<Page>
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: 811-09713
811-21024
Active Assets Institutional Money Trust
Active Assets Institutional Government Securities Trust
(Exact name of registrant as specified in charter)
1221 Avenue of the Americas, New York, New York 10020
(Address of principal executive offices) (Zip code)
Ronald E. Robison
1221 Avenue of the Americas, New York, New York 10020
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: June 30, 2003
Date of reporting period: June 30, 2003
Item 1 - Report to Shareholders
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WELCOME, SHAREHOLDER:
THIS ANNUAL REPORT INCLUDES EACH FUND'S FINANCIAL STATEMENTS AND A LIST OF FUND
INVESTMENTS, AS WELL AS OTHER INFORMATION.
AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH MONEY
MARKET FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE,
IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THESE FUNDS.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS FOR THE FUNDS
BEING OFFERED. THERE IS NO ASSURANCE THAT THE FUNDS WILL ACHIEVE THEIR
INVESTMENT OBJECTIVES. THE FUNDS ARE SUBJECT TO MARKET RISK, WHICH IS THE
POSSIBILITY THAT THE MARKET VALUES OF SECURITIES OWNED BY THE FUNDS WILL DECLINE
AND, THEREFORE, THE VALUE OF THE FUNDS SHARES MAY BE LESS THAN WHAT YOU PAID FOR
THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THESE FUNDS.
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Active Assets Institutional Money Trust
Active Assets Institutional Government Securities Trust
ANNUAL HOUSEHOLDING NOTICE
To reduce printing and mailing costs, the Funds attempt to eliminate duplicate
mailings to the same address. The Funds deliver a single copy of certain
shareholder documents including shareholder reports, prospectuses and proxy
materials, to investors with the same last name and who reside at the same
address. Your participation in this program will continue for an unlimited
period of time, unless you instruct us otherwise. You can request multiple
copies of these documents by calling (800) 350-6414, 8:00 am to 8:00 pm, ET.
Once our Customer Service Center has received your instructions, we will begin
sending individual copies for each account within 30 days.
2
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Active Assets Institutional Money Trust
PORTFOLIO OF INVESTMENTS / / JUNE 30, 2003
<Table>
<Caption>
ANNUALIZED
PRINCIPAL YIELD
AMOUNT IN ON DATE OF
THOUSANDS DESCRIPTION AND MATURITY DATES PURCHASE VALUE
- ------------------------------------------------------------------------------
Commercial Paper (47.5%)
BANKING (2.2%)
$ 25,000 Northern Trust Corp.
08/08/03.......................... 1.22% $ 24,967,806
--------------
FINANCE - AUTOMOTIVE (2.2%)
25,000 Toyota Motor Credit Corp. - 144A*
08/29/03.......................... 1.15 24,952,882
--------------
FINANCE - CONSUMER (10.4%)
40,000 Barton Capital Corp. - 144A*
07/10/03.......................... 1.06 39,989,400
25,000 New Center Asset Trust
08/15/03.......................... 1.05 24,967,188
55,000 Sheffield Rec. Corp. - 144A*
07/03/03 - 08/04/03............... 1.00 - 1.26 54,962,178
--------------
119,918,766
--------------
FINANCIAL CONGLOMERATES (15.2%)
25,000 Delaware Funding Corp. - 144A*
07/25/03.......................... 1.05 24,982,500
45,000 General Electric Capital Corp.
08/27/03 - 09/23/03............... 1.18 - 1.20 44,893,750
50,000 Mortgage Interest Networking Trust
07/18/03 - 07/21/03............... 1.23 - 1.24 49,968,797
55,107 Old Line Funding Corp. - 144A*
07/15/03 - 07/28/03............... 1.05 - 1.23 55,067,497
--------------
174,912,544
--------------
INSURANCE (2.2%)
25,000 Marsh & McLennan Co. Inc. - 144A*
07/28/03.......................... 1.20 24,977,500
--------------
INTERNATIONAL BANKS (8.3%)
25,000 ANZ (DE) Inc.
07/11/03.......................... 1.16 24,991,979
40,000 CBA (Delaware) Finance Inc.
08/01/03.......................... 1.23 39,957,633
20,000 Royal Bank of Scotland PLC
07/02/03.......................... 1.25 19,999,306
11,000 Societe Generale N.A. Inc.
08/01/03.......................... 1.24 10,988,254
--------------
95,937,172
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
3
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Active Assets Institutional Money Trust
PORTFOLIO OF INVESTMENTS / / JUNE 30, 2003 CONTINUED
<Table>
<Caption>
ANNUALIZED
PRINCIPAL YIELD
AMOUNT IN ON DATE OF
THOUSANDS DESCRIPTION AND MATURITY DATES PURCHASE VALUE
- ------------------------------------------------------------------------------
PHARMACEUTICALS: MAJOR (7.0%)
$ 40,000 Johnson & Johnson - 144A*
10/15/03.......................... 1.00% $ 39,882,222
40,000 Pfizer Inc. - 144A*
07/29/03.......................... 1.07 39,966,711
--------------
79,848,933
--------------
Total Commercial Paper
(COST $545,515,603)............................... 545,515,603
--------------
U.S. Government Agencies (23.9%)
30,000 Federal Farm Credit Banks
07/30/03 - 08/05/03............... 1.45 - 1.48 29,961,504
20,000 Federal Home Loan Banks
09/24/03.......................... 0.88 19,958,681
108,035 Federal National Mortgage Assoc.
07/25/03 - 11/26/03............... 0.88 - 1.52 107,731,053
117,065 Freddie Mac
07/17/03 - 02/26/04............... 1.06 - 1.76 116,560,471
--------------
Total U.S. Government Agencies
(COST $274,211,709)............................... 274,211,709
--------------
Certificates of Deposit (15.7%)
50,000 BNP Paribas, New York Branch
07/14/03 - 08/11/03............... 1.19 - 1.24 50,000,000
25,000 Canadian Imperial Bank of Commerce,
New York Branch
07/16/03.......................... 1.24 25,000,000
25,000 Chase Manhattan Bank (USA), N.A.
07/03/03.......................... 1.24 25,000,000
25,000 Citibank, N.A.
09/12/03.......................... 1.10 25,000,000
55,000 State Street Bank & Trust Company
07/31/03 - 10/24/03............... 0.90 - 1.21 55,000,000
--------------
Total Certificates of Deposit
(COST $180,000,000)............................... 180,000,000
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
4
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Active Assets Institutional Money Trust
PORTFOLIO OF INVESTMENTS / / JUNE 30, 2003 CONTINUED
<Table>
<Caption>
ANNUALIZED
PRINCIPAL YIELD
AMOUNT IN ON DATE OF
THOUSANDS DESCRIPTION AND MATURITY DATES PURCHASE VALUE
- ------------------------------------------------------------------------------
Short-Term Bank Notes (4.8%)
$ 25,000 Bank of America, N.A.
07/10/03.......................... 1.23% $ 25,000,000
30,000 LaSalle Bank, N.A.
07/21/03.......................... 1.22 30,000,000
--------------
Total Short-Term Bank Notes
(COST $55,000,000)................................ 55,000,000
--------------
Repurchase Agreement (8.1%)
93,620 Goldman, Sachs & Co.
due 07/01/03 (dated 06/30/03;
proceeds $93,623,121) (a)
(COST $93,620,000)................ 1.20 93,620,000
--------------
</Table>
<Table>
Total Investments
(COST $1,148,347,312) (b)......... 100.0% 1,148,347,312
Other Assets in Excess of
Liabilities....................... 0.0 118,204
----- --------------
Net Assets......................... 100.0% $1,148,465,516
===== ==============
</Table>
- ---------------------
* RESALE IS RESTRICTED TO QUALIFIED INSTITUTIONAL INVESTORS.
(a) COLLATERALIZED BY FEDERAL NATIONAL MORTGAGE ASSOC. 4.50% - 5.50% DUE
05/01/18 - 06/01/33 VALUED AT $95,492,401.
(b) COST IS THE SAME FOR FEDERAL INCOME TAX PURPOSES.
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
5
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Active Assets Institutional Money Trust
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
JUNE 30, 2003
<Table>
Assets:
Investments in securities, at value (cost
$1,148,347,312).................................. $ 1,148,347,312
Cash.............................................. 3,447
Interest receivable............................... 333,633
Prepaid expenses.................................. 36,015
----------------
Total Assets.................................. 1,148,720,407
----------------
Liabilities:
Payable for:
Investment management fee....................... 141,969
Dividends to shareholders....................... 34,547
Accrued expenses.................................. 78,375
----------------
Total Liabilities............................. 254,891
----------------
Net Assets.................................... $ 1,148,465,516
================
Composition of Net Assets:
Paid-in-capital................................... $ 1,148,356,216
Accumulated undistributed net investment income... 109,300
----------------
Net Assets.................................... $ 1,148,465,516
================
Net Asset Value Per Share,
1,148,465,516 shares outstanding (UNLIMITED
SHARES AUTHORIZED OF $.01 PAR VALUE)........... $ 1.00
================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
6
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Active Assets Institutional Money Trust
FINANCIAL STATEMENTS CONTINUED
Statement of Operations
FOR THE YEAR ENDED JUNE 30, 2003
<Table>
Net Investment Income:
Interest Income................................... $ 18,145,067
---------------
Expenses
Investment management fee......................... 1,779,758
Custodian fees.................................... 63,511
Professional fees................................. 47,145
Shareholder reports and notices................... 30,847
Registration fees................................. 27,969
Trustees' fees and expenses....................... 13,457
Transfer agent fees and expenses.................. 2,565
Other............................................. 38,585
---------------
Total Expenses................................ 2,003,837
---------------
Net Investment Income......................... 16,141,230
Net Realized Gain............................. 8,900
---------------
Net Increase...................................... $ 16,150,130
===============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
7
<Page>
Active Assets Institutional Money Trust
FINANCIAL STATEMENTS CONTINUED
Statement of Changes in Net Assets
<Table>
<Caption>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JUNE 30, 2003 JUNE 30, 2002
-------------- --------------
Increase (Decrease) in Net Assets:
Operations:
Net investment income................... $ 16,141,230 $ 28,309,137
Net realized gain....................... 8,900 27,936
-------------- --------------
Net Increase........................ 16,150,130 28,337,073
-------------- --------------
Dividends and Distributions to
Shareholders from:
Net investment income................... (16,141,230) (28,309,137)
Net realized gain....................... (8,900) (27,936)
-------------- --------------
Total Dividends and Distributions... (16,150,130) (28,337,073)
-------------- --------------
Net increase (decrease) from
transactions in shares of beneficial
interest............................... (4,293,399) 6,417,793
-------------- --------------
Net Increase (Decrease)............. (4,293,399) 6,417,793
Net Assets:
Beginning of period..................... 1,152,758,915 1,146,341,122
-------------- --------------
End of Period
(INCLUDING ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME OF $109,300 AND
$109,300, RESPECTIVELY)................ $1,148,465,516 $1,152,758,915
============== ==============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
8
<Page>
Active Assets Institutional Money Trust
NOTES TO FINANCIAL STATEMENTS / / JUNE 30, 2003
1. Organization and Accounting Policies
Active Assets Institutional Money Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is high
current income, preservation of capital and liquidity. The Fund was organized as
a Massachusetts business trust on November 23, 1999 and commenced operations on
February 15, 2000.
The following is a summary of significant accounting policies:
A. Valuation of Investments -- Portfolio securities are valued at amortized
cost, which approximates market value.
B. Accounting for Investments -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Discounts are accreted and premiums are amortized over the life of the
respective securities. Interest income is accrued daily.
C. Repurchase Agreements -- The Fund may invest directly with institutions in
repurchase agreements. The Fund's custodian receives the collateral, which is
marked-to-market daily to determine that the value of the collateral does not
decrease below the repurchase price plus accrued interest.
D. Federal Income Tax Policy -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
E. Dividends and Distributions to Shareholders -- The Fund records dividends and
distributions to shareholders as of the close of each business day.
F. Use of Estimates -- The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures.
Actual results could differ from those estimates.
2. Investment Management Agreement
Pursuant to an Investment Management Agreement with Morgan Stanley Investment
Advisors Inc. (the "Investment Manager"), the Fund pays the Investment Manager a
management fee, accrued daily and payable monthly, by applying the annual rate
of 0.15% to the net assets of the Fund determined as of the close of each
business day.
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
9
<Page>
Active Assets Institutional Money Trust
NOTES TO FINANCIAL STATEMENTS / / JUNE 30, 2003 CONTINUED
The Investment Manager has agreed to reimburse all operating expenses and to
waive the compensation provided for in its Investment Management Agreement to
the extent that such expenses and compensation on an annualized basis exceed
0.20% of the daily net assets of the Fund.
3. Security Transactions and Transactions with Affiliates
The cost of purchases and proceeds from sales/maturities of portfolio securities
for the year ended June 30, 2003 aggregated $39,883,921,228 and $39,901,264,070,
respectively.
Morgan Stanley Trust, an affiliate of the Investment Manager, is the Fund's
transfer agent.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest, at $1.00 per share, were as
follows:
<Table>
<Caption>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JUNE 30, 2003 JUNE 30, 2002
-------------- --------------
Shares sold............................. 4,177,514,450 4,873,773,803
Shares issued in reinvestment of
dividends and distributions............ 16,254,374 28,548,326
-------------- --------------
4,193,768,824 4,902,322,129
Shares redeemed......................... (4,198,062,223) (4,895,904,336)
-------------- --------------
Net increase (decrease) in shares
outstanding............................ (4,293,399) 6,417,793
============== ==============
</Table>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
10
<Page>
Active Assets Institutional Money Trust
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<Table>
<Caption>
FOR THE PERIOD
FOR THE YEAR ENDED JUNE 30, FEBRUARY 15, 2000*
------------------------------------------- THROUGH
2003 2002 2001 JUNE 30, 2000
------------- ------------- ------------- ------------------
Selected Per Share Data:
Net asset value, beginning of
period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------
Net income from investment
operations................... 0.014 0.024 0.058 0.023
Less dividends from net
investment income............ (0.014)+ (0.024)+ (0.058)+ (0.023)
------- ------- ------- -------
Net asset value, end of
period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======
Total Return.................. 1.37% 2.45% 5.95% 2.31%(1)
Ratios to Average Net Assets:
Expenses...................... 0.17% 0.17% 0.19% 0.20%(2)(3)
Net investment income......... 1.36% 2.40% 5.61% 6.12%(2)(3)
Supplemental Data:
Net assets, end of period, in
thousands.................... $1,148,466 $1,152,759 $1,146,341 $813,428
</Table>
- ---------------------
* COMMENCEMENT OF OPERATIONS.
+ INCLUDES CAPITAL GAIN DISTRIBUTION OF LESS THAN $0.001.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
(3) IF THE FUND HAD BORNE ALL OF ITS EXPENSES THAT WERE REIMBURSED OR WAIVED
BY THE INVESTMENT MANAGER, THE ANNUALIZED EXPENSE AND NET INVESTMENT
INCOME RATIOS WOULD HAVE BEEN 0.31% AND 6.01%, RESPECTIVELY.
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
11
<Page>
Active Assets Institutional Money Trust
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees of
Active Assets Institutional Money Trust:
We have audited the accompanying statement of assets and liabilities of Active
Assets Institutional Money Trust (the "Fund"), including the portfolio of
investments, as of June 30, 2003, and the related statements of operations for
the year then ended and changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of June 30, 2003, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Active
Assets Institutional Money Trust as of June 30, 2003, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the periods presented, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
NEW YORK, NEW YORK
AUGUST 7, 2003
2003 FEDERAL TAX NOTICE (UNAUDITED)
Of the Fund's ordinary income dividends paid during the fiscal
year ended June 30, 2003, 2.74% was attributable to qualifying
Federal obligations. Please consult your tax advisor to determine
if any portion of the dividends you received is exempt from state
income tax.
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
12
<Page>
Active Assets Institutional Government Securities Trust
PORTFOLIO OF INVESTMENTS / / JUNE 30, 2003
<Table>
<Caption>
ANNUALIZED
PRINCIPAL YIELD
AMOUNT IN ON DATE OF
THOUSANDS DESCRIPTION AND MATURITY DATES PURCHASE VALUE
- ----------------------------------------------------------------------------
U.S. Government Agencies (68.9%)
$20,000 Federal Farm Credit Banks
07/11/03 - 01/15/04............... 0.98 - 1.16% $ 19,963,554
80,085 Federal Home Loan Banks
07/09/03 - 09/19/03............... 0.95 - 1.16 80,023,636
7,000 Student Loan Marketing Assoc.
07/22/03.......................... 0.89 6,996,366
------------
Total U.S. Government Agencies
(COST $106,983,556)............................... 106,983,556
------------
U.S. Government Obligations (15.4%)
24,000 U.S. Treasury Bills
07/03/03 - 12/26/03
(COST $23,967,957)................ 0.83 - 1.09 23,967,957
------------
Repurchase Agreement (15.4%)
23,945 Goldman, Sachs & Co.
due 07/01/03 (dated 06/30/03;
proceeds $23,945,798) (a)
(COST $23,945,000)................ 1.20 23,945,000
------------
</Table>
<Table>
Total Investments
(COST $154,896,513) (b)........... 99.7% 154,896,513
Other Assets in Excess of
Liabilities....................... 0.3 466,871
----- -------------
Net Assets......................... 100.0% $ 155,363,384
===== =============
</Table>
- ---------------------
(a) COLLATERALIZED BY FEDERAL NATIONAL MORTGAGE ASSOC. 5.00% - 5.50% DUE
06/01/33 - 07/01/33 VALUED AT $24,423,900.
(b) COST IS THE SAME FOR FEDERAL INCOME TAX PURPOSES.
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL GOVERNMENT SECURITIES TRUST
13
<Page>
Active Assets Institutional Government Securities Trust
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
JUNE 30, 2003
<Table>
Assets:
Investments in securities, at value (Including a
repurchase agreement of $23,945,000)
(cost $154,896,513).............................. $154,896,513
Cash.............................................. 481,157
Deferred offering costs........................... 25,473
Receivable from affiliate......................... 44,400
Prepaid expenses and other assets................. 938
------------
Total Assets.................................. 155,448,481
------------
Liabilities:
Dividends payable to shareholders................. 4,438
Offering costs.................................... 25,473
Accrued expenses.................................. 55,186
------------
Total Liabilities............................. 85,097
------------
Net Assets.................................... $155,363,384
============
Composition of Net Assets:
Paid-in-capital................................... $155,360,383
Undistributed net investment income............... 3,001
------------
Net Assets.................................... $155,363,384
============
Net Asset Value Per Share,
155,363,384 shares outstanding (UNLIMITED SHARES
AUTHORIZED OF $.01 PAR VALUE).................. $ 1.00
============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL GOVERNMENT SECURITIES TRUST
14
<Page>
Active Assets Institutional Government Securities Trust
FINANCIAL STATEMENTS CONTINUED
Statement of Operations
FOR THE PERIOD NOVEMBER 4, 2002* THROUGH JUNE 30, 2003
<Table>
Net Investment Income:
Interest Income................................... $447,381
--------
Expenses
Investment management fee......................... 55,648
Offering costs.................................... 48,317
Professional fees................................. 40,910
Registration fees................................. 12,569
Custodian fees.................................... 11,888
Shareholder reports and notices................... 2,241
Transfer agent fees and expenses.................. 692
Other............................................. 3,054
--------
Total Expenses................................ 175,319
Less: amounts waived/reimbursed................... (164,431)
--------
Net Expenses.................................. 10,888
--------
Net Investment Income............................. $436,493
========
</Table>
- ---------------------
* COMMENCEMENT OF OPERATIONS
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL GOVERNMENT SECURITIES TRUST
15
<Page>
Active Assets Institutional Government Securities Trust
FINANCIAL STATEMENTS CONTINUED
Statement of Changes in Net Assets
<Table>
<Caption>
FOR THE PERIOD
NOVEMBER 4, 2002*
THROUGH
JUNE 30, 2003
-----------------
Increase (Decrease) in Net Assets:
Operations:
Net investment income............................. $ 436,493
Dividends to shareholders from net investment
income........................................... (436,493)
Net increase from transactions in shares of
beneficial interest.............................. 155,263,384
------------
Net Increase.................................. 155,263,384
Net Assets:
Beginning of period............................... 100,000
------------
End of Period
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$3,001).......................................... $155,363,384
============
</Table>
- ---------------------
* COMMENCEMENT OF OPERATIONS
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL GOVERNMENT SECURITIES TRUST
16
<Page>
Active Assets Institutional Government Securities Trust
NOTES TO FINANCIAL STATEMENTS / / JUNE 30, 2003
1. Organization and Accounting Policies
Active Assets Institutional Government Securities Trust (the "Fund") is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Fund's investment
objective is high current income, preservation of capital and liquidity. The
Fund was organized as a Massachusetts business trust on January 18, 2002, and
had no operations other than those relating to organizational matters and the
issuance of 100,000 shares of beneficial interest for $100,000 to Morgan Stanley
Investment Advisors Inc. (the "Investment Manager") to effect the Fund's initial
capitalization. The Fund commenced operations on November 4, 2002.
The following is a summary of significant accounting policies:
A. Valuation of Investments -- Portfolio securities are valued at amortized
cost, which approximates market value.
B. Accounting for Investments -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Discounts are accreted and premiums are amortized over the life of the
respective securities. Interest income is accrued daily.
C. Repurchase Agreements -- The Fund may invest directly with institutions in
repurchase agreements. The Fund's custodian receives the collateral, which is
marked-to-market daily to determine that the value of the collateral does not
decrease below the repurchase price plus accrued interest.
D. Federal Income Tax Policy -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
E. Dividends and Distributions to Shareholders -- The Fund records dividends and
distributions to shareholders as of the close of each business day.
F. Offering Costs -- The Investment Manager incurred offering costs on behalf of
the Fund in the amount of $73,790, which will be reimbursed by the Fund for the
full amount thereof, exclusive of amounts waived. Such expenses were deferred
and are being amortized on the straight-line method over a period of
approximately one year or less from the commencement of operations.
ACTIVE ASSETS INSTITUTIONAL GOVERNMENT SECURITIES TRUST
17
<Page>
Active Assets Institutional Government Securities Trust
NOTES TO FINANCIAL STATEMENTS / / JUNE 30, 2003 CONTINUED
G. Use of Estimates -- The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures.
Actual results could differ from those estimates.
2. Investment Management Agreement
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
annual rate of 0.15% to the net assets of the Fund determined as of the close of
each business day.
The Investment Manager has agreed to reimburse all operating expenses and to
waive the compensation provided for in its Investment Management Agreement until
the Fund attains $100 million in net assets or December 31, 2003, whichever
comes first. Once the Fund attains net assets of $100 million, the Fund's
expenses will be capped until December 31, 2003 as follows: 0.05% of the Fund's
daily net assets up to $250 million; 0.10% of the Fund's daily net assets while
the Fund's net assets are between $250 million and $500 million; 0.15% of the
Fund's daily net assets while the Fund's net assets are between $500 million and
$750 million; and 0.20% of the Fund's daily net assets once the Fund's net
assets exceed $750 million. Thereafter, the Investment Manager has agreed to
assume the Fund's operating expenses to the extent that such operating expenses
exceed 0.20% of the Fund's daily net assets. On April 22, 2003, the Fund reached
$100 million in net assets. At June 30, 2003, included in the Statement of
Assets and Liabilities is a receivable from affiliate, which represents expense
reimbursements due to the Fund.
3. Security Transactions and Transactions with Affiliates
The cost of purchases and proceeds from sales/maturities of portfolio securities
for the period ended June 30, 2003 aggregated $3,454,953,541 and $3,300,354,000,
respectively.
Morgan Stanley Trust, an affiliate of the Investment Manager, is the Fund's
transfer agent. At June 30, 2003, the Fund had transfer agent fees and expenses
payable of approximately $400.
ACTIVE ASSETS INSTITUTIONAL GOVERNMENT SECURITIES TRUST
18
<Page>
Active Assets Institutional Government Securities Trust
NOTES TO FINANCIAL STATEMENTS / / JUNE 30, 2003 CONTINUED
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest, at $1.00 per share, were as
follows:
<Table>
<Caption>
FOR THE PERIOD
NOVEMBER 4, 2002*
THROUGH
JUNE 30, 2003
-----------------
Shares sold....................................... 357,206,297
Shares issued in reinvestment of dividends........ 429,497
---------------
357,635,794
Shares redeemed................................... (202,372,410)
---------------
Net increase in shares outstanding................ 155,263,384
===============
</Table>
- ---------------------
* COMMENCEMENT OF OPERATIONS.
ACTIVE ASSETS INSTITUTIONAL GOVERNMENT SECURITIES TRUST
19
<Page>
Active Assets Institutional Government Securities Trust
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<Table>
<Caption>
FOR THE PERIOD
NOVEMBER 4, 2002*
THROUGH
JUNE 30, 2003
-----------------
Selected Per Share Data:
Net asset value, beginning of period.............. $ 1.00
-------
Net income from investment operations............. 0.008
Less dividends from net investment income......... (0.008)
-------
Net asset value, end of period.................... $ 1.00
=======
Total Return...................................... 0.82%(1)
Ratios to Average Net Assets:
Expenses.......................................... 0.03%(2)(3)
Net investment income............................. 1.17%(2)(3)
Supplemental Data:
Net assets, end of period, in thousands........... $155,363
</Table>
- ---------------------
* COMMENCEMENT OF OPERATIONS.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
(3) IF THE FUND HAD BORNE ALL OF ITS EXPENSES THAT WERE REIMBURSED OR WAIVED
BY THE INVESTMENT MANAGER, THE ANNUALIZED EXPENSE AND NET INVESTMENT
INCOME RATIOS WOULD HAVE BEEN 0.47% AND 0.73%.
SEE NOTES TO FINANCIAL STATEMENTS
ACTIVE ASSETS INSTITUTIONAL GOVERNMENT SECURITIES TRUST
20
<Page>
Active Assets Institutional Government Securities Trust
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees of
Active Assets Institutional Government Securities Trust:
We have audited the accompanying statement of assets and liabilities of Active
Assets Institutional Government Securities Trust (the "Fund"), including the
portfolio of investments, as of June 30, 2003, and the related statements of
operations and changes in net assets and the financial highlights for the period
November 4, 2002 (commencement of operations) to June 30, 2003. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of June 30, 2003, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Active
Assets Institutional Government Securities Trust as of June 30, 2003, the
results of its operations, the changes in its net assets and the financial
highlights for the period November 4, 2002 (commencement of operations) to
June 30, 2003, in conformity with accounting principles generally accepted in
the United States of America.
Deloitte & Touche LLP
NEW YORK, NEW YORK
AUGUST 7, 2003
2003 FEDERAL TAX NOTICE (UNAUDITED)
Of the Fund's ordinary income dividends paid during the fiscal
year ended June 30, 2003, 65.57% was attributable to qualifying
Federal obligations. Please consult your tax advisor to determine
if any portion of the dividends you received is exempt from state
income tax.
ACTIVE ASSETS INSTITUTIONAL GOVERNMENT SECURITIES TRUST
21
<Page>
Active Assets Institutional Money Trust
Active Assets Institutional Government Securities Trust
TRUSTEE AND OFFICER INFORMATION
Independent Trustees:
<Table>
<Caption>
TERM OF
POSITION(S) OFFICE AND
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF
INDEPENDENT TRUSTEE REGISTRANTS TIME SERVED* PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS**
- ------------------------ -------------------- -------------------- ---------------------------------------------
Michael Bozic (62) Trustee Since April 1994 Retired; Director or Trustee of the Retail
c/o Mayer, Brown, Rowe & Funds and TCW/DW Term Trust 2003 (since April
Maw LLP 1994) and the Institutional Funds (since July
Counsel to the 2003); formerly Vice Chairman of Kmart
Independent Directors Corporation (December 1998-October 2000),
1675 Broadway Chairman and Chief Executive Officer of
New York, NY Levitz Furniture Corporation (November
1995-November 1998) and President and Chief
Executive Officer of Hills Department Stores
(May 1991-July 1995); formerly variously
Chairman, Chief Executive Officer, President
and Chief Operating Officer (1987-1991) of
the Sears Merchandise Group of Sears, Roebuck
& Co.
Edwin J. Garn (70) Trustee Since January 1993 Director or Trustee of the Retail Funds and
c/o Summit Ventures LLC TCW/DW Term Trust 2003 (since January 1993)
1 Utah Center and the Institutional Funds (since July
201 S. Main Street 2003); member of the Utah Regional Advisory
Salt Lake City, UT Board of Pacific Corp.; formerly United
States Senator (R-Utah) (1974-1992) and
Chairman, Senate Banking Committee
(1980-1986), Mayor of Salt Lake City, Utah
(1971-1974), Astronaut, Space Shuttle
Discovery (April 12-19, 1985), and Vice
Chairman, Huntsman Corporation (chemical
company).
Wayne E. Hedien (69) Trustee Since September 1997 Retired; Director or Trustee of the Retail
c/o Mayer, Brown, Rowe & Funds and TCW/DW Term Trust 2003; (Since
Maw LLP September 1997) and the Institutional Funds
Counsel to the (since July 2003); formerly associated with
Independent Directors the Allstate Companies (1966-1994), most
1675 Broadway recently as Chairman of The Allstate
New York, NY Corporation (March 1993-December 1994) and
Chairman and Chief Executive Officer of its
wholly-owned subsidiary, Allstate Insurance
Company (July 1989-December 1994).
<Caption>
NUMBER OF
PORTFOLIOS
IN FUND
COMPLEX
NAME, AGE AND ADDRESS OF OVERSEEN
INDEPENDENT TRUSTEE BY TRUSTEE*** OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------ -------------------- -----------------------------------
Michael Bozic (62) 216 Director of Weirton Steel
c/o Mayer, Brown, Rowe & Corporation.
Maw LLP
Counsel to the
Independent Directors
1675 Broadway
New York, NY
Edwin J. Garn (70) 216 Director of Franklin Covey (time
c/o Summit Ventures LLC management systems), BMW Bank of
1 Utah Center North America, Inc. (industrial
201 S. Main Street loan corporation), United Space
Salt Lake City, UT Alliance (joint venture between
Lockheed Martin and the Boeing
Company) and Nuskin Asia Pacific
(multilevel marketing); member of
the board of various civic and
charitable organizations.
Wayne E. Hedien (69) 216 Director of The PMI Group Inc.
c/o Mayer, Brown, Rowe & (private mortgage insurance);
Maw LLP Trustee and Vice Chairman of The
Counsel to the Field Museum of Natural History;
Independent Directors director of various other business
1675 Broadway and charitable organizations.
New York, NY
</Table>
22
<Page>
Active Assets Institutional Money Trust
Active Assets Institutional Government Securities Trust
TRUSTEE AND OFFICER INFORMATION CONTINUED
<Table>
<Caption>
TERM OF
POSITION(S) OFFICE AND
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF
INDEPENDENT TRUSTEE REGISTRANTS TIME SERVED* PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS**
- ------------------------ -------------------- -------------------- ---------------------------------------------
Dr. Manuel H. Johnson Trustee Since July 1991 Chairman of the Audit Committee and Director
(54) or Trustee of the Retail Funds and TCW/DW
c/o Johnson Smick Term Trust 2003 (since July 1991) and the
International, Inc. Institutional Funds (since July 2003); Senior
2099 Pennsylvania Partner, Johnson Smick International, Inc., a
Avenue, N.W. consulting firm; Co-Chairman and a founder of
Suite 950 the Group of Seven Council (G7C), an
Washington, D.C. international economic commission; formerly
Vice Chairman of the Board of Governors of
the Federal Reserve System and Assistant
Secretary of the U.S. Treasury.
Joseph J. Kearns (60) Trustee Since July 2003 Deputy Chairman of the Audit Committee and
PMB754 Director or Trustee of the Retail Funds and
23852 Pacific TCW/DW Term Trust 2003 (since July 2003) and
Coast Highway the Institutional Funds (since August 1994);
Malibu, CA previously Chairman of the Audit Committee of
the Institutional Funds (October 2001-July
2003); President, Kearns & Associates LLC
(investment consulting); formerly CFO of the
J. Paul Getty Trust.
Michael E. Nugent (67) Trustee Since July 1991 Chairman of the Insurance Committee and
c/o Triumph Capital, Director or Trustee of the Retail Funds and
L.P. TCW/DW Term Trust 2003 (since July 1991) and
445 Park Avenue the Institutional Funds (since July 2001);
New York, NY General Partner of Triumph Capital, L.P., a
private investment partnership; formerly Vice
President, Bankers Trust Company and BT
Capital Corporation (1984-1988).
Fergus Reid (71) Trustee Since July 2003 Chairman of the Governance Committee and
85 Charles Colman Blvd. Director or Trustee of the Retail Funds and
Pawling, NY TCW/DW Term Trust 2003 (since July 2003) and
the Institutional Funds (since June 1992);
Chairman of Lumelite Plastics Corporation.
<Caption>
NUMBER OF
PORTFOLIOS
IN FUND
COMPLEX
NAME, AGE AND ADDRESS OF OVERSEEN
INDEPENDENT TRUSTEE BY TRUSTEE*** OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------ -------------------- -----------------------------------
Dr. Manuel H. Johnson 216 Director of NVR, Inc. (home
(54) construction); Chairman and Trustee
c/o Johnson Smick of the Financial Accounting
International, Inc. Foundation (oversight organization
2099 Pennsylvania of the Financial Accounting
Avenue, N.W. Standards Board); Director of RBS
Suite 950 Greenwich Capital Holdings
Washington, D.C. (financial holding company).
Joseph J. Kearns (60) 217 Director of Electro Rent
PMB754 Corporation (equipment leasing),
23852 Pacific The Ford Family Foundation, and the
Coast Highway UCLA Foundation.
Malibu, CA
Michael E. Nugent (67) 216 Director of various business
c/o Triumph Capital, organizations.
L.P.
445 Park Avenue
New York, NY
Fergus Reid (71) 217 Trustee and Director of certain
85 Charles Colman Blvd. investment companies in the
Pawling, NY JPMorgan Funds complex managed by
JP Morgan Investment Management
Inc.
</Table>
23
<Page>
Active Assets Institutional Money Trust
Active Assets Institutional Government Securities Trust
TRUSTEE AND OFFICER INFORMATION CONTINUED
Interested Trustees:
<Table>
<Caption>
TERM OF
POSITION(S) OFFICE AND
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF
INTERESTED TRUSTEE REGISTRANTS TIME SERVED* PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS**
- ------------------------ -------------------- -------------------- ---------------------------------------------
Charles A. Fiumefreddo Chairman of the Since July 1991 Chairman and Director or Trustee of the
(70) Board and Trustee Retail Funds and TCW/DW Term Trust 2003
c/o Morgan Stanley Trust (since July 1991) and the Institutional Funds
Harborside Financial (since July 2003); formerly Chief Executive
Center, Officer of the Retail Funds and the TCW/DW
Plaza Two, Term Trust 2003 (until September 2002).
Jersey City, NJ
James F. Higgins (55) Trustee Since June 2000 Director or Trustee of the Retail Funds and
c/o Morgan Stanley Trust TCW/DW Term Trust 2003 (since June 2000) and
Harborside Financial the Institutional Funds (since July 2003);
Center, Senior Advisor of Morgan Stanley (since
Plaza Two, August 2000); Director of the Distributor and
Jersey City, NJ Dean Witter Realty Inc.; previously President
and Chief Operating Officer of the Private
Client Group of Morgan Stanley (May
1999-August 2000), and President and Chief
Operating Officer of Individual Securities of
Morgan Stanley (February 1997-May 1999).
Philip J. Purcell (59) Trustee Since April 1994 Director or Trustee of the Retail Funds and
1585 Broadway TCW/DW Term Trust 2003 (since April 1994) and
New York, NY the Institutional Funds (since July 2003);
Chairman of the Board of Directors and Chief
Executive Officer of Morgan Stanley and
Morgan Stanley DW Inc.; Director of the
Distributor; Chairman of the Board of
Directors and Chief Executive Officer of
Novus Credit Services Inc.; Director and/or
officer of various Morgan Stanley
subsidiaries.
<Caption>
NUMBER OF
PORTFOLIOS
IN FUND
COMPLEX
NAME, AGE AND ADDRESS OF OVERSEEN
INTERESTED TRUSTEE BY TRUSTEE*** OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------ -------------------- -----------------------------------
Charles A. Fiumefreddo 216 None
(70)
c/o Morgan Stanley Trust
Harborside Financial
Center,
Plaza Two,
Jersey City, NJ
James F. Higgins (55) 216 Director of AXA Financial, Inc. and
c/o Morgan Stanley Trust The Equitable Life Assurance
Harborside Financial Society of the United States
Center, (financial services).
Plaza Two,
Jersey City, NJ
Philip J. Purcell (59) 216 Director of American Airlines, Inc.
1585 Broadway and its parent company, AMR
New York, NY Corporation.
</Table>
- ----------------------------
* THIS IS THE EARLIEST DATE THE TRUSTEE BEGAN SERVING THE FUNDS ADVISED BY
MORGAN STANLEY INVESTMENT ADVISORS INC. (THE "INVESTMENT MANAGER") (THE
"RETAIL FUNDS").
** THE DATES REFERENCED BELOW INDICATING COMMENCEMENT OF SERVICES AS
DIRECTOR/TRUSTEE FOR THE RETAIL FUNDS AND THE FUNDS ADVISED BY MORGAN
STANLEY INVESTMENT MANAGEMENT INC., MORGAN STANLEY INVESTMENTS LP AND
MORGAN STANLEY AIP GP LP (THE "INSTITUTIONAL FUNDS") REFLECT THE
EARLIEST DATE THE DIRECTOR/TRUSTEE BEGAN SERVING THE RETAIL OR
INSTITUTIONAL FUNDS AS APPLICABLE.
*** THE FUND COMPLEX INCLUDES ALL OPEN-END AND CLOSED-END FUNDS (INCLUDING
ALL OF THEIR PORTFOLIOS) ADVISED BY THE INVESTMENT MANAGER AND ANY FUNDS
THAT HAVE AN INVESTMENT ADVISOR THAT IS AN AFFILIATED PERSON OF THE
INVESTMENT MANAGER (INCLUDING BUT NOT LIMITED TO MORGAN STANLEY
INVESTMENT MANAGEMENT INC. AND MORGAN STANLEY INVESTMENTS LP).
24
<Page>
Active Assets Institutional Money Trust
Active Assets Institutional Government Securities Trust
TRUSTEE AND OFFICER INFORMATION CONTINUED
Officers:
<Table>
<Caption>
TERM OF
POSITION(S) OFFICE AND
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF
EXECUTIVE OFFICER REGISTRANTS TIME SERVED*
- ------------------------------ ------------------------------ ------------------------------
Mitchell M. Merin (49) President Since May 1999
1221 Avenue of the Americas
New York, NY
Barry Fink (48) Vice President and General Since February 1997
1221 Avenue of the Americas Counsel
New York, NY
Ronald E. Robison (64) Executive Vice President and Since April 2003
1221 Avenue of the Americas Principal Executive Officer
New York, NY
Joseph J. McAlinden (60) Vice President Since July 1995
1221 Avenue of the Americas
New York, NY
Stefanie V. Chang (36) Vice President Since July 2003
1221 Avenue of the Americas
New York, NY
<Caption>
NAME, AGE AND ADDRESS OF
EXECUTIVE OFFICER PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS**
- ------------------------------ ---------------------------------------------
Mitchell M. Merin (49) President and Chief Operating Officer of
1221 Avenue of the Americas Morgan Stanley Investment Management Inc.;
New York, NY President, Director and Chief Executive
Officer of the Investment Manager and Morgan
Stanley Services; Chairman, Chief Executive
Officer and Director of the Distributor;
Chairman and Director of the Transfer Agent;
Director of various Morgan Stanley
subsidiaries; President Morgan Stanley
Investments LP (since February 2003);
President of the Institutional Funds (since
July 2003) and President of the Retail Funds
and TCW/DW Term Trust 2003 (since May 1999);
Trustee (since July 2003) and President
(since December 2002) of the Van Kampen
Closed-End Funds; Trustee (since May 1999)
and President (since October 2002) of the Van
Kampen Open-End Funds.
Barry Fink (48) General Counsel (since May 2000) and Managing
1221 Avenue of the Americas Director (since December 2000) of Morgan
New York, NY Stanley Investment Management; Managing
Director (since December 2000), Secretary
(since February 1997) and Director (since
July 1998) of the Investment Manager and
Morgan Stanley Services; Assistant Secretary
of Morgan Stanley DW; Chief Legal Officer of
Morgan Stanley Investments LP (since July
2002); Vice President of the Institutional
Funds (since July 2003); Vice President and
Secretary of the Distributor; previously
Secretary of the Retail Funds (February
1997-July 2003); previously Vice President
and Assistant General Counsel of the
Investment Manager and Morgan Stanley
Services (February 1997-December 2001).
Ronald E. Robison (64) Chief Global Operations Officer and Managing
1221 Avenue of the Americas Director of Morgan Stanley Investment
New York, NY Management Inc.; Managing DIrector of Morgan
Stanley & Co. Incorporated; Managing DIrector
of Morgan Stanley; Managing Director, Chief
Administrative Officer and Director of the
Investment Manager and Morgan Stanley
Services; Chief Executive Officer and
Director of the Transfer Agent; Executive
Vice President and Principal Executive
Officer of the Institutional Funds (since
July 2003); and the TCW/DW Term Trust 2003
(since April 2003); previously President of
the Institutional Funds (March 2001-July
2003) and Director of the Institutional Funds
(March 2001-July 2003).
Joseph J. McAlinden (60) Managing Director and Chief Investment
1221 Avenue of the Americas Officer of the Investment Manager, Morgan
New York, NY Stanley Investment Management Inc. and Morgan
Stanley Investments LP; Director of the
Transfer Agent, Chief Investment Officer of
the Van Kampen Funds; Vice President of the
Institutional Funds (since July 2003) and the
Retail Funds (since July 1995).
Stefanie V. Chang (36) Executive Director of Morgan Stanley & Co.
1221 Avenue of the Americas and Morgan Stanley Investment Management Inc.
New York, NY and Vice President of the Institutional Funds
(since December 1997) and the Retail Funds
(since July 2003); formerly practiced law
with the New York law firm of Rogers & Wells
(now Clifford Chance LLP).
</Table>
25
<Page>
Active Assets Institutional Money Trust
Active Assets Institutional Government Securities Trust
TRUSTEE AND OFFICER INFORMATION CONTINUED
<Table>
<Caption>
TERM OF
POSITION(S) OFFICE AND
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF
EXECUTIVE OFFICER REGISTRANTS TIME SERVED*
- ------------------------------ ------------------------------ ------------------------------
Francis Smith (37) Treasurer and Chief Financial Treasurer since July 2003 and
c/o Morgan Stanley Trust Officer Chief Financial Officer since
Harborside Financial Center, September 2002
Plaza Two,
Jersey City, NJ
Thomas F. Caloia (57) Vice President Since July 2003
c/o Morgan Stanley Trust
Harborside Financial Center,
Plaza Two,
Jersey City, NJ
Mary E. Mullin (36) Secretary Since July 2003
1221 Avenue of the Americas
New York, NY
<Caption>
NAME, AGE AND ADDRESS OF
EXECUTIVE OFFICER PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS**
- ------------------------------ ---------------------------------------------
Francis Smith (37) Executive Director of the Investment Manager
c/o Morgan Stanley Trust and Morgan Stanley Services (since December
Harborside Financial Center, 2001); previously Vice President of the
Plaza Two, Retail Funds (September 2002-July 2003);
Jersey City, NJ previously Vice President of the Investment
Manager and Morgan Stanley Services (August
2000-November 2001) and Senior Manager at
PricewaterhouseCoopers LLP (January
1998-August 2000).
Thomas F. Caloia (57) Executive Director (since December 2002) and
c/o Morgan Stanley Trust Assistant Treasurer of the Investment
Harborside Financial Center, Manager, the Distributor and Morgan Stanley
Plaza Two, Services; previously Treasurer of the Retail
Jersey City, NJ Funds (April 1989-July 2003); formerly First
Vice President of the Investment Manager, the
Distributor and Morgan Stanley Services.
Mary E. Mullin (36) Vice President of Morgan Stanley & Co.
1221 Avenue of the Americas Incorporated and Morgan Stanley Investment
New York, NY Management Inc.; Secretary of the
Institutional Funds (since June 1999) and the
Retail Funds (since July 2003); formerly
practiced law with the New York law firms of
McDermott, Will & Emery and Skadden, Arps,
Slate, Meagher & Flom LLP.
</Table>
- ----------------------------
* THIS IS THE EARLIEST DATE THE OFFICER BEGAN SERVING THE RETAIL FUNDS.
EACH OFFICER SERVES AN INDEFINITE TERM, UNTIL HIS OR HER SUCCESSOR IS
ELECTED.
** THE DATES REFERENCED BELOW INDICATING COMMENCEMENT OF SERVICE AS AN
OFFICER FOR THE RETAIL AND INSTITUTIONAL FUNDS REFLECT THE EARLIEST DATE
THE OFFICER BEGAN SERVING THE RETAIL OR INSTITUTIONAL FUNDS AS
APPLICABLE.
26
<Page>
MONEY MARKET
ACTIVE ASSETS --
INSTITUTIONAL MONEY
TRUST
INSTITUTIONAL GOVERNMENT
SECURITIES TRUST
ANNUAL REPORT
JUNE 30, 2003
[MORGAN STANLEY LOGO]
<Page>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
James F. Higgins
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael E. Nugent
Philip J. Purcell
Fergus Reid
OFFICERS
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
Mitchell M. Merin
PRESIDENT
Ronald E. Robison
EXECUTIVE VICE PRESIDENT and PRINCIPAL EXECUTIVE OFFICER
Barry Fink
VICE PRESIDENT and GENERAL COUNSEL
Joseph J. McAlinden
VICE PRESIDENT
Stefanie V. Chang
VICE PRESIDENT
Francis Smith
TREASURER and CHIEF FINANCIAL OFFICER
Thomas F. Caloia
VICE PRESIDENT
Mary E. Mullin
SECRETARY
TRANSFER AGENT
Morgan Stanley Trust
Harborside Financial Center, Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
INVESTMENT MANAGER
Morgan Stanley Investment Advisors Inc.
1221 Avenue of the Americas
New York, New York 10020
This report is submitted for the general information of the shareholders of the
Funds. For more detailed information about the Funds, their fees and expenses
and other pertinent information, please read their Prospectuses. The Funds'
Statement of Additional Information contains additional information about the
Funds, including its trustees. It is available, without charge, by calling (800)
869-NEWS.
This report is not authorized for distribution to prospective investors in the
Funds unless preceded or accompanied by an effective Prospectus. Read the
Prospectus carefully before investing.
Investments and services offered through Morgan Stanley DW Inc., member SIPC.
Morgan Stanley Distributors Inc., member NASD.
(C) 2003 Morgan Stanley
[MORGAN STANLEY LOGO]
37854RPT
<Page>
Item 9 - Controls and Procedures
The Fund's principal executive officer and principal financial officer have
concluded that the Fund's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Funds in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Fund's internal controls
or in other factors that could significantly affect the Fund's internal controls
subsequent to the date of their evaluation.
<Page>
Item 10b Exhibits
A separate certification for each principal executive officer and principal
financial officer of the registrants are attached hereto as part of EX-99.CERT.
Items 2 - 8 and Item 10a are not applicable
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrants have duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Active Assets Institutional Money Trust
Active Assets Institutional Government Securities Trust
Ronald E. Robison
Principal Executive Officer
August 19, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrants and in the capacities and on the dates
indicated.
Ronald E. Robison
Principal Executive Officer
August 19, 2003
Francis Smith
Principal Financial Officer
August 19, 2003