asset
Management, Inc. and The AIM Family of
Funds--Registered Trademark--
Formerly: Anti-Money Laundering
Compliance Officer, Fund Management
Company; and Manager of the Fraud
Prevention Department, AIM Investment
Services, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Todd L. Spillane -- 1958 2006 Senior Vice President, A I M Management N/A
Chief Compliance Officer Group Inc.; Senior Vice President and
Chief Compliance Officer, A I M
Advisors, Inc. and A I M Capital
Management, Inc.; Chief Compliance
Officer of The AIM Family of
Funds--Registered Trademark--, INVESCO
Global Asset Management (N.A.), Inc.,
(registered investment advisor), INVESCO
Institutional (N.A.), Inc., (registered
investment advisor), INVESCO Private
Capital Investments, Inc. (holding
company), INVESCO Private Capital, Inc.
(registered investment advisor) and
INVESCO Senior Secured Management, Inc.
(registered investment advisor); and
Vice President, A I M Distributors, Inc.
and AIM Investment Services, Inc.
Formerly: Vice President, A I M Capital
Management, Inc. and Fund Management
Company; Global Head of Product
Development, AIG-Global Investment
Group, Inc.; and Chief Compliance
Officer and Deputy General Counsel,
AIG-SunAmerica Asset Management
- -------------------------------------------------------------------------------------------------------------------------
</Table>
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 1.800.959.4246.
<Table>
OFFICE OF THE FUND INVESTMENT ADVISOR DISTRIBUTOR AUDITORS
11 Greenway Plaza A I M Advisors, Inc. A I M Distributors, PricewaterhouseCoopers
Suite 100 11 Greenway Plaza Inc. LLP
Houston, TX 77046-1173 Suite 100 11 Greenway Plaza 1201 Louisiana Street
Houston, TX 77046-1173 Suite 100 Suite 2900
Houston, TX 77046-1173 Houston, TX 77002-5678
COUNSEL TO THE FUND COUNSEL TO THE TRANSFER AGENT CUSTODIAN
Ballard Spahr INDEPENDENT TRUSTEES AIM Investment State Street Bank and
Andrews & Ingersoll, LLP Kramer, Levin, Naftalis Services, Inc. Trust
1735 Market Street, 51st & Frankel LLP P.O. Box 4739 Company
Floor 1177 Avenue of the Houston, TX 77210-4739 225 Franklin Street
Philadelphia, PA 19103-7599 Americas Boston, MA 02110-2801
New York, NY 10036-2714
</Table>
34
[EDELIVERY Fund holdings and proxy voting information
GO PAPERLESS
AIMINVESTMENTS.COM/EDELIVERY The Fund provides a complete list of its holdings four times in
GRAPHIC] each fiscal year,at the quarter-ends. For the second and fourth
quarters, the lists appear in the Fund's semiannual and annual
REGISTER FOR EDELIVERY reports to shareholders. For the first and third quarters,the
Fund files the lists with the Securities and Exchange Commission
eDelivery is the process of receiving your fund and account (SEC) on Form N-Q. The most recent list of portfolio holdings is
information via e-mail. Once your quarterly statements,tax available at AIMinvestments.com. From our home page,click on
forms,fund reports,and prospectuses are available,we will send Products & Performance,then Mutual Funds,then Fund Overview.
you an e-mail notification containing links to these documents. Select your Fund from the drop-down menu and click on Complete
For security purposes,you will need to log in to your account to Quarterly Holdings. Shareholders can also look up the Fund's
view your statements and tax forms. Forms N-Q on the SEC Web site at sec.gov. Copies of the Fund's
Forms N-Q may be reviewed and copied at the SEC Public Reference
WHY SIGN UP? Room in Washington,D.C. You can obtain information on the
operation of the Public Reference Room,including information
Register for eDelivery to: about duplicating fee charges,by calling 202-942-8090 or
800-732-0330,or by electronic request at the following e-mail
o save your Fund the cost of printing and postage. address: publicinfo@sec.gov. The SEC file numbers for the Fund
are 811-06463 and 033-44611.
o reduce the amount of paper you receive.
A description of the policies and procedures that the Fund uses
o gain access to your documents faster by not waiting for the to determine how to vote proxies relating to portfolio
mail. securities is available without charge,upon request,from our
Client Services department at 800-959-4246 or on the AIM Web
o view your documents online anytime at your convenience. site,AIMinvestments.com. On the home page,scroll down and click
on Proxy Policy. The information is also available on the SEC
o save the documents to your personal computer or print them out Web site,sec.gov.
for your records.
Information regarding how the Fund voted proxies related to its
HOW DO I SIGN UP? portfolio securities during the 12 months ended June 30,2007, is
available at our Web site. Go to AIMinvestments.com,access the
It's easy. Just follow these simple steps: About Us tab,click on Required Notices and then click on Proxy
Voting Activity. Next,select the Fund from the drop-down menu.
1. Log in to your account. The information is also available on the SEC Web site,sec.gov.
2. Click on the "Service Center" tab. If used after January 20, 2008, this report must be accompanied
by a Fund fact sheet or by an AIM Quarterly Performance Review
3. Select "Register for eDelivery" and complete the consent for the most recent quarter-end. Mutual funds and
process. exchange-traded funds distributed by A I M Distributors, Inc.
This AIM service is provided by AIM Investment Services,Inc. IGR-AR-1 A I M Distributors,Inc.
[AIM INVESTMENTS LOGO]
-- REGISTERED TRADEMARK --
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the Registrant had
adopted a code of ethics (the "Code") that applies to the Registrant's
principal executive officer ("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 Raymond Stickel, Jr. Mr.
Stickel is "independent" within the meaning of that term as used in
Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
FEES BILLED BY PWC RELATED TO THE REGISTRANT
PWC billed the Registrant aggregate fees for services rendered to the
Registrant for the last two fiscal years as follows:
Percentage of Fees Percentage of Fees
Billed Applicable to Billed Applicable to
Non-Audit Services Non-Audit Services
Provided for fiscal Provided for fiscal
Fees Billed for year end 2007 Fees Billed for year end 2006
Services Rendered to Pursuant to Waiver of Services Rendered to Pursuant to Waiver of
the Registrant for Pre-Approval the Registrant for Pre-Approval
fiscal year end 2007 Requirement(1) fiscal year end 2006 Requirement(1)
-------------------- --------------------- -------------------- ---------------------
Audit Fees $233,535 N/A $232,608 N/A
Audit-Related Fees $ 0 0% $ 0 0%
Tax Fees(2) $ 48,845 0% $ 47,560 0%
All Other Fees $ 0 0% $ 0 0%
-------- --------
Total Fees $282,380 0% $280,168 0%
PWC billed the Registrant aggregate non-audit fees of $48,845 for the fiscal
year ended 2007, and $47,560 for the fiscal year ended 2006, for non-audit
services rendered to the Registrant.
- ----------
(1) With respect to the provision of non-audit services, the pre-approval
requirement is waived pursuant to a de minimis exception if (i) such
services were not recognized as non-audit services by the Registrant at the
time of engagement, (ii) the aggregate amount of all such services provided
is no more than 5% of the aggregate audit and non-audit fees paid by the
Registrant to PWC during a fiscal year; and (iii) such services are
promptly brought to the attention of the Registrant's Audit Committee and
approved by the Registrant's Audit Committee prior to the completion of the
audit.
(2) Tax Fees for the fiscal year end October 31, 2007 includes fees billed for
reviewing tax returns and consultation services. Tax fees for fiscal year
end October 31, 2006 includes fees billed for reviewing tax returns.
FEES BILLED BY PWC RELATED TO AIM AND AIM AFFILIATES
PWC billed A I M Advisors, Inc. ("AIM"), the Registrant's adviser, and any
entity controlling, controlled by or under common control with AIM that provides
ongoing services to the Registrant ("AIM Affiliates") aggregate fees for
pre-approved non-audit services rendered to AIM and AIM Affiliates for the last
two fiscal years as follows:
Fees Billed for Non- Fees Billed for Non-
Audit Services Audit Services
Rendered to AIM and Percentage of Fees Rendered to AIM and Percentage of Fees
AIM Affiliates for Billed Applicable to AIM Affiliates for Billed Applicable to
fiscal year end 2007 Non-Audit Services fiscal year end 2006 Non-Audit Services
That Were Required Provided for fiscal That Were Required Provided for fiscal
to be Pre-Approved year end 2007 Pursuant to be Pre-Approved year end 2006 Pursuant to
by the Registrant's to Waiver of Pre-Approval by the Registrant's Waiver of Pre-Approval
Audit Committee Requirement(1) Audit Committee Requirement(1)
-------------------- ------------------------- -------------------- -------------------------
Audit-Related Fees $0 0% $0 0%
Tax Fees $0 0% $0 0%
All Other Fees $0 0% $0 0%
--- ---
Total Fees(2) $0 0% $0 0%
- ----------
(1) With respect to the provision of non-audit services, the pre-approval
requirement is waived pursuant to a de minimis exception if (i) such
services were not recognized as non-audit services by the Registrant at the
time of engagement, (ii) the aggregate amount of all such services provided
is no more than 5% of the aggregate audit and non-audit fees paid by the
Registrant, AIM and AIM Affiliates to PWC during a fiscal year; and (iii)
such services are promptly brought to the attention of the Registrant's
Audit Committee and approved by the Registrant's Audit Committee prior to
the completion of the audit.
(2) Including the fees for services not required to be pre-approved by the
registrant's audit committee, PWC billed AIM and AIM Affiliates aggregate
non-audit fees of $0 for the fiscal year ended 2007, and $0 for the fiscal
year ended 2006, for non-audit services rendered to AIM and AIM Affiliates.
The Audit Committee also has considered whether the provision of non-audit
services that were rendered to AIM and AIM Affiliates that were not
required to be pre-approved pursuant to SEC regulations, if any, is
compatible with maintaining PWC's independence.
PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
POLICIES AND PROCEDURES
As adopted by the Audit Committees of
the AIM Funds (the "Funds")
Last Amended September 18, 2006
STATEMENT OF PRINCIPLES
Under the Sarbanes-Oxley Act of 2002 and rules adopted by the Securities and
Exchange Commission ("SEC") ("Rules"), the Audit Committees of the Funds' (the
"Audit Committee") Board of Trustees (the "Board") are responsible for the
appointment, compensation and oversight of the work of independent accountants
(an "Auditor"). As part of this responsibility and to assure that the Auditor's
independence is not impaired, the Audit Committees pre-approve the audit and
non-audit services provided to the Funds by each Auditor, as well as all
non-audit services provided by the Auditor to the Funds' investment adviser and
to affiliates of the adviser that provide ongoing services to the Funds
("Service Affiliates") if the services directly impact the Funds' operations or
financial reporting. The SEC Rules also specify the types of services that an
Auditor may not provide to its audit client. The following policies and
procedures comply with the requirements for pre-approval and provide a mechanism
by which management of the Funds may request and secure pre-approval of audit
and non-audit services in an orderly manner with minimal disruption to normal
business operations.
Proposed services either may be pre-approved without consideration of specific
case-by-case services by the Audit Committees ("general pre-approval") or
require the specific pre-approval of the Audit Committees ("specific
pre-approval"). As set forth in these policies and procedures, unless a type of
service has received general pre-approval, it will require specific pre-approval
by the Audit Committees. Additionally, any fees exceeding 110% of estimated
pre-approved fee levels provided at the time the service was pre-approved will
also require specific approval by the Audit Committees before payment is made.
The Audit Committees will also consider the impact of additional fees on the
Auditor's independence when determining whether to approve any additional fees
for previously pre-approved services.
The Audit Committees will annually review and generally pre-approve the services
that may be provided by each Auditor without obtaining specific pre-approval
from the Audit Committee. The term of any general pre-approval runs from the
date of such pre-approval through September 30th of the following year, unless
the Audit Committees consider a different period and state otherwise. The Audit
Committees will add to or subtract from the list of general pre-approved
services from time to time, based on subsequent determinations.
The purpose of these policies and procedures is to set forth the guidelines to
assist the Audit Committees in fulfilling their responsibilities.
DELEGATION
The Audit Committees may from time to time delegate pre-approval authority to
one or more of its members who are Independent Trustees. All decisions to
pre-approve a service by a delegated member shall be reported to the Audit
Committee at its next quarterly meeting.
AUDIT SERVICES
The annual audit services engagement terms will be subject to specific
pre-approval of the Audit Committees. Audit services include the annual
financial statement audit and other procedures such as tax provision work that
is required to be performed by the independent auditor to be able to form an
opinion on the Funds' financial statements. The Audit Committee will obtain,
review and consider sufficient information concerning the proposed Auditor to
make a reasonable evaluation of the Auditor's qualifications and independence.
In addition to the annual Audit services engagement, the Audit Committees may
grant either general or specific pre-approval of other audit services, which are
those services that only the independent auditor reasonably can provide. Other
Audit services may include services such as issuing consents for the
inclusion of audited financial statements with SEC registration statements,
periodic reports and other documents filed with the SEC or other documents
issued in connection with securities offerings.
NON-AUDIT SERVICES
The Audit Committees may provide either general or specific pre-approval of any
non-audit services to the Funds and its Service Affiliates if the Audit
Committees believe that the provision of the service will not impair the
independence of the Auditor, is consistent with the SEC's Rules on auditor
independence, and otherwise conforms to the Audit Committee's general principles
and policies as set forth herein.
AUDIT-RELATED SERVICES
"Audit-related services" are assurance and related services that are reasonably
related to the performance of the audit or review of the Fund's financial
statements or that are traditionally performed by the independent auditor.
Audit-related services include, among others, accounting consultations related
to accounting, financial reporting or disclosure matters not classified as
"Audit services"; assistance with understanding and implementing new accounting
and financial reporting guidance from rulemaking authorities; and agreed-upon
procedures related to mergers, compliance with ratings agency requirements and
interfund lending activities.
TAX SERVICES
"Tax services" include, but are not limited to, the review and signing of the
Funds' federal tax returns, the review of required distributions by the Funds
and consultations regarding tax matters such as the tax treatment of new
investments or the impact of new regulations. The Audit Committee will
scrutinize carefully the retention of the Auditor in connection with a
transaction initially recommended by the Auditor, the major business purpose of
which may be tax avoidance or the tax treatment of which may not be supported in
the Internal Revenue Code and related regulations. The Audit Committee will
consult with the Funds' Treasurer (or his or her designee) and may consult with
outside counsel or advisors as necessary to ensure the consistency of Tax
services rendered by the Auditor with the foregoing policy.
No Auditor shall represent any Fund or any Service Affiliate before a tax court,
district court or federal court of claims.
Under rules adopted by the Public Company Accounting Oversight Board and
approved by the SEC, in connection with seeking Audit Committee pre-approval of
permissible Tax services, the Auditor shall:
1. Describe in writing to the Audit Committees, which writing may be in
the form of the proposed engagement letter:
a. The scope of the service, the fee structure for the
engagement, and any side letter or amendment to the
engagement letter, or any other agreement between the
Auditor and the Fund, relating to the service; and
b. Any compensation arrangement or other agreement, such as a
referral agreement, a referral fee or fee-sharing
arrangement, between the Auditor and any person (other than
the Fund) with respect to the promoting, marketing, or
recommending of a transaction covered by the service;
2. Discuss with the Audit Committees the potential effects of the
services on the independence of the Auditor; and
3. Document the substance of its discussion with the Audit Committees.
ALL OTHER AUDITOR SERVICES
The Audit Committees may pre-approve non-audit services classified as "All other
services" that are not categorically prohibited by the SEC, as listed in Exhibit
1 to this policy.
PRE-APPROVAL FEE LEVELS OR ESTABLISHED AMOUNTS
Pre-approval of estimated fees or established amounts for services to be
provided by the Auditor under general or specific pre-approval policies will be
set periodically by the Audit Committees. Any proposed fees exceeding 110% of
the maximum estimated pre-approved fees or established amounts for pre-approved
audit and non-audit services will be reported to the Audit Committees at the
quarterly Audit Committees meeting and will require specific approval by the
Audit Committees before payment is made. The Audit Committee will always factor
in the overall relationship of fees for audit and non-audit services in
determining whether to pre-approve any such services and in determining whether
to approve any additional fees exceeding 110% of the maximum pre-approved fees
or established amounts for previously pre-approved services.
PROCEDURES
On an annual basis, A I M Advisors, Inc. ("AIM") will submit to the Audit
Committees for general pre-approval, a list of non-audit services that the Funds
or Service Affiliates of the Funds may request from the Auditor. The list will
describe the non-audit services in reasonable detail and will include an
estimated range of fees and such other information as the Audit Committee may
request.
Each request for services to be provided by the Auditor under the general
pre-approval of the Audit Committees will be submitted to the Funds' Treasurer
(or his or her designee) and must include a detailed description of the services
to be rendered. The Treasurer or his or her designee will ensure that such
services are included within the list of services that have received the general
pre-approval of the Audit Committees. The Audit Committees will be informed at
the next quarterly scheduled Audit Committees meeting of any such services for
which the Auditor rendered an invoice and whether such services and fees had
been pre-approved and if so, by what means.
Each request to provide services that require specific approval by the Audit
Committees shall be submitted to the Audit Committees jointly by the Fund's
Treasurer or his or her designee and the Auditor, and must include a joint
statement that, in their view, such request is consistent with the policies and
procedures and the SEC Rules.
Each request to provide tax services under either the general or specific
pre-approval of the Audit Committees will describe in writing: (i) the scope of
the service, the fee structure for the engagement, and any side letter or
amendment to the engagement letter, or any other agreement between the Auditor
and the audit client, relating to the service; and (ii) any compensation
arrangement or other agreement between the Auditor and any person (other than
the audit client) with respect to the promoting, marketing, or recommending of a
transaction covered by the service. The Auditor will discuss with the Audit
Committees the potential effects of the services on the Auditor's independence
and will document the substance of the discussion.
Non-audit services pursuant to the de minimis exception provided by the SEC
Rules will be promptly brought to the attention of the Audit Committees for
approval, including documentation that each of the conditions for this
exception, as set forth in the SEC Rules, has been satisfied.
On at least an annual basis, the Auditor will prepare a summary of all the
services provided to any entity in the investment company complex as defined in
section 2-01(f)(14) of Regulation S-X in sufficient detail as to the nature of
the engagement and the fees associated with those services.
The Audit Committees have designated the Funds' Treasurer to monitor the
performance of all services provided by the Auditor and to ensure such services
are in compliance with these policies and procedures. The Funds' Treasurer will
report to the Audit Committee on a periodic basis as to the results of such
monitoring. Both the Funds' Treasurer and management of AIM will immediately
report to the chairman of the Audit Committee any breach of these policies and
procedures that comes to the attention of the Funds' Treasurer or senior
management of AIM.
EXHIBIT 1 TO PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES POLICIES AND
PROCEDURES
CONDITIONALLY PROHIBITED NON-AUDIT SERVICES (NOT PROHIBITED IF THE FUND CAN
REASONABLY CONCLUDE THAT THE RESULTS OF THE SERVICE WOULD NOT BE SUBJECT TO
AUDIT PROCEDURES IN CONNECTION WITH THE AUDIT OF THE FUND'S FINANCIAL
STATEMENTS)
- Bookkeeping or other services related to the accounting records or
financial statements of the audit client
- Financial information systems design and implementation
- Appraisal or valuation services, fairness opinions, or
contribution-in-kind reports
- Actuarial services
- Internal audit outsourcing services
CATEGORICALLY PROHIBITED NON-AUDIT SERVICES
- Management functions
- Human resources
- Broker-dealer, investment adviser, or investment banking services
- Legal services
- Expert services unrelated to the audit
- Any service or product provided for a contingent fee or a commission
- Services related to marketing, planning, or opining in favor of the
tax treatment of confidential transactions or aggressive tax position
transactions, a significant purpose of which is tax avoidance
- Tax services for persons in financial reporting oversight roles at the
Fund
- Any other service that the Public Company Oversight Board determines
by regulation is impermissible.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Investments in securities of unaffiliated issuers is included as part
of the reports to stockholders filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 11. CONTROLS AND PROCEDURES.
(a) As of December 17, 2007, an evaluation was performed under the supervision
and with the participation of the officers of the Registrant, including the
PEO and PFO, to assess the effectiveness of the Registrant's disclosure
controls and procedures, as that term is defined in Rule 30a-3(c) under the
Investment Company Act of 1940 (the "Act"), as amended. Based on that
evaluation, the Registrant's officers, including the PEO and PFO, concluded
that, as of December 17, 2007, the Registrant's disclosure controls and
procedures were reasonably designed to ensure: (1) that information
required to be disclosed by the Registrant on Form N-CSR is recorded,
processed, summarized and reported within the time periods specified by the
rules and forms of the Securities and Exchange Commission; and (2) that
material information relating to the Registrant is made known to the PEO
and PFO as appropriate to allow timely decisions regarding required
disclosure.
(b) There have been no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act) that
occurred during the second fiscal quarter of the period covered by this
report that have materially affected, or are reasonably likely to
materially affect, the Registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
12(a)(1) Code of Ethics.
12(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.
12(a)(3) Not applicable.
12(b) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(b) under the Investment Company Act of
1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: AIM International Mutual Funds
By: /s/ PHILIP A. TAYLOR
---------------------------------
Philip A. Taylor
Principal Executive Officer
Date: January 4, 2008
Pursuant to the requirements of the Securities and 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.
By: /s/ PHILIP A. TAYLOR
---------------------------------
Philip A. Taylor
Principal Executive Officer
Date: January 4, 2008
By: /s/ SIDNEY M. DILGREN
---------------------------------
Sidney M. Dilgren
Principal Financial Officer
Date: January 4, 2008
EXHIBIT INDEX
12(a) (1) Code of Ethics.
12(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.
12(a)(3) Not applicable.
12(b) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(b) under the Investment Company Act of
1940.