Far Eastern Investment Series Annual Report Including Long Form Financial Statements

Transcription

1 Far Eastern Investment Series Annual Report Including Long Form Financial Statements Issued January 2014 For the year 1 December 2012 to 30 November 2013

2 Contents Invesco Perpetual Far Eastern Investment Series 02 Report of the Authorised Corporate Director (ACD) 05 Company s financial statements 15 Invesco Perpetual Asian Fund 16 Strategy, review and outlook 17 Comparative table 24 Financial statements 32 Distribution table 33 Invesco Perpetual Asian Equity Income Fund 34 Strategy, review and outlook 35 Comparative table 41 Financial statements 49 Distribution tables 50 Invesco Perpetual Hong Kong & China Fund 51 Strategy, review and outlook 52 Comparative table 56 Financial statements 63 Distribution table 64 Invesco Perpetual Japan Fund 65 Strategy, review and outlook 66 Comparative table 71 Financial statements 78 Distribution table 79 Invesco Perpetual Pacific Fund 80 Strategy, review and outlook 81 Comparative table 87 Financial statements 95 Distribution table 96 Regulatory Statements 96 Statement of ACD s responsibilities 96 Statement of Depositary s responsibilities 96 Depositary s Report to Shareholders 97 Independent Auditors Report 01 Far Eastern Investment Series

3 Invesco Perpetual Far Eastern Investment Series Report of the Authorised Corporate Director (ACD) The Company The Invesco Perpetual Far Eastern Investment Series is an Investment Company with variable capital, incorporated in England and Wales on 8 May The Company is an Umbrella Company (under the ICVC Regulations) and therefore new sub funds may be formed by the ACD, subject to Regulatory approval. Any changes to sub funds or share classes will be included in an updated Prospectus. Each sub fund of the Company belongs to the type of UCITS Scheme which complies with Chapter 5 of the FCA Collective Investment Schemes sourcebook ( COLL ). At 30 November 2013, the Company consisted of five sub funds: Invesco Perpetual Asian Fund Invesco Perpetual Asian Equity Income Fund Invesco Perpetual Hong Kong & China Fund Invesco Perpetual Japan Fund Invesco Perpetual Pacific Fund Accounting periods Annual accounting date Interim accounting date Distribution payable on 30 November 31 May 31 January The following fund will also pay an interim distribution on 31 July: Invesco Perpetual Asian Equity Income Fund Should expenses and taxation exceed revenue in a distribution period, no distribution will be payable. Share classes available Invesco Perpetual Asian Fund Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Income shares Income shares (No Trail) Z Income shares Invesco Perpetual Asian Equity Income Fund Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Income shares Income shares (No Trail) Z Income shares Invesco Perpetual Hong Kong & China Fund Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Invesco Perpetual Japan Fund Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Invesco Perpetual Pacific Fund Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Income shares Income shares (No Trail) Z Income shares The sub funds are valued at 12 noon on each dealing day. Prices can be found in the Financial Times and on our website ( 02 Far Eastern Investment Series

4 Invesco Perpetual Far Eastern Investment Series Report of the Authorised Corporate Director (ACD) Risk Profile Shareholders should be aware of the risks inherent in investing in securities and other financial instruments. Financial markets can be vulnerable to unpredictable price movements and are affected by a number of factors, both political and economic. The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Over time, inflation may erode the value of investments. The sub funds' performance may be adversely affected by variations in the relative strength of world currencies or if Sterling strengthens against those currencies. The sub funds may use derivatives (complex instruments) in an attempt to reduce the overall risk of its investments, reduce the costs of investing or generate additional capital or income, although this may not be achieved. The use of such complex instruments may result in greater fluctuations of the value of the sub funds. The managers, however, will ensure that the use of derivatives within the sub funds does not materially alter the overall risk profile of the sub funds. As one of the key objectives of the Invesco Perpetual Asian Equity Income Fund is to provide income, the annual management charge is taken from capital rather than income. This can erode capital and reduce the potential for capital growth. As the Invesco Perpetual Asian Fund, Invesco Perpetual Asian Equity Income Fund, Invesco Perpetual Hong Kong & China Fund and Invesco Perpetual Pacific Fund are emerging markets funds, investors should be prepared to accept a higher degree of risk than for funds with a broader investment mandate as there is potential for a decrease in market liquidity, which may mean that it is not easy to buy or sell securities, as well as operational difficulties. As the Invesco Perpetual Japan Fund has a concentrated number of holdings, investors should be prepared to accept higher risk. The main risks from the Company s holding of financial instruments are set out in note 14 of the Notes to the Company s financial statements on pages 12 to 14. Fund Ratings Invesco Perpetual Asian Fund S&P Capital IQ grading 1 Morningstar OBSR analyst rating 2 Invesco Perpetual Asian Equity Income Fund S&P Capital IQ grading 1 Invesco Perpetual Japan Fund S&P Capital IQ grading 1 Morningstar OBSR analyst rating 2 Invesco Perpetual Pacific Fund S&P Capital IQ grading 1 Gold Bronze Silver Gold Bronze Gold 1 As at 30 November An S&P Capital IQ fund grading represents an opinion only and should not be relied on when making an investment decision. Past performance is not indicative of future results. Currency exchange rates may affect the value of investments. Copyright 2013 by McGraw-Hill International (UK) Limited (S&P), a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved. 2 Morningstar OBSR analyst rating as at 30 November Liability The shareholders of the Company have no liability for the debts of the Company. The Company is structured by having segregated liability between its sub funds. As a consequence the assets of one sub fund will not be available to meet the liabilities of another sub fund within the Company, although it is not yet known whether a foreign court would apply segregated liability if a dispute arose under a foreign law contract made with the Manager or on behalf of the Company. ISA Eligibility All the Company s sub funds qualify for stocks and shares ISA investment. None of the sub funds qualify for cash ISA investment. Certification of the Annual Report by the ACD In accordance with the requirements of the Financial Services (Open-Ended Investment Companies) Regulations 2001, We hereby certify these financial statements on behalf of the Directors of Invesco Fund Managers Limited. John Rowland Director 20 January 2014 Graeme Proudfoot Director 20 January Far Eastern Investment Series

5 Invesco Perpetual Far Eastern Investment Series Report of the Authorised Corporate Director (ACD) KIID Risk and Reward Profiles Invesco Perpetual introduced Key Investor Information Documents (KIIDs) for all its funds and share classes on 20 February 2012 which include Risk and Reward numerical indicators. Risk and Reward Numerical Indicator Published in the KIID for the year to to Invesco Perpetual Asian Fund Accumulation shares 6 6 Accumulation shares (No Trail) 6 6 Z Accumulation shares Income shares 6 6 Income shares (No Trail) 6 6 Z Income shares Invesco Perpetual Asian Equity Income Fund Accumulation shares 6 6 Accumulation shares (No Trail) 6 6 Z Accumulation shares Income shares 6 6 Income shares (No Trail) 6 6 Z Income shares Invesco Perpetual Hong Kong & China Fund Accumulation shares 7 6 Accumulation shares (No Trail) 7 6 Z Accumulation shares Invesco Perpetual Japan Fund Accumulation shares 6 6 Accumulation shares (No Trail) 6 6 Z Accumulation shares Invesco Perpetual Pacific Fund Accumulation shares 6 6 Accumulation shares (No Trail) 6 6 Z Accumulation shares Income shares 6 6 Income shares (No Trail) 6 6 Z Income shares Share class launched 12 November 2012 For more information on our funds risk and reward profiles, please refer to the most up to date relevant fund and share class specific Key Investor Information Documents (KIIDs), which are available at or by contacting us. 04 Far Eastern Investment Series

6 Invesco Perpetual Far Eastern Investment Series Company s financial statements Aggregated Statement of Total Return for the year 1 December 2012 to 30 November 2013 to to Notes Income Net capital gains 2 249, ,551 Revenue 3 31,108 30,108 Expenses 4 (21,706) (20,019) Finance costs: Interest 6 (3) (4) Net revenue before taxation 9,399 10,085 Taxation 5 (1,885) (1,776) Net revenue after taxation 7,514 8,309 Total return before distributions 256, ,860 Finance costs: Distributions 6 (8,005) (8,523) Change in net assets attributable to shareholders from investment activities 248, ,337 Aggregated Statement of Change in Net Assets Attributable to Shareholders for the year 1 December 2012 to 30 November 2013 to to Opening net assets attributable to shareholders 1,151,881 1,235,843 Amounts received on issue of shares 231, ,611 Amounts paid on cancellation of shares (263,791) (303,381) In-specie transfer (21,502) (53,812) (200,770) Dilution adjustment 630 1,010 Stamp Duty Reserve Tax (14) (9) Change in net assets attributable to shareholders from investment activities 248, ,337 Retained distribution on accumulation shares 7,354 7,470 Closing net assets attributable to shareholders 1,354,967 1,151, Far Eastern Investment Series

7 Invesco Perpetual Far Eastern Investment Series Company s financial statements Aggregated Balance Sheet as at 30 November 2013 Notes Assets Investment assets 1,342,658 1,118,545 Debtors 7 8,357 19,064 Cash and bank balances 8 15,075 27,311 Total other assets 23,432 46,375 Total assets 1,366,090 1,164,920 Liabilities Investment liabilities Creditors 9 10,340 10,113 Bank overdrafts 37 2,194 Distribution payable on income shares Total other liabilities 11,123 13,039 Total liabilities 11,123 13,039 Net assets attributable to shareholders 1,354,967 1,151, Far Eastern Investment Series

8 Invesco Perpetual Far Eastern Investment Series Notes to the Company s financial statements 1 Accounting policies a) Basis of accounting The financial statements have been prepared under the historical cost basis, as modified by the revaluation of investments, and in accordance with the Statement of Recommended Practice for Financial Statements of Authorised Funds issued by the IMA in October 2010 (the SORP ). The financial statements have been prepared on the going concern basis. b) Recognition of revenue i) Dividends on quoted ordinary shares, collective investment schemes and preference shares are recognised when the securities are quoted ex-dividend. Where such securities are not quoted, dividends are recognised when they are declared. ii) iii) iv) Nominal interest on bank balances and deposits is recognised on an accruals basis. Revenue arising on debt securities is accreted or amortised over the life of such securities and recognised at a consistent rate over the life of the instrument (effective yield accounting). Future cash flow on all debt securities are considered when calculating revenue on an effective yield basis and where purchase costs are considered to reflect incurred credit losses, such losses are taken into account so that interest is recognised at a reasonably expected commercial rate. Accrued interest purchased and sold on interest-bearing securities is excluded from the capital cost of these securities and dealt with as part of the revenue of the Company. All revenue is recognised at a gross amount that includes any withholding taxes but excludes any other taxes, such as attributable tax credits. c) Stock dividends Ordinary stock dividends are recognised wholly as revenue and are based on the market value of the shares on the dates they are quoted ex-dividend. Where an enhancement is offered, the amount by which the market value of the shares on the date they are quoted ex-dividend exceeds the cash dividend is taken to capital. The ordinary element of stock dividends is treated as revenue and forms part of the Company s distribution. d) Special dividends and share buy-backs The underlying circumstances behind both special dividends and the proceeds from share buybacks are reviewed on a case by case basis in determining whether the amount is capital or revenue in nature. Amounts recognised as revenue will form part of the Company s distribution. Any tax treatment thereon will follow the accounting treatment of the principal amount. e) Underwriting commission Underwriting commission is wholly recognised as revenue when the issue takes place, except where the Company is required to take up all or some of the shares underwritten, in which case an appropriate proportion of the commission received is deducted from the cost of those shares. f) Expenses All expenses, except for those relating to the purchase and sale of investments and Stamp Duty Reserve Tax, are recognised on an accrual basis and charged initially against revenue. g) Revenue allocation to share classes Revenue is allocated each day pro rata to the capital value of assets attributable to each class and taxation is computed by reference to the net revenue after expenses and tax attributable to each class. h) Distribution The Company will distribute all revenue disclosed in the annual financial statements (less expenses and taxation). Should expenses and taxation exceed revenue, there will be no distribution and the shortfall will be met from capital. All sub fund accumulations and distributions are paid as dividend distributions. In calculating the amount to be distributed, Invesco Perpetual Asian Equity Income Fund allocates the ACD s annual management charge to capital, thereby increasing the amount available for distribution. Distributions which have remained unclaimed by shareholders for more than six years are credited to the capital property of the sub fund. 07 Far Eastern Investment Series

9 Invesco Perpetual Far Eastern Investment Series Notes to the Company s financial statements 1 Accounting policies continued i) Basis of valuation of investments All investments have been valued on the last business day of the period at bid market value net of any accrued revenue, at 4.30pm. Where there is no reputable price source for an investment, the ACD will assess any information available from internal and external sources in order to arrive at an estimated fair value. Those particular investments are valued with reference to the International Private Equity and Venture Capital ( IPEVC ) Valuation guidelines. The fair value is established by using measures of value such as the price of recent transactions, earnings multiple and net assets. The ACD of the Company also makes judgements and estimates based on their knowledge of recent investment performance, historical experience and other assumptions that are considered reasonable under the circumstances. The estimates and the assumptions used are under continuous review by the ACD with particular attention paid to the carrying value of the investments. This approach is consistent with IPEVC valuation guidelines. j) Exchange rates Assets and liabilities in foreign currencies are translated into Sterling at the exchange rates ruling at 4.30pm on the last business day of the period. Revenue items denominated in foreign currencies are translated into Sterling at the exchange rates ruling at the times of the transactions. k) Taxation and deferred taxation Provision is made for corporation tax at the current rate on the excess of taxable revenue over allowable expenses. Provision is made on all material timing differences arising from the different treatment of items for accounting and tax purposes. A deferred tax asset is recognised only to the extent that there will be taxable profits in the future against which the asset can be offset. l) Efficient portfolio management Where appropriate, certain permitted transactions such as derivatives or forward currency transactions are used for efficient portfolio management. Where such transactions are used to protect or enhance revenue, the revenue and expenses derived therefrom are included in Revenue or Expenses in the Statement of Total Return. Where such transactions are used to protect or enhance capital, the gains and losses derived therefrom are included in Net capital gains/losses in the Statement of Total Return. Any positions on such transactions open at the period end are reflected in the Balance Sheet at their marked to market value. m) Dilution adjustment The ACD may apply a dilution adjustment on the issue and redemption of such shares if, in its opinion, the existing shareholders (for sales) or remaining shareholders (for redemptions) might otherwise be adversely affected, and if applying a dilution adjustment, so far as practicable, it is fair to all shareholders and potential shareholders. In particular, the dilution adjustment may be applied in the following circumstances for all sub funds in the Invesco Perpetual Far Eastern Investment Series: where over a dealing period a sub fund has experienced a large level of net issues or redemptions relative to its size. For these purposes a large level of net dealing is defined as 5% or more of the net asset value of the sub fund in question (as calculated at the last valuation point); or where the ACD considers it necessary to protect the interests of the shareholders of that Company. Please refer to Appendix 1 of the Prospectus which shows the size of typical dilution adjustments by sub fund and an indication of the frequency of application of such adjustments. n) Stamp Duty Reserve Tax (SDRT) The sub funds will normally bear the cost of SDRT as it is not the ACD s intention to charge individual buyers or sellers of shares for this on normal transactions. However, the ACD reserves the right to charge a SDRT provision of up to 0.5% of its value, on a deal under certain circumstances. These exceptional circumstances are set out in the Prospectus. 08 Far Eastern Investment Series

10 Invesco Perpetual Far Eastern Investment Series Notes to the Company s financial statements 2 Net capital gains to to Non-derivative securities 250, ,054 Foreign currency (losses)/gains (683) 3,593 Transaction expenses (99) (96) Net capital gains 249, ,551 3 Revenue to to UK franked dividends 1, Non-taxable overseas dividends 27,891 27,825 Taxable overseas dividends 1,132 1,247 Stock dividends Bank interest ,108 30,108 4 Expenses to to Payable to the ACD, associates of the ACD and agents of either of them: ACD's annual management charge 19,218 17,767 Registration fees 1,782 Accounts printing and postage ,258 19,587 Payable to the Depositary, associates of the Depositary and agents of either of them: Depositary s fees Other expenses: Audit fee* Dividend collection charges FT listing fees Professional fees 18 7 Registration fees 1,956 Safe custody fees , Total expenses 21,706 20,019 *Audit fees in the current and prior years are disclosed inclusive of VAT, to the extent that it is not recoverable. 09 Far Eastern Investment Series

11 Invesco Perpetual Far Eastern Investment Series Notes to the Company s financial statements 5 Taxation to to a) Analysis of charge for the year Overseas tax 1,885 1,776 Current and total tax charge 1,885 1,776 b) Factors affecting the tax charge for the year The tax assessed for the year is higher ( lower) than the standard rate of corporation tax in the UK for an authorised investment company with variable capital. The differences are explained below: to to Net revenue before taxation 9,399 10,085 Corporation tax at 20% ( %) 1,880 2,017 Effects of: Overseas tax 1,885 1,776 Relief for overseas tax treated as an expense (8) (6) Revenue not subject to tax (5,992) (5,768) Movement in excess expenses 4,120 3,757 Current tax charge 1,885 1,776 Authorised investment companies with variable capital are exempt from tax on capital gains. Therefore any capital return is not included in the above reconciliation. 6 Finance costs to to Distributions and interest Accumulations and distributions paid 31 July Accumulations and distributions payable 31 January ,968 8,092 Amounts deducted on cancellation of shares Amounts received on issue of shares (1,061) (410) 8,005 8,523 Interest 3 4 Total finance costs 8,008 8,527 The distributable amount has been calculated as follows: Net revenue after taxation 7,514 8,309 ACD s annual management charge taken to capital Tax relief on ACD s annual management charge taken to capital (7) (6) Equalisation on conversions 231 8,005 8,523 7 Debtors Amounts receivable for issue of shares 2,113 6,120 Sales awaiting settlement 482 5,879 Foreign currency contracts awaiting settlement 2,810 4,006 Accrued revenue 2,628 2,851 Prepaid expenses VAT recoverable ,357 19, Far Eastern Investment Series

12 Invesco Perpetual Far Eastern Investment Series Notes to the Company s financial statements 8 Cash and bank balances Cash and bank balances 15,075 27,311 9 Creditors Amounts payable for cancellation of shares 1,523 1,977 Purchases awaiting settlement 4,123 2,511 Foreign currency contracts awaiting settlement 2,826 3,990 Accrued expenses 1,868 1,635 10,340 10, Commitments and contingent liabilities Potential calls on partly paid shares, if exercised 2, Transactions and balances with related parties Invesco Fund Managers Limited (and its associates), as ACD, is a related party and acts as principal in respect of all transactions in the shares of the Company. The aggregate monies received through the issue and paid on cancellation of shares are disclosed in the Aggregated Statement of Change in Net Assets Attributable to Shareholders on page 05. Amounts payable to Invesco Fund Managers Limited in respect of administration services are disclosed in note 4. Amounts due at the end of the accounting year for administration services 1,577,000 (2012-1,378,000) are disclosed in note 9 within accrued expenses. Invesco Fund Managers Limited and its associates (including other authorised investment companies managed by Invesco Fund Managers Limited) held the following shareholdings in the sub funds: Held at Change in Held at year Asian Fund accumulation shares 16,122,603 (909,988) 17,032,591 Asian Fund Z accumulation shares 5,000 5,000 Asian Fund income shares 6,795,425 (1,497,330) 8,292,755 Asian Fund income shares (No Trail) 1,000 1,000 Asian Fund Z income shares 5,000 5,000 Asian Equity Income Fund accumulation shares 83,275 (33,274) 116,549 Asian Equity Income Fund accumulation shares (No Trail) 25,000 25,000 Asian Equity Income Fund Z accumulation shares 5,000 5,000 Asian Equity Income Fund income shares 10,948,821 (523,294) 11,472,115 Asian Equity Income Fund income shares (No Trail) 25,000 25,000 Asian Equity Income Fund Z income shares 5,000 5,000 Hong Kong & China Fund Z accumulation shares 5,000 4,000 1,000 Japan Fund accumulation shares 16,350,352 (406,501) 16,756,853 Japan Fund Z accumulation shares 5,000 5,000 Pacific Fund accumulation shares 30,164 (346) 30,510 Pacific Fund Z accumulation shares 5,000 5,000 Pacific Fund Z income shares 5,000 5, Dealing commission arrangements The level of securities trading on the sub funds is determined by fund management decisions. The ACD s buying and selling values of securities trades meet current best execution regulations. Commissions are paid to brokers for these trades. Under current regulations, the ACD is allowed to ask a number of brokers, with whom it has commission sharing arrangements, to use some of the commissions paid to brokers to pay for permitted execution and research services used by the ACD in the managing of its funds. If trading does not result in sufficient commissions to pay for these services, then the ACD pays for them. 11 Far Eastern Investment Series

13 Invesco Perpetual Far Eastern Investment Series Notes to the Company s financial statements 13 Shareholders funds The ACD s entry charge and annual management charge are as follows: Annual Entry Management Charge Charge % % Asian Fund Trail classes No Trail classes Z classes Asian Equity Income Fund Trail classes No Trail classes Z classes Hong Kong & China Fund Trail class No Trail class Z class Japan Fund Trail class No Trail class Z class Pacific Fund Trail classes No Trail classes Z classes The net assets attributable to each share class, the net assets value per share and the number of shares in issue of each share class are shown in the comparative table of each sub fund. These can be found on: Asian Fund page 17 Asian Equity Income Fund page 35 Hong Kong & China Fund page 52 Japan Fund page 66 Pacific Fund page 81 Each share class has the same rights on a winding up of the Company. 14 Derivatives and other financial instruments In pursuing its investment objectives, the Company holds a number of financial instruments that may comprise securities and other investments, cash balances and debtors and creditors that arise directly from its operations. There are certain investment risks which apply in relation to the use of derivatives. Derivatives may be used to provide protection for an investment or as a cheaper or more liquid alternative for an investment. However, should the Manager s expectations in employing such techniques and instruments be incorrect, a sub fund may suffer a substantial loss, having an adverse effect on the net asset value of shares. Such instruments may cause greater fluctuations of the net asset value of the sub fund concerned. However, transactions in derivatives are used in the sub funds solely for the purposes of efficient portfolio management. Derivatives exposure is managed within the investment limits set by the Manager to ensure that the use of derivatives does not materially alter the overall risk profile of the fund. Political and economic events in the major economies of the world, such as the United States, Japan and the Far Eastern Union, will influence stock and securities markets worldwide. The main risks from the Company s holding of financial instruments are set out below together with the ACD s policy for managing these risks. Market price risk The Company is exposed to the risks normally associated with investment in stocks and shares such as general economic conditions, market events or the performance of underlying stocks. As such the prices of and the income generated by the Company s securities may go down as well as up and an investor may not get back the full amount invested. Adhering to investment guidelines and avoiding excessive exposure to one particular issuer can mitigate market risk. Currency exchange risk The Company may invest in securities denominated in currencies other than Pound Sterling. As a result, changes in exchange rates may adversely affect the value of any investment, which will have a related effect on the price of shares. Currency exchange risk may be mitigated by hedging the exposure through the use of forward currency contracts. 12 Far Eastern Investment Series

14 Invesco Perpetual Far Eastern Investment Series Notes to the Company s financial statements 14 Derivatives and other financial instruments continued Liquidity risk The Company may be affected by a decrease in market liquidity for the securities in which it invests, which may mean that the Company may not be able to sell some securities at a fair price within a timely manner. In order to mitigate this risk, a substantial proportion of the Company s assets consist of readily realisable assets. Counterparty risk The Company may enter into derivative transactions or place cash in bank deposits with counterparties who may not be able to fulfil their responsibility by completing their side of the transactions. As a result, the Company could experience delays in liquidating positions and significant losses, including declines in the value of the investment during the period in which the Company seeks to enforce its rights or inability to realise any gain on investments. In order to mitigate this risk, the Company conducts trades through reputable counterparties. Investing in Emerging Markets Sub funds that invest mainly in established markets, may also invest in emerging and developing markets, where difficulties in dealing, settlement and custody problems could arise. Investments in emerging markets may be more volatile than investments in more developed markets. Some of these markets may have relatively unstable governments, economies based on only a few industries and securities markets that trade only a limited number of securities. Many emerging markets do not have well developed regulatory systems and disclosure standards may be less stringent than those of developed markets. The risks of expropriation, nationalisation and social, political and economic instability are greater in emerging markets than in more developed markets. The following is a brief summary of some of the more common risks associated with emerging markets investment: Lack of Liquidity The acquisition and disposal of securities may be more expensive, time consuming and generally more difficult than in more developed markets. Many emerging markets are small, have low trading volumes, low liquidity and significant price volatility. Settlement and Custody Risks Settlement and custody systems in emerging markets are not as well developed as those in developed markets. Standards may not be as high and supervisory and regulatory authorities not as sophisticated. As a result there may be a risk that settlement could be delayed and that cash or securities could be disadvantaged. Investment and Remittance Restrictions In some cases, emerging markets may restrict the access of foreign investors to securities. As a result, certain equity securities may not always be available to a sub fund because the maximum permitted number of or investment by foreign shareholders has been reached. In addition, the outward remittance by foreign investors of their share of net profits, capital and dividends may be restricted or require governmental approval and there can be no guarantee that additional restrictions will not be imposed. Accounting Accounting, auditing and financial reporting standards, practices and disclosure requirements applicable to companies in emerging markets differ from those applicable in more developed markets in respect of the nature, quality and timeliness of the information disclosed to investors and, accordingly, investment possibilities may be difficult to properly assess. Taking charges from capital Where the investment objective of a sub fund is to treat the generation of income as a higher priority than capital growth, or the generation of income and capital growth have equal priority, all or part of the Manager s fee as well as other fees and expenses of the Company may be charged against capital instead of income. The Company will charge such fees and expenses to capital in order to manage the level of income paid and/or available to shareholders. This may result in capital erosion or may constrain capital growth. 13 Far Eastern Investment Series

15 Invesco Perpetual Far Eastern Investment Series Notes to the Company s financial statements 14 Derivatives and other financial instruments continued Monitoring of Global Exposure The Manager uses a risk management process (including a risk management policy) to monitor and measure at any time the risks related to the positions entered into on behalf of the sub funds, including the risks attached to financial derivative instruments. The Manager uses a relative VaR (Value-at-Risk) approach to measure the global exposure of each sub fund. VaR is a statistical measurement that intends to measure the maximum potential loss of a portfolio, at a given confidence level (probability), over a specified time period under normal market conditions. In accordance with ESMA s Guidelines on Risk Measurement and the Calculation of Global Exposure and Counterparty Risk for UCITS (ref: ), for each of the sub funds, the VaR of the portfolio will not be greater than twice the VaR of its respective reference benchmarks (Relative VaR). However there is no guarantee that the VaR limits set by the Manager will be adhered to in all instances. The Manager calculates the global exposure of each sub fund on a daily basis. Investment objective Each sub fund has been managed throughout the period in accordance with its investment objective. These can be found on: Asian Fund page 15 Asian Equity Income Fund page 33 Hong Kong & China Fund page 50 Japan Fund page 64 Pacific Fund page 79 The sub funds may also hold cash and near cash assets where reasonably necessary to fund cancellations of shares, for the efficient portfolio management of the sub fund or for purposes ancillary to the objectives of the sub fund. They may also borrow, providing such borrowing is on a temporary basis and does not exceed the limits laid down in the regulations. The exercise of these powers and the management of risk during the period is disclosed above. The use of financial instruments by a UCITS scheme is set out in the COLL. Fair value The market value of investments is taken to equal fair value. There is no material difference between the value of the financial assets and liabilities as shown in the Balance Sheet and their fair value. Base currency The base currency of the Company is Sterling and is taken to be the functional currency of the Company. Bank balances and overdrafts Bank balances and overdrafts are held by the Custodian, and are subject to the Custodian s variable credit and debit interest rates respectively. Borrowings The borrowing facilities available to the Company as at 30 November 2013 comprise a bank overdraft facility of up to 10% of the value of the Company. 15 Post balance sheet events There are no post balance sheet events that require disclosure or adjustments to the financial statements. 14 Far Eastern Investment Series

16 Asian Fund Investment report for the year The Investment Objective of the Asian Fund The fund aims to achieve capital growth in Asia and Australasia excluding Japan. The fund intends to invest primarily in shares of companies in Asia and Australasia (excluding Japan), although it may include other Asian and Australasian related investments. In pursuing this objective, the fund managers may include investments that they consider appropriate which include transferable securities, money market instruments, warrants, collective investment schemes, deposits and other permitted investments and transactions as detailed in Appendix 2 of the most recent Prospectus. Share Prices p p Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Income shares (xd) Income shares (No Trail) (xd) Z Income shares (xd) Performance Percentage growth to 30 November 2013 Since Since Since Since Since % % % % % Asian Fund (accumulation shares) MSCI All Countries Asia Pacific (ex Japan) Index IMA Asia Pacific excluding Japan Sector Fund Ranking 29/63 13/63 27/58 15/53 8/34 Standardised rolling 12 month performance Percentage growth % % % % % Asian Fund (accumulation shares) This standardised past performance information is updated on a quarterly basis. Should you require up to date past performance information, this is available on our website or by contacting us. Fund and sector average performance data source: Lipper, mid-to-mid (excluding the entry charge), in Sterling, with net income reinvested. MSCI All Countries Asia Pacific (ex Japan) Index data source: Thomson Reuters Datastream, total return, in Sterling. The value of investments and any income from them will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Past performance is not a guide to future returns. Current tax levels and reliefs may change. Depending on individual circumstances, this may affect investment returns. 15 Far Eastern Investment Series

17 Asian Fund Investment report for the year Strategy, review and outlook The fund returned 8.1% over the twelve months to the end of November 2013, compared to the benchmark MSCI All Countries Asia Pacific (ex Japan) Index, which returned 5.9%. The fund was in the first quartile of its peer group, the IMA Asia Pacific (ex Japan) Sector, which returned an average of 5.7%. Fund and sector average performance data source: Lipper, mid-to-mid (excluding the entry charge), in Sterling, with net income reinvested. MSCI All Countries Asia Pacific (ex Japan) Index data source: Thomson Reuters Datastream, total return, in Sterling. Past performance is not a guide to future returns. Asia Pacific (ex Japan) equity markets registered positive returns over what has proven to be an eventful twelve months. Initial gains were reversed due to concerns over the slowdown in China s economy and uncertainty surrounding US monetary policy. However, markets have since recovered thanks to signs of stabilisation in China s economy and the postponing of QE tapering by the US Federal Reserve. North Asian economies have been less vulnerable to changing expectations of the global liquidity environment, while the gradual improvement in the outlook for global trade has been supportive for exporters generally. Conversely, South Asian markets have proved to be more volatile, particularly those with large current account deficits, such as Indonesia, where inflation has remained elevated and the central bank has raised interest rates to 7.50% from 5.75% over the period. Fund performance benefited from strong stock selection across a number of different sectors, particularly IT, consumer discretionary and industrials. The biggest single contributor to overall performance was our holding in Hyundai Motor preference shares as their discount to the ordinary share class narrowed, while holdings in Chinese internet companies added notable value. On the other hand, our exposure in South Asian banks and real estate companies detracted due to lingering concerns over QE-tapering and specific macroeconomic concerns. Finally, stock selection in Australia disappointed as our limited exposure to its banks counted against us, while our holding in Newcrest Mining detracted notably as the gold price weakened. Our main overweight position relative to the benchmark index continues to be in Hong Kong & China, where we favour consumer-related areas of the market that we believe are undervalued. We remain underweight in Australia, particularly its banks, preferring to hold banks which we believe have the potential to grow their loan books profitably, such as those in India where credit penetration is still growing. Our exposure in the technology sector remains significant and includes industry leaders with significant competitive advantages as well as Chinese internet companies which continue to generate significant free cash flow. Over the period we have moved from having a small underweight position in India to an overweight, reflecting our increased confidence in the mediumterm outlook, with a more progressive reform agenda likely to be the focus of next year s general elections. We have also added exposure in the energy and utility sectors, where valuations appeared attractive to us given the potential for gradually improving earnings growth. In turn, we have continued to take profits from recent outperformers where share prices now reflect a more optimistic view of future growth. Asian economic growth has slowed, but we expect it to be sufficiently high in 2014 to offer attractive investment opportunities. China s ambitious new reform agenda has also given us grounds for optimism. While much depends on successful implementation, there is real potential for meaningful change, particularly in allowing market forces to take a more decisive role in the allocation of resources. The region still faces a number of challenges that require structural reform, in our opinion, but markets have to a large extent discounted this given current low valuation levels relative to history and developed markets. Consensus earnings growth forecasts for Asia Pacific (ex Japan) companies are currently around 12.0% for 2014, bringing valuation levels for the region to 11.7 times 2014 expected earnings. In our opinion, these valuation levels remain supportive. Stuart Parks, Fund Manager Where Stuart Parks has expressed opinions, they are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco Perpetual investment professionals. The fund s ten largest investments were % Samsung Electronics 7.62 Hyundai Motor 3.38 Hutchison Whampoa 3.32 Taiwan Semiconductor Manufacturing 3.15 NetEase 3.02 BHP Billiton 2.84 Baidu 2.39 ICICI Bank 2.38 Industrial & Commercial Bank of China H 2.31 Keppel Far Eastern Investment Series

18 Asian Fund Investment report for the year Comparative table Total net assets of fund Total net assets 548, , , ,310 Net asset value Accumulation shares Assets attributable ( '000) 483, , , ,135 Shares in issue 117,380, ,156, ,268, ,112,966 Net asset value (pence per share) Accumulation shares (No Trail) Assets attributable ( '000) 2,851 4,191 2,348 2,863 Shares in issue 1,668,625 2,670,549 1,716,672 1,889,506 Net asset value (pence per share) Z Accumulation shares Assets attributable ( '000) 10, Shares in issue 4,844,932 5,000 Net asset value (pence per share) Income shares Assets attributable ( '000) 44,514 51,517 48,337 60,272 Shares in issue 11,942,312 14,867,015 15,818,461 17,534,977 Net asset value (pence per share) Income shares (No Trail) Assets attributable ( '000) Shares in issue 526, ,515 27,993 27,993 Net asset value (pence per share) Z Income shares Assets attributable ( '000) 6, Shares in issue 2,802,324 5,000 Net asset value (pence per share) Far Eastern Investment Series

19 Asian Fund Investment report for the year Price and revenue record by share class Highest Lowest Net share share revenue price price per share Calendar year p p p Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Income shares Income shares (No Trail) Z Income shares to 30 November 2 from 12 November Z accumulation shares and Z income shares were issued at 200p on 12 November Far Eastern Investment Series

20 Asian Fund Investment report for the year Ongoing charges figure (OCF) to to Ongoing charges as % of average net assets Accumulation shares and income shares 1.70% 1.70% Accumulation shares (No Trail) and income shares (No Trail) 1.20% 1.20% Z accumulation shares and Z income shares 0.95% 0.95% Total expenses per note 4 ( 000) 9,613 9,400 Transaction expenses per note 2 ( 000) Total expenses ( 000) 9,649 9,434 Average net assets for the year ( 000) 570, ,138 The OCF represents the annual operating expenses of the fund expressed as a percentage of average net assets for the year it does not include entry charges. The OCF includes the annual management charge and also the following charges which are deducted directly from the fund: Registration Fee, Depositary Fee, Custody Fee, Audit Fee, FCA Fee, Price Publication Fee, Report production and transaction expenses, less: VAT recoverable where applicable. 19 Far Eastern Investment Series

21 Asian Fund Investment report for the year Portfolio Statement Holding or Percentage as at 30 November 2013 nominal Market of total value of value net assets Investment positions 000 % Australia 8.87% ( %) Amcor 1,216,404 7, Australia & New Zealand Banking 543,585 9, Dart Energy 5,851, Goodman 1,895,962 5, Orica 194,437 2, Origin Energy 765,455 5, QBE Insurance 483,199 4, Treasury Wine Estates 789,394 2, Westpac Banking 616,991 11, China 13.66% ( %) Baidu ADR 129,132 13, China Shenhua Energy H 2,478,500 5, E-House China ADR 275,644 1, ENN Energy 1,132,000 4, Industrial & Commercial Bank of China H 28,923,840 12, Mindray Medical International ADR 413,294 10, NetEase ADR 378,068 16, PetroChina H 7,514,000 5, Wumart Stores H 2,321,000 2, Zhejiang Expressway H 5,436,000 3, Hong Kong 23.15% ( %) AIA 3,884,000 12, Cathay Pacific Airways 4,928,000 6, Cheung Kong 662,574 6, China Mobile 1,702,500 11, China Resources Enterprise 1,720,000 3, CNOOC 8,870,000 11, Galaxy Entertainment 926,000 4, Hengan International 477,500 3, HKR International 18,996,000 5, HSBC 1,470,242 10, Hutchison Whampoa 2,346,000 18, Jardine Matheson (Singapore quote) 259,513 7, Jardine Strategic (Singapore quote) 349,888 6, Noble 7,269,000 3, Samsonite 2,939,400 5, Tencent 231,500 8, Wharf 389,287 1, India 8.97% ( %) Adani Port and Special Economic Zone 2,493,602 3, Godrej Consumer Products 691,268 6, Housing Development Finance 500,543 4, ICICI Bank 210,825 2, ICICI Bank ADR 496,702 10, Infosys 133,931 4, NTPC 5,817,256 8, UPL 5,829,076 9, Indonesia 1.05% ( %) Bank Negara Indonesia 21,659,500 4, Surya Citra Media 8,532,000 1, New Zealand 0.62% ( Nil) Meridian Energy (partly paid) 6,967,009 3, Philippines 2.73% ( %) Filinvest Land 356,949,000 6, LT 17,971,000 3, Metro Pacific Investments 70,207,600 4, Singapore 4.89% ( %) Keppel 2,299,000 12, Parkway Life Real Estate Investment Trust 8,325,000 9, United Overseas Bank 506,988 5, Far Eastern Investment Series

22 Asian Fund Investment report for the year Portfolio Statement continued Holding or Percentage as at 30 November 2013 nominal Market of total value of value net assets Investment positions 000 % South Korea 17.90% ( %) DGB Financial 756,010 7, Hyundai Mobis 69,544 12, Hyundai Motor pref. 253,788 18, Korea Electric Power 291,020 5, POSCO 23,199 4, Samsung Electronics 40,610 34, Samsung Electronics GDR 15,794 6, Shinhan Financial 327,450 8, Taiwan 11.55% ( %) Airtac International 1,452,820 7, China Life Insurance 15,894,185 9, Delta Electronic 2,090,000 6, E.Sun Financial 19,877,659 8, Far Eastern New Century 13,818,180 9, Hon Hai Precision Industry 3,109,505 4, Taiwan Semiconductor Manufacturing 8,008,613 17, Thailand 2.57% ( %) Advanced Info Service 501,200 2, Bangkok Bank 2,094,000 7, CPN Retail Growth Leasehold Rights 19/12/2013 4,217, CPN Retail Growth Property Fund (Alien market) 12,458,200 3, United Kingdom 3.72% ( %) BHP Billiton (London listing) 837,049 15, M.P. Evans 1,043,780 4, Portfolio of investments ( %) 546, Net other assets ( %) 1, Net assets 548, Holdings are ordinary shares unless otherwise stated. 21 Far Eastern Investment Series

23 Asian Fund Investment report for the year Summary of Material Portfolio Changes for the year 1 December 2012 to 30 November 2013 Cost 000 Total purchases 183,248 Largest purchases: Australia Amcor 7,948 Origin Energy 6,375 Goodman 5,643 China NetEase ADR 11,248 PetroChina H 5,733 Baidu ADR 4,893 ENN Energy 3,953 Hong Kong Samsonite 4,648 Noble 3,836 China Mobile 3,652 Galaxy Entertainment 3,281 India ICICI Bank ADR 13,907 NTPC 5,813 Adani Port and Special Economic Zone 4,254 New Zealand Meridian Energy (partly paid) 3,596 Philippines LT 6,082 South Korea Korea Electric Power 5,781 Taiwan Far Eastern New Century 8,014 Delta Electronic 6,737 United Kingdom BHP Billiton (London listing) 16, Far Eastern Investment Series

24 Asian Fund Investment report for the year Summary of Material Portfolio Changes continued for the year 1 December 2012 to 30 November 2013 Proceeds 000 Total sales 214,376 Largest sales: Australia BHP Billiton 14,650 Caltex Australia 8,682 Newcrest Mining 4,338 China Sohu.com 8,193 E-House China ADR 4,722 Hong Kong Jardine Matheson (Singapore quote) 12,320 Hutchison Whampoa 7,490 China Mobile 7,238 Jardine Strategic (Singapore quote) 7,022 Tencent 6,453 HSBC 5,279 Wharf 4,755 India Housing Development Finance 5,687 Philippines Philippine Long Distance Telephone 3,845 Singapore United Overseas Bank 6,108 City Developments 4,518 South Korea Samsung Electronics 9,454 POSCO 3,892 Taiwan Taiwan Semiconductor Manufacturing 4,035 Thailand Siam Commercial Bank 4, Far Eastern Investment Series

25 Asian Fund Financial statements Statement of Total Return for the year 1 December 2012 to 30 November 2013 to to Notes Income Net capital gains 2 41,604 71,092 Revenue 3 14,754 14,511 Expenses 4 (9,613) (9,400) Finance costs: Interest 6 (2) (2) Net revenue before taxation 5,139 5,109 Taxation 5 (959) (829) Net revenue after taxation 4,180 4,280 Total return before distributions 45,784 75,372 Finance costs: Distributions 6 (4,252) (4,280) Change in net assets attributable to shareholders from investment activities 41,532 71,092 Statement of Change in Net Assets Attributable to Shareholders for the year 1 December 2012 to 30 November 2013 to to Opening net assets attributable to shareholders 558, ,142 Amounts received on issue of shares 78,425 39,825 Amounts paid on cancellation of shares (112,542) (141,184) In-specie transfer (21,502) (55,619) (101,359) Dilution adjustment Stamp Duty Reserve Tax (10) (7) Change in net assets attributable to shareholders from investment activities 41,532 71,092 Retained distribution on accumulation shares 3,630 3,832 Closing net assets attributable to shareholders 548, , Far Eastern Investment Series

26 Asian Fund Financial statements Balance Sheet as at 30 November 2013 Notes Assets Investment assets 546, ,829 Debtors 7 1,709 4,534 Cash and bank balances 8 2,712 21,902 Total other assets 4,421 26,436 Total assets 550, ,265 Liabilities Investment liabilities Creditors 9 2,198 2,492 Bank overdrafts 37 Distribution payable on income shares Total other liabilities 2,654 2,887 Total liabilities 2,654 2,887 Net assets attributable to shareholders 548, , Far Eastern Investment Series

27 Asian Fund Notes to the financial statements 1 Accounting policies The fund s financial statements have been prepared on the same basis as the Company s financial statements. 2 Net capital gains to to Non derivative securities 41,848 71,674 Foreign currency losses (208) (548) Transaction expenses (36) (34) Net capital gains 41,604 71,092 3 Revenue to to UK franked dividends Non taxable overseas dividends 11,986 12,774 Taxable overseas dividends 1,049 1,041 Stock dividends Bank interest ,754 14,511 4 Expenses to to Payable to the ACD, associates of the ACD and agents of either of them: ACD's annual management charge 8,506 8,310 Registration fees 839 Accounts printing and postage ,521 9,163 Payable to the Depositary, associates of the Depositary and agents of either of them Depositary s fees Other expenses: Audit fee* 6 7 Dividend collection charges FT listing fees 5 5 Professional fees 8 5 Registration fees 839 Safe custody fees , Total expenses 9,613 9,400 *Audit fees in the current and prior years are disclosed inclusive of VAT, to the extent that it is not recoverable. 26 Far Eastern Investment Series

28 Asian Fund Notes to the financial statements 5 Taxation to to a) Analysis of charge for the year Overseas tax Current and total tax charge There is no corporation tax charge for the year (2012 Nil). b) Factors affecting the tax charge for the year The tax assessed for the year is lower (2012 lower) than the standard rate of corporation tax in the UK for an authorised investment company with variable capital. The differences are explained below: to to Net revenue before taxation 5,139 5,109 Corporation tax at 20% ( %) 1,028 1,022 Effects of: Overseas tax Relief for overseas tax treated as an expense (7) (6) Revenue not subject to tax (2,739) (2,692) Movement in excess expenses 1,718 1,676 Current tax charge Authorised investment companies with variable capital are exempt from tax on capital gains. Therefore any capital return is not included in the above reconciliation. c) Deferred tax At the year end the fund had surplus management expenses of 37,589,000 ( ,001,000). It is unlikely that the fund will generate sufficient taxable profits in the future to utilise these expenses and therefore a deferred tax asset of 7,518,000 (2012-5,800,000) has not been recognised. 6 Finance costs to to Distributions and interest Accumulations and distributions payable 31 January ,049 4,227 Amounts deducted on cancellation of shares Amounts received on issue of shares (423) (217) 4,252 4,280 Interest 2 2 Total finance costs 4,254 4,282 The distributable amount has been calculated as follows: Net revenue after taxation 4,180 4,280 Equalisation on conversions 72 4,252 4, Far Eastern Investment Series

29 Asian Fund Notes to the financial statements 7 Debtors Amounts receivable for issue of shares 25 2,877 Sales awaiting settlement Foreign currency contracts awaiting settlement 169 Accrued revenue Prepaid expenses 5 5 VAT recoverable ,709 4,534 8 Cash and bank balances Cash and bank balances 2,712 21,902 9 Creditors Amounts payable for cancellation of shares Purchases awaiting settlement 796 1,288 Foreign currency contracts awaiting settlement 169 Accrued expenses ,198 2, Commitments and contingent liabilities Potential calls on partly paid shares, if exercised 1, Related parties Related party interests in the fund are disclosed in note 11 of the Company s financial statements on page 11. Amounts payable to Invesco Fund Managers Limited in respect of administration services are disclosed in note 4. Amounts due at the end of the accounting period for administration services 629,000 ( ,000) are disclosed in note 9 within accrued expenses. 28 Far Eastern Investment Series

30 Asian Fund Notes to the financial statements 12 Derivatives and other financial instruments The fund s performance may be adversely affected by variations in the relative strength of world currencies or if Sterling strengthens against those currencies. The risk factors relating to the fund are discussed more fully in note 14 on pages 12 to 14 of the Company s financial statements. Numerical disclosures relating to the fund are as follows: Currency exposure Net foreign currency assets/(liabilities) Non Monetary monetary exposures exposures Total Currency Australian dollar ,624 49,175 Hong Kong dollar 141, ,552 Indian rupee 11 38,334 38,345 Indonesian rupiah (601) 5,751 5,150 New Zealand dollar 3,420 3,420 Philippine peso ,982 15,718 Singapore dollar 97 30,739 30,836 South Korean won 91,311 91,311 Taiwan dollar 5 63,329 63,334 Thai baht 64 14,065 14,129 US dollar ,996 74, , ,075 Sterling ,414 21,209 1, , , Australian dollar ,587 65,278 Hong Kong dollar 148, ,781 Indian rupee 20 33,389 33,409 Indonesian rupiah 7,426 7,426 Philippine peso ,437 19,888 Singapore dollar ,556 40,663 South Korean won ,274 91,558 Taiwan dollar (890) 46,398 45,508 Thai baht 16,715 16,715 US dollar 30 60,843 60, , ,099 Sterling 22,856 5,423 28,279 23, , , Far Eastern Investment Series

31 Asian Fund Notes to the financial statements 12 Derivatives and other financial instruments continued Interest rate risk profile of financial assets Financial Floating rate Fixed rate assets not financial financial carrying assets assets interest Total Currency Australian dollar 49,401 49,401 Hong Kong dollar 141, ,552 Indian rupee 5 38,340 38,345 Indonesian rupiah 5,757 5,757 New Zealand dollar 3,420 3,420 Philippine peso ,455 15,718 Singapore dollar 30,836 30,836 South Korean won 91,311 91,311 Taiwan dollar 5 63,329 63,334 Thai baht 14,129 14,129 US dollar 74,105 74,105 Sterling 2,439 20,591 23,030 2, , , Australian dollar 65,278 65,278 Hong Kong dollar 148, ,781 Indian rupee 10 33,399 33,409 Indonesian rupiah 7,426 7,426 Philippine peso 19,888 19,888 Singapore dollar 40,663 40,663 South Korean won 91,558 91,558 Taiwan dollar ,399 46,797 Thai baht 16,715 16,715 US dollar 60,873 60,873 Sterling 21,494 8,383 29,877 21, , ,265 Interest rate risk profile of financial liabilities Financial Floating rate liabilities not financial carrying liabilities interest Total Currency Australian dollar Indonesian rupiah Sterling 1,821 1, ,617 2, Taiwan dollar 1,289 1,289 Sterling 1,598 1,598 2,887 2,887 Interest rate risk profile of fixed rate financial assets The fund held no fixed rate financial assets as at 30 November 2013 ( Nil). 30 Far Eastern Investment Series

32 Asian Fund Notes to the financial statements 12 Derivatives and other financial instruments continued Interest rate risk profile of floating rate financial assets and liabilities Weighted Weighted average period Market average for which value interest rate rate is fixed 000 % years Cash and bank balances 2, n/a Bank overdrafts n/a Cash and bank balances 21, n/a Interest rates on bank balances and overdrafts are linked to LIBOR, EONIA or other local interest rates as appropriate to the currency. Economic exposure and sensitivity analysis Changes in currency exposure during the year can be seen from the table below: Currency % % Australian dollar Hong Kong dollar Indian rupee Indonesian rupiah New Zealand dollar 0.6 Philippine peso Singapore dollar South Korean won Taiwan dollar Thai baht US dollar Sterling Sensitivity analysis No derivatives are held which could impact the fund significantly (2012 Nil). 13 Portfolio transaction costs to to Analysis of total purchase costs Purchases before transaction costs 182, ,467 Commissions Taxes Total purchase costs Gross purchases total 183, ,822 Analysis of total sale costs Gross sales before transaction costs* 214, ,938 Commissions (358) (495) Taxes (236) (313) Total sale costs (594) (808) Total sales net of transaction costs 214, ,130 * Includes in-specie transfer. 31 Far Eastern Investment Series

33 Asian Fund Distribution table Distribution table for the year 1 December 2012 to 30 November 2013 Net Net distribution distribution Net payable paid revenue Equalisation Distribution payable 31 January 2014 p p p p Accumulation shares Group Group Accumulation shares (No Trail) Group Group Z Accumulation shares Group Group Income shares Group Group Income shares (No Trail) Group Group Z Income shares Group Group Group 1: shares purchased prior to 1 December 2012 Group 2: shares purchased on or after 1 December 2012 Equalisation applies only to shares purchased during the distribution period (Group 2). It is the average amount of revenue included in the purchase price of all Group 2 shares and is refunded to holders of these shares as a return of capital. Being capital it is not liable to income tax. Instead, it must be deducted from the cost of income shares for capital gains purposes. 32 Far Eastern Investment Series

34 Asian Equity Income Fund Investment report for the year The Investment Objective of the Asian Equity Income Fund The fund aims to generate a rising level of income together with long term capital growth by investing primarily in shares of companies in Asia and Australasia (excluding Japan). In pursuing this objective, the fund managers may include investments that they consider appropriate which include transferable securities, money market instruments, warrants, collective investment schemes, deposits and other permitted investments and transactions as detailed in Appendix 2 of the most recent Prospectus. Share Prices p p Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Income shares (xd) Income shares (No Trail) (xd) Z Income shares (xd) Performance Percentage growth to 30 November 2013 Since Since Since launch % % % Asian Equity Income Fund (accumulation shares) MCSI All Countries Asia Pacific (ex Japan) Index IMA Asia Pacific excluding Japan Sector Fund Ranking 41/63 39/63 17/60 Standardised rolling 12 month performance Percentage growth % % % % % Asian Equity Income Fund (accumulation shares) n/a n/a n/a This standardised past performance information is updated on a quarterly basis. Standardised rolling 12 month performance data for the years 30 September 2008 to 30 September 2011 is not available as the fund was launched on 7 March Should you require up to date past performance information, this is available on our website or by contacting us. Fund and sector average performance data source: Lipper, mid-to-mid (excluding the entry charge), in Sterling, with net income reinvested. MCSI All Countries Asia Pacific (ex Japan) Index data source: Thomson Reuters Datastream, total return, in Sterling. The value of investments and any income from them will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Past performance is not a guide to future returns. Current tax levels and reliefs may change. Depending on individual circumstances, this may affect investment returns. 33 Far Eastern Investment Series

35 Asian Equity Income Fund Investment report for the year Strategy, review and outlook The fund returned 4.7% over the twelve months to the end of November 2013, compared to the benchmark MSCI All Countries Asia Pacific (ex Japan) Index, which returned 5.9%. The fund was in the third quartile of its peer group, the IMA Asia Pacific (ex Japan) Sector, which returned an average of 5.7%. Fund and sector average performance data source: Lipper, mid-to-mid (excluding the entry charge), in Sterling, with net income reinvested. MSCI All Countries Asia Pacific (ex Japan) Index data source: Thomson Reuters Datastream, total return, in Sterling. Past performance is not a guide to future returns. Asia Pacific (ex Japan) equity markets registered positive returns over what has proven to be an eventful twelve months. Initial gains were reversed due to concerns over the slowdown in China s economy and uncertainty surrounding US monetary policy. However, markets have since recovered thanks to signs of stabilisation in China s economy and the postponing of QE tapering by the US Federal Reserve. North Asian economies have been less vulnerable to changing expectations of the global liquidity environment, while the gradual improvement in the outlook for global trade has been supportive for exporters generally. Conversely, South Asian markets have proved to be more volatile, particularly those with large current account deficits, such as Indonesia, where inflation has remained elevated and the central bank has raised interest rates to 7.50% from 5.75% over the period. While the fund generated positive returns over the period, performance lagged that of the benchmark. This was largely due to stock selection in Australia where holdings in materials stocks and real estate investments trusts underperformed the broader market, with Newcrest Mining the biggest laggard on gold price weakness. Our limited exposure in Australian banks also counted against us, as these large benchmark constituents outperformed over the period. Elsewhere, stock selection in the utilities and industrial sectors disappointed. On the other hand, stock selection in the consumer discretionary and IT sectors added value, with holdings in the preference shares of Samsung Electronics and Hyundai Motor (which offer an additional dividend in exchange for voting rights) generating strong returns as their discount to the ordinary share class narrowed. Over the period we have moved from having a small underweight position in India to an overweight, reflecting our increased confidence in the medium-term outlook, with a more progressive reform agenda likely to be the focus of next year s general elections. We have also added exposure in the industrial, energy and utility sectors, where valuations appeared attractive to us given the potential for gradually improving earnings growth. In turn, we have continued to take profits from recent outperformers where share prices now reflect a more optimistic view of future growth. Asian economic growth has slowed, but we expect it to be sufficiently high in 2014 to offer attractive investment opportunities. China s ambitious new reform agenda has also given us grounds for optimism. While much depends on successful implementation, there is real potential for meaningful change, particularly in allowing market forces to take a more decisive role in the allocation of resources. The region still faces a number of challenges that require structural reform, in our opinion, but markets have to a large extent discounted this given current low valuation levels relative to history and developed markets. Consensus earnings growth forecasts for Asia Pacific (ex Japan) companies are currently around 12.0% for 2014, bringing valuation levels for the region to 11.7 times 2014 expected earnings. In our opinion, these valuation levels remain supportive. Stuart Parks and Tim Dickson, Fund Managers Where Stuart Parks and Tim Dickson have expressed opinions, they are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco Perpetual investment professionals. The fund s ten largest investments were % Samsung Electronics 4.94 Taiwan Semiconductor Manufacturing 3.58 Hyundai Motor 3.37 Australia & New Zealand Banking 3.14 Hutchison Whampoa 3.10 Amcor 2.93 China Mobile 2.93 HSBC 2.89 POSCO 2.85 NTPC 2.41 The overall strategy of the fund remains largely unchanged, seeking to take advantage of the growth in domestic demand in Asia, particularly in companies that we believe have the ability to generate and increase dividend payments. We continue to have significant exposure in Hong Kong & China where we favour consumer-related areas of the market that we believe are undervalued. The real estate sector remains well represented, providing an attractive level of income. Meanwhile, we have limited exposure in Australia, particularly in respect of its banks, as in our analysis there are few attractive opportunities that combine yield with good sustainable growth. 34 Far Eastern Investment Series

36 Asian Equity Income Fund Investment report for the year Comparative table Total net assets of fund Total net assets 17,825 17,783 11,618 Net asset value Accumulation shares Assets attributable ( '000) 5,972 6,419 4,302 Shares in issue 10,520,999 11,788,833 9,602,564 Net asset value (pence per share) Accumulation shares (No Trail) Assets attributable ( '000) Shares in issue 386, ,092 26,949 Net asset value (pence per share) Z Accumulation shares Assets attributable ( '000) 1, Shares in issue 539,571 5,000 Net asset value (pence per share) Income shares Assets attributable ( '000) 8,854 9,810 6,702 Shares in issue 17,319,425 19,338,117 15,469,026 Net asset value (pence per share) Income shares (No Trail) Assets attributable ( '000) Shares in issue 78, , ,923 Net asset value (pence per share) Z Income shares Assets attributable ( '000) 1, Shares in issue 659,785 5,000 Net asset value (pence per share) Far Eastern Investment Series

37 Asian Equity Income Fund Investment report for the year Price and revenue record by share class Highest Lowest Net share share revenue price price per share Calendar year p p p Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Income shares Income shares (No Trail) Z Income shares to 30 November 2 from 7 March 3 from 12 November The fund was launched on 7 March Accumulation shares and income shares were issued at 50p per share and accumulation shares (No Trail) and income shares (No Trail) were issued at 100p per share. Z accumulation shares and Z income shares were issued at 200p on 12 November Far Eastern Investment Series

38 Asian Equity Income Fund Investment report for the year Ongoing charges figure (OCF) to to Ongoing charges as % of average net assets Accumulation shares and income shares 1.79% 1.79% Accumulation shares (No Trail) and income shares (No Trail) 1.29% 1.29% Z accumulation shares and Z income shares 1.04% 1.04% Total expenses per note 4 ( 000) Transaction expenses per note 2 ( 000) 3 3 Total expenses ( 000) Average net assets for the year ( 000) 18,585 15,223 The OCF represents the annual operating expenses of the fund expressed as a percentage of average net assets for the year it does not include entry charges. The OCF includes the annual management charge and also the following charges which are deducted directly from the fund: Registration Fee, Depositary Fee, Custody Fee, Audit Fee, FCA Fee, Price Publication Fee, Report production and transaction expenses, less: VAT recoverable where applicable. 37 Far Eastern Investment Series

39 Asian Equity Income Fund Investment report for the year Portfolio Statement Holding or Percentage as at 30 November 2013 nominal Market of total value of value net assets Investment positions 000 % Australia 12.81% ( %) Amcor 85, Australia & New Zealand Banking 31, Goodman 62, Metcash 75, Newcrest Mining 19, Orica 31, Origin Energy 23, Westfield Retail Trust 41, China 10.67% ( %) Bank of China H 1,244, China Shenhua Energy H 159, Giant Interactive ADR 35, Industrial & Commercial Bank of China H 887, Qingling Motors H 1,414, Zhejiang Expressway H 554, Hong Kong 24.96% ( %) Cathay Pacific Airways 163, Cheung Kong 34, China Mobile 79, CNOOC 260, HKR International 337, HSBC 75, Hutchison Whampoa 71, Jardine Matheson (Singapore quote) 12, NWS 401, Samson 2,409, Standard Chartered 25, Wharf 36, Yue Yuen Industrial 199, India 8.16% ( %) Ascendas India Trust 671, Coal India 74, ICICI Bank 28, NTPC 298, Oil & Natural Gas 106, Indonesia 1.91% ( %) Astra Agro Lestari 302, Malaysia 1.53% ( %) Axiata 215, New Zealand 0.94% ( Nil) Meridian Energy (partly paid) 340, Philippines 2.02% ( %) Filinvest Land 7,485, Metropolitan Bank & Trust 206, Singapore 10.45% ( %) Cache Logistics Trust 621, Cambridge Industrial Trust 807, Frasers Centrepoint 306, Keppel 71, Parkway Life Real Estate Investment Trust 245, United Overseas Bank 32, South Korea 12.70% ( %) DGB Financial 28, Hyundai Motor pref. 8, POSCO 2, Samsung Electronics pref. 1, Far Eastern Investment Series

40 Asian Equity Income Fund Investment report for the year Portfolio Statement continued Holding or Percentage as at 30 November 2013 nominal Market of total value of value net assets Investment positions 000 % Taiwan 9.36% ( %) Far Eastern New Century 521, Giant Manufacturing 39, Quanta Computer 267, Taiwan Semiconductor Manufacturing 296, Tripod Technology 127, Thailand 2.53% ( %) Bangkok Bank 67, LPN Development 598, United Kingdom 2.08% ( %) BHP Billiton (London listing) 19, Portfolio of investments ( %) 17, Net other (liabilities)/assets ( %) (21) (0.12) Net assets 17, Holdings are ordinary shares unless otherwise stated. 39 Far Eastern Investment Series

41 Asian Equity Income Fund Investment report for the year Summary of Material Portfolio Changes for the year 1 December 2012 to 30 November 2013 Cost 000 Total purchases 5,810 Largest purchases: Australia Origin Energy 188 Goodman 186 China Zhejiang Expressway H 280 Baidu ADR 274 China Shenhua Energy H 194 Giant Interactive ADR 188 Hong Kong Samson 295 HSBC 204 Standard Chartered 200 NWS 195 China Mobile 194 India ICICI Bank 266 Coal India 189 Oil & Natural Gas 183 Indonesia Astra Agro Lestari 387 New Zealand Meridian Energy (partly paid) 179 Singapore Cambridge Industrial Trust 275 Taiwan Far Eastern New Century 215 Tripod Technology 190 Thailand Banpu 423 Proceeds 000 Total sales 5,273 Largest sales: Australia Caltex Australia 342 Westpac Banking 308 China Baidu ADR 420 Hong Kong HKT 398 AIA 338 Vtech 258 China Resources Enterprise 243 China Mobile 179 Amvig 162 Wharf 92 India Jain Irrigation Systems 117 Indonesia Semen Indonesia 330 South Korea Hyundai Home Shopping Network 271 Korean Reinsurance 195 DGB Financial 184 Taiwan Giant Manufacturing 187 Lumax International 162 Thailand Banpu 357 LPN Development 329 CPN Retail Growth Property Fund (Alien Market) Far Eastern Investment Series

42 Asian Equity Income Fund Financial statements Statement of Total Return for the year 1 December 2012 to 30 November 2013 to to Notes Income Net capital gains ,409 Revenue Expenses 4 (318) (262) Finance costs: Interest 6 Net revenue before taxation Taxation 5 (51) (34) Net revenue after taxation Total return before distributions 656 2,791 Finance costs: Distributions 6 (631) (596) Change in net assets attributable to shareholders from investment activities 25 2,195 Statement of Change in Net Assets Attributable to Shareholders for the year 1 December 2012 to 30 November 2013 to to Opening net assets attributable to shareholders 17,783 11,618 Amounts received on issue of shares 4,614 5,234 Amounts paid on cancellation of shares (4,878) (1,533) (264) 3,701 Dilution adjustment 8 16 Stamp Duty Reserve Tax (1) Change in net assets attributable to shareholders from investment activities 25 2,195 Retained distribution on accumulation shares Closing net assets attributable to shareholders 17,825 17, Far Eastern Investment Series

43 Asian Equity Income Fund Financial statements Balance Sheet as at 30 November 2013 Notes Assets Investment assets 17,846 17,015 Debtors Cash and bank balances Total other assets 290 1,104 Total assets 18,136 18,119 Liabilities Investment liabilities Creditors Distribution payable on income shares Total other liabilities Total liabilities Net assets attributable to shareholders 17,825 17, Far Eastern Investment Series

44 Asian Equity Income Fund Notes to the financial statements 1 Accounting policies The fund s financial statements have been prepared on the same basis as the Company s financial statements. 2 Net capital gains to to Non-derivative securities 293 2,421 Foreign currency losses (5) (9) Transaction expenses (3) (3) Net capital gains 285 2,409 3 Revenue to to UK franked dividends Non-taxable overseas dividends Taxable overseas dividends Stock dividends Expenses to to Payable to the ACD, associates of the ACD and agents of either of them: ACD's annual management charge Registration fees Payable to the Depositary, associates of the Depositary and agents of either of them: Depositary s fees Other expenses: Audit fee* 7 9 FT listing fees 5 3 Professional fees 4 Registration fees 28 Safe custody fees Total expenses *Audit fees in the current and prior years are disclosed inclusive of VAT, to the extent that it is not recoverable. 43 Far Eastern Investment Series

45 Asian Equity Income Fund Notes to the financial statements 5 Taxation to to a) Analysis of charge for the year Overseas tax Current and total tax charge There is no corporation tax charge for the year ( Nil). b) Factors affecting the tax charge for the year The tax assessed for the year is lower ( lower) than the standard rate of corporation tax in the UK for an authorised investment company with variable capital. The differences are explained below: to to Net revenue before taxation Corporation tax at 20% ( %) Effects of: Overseas tax Relief for overseas tax treated as an expense (1) Revenue not subject to tax (131) (117) Movement in excess expenses Current tax charge Authorised investment companies with variable capital are exempt from tax on capital gains. Therefore any capital return is not included in the above reconciliation. c) Deferred tax At the year end the fund had surplus management expenses of 507,000 ( ,000). It is unlikely that the fund will generate sufficient taxable profits in the future to utilise these expenses and therefore a deferred tax asset of 101,000 ( ,000) has not been recognised. 6 Finance costs to to Distributions and interest Accumulations and distributions paid 31 July Accumulations and distributions payable 31 January Amounts deducted on cancellation of shares Amounts received on issue of shares (37) (51) Interest Total finance costs The distributable amount has been calculated as follows: Net revenue after taxation ACD s annual management charge taken to capital Tax relief on ACD s annual management charge taken to capital (7) (6) Far Eastern Investment Series

46 Asian Equity Income Fund Notes to the financial statements 7 Debtors Amounts receivable for issue of shares Accrued revenue Prepaid expenses 4 4 VAT recoverable Cash and bank balances Cash and bank balances Creditors Amounts payable for cancellation of shares 82 5 Purchases awaiting settlement 80 Accrued expenses Commitments and contingent liabilities Potential calls on partly paid shares, if exercised Related parties Related party interests in the fund are disclosed in note 11 of the Company s financial statements on page 11. Amounts payable to Invesco Fund Managers Limited in respect of administration services are disclosed in note 4. Amounts due at the end of the accounting period for administration services 21,000 ( ,000) are disclosed in note 9 within accrued expenses. 45 Far Eastern Investment Series

47 Asian Equity Income Fund Notes to the financial statements 12 Derivatives and other financial instruments The fund s performance may be adversely affected by variations in the relative strength of world currencies or if Sterling strengthens against those currencies. The risk factors relating to the fund are discussed more fully in note 14 on pages 12 to 14 of the Company s financial statements. Numerical disclosures relating to the fund are as follows: Currency exposure Net foreign currency assets/(liabilities) Non- Monetary monetary exposures exposures Total Currency Australian dollar 26 2,283 2,309 Hong Kong dollar 8 5,729 5,737 Indian rupee 1,234 1,234 Indonesian rupiah Malaysian ringgit New Zealand dollar Philippine peso Singapore dollar 8 2,083 2,091 South Korean won 2,264 2,264 Taiwan dollar 1,668 1,668 Thai baht US dollar ,475 17,521 Sterling (67) (21) 17,846 17, Australian dollar 34 2,561 2,595 Hong Kong dollar 8 5,720 5,728 Indian rupee Indonesian rupiah Malaysian ringgit Philippine peso Singapore dollar 4 1,716 1,720 South Korean won 2,354 2,354 Taiwan dollar (56) 1,534 1,478 Thai baht US dollar (8) 16,710 16,702 Sterling , ,015 17, Far Eastern Investment Series

48 Asian Equity Income Fund Notes to the financial statements 12 Derivatives and other financial instruments continued Interest rate risk profile of financial assets Financial Floating rate Fixed rate assets not financial financial carrying assets assets interest Total Currency Australian dollar 2,309 2,309 Hong Kong dollar 5,737 5,737 Indian rupee 1,234 1,234 Indonesian rupiah Malaysian ringgit New Zealand dollar Philippine peso Singapore dollar 2,091 2,091 South Korean won 2,264 2,264 Taiwan dollar 1,668 1,668 Thai baht US dollar Sterling ,962 18, Australian dollar 2,595 2,595 Hong Kong dollar 5,728 5,728 Indian rupee Indonesian rupiah Malaysian ringgit Philippine peso Singapore dollar 1 1,719 1,720 South Korean won 2,354 2,354 Taiwan dollar 24 1,534 1,558 Thai baht US dollar Sterling , ,467 18,119 Interest rate risk profile of financial liabilities Financial Floating rate liabilities not financial carrying liabilities interest Total Currency Sterling Taiwan dollar Sterling Interest rate risk profile of fixed rate financial assets The fund held no fixed rate financial assets as at 30 November 2013 ( Nil). 47 Far Eastern Investment Series

49 Asian Equity Income Fund Notes to the financial statements 12 Derivatives and other financial instruments continued Interest rate risk profile of floating rate financial assets and liabilities Weighted Weighted average period Market average for which value interest rate rate is fixed 000 % years Cash and bank balances n/a Cash and bank balances n/a Interest rates on bank balances and overdrafts are linked to LIBOR, EONIA or other local interest rates as appropriate to the currency. Economic exposure and sensitivity analysis Changes in currency exposure during the year can be seen from the table below: Currency % % Australian dollar Hong Kong dollar Indian rupee Indonesian rupiah Malaysian ringgit New Zealand dollar 1.0 Philippine peso Singapore dollar South Korean won Taiwan dollar Thai baht US dollar Sterling Sensitivity analysis No derivatives are held which could impact the fund significantly ( Nil). 13 Portfolio transaction costs to to Analysis of total purchase costs Purchases before transaction costs 5,799 5,988 Commissions 7 9 Taxes 4 3 Total purchase costs Gross purchases total 5,810 6,000 Analysis of total sale costs Gross sales before transaction costs 5,286 2,932 Commissions (7) (5) Taxes (6) (3) Total sale costs (13) (8) Total sales net of transaction costs 5,273 2, Far Eastern Investment Series

50 Asian Equity Income Fund Distribution tables Distribution tables for the year 1 December 2012 to 30 November 2013 Net Net distribution distribution Net paid paid revenue Equalisation Distribution paid 31 July p p p p Accumulation shares Group Group Accumulation shares (No Trail) Group Group Z Accumulation shares 1 Group Group Income shares Group Group Income shares (No Trail) Group Group Z Income shares 1 Group Group Group 1: shares purchased prior to 1 December 2012 Group 2: shares purchased on or after 1 December 2012 Net Net distribution distribution Net payable paid revenue Equalisation Distribution payable 31 January 2014 p p p p Accumulation shares Group Group Accumulation shares (No Trail) Group Group Z Accumulation shares Group Group Income shares Group Group Income shares (No Trail) Group Group Z Income shares Group Group Group 1: shares purchased prior to 1 June 2013 Group 2: shares purchased on or after 1 June 2013 Equalisation applies only to shares purchased during the distribution period (Group 2). It is the average amount of revenue included in the purchase price of all Group 2 shares and is refunded to holders of these shares as a return of capital. Being capital it is not liable to income tax. Instead, it must be deducted from the cost of income shares for capital gains purposes. 1 As the Z accumulation and Z income shares were issued on 12 November 2012, there are no prior year comparatives for these share classes. 49 Far Eastern Investment Series

51 Hong Kong and China Fund Investment report for the year The Investment Objective of the Hong Kong and China Fund The fund aims to achieve capital growth through a portfolio of investments with an exposure to the economies of Hong Kong and China. Exposure to China will be largely obtained through indirect investment in securities traded on other markets. In pursuing this objective, the fund managers may include investments that they consider appropriate which include transferable securities, money market instruments, warrants, collective investment schemes, deposits and other permitted investments and transactions as detailed in Appendix 2 of the most recent Prospectus. Share Prices p p Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Performance Percentage growth to 30 November 2013 Since Since Since Since Since % % % % % Hong Kong & China Fund (accumulation shares) MSCI Zhong Hua Index IMA China/Greater China Sector Fund Ranking 3/19 1/18 2/16 3/13 1/6 Standardised rolling 12 month performance Percentage growth % % % % % Hong Kong & China Fund (accumulation shares) This standardised past performance information is updated on a quarterly basis. Should you require up to date past performance information, this is available on our website or by contacting us. Fund and sector average performance data source: Lipper, mid-to-mid (excluding the entry charge), in Sterling, with net income reinvested. MSCI Zhong Hua Index data source: Thomson Reuters Datastream, total return, in Sterling. The value of investments and any income from them will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Past performance is not a guide to future returns. Current tax levels and reliefs may change. Depending on individual circumstances, this may affect investment returns. 50 Far Eastern Investment Series

52 Hong Kong and China Fund Investment report for the year Strategy, review and outlook The fund returned 32.6% over the twelve months to the end of November 2013, compared to the benchmark MSCI Zhong Hua Index, which returned 10.1%. This placed the fund in the first quartile of its peer group, the IMA China/Greater China Sector, which returned an average of 16.8%. Fund and sector average performance data source: Lipper, mid-to-mid (excluding the entry charge), in Sterling, with net income reinvested. MSCI Zhong Hua Index data source: Thomson Reuters Datastream, total return, in Sterling. Past performance is not a guide to future returns. For the period under review, both stock selection and asset allocation had a positive effect on fund performance. Stock selection in the consumer discretionary sector made a notable contribution, thanks to holdings in Ctrip, an online travel services provider, automobile body parts manufacturer Minth and the Chow Tai Fook Jewellery Group. Our large overweight position in the healthcare sector, which is driven by our bottom-up stock selection process, added value as this was the best performing sector over the period, buoyed by healthcare-related reforms to be introduced to enhance medical insurance and encourage private investment. Finally, stock selection in financials added value, helped by our lack of exposure in the Chinese real estate sector, which was hit by the announcement that property tax legislation and various environmental related taxes would be accelerated. The recent Third Plenum marked a new era of growth for China. The reform package announced is in line with our expectations and is moving in the right direction towards economic liberalisation. The reforms mark a bold and profound change in the mindset of the new leadership as they seek to meet the challenges of the 21st century. The major rationale of the reform package is to let market forces take a decisive role in resource allocation in as many areas as possible. This has huge implications for financial and state-owned enterprise (SOE) reform. In fact, we have already seen progress just days after the Third Plenum with the statement from the central bank on withdrawing from normal foreign exchange intervention and accelerating capital markets reform. The conviction and commitment of the central government in pushing forward reform is unquestionable. While we expect the reforms will have a structurally positive impact on the economy over time, the key is implementation which can be a challenge especially in areas where there are many existing stakeholders. Apart from the aggressiveness of the reform surprising the market on the upside, positive macroeconomic data from China, such as the strong rebound in export growth, confirms that the economy is stabilising. We remain reasonably optimistic over the medium-term outlook for China, and believe that GDP growth is more resilient than most investors think. Despite a recent run-up in market performance, China s equity market is still trading at what we consider to be compelling valuations relative to historic averages. The improvement in the Chinese economy also benefits Hong Kong and Taiwan to a large extent. In terms of our fund strategy, we adopt a selective approach to stock picking with a focus on valuations, as well as ownership structures and management quality of corporates operating in China. As such, we are selective when investing in SOEs as we are concerned that management of SOEs might not be as focused on profitability as those of private enterprises. Our bottom-up stock selection process has led us to hold underweight positions relative to the benchmark in the financial and energy sectors as they are largely dominated by SOEs. On the other hand, we are finding abundant stock opportunities in consumer related sectors. We continue to have diverse exposure across different consumer industries such as autos, retailing and consumer staples. Mike Shiao and Lorraine Kuo, Fund Managers Where Mike Shiao and Lorraine Kuo have expressed opinions, they are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco Perpetual investment professionals. The fund s ten largest investments were % Minth 6.71 China Construction Bank H 4.96 China Merchants Bank H 4.56 MediaTek 4.29 Vinda International 4.11 Hutchison Whampoa 3.60 China Unicom 3.57 AIA 3.38 China Petroleum & Chemical 2.87 WuXi PharmaTech Far Eastern Investment Series

53 Hong Kong and China Fund Investment report for the year Comparative table Total net assets of fund Total net assets 259, , , ,857 Net asset value Accumulation shares Assets attributable ( '000) 221, , , ,822 Shares in issue 51,035,978 53,155,632 59,149,179 68,355,775 Net asset value (pence per share) Accumulation shares (No Trail) Assets attributable ( '000) 1, Shares in issue 762,747 89,361 61,672 24,950 Net asset value (pence per share) Z Accumulation shares Assets attributable ( '000) 37, Shares in issue 14,175,636 5,000 Net asset value (pence per share) Price and revenue record by share class Highest Lowest Net share share revenue price price per share Calendar year p p p Accumulation shares Accumulation shares (No Trail) Z Accumulation shares to 30 November 2 from 12 June 3 from 12 November Accumulation shares (No Trail) were issued at 100p on 12 June Z accumulation shares were issued at 200p on 12 November Far Eastern Investment Series

54 Hong Kong and China Fund Investment report for the year Ongoing charges figure (OCF) to to Ongoing charges as % of average net assets Accumulation shares 1.70% 1.70% Accumulation shares (No Trail) 1.20% 1.20% Z accumulation shares 0.95% 0.95% Total expenses per note 4 ( 000) 3,479 2,909 Transaction expenses per note 2 ( 000) Total expenses ( 000) 3,512 2,937 Average net assets for the year ( 000) 209, ,909 The OCF represents the annual operating expenses of the fund expressed as a percentage of average net assets for the year it does not include entry charges. The OCF includes the annual management charge and also the following charges which are deducted directly from the fund: Registration Fee, Depositary Fee, Custody Fee, Audit Fee, FCA Fee, Price Publication Fee, Report production and transaction expenses, less: VAT recoverable where applicable. 53 Far Eastern Investment Series

55 Hong Kong and China Fund Investment report for the year Portfolio Statement Holding or Percentage as at 30 November 2013 nominal Market of total value of value net assets Investment positions 000 % China 52.58% ( %) Anhui Conch Cement H 2,946,000 7, Baidu ADR 59,064 6, Bank of China H 21,253,000 6, China Construction Bank H 26,072,000 12, China Dongxiang 46,740,000 4, China Life Insurance H 2,941,000 5, China Merchants Bank H 9,114,000 11, China Petroleum & Chemical 14,276,000 7, China Shenhua Energy H 1,245,500 2, China Unicom 9,600,000 9, CITIC Telecom International 10,143,375 2, Ctrip.com ADS 143,297 4, Dalian Port 5,798, Dongfeng Motor 3,868,000 3, FIH Mobile 11,411,000 3, Golden Eagle Retail 1,680,000 1, Hosa International 2,668, Man Wah 1,337,200 1, Microport Scientific 4,297,000 1, Nine Dragons Paper 4,712,000 2, Ping An Insurance 680,000 3, Shanghai Fosun Pharmaceutical 2,022,500 3, Shanghai Jinjiang International Hotels Development B 4,942,249 4, Sina 54,222 2, Sinopharm 2,116,800 3, Sohu.com 118,000 4, Sun Art Retail 7,918,500 7, Uni-President 5,532,000 3, WuXi PharmaTech ADR 368,000 7, Hong Kong 39.49% ( %) AAC Technologies 2,171,500 6, AIA 2,838,200 8, Ajisen China 6,781,000 4, Asia Cement China 16,570,000 6, Cheung Kong 89, China Mobile 786,500 5, Chow Tai Fook Jewellery 3,906,200 3, Giordano International 8,408,000 4, Hengan International 707,000 5, Hong Kong Exchanges & Clearing 411,800 4, Hutchison Whampoa 1,203,000 9, Lenovo 1,982,000 1, L'Occitane International 1,980,750 2, Minth 13,664,000 17, Moulin Global Eyecare 1 1,400, MTR 1,122,500 2, SmarTone Telecommunications 1,506,500 1, Stella International 1,497,000 2, Towngas China 4,637,000 3, Vinda International 11,051,000 10, Yue Yuen Industrial 1,498,000 2, Taiwan 7.06% ( %) MediaTek 1,241,000 11, Uni-President Enterprises 6,602,740 7, Portfolio of investments ( %) 257, Net other assets ( %) 2, Net assets 259, Holdings are ordinary shares unless otherwise stated. 1 Unquoted securities - for the year ended 30 November 2013 this amounts to 0.00% (30 November %) of the Net Asset Value of the fund. 54 Far Eastern Investment Series

56 Hong Kong and China Fund Investment report for the year Summary of Material Portfolio Changes for the year 1 December 2012 to 30 November 2013 Cost 000 Total purchases 169,853 Largest purchases: China China Construction Bank H 13,257 China Merchants Bank H 10,847 China Unicom 9,482 Sun Art Retail 7,074 China Life Insurance H 6,566 China Petroleum & Chemical 6,557 Nine Dragons Paper 5,117 Anhui Conch Cement H 5,088 Sohu.com 4,720 China Telecom 4,209 FIH Mobile 3,940 Uni-President 3,700 Dongfeng Motor 3,638 Hong Kong China Mobile 7,177 Hong Kong Exchanges & Clearing 6,647 Lenovo 5,712 Yue Yuen Industrial 5,256 Hutchison Whampoa 4,182 Taiwan MediaTek 9,673 Uni-President Enterprises 5,961 Proceeds 000 Total sales 138,457 Largest sales: China Industrial & Commercial Bank of China H 11,556 China Construction Bank H 10,020 China Shenhua Energy H 8,987 Ctrip.com ADS 8,457 China Life Insurance H 6,513 China Telecom 3,973 Nine Dragons Paper 3,097 Hong Kong Shenzhou International 10,544 Lenovo 9,643 AAC Technologies 8,967 China Mobile 8,295 Tencent 7,386 Hong Kong Exchanges & Clearing 5,804 Haitian International 5,587 Sa Sa International 3,692 Giordano International 3,175 Cheung Kong 3,023 Yue Yuen Industrial 2,428 Cathay Pacific Airways 2,063 Taiwan Uni-President Enterprises 3, Far Eastern Investment Series

57 Hong Kong and China Fund Financial statements Statement of Total Return for the year 1 December 2012 to 30 November 2013 to to Notes Income Net capital gains 2 54,128 24,606 Revenue 3 5,377 5,032 Expenses 4 (3,479) (2,909) Finance costs: Interest 6 Net revenue before taxation 1,898 2,123 Taxation 5 (279) (253) Net revenue after taxation 1,619 1,870 Total return before distributions 55,747 26,476 Finance costs: Distributions 6 (1,667) (1,870) Change in net assets attributable to shareholders from investment activities 54,080 24,606 Statement of Change in Net Assets Attributable to Shareholders for the year 1 December 2012 to 30 November 2013 to to Opening net assets attributable to shareholders 175, ,578 Amounts received on issue of shares 50,828 9,114 Amounts paid on cancellation of shares (22,912) (27,474) 27,916 (18,360) Dilution adjustment Change in net assets attributable to shareholders from investment activities 54,080 24,606 Retained distribution on accumulation shares 2,143 1,769 Closing net assets attributable to shareholders 259, , Far Eastern Investment Series

58 Hong Kong and China Fund Financial statements Balance Sheet as at 30 November 2013 Notes Assets Investment assets 257, ,735 Debtors 7 3, Cash and bank balances 8 4,002 4,339 Total other assets 7,909 4,548 Total assets 265, ,283 Liabilities Investment liabilities Creditors 9 5, Total other liabilities 5, Total liabilities 5, Net assets attributable to shareholders 259, , Far Eastern Investment Series

59 Hong Kong and China Fund Notes to the financial statements 1 Accounting policies The fund s financial statements have been prepared on the same basis as the Company s financial statements. 2 Net capital gains to to Non-derivative securities 54,458 24,631 Foreign currency (losses)/gains (297) 3 Transaction expenses (33) (28) Net capital gains 54,128 24,606 3 Revenue to to Non-taxable overseas dividends 5,307 4,841 Taxable overseas dividends 100 Stock dividends Bank interest 5 6 5,377 5,032 4 Expenses to to Payable to the ACD, associates of the ACD and agents of either of them: ACD's annual management charge 3,084 2,593 Registration fees 261 Accounts printing and postage 6 6 3,090 2,860 Payable to the Depositary, associates of the Depositary and agents of either of them: Depositary s fees Other expenses: Audit fee* 7 7 FT listing fees 2 2 Professional fees 1 Registration fees 319 Safe custody fees Total expenses 3,479 2,909 *Audit fees in the current and prior years are disclosed inclusive of VAT, to the extent that it is not recoverable. 58 Far Eastern Investment Series

60 Hong Kong and China Fund Notes to the financial statements 5 Taxation to to a) Analysis of charge for the year Overseas tax Current and total tax charge There is no corporation tax charge for the year ( Nil). b) Factors affecting the tax charge for the year The tax assessed for the year is lower ( lower) than the standard rate of corporation tax in the UK for an authorised investment company with variable capital. The differences are explained below: to to Net revenue before taxation 1,898 2,123 Corporation tax at 20% ( %) Effects of: Overseas tax Revenue not subject to tax (1,075) (985) Movement in excess expenses Current tax charge Authorised investment companies with variable capital are exempt from tax on capital gains. Therefore any capital return is not included in the above reconciliation. c) Deferred tax At the year end the fund had surplus management expenses of 13,920,000 ( ,445,000). It is unlikely that the fund will generate sufficient taxable profits in the future to utilise these expenses and therefore a deferred tax asset of 2,784,000 (2012-2,089,000) has not been recognised. 6 Finance costs to to Distributions and interest Accumulations payable 31 January ,143 1,769 Amounts deducted on cancellation of shares Amounts received on issue of shares (493) (31) 1,667 1,870 Interest Total finance costs 1,667 1,870 The distributable amount has been calculated as follows: Net revenue after taxation 1,619 1,870 Equalisation on conversions 48 1,667 1, Far Eastern Investment Series

61 Hong Kong and China Fund Notes to the financial statements 7 Debtors Amounts receivable for issue of shares 1, Sales awaiting settlement 1 Foreign currency contracts awaiting settlement 2,641 Accrued revenue Prepaid expenses 2 2 VAT recoverable , Cash and bank balances Cash and bank balances 4,002 4,339 9 Creditors Amounts payable for cancellation of shares Purchases awaiting settlement 2,641 Foreign currency contracts awaiting settlement 2,657 Accrued expenses , Commitments and contingent liabilities There were no commitments or contingent liabilities at the balance sheet date ( Nil). 11 Related parties Related party interests in the fund are disclosed in note 11 of the Company s financial statements on page 11. Amounts payable to Invesco Fund Managers Limited in respect of administration services are disclosed in note 4. Amounts due at the end of the accounting period for administration services 293,000 ( ,000) are disclosed in note 9 within accrued expenses. 60 Far Eastern Investment Series

62 Hong Kong and China Fund Notes to the financial statements 12 Derivatives and other financial instruments The fund s performance may be adversely affected by variations in the relative strength of world currencies or if Sterling strengthens against those currencies. The risk factors relating to the fund are discussed more fully in note 14 on pages 12 to 14 of the Company s financial statements. Numerical disclosures relating to the fund are as follows: Currency exposure Net foreign currency assets Non- Monetary monetary exposures exposures Total Currency Hong Kong dollar , ,736 Taiwan dollar 18,340 18,340 US dollar 29,649 29, , ,725 Sterling 2,198 2,198 2, , , Hong Kong dollar , ,601 Taiwan dollar 4,514 4,514 US dollar 13,651 13, , ,766 Sterling 3,896 3,896 3, , ,662 Interest rate risk profile of financial assets Financial Floating rate Fixed rate assets not financial financial carrying assets assets interest Total Currency Hong Kong dollar 209, ,736 Taiwan dollar 18,340 18,340 US dollar 32,290 32,290 Sterling 4,002 1,205 5,207 4, , , Hong Kong dollar 153, ,601 Taiwan dollar 4,514 4,514 US dollar 13,651 13,651 Sterling 4, ,517 4, , ,283 Interest rate risk profile of financial liabilities Financial Floating rate liabilities not financial carrying liabilities interest Total Currency US dollar 2,641 2,641 Sterling 3,009 3,009 5,650 5, Sterling Interest rate risk profile of fixed rate financial assets The fund held no fixed rate financial assets as at 30 November 2013 ( Nil). 61 Far Eastern Investment Series

63 Hong Kong and China Fund Notes to the financial statements 12 Derivatives and other financial instruments continued Interest rate risk profile of floating rate financial assets and liabilities Weighted Weighted average period Market average for which value interest rate rate is fixed 000 % years Cash and bank balances 4, n/a Cash and bank balances 4, n/a Interest rates on bank balances and overdrafts are linked to LIBOR, EONIA or other local interest rates as appropriate to the currency. Economic exposure and sensitivity analysis Changes in currency exposure during the year can be seen from the table below: Currency % % Hong Kong dollar Taiwan dollar US dollar Sterling Sensitivity analysis No derivatives are held which could impact the fund significantly ( Nil). 13 Portfolio transaction costs to to Analysis of total purchase costs Purchases before transaction costs 169, ,172 Commissions Taxes Total purchase costs Gross purchases total 169, ,608 Analysis of total sale costs Gross sales before transaction costs 138, ,053 Commissions (171) (261) Taxes (148) (186) Total sale costs (319) (447) Total sales net of transaction costs 138, , Far Eastern Investment Series

64 Hong Kong and China Fund Distribution table Distribution table for the year 1 December 2012 to 30 November 2013 Net Net distribution distribution Net payable paid revenue Equalisation Distribution payable 31 January 2014 p p p p Accumulation shares Group Group Accumulation shares (No Trail) Group Group Z Accumulation shares Group Group Group 1: shares purchased prior to 1 December 2012 Group 2: shares purchased on or after 1 December 2012 Equalisation applies only to shares purchased during the distribution period (Group 2). It is the average amount of revenue included in the purchase price of all Group 2 shares and is refunded to holders of these shares as a return of capital. Being capital it is not liable to income tax. Instead, it must be deducted from the cost of income shares for capital gains purposes. 63 Far Eastern Investment Series

65 Japan Fund Investment report for the year The Investment Objective of the Japan Fund The fund aims to achieve capital growth in Japan. The fund intends to invest primarily in shares of companies in Japan, although it may include other Japanese related investments. In pursuing this objective, the fund managers may include investments that they consider appropriate which include transferable securities, money market instruments, warrants, collective investment schemes, deposits and other permitted investments and transactions as detailed in Appendix 2 of the most recent Prospectus. Share Prices p p Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Performance Percentage growth to 30 November 2013 Since Since Since Since Since % % % % % Japan Fund (accumulation shares) Tokyo Stock Exchange First Section Index IMA Japan Sector Fund Ranking 22/47 3/46 28/45 4/44 5/33 Standardised rolling 12 month performance Percentage growth % % % % % Japan Fund (accumulation shares) This standardised past performance information is updated on a quarterly basis. Should you require up to date past performance information, this is available on our website or by contacting us. Fund and sector average performance data source: Lipper, mid-to-mid (excluding the entry charge), in Sterling, with net income reinvested. Tokyo Stock Exchange First Section Index data source: Thomson Reuters Datastream, total return, in Sterling. The value of investments and any income from them will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Past performance is not a guide to future returns. Current tax levels and reliefs may change. Depending on individual circumstances, this may affect investment returns. 64 Far Eastern Investment Series

66 Japan Fund Investment report for the year Strategy, review and outlook The fund returned 47.7% over the twelve months to the end of November 2013, compared to the benchmark Tokyo Stock Exchange First Section Index, which returned 29.4%. This placed the fund in the first quartile of its peer group, the IMA Japan Sector, which returned an average of 31.8%. Fund and sector average performance data source: Lipper, mid-to-mid (excluding the entry charge), in Sterling, with net income reinvested. Tokyo Stock Exchange First Section Index data source: Thomson Reuters Datastream, total return, in Sterling. Past performance is not a guide to future returns. Japanese equity markets made strong gains over the twelve months, driven higher by a combination of low valuations and expectations of Prime Minister Shinzo Abe s Abenomics. The most significant development has been the Bank of Japan s aggressive monetary policy easing measures, designed to overcome deflation and help revitalise the economy. This has weakened the yen against other major currencies, a significant tailwind for Japan s exporters. There has also been considerable fiscal stimulus, including public spending that has provided a boost for the Japanese economy. Consumer and business confidence has been buoyed by gradual improvement in the outlook for global trade and evidence of a sustainable domestic economic recovery. While there was a correction in Japanese equity markets in May, triggered by QE-tapering concerns from the US and weaker-than-expected economic data from China, markets quickly stabilised and have held onto impressive year-to-date gains supported by growing evidence of a domestic economic recovery and very strong corporate earnings growth. The fund s strong outperformance relative to the benchmark has been driven by good stock selection across a number of economically sensitive sectors. Positions in brokers had the largest impact, with strong share price returns over the period reflecting the sensitivity of their earnings to higher market values and trading volumes. Yen weakness has also combined with greater investor risk appetite to help drive up share prices in a number of other areas where we have significant exposure, including manufacturers of autos, machine tools and metal products, as well as banks and shipping companies. On the other hand, selected holdings in the electric appliances sector disappointed. We continue to favour economically sensitive areas of the Japanese equity market, as in our view this is where the best opportunities lie, with valuation levels reflecting a weaker profit recovery than we think likely. Our largest overweight positions relative to the benchmark Topix index are in the financials and technology sectors. We believe valuations among many exporters still reflect a slower earnings recovery than we expect, and as such we have a number of holdings in large exporters of electrical appliances and automobiles in the fund. Within financials, we favour banks and brokers, where in our opinion valuations remain attractive. We also have exposure to other economically sensitive areas such as shipping and iron & steel. Over the period we have taken profits from recent outperformers where upside potential of share prices is less evident in our opinion, for example by reducing our exposure in brokers, real estate and selected auto manufacturers. In turn, we have added to areas which we believe have strong valuation support, notably in the technology sector. The medium term-outlook for Japanese equity markets remains positive, in our opinion. Valuations do not appear stretched, in our view, considering consensus expectations for strong earnings growth. The Bank of Japan is firmly committed to an accommodative monetary policy setting, while domestic economic growth remains healthy and the external environment is supportive, with continued gradual improvement in the US and signs of recovery in Europe. In terms of valuation, we believe Japanese stocks are attractively valued in absolute terms and relative to other markets. The Topix index trades on a price to earnings multiple that is comparable to those of other developed markets, while consensus expectations are for earnings per share (EPS) to grow more than 60% in Japan in the fiscal year to March 2014, compared with a global average of around 10%, with a positive outlook for the next fiscal year. Although the market has seen strong returns so far this year, we are still able to find stock specific opportunities where valuations are significantly lower than the market averages, but with strong earnings growth potential. Paul Chesson (lead) and Tony Roberts, Fund Managers Where Paul Chesson and Tony Roberts have expressed opinions, they are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco Perpetual investment professionals. The fund s ten largest investments were % Nippon Paper Industries 5.75 Honda Motor 5.34 Sumitomo Mitsui Financial 5.00 Mitsubishi UFJ Financial 4.92 Nomura 4.90 Yamaha Motor 4.44 Canon 4.33 Mitsui O.S.K. Lines 4.27 Konica Minolta 4.21 Resona Far Eastern Investment Series

67 Japan Fund Investment report for the year Comparative table Total net assets of fund Total net assets 313, , , ,518 Net asset value Accumulation shares Assets attributable ( '000) 294, , , ,594 Shares in issue 102,282, ,454, ,854, ,760,022 Net asset value (pence per share) Accumulation shares (No Trail) Assets attributable ( '000) 1,745 3,444 4,337 5,924 Shares in issue 1,290,059 3,753,736 4,716,921 5,245,198 Net asset value (pence per share) Z Accumulation Shares Assets attributable ( '000) 17, Shares in issue 5,553,554 5,000 Net asset value (pence per share) Price and revenue record by share class Highest Lowest Net share share revenue price price per share Calendar year p p p Accumulation shares Accumulation shares (No Trail) Z Accumulation shares to 30 November 2 from 12 June 3 from 12 November Accumulation shares (No Trail) were issued at 100p on 12 June Z accumulation shares were issued at 200p on 12 November Far Eastern Investment Series

68 Japan Fund Investment report for the year Ongoing charges figure (OCF) to to Ongoing charges as % of average net assets Accumulation shares 1.68% 1.67% Accumulation shares (No Trail) 1.18% 1.17% Z accumulation shares 0.93% 0.92% Total expenses per note 4 ( 000) 4,899 4,401 Transaction expenses per note 2 ( 000) 8 7 Total expenses ( 000) 4,907 4,408 Average net assets for the year ( 000) 296, ,090 The OCF represents the annual operating expenses of the fund expressed as a percentage of average net assets for the year it does not include entry charges. The OCF includes the annual management charge and also the following charges which are deducted directly from the fund: Registration Fee, Depositary Fee, Custody Fee, Audit Fee, FCA Fee, Price Publication Fee, Report production and transaction expenses, less: VAT recoverable where applicable. 67 Far Eastern Investment Series

69 Japan Fund Investment report for the year Portfolio Statement Holding or Percentage as at 30 November 2013 nominal Market of total value of value net assets Investment positions 000 % Manufacturing 60.57% ( %) Pulp & Paper 5.75% ( %) Nippon Paper Industries 1,622,700 18, Chemicals 4.47% ( %) Daicel Corporation 852,000 4, Nissan Chemical Industries 1,033,700 9, Iron & Steel 3.91% ( %) JFE 894,300 12, Metal Products 5.36% ( %) LIXIL 253,200 4, SUMCO 2,164,300 12, Machinery 3.49% ( %) Amada 144, DMG Mori Seiki 598,900 6, THK 228,100 3, Toshiba Machine 223, Electric Appliances 21.28% ( %) Canon 668,700 13, Ibiden 1,063,200 11, Konica Minolta 2,146,000 13, Shinko Electric Industries 1,876,800 9, Taiyo Yuden 637,600 4, TDK 450,700 12, Tokyo Electron 44,800 1, Transportation Equipment 11.12% ( %) Honda Motor 650,000 16, Nissan Motor 491,800 2, Toyota Motor 38,700 1, Yamaha Motor 1,427,300 13, Precision Instruments 3.11% ( %) Hoya 590,700 9, Other Products 2.08% ( %) Lintec 154,400 1, Nintendo 61,100 4, Transport & Communications 13.29% ( %) Land Transportation 2.71% ( %) East Japan Railway 169,700 8, Marine Transportation 6.63% ( %) Kawasaki Kisen Kaisha 5,115,000 7, Mitsui O.S.K. Lines 4,943,000 13, Information & Communication 3.95% ( %) NTT DOCOMO 1,261,700 12, Far Eastern Investment Series

70 Japan Fund Investment report for the year Portfolio Statement continued Holding or Percentage as at 30 November 2013 nominal Market of total value of value net assets Investment positions 000 % Finance & Insurance 21.69% ( %) Banks 14.06% ( %) Mitsubishi UFJ Financial 3,936,100 15, Resona 4,291,800 13, Sumitomo Mitsui Financial 519,600 15, Securities & Commodity Futures 6.53% ( %) Daiwa Securities 862,000 5, Nomura 3,181,500 15, Insurance 1.10% ( Nil) T&D 428,200 3, Real Estate 3.24% ( %) NTT Urban Development 1,444,900 10, Portfolio of investments ( %) 309, Net other assets ( %) 3, Net assets 313, Holdings are ordinary shares unless otherwise stated. 69 Far Eastern Investment Series

71 Japan Fund Investment report for the year Summary of Material Portfolio Changes for the year 1 December 2012 to 30 November 2013 Cost 000 Total purchases 125,653 Largest purchases: NTT DOCOMO 9,952 Canon 8,903 East Japan Railway 7,722 Ibiden 6,727 Honda Motor 5,511 Nippon Paper 5,495 Hoya 5,418 Nintendo 4,616 Tokyo Electron 4,207 NTT Urban Development 4,124 SUMCO 4,113 Mitsui O.S.K. Lines 4,005 LIXIL 3,844 Nippon Paper Industries 3,715 JFE 3,678 Yamaha Motor 3,574 T&D 3,528 Nomura 3,468 Nissan Motor 3,224 Mitsubishi UFJ Financial 3,216 Proceeds 000 Total sales 148,242 Largest sales: Daiwa Securities 16,760 Tokyo Electron 16,034 Nomura 14,211 Mazda Motor 12,777 Taiyo Yuden 12,752 DMG Mori Seiki 8,859 Hoya 8,056 NTT Urban Development 5,521 Yamaha Motor 4,966 Toyota Motor 4,734 JFE 3,879 Amada 3,661 SUMCO 3,066 Sumitomo Mitsui Financial 2,875 Mitsubishi Estate 2,689 Nissha Printing 2,276 Mitsubishi UFJ Financial 2,206 East Japan Railway 2,039 Honda Motor 2,010 Canon 1, Far Eastern Investment Series

72 Japan Fund Financial statements Statement of Total Return for the year 1 December 2012 to 30 November 2013 to to Notes Income Net capital gains 2 105, Revenue 3 5,957 5,481 Expenses 4 (4,899) (4,401) Finance costs: Interest 6 (1) (1) Net revenue before taxation 1,057 1,079 Taxation 5 (426) (384) Net revenue after taxation Total return before distributions 106, Finance costs: Distributions 6 (690) (695) Change in net assets attributable to shareholders from investment activities 105, Statement of Change in Net Assets Attributable to Shareholders for the year 1 December 2012 to 30 November 2013 to to Opening net assets attributable to shareholders 231, ,155 Amounts received on issue of shares 78,062 44,356 Amounts paid on cancellation of shares (102,224) (108,041) (24,162) (63,685) Dilution adjustment Change in net assets attributable to shareholders from investment activities 105, Retained distribution on accumulation shares Closing net assets attributable to shareholders 313, , Far Eastern Investment Series

73 Japan Fund Financial statements Balance Sheet as at 30 November 2013 Notes Assets Investment assets 309, ,947 Debtors 7 1,865 13,233 Cash and bank balances 8 2,840 Total other assets 4,705 13,233 Total assets 314, ,180 Liabilities Investment liabilities Creditors ,295 Bank overdrafts 2,194 Total other liabilities 922 8,489 Total liabilities 922 8,489 Net assets attributable to shareholders 313, , Far Eastern Investment Series

74 Japan Fund Notes to the financial statements 1 Accounting policies The fund s financial statements have been prepared on the same basis as the Company s financial statements. 2 Net capital gains to to Non-derivative securities 105, Foreign currency losses (94) (45) Transaction expenses (8) (7) Net capital gains 105, Revenue to to Non-taxable overseas dividends 5,956 5,480 Bank interest 1 1 5,957 5,481 4 Expenses to to Payable to the ACD, associates of the ACD and agents of either of them: ACD's annual management charge 4,366 3,946 Registration fees 390 Accounts printing and postage ,377 4,346 Payable to the Depositary, associates of the Depositary and agents of either of them Depositary s fees Other expenses: Audit fee* 6 6 FT listing fees 2 2 Registration fees 460 Safe custody fees Total expenses 4,899 4,401 *Audit fees in the current and prior years are disclosed inclusive of VAT, to the extent that it is not recoverable. 73 Far Eastern Investment Series

75 Japan Fund Notes to the financial statements 5 Taxation to to a) Analysis of charge for the year Overseas tax Current and total tax charge There is no corporation tax charge for the year ( Nil). b) Factors affecting the tax charge for the year The tax assessed for the year is higher ( higher) than the standard rate of corporation tax in the UK for an authorised investment company with variable capital. The differences are explained below: to to Net revenue before taxation 1,057 1,079 Corporation tax at 20% ( %) Effects of: Overseas tax Revenue not subject to tax (1,191) (1,096) Movement in excess expenses Current tax charge Authorised investment companies with variable capital are exempt from tax on capital gains. Therefore any capital return is not included in the above reconciliation. c) Deferred tax At the year end the fund had surplus management expenses of 37,795,000 ( ,896,000). It is unlikely that the fund will generate sufficient taxable profits in the future to utilise these expenses and therefore a deferred tax asset of 7,559,000 (2012-6,579,000) has not been recognised. 6 Finance costs to to Distributions and interest Accumulations payable 31 January Amounts deducted on cancellation of shares Amounts received on issue of shares (28) (94) Interest 1 1 Total finance costs The distributable amount has been calculated as follows: Net revenue after taxation Equalisation on conversions Far Eastern Investment Series

76 Japan Fund Notes to the financial statements 7 Debtors Amounts receivable for issue of shares 625 2,673 Sales awaiting settlement 5,123 Foreign currency contracts awaiting settlement 4,006 Accrued revenue 1,175 1,380 Prepaid expenses 3 3 VAT recoverable ,865 13,233 8 Cash and bank balances Cash and bank balances 2,840 9 Creditors Amounts payable for cancellation of shares Purchases awaiting settlement 1,143 Foreign currency contracts awaiting settlement 3,990 Accrued expenses , Commitments and contingent liabilities There were no commitments or contingent liabilities at the balance sheet date ( Nil). 11 Related parties Related party interests in the fund are disclosed in note 11 of the Company s financial statements on page 11. Amounts payable to Invesco Fund Managers Limited in respect of administration services are disclosed in note 4. Amounts due at the end of the accounting period for administration services 376,000 ( ,000) are disclosed in note 9 within accrued expenses. 75 Far Eastern Investment Series

77 Japan Fund Notes to the financial statements 12 Derivatives and other financial instruments The fund s performance may be adversely affected by variations in the relative strength of world currencies or if Sterling strengthens against those currencies. The risk factors relating to the fund are discussed more fully in note 14 on pages 12 to 14 of the Company s financial statements. Numerical disclosures relating to the fund are as follows: Currency exposure Net foreign currency assets Non- Monetary monetary exposures exposures Total Currency Japanese yen 1, , ,990 Sterling 2,608 2,608 3, , , Japanese yen 1, , ,317 Sterling 3,374 3,374 4, , ,691 Interest rate risk profile of financial assets Financial Floating rate Fixed rate assets not financial financial carrying assets assets interest Total Currency Japanese yen 310, ,990 Sterling 2, ,530 2, , , Japanese yen 233, ,450 Sterling 6,730 6, , ,180 Interest rate risk profile of financial liabilities Financial Floating rate liabilities not financial carrying liabilities interest Total Currency Sterling Japanese yen 5,133 5,133 Sterling 2,194 1,162 3,356 2,194 6,295 8,489 Interest rate risk profile of fixed rate financial assets The fund held no fixed rate financial assets as at 30 November 2013 ( Nil). 76 Far Eastern Investment Series

78 Japan Fund Notes to the financial statements 12 Derivatives and other financial instruments continued Interest rate risk profile of floating rate financial assets and liabilities Weighted Weighted average period Market average for which value interest rate rate is fixed 000 % years Cash and bank balances 2, n/a Bank overdrafts 2, n/a Interest rates on bank balances and overdrafts are linked to LIBOR, EONIA or other local interest rates as appropriate to the currency. Economic exposure and sensitivity analysis Changes in currency exposure during the year can be seen from the table below: Currency % % Japanese yen Sterling Sensitivity analysis No derivatives are held which could impact the fund significantly ( Nil). 13 Portfolio transaction costs to to Analysis of total purchase costs Purchases before transaction costs 125,460 68,675 Commissions Total purchase costs Gross purchases total 125,653 68,782 Analysis of total sale costs Gross sales before transaction costs 148, ,857 Commissions (221) (140) Total sale costs (221) (140) Total sales net of transaction costs 148, , Far Eastern Investment Series

79 Japan Fund Distribution table Distribution table for the year 1 December 2012 to 30 November 2013 Net Net distribution distribution Net payable paid revenue Equalisation Distribution payable 31 January 2014 p p p p Accumulation shares Group Group Accumulation shares (No Trail) Group Group Z Accumulation shares Group Group Group 1: shares purchased prior to 1 December 2012 Group 2: shares purchased on or after 1 December 2012 Equalisation applies only to shares purchased during the distribution period (Group 2). It is the average amount of revenue included in the purchase price of all Group 2 shares and is refunded to holders of these shares as a return of capital. Being capital it is not liable to income tax. Instead, it must be deducted from the cost of income shares for capital gains purposes. 78 Far Eastern Investment Series

80 Pacific Fund Investment report for the year The Investment Objective of the Pacific Fund The fund aims to achieve capital growth in the Far East, including Australasia. The fund intends to invest primarily in shares of companies in the Far East, although it may include other Far Eastern related investments. In pursuing this objective, the fund managers may include investments that they consider appropriate which include transferable securities, money market instruments, warrants, collective investment schemes, deposits and other permitted investments and transactions as detailed in Appendix 2 of the most recent Prospectus. Share Prices p p Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Income shares (xd) Income shares (No Trail) (xd) Z Income shares (xd) Performance Percentage growth to 30 November 2013 Since Since Since Since Since % % % % % Pacific Fund (accumulation shares) MSCI All Countries Pacific Index IMA Asia Pacific including Japan Sector Fund Ranking 1/5 1/5 1/5 1/5 1/4 Standardised rolling 12 month performance Percentage growth % % % % % Pacific Fund (accumulation shares) This standardised past performance information is updated on a quarterly basis. Should you require up to date past performance information, this is available on our website or by contacting us. Fund and sector average performance data source: Lipper, mid-to-mid (excluding the entry charge), in Sterling, with net income reinvested. MSCI All Countries Pacific Index data source: Thomson Reuters Datastream, total return, in Sterling. The value of investments and any income from them will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Past performance is not a guide to future returns. Current tax levels and reliefs may change. Depending on individual circumstances, this may affect investment returns. 79 Far Eastern Investment Series

81 Pacific Fund Investment report for the year Strategy, review and outlook The fund returned 30.1% over the twelve months to the end of November 2013, compared to the benchmark MSCI All Countries Pacific index, which returned 15.6%. The fund was in the first quartile of its peer group, the IMA Asia Pacific including Japan Sector, which returned an average 13.5%. Fund and sector average performance data source: Lipper, mid-to-mid (excluding the entry charge), in Sterling, with net income reinvested. MSCI All Countries Pacific Index data source: Thomson Reuters Datastream, total return, in Sterling. Past performance is not a guide to future returns. Pacific equity markets registered positive returns over what has proven to be an eventful twelve months. In Japan, the election of Prime Minister Shinzo Abe saw equity markets rally strongly, driven higher by a combination of low valuations and expectations of Abenomics. The key driver has been the Bank of Japan s aggressive monetary policy easing measures, designed to overcome deflation and help revitalise the economy, which has helped weaken the yen against other major currencies, a significant tailwind for Japan s exporters. There has also been considerable fiscal stimulus that has provided a boost for the domestic economy. Asian equity markets have been more susceptible to uncertainty surrounding US monetary policy, with South Asian markets especially volatile, particularly those with large current account deficits, such as Indonesia. However, markets have recovered from mid-summer lows thanks to signs of stabilisation in China s economy and the surprise decision by the US Federal Reserve to postpone QE-tapering. The fund s strong outperformance relative to the benchmark was largely driven by stock selection in Japan, where holdings in a number of economically sensitive sectors added notable value. While our holdings in brokers were the stand-out performers, yen weakness and greater investor risk appetite also helped drive share prices in manufacturers of autos, machine tools and metal products, as well as banks and shipping companies. On the other hand, selected holdings in the electric appliances sector disappointed. Stock selection in China and Korea also added notable value, thanks to strong contributions from holdings in Chinese internet and healthcare stocks, while our holding in Hyundai Motor preference shares made a significant contribution as their discount to the ordinary share class narrowed. We seek to invest in companies whose share prices are substantially below our estimate of fair value. Currently this includes Japanese financials, leading technology companies with significant market share, Chinese internet stocks and franchises with indirect exposure to Asian consumption growth such as Hong Kong based conglomerates. We are underweight in Australia, relative to the benchmark, as we believe there are better opportunities elsewhere and we believe that the Australian dollar is overvalued, even after its recent correction. Over the period we have taken some profits from recent outperformers where the upside potential for share prices is now less evident in our opinion, particularly holdings in Japanese brokers, real estate companies and selected IT names, as well as from holdings in Chinese internet companies. In turn, we have added to existing holdings that we believe the market continues to undervalue considering their earnings growth potential. Elsewhere, we have increased our exposure to India, reflecting our increased confidence in the medium-term outlook, with a more progressive reform agenda likely to be the focus of next year s general elections. Asian economic growth has slowed, but we expect it to be sufficiently high in 2014 to offer attractive investment opportunities. Other reasons for optimism include China s ambitious new reform agenda, which exceeded market expectations. While much depends on successful implementation, there is real potential for meaningful change, particularly in allowing market forces to take a more decisive role in the allocation of resources. The region faces a number of other challenges that require structural reform, in our opinion, but markets have to a large extent discounted this given the current low valuation levels relative to history and against developed markets. Consensus earnings growth forecasts for Asia Pacific (ex Japan) companies are currently around 12.0% for 2014, bringing valuation levels for the region to 11.7 times 2014 expected earnings. In our opinion, these valuation levels remain supportive. In our view, the medium term-outlook for Japanese equity markets remains positive, with an accommodative monetary policy, healthy domestic economic growth and a supportive external environment, thanks to gradual improvement in the US and signs of recovery in Europe. We believe Japanese stocks are attractively valued in absolute terms and relative to other markets, particularly considering consensus expectations for strong earnings growth this year. Even after this year s rally in equity markets, we are able to find stock specific opportunities where valuations are significantly lower than market averages, but with strong earnings growth potential. Stuart Parks, Fund Manager Where Stuart Parks has expressed opinions, they are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco Perpetual investment professionals. The fund s ten largest investments were % Samsung Electronics 3.98 NetEase 3.07 Nippon Paper Industries 2.72 Sumitomo Mitsui Financial 2.43 Honda Motor 2.39 Mitsubishi UFJ Financial 2.26 Yamaha Motor 2.14 Nomura 2.06 Baidu 2.04 Hoya Far Eastern Investment Series

82 Pacific Fund Investment report for the year Comparative table Total net assets of fund Total net assets 215, , , ,548 Net asset value Accumulation shares Assets attributable ( '000) 177, , , ,354 Shares in issue 19,401,940 20,799,023 23,372,678 24,640,151 Net asset value (pence per share) Accumulation shares (No Trail) Assets attributable ( '000) 1,283 1,292 1,241 1,130 Shares in issue 763, ,955 1,025, ,809 Net asset value (pence per share) Z Accumulation shares Assets attributable ( '000) 8, Shares in issue 3,251,907 5,000 Net asset value (pence per share) Income shares Assets attributable ( '000) 20,718 19,361 21,339 26,968 Shares in issue 2,457,942 2,957,212 3,449,729 3,848,855 Net asset value (pence per share) Income shares (No Trail) Assets attributable ( '000) 4, Shares in issue 2,534, , ,998 71,980 Net asset value (pence per share) Z Income shares Assets attributable ( '000) 3, Shares in issue 1,135,670 5,000 Net asset value (pence per share) Far Eastern Investment Series

83 Pacific Fund Investment report for the year Price and revenue record by share class Highest Lowest Net share share revenue price price per share Calendar year p p p Accumulation shares Accumulation shares (No Trail) Z Accumulation shares Income shares Income shares (No Trail) Z Income shares to 30 November 2 from 12 June 3 from 12 November Accumulation shares (No Trail) and income shares (No Trail) were issued at 100p on 12 June Z accumulation shares and Z income shares were issued at 200p on 12 November Far Eastern Investment Series

84 Pacific Fund Investment report for the year Ongoing charges figure (OCF) to to Ongoing charges as % of average net assets Accumulation shares and income shares 1.71% 1.71% Accumulation shares (No Trail) and income shares (No Trail) 1.21% 1.21% Z accumulation shares and Z income shares 0.96% 0.96% Total expenses per note 4 ( 000) 3,397 3,047 Transaction expenses per note 2 ( 000) Total expenses ( 000) 3,416 3,071 Average net assets for the year ( 000) 202, ,227 The OCF represents the annual operating expenses of the fund expressed as a percentage of average net assets for the year it does not include entry charges. The OCF includes the annual management charge and also the following charges which are deducted directly from the fund: Registration Fee, Depositary Fee, Custody Fee, Audit Fee, FCA Fee, Price Publication Fee, Report production and transaction expenses, less: VAT recoverable where applicable. 83 Far Eastern Investment Series

85 Pacific Fund Investment report for the year Portfolio Statement Holding or Percentage as at 30 November 2013 nominal Market of total value of value net assets Investment positions 000 % Australia 4.78% ( %) Alumina 2,256,184 1, Australia & New Zealand Banking 101,358 1, Dart Energy 854, Fairfax Media 5,454,540 1, Metcash 897,174 1, Newcrest Mining 99, Origin Energy 297,784 2, QBE Insurance 126,470 1, China 11.60% ( %) 51Job ADR 21, Baidu ADR 43,210 4, Changyou.com ADR 127,753 2, Charm Communications ADR 197, China Shenhua Energy H 643,500 1, E-House China ADR 90, Hopefluent 3,234, Mindray Medical International ADR 112,989 2, NetEase ADR 151,205 6, Qingling Motors H 3,062, Sohu.com 45,490 1, WuXi PharmaTech ADR 116,105 2, Hong Kong 11.01% ( %) AIA 399,000 1, Cathay Pacific Airways 1,203,000 1, Cheung Kong 202,000 1, China Mobile 283,000 1, HKR International 4,317,600 1, HSBC 513,378 3, Hutchison Whampoa 531,000 4, Jardine Matheson (Singapore quote) 73,151 2, Noble 4,167,000 2, Pacific Basin Shipping 3,151,000 1, Standard Chartered 68, Worldsec 550, Yingde Gases 2,052,500 1, India 3.50% ( %) ICICI Bank 260,817 2, Infosys 55,028 1, NTPC 590, UPL 1,322,814 2, Japan 46.54% ( %) Canon 203,600 4, Daiwa Securities 418,000 2, DMG Mori Seiki 256,000 2, East Japan Railway 60,900 3, Honda Motor 199,400 5, Hoya 265,800 4, Ibiden 319,700 3, Inpex 208,100 1, JFE 265,300 3, Kawasaki Kisen Kaisha 2,718,000 3, Konica Minolta 651,000 4, Mitsubishi Estate 99,000 1, Mitsubishi UFJ Financial 1,244,300 4, Mitsui O.S.K. Lines 750,000 2, Nintendo 21,200 1, Nippon Paper Industries 526,100 5, Nissan Chemical Industries 327,100 3, Nissan Motor 270,900 1, Nomura 920,300 4, NTT DOCOMO 303,000 2, NTT Urban Development 446,800 3, Far Eastern Investment Series

86 Pacific Fund Investment report for the year Portfolio Statement continued Holding or Percentage as at 30 November 2013 nominal Market of total value of value net assets Investment positions 000 % Japan continued Resona 1,276,600 3, Shinko Electric Industries 557,600 2, SUMCO 560,500 3, Sumitomo Mitsui Financial 173,100 5, Taiyo Yuden 214,500 1, TDK 131,700 3, THK 50, Tokyo Electron 73,300 2, Toyota Motor 61,100 2, Yamaha Motor 472,300 4, New Zealand 0.32% ( Nil) Meridian Energy (partly paid) 1,400, Philippines 0.98% ( %) Filinvest Land 34,295, LT 2,633, Philippine Long Distance Telephone 24, Singapore 1.49% ( %) Keppel 221,000 1, United Overseas Bank 195,000 1, South Korea 13.31% ( %) DGB Financial 142,860 1, E-Mart 13,988 2, Hyundai Motor pref. 54,771 3, Korea Electric Power 166,560 3, Korea Investment 67,013 1, POSCO 10,563 1, Samsung Electronics 6,753 5, Samsung Electronics pref. 4,784 2, Samsung Fire & Marine Insurance 20,800 3, Shinhan Financial 108,090 2, Taiwan 3.30% ( %) China Life Insurance 1,161, Chroma Ate 1,169,000 1, E.Sun Financial 2,740,815 1, Taiwan Semiconductor Manufacturing 1,338,216 2, Yageo 4,724, Thailand 1.07% ( %) Bangkok Bank 648,700 2, Portfolio of investments ( %) 210, Net other assets ( %) 4, Net assets 215, Holdings are ordinary shares unless otherwise stated. 85 Far Eastern Investment Series

87 Pacific Fund Investment report for the year Summary of Material Portfolio Changes for the year 1 December 2012 to 30 November 2013 Cost 000 Total purchases 57,168 Largest purchases: Australia Origin Energy 2,351 Alumina 1,423 China Baidu ADR 2,398 NetEase ADR 2,020 Hong Kong Noble 1,951 India ICICI Bank 2,992 Japan Nippon Paper 3,023 Nissan Motor 1,731 Mitsui O.S.K. Lines 1,725 Honda Motor 1,570 Nintendo 1,570 Inpex 1,510 Nippon Paper Industries 1,411 Ibiden 1,379 NTT DOCOMO 1,370 Nissan Chemical Industries 1,351 Singapore Keppel 1,426 South Korea Korea Electric Power 3,023 Samsung Electronics pref. 2,581 Taiwan Chroma Ate 1,436 Proceeds 000 Total sales 62,548 Largest sales: Australia Westpac Banking 2,358 China E-House China ADR 2,501 Baidu ADR 2,020 Sohu.com 1,689 Hong Kong Jardine Matheson (Singapore quote) 1,683 CNOOC 1,143 Japan Daiwa Securities 4,844 Mazda Motor 3,727 Taiyo Yuden 3,572 Nomura 3,442 Mitsubishi Estate 3,077 Tokyo Electron 2,635 DMG Mori Seiki 1,638 NTT Urban Development 1,414 Toyota Motor 1,357 Amada 1,198 Philippines Filinvest Land 1,407 Singapore Venture 1,874 South Korea KT&G 1,378 Taiwan Hon Hai Precision Industry 2, Far Eastern Investment Series

88 Pacific Fund Financial statements Statement of Total Return for the year 1 December 2012 to 30 November 2013 to to Notes Income Net capital gains 2 48,012 10,180 Revenue 3 4,280 4,406 Expenses 4 (3,397) (3,047) Finance costs: Interest 6 (1) Net revenue before taxation 883 1,358 Taxation 5 (170) (276) Net revenue after taxation 713 1,082 Total return before distributions 48,725 11,262 Finance costs: Distributions 6 (765) (1,082) Change in net assets attributable to shareholders from investment activities 47,960 10,180 Statement of Change in Net Assets Attributable to Shareholders for the year 1 December 2012 to 30 November 2013 to to Opening net assets attributable to shareholders 168, ,350 Amounts received on issue of shares 19,552 4,082 Amounts paid on cancellation of shares (21,235) (25,149) (1,683) (21,067) Dilution adjustment Stamp Duty Reserve Tax (3) (2) Change in net assets attributable to shareholders from investment activities 47,960 10,180 Retained distribution on accumulation shares Closing net assets attributable to shareholders 215, , Far Eastern Investment Series

89 Pacific Fund Financial statements Balance Sheet as at 30 November 2013 Notes Assets Investment assets 210, ,019 Debtors Cash and bank balances 8 5, Total other assets 6,107 1,054 Total assets 216, ,073 Liabilities Investment liabilities Creditors 9 1, Distribution payable on income shares Total other liabilities 1, Total liabilities 1, Net assets attributable to shareholders 215, , Far Eastern Investment Series

90 Pacific Fund Notes to the financial statements 1 Accounting policies The fund s financial statements have been prepared on the same basis as the Company s financial statements. 2 Net capital gains to to Non-derivative securities 48,110 6,012 Foreign currency (losses)/gains (79) 4,192 Transaction expenses (19) (24) Net capital gains 48,012 10,180 3 Revenue to to UK franked dividends Non-taxable overseas dividends 4,033 4,178 Taxable overseas dividends 12 Stock dividends Bank interest 3 3 4,280 4,406 4 Expenses to to Payable to the ACD, associates of the ACD and agents of either of them: ACD's annual management charge 2,995 2,698 Registration fees 268 Accounts printing and postage 8 8 3,003 2,974 Payable to the Depositary, associates of the Depositary and agents of either of them: Depositary s fees Other expenses: Audit fee* 7 7 Dividend collection fees 13 9 FT listing fees 5 5 Professional fees 5 2 Registration fees 310 Safe custody fees Total expenses 3,397 3,047 *Audit fees in the current and prior years are disclosed inclusive of VAT, to the extent that it is not recoverable. 89 Far Eastern Investment Series

91 Pacific Fund Notes to the financial statements 5 Taxation to to a) Analysis of charge for the year Overseas tax Current and total tax charge There is no corporation tax charge for the year ( Nil). b) Factors affecting the tax charge for the year The tax assessed for the year is lower ( higher) than the standard rate of corporation tax in the UK for an authorised investment company with variable capital. The differences are explained below: to to Net revenue before taxation 883 1,358 Corporation tax at 20% ( %) Effects of: Overseas tax Revenue not subject to tax (856) (878) Movement in excess expenses Current tax charge Authorised investment companies with variable capital are exempt from tax on capital gains. Therefore any capital return is not included in the above reconciliation. c) Deferred tax At the year end the fund had surplus management expenses of 14,085,000 ( ,691,000). It is unlikely that the fund will generate sufficient taxable profits in the future to utilise these expenses and therefore a deferred tax asset of 2,817,000 (2012-2,138,000) has not been recognised. 6 Finance costs to to Distributions and interest Accumulations and distributions payable 31 January Amounts deducted on cancellation of shares Amounts received on issue of shares (80) (17) 765 1,082 Interest 1 Total finance costs 765 1,083 The distributable amount has been calculated as follows: Net revenue after taxation 713 1,082 Equalisation on conversions , Far Eastern Investment Series

92 Pacific Fund Notes to the financial statements 7 Debtors Amounts receivable for issue of shares Sales awaiting settlement 10 Accrued revenue Prepaid expenses 4 5 VAT recoverable Cash and bank balances Cash and bank balances 5, Creditors Amounts payable for cancellation of shares Purchases awaiting settlement 686 Accrued expenses , Commitments and contingent liabilities Potential calls on partly paid shares, if exercised Related parties Related party interests in the fund are disclosed in note 11 of the Company s financial statements on page 11. Amounts payable to Invesco Fund Managers Limited in respect of administration services are disclosed in note 4. Amounts due at the end of the accounting period for administration services 258,000 ( ,000) are disclosed in note 9 within accrued expenses. 91 Far Eastern Investment Series

93 Pacific Fund Notes to the financial statements 12 Derivatives and other financial instruments The fund s performance may be adversely affected by variations in the relative strength of world currencies or if Sterling strengthens against those currencies. The risk factors relating to the fund are discussed more fully in note 14 on pages 12 to 14 of the Company s financial statements. Numerical disclosures relating to the fund are as follows: Currency exposure Net foreign currency assets/(liabilities) Non- Monetary monetary exposures exposures Total Currency Australian dollar 52 10,300 10,352 Hong Kong dollar 6 21,913 21,919 Indian rupee 48 7,533 7,581 Japanese yen , ,605 New Zealand dollar Philippine peso 198 2,099 2,297 Singapore dollar 5,447 5,447 South Korean won 28,660 28,660 Taiwan dollar (682) 7,116 6,434 Thai baht 2,312 2,312 US dollar 30 24,496 24, , ,820 Sterling 4, ,517 4, , , Australian dollar 113 9,212 9,325 Hong Kong dollar 22,535 22,535 Indian rupee 56 3,353 3,409 Japanese yen ,600 75,025 Philippine peso 227 3,049 3,276 Singapore dollar 3,235 3,235 South Korean won 20,769 20,769 Taiwan dollar 9,035 9,035 Thai baht 2,414 2,414 US dollar 29 19,806 19, , ,858 Sterling (502) 11 (491) , , Far Eastern Investment Series

94 Pacific Fund Notes to the financial statements 12 Derivatives and other financial instruments continued Interest rate risk profile of financial assets Financial Floating rate Fixed rate assets not financial financial carrying assets assets interest Total Currency Australian dollar 10,352 10,352 Hong Kong dollar 6 21,913 21,919 Indian rupee 48 7,533 7,581 Japanese yen 100, ,605 New Zealand dollar Philippine peso 198 2,099 2,297 Singapore dollar 5,447 5,447 South Korean won 28,660 28,660 Taiwan dollar 4 7,116 7,120 Thai baht 2,312 2,312 US dollar 24,526 24,526 Sterling 5, ,417 5, , , Australian dollar 9,325 9,325 Hong Kong dollar 22,535 22,535 Indian rupee 56 3,353 3,409 Japanese yen 75,025 75,025 Philippine peso 217 3,059 3,276 Singapore dollar 3,235 3,235 South Korean won 20,769 20,769 Taiwan dollar 9,035 9,035 Thai baht 2,414 2,414 US dollar 19,835 19,835 Sterling , ,073 Interest rate risk profile of financial liabilities Financial Floating rate liabilities not financial carrying liabilities interest Total Currency Taiwan dollar Sterling ,586 1, Sterling Interest rate risk profile of fixed rate financial assets The fund held no fixed rate financial assets as at 30 November 2013 ( Nil). 93 Far Eastern Investment Series

95 Pacific Fund Notes to the financial statements 12 Derivatives and other financial instruments continued Interest rate risk profile of floating rate financial assets and liabilities Weighted Weighted average period Market average for which value interest rate rate is fixed 000 % years Cash and bank balances 5, n/a Cash and bank balances n/a Interest rates on bank balances and overdrafts are linked to LIBOR, EONIA or other local interest rates as appropriate to the currency. Economic exposure and sensitivity analysis Changes in currency exposure during the year can be seen from the table below: Currency % % Australian dollar Hong Kong dollar Indian rupee Japanese yen New Zealand dollar 0.3 Philippine peso Singapore dollar South Korean won Taiwan dollar Thai baht US dollar Sterling 2.1 (0.3) Sensitivity analysis No derivatives are held which could impact the fund significantly ( Nil). 13 Portfolio transaction costs to to Analysis of total purchase costs Purchases before transaction costs 57,041 35,514 Commissions Taxes 10 8 Total purchase costs Gross purchases total 57,168 35,582 Analysis of total sale costs Gross sales before transaction costs 62,708 53,477 Commissions (125) (99) Taxes (35) (69) Total sale costs (160) (168) Total sales net of transaction costs 62,548 53, Far Eastern Investment Series

96 Pacific Fund Distribution table Distribution table for the year 1 December 2012 to 30 November 2013 Net Net distribution distribution Net payable paid revenue Equalisation Distribution payable 31 January 2014 p p p p Accumulation shares Group Group Accumulation shares (No Trail) Group Group Z Accumulation shares Group Group Income shares Group Group Income shares (No Trail) Group Group Z Income shares Group Group Group 1: shares purchased prior to 1 December 2012 Group 2: shares purchased on or after 1 December 2012 Equalisation applies only to shares purchased during the distribution period (Group 2). It is the average amount of revenue included in the purchase price of all Group 2 shares and is refunded to holders of these shares as a return of capital. Being capital it is not liable to income tax. Instead, it must be deducted from the cost of income shares for capital gains purposes. 95 Far Eastern Investment Series

97 Invesco Perpetual Far Eastern Investment Series Regulatory statements Statement of the ACD s Responsibilities in relation to the Financial Statements The Collective Investment Schemes sourcebook ( COLL ) requires the ACD to prepare accounts for each annual accounting period which give a true and fair view of the financial position of the Company as at the end of the year and of the net revenue or expense and the net capital gains or losses on the scheme property of the Company for the year then ended. In preparing the accounts the ACD is required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; comply with the disclosure requirements of the Statement of Recommended Practice relating to Financial Statements of Authorised Funds; follow applicable accounting standards; and keep proper accounting records which enable it to demonstrate that the accounts as prepared comply with the above requirements. The ACD is responsible for the management of the Company in accordance with the Prospectus and the OEIC Regulations. The ACD is responsible for taking reasonable steps for the prevention and detection of fraud and other irregularities. Statement of Depositary s Responsibilities in relation to the Financial Statements The Depositary is responsible for the safekeeping of all of the property of the Company (other than tangible moveable property) which is entrusted to it. It is the duty of the Depositary to take reasonable care to ensure that the Company is managed in accordance with the COLL, the Open-Ended Investment Companies Regulations 2001 (SI 2001/1228) ( the OEIC Regulations ) and the Company s Instrument of Incorporation in relation to the pricing of, and dealings in, the shares of the Company, the application of the revenue of the Company, and the investment and borrowing powers of the Company. Depositary s Report to Shareholders Having carried out such procedures as we considered necessary to discharge our responsibilities and duties as Depositary of the Company, it is our opinion, based on the information available to us and the explanations provided, that in all material respects the Company, acting through the ACD: (i) has carried out the issue, sale, redemption and cancellation of shares in the Company, the calculation of the price of the Company s shares and the application of the Company s revenue in accordance with the COLL and, where applicable, the OEIC Regulations and the Instrument of Incorporation of the Company; and (ii) has observed the investment and borrowing powers and restrictions applicable to the Company. Citibank International plc London 20 January Far Eastern Investment Series

98 Invesco Perpetual Far Eastern Investment Series Independent Auditors Report to the Members of Invesco Perpetual Far Eastern Investment Series We have audited the financial statements of Invesco Perpetual Far Eastern Investment Series (the Company ) for the year ended 30 November 2013 which comprise the Aggregated Statement of Total Return, the Aggregated Statement of Change in Net Assets Attributable to Shareholders, the Aggregated Balance Sheet and related notes and for each of the Company s sub-funds, the Statement of Total Return, the Statement of Change in Net Assets Attributable to Shareholders, the Balance Sheet, the related notes and the distribution tables. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and the Statement of Recommended Practice Financial Statements of Authorised Funds issued by the Investment Management Association (the Statement of Recommended Practice for Authorised Funds ). Respective responsibilities of director and auditors As explained more fully in the Authorised Corporate Director s Responsibilities Statement the Authorised Corporate Director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the Company s members as a body in accordance with paragraph of the Collective Investment Schemes sourcebook as required by paragraph 67(2) of the Open-Ended Investment Companies Regulations 2001 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Authorised Corporate Director; and the overall presentation of the financial statements. In addition, we read all the financial and non- financial information in the Invesco Perpetual Far Eastern Investment Series Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on Financial Statements In our opinion the financial statements: give a true and fair view of the financial position of the Company and each of the sub-funds at 30 November 2013 and of the net revenue/(expenses) and the net capital gains/(losses) of the scheme property of the Company and each of the sub-funds for the year then ended; and have been properly prepared in accordance with the Statement of Recommended Practice for Authorised Funds, the Collective Investment Schemes sourcebook and the Instrument of Incorporation. Opinion on other matters prescribed by the Collective Investment Schemes sourcebook In our opinion: we have obtained all the information and explanations we consider necessary for the purposes of the audit; and the information given in the Authorised Corporate Director s Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Collective Investment Schemes sourcebook requires us to report to you if, in our opinion: proper accounting records for the Company have not been kept; or the financial statements are not in agreement with the accounting records and returns. PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London 20 January 2014 The financial statements are published at which is a website maintained by the Authorised Corporate Director. The maintenance and integrity of the Invesco Perpetual website is the responsibility of the Authorised Corporate Director.The work carried out by the independent auditors does not involve consideration of these matters, and accordingly, the independent auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. Visitors to the website need to be aware that legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in their jurisdiction. 97 Far Eastern Investment Series

99 Authorised Corporate Director Invesco Fund Managers Limited Registered Office: 30 Finsbury Square, London EC2A 1AG, UK Registered in England No The Company is an investment company with variable capital under Regulation 12 of the Open-Ended Investment Companies Regulations 2001 and is a wider-range investment for the purposes of the Trustee Investment Act The Authorised Corporate Director s investment adviser is: Invesco Asset Management Limited, 30 Finsbury Square, London EC2A 1AG, UK Registered in England No Invesco Asset Management Limited and Invesco Fund Managers Limited are authorised and regulated by the Financial Conduct Authority. Registrar Invesco Administration Services Limited Registered Office: 30 Finsbury Square, London EC2A 1AG, UK For registration enquiries please call free on or write to us at: Invesco Perpetual, PO Box 11150, Chelmsford CM99 2DL, UK Depositary Citibank International plc Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, UK Authorised and regulated by the Financial Conduct Authority. Independent Auditors PricewaterhouseCoopers LLP 7 More London Riverside, London SE1 2RT, UK Please note that the Registered Office address for all Invesco companies using 30 Finsbury Square, London will change to Perpetual Park, Perpetual Park Drive, Henley on Thames, Oxfordshire RG9 1HH, UK with effect from 1 February 2014.

100 Further information General enquiries Investor Services Team Broker Services Team International calls +44 (0) Lines are open 8.30am to 6pm, Monday to Friday, excluding UK Bank Holidays. Fax Post: Invesco Perpetual, PO Box 11150, Chelmsford CM99 2DL, UK To invest ISA Dealing Line ICVC Dealing Line Clients must confirm that they have been provided with the most up to date relevant fund and share class specific Key Investor Information Document(s) prior to investing. We will record telephone calls to our Dealing Line. Valuations Automated Valuation Service Lines are open 24 hours a day. Further information on our products, including the most up to date relevant fund and share class specific Key Investor Information Document(s) and the Supplementary Information Document, is available using the contact details above. The Prospectus, which contains a written statement of the terms and conditions of the Company, can be obtained from the ACD, as can copies of Interim and Annual Reports. Please call our Literature Request Line on (for clients) and (for intermediaries) or log onto our website ( Telephone calls may be recorded. Invesco Perpetual is a business name of Invesco Fund Managers Limited Authorised and regulated by the Financial Conduct Authority, FCA Registered No Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK Registered in England No Registered address: 30 Finsbury Square, London EC2A 1AG, UK 54637/PDF/200114