Invesco Perpetual Smaller Companies and Markets Investment Series

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Smaller Companies and Markets Investment Series Annual Report Including Long Form Financial Statements

Issued September 2017 For the year 1 August 2016 to 31 July 2017 02 Aggregate_Layout 1 26-Sep-17 16:23 Page 1

Contents

Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) 02 Report of the Authorised Corporate Director (the “Manager”)* 05 Notes applicable to the financial statements of all Sub-Funds

15 Invesco Perpetual Emerging European Fund 16 Strategy, review and outlook* 17 Comparative tables 21 Portfolio statement* 24 Financial statements 32 Distribution table

33 Invesco Perpetual European Smaller Companies Fund 34 Strategy, review and outlook* 35 Comparative tables 37 Portfolio statement* 42 Financial statements 50 Distribution table

51 Invesco Perpetual Global Emerging Markets Fund 52 Strategy, review and outlook* 53 Comparative tables 57 Portfolio statement* 61 Financial statements 69 Distribution table

70 Invesco Perpetual Global Smaller Companies Fund 71 Strategy, review and outlook* 72 Comparative tables 76 Portfolio statement* 86 Financial statements 94 Distribution table

95 Invesco Perpetual Japanese Smaller Companies Fund 96 Strategy, review and outlook* 97 Comparative tables 99 Portfolio statement* 102 Financial statements 109 Distribution table

110 Invesco Perpetual UK Smaller Companies Equity Fund 111 Strategy, review and outlook* 112 Comparative tables 116 Portfolio statement* 119 Financial statements 127 Distribution table

128 Regulatory Statements 128 Statement of Manager’s responsibilities 128 Statement of Depositary’s responsibilities 128 Depositary’s Report to Shareholders

129 Independent Auditors’ Report

* These collectively comprise the Authorised Corporate Director’s Report.

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Report of the Authorised Corporate Director (the “Manager”)

The Company is consistent with the new remuneration principles The Invesco Perpetual Smaller Companies and Markets applicable to UCITS management companies. Its Investment Series i s an investment company with purpose is to ensure that the remuneration of the staff variable capital, incorporated in England and Wales of the Manager is consistent with and promotes sound on 8 May 2003. and effective risk management, does not encourage risk-taking which is inconsistent with the risk profiles, The Company is an “umbrella company” (under the rules or instruments of incorporation of itself and the OEIC Regulations) and therefore new Sub-Funds may UCITS it manages (including the Company) and does be formed by the Manager, subject to regulatory not impair the Manager’s compliance with its duty to approval. Any changes to Sub-Funds or share classes act in the best interests of the UCITS it manages. will be included in an updated Prospectus. Further information is available in the Manager’s UCITS Remuneration Policy document which can be obtained The Company is a Financial Conduct Authority (FCA) from the Literature and forms section of our website authorised scheme complying with the FCA’s Collective (www.invescoperpetual.co.uk). Paper copies can be Investment Schemes sourcebook. obtained, free of charge, upon request to the Manager using the contact details shown on the back cover. Terms used in this report shall have the same meaning as defined in the Prospectus. The rules require the Manager to disclose in the Company’s annual report, certain quantitative At 31 July 2017, the Company consisted of disclosures concerning the Manager’s remuneration six Sub-Funds: policy, including: (i) the total and aggregate amount of Invesco Perpetual Emerging European Fund remuneration paid by the Manager to its staff (including Invesco Perpetual European Smaller Companies Fund any amounts paid directly by the Company); (ii) the Invesco Perpetual Global Emerging Markets Fund number of beneficiaries; (iii) a description of how the Invesco Perpetual Global Smaller Companies Fund remuneration and benefits have been calculated; and Invesco Perpetual Japanese Smaller Companies Fund (iv) certain information regarding the Manager’s Invesco Perpetual UK Smaller Companies Equity Fund oversight of its remuneration policy and details of any changes to the Manager’s remuneration policies since Accounting periods the previous annual report. However, as noted above, Annual accounting date 31 July the revised policy has been in place for less than a full Interim accounting date 31 January performance period. Consequently, in accordance with Distribution payable on 30 September the relevant rules, the aforementioned disclosures are not included in this report as the available partial-year Should expenses and taxation exceed revenue in a information would not provide materially relevant, distribution period for a share class, no distribution reliable, comparable and clear information to investors. will be payable for that class. The Manager will disclose the quantitative UCITS remuneration data in the next annual report for the Securities Financing Transactions Regulation Company where information for a full performance The European Regulation on reporting and year will be available. transparency of securities financing transactions (SFTR), which aims to improve the transparency Share classes available and monitoring of the financial system, entered into force on 12 January 2016. The SFTR applies to Invesco Perpetual Emerging European Fund the Manager as a UCITS management company Accumulation shares and requires the Manager to comply with a series Accumulation shares (No Trail) of obligations. In particular, the Manager will be Z Accumulation shares required to provide investors with information on the Y Accumulation shares use of securities financing transactions (SFTs) and Income shares total return swaps (TRS) by the Company in Income shares (No Trail) all interim and annual reports for the Company Z Income shares published from 13 January 2017. Y Income shares

During the year from 1 August 2016 to 31 July 2017, Invesco Perpetual European Smaller Companies Fund none of the Sub-Funds entered into any SFTs and/or Accumulation shares TRS. Should this change in the future, the interim Accumulation shares (No Trail) and annual reports for the Company will disclose all Z Accumulation shares required information on the use of SFTs and TRS Y Accumulation shares by the Company. Invesco Perpetual Global Emerging Markets Fund Please refer to the Prospectus for further details on Accumulation shares SFTs and TRS. Accumulation shares (No Trail) Z Accumulation shares Remuneration policy Y Accumulation shares Following recent changes to the rules applicable to Income shares UCITS management companies (such as the Manager, Income shares (No Trail) Invesco Fund Managers Limited), the Manager adopted Z Income shares on 18 March 2016 a revised remuneration policy which Y Income shares

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Report of the Authorised Corporate Director (the “Manager”)

Share classes available continued Global Emerging Markets Fund and the Invesco Perpetual Global Smaller Companies Fund may invest Invesco Perpetual Global Smaller Companies Fund to a limited extent in certain securities listed in China, Accumulation shares which can involve significant regulatory constraints Accumulation shares (No Trail) that may affect the liquidity and/or the investment Z Accumulation shares performance of the Sub-Fund. The Invesco Perpetual Y Accumulation shares Emerging European Fund will invest directly in Russia, Income shares which can involve significant risks to capital. Although Income shares (No Trail) the Invesco Perpetual Emerging European Fund does Z Income shares not actively pursue a concentrated portfolio, it may Y Income shares have a concentrated number of holdings on occasions. Accordingly, the Sub-Fund may carry a higher degree Invesco Perpetual Japanese Smaller of risk than a Sub-Fund which invests in a broader range Companies Fund of companies or takes smaller positions in a relatively Accumulation shares large number of holdings. Although the Invesco Accumulation shares (No Trail) Perpetual Global Smaller Companies Fund invests Z Accumulation shares mainly in established markets, it can invest in emerging Y Accumulation shares and developing markets, where there is potential for a decrease in market liquidity, which may mean that it is Invesco Perpetual UK Smaller Companies not easy to buy or sell securities. There may also be Equity Fund difficulties in dealing and settlement, and custody Accumulation shares problems could arise. Accumulation shares (No Trail) Z Accumulation shares The Invesco Perpetual European Smaller Companies Y Accumulation shares Fund, Invesco Perpetual Global Smaller Companies Income shares Fund, Invesco Perpetual Japanese Smaller Companies Income shares (No Trail) Fund and Invesco Perpetual UK Smaller Companies Z Income shares Equity Fund are smaller companies Sub-Funds. Smaller Y Income shares company Sub-Funds are higher risk than Sub-Funds that can invest in larger company sizes. Market The prices of shares will appear on our website conditions, such as a decrease in market liquidity, (www.invescoperpetual.co.uk). This is the primary may mean that it is not easy to buy or sell securities. method of price publication. The prices of shares may also be obtained by calling 0800 085 8677 during the All risks are contained within the Prospectus. Manager’s normal business hours. The prices of certain share classes can be found in the Financial Times. Holdings in other Sub-Funds of the Company As at 31 July 2017, no Sub-Funds held shares in Risk Profile any other Sub-Fund of the Company. Shareholders should be aware of the risks inherent in investing in securities and other financial instruments. Liability Financial markets can be vulnerable to unpredictable The Company is structured by having different price movements and are affected by a number of Sub-Funds. The assets and liabilities of each Sub-Fund factors, both political and economic. are segregated by UK Law. As a consequence the assets of a Sub-Fund will not be available to meet the The value of investments and any income will fluctuate liabilities of another Sub-Fund within the Company. (this may partly be the result of exchange rate fluctuations) and investors may not get back the full The Shareholders are not liable for the debts of amount invested. Over time, inflation may erode the the Company. value of investments. The Sub-Funds’ performance may be adversely affected by variations in the relative ISA Eligibility strength of world currencies or if Sterling strengthens All the Company’s Sub-Funds qualify for stocks and against those currencies. The Sub-Funds may use shares ISA investment. None of the Sub-Funds qualify derivatives (complex instruments) in an attempt to for cash ISA investment. reduce the overall risk of their investments, reduce the costs of investing and/or generate additional Certification of the Annual Report by the Manager capital or income, although this may not be achieved. In accordance with the requirements of the Financial The use of such complex instruments may result in Services (Open-Ended Investment Companies) greater fluctuations of the value of the Sub-Funds. Regulations 2001, we hereby certify these financial The Manager, however, will ensure that the use of statements on behalf of the Directors of Invesco derivatives within the Sub-Funds does not materially Fund Managers Limited. alter the overall risk profile of the Sub-Funds.

The Invesco Perpetual Emerging European Fund and the Director – Invesco Perpetual Global Emerging Markets Fund invest in emerging and developing markets, where there is potential for a decrease in market liquidity, which may Director – mean that it is not easy to buy or sell securities. There may also be difficulties in dealing and settlement, and custody problems could arise. The Invesco Perpetual 27 September 2017

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Report of the Authorised Corporate Director (the “Manager”)

Risk and Reward Profiles The risk categories shown are not a measure of capital for the year 1 August 2016 to 31 July 2017 losses or gains, but of how significant the rises and falls in the share class prices have been historically. Invesco Perpetual Emerging European Fund For example a share class whose price has experienced Lower Risk Higher Risk significant rises and falls will be in a higher risk category, Typically lower rewards Typically higher rewards whereas a share class whose price has experienced less significant rises and falls will be in a lower risk category. 123456 7 As the Share Class risk category has been calculated using historical data, it may not be a reliable indication of the Share Class future risk profile. Please note that Invesco Perpetual European Smaller the Share Class risk category may change in the future Companies Fund 1 and is not guaranteed. The lowest risk category does Lower Risk Higher Risk not mean a risk free investment.

Typically lower rewards Typically higher rewards A share class in risk category 1 indicates its price has 1 23 45 67 experienced very low rises and falls historically.

A share class in risk category 2 indicates its price has Invesco Perpetual Global Emerging Markets Fund experienced minor rises and falls historically. Lower Risk Higher Risk A share class in risk category 3 indicates its price has Typically lower rewards Typically higher rewards experienced very moderate rises and falls historically. 123456 7 A share class in risk category 4 indicates its price has experienced moderate rises and falls historically. Invesco Perpetual Global Smaller Companies Fund A share class in risk category 5 indicates its price has Lower Risk Higher Risk experienced significant rises and falls historically. Typically lower rewards Typically higher rewards 12345 67 A share class in risk category 6 indicates its price has experienced very significant rises and falls historically.

A share class in risk category 7 indicates its price has Invesco Perpetual Japanese Smaller Companies Fund experienced major rises and falls historically. Lower Risk Higher Risk

Typically lower rewards Typically higher rewards For more information on our Sub-Funds’ risk and reward profiles, please refer to the most up to date 123456 7 relevant Sub-Fund and share class specific Key Investor Information Documents (KIIDs), which are available at www.invescoperpetual.co.uk or by Invesco Perpetual UK Smaller Companies contacting us. Equity Fund Lower Risk Higher Risk

Typically lower rewards Typically higher rewards 12345 67

1 The risk category for this Sub-Fund changed from 6 to 5 on 1 April 2017.

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Notes applicable to the financial statements of all Sub-Funds

1 Accounting policies

a) Basis of accounting The financial statements of the Company comprise the financial statements of each of the Sub-Funds and have been prepared on a going concern basis in accordance with FRS 102 and the Statement of Recommended Practice ‘Financial Statements of UK Authorised Funds’ (the “SORP”) issued by The Investment Association (I A) in May 2014 .

b) Recognition of revenue i) Dividends on quoted ordinary shares 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) Interest on bank balances and deposits is recognised on an accruals basis. iii) 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 flows 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. iv) 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.

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, are charged initially against revenue and are accounted for on an accruals basis.

g) Revenue allocation to share classes Revenue is allocated each day pro rata to the capital value o f assets attributable to each class and taxation is computed by reference to the net revenue after expenses and tax attributable to each class.

h) Measurement basis The measurement basis used in preparing the financial statements is fair value for investments and historical cost for all other assets and liabilities.

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Notes applicable to the financial statements of all Sub-Funds

1 Accounting policies continued

i) Basis of valuation of investments All investments are valued at their fair value as at the balance sheet date.

All investments have been valued on the last business day of the year at bid market value net of any accrued revenue, at close of business. Where there is no price source from an active market for an investment, the Manager will assess any information available from internal and external sources in order to arrive at an estimated fair value. The fair value is established by using measures of value such as the price of recent transactions, earnings multiple and net assets. The Manager 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 Manager with particular attention paid to the carrying value of the investments.

j) Exchange rates Assets and liabilities in foreign currencies are translated into Sterling at the exchange rates ruling at close of business 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 year end are reflected in the Balance Sheet at their marked to market value.

m) Dilution adjustment The need to apply a dilution adjustment will depend on the volume of sales (where they are issued) or redemptions (where they are cancelled) of shares. The Manager 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, 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 Smaller Companies and Markets 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 1% or more of the net asset value of the Sub-Fund in question (as calculated at the last valuation point); or — where the Manager considers it necessary to protect the interests of the Shareholders of the Company.

On the occasions that the dilution adjustment is not applied there may be an adverse impact on the total assets of the Sub-Fund which may otherwise constrain the future growth of the Sub-Fund in question.

Please refer to Appendix 6 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.

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Notes applicable to the financial statements of all Sub-Funds

2 Distribution policies The Sub-Funds will distribute all revenue disclosed in the annual financial statements (less expenses and taxation). The ordinary element of stock dividends is treated as revenue and forms part of the Company’s distribution. Should expenses and taxation exceed revenue for a share class, there will be no distribution for that share class and the shortfall will be met from capital. All Sub-Fund accumulations and distributions are paid as dividend distributions.

Distributions which have remained unclaimed by Shareholders for more than six years are credited to the capital property of the Sub-Fund.

3 Use of dealing commission sharing arrangements The level of equity securities trading on relevant Sub-Funds is determined by fund management decisions and the main impact on the relevant Sub-Funds from this trading is the associated commission costs of buying and selling values of trades. Our buying and selling values of equity securities trades meet current best execution regulations or their equivalent in relevant countries of operation of the Manager, the Investment Adviser or any sub advisers. Commissions are paid to brokers for the execution of these trades and additional research services permitted under the FCA Rules. In accordance with current regulations, Invesco may also make use of commission sharing arrangements, to use some of the commissions paid to the brokers to pay for permitted third party execution and research services used by us in managing the Sub-Funds. If trading does not result in sufficient commissions to pay for these services, then the Manager will pay for them.

4 Shareholders’ Sub-Funds The Manager’s entry charge and Fund Management Fee (FMF) are as follows:

Fund Entry Management Charge Fee % % Invesco Perpetual Emerging European Fund - Trail classes 5.0 1.92 - No Trail classes 5.0 1.42 - Z classes 5.0 1.17 - Y classes 5.0 1.12 Invesco Perpetual European Smaller Companies Fund - Trail class 5.0 1.70 - No Trail class 5.0 1.20 - Z class 5.0 0.95 - Y class 5.0 0.90 Invesco Perpetual Global Emerging Markets Fund - Trail classes 5.0 1.75 - No Trail classes 5.0 1.25 - Z classes 5.0 1.00 - Y classes 5.0 0.95 Invesco Perpetual Global Smaller Companies Fund - Trail classes 5.0 1.70 - No Trail classes 5.0 1.20 - Z classes 5.0 0.95 - Y classes 5.0 0.90 Invesco Perpetual Japanese Smaller Companies Fund - Trail class 5.0 1.74 - No Trail class 5.0 1.24 - Z class 5.0 0.99 - Y class 5.0 0.94 Invesco Perpetual UK Smaller Companies Equity Fund - Trail classes 5.0 1.67 - No Trail classes 5.0 1.17 - Z classes 5.0 0.92 - Y classes 5.0 0.87

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:

Invesco Perpetual Emerging European Fund pages 17 to 20 Invesco Perpetual European Smaller Companies Fund pages 35 to 36 Invesco Perpetual Global Emerging Markets Fund pages 53 to 56 Invesco Perpetual Global Smaller Companies Fund pages 72 to 75 Invesco Perpetual Japanese Smaller Companies Fund pages 97 to 98 Invesco Perpetual UK Smaller Companies Equity Fund pages 112 to 115

Each share class has the same rights on a winding up of the Company.

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Notes applicable to the financial statements of all Sub-Funds

5 Generic Risk factors 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.

Political and economic events in the major economies of the world, such as the United States, Japan and the European 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 Manager’s policy for managing these risks.

Investing in Financial Derivative Instruments 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. Transactions in derivatives are used in the Sub-Funds for 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 Sub-Fund.

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 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.

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.

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Notes applicable to the financial statements of all Sub-Funds

5 Generic Risk factors continued

Investing in a Concentrated Portfolio Certain Sub-Funds may have concentrated portfolios (holding a limited number of investments and/or large positions in relatively small number of stocks). If one or more of those investments decline or are otherwise adversely affected, it may have a more pronounced effect on the Sub-Fund’s net asset value than if a larger number of investments were held or if the Sub-Fund had fewer larger positions. Accordingly they may carry a higher degree of risk and NAV volatility than a Sub-Fund which invests in a broad range of companies and/or does not take large positions in a relatively small number of stocks.

Investment in Emerging Markets 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.

Investment in Smaller Companies Sub-Funds investing in smaller companies invest in transferable securities which may be less liquid than the securities of larger companies, as a result of inadequate trading volume or restrictions on trading. Securities in smaller companies may possess greater potential for capital appreciation, but also involve risks, such as limited product lines, markets and financial or managerial resources and trading in such securities may be subject to more abrupt price movements than trading in the securities of larger companies.

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Notes applicable to the financial statements of all Sub-Funds

5 Generic Risk factors continued

Calculation methods of the Risk Exposure Following the assessment of the investment policy of each Sub-Fund of the Company, Invesco Fund Managers Limited has decided to use Value at Risk (VaR) for the assessment of the global exposure of each Sub-Fund.

Value-at-Risk (VaR) is a statistical measurement. It intends to measure the maximum potential loss at a given confidence level (probability) over a specific time period under normal market conditions. All of the positions within the portfolio are taken into account for the VaR calculation, not just derivatives.

Absolute and Relative VaR are calculated daily using a VaR risk model based on a two years historical simulation methodology. This method for calculating VaR contains no standard distribution assumption and assumes that history repeats itself.

Under the relative VaR approach, the VaR of the Sub-Fund is compared to that of a benchmark or reference portfolio. With this approach the choice of benchmark is important and hence the Manager will choose a leverage free benchmark with similar risks to the Sub-Fund.

The calculation standards used for the VaR model are in compliance with the provisions in box 15 of ESMA Guidelines on Risk Measurement and the calculation of Global Exposure and Counterparty Risk for UCITS (Ref: 10-788) (“ESMA Guidelines”).

The Absolute VaR of a UCITS cannot be greater than 20% of its NAV. The Relative VaR of a UCITS cannot be more than two times the VaR of the reference portfolio. Invesco Fund Managers Limited monitors that the (VaR of the UCITS)/(2* VaR of the reference portfolio) is not greater than 100%.

The calculation of the Absolute and Relative VaR is carried out in accordance with the following parameters:

— one-tailed confidence interval of 99%; — holding period equivalent to one month (i.e. 20 business days); — effective observation period (history) of risk factors of 500 business days (ESMA Guidelines require at least 250 business days); — daily calculation.

In line with box 25 of ESMA Guidelines, as the Sub-Funds use the VaR approach to monitor the global exposure, Invesco Fund Managers Limited calculates the leverage for each Sub-Fund on a daily basis, as the sum of the absolute value of the notionals of the derivatives used. With respect to financial derivative instruments which do not have a notional value attached to them, the calculation of the value is based upon the market value of the equivalent position of the underlying asset that is attached to the financial derivative instrument and applied consistently and appropriately.

The average level of leverage figures provided below does not take into account any netting and hedging arrangements that the Sub-Funds may have in place at any time even though these netting and hedging arrangements are used for risk reduction purpose.

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Notes applicable to the financial statements of all Sub-Funds

5 Generic Risk factors continued

Calculation methods of the Risk Exposure continued The table below details the VaR approach for each Sub-Fund and, for those Sub-Funds utilising the relative VaR methodology, it details the reference portfolio. The table also details the minimum, maximum and average daily VaR utilisation that occurred during the one year period ending 31 July 2017, as well as the daily average level of leverage for each Sub-Fund during the one year period ending 31 July 2017.

Global Exposure Leverage Reference portfolio for using Leverage Method used to Relative VaR limits reached for last level Method calculate VaR VaR financial year VaR limits reached used to during the calculate financial Global year exposure Type of (Average (Commit model levels as a ment, Parameters Average % of NAV, Absolute (Historical calculated Leverage Period of VaR, simulation, (Confidence Interval, (based at least calculation Fund Obser- Relative Monte holding period, on daily Regulatory twice per method name vation VaR) Carlo) observation period) Lowest Highest data) limits month) used Invesco 1 August Relative Historical 99% MSCI 31.93% 40.73% 36.90% 100.00% 0.00% Sum Perpetual 2016 - VaR Simulation confidence Emerging of the Emerging 31 July level, Markets Notional European 2017 20 days, Eastern of the Fund 2 years of Europe derivatives risk factors Index Invesco 1 August Relative Historical 99% Euromoney 41.37% 59.91% 53.97% 100.00% 27.07% Sum Perpetual 2016 - VaR Simulation confidence Smaller of the European 31 July level, Europe Notional Smaller 2017 20 days, (ex UK) of the Companies 2 years of Index derivatives Fund risk factors Invesco 1 August Relative Historical 99% MSCI 49.60% 53.98% 51.45% 100.00% 0.39% Sum Perpetual 2016 - VaR Simulation confidence Emerging of the Global 31 July level, Markets Notional Emerging 2017 20 days, Index of the Markets 2 years of derivatives Fund risk factors Invesco 1 August Relative Historical 99% MSCI 41.04% 48.56% 44.64% 100.00% 0.00% Sum Perpetual 2016 - VaR Simulation confidence AC of the Global 31 July level, World Notional Smaller 2017 20 days, Small of the Companies 2 years of Cap Index derivatives Fund risk factors Invesco 1 August Relative Historical 99% Russell 44.99% 55.17% 49.57% 100.00% 0.00% Sum Perpetual 2016 - VaR Simulation confidence Nomura of the Japanese 31 July level, Small-Cap Notional Smaller 2017 20 days, Index of the Companies 2 years of derivatives Fund risk factors Invesco 1 August Relative Historical 99% Numis 42.84% 48.40% 46.13% 100.00% 0.00% Sum Perpetual 2016 - VaR Simulation confidence Smaller of the UK Smaller 31 July level, Companies Notional Companies 2017 20 days, (ex of the Equity 2 years of Investment derivatives Fund risk factors Companies) Index

11 Invesco Perpetual Smaller Companies and Markets Investment Series 02 Aggregate_Layout 1 26-Sep-17 16:23 Page 12

Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Notes applicable to the financial statements of all Sub-Funds

5 Generic Risk factors continued

Calculation methods of the Risk Exposure continued The table below details the VaR approach for each Sub-Fund and, for those Sub-Funds utilising the relative VaR methodology, it details the reference portfolio. The table also details the minimum, maximum and average daily VaR utilisation that occurred during the one year period ending 31 July 2016, as well as the daily average level of leverage for each Sub-Fund during the one year period ending 31 July 2016.

Global Exposure Leverage Reference portfolio for using Leverage Method used to Relative VaR limits reached for last level Method calculate VaR VaR financial year VaR limits reached used to during the calculate financial Global year exposure Type of (Average (Commit model levels as a ment, Parameters Average % of NAV, Absolute (Historical calculated Leverage Period of VaR, simulation, (Confidence Interval, (based at least calculation Fund Obser- Relative Monte holding period, on daily Regulatory twice per method name vation VaR) Carlo) observation period) Lowest Highest data) limits month) used Invesco 1 August Relative Historical 99% MSCI 29.68% 40.76% 35.90% 100.00% 0.00% Sum Perpetual 2015 - VaR Simulation confidence Emerging of the Emerging 31 July level, Markets Notional European 2016 20 days, Eastern of the Fund 2 years of Europe derivatives risk factors Index Invesco 1 August Relative Historical 99% Euromoney 35.10% 60.09% 49.44% 100.00% 54.65% Sum Perpetual 2015 - VaR Simulation confidence Smaller of the European 31 July level, Europe Notional Smaller 2016 20 days, (ex UK) of the Companies 2 years of Index derivatives Fund risk factors Invesco 1 August Relative Historical 99% MSCI 39.16% 53.65% 47.01% 100.00% 2.07% Sum Perpetual 2015 - VaR Simulation confidence Emerging of the Global 31 July level, Markets Notional Emerging 2016 20 days, Index of the Markets 2 years of derivatives Fund risk factors Invesco 1 August Relative Historical 99% MSCI 38.97% 46.27% 43.63% 100.00% 0.00% Sum Perpetual 2015 - VaR Simulation confidence AC of the Global 31 July level, World Notional Smaller 2016 20 days, Small of the Companies 2 years of Cap Index derivatives Fund risk factors Invesco 1 August Relative Historical 99% Russell 44.00% 59.89% 53.22% 100.00% 0.00% Sum Perpetual 2015 - VaR Simulation confidence Nomura of the Japanese 31 July level, Small-Cap Notional Smaller 2016 20 days, Index of the Companies 2 years of derivatives Fund risk factors Invesco 1 August Relative Historical 99% Numis 34.12% 54.41% 41.44% 100.00% 0.00% Sum Perpetual 2015 - VaR Simulation confidence Smaller of the UK Smaller 31 July level, Companies Notional Companies 2016 20 days, (ex of the Equity 2 years of Investment derivatives Fund risk factors Companies) Index

12 Invesco Perpetual Smaller Companies and Markets Investment Series 02 Aggregate_Layout 1 26-Sep-17 16:23 Page 13

Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Notes applicable to the financial statements of all Sub-Funds

6 Investment objective and policy The investment objective and policy of each Sub-Fund can be found on:

Invesco Perpetual Emerging European Fund page 15 Invesco Perpetual European Smaller Companies Fund page 33 Invesco Perpetual Global Emerging Markets Fund page 51 Invesco Perpetual Global Smaller Companies Fund page 70 Invesco Perpetual Japanese Smaller Companies Fund page 95 Invesco Perpetual UK Smaller Companies Equity Fund page 110

The Sub-Funds may also hold cash and near cash assets only to the extent that this may reasonably be regarded as necessary for the pursuit of the Sub-Fund’s investment objective, to fund redemptions of shares in that Sub-Fund, for the efficient management of the Sub-Fund in accordance with its investment objective or for other purposes which may reasonably be regarded as ancillary to the investment objectives of the Sub-Fund. They may also borrow, provided such borrowing is on a temporary basis and does not exceed the limits laid down in the regulations.

7 Base currency The base currency of the Company is Sterling and is taken to be the ‘functional currency’ of the Company.

8 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.

9 Borrowings The borrowing facilities available to the Company as at 31 July 2017 comprise a bank overdraft facility of up to 10% of the value of the Company (31 July 2016 - 10%).

13 Invesco Perpetual Smaller Companies and Markets Investment Series 02 Aggregate_Layout 1 26-Sep-17 16:23 Page 14

Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Notes applicable to the financial statements of all Sub-Funds

10 Transactions and balances with related parties Invesco Fund Managers Limited (and its associates), as Manager, is a related party and acts as principal in respect of all transactions in the shares of the Company.

Amounts payable to Invesco Fund Managers Limited in respect of Fund Management Fees are disclosed in note 4, within each Sub-Fund. Management fee rebates are disclosed in notes 2 and 3 within each Sub-Fund. Amounts due at the end of the accounting year for Fund Management Fees are disclosed in note 10 within accrued expenses, within each Sub-Fund.

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 31.7.17 year 31.7.16 Invesco Perpetual Emerging European Fund Accumulation shares 4,221,132 (2,007,632) 6,228,764 Invesco Perpetual Emerging European Fund Income shares 3,348,631 (2,109,449) 5,458,080 Invesco Perpetual Emerging European Fund Income shares (No Trail) 1,024 – 1,024 Invesco Perpetual Emerging European Fund Y Accumulation shares 508,975 508,975 – Invesco Perpetual Emerging European Fund Y Income shares 5,000 – 5,000 Invesco Perpetual European Smaller Companies Fund Accumulation shares 7,432 (2,810) 10,242 Invesco Perpetual Global Emerging Markets Fund Accumulation shares 18,989 (110,369) 129,358 Invesco Perpetual Global Emerging Markets Fund Income shares (No Trail) 500 – 500 Invesco Perpetual Global Emerging Markets Fund Y Accumulation shares 132,003 132,003 – Invesco Perpetual Global Smaller Companies Fund Accumulation shares 1,145,124 (39,859) 1,184,983 Invesco Perpetual Global Smaller Companies Fund Income shares 777,560 (56,591) 834,151 Invesco Perpetual UK Smaller Companies Equity Fund Accumulation shares 589,801 (5,538,063) 6,127,864 Invesco Perpetual UK Smaller Companies Equity Fund Y Accumulation shares 20,726,115 20,726,115 –

14 Invesco Perpetual Smaller Companies and Markets Investment Series 03 Emerging European Fund_Layout 1 26-Sep-17 16:23 Page 15

Invesco Perpetual Emerging European Fund Investment report for the year

The Investment Objective and Policy of the Invesco Perpetual Emerging European Fund The Sub-Fund aims to achieve long-term capital growth from investment primarily in shares of companies in emerging European countries, which includes Russia. 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.

Performance Percentage growth to 31 July 2017 Since Since Since Since Since launch 31.1.17 31.7.16 31.7.14 31.7.12 12.12.07 % % % % % Invesco Perpetual Emerging European Fund (Z Accumulation shares) 1 -1.51 27.30 36.99 34.34 8.39 MSCI Emerging Markets Eastern Europe Index -3.70 23.88 23.67 16.93 -18.32

No suitable IA peer group exists for this Sub-Fund.

Standardised rolling 12 month performance Percentage growth 30.6.12 30.6.13 30.6.14 30.6.15 30.6.16 30.6.13 30.6.14 30.6.15 30.6.16 30.6.17 % % % % % Invesco Perpetual Emerging European Fund (Z Accumulation shares) 1 12.3 -2.4 -14.5 14.6 29.7

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 www.invescoperpetual.co.uk or by contacting us.

Fund and sector average performance data source: Lipper, in Sterling, with income reinvested and net of the ongoing charge and portfolio transaction costs. The figures do not reflect the entry charge paid by individual investors. This may differ from the performance figure shown on page 18 for Z Accumulation shares as the figure above is based on the quoted 12pm price and the figure shown on page 18 is based on the close of business bid price. MSCI Emerging Markets Eastern Europe 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.

1 Effective 18 April 2016, the primary share class changed from Accumulation share class to Z Accumulation share class. Performance figures are based on the Z Accumulation share class. As this was launched on 12 November 2012, for the years prior to this launch date, performance figures are based on the Accumulation share class, without any adjustment for fees.

15 Invesco Perpetual Smaller Companies and Markets Investment Series 03 Emerging European Fund_Layout 1 26-Sep-17 16:23 Page 16

Invesco Perpetual Emerging European Fund Investment report for the year

Strategy, review and outlook During the review period we added some new stocks The Sub-Fund increased by 27.3% over the twelve to the portfolio, including Atrium European Real Estate months to the end of July 2017, compared to a and KAZ Minerals. Atrium owns a portfolio of €2.5 23.9% gain in the benchmark MSCI Emerging billion, mainly shopping centres in urban centres Markets Eastern Europe Index. in Central and Eastern Europe. KAZ is a copper producer with assets in Kazakhstan. Other new names Fund performance data source: Lipper, in Sterling, with introduced to the Sub-Fund were Globaltrans, a leading income reinvested and net of the ongoing charge and Russian freight rail operator with a large modern fleet, portfolio transaction costs. Performance figures are and Aeroflot, the largest Russian airline in terms of based on the Z Accumulation share class. The figures passenger turnover. We sold our interests in Aegean do not reflect the entry charge paid by individual Airlines, Hikma Pharmaceuticals and M.video. investors. MSCI Emerging Markets Eastern Europe Index data source: Thomson Reuters Datastream, Nicholas Mason, Fund Manager total return, in Sterling. Where Nicholas Mason has expressed opinions, they are based on current market conditions and are Past performance is not a guide to future returns. subject to change without notice. These opinions may differ from those of other Invesco Perpetual Our holdings in Russia and Poland contributed the investment professionals. most towards performance with positive gains being delivered in Hungary, Turkey and Kazakhstan. Sector returns were also broad-based with financials, energy The Sub-Fund’s ten largest investments were % and materials coming out on top, led by the strong Sberbank of Russia 9.58 performance of Sberbank and KRUK. Sberbank LUKOIL 7.98 benefited from a growing and improving outlook for the Russian economy. KRUK is a leading Polish Novatek 5.33 debt collection service provider and was rewarded Powszechny Zaklad Ubezpieczeñ 5.29 by its innovative ability to increase the number of KRUK 4.93 amicable settlements. Gazprom 4.10 We are seeing further evidence that a nascent MMC Norilsk Nickel 3.62 economic recovery remains in place in Russia. Prudent Rosneft 3.52 policymaking and a strengthening rouble are providing X5 Retail 3.11 a more stable backdrop for companies to invest. With Tatneft 2.84 inflation falling to its lowest level since 2012 and the central bank continuing to cut interest rates, business and consumer confidence levels are rising.

The macroeconomic picture in Central and Eastern Europe continues to improve with hard data in the region surpassing expectations. With growth also picking up in the Eurozone, we believe the region is heading in the right direction. Stronger fundamentals are having a positive impact on corporate earnings. Encouragingly, we are seeing an increase in the number of companies that are reporting better-than-expected results. However, we believe that the more favourable outlook is not being reflected in equity valuations which, in Russia’s case at least, trade at a discount to peers elsewhere in both the emerging and developed world.

The Sub-Fund is positioned to benefit from long-term growth opportunities in a region that we believe remains undervalued by the market. We seek to hold stakes in companies that we believe are well-run and have a market position that should allow them to deliver a high level of return on invested capital. In terms of Sub-Fund positioning we continue to favour sectors such as industrials, real estate and consumer-related stocks at the expense of energy and financials. Our largest country holding is in Russia, though the Sub- Fund also seeks to enhance its risk-reward profile by investing in off-index countries such as Kazakhstan.

16 Invesco Perpetual Smaller Companies and Markets Investment Series 03 Emerging European Fund_Layout 1 26-Sep-17 16:23 Page 17

Invesco Perpetual Emerging European Fund Investment report for the year

Comparative tables

Year ended 31.7.17 31.7.16 31.7.15 Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 41.22 35.34 38.67 Return before operating charges* 11.95 6.56 (2.63) Operating charges (0.95) (0.68) (0.70) Return after operating charges 11.00 5.88 (3.33) Distributions (1.08) (0.75) (0.90) Retained distributions on accumulation shares 1.08 0.75 0.90 Closing net asset value per share 52.22 41.22 35.34

*After direct transaction costs of (0.08) (0.06) (0.10) Performance Return after charges 26.69% 16.64% (8.61%) Other information Closing net asset value (£'000) 15,903 13,084 12,571 Closing number of shares 30,453,643 31,745,799 35,575,540 Operating charges 1.92% 1.92% 1.92% Direct transaction costs 0.17% 0.17% 0.26% Performance fee – – – Prices Highest share price 54.26 42.42 41.67 Lowest share price 40.69 28.79 27.60

Year ended 31.7. 17 31.7. 16 31.7. 15 Accumulation shares (No Trail) (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 86.05 73.41 79.94 Return before operating charges* 24.95 13.68 (5.46) Operating charges (1.47) (1.04) (1.07) Return after operating charges 23.48 12.64 (6.53) Distributions (2.72) (1.92) (2.24) Retained distributions on accumulation shares 2.72 1.92 2.24 Closing net asset value per share 109.53 86.05 73.41

*After direct transaction costs of (0.17) (0.12) (0.20) Performance Return after charges 27.29% 17.22% (8.17%) Other information Closing net asset value (£'000) 46 44 102 Closing number of shares 41,795 50,954 138,619 Operating charges 1.42% 1.42% 1.42% Direct transaction costs 0.17% 0.17% 0.26% Performance fee – – – Prices Highest share price 113.57 88.54 86.18 Lowest share price 84.95 59.95 57.15

Direct transaction costs comprise commission and taxes, principally applicable to equity investment purchases and sales. Shareholders should note that additionally there are other transaction costs such as dealing spread and underlying costs with regard to Collective Investment Scheme holdings which will also have reduced the Sub-Fund and share class returns before operating charges.

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

17 Invesco Perpetual Smaller Companies and Markets Investment Series 03 Emerging European Fund_Layout 1 26-Sep-17 16:23 Page 18

Invesco Perpetual Emerging European Fund Investment report for the year

Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Z Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 208.18 177.12 192.36 Return before operating charges* 60.60 33.14 (13.12) Operating charges (2.93) (2.08) (2.12) Return after operating charges 57.67 31.06 (15.24) Distributions (7.13) (5.13) (5.88) Retained distributions on accumulation shares 7.13 5.13 5.88 Closing net asset value per share 265.85 208.18 177.12

*After direct transaction costs of (0.42) (0.30) (0.48) Performance Return after charges 27.70% 17.54% (7.92%) Other information Closing net asset value (£'000) 2,082 940 1,056 Closing number of shares 783,014 451,816 596,269 Operating charges 1.17% 1.17% 1.17% Direct transaction costs 0.17% 0.17% 0.26% Performance fee – – – Prices Highest share price 275.18 214.18 207.43 Lowest share price 205.52 144.82 137.63

Year ended 31.7. 17 31.7. 16 31.7. 15 Y Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 216.85 184.35 200.08 Return before operating charges* 63.13 34.57 (13.62) Operating charges (2.93) (2.07) (2.11) Return after operating charges 60.20 32.50 (15.73) Distributions (7.54) (5.48) (6.24) Retained distributions on accumulation shares 7.54 5.48 6.24 Closing net asset value per share 277.05 216.85 184.35

*After direct transaction costs of (0.43) (0.31) (0.50) Performance Return after charges 27.76% 17.63% (7.86%) Other information Closing net asset value (£'000) 17,763 9,432 1,613 Closing number of shares 6,411,248 4,349,519 874,962 Operating charges 1.12% 1.12% 1.12% Direct transaction costs 0.17% 0.17% 0.26% Performance fee – – – Prices Highest share price 286.71 223.10 215.80 Lowest share price 214.07 150.78 143.20

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

18 Invesco Perpetual Smaller Companies and Markets Investment Series 03 Emerging European Fund_Layout 1 26-Sep-17 16:23 Page 19

Invesco Perpetual Emerging European Fund Investment report for the year

Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 36.89 32.22 36.19 Return before operating charges* 10.72 5.97 (2.48) Operating charges (0.85) (0.62) (0.65) Return after operating charges 9.87 5.35 (3.13) Distributions (0.97) (0.68) (0.84) Retained distributions on accumulation shares – – – Closing net asset value per share 45.79 36.89 32.22

*After direct transaction costs of (0.07) (0.05) (0.09) Performance Return after charges 26.76% 16.60% (8.65%) Other information Closing net asset value (£'000) 1,629 1,295 1,368 Closing number of shares 3,557,497 3,509,265 4,246,048 Operating charges 1.92% 1.92% 1.92% Direct transaction costs 0.17% 0.17% 0.26% Performance fee – – – Prices Highest share price 48.58 38.67 39.00 Lowest share price 36.43 26.25 25.82

Year ended 31.7. 17 31.7. 16 31.7. 15 Income shares (No Trail) (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 74.35 64.89 72.88 Return before operating charges* 21.60 12.08 (4.97) Operating charges (1.27) (0.92) (0.97) Return after operating charges 20.33 11.16 (5.94) Distributions (2.35) (1.70) (2.05) Retained distributions on accumulation shares – – – Closing net asset value per share 92.33 74.35 64.89

*After direct transaction costs of (0.15) (0.11) (0.18) Performance Return after charges 27.34% 17.20% (8.15%) Other information Closing net asset value (£'000) 19 2 31 Closing number of shares 20,636 2,459 48,293 Operating charges 1.42% 1.42% 1.42% Direct transaction costs 0.17% 0.17% 0.26% Performance fee – – – Prices Highest share price 98.16 78.23 78.57 Lowest share price 73.42 52.98 52.09

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

19 Invesco Perpetual Smaller Companies and Markets Investment Series 03 Emerging European Fund_Layout 1 26-Sep-17 16:23 Page 20

Invesco Perpetual Emerging European Fund Investment report for the year

Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Z Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 185.26 161.65 181.63 Return before operating charges* 54.04 30.19 (12.43) Operating charges (2.61) (1.90) (2.00) Return after operating charges 51.43 28.29 (14.43) Distributions (6.35) (4.68) (5.55) Retained distributions on accumulation shares – – – Closing net asset value per share 230.34 185.26 161.65

*After direct transaction costs of (0.37) (0.27) (0.45) Performance Return after charges 27.76% 17.50% (7.94%) Other information Closing net asset value (£'000) 508 245 119 Closing number of shares 220,728 132,112 73,289 Operating charges 1.17% 1.17% 1.17% Direct transaction costs 0.17% 0.17% 0.26% Performance fee – – – Prices Highest share price 244.97 195.44 195.83 Lowest share price 182.97 132.15 129.93

Year ended 31.7. 17 31.7. 16 31.7. 15 Y Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 197.73 172.51 193.83 Return before operating charges* 57.67 32.29 (13.23) Operating charges (2.67) (1.94) (2.05) Return after operating charges 55.00 30.35 (15.28) Distributions (6.88) (5.13) (6.04) Retained distributions on accumulation shares – – – Closing net asset value per share 245.85 197.73 172.51

*After direct transaction costs of (0.40) (0.29) (0.48) Performance Return after charges 27.82% 17.59% (7.88%) Other information Closing net asset value (£'000) 767 493 67 Closing number of shares 311,966 249,247 38,735 Operating charges 1.12% 1.12% 1.12% Direct transaction costs 0.17% 0.17% 0.26% Performance fee – – – Prices Highest share price 261.54 208.71 208.99 Lowest share price 195.28 141.06 138.70

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

20 Invesco Perpetual Smaller Companies and Markets Investment Series 03 Emerging European Fund_Layout 1 26-Sep-17 16:23 Page 21

Invesco Perpetual Emerging European Fund Investment report for the year

Portfolio Statement Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Austria Nil (31.7.16 - 1.34%)

Greece 2.43% (31.7.16 - 2.92%) Motor Oil Hellas Corinth Refineries 45,000 767 1.98 Piraeus Bank 830,000 172 0.45

Hungary 5.86% (31.7.16 - 3.32%) OTP Bank 32,500 913 2.36 Richter Gedeon 38,500 746 1.92 Wizz Air 23,500 611 1.58

Israel 1.04% (31.7.16 - 1.63%) Frutarom 7,500 403 1.04

Jersey 1.32% (31.7.16 - Nil) Atrium European Real Estate 145,000 511 1.32

Kazakhstan 3.35% (31.7.16 - 2.44%) KAZ Minerals 105,000 754 1.95 Nostrum Oil & Gas 134,000 542 1.40

Netherlands 1.21% (31.7.16 - Nil) DP Eurasia 240,000 468 1.21

Poland 15.29% (31.7.16 - 12.99%) CCC 17,000 868 2.24 KRUK 26,500 1,911 4.93 Polenergia 53,000 143 0.37 Powszechny Zaklad Ubezpieczeñ 220,000 2,047 5.29 Warsaw Stock Exchange 97,000 952 2.46

Portugal 2.30% (31.7.16 - 2.26%) Jeronimo Martins 60,000 891 2.30

Russia 59.16% (31.7.16 - 63.25%) Aeroflot 185,000 470 1.21 Alrosa 910,000 963 2.49 Detsky Mir PJSC 275,000 313 0.81 Etalon GDR 232,850 631 1.63 Gazprom ADR 540,000 1,589 4.10 Gazprom Neft ADR 56,500 705 1.82 Globaltrans GDR 79,000 462 1.19 Inter RAO UES 8,250,000 391 1.01 LUKOIL ADR 87,500 3,088 7.98 Magnitogorsk Iron & Steel Works GDR Reg. S 63,500 355 0.92 MMC Norilsk Nickel ADR 124,500 1,400 3.62 Mobile TeleSystems 317,000 945 2.44 Moscow Exchange 365,000 495 1.28 Novatek GDR 26,000 2,063 5.33 PhosAgro GDR 37,500 393 1.02 Rosneft GDR 350,000 1,362 3.52 Sberbank of Russia ADR 420,000 3,711 9.58 Tatneft ADS 37,550 1,099 2.84 TCS GDR 32,500 319 0.82 TMK GDR 140,000 555 1.43 United Company 950,000 393 1.01 X5 Retail 41,000 1,203 3.11

Turkey 4.56% (31.7.16 - 3.64%) BIM Birlesik Magazalar 27,000 399 1.03 Pegasus Hava Tasimaciligi 44,000 228 0.59 Türk Tuborg 220,000 494 1.27 Turkiye Sinai Kalkinma Bankasi 1,960,001 646 1.67

21 Invesco Perpetual Smaller Companies and Markets Investment Series 03 Emerging European Fund_Layout 1 26-Sep-17 16:23 Page 22

Invesco Perpetual Emerging European Fund Investment report for the year

Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % United Kingdom Nil (31.7.16 - 2.32%)

United States 1.39% (31.7.16 - 1.91%) Luxoft 11,250 537 1.39

Portfolio of investments (31.7.16 - 98.02%) 37,908 97.91 Net other assets (31.7.16 - 1.98%) 809 2.09 Net assets 38,717 100.00

Unless otherwise stated, all holdings are quoted in ordinary shares and are listed on a recognised exchange.

22 Invesco Perpetual Smaller Companies and Markets Investment Series 03 Emerging European Fund_Layout 1 26-Sep-17 16:23 Page 23

Invesco Perpetual Emerging European Fund Investment report for the year

Summary of Material Portfolio Changes for the year 1 August 2016 to 31 July 2017 Cost £’000 Total purchases 18,170 Largest purchases: Greece Motor Oil Hellas Corinth Refineries 480 Hungary Richter Gedeon 667 Jersey Atrium European Real Estate 493 Kazakhstan KAZ Minerals 451 Netherlands DP Eurasia 480 Poland Powszechny Zaklad Ubezpieczeñ 496 Russia Mobile TeleSystems 1,253 X5 Retail 1,004 Sberbank of Russia ADR 983 LUKOIL ADR 834 Magnit 822 Alrosa 747 Gazprom ADR 721 TMK GDR 595 Inter RAO UES 572 Novatek GDR 448 Globaltrans GDR 426 United Company 409 Turkey BIM Birlesik Magazalar 488 United States of America Lenta GDR 434

Proceeds £’000 Total sales 11,417 Largest sales: Austria DO & CO 364 Greece Jumbo 448 Aegean Airlines 310 Israel Frutarom 176 Kazakhstan Nostrum Oil & Gas 412 Poland Powszechny Zaklad Ubezpieczeñ 175 Russia Mobile TeleSystems ADR 1,169 Magnit GDR 803 Moscow Exchange 704 Magnit 696 M.video 536 Surgutneftegaz pref. 513 MMC Norilsk Nickel ADR 496 PhosAgro GDR 430 Inter RAO UES 304 Novatek GDR 246 Mail.ru GDR 232 United Kingdom Hikma Pharmaceuticals 476 United States of America Lenta GDR 375 Luxoft 197

23 Invesco Perpetual Smaller Companies and Markets Investment Series 03 Emerging European Fund_Layout 1 26-Sep-17 16:23 Page 24

Invesco Perpetual Emerging European Fund Financial Statements

Statement of Total Return 01.8.16 01.8.15 for the year 1 August 2016 to 31 July 2017 to 31.7.17 to 31.7.16 Notes £’000 £’000 £’000 £’000 Income Net capital gains 2 6,103 2,641 Revenue 3 1,607 895 Expenses 4 (526) (302) Interest payable and similar charges 6 – – Net revenue before taxation 1,081 593 Taxation 5 (129) (85) Net revenue after taxation 952 508 Total return before distributions 7,055 3,149 Distributions 7 (953) (510) Change in net assets attributable to Shareholders from investment activities 6,102 2,639

Statement of Change i n Net Assets Attributable to Shareholders 01.8.16 01.8.15 for the year 1 August 2016 to 31 July 2017 to 31.7.17 to 31.7.16 £’000 £’000 £’000 £’000 Opening net assets attributable to Shareholders 25,535 16,927

Amounts received on issue of shares 13,131 8,308 Amounts paid on redemption of shares (6,941) (2,864) 6,190 5,444

Dilution adjustment 21 25 Change in net assets attributable to Shareholders from investment activities 6,102 2,639 Retained distribution on accumulation shares 869 500 Closing net assets attributable to Shareholders 38,717 25,535

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Invesco Perpetual Emerging European Fund Financial Statements

Balance Sheet 31.7.17 31.7.16 as at 31 July 2017 Notes £’000 £’000 £’000 £’000 Assets Fixed assets Investments 37,908 25,030

Current assets Debtors 8 453 398 Cash and bank balances 9 584 220 Total other assets 1,037 618 Total assets 38,945 25,648

Liabilities Investment liabilities – –

Creditors Distribution payable 10 70 43 Other creditors 10 108 70 Bank overdrafts 50 – Total other liabilities 228 113 Total liabilities 228 113 Net assets attributable to Shareholders 38,717 25,535

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Invesco Perpetual Emerging European Fund Notes to the financial statements Refer to pages 05 to 14 for notes applicable to the financial statements of all Sub-Funds.

1 Accounting policies The Sub-Fund’s accounting and distribution policies are set out on pages 05 to 07.

2 Net capital gains 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Non-derivative securities 6,124 2,631 Foreign currency (losses)/gains (21) 10 Net capital gains 6,103 2,641

3 Revenue 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Non-taxable overseas dividends 334 188 Taxable overseas dividends 1,266 703 UK dividends 7 4 1,607 895

4 Expenses 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Payable to the Manager, associates of the Manager and agents of either of them: Fund Management Fee 1 527 302 527 302

Other expenses: VAT recoverable (1) – (1) –

Total expenses 526 302

1 Total audit fees of £6,866 (2016 - £6,891) exclusive of VAT payable to the auditors for the year ended 31 July 2017 are borne out of the Fund Management Fee.

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Invesco Perpetual Emerging European Fund Notes to the financial statements

5 Taxation 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 a) Analysis of charge for the year Overseas tax 129 85 Total tax charge 129 85

There is no corporation tax charge for the year (2016 - Nil).

b) Factors affecting the tax charge for the year The tax assessed for the year is lower (2016 - lower) than the standard rate of corporation tax in the UK for an authorised investment company with variable capital. The differences are explained below:

01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Net revenue before taxation 1,081 593 Corporation tax at 20% (2016 - 20%) 216 119

Effects of: Overseas tax 1 129 85 Revenue not subject to tax (68) (39) Relief for overseas tax treated as an expense (26) (14) Movement in excess expenses (122) (66) Total tax charge 129 85

1 Includes amounts for the recovery of excess withholding tax suffered on dividends received in prior accounting periods.

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 Sub-Fund had surplus management expenses of £ 963 ,000 (2016 - £1,545,000). It is unlikely that the Sub-Fund will generate sufficient taxable profits in the future to utilise these expenses and therefore a deferred tax asset of £ 193 ,000 (2016 - £309,000) has not been recognised.

6 Interest payable and similar charges 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Interest – –

7 Distributions 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Accumulations and distributions payable 30 September 2017 939 543 Amounts deducted on redemption of shares 105 37 Amounts received on issue of shares (91) (70) 953 510

The distributable amount has been calculated as follows: Net revenue after taxation 952 508 Equalisation on conversions 1 2 953 510

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Invesco Perpetual Emerging European Fund Notes to the financial statements

8 Debtors 31.7.17 31.7.16 £’000 £’000 Amounts receivable for issue of shares 58 22 Sales awaiting settlement 2 – Accrued revenue 369 372 Foreign currency contracts awaiting settlement 2 – Overseas tax recoverable – 4 Overseas withholding tax 22 – 453 398

9 Cash and bank balances 31.7.17 31.7.16 £’000 £’000 Cash and bank balances 584 220

10 Creditors 31.7.17 31.7.16 £’000 £’000 a) Distribution payable Net distribution payable 70 43 70 43

b) Other creditors Amounts payable for redemption of shares 57 10 Purchases awaiting settlement – 25 Foreign currency contracts awaiting settlement 2 – Accrued expenses 49 34 VAT payable – 1 108 70

11 Commitments and contingent liabilities There were no commitments or contingent liabilities at the balance sheet date (2016 - Nil).

12 Related parties Related party interests in the Sub-Fund are disclosed in note 10 of the notes applicable to the financial statements of all Sub-Funds on page 14. Amounts payable to Invesco Fund Managers Limited in respect of Fund Management Fees are disclosed in note 4. Amounts due at the end of the accounting year for Fund Management Fees of £49,000 (2016 - £34,000) are disclosed in note 10 within accrued expenses.

13 Generic Risk factors As this is an emerging markets fund, investors should be prepared to accept a higher degree of risk than for a Sub-Fund with a broader investment mandate, as difficulties in dealing, settlement and custody problems could arise. The Sub-Fund may invest directly in Russia, which can involve significant risks to capital. As the Sub-Fund has a concentrated number of holdings, investors should be prepared to accept higher risks.

The Sub-Fund’s performance may be adversely affected by variations in interest rates and by variations in the relative strength of world currencies or if Sterling strengthens against those currencies.

The risk factors relating to the Sub-Fund are discussed more fully in note 5 of the notes applicable to the financial statements of all Sub-Funds on pages 08 to 12.

a) Counterparty risk The Sub-Fund was not exposed to any counterparty risk as at the balance sheet date (2016 - Nil).

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Invesco Perpetual Emerging European Fund Notes to the financial statements

13 Generic Risk factors continued

b) Valuation of financial investments The categorisation of financial investments in the tables below reflect the basis of valuation of investments used to measure their fair value.

Assets Liabilities £’000 £’000 31.7. 17 Level 1: Unadjusted quoted price in an active market for an identical instrument; 37,908 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 37,908 –

31.7. 16 Level 1: Unadjusted quoted price in an active market for an identical instrument; 25,030 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 25,030 –

All financial investments are classified as level 1: Unadjusted quoted price in an active market for an identical instrument.

14 Portfolio transaction costs for the year 1 August 2016 to 31 July 2017

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 18,133 32 0.18 5 0.03 Total purchases 18,133 32 5 Total purchases including transaction costs 18,170

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 11,438 21 0.18 – – Total sales 11,438 21 – Total sales net of transaction costs 11,417

Derivative transaction costs – –

Total transaction costs 53 5

Total transaction costs as a % of average net assets 0.15% 0.02%

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Invesco Perpetual Emerging European Fund Notes to the financial statements

14 Portfolio transaction costs continued for the year 1 August 2015 to 31 July 2016

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 11,804 14 0.12 4 0.03 Total purchases 11,804 14 4 Total purchases including transaction costs 11,822

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 6,127 11 0.18 – – Total sales 6,127 11 – Total sales net of transaction costs 6,116

Derivative transaction costs – –

Total transaction costs 25 4

Total transaction costs as a % of average net assets 0.15% 0.02%

The above analysis covers any direct transaction costs suffered by the Sub-Fund during the year. However it is important to understand the nature of other transaction costs associated with different investment asset classes and instruments types.

Separately identifiable direct transaction costs (commissions and taxes etc.) are attributable to the Sub-Fund's purchase and sale of equity shares. Additionally for equity shares, there is a dealing spread cost (the difference between the buying and selling prices) which will be suffered on purchase and sale transactions.

For the Sub-Fund's investment transactions in debt and money market instruments any applicable transaction charges form part of the dealing spread for these instruments. Transactions in money market instruments to manage the Sub-Fund's daily liquidity position are excluded from the analysis.

For the Sub-Fund's investment in collective investment scheme holdings there will potentially be dealing spread costs applicable to purchases and sales. However, additionally there are indirect transaction costs suffered in those underlying Sub-Funds, throughout the holding period for the instruments, which are not separately identifiable and do not form part of the analysis above.

Dealing spread costs suffered by the Sub-Fund vary considerably for the different asset/instrument types depending on a number of factors including transaction value and market sentiment.

At the balance sheet date the average portfolio dealing spread (difference between bid and offer prices of all investments expressed as a percentage of the offer price value) was 0.20% (2016 - 0.23%).

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Invesco Perpetual Emerging European Fund Notes to the financial statements

15 Share movement for the year 1 August 2016 to 31 July 2017

Accumulation Accumulation Z Accumulation Y Accumulation shares shares (No Trail) shares shares Opening shares 31,745,799 50,954 451,816 4,349,519

Shares issued 5,929,765 34,372 738,390 2,699,288 Shares redeemed (4,517,696) (43,531) (449,716) (1,110,234) Shares converted (2,704,225) – 42,524 472,675

Closing shares 30,453,643 41,795 783,014 6,411,248

Income Income shares Z Income Y Income shares (No Trail) shares shares Opening shares 3,509,265 2,459 132,112 249,247

Shares issued 432,295 18,177 110,796 158,709 Shares redeemed (384,063) – (20,240) (97,807) Shares converted – – (1,940) 1,817

Closing shares 3,557,497 20,636 220,728 311,966

16 Post balance sheet events There are no post balance sheet events that require disclosure or adjustments to the financial statements.

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Invesco Perpetual Emerging European Fund Distribution table

Distribution table for the year 1 August 2016 to 31 July 2017

Net Net distribution distribution Net payable paid revenue Equalisation 30.9.17 30.9.16 Distribution payable 30 September 2017 p p p p Accumulation shares Group 1 1.0784 – 1.0784 0.7468 Group 2 0.9938 0.0846 1.0784 0.7468 Accumulation shares (No Trail) Group 1 2.7159 – 2.7159 1.9219 Group 2 2.2737 0.4422 2.7159 1.9219 Z Accumulation shares Group 1 7.1262 – 7.1262 5.1316 Group 2 5.5521 1.5741 7.1262 5.1316 Y Accumulation shares Group 1 7.5392 – 7.5392 5.4843 Group 2 6.1763 1.3629 7.5392 5.4843 Income shares Group 1 0.9663 – 0.9663 0.6813 Group 2 0.9265 0.0398 0.9663 0.6813 Income shares (No Trail) Group 1 2.3489 – 2.3489 1.6980 Group 2 0.0348 2.3141 2.3489 1.6980 Z Income shares Group 1 6.3482 – 6.3482 4.6821 Group 2 5.0740 1.2742 6.3482 4.6821 Y Income shares Group 1 6.8803 – 6.8803 5.1305 Group 2 5.6780 1.2023 6.8803 5.1305

Group 1: shares purchased prior to 1 August 2016 Group 2: shares purchased on or after 1 August 2016

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 shares for capital gains purposes.

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Invesco Perpetual European Smaller Companies Fund Investment report for the year

The Investment Objective and Policy of the Invesco Perpetual European Smaller Companies Fund The Sub-Fund aims to achieve capital growth through a portfolio of investments primarily in smaller European companies, excluding the United Kingdom. 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.

Performance Percentage growth to 31 July 2017 Since Since Since Since Since 31.1.17 31.7.16 31.7.14 31.7.12 31.7.07 % % % % % Invesco Perpetual European Smaller Companies Fund (Z Accumulation shares) 1 7.99 22.42 51.48 146.80 56.68 Euromoney Smaller Europe (ex UK) Index 16.85 29.95 66.37 169.52 117.47 IA European Smaller Companies Sector NR 17.20 28.56 68.07 146.94 134.25 Fund Ranking 13/13 13/13 11/12 9/12 10/10

Standardised rolling 12 month performance Percentage growth 30.6.12 30.6.13 30.6.14 30.6.15 30.6.16 30.6.13 30.6.14 30.6.15 30.6.16 30.6.17 % % % % % Invesco Perpetual European Smaller Companies Fund (Z Accumulation shares) 1 30.3 34.1 1.0 9.2 26.2

Fund and sector average performance data source: Lipper, in Sterling, with income reinvested and net of the ongoing charge and portfolio transaction costs. The figures do not reflect the entry charge paid by individual investors. This may differ from the performance figure shown on page 36 for Z Accumulation shares as the figure above is based on the quoted 12pm price and the figure shown on page 36 is based on the close of business bid price. Euromoney Smaller Europe (ex UK) 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.

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Invesco Perpetual European Smaller Companies Fund Investment report for the year

Strategy, review and outlook a newly listed Spanish auto parts manufacturer. The Sub-Fund returned 22.4% in the twelve months We are encouraged by the company’s strong market ending 31 July 2017, while the Euromoney Smaller share in its segment (car shell equipment) and its profile Europe (ex UK) Index benchmark returned 30.0%, which we see as relatively less sensitive to economic and the IA European Smaller Companies Sector NR cycles compared to peers. The Sub-Fund’s exposure to averaged a return of 28.6%, placing the Sub-Fund the basic materials sector was also raised. Meanwhile, in the fourth quartile of its peer group. we trimmed some positions within the financials sector where valuations reached fuller levels in our view. At Fund and sector average performance data source: period-end, technology stood as the largest overweight Lipper, in Sterling, with income reinvested and net of sector relative to the benchmark and consumer goods the ongoing charge and portfolio transaction costs. the biggest underweight sector. Performance figures are based on the Z Accumulation share class. The figures do not reflect the entry Our investment approach is based on individual stock charge paid by individual investors. Euromoney picking and driven by valuation. We continue to look for Smaller Europe (ex UK) Index source: Thomson robust businesses that can withstand any volatility in Reuters Datastream, total return, in Sterling. global activity levels and with strong fundamentals. We favour companies which have good growth prospects Past performance is not a guide to future returns. and possess what we view as competitive advantages relative to peers. Many of the companies we hold in the European smaller equites advanced over the last Sub-Fund are considered to be disruptive and innovative year as the economy showed an increasingly strong in their sectors, offering an attractiveness which is not recovery. Private sector activity surveys continued priced into valuations in our view. to indicate good growth across the manufacturing, services and composite segments, while unemployment Over the last twelve to eighteen months, stock in the Euro-area dropped to the lowest point in more specific issues combined with a global economic than eight years. The European Central Bank (ECB)’s backdrop that seemed increasingly uncertain to many stimulus programme was extended until the end of smaller businesses placed a drag on performance. 2017, albeit at a reduced monthly pace from April While some challenges remain, we are encouraged by 2017 onwards. Subdued inflation levels in the Eurozone developments in continental Europe. We believe the continued to influence ECB policy easing prospects. improving macroeconomic environment, positive corporate earnings growth and valuations which to The Sub-Fund’s underperformance relative to the us remain very attractive in certain sectors of the benchmark was driven in part by exposure to certain market, offer good opportunities for investors in companies within the diversified financials sector. smaller companies going forward. Flow Traders, the ETF (exchange traded funds) market maker, was among the biggest detractors Politics has also been a major source of anxiety for due to a challenging trading environment which investors vis-à-vis Europe. Yet after the results of the weighed on revenues. Leonteq, the Swiss provider Dutch and French elections, we believe the political of structured products, also weighed on relative risk in continental Europe has materially receded. As returns as the company faced rising costs and some we go through the rest of the elections season and as hurdles in its Asian expansion plans. Yet we believe the political landscape becomes clearer, the political the company’s growth outlook is back on track uncertainty in Europe should continue to fade, after finding a new Asian partner and showing very restoring confidence in the region and allowing encouraging results in the first half of this year. investors to return to fundamentals – which are The business providers sector was another area improving at both macro and corporate levels. impacting relative returns over the last year. Ocean Yield, the vessel leasing firm, was among the main Adrian Bignell and Matthew Perowne, detractors amid some concerns over its future Fund Managers cashflow prospects. Yet we believe these fears Where Adrian Bignell and Matthew Perowne have are overstated. The long-term investment case expressed opinions, they are based on current and dividend profile of the company remain market conditions and are subject to change without attractive in our view. notice. These opinions may differ from those of other Invesco Perpetual investment professionals. On another hand, the basic materials sector was the leading outperformer relative to the benchmark, owing to good stock picking. AMG Advanced The Sub-Fund’s ten largest investments were % Metallurgical was among the strongest performers Cancom 7.02 in the sector, benefiting from a positive momentum Ocean Yield 4.86 in steel pricing. The technology sector was another top outperformer, thanks to an overweight position Flow Traders 3.42 relative to the benchmark and good stock selection. Africa Oil 3.36 RIB Software, the German technology firm advanced Mota-Engil 3.02 as its core business continued to perform strongly, AMG Advanced Metallurgical 2.84 posting better than expected results. Nabaltec 2.09 In portfolio activity terms, we increased the Sub-Fund’s Pandora 1.92 exposure to the industrial goods sector, easing the RIB Software 1.83 underweight position relative to the benchmark. B.R.A.I.N Biotechnology Research & A new holding was initiated in Gestamp Automocion, Information Network 1.68

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Invesco Perpetual European Smaller Companies Fund Investment report for the year

Comparative tables

Year ended 31.7.17 31.7.16 31.7.15 Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 206.93 188.80 168.71 Return before operating charges* 48.04 21.36 23.03 Operating charges (3.91) (3.23) (2.94) Return after operating charges 44.13 18.13 20.09 Distributions (0.44) (2.08) (0.39) Retained distributions on accumulation shares 0.44 2.08 0.39 Closing net asset value per share 251.06 206.93 188.80

*After direct transaction costs of (0.59) (0.58) (0.65) Performance Return after charges 21.33% 9.60% 11.91% Other information Closing net asset value (£'000) 130,949 119,488 140,654 Closing number of shares 52,159,508 57,742,973 74,500,714 Operating charges 1.70% 1.70% 1.70% Direct transaction costs 0.26% 0.30% 0.38% Performance fee – – – Prices Highest share price 252.15 206.92 192.67 Lowest share price 203.02 172.50 147.13

Year ended 31.7. 17 31.7. 16 31.7. 15 Accumulation shares (No Trail) (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 255.04 231.53 205.87 Return before operating charges* 59.35 26.32 28.20 Operating charges (3.41) (2.81) (2.54) Return after operating charges 55.94 23.51 25.66 Distributions (1.96) (3.73) (1.54) Retained distributions on accumulation shares 1.96 3.73 1.54 Closing net asset value per share 310.98 255.04 231.53

*After direct transaction costs of (0.73) (0.71) (0.80) Performance Return after charges 21.93% 10.15% 12.46% Other information Closing net asset value (£'000) 803 613 470 Closing number of shares 258,087 240,159 203,265 Operating charges 1.20% 1.20% 1.20% Direct transaction costs 0.26% 0.30% 0.38% Performance fee – – – Prices Highest share price 312.31 255.02 236.00 Lowest share price 250.24 212.12 179.71

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

35 Invesco Perpetual Smaller Companies and Markets Investment Series 04 European Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 36

Invesco Perpetual European Smaller Companies Fund Investment report for the year

Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Z Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 375.18 339.73 301.32 Return before operating charges* 87.43 38.71 41.35 Operating charges (3.98) (3.26) (2.94) Return after operating charges 83.45 35.45 38.41 Distributions (3.94) (6.35) (3.03) Retained distributions on accumulation shares 3.94 6.35 3.03 Closing net asset value per share 458.63 375.18 339.73

*After direct transaction costs of (1.08) (1.04) (1.17) Performance Return after charges 22.24% 10.43% 12.75% Other information Closing net asset value (£'000) 11,751 11,018 8,962 Closing number of shares 2,562,217 2,936,777 2,637,850 Operating charges 0.95% 0.95% 0.95% Direct transaction costs 0.26% 0.30% 0.38% Performance fee – – – Prices Highest share price 460.57 375.15 346.09 Lowest share price 368.12 311.68 263.19

Year ended 31.7. 17 31.7. 16 31.7. 15 Y Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 233.76 211.57 187.54 Return before operating charges* 54.48 24.12 25.77 Operating charges (2.35) (1.93) (1.74) Return after operating charges 52.13 22.19 24.03 Distributions (2.58) (4.07) (1.99) Retained distributions on accumulation shares 2.58 4.07 1.99 Closing net asset value per share 285.89 233.76 211.57

*After direct transaction costs of (0.67) (0.65) (0.73) Performance Return after charges 22.30% 10.49% 12.81% Other information Closing net asset value (£'000) 38,393 40,927 20,414 Closing number of shares 13,429,157 17,508,008 9,648,960 Operating charges 0.90% 0.90% 0.90% Direct transaction costs 0.26% 0.30% 0.38% Performance fee – – – Prices Highest share price 287.10 233.74 215.50 Lowest share price 229.36 194.15 163.81

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

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Invesco Perpetual European Smaller Companies Fund Investment report for the year

Portfolio Statement Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Austria Nil (31.7.16 - 1.18%)

Belgium 1.49% (31.7.16 - 1.90%) Celyad 107,684 2,711 1.49

Bermuda 1.27% (31.7.16 - Nil) Golar 127,929 2,311 1.27

Canada 3.90% (31.7.16 - 2.93%) Africa Oil 5,164,171 6,111 3.36 Wentworth Resources 4,514,819 984 0.54

Denmark 1.92% (31.7.16 - 2.00%) OW Bunker 1 155,297 – 0.00 Pandora 40,100 3,486 1.92

Finland 3.03% (31.7.16 - 1.86%) Basware 62,154 2,223 1.22 Huhtamaki 54,060 1,583 0.87 Kamux 230,300 1,712 0.94

France 10.19% (31.7.16 - 11.88%) Balyo 286,282 1,344 0.74 Criteo ADS 46,547 1,784 0.98 Faurecia 35,570 1,491 0.82 Francaise Energie 69,207 1,227 0.67 Inside Secure 1,193,969 2,798 1.54 LISI 69,650 2,537 1.40 Orchestra-Premaman 268,347 1,641 0.90 Prodways 254,908 1,197 0.66 Solocal 1,147,291 871 0.48 Ubisoft Entertainment 51,460 2,459 1.35 Voltalia 114,065 1,182 0.65

Germany 22.21% (31.7.16 - 20.97%) B.R.A.I.N Biotechnology Research & Information Network 186,308 3,060 1.68 Cancom 256,686 12,768 7.02 Capital Stage 383,324 2,081 1.15 Datagroup 42,958 1,402 0.77 Elmos Semiconductor 26,815 495 0.27 K & S 72,869 1,435 0.79 MPC Muenchmeyer Petersen Capital 335,420 1,877 1.03 MTU Aero Engines 13,202 1,460 0.80 Nabaltec 189,005 3,803 2.09 Paion 551,356 1,385 0.76 Rheinmetall 14,420 1,087 0.60 RIB Software 248,279 3,331 1.83 Scout24 69,419 1,999 1.10 SNP Schneider-Neureither & Partner 70,741 2,053 1.13 va-Q-tec 113,707 2,158 1.19

Ghana 1.53% (31.7.16 - Nil) Tullow Oil 1,661,184 2,792 1.53

Italy 3.29% (31.7.16 - 1.79%) Banca Sistema 1,400,245 2,775 1.52 Banco BPM 743,894 2,052 1.13 Prysmian 48,091 1,162 0.64

Luxembourg 1.40% (31.7.16 - Nil) Solutions 30 115,674 2,540 1.40

Monaco 0.77% (31.7.16 - Nil) GasLog 101,442 1,400 0.77

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Invesco Perpetual European Smaller Companies Fund Investment report for the year

Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Netherlands 9.18% (31.7.16 - 5.00%) AMG Advanced Metallurgical 198,141 5,160 2.84 Basic-Fit 118,002 1,630 0.89 Flow Traders 272,355 6,223 3.42 Philips Lighting 46,451 1,332 0.73 Van Lanschot 105,681 2,358 1.30

Norway 16.29% (31.7.16 - 18.04%) Aker BP (previously Det Norske Oljeselskap) 94,732 1,349 0.74 Avance Gas 361,871 827 0.45 Awilco Lng As 2,500,000 830 0.46 Borr Drilling 374,802 1,025 0.56 Europris 769,638 2,719 1.50 Evry 677,958 1,900 1.04 Hexagon Composites 612,809 1,618 0.89 Hoegh LNG 281,454 2,351 1.29 Hunter 21,225,389 652 0.36 Magseis 1,098,845 1,566 0.86 Ocean Yield 1,384,584 8,839 4.86 Sevan Marine 765,804 945 0.52 Spectrum 803,082 2,930 1.61 Storebrand ‘A’ 331,268 2,088 1.15

Portugal 3.02% (31.7.16 - 3.45%) Mota-Engil 2,587,920 5,501 3.02

Republic of Ireland 4.48% (31.7.16 - 3.51%) Applegreen 627,666 2,975 1.64 Greencoat Renewables 2,444,222 2,280 1.25 Hibernia REIT 2,268,579 2,885 1.59

Singapore 0.91% (31.7.16 - Nil) BW LPG 489,344 1,660 0.91

Spain 1.93% (31.7.16 - 0.06%) Almirall 332,703 2,434 1.34 Gestamp Automocion 194,486 1,069 0.59

Sweden 3.40% (31.7.16 - 9.60%) Avanza Bank 69,506 2,165 1.19 Bufab 161,207 1,361 0.75 Cellavision 80,424 988 0.54 Modern Times ‘B’ 41,826 1,103 0.61 Tobii 165,254 563 0.31

Switzerland 5.25% (31.7.16 - 6.02%) Comet 22,923 2,487 1.37 EDAG Engineering 104,903 1,257 0.69 Lastminute.com 66,989 629 0.34 Leonteq 42,334 1,815 1.00 Rieter 11,514 2,028 1.11 Zur Rose 11,582 1,338 0.74

United Kingdom 3.34% (31.7.16 - 0.99%) Accsys Technologies 3,378,922 2,669 1.47 African Petroleum 1,086,600 379 0.21 Dialog Semiconductor 76,140 2,511 1.38 Kenmare Resources warrants 16/11/2019 1 685 – 0.00 Wentworth Resources (UK Regd.) 2,441,026 513 0.28

United States 1.09% (31.7.16 - 1.23%) Navios Maritime Acquisition 1,846,786 1,975 1.09

38 Invesco Perpetual Smaller Companies and Markets Investment Series 04 European Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 39

Invesco Perpetual European Smaller Companies Fund Investment report for the year

Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Futures and Derivatives 0.12% (31.7.16 - 0.40%) Options 0.12% (31.7.16 - 0.40%) DAX Put Options 15/9/2017 11500 700 213 0.12

Portfolio of investments (31.7.16 - 92.81%) 181,907 100.01 Net other (liabilities)/assets (31.7.16 - 7.19%) (11) (0.01) Net assets 181,896 100.00

Unless otherwise stated, all holdings are quoted in ordinary shares and are listed on a recognised exchange.

1 Unquoted securities - for the year ended 31 July 2017 these amount to 0.00% (31 July 2016 - 0.00%) of the Net Asset Value of the Sub-Fund.

39 Invesco Perpetual Smaller Companies and Markets Investment Series 04 European Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 40

Invesco Perpetual European Smaller Companies Fund Investment report for the year

Summary of Material Portfolio Changes for the year 1 August 2016 to 31 July 2017 Cost £’000 Total purchases 125,105 Largest purchases: Bermuda Golar 2,758 Canada Africa Oil 2,456 Denmark Pandora 3,816 Finland Metsä Board ‘B’ 2,468 France Orchestra-Premaman 3,233 Germany Aurelius 2,563 Scout24 2,409 Paion 2,326 Rheinmetall 2,184 Ghana Tullow Oil 4,471 Italy Banco BPM 2,113 Luxembourg Arcelormittal 3,045 Netherlands AMG Advanced Metallurgical 4,370 Euronext 2,433 Norway Hoegh LNG 2,398 Republic of Ireland Greencoat Renewables 2,173 Singapore BW LPG 1,990 Spain Almirall 4,506 Switzerland Syngenta 2,655 United Kingdom Dialog Semiconductor 2,856

40 Invesco Perpetual Smaller Companies and Markets Investment Series 04 European Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 41

Invesco Perpetual European Smaller Companies Fund Investment report for the year

Summary of Material Portfolio Changes continued for the year 1 August 2016 to 31 July 2017 Proceeds £’000 Total sales 139,001 Largest sales: Austria DO & CO 2,114 Denmark Pandora 3,969 Finland Metsä Board ‘B’ 3,144 France Korian 4,028 Maisons Du Monde 3,707 Criteo ADS 2,407 Germany Aurelius 4,420 RIB Software 3,352 SNP Schneider-Neureither & Partner 3,278 Zooplus 2,427 Netherlands Euronext 2,471 Norway Nordic Nanovector 5,302 Aker BP (previously Det Norske Oljeselskap) 4,323 Marine Harvest 4,236 Portugal NOS SGPS 2,233 Sweden Nobina 6,117 Gränges 3,613 Avanza Bank 3,434 Switzerland Leonteq 2,985 Syngenta 2,145

41 Invesco Perpetual Smaller Companies and Markets Investment Series 04 European Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 42

Invesco Perpetual European Smaller Companies Fund Financial Statements

Statement of Total Return 01.8.16 01.8.15 for the year 1 August 2016 to 31 July 2017 to 31.7.17 to 31.7.16 Notes £’000 £’000 £’000 £’000 Income Net capital gains 2 33,903 13,512 Revenue 3 3,414 4,816 Expenses 4 (2,593) (2,518) Interest payable and similar charges 6 (2) (2) Net revenue before taxation 819 2,296 Taxation 5 (172) (163) Net revenue after taxation 647 2,133 Total return before distributions 34,550 15,645 Distributions 7 (657) (2,203) Change in net assets attributable to Shareholders from investment activities 33,893 13,442

Amounts received on issue of shares 1,694 9,139 Amounts paid on redemption of shares (26,522) (23,172) (24,828) (14,033) 29 Dilution adjustment 105 – Change in net assets attributable to Shareholders from investment activities 33,893 13,442 Retained distribution on accumulation shares 680 2,108 Closing net assets attributable to Shareholders 181,896 172,046

42 Invesco Perpetual Smaller Companies and Markets Investment Series 04 European Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 43

Invesco Perpetual European Smaller Companies Fund Financial Statements

Balance Sheet 31.7.17 31.7.16 as at 31 July 2017 Notes £’000 £’000 £’000 £’000 Assets Fixed assets Investments 181,907 159,674

Current assets Debtors 8 2,411 547 Cash and bank balances 9 – 12,196 Total other assets 2,411 12,743 Total assets 184,318 172,417

Liabilities Investment liabilities – –

Creditors Distribution payable 10 – – Other creditors 10 1,042 369 Bank overdrafts 1,380 2 Total other liabilities 2,422 371 Total liabilities 2,422 371 Net assets attributable to Shareholders 181,896 172,046

43 Invesco Perpetual Smaller Companies and Markets Investment Series 04 European Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 44

Invesco Perpetual European Smaller Companies Fund Notes to the financial statements Refer to pages 05 to 14 for notes applicable to the financial statements of all Sub-Funds.

1 Accounting policies The Sub-Fund’s accounting and distribution policies are set out on pages 05 to 07.

2 Net capital gains 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Non-derivative securities 36,647 5,907 Derivative securities (2,543) 7,770 Forward currency contracts 6 (1) Foreign currency losses (207) (164) Net capital gains 33,903 13,512

3 Revenue 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Bank interest 1 8 Non-taxable overseas dividends 3,128 4,650 Taxable overseas dividends 285 158 3,414 4,816

4 Expenses 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Payable to the Manager, associates of the Manager and agents of either of them: Fund Management Fee 1 2,593 2,518 2,593 2,518

Total expenses 2,593 2,518

1 Total audit fees of £6,206 (2016 - £6,231) exclusive of VAT payable to the auditors for the year ended 31 July 2017 are borne out of the Fund Management Fee.

44 Invesco Perpetual Smaller Companies and Markets Investment Series 04 European Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 45

Invesco Perpetual European Smaller Companies Fund Notes to the financial statements

5 Taxation 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 a) Analysis of charge for the year Overseas tax 172 163 Total tax charge 172 163

There is no corporation tax charge for the year (2016 - Nil).

b) Factors affecting the tax charge for the year The tax assessed for the year is higher (2016 - lower) than the standard rate of corporation tax in the UK for an authorised investment company with variable capital. The differences are explained below:

01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Net revenue before taxation 819 2,296 Corporation tax at 20% (2016 - 20%) 164 459

Effects of: Overseas tax 1 172 163 Revenue not subject to tax (626) (930) Relief for overseas tax treated as an expense (8) (5) Movement in excess expenses 470 476 Total tax charge 172 163

1 Includes amounts for the recovery of excess withholding tax suffered on dividends received in prior accounting periods.

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 Sub-Fund had surplus management expenses of £29,889,000 (2016 - £27,537,000). It is unlikely that the Sub-Fund will generate sufficient taxable profits in the future to utilise these expenses and therefore a deferred tax asset of £5,978,000 (2016 - £5,508,000) has not been recognised.

6 Interest payable and similar charges 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Interest 2 2

7 Distributions 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Accumulations and distributions payable 30 September 2017 680 2,108 Amounts deducted on redemption of shares (23) 118 Amounts received on issue of shares – (23) 657 2,203

The distributable amount has been calculated as follows: Net revenue after taxation 647 2,133 Equalisation on conversions 10 70 657 2,203

45 Invesco Perpetual Smaller Companies and Markets Investment Series 04 European Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 46

Invesco Perpetual European Smaller Companies Fund Notes to the financial statements

8 Debtors 31.7.17 31.7.16 £’000 £’000 Amounts receivable for issue of shares 10 9 Sales awaiting settlement 1,390 69 Foreign currency contracts awaiting settlement 609 27 Accrued revenue – 42 Overseas tax recoverable 402 400 2,411 547

9 Cash and bank balances 31.7.17 31.7.16 £’000 £’000 Cash and bank balances – 12,196

10 Creditors 31.7.17 31.7.16 £’000 £’000 a) Distribution payable Net distribution payable – – – –

b) Other creditors Amounts payable for redemption of shares 203 129 Foreign currency contracts awaiting settlement 609 27 Accrued expenses 228 211 VAT payable 2 2 1,042 369

11 Commitments and contingent liabilities There were no commitments or contingent liabilities at the balance sheet date (2016 - Nil).

12 Related parties Related party interests in the Sub-Fund are disclosed in note 10 of the notes applicable to the financial statements of all Sub-Funds on page 14. Amounts payable to Invesco Fund Managers Limited in respect of Fund Management Fees are disclosed in note 4. Amounts due at the end of the accounting year for Fund Management Fees of £228,000 (2016 - £211,000) are disclosed in note 10 within accrued expenses.

13 Generic Risk factors As this is a smaller companies fund, investors should be prepared to accept a higher degree of risk than for a Sub-Fund with a broader investment mandate.

The risk factors relating to the Sub-Fund are discussed more fully in note 5 of the notes applicable to the financial statements of all Sub-Funds on pages 08 to 12.

a) Counterparty risk The Sub-Fund was not exposed to any counterparty risk as at the balance sheet date (2016 - Nil).

46 Invesco Perpetual Smaller Companies and Markets Investment Series 04 European Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 47

Invesco Perpetual European Smaller Companies Fund Notes to the financial statements

13 Generic Risk factors continued

b) Valuation of financial investments The categorisation of financial investments in the tables below reflect the basis of valuation of investments used to measure their fair value.

Assets Liabilities £’000 £’000 31.7. 17 Level 1: Unadjusted quoted price in an active market for an identical instrument; 181,907 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 181,907 –

31.7. 16 Level 1: Unadjusted quoted price in an active market for an identical instrument; 159,674 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 159,674 –

All financial investments are classified as level 1: Unadjusted quoted price in an active market for an identical instrument.

14 Portfolio transaction costs for the year 1 August 2016 to 31 July 2017

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 124,646 165 0.13 34 0.03 Debt instruments (direct) 260 – – – – Total purchases 124,906 165 34 Total purchases including transaction costs 125,105

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 138,907 219 0.16 – – Debt instruments (direct) 313 – – – – Total sales 139,220 219 – Total sales net of transaction costs 139,001

Derivative transaction costs 34 –

Total transaction costs 418 34

Total transaction costs as a % of average net assets 0.24% 0.02%

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Invesco Perpetual European Smaller Companies Fund Notes to the financial statements

14 Portfolio transaction costs continued for the year 1 August 2015 to 31 July 2016

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 131,862 172 0.13 51 0.04 Total purchases 131,862 172 51 Total purchases including transaction costs 132,085

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 143,643 218 0.15 – – Total sales 143,643 218 – Total sales net of transaction costs 143,425

Derivative transaction costs 67 –

Total transaction costs 457 51

Total transaction costs as a % of average net assets 0.27% 0.03%

During the year the Sub-Fund utilised derivative instruments including options covering different underlying asset classes. The settlement values for opening and closing derivative positions are not comparable to principal values for transactions in direct holding investments and therefore purchase and sale amounts for derivative transactions are not quantified in the analysis above. Transaction costs for derivatives positions will be either suffered as direct costs or form part of the dealing spread for the instruments. Any direct costs are identified in the analysis above.

Dealing spread costs suffered by the Sub-Fund vary considerably for the different asset/instrument types depending on a number of factors including transaction value and market sentiment.

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Invesco Perpetual European Smaller Companies Fund Notes to the financial statements

15 Share movement for the year 1 August 2016 to 31 July 2017

Accumulation Accumulation Z Accumulation Y Accumulation shares shares (No Trail) shares shares Opening shares 57,742,973 240,159 2,936,777 17,508,008

Shares issued 169,885 25,423 153,706 226,905 Shares redeemed (4,950,338) (24,196) (804,945) (4,550,649) Shares converted (803,012) 16,701 276,679 244,893

Closing shares 52,159,508 258,087 2,562,217 13,429,157

16 Post balance sheet events There are no post balance sheet events that require disclosure or adjustments to the financial statements.

49 Invesco Perpetual Smaller Companies and Markets Investment Series 04 European Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 50

Invesco Perpetual European Smaller Companies Fund Distribution table

Distribution table for the year 1 August 2016 to 31 July 2017

Net Net distribution distribution Net payable paid revenue Equalisation 30.9.17 30.9.16 Distribution payable 30 September 2017 p p p p Accumulation shares Group 1 0.4353 – 0.4353 2.0783 Group 2 0.4353 0.0000 0.4353 2.0783 Accumulation shares (No Trail) Group 1 1.9627 – 1.9627 3.7346 Group 2 0.8025 1.1602 1.9627 3.7346 Z Accumulation shares Group 1 3.9365 – 3.9365 6.3544 Group 2 3.3913 0.5452 3.9365 6.3544 Y Accumulation shares Group 1 2.5826 – 2.5826 4.0693 Group 2 2.3891 0.1935 2.5826 4.0693

Group 1: shares purchased prior to 1 August 2016 Group 2: shares purchased on or after 1 August 2016

50 Invesco Perpetual Smaller Companies and Markets Investment Series 05 Global Emerging Markets Fund_Layout 1 26-Sep-17 16:24 Page 51

Invesco Perpetual Global Emerging Markets Fund Investment report for the year

The Investment Objective and Policy of the Invesco Perpetual Global Emerging Markets Fund The Sub-Fund aims to achieve capital growth primarily through a portfolio of shares in companies established and/or operating in countries where, in the opinion of the Manager, there is an emerging market. Exposure to such markets will partially be 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.

Performance Percentage growth to 31 July 2017 Since Since Since Since Since 31.1.17 31.7.16 31.7.14 31.7.12 31.7.07 % % % % % Invesco Perpetual Global Emerging Markets Fund (Z Accumulation shares) 1 12.91 27.51 47.29 80.56 107.36 MSCI Emerging Markets Index 13.79 26.19 38.97 52.67 93.77 IA Global Emerging Markets Sector NR 12.70 24.16 37.97 48.35 76.38 Fund Ranking 31/60 14/60 12/53 2/44 6/21

Standardised rolling 12 month performance Percentage growth 30.6.12 30.6.13 30.6.14 30.6.15 30.6.16 30.6.13 30.6.14 30.6.15 30.6.16 30.6.17 % % % % % Invesco Perpetual Global Emerging Markets Fund (Z Accumulation shares) 1 16.3 5.0 3.7 8.7 28.9

Fund and sector average performance data source: Lipper, in Sterling, with income reinvested and net of the ongoing charge and portfolio transaction costs. The figures do not reflect the entry charge paid by individual investors. This may differ from the performance figure shown on page 54 for Z Accumulation shares as the figure above is based on the quoted 12pm price and the figure shown on page 54 is based on the close of business bid price. MSCI Emerging Markets 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.

51 Invesco Perpetual Smaller Companies and Markets Investment Series 05 Global Emerging Markets Fund_Layout 1 26-Sep-17 16:24 Page 52

Invesco Perpetual Global Emerging Markets Fund Investment report for the year

Strategy, review and outlook During the review period we added MediaTek, a The Sub-Fund increased by 27.5% over the twelve Taiwanese fabless semiconductor company that months to the end of July 2017, compared to a 26.2% provides solutions for wireless communications and gain for the benchmark MSCI Emerging Markets Index. digital consumer markets. With its comprehensive This placed the Sub-Fund in the first quartile of its peer product offerings we believe MediaTek is well positioned group, the IA Global Emerging Markets Sector NR, to benefit from favourable trends in areas such as IoT which rose by an average of 24.2%. (Internet of Things), for example bike-sharing in China, smart home devices and intelligent wearables (watches, Fund and sector average performance data source: trackers, home and office appliances). Lipper, in Sterling, with income reinvested and net of the ongoing charge and portfolio transaction costs. Dean Newman, Fund Manager Performance figures are based on the Z Accumulation Where Dean Newman has expressed opinions, they share class. The figures do not reflect the entry are based on current market conditions and are charge paid by individual investors. MSCI Emerging subject to change without notice. These opinions Markets Index source: Thomson Reuters Datastream, may differ from those of other Invesco Perpetual total return, in Sterling. investment professionals.

Past performance is not a guide to future returns. The Sub-Fund’s ten largest investments were % Improving fundamentals and better news on the Samsung Electronics 6.79 corporate earnings front underpinned the strong Naspers 5.20 advance in equity prices. Our holdings in Asian technology stocks drove performance with financials Alibaba 4.57 (banks) also doing well. Our top country contributors Taiwan Semiconductor Manufacturing 4.28 were China, Korea and Taiwan. There was significant NetEase 2.71 input from other regions too, led by Russia and South KB Financial 2.40 Africa in Europe, Middle East and Africa (EMEA) and Brazil in Latin America. Our largest stock contributors Baidu 2.36 were Alibaba and Samsung Electronics. Alibaba, the Housing Development Finance 2.13 world’s biggest e-commerce platform operator, Sberbank of Russia 1.91 benefitted from continuing growth in online sales. Shinhan Financial 1.88 The company made further progress in new areas such as cloud computing services and streaming music. Samsung Electronics drew support from growth in its semiconductor and display panel businesses – demand for flash storage chips remains strong.

With emerging market economies heading in the right direction, many companies are seeing an improving outlook for corporate earnings. In recent months there has been a pick-up in results, leading to upgrades to 2017 earnings estimates. As usual, however, there still remains a wide dispersion between countries and sectors. Looking ahead we expect technology companies to continue to do well along with banks and some consumer discretionary firms. While we envisage earnings growth to increase at a faster pace in Asia, for example Korean and Chinese tech firms, we are confident that companies in Brazil, South Africa and Russia will also deliver.

In terms of Sub-Fund positioning we are finding the EMEA region particularly interesting because it offers a wide range of diversified companies with strong management teams operating in areas of growth. We hold less than the benchmark in Asia, which, of course, is a big part of emerging markets. There are a lot of attractions here but we struggle to find enough cheap stocks in countries such as Malaysia, and are put off from Chinese financials given concerns over their debt levels. However, given strong consumer trends and the growing influence of e-commerce in Asia, the fund manager favours technology stocks in the region.

52 Invesco Perpetual Smaller Companies and Markets Investment Series 05 Global Emerging Markets Fund_Layout 1 26-Sep-17 16:24 Page 53

Invesco Perpetual Global Emerging Markets Fund Investment report for the year

Comparative tables

Year ended 31.7.17 31.7.16 31.7.15 Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 287.02 242.40 250.53 Return before operating charges* 81.27 48.82 (3.63) Operating charges (5.70) (4.20) (4.50) Return after operating charges 75.57 44.62 (8.13) Distributions (2.04) (1.83) (2.12) Retained distributions on accumulation shares 2.04 1.83 2.12 Closing net asset value per share 362.59 287.02 242.40

*After direct transaction costs of (0.66) (0.46) (0.48) Performance Return after charges 26.33% 18.41% (3.25%) Other information Closing net asset value (£'000) 77,055 65,908 72,340 Closing number of shares 21,251,490 22,962,806 29,842,992 Operating charges 1.75% 1.75% 1.75% Direct transaction costs 0.20% 0.19% 0.19% Performance fee – – – Prices Highest share price 365.68 290.92 280.69 Lowest share price 283.66 210.83 235.96

Year ended 31.7. 17 31.7. 16 31.7. 15 Accumulation shares (No Trail) (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 188.80 158.65 163.14 Return before operating charges* 53.58 32.12 (2.39) Operating charges (2.68) (1.97) (2.10) Return after operating charges 50.90 30.15 (4.49) Distributions (2.42) (2.00) (2.23) Retained distributions on accumulation shares 2.42 2.00 2.23 Closing net asset value per share 239.70 188.80 158.65

*After direct transaction costs of (0.44) (0.30) (0.31) Performance Return after charges 26.96% 19.00% (2.75%) Other information Closing net asset value (£'000) 63,648 68,144 37,383 Closing number of shares 26,553,416 36,093,014 23,563,524 Operating charges 1.25% 1.25% 1.25% Direct transaction costs 0.20% 0.19% 0.19% Performance fee – – – Prices Highest share price 241.73 191.35 183.43 Lowest share price 186.60 138.29 153.95

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

53 Invesco Perpetual Smaller Companies and Markets Investment Series 05 Global Emerging Markets Fund_Layout 1 26-Sep-17 16:24 Page 54

Invesco Perpetual Global Emerging Markets Fund Investment report for the year

Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Z Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 273.40 229.16 235.07 Return before operating charges* 77.68 46.52 (3.49) Operating charges (3.11) (2.28) (2.42) Return after operating charges 74.57 44.24 (5.91) Distributions (4.29) (3.46) (3.81) Retained distributions on accumulation shares 4.29 3.46 3.81 Closing net asset value per share 347.97 273.40 229.16

*After direct transaction costs of (0.63) (0.43) (0.45) Performance Return after charges 27.28% 19.31% (2.51%) Other information Closing net asset value (£'000) 60,453 42,618 27,594 Closing number of shares 17,373,029 15,588,391 12,041,291 Operating charges 1.00% 1.00% 1.00% Direct transaction costs 0.20% 0.19% 0.19% Performance fee – – – Prices Highest share price 350.91 277.09 264.76 Lowest share price 270.21 199.78 222.03

Year ended 31.7. 17 31.7. 16 31.7. 15 Y Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 250.19 209.60 214.87 Return before operating charges* 71.11 42.57 (3.16) Operating charges (2.71) (1.98) (2.11) Return after operating charges 68.40 40.59 (5.27) Distributions (4.07) (3.27) (3.62) Retained distributions on accumulation shares 4.07 3.27 3.62 Closing net asset value per share 318.59 250.19 209.60

*After direct transaction costs of (0.58) (0.40) (0.41) Performance Return after charges 27.34% 19.37% (2.45%) Other information Closing net asset value (£'000) 147,291 111,516 74,334 Closing number of shares 46,232,251 44,572,675 35,464,662 Operating charges 0.95% 0.95% 0.95% Direct transaction costs 0.20% 0.19% 0.19% Performance fee – – – Prices Highest share price 321.28 253.57 242.12 Lowest share price 247.27 182.74 203.01

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

54 Invesco Perpetual Smaller Companies and Markets Investment Series 05 Global Emerging Markets Fund_Layout 1 26-Sep-17 16:24 Page 55

Invesco Perpetual Global Emerging Markets Fund Investment report for the year

Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 257.18 218.60 227.94 Return before operating charges* 72.85 44.03 (3.31) Operating charges (5.11) (3.79) (4.10) Return after operating charges 67.74 40.24 (7.41) Distributions (1.83) (1.66) (1.93) Retained distributions on accumulation shares – – – Closing net asset value per share 323.09 257.18 218.60

*After direct transaction costs of (0.59) (0.41) (0.44) Performance Return after charges 26.34% 18.41% (3.25%) Other information Closing net asset value (£'000) 13,685 11,557 9,951 Closing number of shares 4,235,565 4,493,941 4,552,067 Operating charges 1.75% 1.75% 1.75% Direct transaction costs 0.20% 0.19% 0.19% Performance fee – – – Prices Highest share price 327.69 262.35 255.37 Lowest share price 254.19 190.12 214.67

Year ended 31.7. 17 31.7. 16 31.7. 15 Income shares (No Trail) (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 173.58 147.43 153.77 Return before operating charges* 49.29 29.83 (2.26) Operating charges (2.47) (1.83) (1.98) Return after operating charges 46.82 28.00 (4.24) Distributions (2.22) (1.85) (2.10) Retained distributions on accumulation shares – – – Closing net asset value per share 218.18 173.58 147.43

*After direct transaction costs of (0.40) (0.28) (0.29) Performance Return after charges 26.97% 18.99% (2.76%) Other information Closing net asset value (£'000) 238 271 562 Closing number of shares 109,103 155,945 381,580 Operating charges 1.25% 1.25% 1.25% Direct transaction costs 0.20% 0.19% 0.19% Performance fee – – – Prices Highest share price 222.27 177.80 172.89 Lowest share price 171.58 128.50 145.10

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

55 Invesco Perpetual Smaller Companies and Markets Investment Series 05 Global Emerging Markets Fund_Layout 1 26-Sep-17 16:24 Page 56

Invesco Perpetual Global Emerging Markets Fund Investment report for the year

Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Z Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 258.74 219.67 229.16 Return before operating charges* 73.61 44.56 (3.41) Operating charges (2.95) (2.18) (2.36) Return after operating charges 70.66 42.38 (5.77) Distributions (4.06) (3.31) (3.72) Retained distributions on accumulation shares – – – Closing net asset value per share 325.34 258.74 219.67

*After direct transaction costs of (0.60) (0.42) (0.44) Performance Return after charges 27.31% 19.29% (2.52%) Other information Closing net asset value (£'000) 7,949 5,123 5,261 Closing number of shares 2,443,336 1,979,814 2,395,236 Operating charges 1.00% 1.00% 1.00% Direct transaction costs 0.20% 0.19% 0.19% Performance fee – – – Prices Highest share price 332.17 265.60 258.10 Lowest share price 255.78 191.49 216.45

Year ended 31.7. 17 31.7. 16 31.7. 15 Y Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 239.66 203.45 212.25 Return before operating charges* 68.17 41.30 (3.14) Operating charges (2.59) (1.92) (2.08) Return after operating charges 65.58 39.38 (5.22) Distributions (3.90) (3.17) (3.58) Retained distributions on accumulation shares – – – Closing net asset value per share 301.34 239.66 203.45

*After direct transaction costs of (0.55) (0.39) (0.41) Performance Return after charges 27.36% 19.36% (2.46%) Other information Closing net asset value (£'000) 8,910 6,376 7,930 Closing number of shares 2,956,846 2,660,477 3,897,697 Operating charges 0.95% 0.95% 0.95% Direct transaction costs 0.20% 0.19% 0.19% Performance fee – – – Prices Highest share price 307.82 246.11 239.16 Lowest share price 236.91 177.36 200.51

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

56 Invesco Perpetual Smaller Companies and Markets Investment Series 05 Global Emerging Markets Fund_Layout 1 26-Sep-17 16:24 Page 57

Invesco Perpetual Global Emerging Markets Fund Investment report for the year

Portfolio Statement Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Argentina Nil (31.7.16 - 0.67%)

Austria Nil (31.7.16 - 1.00%)

Brazil 8.67% (31.7.16 - 7.79%) BRF 415,500 3,724 0.98 CIA Energetica Minas Gerais pref. 1,688,100 3,487 0.92 Itau Unibanco pref. ADR 645,600 5,832 1.54 Kroton Educacional 791,500 2,897 0.76 Localiza Rent A Car 303,875 3,815 1.01 Lojas Renner 576,215 4,097 1.08 Movida Participacoes 825,500 1,976 0.52 Petroleo Brasileiro pref. ADR 673,600 4,338 1.14 Tupy 763,350 2,714 0.72

Canada 2.66% (31.7.16 - 4.94%) Gran Tierra Energy 1,778,200 3,139 0.83 Methanex 150,700 5,047 1.33 Parex Resources 206,150 1,916 0.50

Chile Nil (31.7.16 - 0.88%)

China 12.47% (31.7.16 - 11.17%) Alibaba ADS 147,500 17,333 4.57 Autohome ADR 118,500 4,372 1.15 Baidu ADR 52,000 8,926 2.36 Bank of China ‘H’ 10,076,000 3,758 0.99 Changyou.com ADR 81,500 2,614 0.69 NetEase ADR 43,575 10,285 2.71

Greece 1.96% (31.7.16 - 0.40%) Motor Oil Hellas Corinth Refineries 174,800 2,978 0.79 Mytilineos 408,250 3,067 0.81 Piraeus Bank 6,622,750 1,374 0.36

Hong Kong 7.37% (31.7.16 - 8.64%) Cheung Kong Property 706,868 4,339 1.14 China Mobile 867,500 7,052 1.86 CK Hutchison 528,868 5,280 1.39 HSBC (Hong Kong listing) 789,600 6,012 1.59 Minth 1,510,000 5,250 1.39

Hungary 0.73% (31.7.16 - Nil) Wizz Air 106,200 2,762 0.73

India 8.36% (31.7.16 - 8.94%) Housing Development Finance 382,900 8,093 2.13 ICICI Bank ADR 959,470 6,776 1.79 Infosys ADR 526,250 6,311 1.66 ITC GDR 1,897,854 6,393 1.69 Tata Motors ADR 158,050 4,129 1.09

Indonesia 1.30% (31.7.16 - 1.21%) Bank Negara Indonesia 11,691,400 4,925 1.30

Israel Nil (31.7.16 - 1.26%)

Kazakhstan 1.22% (31.7.16 - Nil) KAZ Minerals 643,250 4,619 1.22

Luxembourg 0.92% (31.7.16 - Nil) Tenaris ADR 145,260 3,474 0.92

Mexico 3.65% (31.7.16 - 2.02%) BanRegio Grupo Financiero 607,300 3,011 0.79 Cemex ADR 743,750 5,455 1.44 Mexichem 2,498,800 5,394 1.42

57 Invesco Perpetual Smaller Companies and Markets Investment Series 05 Global Emerging Markets Fund_Layout 1 26-Sep-17 16:24 Page 58

Invesco Perpetual Global Emerging Markets Fund Investment report for the year

Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Peru 0.97% (31.7.16 - 1.07%) Credicorp 26,100 3,665 0.97

Philippines 0.83% (31.7.16 - 1.24%) Filinvest Land 118,581,000 3,137 0.83

Poland 1.40% (31.7.16 - 1.20%) KRUK 73,650 5,310 1.40

Portugal 0.67% (31.7.16 - 0.77%) Jeronimo Martins 171,400 2,544 0.67

Russia 5.00% (31.7.16 - 7.03%) Aeroflot 1,245,400 3,169 0.84 Alrosa 2,860,500 3,026 0.80 Novatek GDR 69,550 5,518 1.45 Sberbank of Russia ADR 820,250 7,248 1.91

South Africa 7.44% (31.7.16 - 7.22%) Dis-Chem Pharmacies 1,705,000 2,783 0.73 KAP Industrial 5,969,350 2,752 0.73 Naspers ‘N’ 117,900 19,714 5.20 PSG 199,550 2,966 0.78

South Korea 16.43% (31.7.16 - 14.10%) E-Mart 26,200 4,502 1.19 Hyundai Motor ‘2’ pref. 89,650 6,411 1.69 KB Financial 226,850 9,118 2.40 Korea Electric Power 169,100 5,101 1.34 LG 84,750 4,326 1.14 Samsung Electronics pref. 19,675 25,739 6.79 Shinhan Financial 198,100 7,117 1.88

Taiwan 11.06% (31.7.16 - 9.74%) ASUSTeK Computer 713,000 5,024 1.32 China Life Insurance 6,940,784 5,571 1.47 Hon Hai Precision Industry 1,905,356 5,600 1.48 MediaTek 631,000 4,216 1.11 Taiwan Semiconductor Manufacturing 3,022,274 16,247 4.28 Yageo 1,841,208 5,296 1.40

Thailand 1.35% (31.7.16 - 1.65%) Kasikornbank 1,138,500 5,138 1.35

Turkey 2.49% (31.7.16 - 1.74%) BIM Birlesik Magazalar 214,100 3,162 0.83 Turkiye Sinai Kalkinma Bankasi 19,060,030 6,278 1.66

United Arab Emirates 1.23% (31.7.16 - 2.08%) NMC Health 206,200 4,666 1.23

United Kingdom 0.69% (31.7.16 - 1.44%) Hikma Pharmaceuticals 185,250 2,616 0.69

United States 0.48% (31.7.16 - 0.90%) Luxoft 38,500 1,838 0.48

Portfolio of Investments (31.7.16 - 99.10%) 376,762 99.35 Net other assets (31.7.16 - 0.90%) 2,467 0.65 Net assets 379,229 100.00

Unless otherwise stated, all holdings are quoted in ordinary shares and are listed on a recognised exchange.

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Invesco Perpetual Global Emerging Markets Fund Investment report for the year

Summary of Material Portfolio Changes for the year 1 August 2016 to 31 July 2017 Cost £’000 Total purchases 137,473 Largest purchases: Brazil Petroleo Brasileiro pref. ADR 5,699 CIA Energetica Minas Gerais pref. 4,721 Lojas Renner 3,526 Tupy 3,113 China Alibaba ADS 3,409 India Housing Development Finance 6,909 Kazakhstan KAZ Minerals 3,105 Luxembourg Tenaris ADR 3,625 Mexico Cemex ADR 4,873 BanRegio Grupo Financiero 2,935 Russia Sberbank of Russia ADR 6,806 Alrosa 3,908 Aeroflot 3,274 South Africa KAP Industrial 3,529 SPAR 3,331 PSG 3,097 Dis-Chem Pharmacies 2,915 South Korea LG 3,779 Taiwan MediaTek 3,846 Turkey BIM Birlesik Magazalar 3,541

59 Invesco Perpetual Smaller Companies and Markets Investment Series 05 Global Emerging Markets Fund_Layout 1 26-Sep-17 16:24 Page 60

Invesco Perpetual Global Emerging Markets Fund Investment report for the year

Summary of Material Portfolio Changes continued for the year 1 August 2016 to 31 July 2017 Cost £’000 Total sales 142,200 Largest sales: Austria DO & CO 3,065 Brazil Ultrapar Participacoes 4,795 CPFL Energia 4,426 Ecorodovias Infraestrutura e Logistica 3,734 Klabin 3,394 Canada Silver Wheaton 3,005 Methanex 2,758 Chile S.A.C.I. Falabella 3,236 China NetEase ADR 5,435 ENN Energy 3,444 Hong Kong Samsonite International 3,526 Israel Frutarom 4,329 Russia MMC Norilsk Nickel ADR 6,550 Rosneft GDR 6,245 Moscow Exchange 3,505 South Africa Remgro 5,704 SPAR 3,278 Brait 3,236 South Korea Samsung Electronics pref. 2,880 United Arab Emirates Aldar Properties 3,843

60 Invesco Perpetual Smaller Companies and Markets Investment Series 05 Global Emerging Markets Fund_Layout 1 26-Sep-17 16:24 Page 61

Invesco Perpetual Global Emerging Markets Fund Financial Statements

Statement of Total Return 01.8.16 01.8.15 for the year 1 August 2016 to 31 July 2017 to 31.7.17 to 31.7.16 Notes £’000 £’000 £’000 £’000 Income Net capital gains 2 79,436 44,476 Revenue 3 9,198 6,896 Expenses 4 (4,209) (3,027) Interest payable and similar charges 6 (1) (1) Net revenue before taxation 4,988 3,868 Taxation 5 (942) (732) Net revenue after taxation 4,046 3,136 Total return before distributions 83,482 47,612 Distributions 7 (4,049) (3,186) Change in net assets attributable to Shareholders from investment activities 79,433 44,426

Amounts received on issue of shares 71,919 72,113 Amounts paid on redemption of shares (87,432) (43,672) (15,513) 28,441

Dilution adjustment 95 152 Change in net assets attributable to Shareholders from investment activities 79,433 44,426 Retained distribution on accumulation shares 3,701 3,138 Unclaimed distributions – 1 Closing net assets attributable to Shareholders 379,229 311,513

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Invesco Perpetual Global Emerging Markets Fund Financial Statements

Balance Sheet 31.7.17 31.7.16 as at 31 July 2017 Notes £’000 £’000 £’000 £’000 Assets Fixed assets Investments 376,762 308,721

Current assets Debtors 8 1,525 19,175 Cash and bank balances 9 1,691 1,913 Total other assets 3,216 21,088 Total assets 379,978 329,809

Liabilities Investment liabilities – –

Creditors Distribution payable 10 294 227 Other creditors 10 455 18,068 Bank overdrafts – 1 Total other liabilities 749 18,296 Total liabilities 749 18,296 Net assets attributable to Shareholders 379,229 311,513

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Invesco Perpetual Global Emerging Markets Fund Notes to the financial statements Refer to pages 05 to 14 for notes applicable to the financial statements of all Sub-Funds.

1 Accounting policies The Sub-Fund’s accounting and distribution policies are set out on pages 05 to 07.

2 Net capital gains 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Non-derivative securities 77,913 44,546 Derivative securities 1,652 – Foreign currency contracts 2 (33) Foreign currency losses (131) (37) Net capital gains 79,436 44,476

3 Revenue 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Bank interest – 2 Non-taxable overseas dividends 6,967 5,397 Stock dividends 367 99 Taxable overseas dividends 1,499 1,159 UK dividends 365 239 9,198 6,896

4 Expenses 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Payable to the Manager, associates of the Manager and agents of either of them: Fund Management Fee 1 4,213 3,027 4,213 3,027

Other expenses: VAT recoverable (4) – (4) –

Total expenses 4,209 3,027

1 Total audit fees of £6,423 (2016 - £6,448) exclusive of VAT payable to the auditors for the year ended 31 July 2017 are borne out of the Fund Management Fee.

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Invesco Perpetual Global Emerging Markets Fund Notes to the financial statements

5 Taxation 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 a) Analysis of charge for the year Overseas tax 942 732 Total tax charge 942 732

There is no corporation tax charge for the year (2016 - Nil).

b) Factors affecting the tax charge for the year The tax assessed for the year is lower (2016 - lower 1) than the standard rate of corporation tax in the UK for an authorised investment company with variable capital. The differences are explained below:

01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Net revenue before taxation 4,988 3,868 Corporation tax at 20% (2016 - 20%) 998 774

Effects of: Overseas tax 2 942 732 Revenue not subject to tax (1,540) (1,147) Relief for overseas tax treated as an expense (29) (21) Movement in excess expenses 571 394 Total tax charge 942 732

1 Please note that the Annual Report for the prior year ended 31.07.16 had incorrectly stated the wording 'higher' instead of ‘lower’ and this has now been updated in the current year report. This is purely a narrative correction and has no impact on the numerical data in the prior year Financial Statements. 2 Includes amounts for the recovery of excess withholding tax suffered on dividends received in prior accounting periods.

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 Sub-Fund had surplus management expenses of £14,432,000 (2016 - £11,576,000). It is unlikely that the Sub-Fund will generate sufficient taxable profits in the future to utilise these expenses and therefore a deferred tax asset of £2,886,000 (2016 - £2,315,000) has not been recognised.

6 Interest payable and similar charges 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Interest 1 1

7 Distributions 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Accumulations and distributions payable 30 September 2017 3,995 3,365 Amounts deducted on redemption of shares 389 210 Amounts received on issue of shares (335) (389) 4,049 3,186

The distributable amount has been calculated as follows: Net revenue after taxation 4,046 3,136 Equalisation on conversions 3 50 4,049 3,186

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Invesco Perpetual Global Emerging Markets Fund Notes to the financial statements

8 Debtors 31.7.17 31.7.16 £’000 £’000 Amounts receivable for issue of shares 439 15,564 Sales awaiting settlement 24 594 Foreign currency contracts awaiting settlement – 2,614 Accrued revenue 1,060 401 Overseas tax recoverable 2 2 1,525 19,175

9 Cash and bank balances 31.7.17 31.7.16 £’000 £’000 Cash and bank balances 1,691 1,913

10 Creditors 31.7.17 31.7.16 £’000 £’000 a) Distribution payable Net distribution payable 294 227 294 227

b) Other creditors Amounts payable for redemption of shares 74 326 Purchases awaiting settlement – 14,820 Foreign currency contracts awaiting settlement – 2,615 Accrued expenses 381 304 VAT payable – 3 455 18,068

11 Commitments and contingent liabilities There were no commitments or contingent liabilities at the balance sheet date (2016 - Nil).

12 Related parties Related party interests in the Sub-Fund are disclosed in note 10 of the notes applicable to the financial statements of all Sub-Funds on page 14. Amounts payable to Invesco Fund Managers Limited in respect of Fund Management Fees are disclosed in note 4. Amounts due at the end of the accounting year for Fund Management Fees of £381,000 (2016 - £304,000) are disclosed in note 10 within accrued expenses.

The risk factors relating to the Sub-Fund are discussed more fully in note 5 of the notes applicable to the financial statements of all Sub-Funds on pages 08 to 12.

a) Counterparty risk The Sub-Fund was not exposed to any counterparty risk as at the balance sheet date (2016 - Nil).

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Invesco Perpetual Global Emerging Markets Fund Notes to the financial statements

13 Generic Risk factors continued

b) Valuation of financial investments The categorisation of financial investments in the tables below reflect the basis of valuation of investments used to measure their fair value.

Assets Liabilities £’000 £’000 31.7. 17 Level 1: Unadjusted quoted price in an active market for an identical instrument; 376,762 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 376,762 –

31.7. 16 Level 1: Unadjusted quoted price in an active market for an identical instrument; 308,721 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 308,721 –

All financial investments are classified as level 1: Unadjusted quoted price in an active market for an identical instrument.

14 Portfolio transaction costs for the year 1 August 2016 to 31 July 2017

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 137,098 290 0.21 85 0.06 Total purchases 137,098 290 85 Total purchases including transaction costs 137,473

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 142,536 274 0.19 62 0.04 Total sales 142,536 274 62 Total sales net of transaction costs 142,200

Derivative transaction costs – –

Total transaction costs 564 147

Total transaction costs as a % of average net assets 0.16% 0.04%

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Invesco Perpetual Global Emerging Markets Fund Notes to the financial statements

14 Portfolio transaction costs continued for the year 1 August 2015 to 31 July 2016

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 112,451 198 0.18 42 0.04 Total purchases 112,451 198 42 Total purchases including transaction costs 112,691

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 81,410 171 0.21 54 0.07 Total sales 81,410 171 54 Total sales net of transaction costs 81,185

Derivative transaction costs – –

Total transaction costs 369 96

Total transaction costs as a % of average net assets 0.15% 0.04%

Dealing spread costs suffered by the Sub-Fund vary considerably for the different asset/instrument types depending on a number of factors including transaction value and market sentiment.

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Invesco Perpetual Global Emerging Markets Fund Notes to the financial statements

15 Share movement for the year 1 August 2016 to 31 July 2017

Accumulation Accumulation Z Accumulation Y Accumulation shares shares (No Trail) shares shares Opening shares 22,962,806 36,093,014 15,588,391 44,572,675

Shares issued 1,315,883 2,178,314 4,774,184 14,369,410 Shares redeemed (2,829,080) (11,328,405) (3,452,302) (12,720,961) Shares converted (198,119) (389,507) 462,756 11,127

Closing shares 21,251,490 26,553,416 17,373,029 46,232,251

Income Income shares Z Income Y Income shares (No Trail) shares shares Opening shares 4,493,941 155,945 1,979,814 2,660,477

Shares issued 544,663 – 988,674 882,922 Shares redeemed (779,967) (46,842) (560,807) (576,274) Shares converted (23,072) – 35,655 (10,279)

Closing shares 4,235,565 109,103 2,443,336 2,956,846

16 Post balance sheet events There are no post balance sheet events that require disclosure or adjustments to the financial statements.

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Invesco Perpetual Global Emerging Markets Fund Distribution table

Distribution table for the year 1 August 2016 to 31 July 2017

Net Net distribution distribution Net payable paid revenue Equalisation 30.9.17 30.9.16 Distribution payable 30 September 2017 p p p p Accumulation shares Group 1 2.0404 – 2.0404 1.8299 Group 2 1.5944 0.4460 2.0404 1.8299 Accumulation shares (No Trail) Group 1 2.4174 – 2.4174 1.9995 Group 2 1.8480 0.5694 2.4174 1.9995 Z Accumulation shares Group 1 4.2886 – 4.2886 3.4586 Group 2 2.7270 1.5616 4.2886 3.4586 Y Accumulation shares Group 1 4.0677 – 4.0677 3.2682 Group 2 2.5573 1.5104 4.0677 3.2682 Income shares Group 1 1.8285 – 1.8285 1.6561 Group 2 1.2110 0.6175 1.8285 1.6561 Income shares (No Trail) Group 1 2.2236 – 2.2236 1.8539 Group 2 2.2236 0.0000 2.2236 1.8539 Z Income shares Group 1 4.0608 – 4.0608 3.3125 Group 2 2.4105 1.6503 4.0608 3.3125 Y Income shares Group 1 3.8979 – 3.8979 3.1700 Group 2 2.5140 1.3839 3.8979 3.1700

Group 1: shares purchased prior to 1 August 2016 Group 2: shares purchased on or after 1 August 2016

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Invesco Perpetual Global Smaller Companies Fund Investment report for the year

The Investment Objective and Policy of the Invesco Perpetual Global Smaller Companies Fund The Sub-Fund aims to achieve capital growth through a portfolio of investments in international securities. The Sub-Fund intends to invest mainly in shares of smaller companies, which are quoted on the world’s stock 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.

Performance Percentage growth to 31 July 2017 Since Since Since Since Since 31.1.17 31.7.16 31.7.14 31.7.12 31.7.07 % % % % % Invesco Perpetual Global Smaller Companies Fund (Z Accumulation shares) 1 10.71 26.26 61.49 134.80 181.22 MSCI AC World Small Cap Index 5.43 18.43 60.45 120.48 185.06 IA Global Sector NR 7.14 17.82 48.27 92.60 106.22 Fund Ranking 22/193 10/191 26/173 13/140 8/93

Standardised rolling 12 month performance Percentage growth 30.6.12 30.6.13 30.6.14 30.6.15 30.6.16 30.6.13 30.6.14 30.6.15 30.6.16 30.6.17 % % % % % Invesco Perpetual Global Smaller Companies Fund (Z Accumulation shares) 1 31.3 11.8 11.6 6.0 32.7

Fund and sector average performance data source: Lipper, in Sterling, with income reinvested and net of the ongoing charge and portfolio transaction costs. The figures do not reflect the entry charge paid by individual investors. This may differ from the performance figure shown on page 73 for Z Accumulation shares as the figure above is based on the quoted 12pm price and the figure shown on page 73 is based on the close of business bid price. MSCI AC World Small Cap 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.

70 Invesco Perpetual Smaller Companies and Markets Investment Series 06 Global Smaller Companies Fund_Layout 1 26-Sep-17 16:24 Page 71

Invesco Perpetual Global Smaller Companies Fund Investment report for the year

Strategy, review and outlook Nick Mustoe (lead) and the Invesco Perpetual The Sub-Fund returned 26.3% over the twelve Global Smaller Companies Group, Fund Managers months to the end of July 2017, compared to a return Where Nick Mustoe and the Invesco Perpetual Global of 18.4% for the benchmark MSCI AC World Small Smaller Companies Group have expressed opinions, Cap Index. This placed the Sub-Fund in the first they are based on current market conditions and are quartile of its peer group, the IA Global Sector NR, subject to change without notice. These opinions which returned an average of 17.8%. may differ from those of other Invesco Perpetual investment professionals. Fund and sector average performance data source: Lipper, in Sterling, with income reinvested and net of the ongoing charge and portfolio transaction costs. The Sub-Fund’s ten largest investments were % Performance figures are based on the Z Accumulation HDFC Bank 1.13 share class. The figures do not reflect the entry Eurazeo 0.73 charge paid by individual investors. MSCI AC World Small Cap Index source: Thomson Reuters Hibernia 0.70 Datastream, total return, in Sterling terms. Outokumpu 0.69 Hon Hai Precision Industry 0.68 Past performance is not a guide to future returns. TKH 0.67 Global smaller companies markets remained resilient LISI 0.65 in the aftermath of the UK’s Brexit vote and Donald NetEase 0.65 Trump’s election victory in the US. The positive Telepizza 0.63 momentum continued into 2017 when markets enjoyed Hapag-Lloyd 0.61 a strong start to the year amid optimism that the US administration’s pro-growth policies were likely to boost corporate profitability. By July, global equity markets in total had reached all-time highs after more than $10 trillion was added to their value in the first half of the year (source: Bloomberg, as at 17 July 2017). Economic data largely supported the global growth story over the twelve months. Yet potential headwinds remain. There was the surprise outcome of the election in the UK in June 2017 as Brexit negotiations got under way, and forthcoming elections in Germany and Italy. Meanwhile in the US President Trump’s ability to implement spending and tax-cut plans is far from certain.

Stock selection was positive across most of the main regions, with European shipping firms particularly strong. German container shipping line Hapag-Lloyd, and Fincantieri, an Italian firm which designs and builds merchant and naval ships, were among the top individual performers. The share price of Hapag-Lloyd continued to perform well as it completed its merger with United Arab Shipping Company in May. European financials and industrials stocks were also strong. Eurazeo, a multinational, private equity firm based in Paris, Van Lanshot, the Dutch financial services firm, and LISI, a French aerospace firm, were among the top performing stocks.

The US smaller companies market lagged the broader market and our underweight exposure helped to boost returns. While stock selection was weak, the best performing stock overall was US firm Coherent, which provides lasers and laser-based technology in a range of scientific, commercial, and industrial settings. Coherent has benefited from the growth in products using OLED technology (organic light-emitting diode – a display technology), which continues to accelerate.

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Invesco Perpetual Global Smaller Companies Fund Investment report for the year

Comparative tables

Year ended 31.7.17 31.7.16 31.7.15 Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 1,943.40 1,728.58 1,531.01 Return before operating charges* 528.72 243.66 225.89 Operating charges (37.62) (28.84) (28.32) Return after operating charges 491.10 214.82 197.57 Distributions (0.59) (3.12) (3.10) Retained distributions on accumulation shares 0.59 3.12 3.10 Closing net asset value per share 2,434.50 1,943.40 1,728.58

*After direct transaction costs of (4.50) (3.43) (3.50) Performance Return after charges 25.27% 12.43% 12.90% Other information Closing net asset value (£'000) 295,274 268,784 317,734 Closing number of shares 12,128,736 13,830,591 18,381,251 Operating charges 1.70% 1.70% 1.70% Direct transaction costs 0.20% 0.20% 0.21% Performance fee – – – Prices Highest share price 2,465.49 1,951.71 1,834.67 Lowest share price 1,912.44 1,489.04 1,470.14

Year ended 31.7. 17 31.7. 16 31.7. 15 Accumulation shares (No Trail) (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 284.94 252.18 222.24 Return before operating charges* 77.69 35.74 32.85 Operating charges (3.90) (2.98) (2.91) Return after operating charges 73.79 32.76 29.94 Distributions (1.71) (1.70) (1.67) Retained distributions on accumulation shares 1.71 1.70 1.67 Closing net asset value per share 358.73 284.94 252.18

*After direct transaction costs of (0.66) (0.50) (0.51) Performance Return after charges 25.90% 12.99% 13.47% Other information Closing net asset value (£'000) 39,522 32,159 38,047 Closing number of shares 11,017,048 11,286,270 15,087,380 Operating charges 1.20% 1.20% 1.20% Direct transaction costs 0.20% 0.20% 0.21% Performance fee – – – Prices Highest share price 363.25 286.15 267.26 Lowest share price 280.41 217.82 213.63

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

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Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Z Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 353.39 311.97 274.26 Return before operating charges* 96.48 44.34 40.56 Operating charges (3.84) (2.92) (2.85) Return after operating charges 92.64 41.42 37.71 Distributions (3.14) (2.88) (2.80) Retained distributions on accumulation shares 3.14 2.88 2.80 Closing net asset value per share 446.03 353.39 311.97

*After direct transaction costs of (0.82) (0.62) (0.63) Performance Return after charges 26.21% 13.28% 13.75% Other information Closing net asset value (£'000) 93,175 66,943 57,478 Closing number of shares 20,890,156 18,943,011 18,424,012 Operating charges 0.95% 0.95% 0.95% Direct transaction costs 0.20% 0.20% 0.21% Performance fee – – – Prices Highest share price 451.60 354.88 330.38 Lowest share price 347.78 269.83 263.77

Year ended 31.7. 17 31.7. 16 31.7. 15 Y Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 256.68 226.48 198.99 Return before operating charges* 70.09 32.21 29.45 Operating charges (2.64) (2.01) (1.96) Return after operating charges 67.45 30.20 27.49 Distributions (2.43) (2.21) (2.16) Retained distributions on accumulation shares 2.43 2.21 2.16 Closing net asset value per share 324.13 256.68 226.48

*After direct transaction costs of (0.60) (0.45) (0.46) Performance Return after charges 26.28% 13.33% 13.81% Other information Closing net asset value (£'000) 273,584 196,784 132,512 Closing number of shares 84,406,079 76,663,877 58,509,135 Operating charges 0.90% 0.90% 0.90% Direct transaction costs 0.20% 0.20% 0.21% Performance fee – – – Prices Highest share price 328.17 257.76 239.81 Lowest share price 252.61 195.94 191.40

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

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Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 1,852.73 1,650.58 1,464.55 Return before operating charges* 504.08 232.67 216.10 Operating charges (35.87) (27.54) (27.10) Return after operating charges 468.21 205.13 189.00 Distributions (0.55) (2.98) (2.97) Retained distributions on accumulation shares – – – Closing net asset value per share 2,320.39 1,852.73 1,650.58

*After direct transaction costs of (4.29) (3.28) (3.34) Performance Return after charges 25.27% 12.43% 12.90% Other information Closing net asset value (£'000) 32,499 29,820 37,035 Closing number of shares 1,400,602 1,609,503 2,243,772 Operating charges 1.70% 1.70% 1.70% Direct transaction costs 0.20% 0.20% 0.21% Performance fee – – – Prices Highest share price 2,350.49 1,863.64 1,755.03 Lowest share price 1,823.24 1,421.86 1,406.32

Year ended 31.7. 17 31.7. 16 31.7. 15 Income shares (No Trail) (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 270.63 240.96 213.77 Return before operating charges* 73.81 34.14 31.59 Operating charges (3.71) (2.85) (2.80) Return after operating charges 70.10 31.29 28.79 Distributions (1.62) (1.62) (1.60) Retained distributions on accumulation shares – – – Closing net asset value per share 339.11 270.63 240.96

*After direct transaction costs of (0.63) (0.48) (0.49) Performance Return after charges 25.90% 12.99% 13.47% Other information Closing net asset value (£'000) 479 700 1,539 Closing number of shares 141,188 258,710 638,558 Operating charges 1.20% 1.20% 1.20% Direct transaction costs 0.20% 0.20% 0.21% Performance fee – – – Prices Highest share price 345.02 273.40 257.06 Lowest share price 266.34 208.13 205.48

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

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Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Z Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 342.06 304.45 270.07 Return before operating charges* 93.41 43.28 39.94 Operating charges (3.72) (2.85) (2.80) Return after operating charges 89.69 40.43 37.14 Distributions (3.04) (2.82) (2.76) Retained distributions on accumulation shares – – – Closing net asset value per share 428.71 342.06 304.45

*After direct transaction costs of (0.80) (0.61) (0.62) Performance Return after charges 26.22% 13.28% 13.75% Other information Closing net asset value (£'000) 12,887 11,247 8,579 Closing number of shares 3,006,020 3,287,965 2,817,977 Operating charges 0.95% 0.95% 0.95% Direct transaction costs 0.20% 0.20% 0.21% Performance fee – – – Prices Highest share price 437.14 346.33 325.34 Lowest share price 336.66 263.33 259.74

Year ended 31.7. 17 31.7. 16 31.7. 15 Y Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 250.31 222.77 197.62 Return before operating charges* 68.37 31.69 29.23 Operating charges (2.58) (1.98) (1.94) Return after operating charges 65.79 29.71 27.29 Distributions (2.37) (2.17) (2.14) Retained distributions on accumulation shares – – – Closing net asset value per share 313.73 250.31 222.77

*After direct transaction costs of (0.58) (0.44) (0.45) Performance Return after charges 26.28% 13.34% 13.81% Other information Closing net asset value (£'000) 23,521 21,529 12,997 Closing number of shares 7,497,169 8,600,873 5,834,158 Operating charges 0.90% 0.90% 0.90% Direct transaction costs 0.20% 0.20% 0.21% Performance fee – – – Prices Highest share price 320.05 253.54 238.16 Lowest share price 246.36 192.73 190.08

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

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Portfolio Statement Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Asia & Australasia (excluding Japan) 16.13% (31.7.16 - 16.06%)

Australia 0.12% (31.7.16 - Nil) Asaleo Care 1,158,479 933 0.12

China 2.26% (31.7.16 - 2.77%) 51job ADR 13,152 491 0.06 China MeiDong Auto 11,316,701 2,935 0.38 JD.com 96,770 3,315 0.43 KWG Property 1,265,000 708 0.09 NetEase ADR 21,157 4,994 0.65 Qingling Motors ‘H’ 8,974,000 2,257 0.29 Shenzhen Expressway 2,476,000 1,679 0.22 Zhejiang Expressway ‘H’ 1,120,000 1,061 0.14

Hong Kong 3.41% (31.7.16 - 3.46%) EVA Precision Industrial 33,070,000 3,565 0.46 FIH Mobile 6,423,000 1,628 0.21 Fortune Real Estate Investment Trust 3,965,900 3,755 0.49 HKR International 6,992,800 2,947 0.38 Minth 1,298,000 4,513 0.59 Pacific Basin Shipping 9,403,000 1,562 0.20 Qingdao Port International 5,768,000 2,476 0.32 Samson 20,875,000 1,500 0.20 Samsonite International 1,353,600 4,305 0.56

India 2.81% (31.7.16 - 2.92%) Adani Ports & Special Economic Zone 274,126 1,282 0.17 Aurobindo Pharma 247,440 2,103 0.27 Gujarat Gas 173,077 1,557 0.20 HDFC Bank 403,516 8,744 1.13 Housing Development Finance 92,830 1,962 0.26 Sobha Developers 656,047 3,102 0.40 UPL 284,029 2,936 0.38

Indonesia 0.67% (31.7.16 - 0.65%) Bank Negara Indonesia 5,615,500 2,366 0.31 Indosat 7,610,600 2,805 0.36

Malaysia 0.14% (31.7.16 - Nil) British American Tobacco - Malaysia 141,000 1,099 0.14

Philippines 0.42% (31.7.16 - 0.62%) Filinvest Land 121,782,000 3,222 0.42

Singapore 0.71% (31.7.16 - 0.80%) Accordia Golf Trust 3,941,700 1,542 0.20 ESR-REIT 11,467,511 3,621 0.47 Gallant Venture 3,974,900 307 0.04

South Korea 2.90% (31.7.16 - 2.75%) DGB Financial 569,773 4,596 0.60 Finetex EnE 363,307 1,159 0.15 Hyundai Home Shopping Network 29,525 2,762 0.36 Hyundai Mobis 7,554 1,260 0.16 Hyundai Motor ‘2’ pref. 63,227 4,521 0.59 Korea Investment 48,208 2,327 0.30 Korean Reinsurance 261,388 2,286 0.30 Shinhan Financial 94,776 3,405 0.44

Taiwan 2.69% (31.7.16 - 2.09%) ASUSTeK Computer 351,000 2,473 0.32 China Life Insurance 5,558,626 4,461 0.58 Chroma ATE 1,112,000 2,668 0.34 Hon Hai Precision Industry GDR 894,865 5,233 0.68

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Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Taiwan continued MediaTek 484,000 3,234 0.42 Wistron NeWeb 23,538 57 0.01 Yageo 921,039 2,649 0.34

Europe (excluding UK) 22.27% (31.7.16 - 22.60%)

Austria 1.07% (31.7.16 - 0.47%) Schoeller-Bleckmann Oilfield Equipment 64,034 3,665 0.47 Voestalpine 119,883 4,603 0.60

Belgium Nil (31.7.16 - 0.62%)

Denmark 1.06% (31.7.16 - 0.70%) D/S Norden 159,019 2,373 0.31 NNIT 85,255 2,045 0.26 Sydbank 119,844 3,776 0.49

Finland 1.00% (31.7.16 - 0.86%) Cargotec 51,173 2,361 0.31 Outokumpu 838,189 5,337 0.69

France 4.77% (31.7.16 - 7.68%) Air France-KLM 220,982 2,259 0.29 Altran Technologies 173,311 2,295 0.30 Euler Hermes 50,832 4,589 0.59 Eurazeo 91,746 5,645 0.73 Europcar 341,869 3,753 0.49 LISI 137,864 5,021 0.65 Maisons du Monde 114,368 3,201 0.42 Oeneo 555,290 4,673 0.61 Rothschild 50,032 1,396 0.18 Terreis 88,554 3,293 0.43 Total Gabon 5,222 623 0.08

Germany 0.72% (31.7.16 - 1.40%) HanseYachts 148,836 855 0.11 Hapag-Lloyd 157,610 4,691 0.61

Greece 0.33% (31.7.16 - 0.39%) Motor Oil Hellas Corinth Refineries 52,200 889 0.12 Mytilineos 114,300 859 0.11 National Bank of Greece 2,616,300 800 0.10

Hungary 0.18% (31.7.16 - 0.11%) Wizz Air 54,050 1,406 0.18

Italy 2.58% (31.7.16 - 1.97%) Banca Generali 153,973 4,127 0.54 Banca Mediolanum 656,277 4,337 0.56 Banco BPM 817,982 2,256 0.29 Elica 807,371 1,279 0.17 Fila 175,807 2,912 0.38 Fincantieri 2,353,724 2,101 0.27 Massimo Zanetti Beverage 75,196 539 0.07 Reply 14,695 2,342 0.30

Luxembourg 0.10% (31.7.16 - 0.16%) Ternium ADR 33,850 785 0.10

Monaco 0.21% (31.7.16 - Nil) Scorpio Tankers 576,092 1,621 0.21

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Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Netherlands 2.99% (31.7.16 - 2.99%) AFC Ajax 250,000 2,313 0.30 Boskalis Westminster 90,764 2,453 0.32 ICT 197,156 2,186 0.28 Philips Lighting 147,989 4,244 0.55 Stern 127,322 2,779 0.36 TKH 110,909 5,119 0.67 Van Lanschot 175,424 3,914 0.51

Norway 1.51% (31.7.16 - Nil) Evry 1,566,794 4,392 0.57 Kongsberg Gruppen 316,278 4,008 0.52 Wilh. Wilhelmsen 696,865 3,271 0.42

Poland 0.23% (31.7.16 - 0.36%) KRUK 24,300 1,752 0.23

Portugal 0.89% (31.7.16 - 0.80%) Banco Comercial Portugues 13,255,740 2,862 0.37 Corticeira Amorim 192,871 2,026 0.26 Sonae 2,248,124 1,950 0.26

Republic of Ireland 2.13% (31.7.16 - 2.27%) F.B.D. HLDGS 318,709 2,394 0.31 Hibernia REIT 4,254,359 5,410 0.70 Irish Continental 566,443 2,726 0.36 Origin Enterprises 477,068 2,816 0.37 Permanent TSB 651,131 1,223 0.16 Total Produce 927,413 1,789 0.23

Russia 0.27% (31.7.16 - 0.24%) Aeroflot 437,600 1,113 0.14 Globaltrans GDR 176,950 1,035 0.13

Spain 1.44% (31.7.16 - 0.28%) Parques Reunidos Servicios Centrales 210,153 3,005 0.39 Prosegur Seguridad 626,082 3,236 0.42 Telepizza 1,084,168 4,839 0.63

Sweden 0.39% (31.7.16 - 0.32%) Granges 359,208 2,998 0.39

Switzerland Nil (31.7.16 - 0.63%)

Turkey 0.40% (31.7.16 - 0.35%) Logo Yazilim Sanayi Ve Ticaret 75,850 896 0.12 Türk Tuborg 417,100 936 0.12 Turkiye Sinai Kalkinma Bankasi 3,881,609 1,278 0.16

Japan 12.39% (31.7.16 - 11.85%) Advantest 120,700 1,680 0.22 Ateam 41,300 803 0.10 Casio Computer 151,000 1,874 0.24 Chiba Bank 598,000 3,247 0.42 Digital Arts 41,200 1,065 0.14 Don Quijote 88,800 2,444 0.32 Financial Products 159,000 1,362 0.18 FP 72,000 2,975 0.39 Fullcast 216,600 2,064 0.27 Hitachi Metals 285,200 3,011 0.39 Investors Cloud 26,700 1,034 0.13 Kenedix Realty Investment 368 1,571 0.20 Kose 36,400 3,066 0.40 K's 57,300 870 0.11

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Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Japan continued Kyushu Electric Power 180,400 1,616 0.21 Lasertec 24,000 272 0.04 Metawater 100,300 2,097 0.27 Minebea 298,600 3,735 0.48 Miroku Jyoho Service 120,300 1,920 0.25 Misumi 68,400 1,284 0.17 Miura 176,100 2,699 0.35 N Field 104,300 1,086 0.14 Nakanishi 47,100 1,487 0.19 Nexon 159,500 2,513 0.33 NGK Spark Plug 130,800 2,006 0.26 Nifco 44,800 1,956 0.25 Nihon M&A Center 116,000 3,516 0.46 Nippon Prologis 1,032 1,646 0.21 NTT Urban Development 231,000 1,789 0.23 Park 24 97,900 1,874 0.24 PeptiDream 132,900 3,166 0.41 Relia 301,900 2,441 0.32 SATO 156,900 2,849 0.37 Sawai Pharmaceutical 41,300 1,761 0.23 Seikagaku 66,100 807 0.11 SIIX 44,800 1,445 0.19 Skylark 150,100 1,717 0.22 SMS 177,200 4,239 0.55 Solasto 181,300 2,014 0.26 Sosei 23,200 1,825 0.24 Square-Enix 52,200 1,294 0.17 Star Mica 33,600 727 0.09 Suruga Bank 221,400 4,044 0.52 Systena 119,100 2,069 0.27 TechnoPro 72,100 2,339 0.30 Tsubaki Nakashima 85,800 1,303 0.17 Tsukui 373,300 1,714 0.22 Union Tool 53,500 1,201 0.16

Latin America 2.15% (31.7.16 - 2.86%)

Argentina 0.10% (31.7.16 - Nil) Mercadolibre 3,500 765 0.10

Brazil 1.19% (31.7.16 - 1.38%) Alpargatas pref. 245,800 880 0.11 Banco ABC Brasil pref. 164,300 644 0.08 Banco ABC Brasil rights 31/8/2017 5,785 4 0.00 Bradespar pref. 131,200 735 0.09 CIA Hering 63,200 327 0.04 Direcional Engenharia 376,600 515 0.07 Energisa 145,700 873 0.11 Iguatemi Empresa Shopping Centers 110,400 983 0.13 Kroton Educacional 274,600 1,005 0.13 Localiza Rent A Car 78,035 980 0.13 MAHLE Metal Leve 134,500 555 0.07 Movida Participacoes 292,700 701 0.09 Netshoes Cayman 22,950 354 0.05 Tupy 193,700 689 0.09

Chile 0.08% (31.7.16 - 0.14%) Forus 213,500 580 0.08

Mexico 0.70% (31.7.16 - 1.04%) Alfa ‘A’ 642,700 675 0.09 Alsea 250,500 736 0.10 BanRegio Grupo Financiero 162,900 808 0.11 Controladora Vuela Cia de Aviacion ADR 61,650 641 0.08 Gruma ‘B’ 47,650 497 0.06 Grupo Financiero Interacciones 189,300 806 0.10

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Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Mexico continued Telesites 1,325,000 734 0.10 Unifin Financiera 198,400 488 0.06

Panama Nil (31.7.16 - 0.13%)

Peru 0.08% (31.7.16 - 0.17%) Intergroup Financial Services 22,500 589 0.08

Middle East and Africa 1.94% (31.7.16 - 2.44%)

Israel Nil (31.7.16 - 0.52%)

Ghana 0.12% (31.7.16 - Nil) Tullow Oil 570,076 958 0.12

South Africa 1.42% (31.7.16 - 1.68%) Clicks 167,950 1,440 0.19 EOH 164,093 1,016 0.13 Harmony Gold Mining 325,050 438 0.06 KAP Industrial 3,693,850 1,703 0.22 Mpact 598,700 941 0.12 Mr Price 101,800 1,013 0.13 PSG 133,700 1,987 0.26 Shoprite 127,700 1,481 0.19 Tsogo Sun 681,550 894 0.12

United Arab Emirates 0.40% (31.7.16 - 0.24%) Aramex 978,000 1,070 0.14 National Central Cooling 2,122,950 903 0.12 NMC Health 49,750 1,126 0.14

North America 33.15% (31.7.16 - 33.09%)

Canada 0.24% (31.7.16 - 0.69%) Lithium Americas 940,950 576 0.08 Methanex 19,300 646 0.08 Parex Resources 68,750 639 0.08

Marshall Islands 0.42% (31.7.16 - Nil) Hunter Maritime Acquisition 190,000 1,448 0.19 Scorpio Bulkers 330,982 1,808 0.23

United States 32.49% (31.7.16 - 32.40%) ABM Industries 83,282 2,817 0.37 Acadia Healthcare 56,682 2,274 0.29 Albany International ‘A’ 91,203 3,701 0.48 American Eagle Outfitters 176,031 1,580 0.20 American Financial 45,340 3,487 0.45 Apogee Enterprises 70,683 2,792 0.36 Aspen Insurance 65,001 2,404 0.31 Bank of the Ozarks 77,967 2,548 0.33 BankUnited 89,578 2,338 0.30 Beazer Homes USA 149,549 1,503 0.19 Belden 43,469 2,372 0.31 Blackbaud 55,276 3,872 0.50 Boyd Gaming 124,573 2,368 0.31 BWX Technologies 88,281 3,527 0.46 Cambrex 59,846 2,767 0.36 CNO Financial 188,140 3,264 0.42 Coherent 23,049 4,632 0.60 CommVault Systems 54,506 2,462 0.32 Cooper Tire & Rubber 80,578 2,231 0.29 CubeSmart 134,484 2,514 0.33 Dycom Industries 32,594 2,238 0.29 E*TRADE Financial 116,940 3,637 0.47

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Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % United States continued Eagle Materials 30,891 2,204 0.29 Energen 66,199 2,675 0.35 Enersys 46,940 2,573 0.33 Euronet Worldwide 36,119 2,645 0.34 FLIR Systems 95,037 2,689 0.35 Forum Energy Technologies 158,177 1,584 0.21 Forward Air 69,051 2,714 0.35 Generac 86,548 2,362 0.31 Genpact 116,416 2,560 0.33 Graphic Packaging 381,599 3,812 0.49 Great Western Bancorp 104,066 3,079 0.40 Hanover Insurance 42,116 3,029 0.39 Healthcare Trust of America 98,067 2,275 0.30 HealthEquity 14 – 0.00 Helen of Troy 38,108 2,912 0.38 Highwoods Properties 61,381 2,397 0.31 Hill-Rom 43,406 2,454 0.32 Horace Mann Educators 79,507 2,225 0.29 Iberiabank 47,105 2,887 0.37 Iridium Communications 374,691 2,828 0.37 Jack Henry & Associates 31,268 2,545 0.33 Kennedy Wilson 133,176 2,030 0.26 Lantheus 117,786 1,644 0.21 Lazard ‘A’ 76,657 2,713 0.35 La-Z-Boy 118,926 3,045 0.39 Luxoft 59,584 2,845 0.37 MACOM Technology Solutions 68,237 3,133 0.41 Michaels 140,280 2,143 0.28 Microsemi 93,847 3,707 0.48 Minerals Technologies 47,418 2,545 0.33 Mobile Mini 96,445 2,250 0.29 National Instruments 80,452 2,510 0.33 Neurocrine Biosciences 64,717 2,358 0.31 Nevro 36,440 2,378 0.31 Newfield Exploration 80,518 1,755 0.23 Old Dominion Freight Line 36,576 2,661 0.35 Papa Johns International 41,202 2,229 0.29 Parsley Energy 93,559 2,077 0.27 Penn National Gaming 155,821 2,383 0.31 Phibro Animal Health ‘A’ 94,480 2,734 0.35 Pinnacle Financial Partners 55,645 2,695 0.35 Pinnacle Foods 49,652 2,236 0.29 Piper Jaffray 41,916 1,984 0.26 Pitney Bowes 141,089 1,684 0.22 Polyone 97,127 2,694 0.35 Power Integrations 24,691 1,322 0.17 Primoris Services 118,341 2,236 0.29 Retrophin 104,887 1,611 0.21 RSP Permian 102,348 2,667 0.35 Sally Beauty Holdings 95,209 1,460 0.19 Sensient Technologies 37,763 2,130 0.28 Servicemaster 85,517 2,852 0.37 SLM 281,459 2,361 0.31 SPX 178,219 3,719 0.48 Superior Energy Services 170,618 1,391 0.18 Supernus Pharmaceuticals 123,469 3,788 0.49 Swift Transportation 129,642 2,507 0.33 Synovus Financial 100,466 3,313 0.43 Take-Two Interactive Software 72,983 4,399 0.57 Team 80,863 877 0.11 Tech Data 36,518 2,836 0.37 Tivity Health 83,252 2,501 0.32 Treehouse Foods 34,803 2,238 0.29 Trex 43,910 2,501 0.32 UGI 92,424 3,538 0.46 Verint Systems 60,572 1,819 0.24 Visteon 35,042 2,964 0.38 Waste Connections 69,353 3,418 0.44

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Invesco Perpetual Global Smaller Companies Fund Investment report for the year

Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % United States continued Watts Water Technologies ‘A’ 50,746 2,475 0.32 Webster Financial 81,644 3,214 0.42 Wendy's 205,991 2,411 0.31 Western Alliance Bancorporation 83,466 3,189 0.41 Wright Medical 148,769 2,963 0.39 Xperi 84,035 1,864 0.24 Zebra Technologies Corp-Cl A 47,613 3,672 0.48

United Kingdom 9.84% (31.7.16 - 10.01%) 4imprint 87,396 1,368 0.18 Advanced Medical Solutions 238,615 710 0.09 Amerisur Resources 3,259,328 587 0.08 Arrow Global 268,765 1,171 0.15 AVEVA 27,397 543 0.07 boohoo.com 579,019 1,362 0.18 Bovis Homes 91,273 920 0.12 Brooks MacDonald 41,354 827 0.11 Cape 165,326 431 0.06 Carpetright 189,780 368 0.05 Clinigen 183,734 1,839 0.24 CLS 401,150 846 0.11 Coats 2,485,344 1,963 0.25 Consort Medical 155,159 1,652 0.21 Crest Nicholson 95,889 515 0.07 CVS 132,681 1,712 0.22 Dairy Crest 107,517 638 0.08 Dechra Pharmaceuticals 100,088 1,775 0.23 Digital Barriers 813,586 232 0.03 Diploma 86,868 937 0.12 Ebiquity 490,236 578 0.07 ECO Animal Health 174,679 1,144 0.15 EMIS 142,481 1,352 0.18 Equiniti 688,888 1,812 0.23 Essentra 215,577 1,154 0.15 Euromoney Institutional Investor 93,671 1,034 0.13 Faroe Petroleum 1,078,908 944 0.12 FDM 229,119 2,107 0.27 Future 180,514 572 0.07 Gamma Communications 216,199 1,401 0.18 Hill & Smith 85,038 1,140 0.15 Hilton Food 142,963 966 0.13 Hollywood Bowl 302,627 490 0.06 James Fisher & Sons 59,645 935 0.12 JD Sports Fashion 319,495 1,143 0.15 Johnson Service 1,552,069 2,056 0.27 Kainos 137,745 395 0.05 Keywords 148,919 1,677 0.22 Kier 37,951 489 0.06 Luceco 18,405 41 0.01 M&C Saatchi 284,159 911 0.12 Majestic Wine 190,764 609 0.08 Marston's 691,246 800 0.10 Mears 10,782 53 0.01 Microgen 292,882 1,254 0.16 NCC 325,578 630 0.08 Northgate 224,944 970 0.13 Patisserie 174,791 636 0.08 Polypipe 222,161 891 0.12 Premier Oil 619,206 373 0.05 Rathbone Brothers 41,243 1,102 0.14 Restore 174,917 829 0.11 Ricardo 85,560 660 0.09 Robert Walters 146,071 679 0.09 RWS 343,150 1,452 0.19 Safestore 384,874 1,626 0.21 Sanne 206,515 1,426 0.18 Savills 117,164 1,071 0.14 SDL 182,656 1,174 0.15

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Invesco Perpetual Global Smaller Companies Fund Investment report for the year

Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % United Kingdom continued Secure Trust 31,419 597 0.08 Servelec 331,692 939 0.12 Severfield 1,110,441 800 0.10 Softcat 236,439 946 0.12 St. Modwen Properties 357,238 1,279 0.17 Staffline 88,787 1,078 0.14 Tarsus 379,135 1,131 0.15 Ted Baker 12,876 323 0.04 Topps Tiles 664,523 547 0.07 Tracsis 26,949 116 0.01 Ultra Electronics 77,909 1,634 0.21 Urban & Civic 161,211 435 0.06 Vectura 574,821 656 0.09 Victoria 92,539 504 0.07 Victrex 84,297 1,657 0.21 Vp 106,818 887 0.12 Wetherspoon (JD) 104,859 1,071 0.14 Workspace 94,490 864 0.11 Xafinity 361,499 568 0.07 Young & Co's Brewery (non-voting) 81,934 832 0.11

Bonds 0.00% (31.7.16 - 0.00%) Scotia 8.5% Convertible Bond 26/3/2002 1 15,000 – 0.00

Portfolio of investments (31.7.16 - 98.91%) 754,483 97.87 Net other assets (31.7.16 - 1.09%) 16,458 2.13 Net assets 770,941 100.00

Unless otherwise stated, all holdings are quoted in ordinary shares and are listed on a recognised exchange.

1 Unquoted securities - for the year ended 31 July 2017 these amount to 0.00% (31 July 2016 - 0.00%) of the Net Asset Value of the Sub-Fund.

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Invesco Perpetual Global Smaller Companies Fund Investment report for the year

Summary of Material Portfolio Changes for the year 1 August 2016 to 31 July 2017 Cost £’000 Total purchases 413,623 Largest purchases: Austria Voestalpine 4,425 Denmark Sydbank 3,532 France Oeneo 3,997 Air France-KLM 3,824 Germany Scout24 4,027 Hapag-Lloyd 3,788 Italy Banca Generali 3,747 FinecoBank 3,530 Japan Chiba Bank 4,349 Minebea 3,530 Casio Computer 3,393 Hitachi Metals 3,130 Nihon M&A Center 3,043 Monaco Scorpio Tankers 3,104 Netherlands Philips Lighting 6,156 Fugro 3,218 Norway Evry 5,414 Kongsberg Gruppen 3,853 Spain Telepizza 4,347 United States Orbital ATK 3,029

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Invesco Perpetual Global Smaller Companies Fund Investment report for the year

Summary of Material Portfolio Changes continued for the year 1 August 2016 to 31 July 2017 Cost £’000 Total sales 436,648 Largest sales: Belgium Telenet 4,842 Finland Outokumpu 3,379 France Virbac 4,910 Korian 3,613 Havas 3,487 Edenred 3,436 Amundi 3,271 Germany Scout24 3,846 India UPL 3,854 Italy FinecoBank 5,978 Ferrari 4,438 Japan Lasertec 3,437 Konica Minolta 3,365 Shikoku Electric Power 3,309 Netherlands GrandVision 3,693 Fugro 3,312 Republic of Ireland Fyffes 4,916 United States Entegris 3,878 Intersil 3,434 Panera Bread 3,395

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Invesco Perpetual Global Smaller Companies Fund Financial Statements

Statement of Total Return 01.8.16 01.8.15 for the year 1 August 2016 to 31 July 2017 to 31.7.17 to 31.7.16 Notes £’000 £’000 £’000 £’000 Income Net capital gains 2 156,431 67,288 Revenue 3 13,196 11,696 Expenses 4 (9,019) (7,650) Interest payable and similar charges 6 (1) (2) Net revenue before taxation 4,176 4,044 Taxation 5 (1,066) (988) Net revenue after taxation 3,110 3,056 Total return before distributions 159,541 70,344 Distributions 7 (3,163) (3,239) Change in net assets attributable to Shareholders from investment activities 156,378 67,105

Amounts received on issue of shares 49,282 18,222 Amounts paid on redemption of shares (65,650) (66,170) (16,368) (47,948)

Dilution adjustment – 25 Change in net assets attributable to Shareholders from investment activities 156,378 67,105 Retained distribution on accumulation shares 2,965 2,863 Closing net assets attributable to Shareholders 770,941 627,966

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Invesco Perpetual Global Smaller Companies Fund Financial Statements

Balance Sheet 31.7.17 31.7.16 as at 31 July 2017 Notes £’000 £’000 £’000 £’000 Assets Fixed assets Investments 754,483 621,091

Current assets Debtors 8 5,438 4,918 Cash and bank balances 9 19,418 6,142 Total other assets 24,856 11,060 Total assets 779,339 632,151

Liabilities Investment liabilities – –

Creditors Distribution payable 10 279 332 Other creditors 10 8,118 3,798 Bank overdrafts 1 55 Total other liabilities 8,398 4,185 Total liabilities 8,398 4,185 Net assets attributable to Shareholders 770,941 627,966

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Invesco Perpetual Global Smaller Companies Fund Notes to the financial statements Refer to pages 05 to 14 for notes applicable to the financial statements of all Sub-Funds.

1 Accounting policies The Sub-Fund’s accounting and distribution policies are set out on pages 05 to 07.

2 Net capital gains 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Non-derivative securities 156,318 67,434 Foreign currency gains/(losses) 113 (146) Net capital gains 156,431 67,288

3 Revenue 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Bank interest – 3 Non-taxable overseas dividends 10,291 8,968 Non-US Overseas REIT dividends 237 433 Stock dividends 280 480 Taxable overseas dividends 967 613 UK dividends 1,268 1,020 UK REIT dividends 54 70 US REIT dividends 99 109 13,196 11,696

4 Expenses 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Payable to the Manager, associates of the Manager and agents of either of them: Fund Management Fee 1 9,033 7,650 9,033 7,650

Other expenses: VAT recoverable (14) – (14) –

Total expenses 9,019 7,650

1 Total audit fees of £6,423 (2016 - £6,448) exclusive of VAT payable to the auditors for the year ended 31 July 2017 are borne out of the Fund Management Fee.

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Invesco Perpetual Global Smaller Companies Fund Notes to the financial statements

5 Taxation 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 a) Analysis of charge for the year Overseas tax 1,066 988 Total tax charge 1,066 988

There is no corporation tax charge for the year (2016 - Nil).

b) Factors affecting the tax charge for the year The tax assessed for the year is higher (2016 - higher 1) than the standard rate of corporation tax in the UK for an authorised investment company with variable capital. The differences are explained below:

01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Net revenue before taxation 4,176 4,044 Corporation tax at 20% (2016 - 20%) 835 809

Effects of: Overseas tax 2 1,066 988 Revenue not subject to tax (2,431) (2,180) Relief for overseas tax treated as an expense (9) (7) Movement in excess expenses 1,605 1,378 Total tax charge 1,066 988

1 Please note that the Annual Report for the prior year ended 31.07.16 had incorrectly stated the wording 'lower' instead of ‘higher’ and this has now been updated in the current year report. This is purely a narrative correction and has no impact on the numerical data in the prior year Financial Statements. 2 Includes amounts for the recovery of excess withholding tax suffered on dividends received in prior accounting periods.

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 Sub-Fund had surplus management expenses of £65,079,000 (2016 - £57,054,000). It is unlikely that the Sub-Fund will generate sufficient taxable profits in the future to utilise these expenses and therefore a deferred tax asset of £13,016,000 (2016 - £11,411,000) has not been recognised.

6 Interest payable and similar charges 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Interest 1 2

7 Distributions 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Accumulations and distributions payable 30 September 2017 3,244 3,195 Amounts deducted on redemption of shares 60 97 Amounts received on issue of shares (141) (53) 3,163 3,239

The distributable amount has been calculated as follows: Net revenue after taxation 3,110 3,056 Equalisation on conversions 53 183 3,163 3,239

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Invesco Perpetual Global Smaller Companies Fund Notes to the financial statements

8 Debtors 31.7.17 31.7.16 £’000 £’000 Amounts receivable for issue of shares 381 940 Sales awaiting settlement 683 1,957 Foreign currency contracts awaiting settlement 3,248 1,190 Accrued revenue 841 631 Overseas tax recoverable 285 200 5,438 4,918

9 Cash and bank balances 31.7.17 31.7.16 £’000 £’000 Cash and bank balances 19,418 6,142

10 Creditors 31.7.17 31.7.16 £’000 £’000 a) Distribution payable Net distribution payable 279 332 279 332

b) Other creditors Amounts payable for redemption of shares 369 411 Purchases awaiting settlement 3,676 1,516 Foreign currency contracts awaiting settlement 3,251 1,182 Accrued expenses 822 679 VAT payable – 10 8,118 3,798

11 Commitments and contingent liabilities There were no commitments or contingent liabilities at the balance sheet date (2016 - Nil).

12 Related parties Related party interests in the Sub-Fund are disclosed in note 10 of the notes applicable to the financial statements of all Sub-Funds on page 14. Amounts payable to Invesco Fund Managers Limited in respect of Fund Management Fees are disclosed in note 4. Amounts due at the end of the accounting year for Fund Management Fees of £822,000 (2016 - £679,000) are disclosed in note 10 within accrued expenses.

13 Generic Risk factors As this is a smaller companies fund, investors should be prepared to accept a higher degree of risk than for a Sub-Fund with a broader investment mandate. Although the Sub-Fund invests mainly in established markets, it can invest in emerging and developing markets, where there is potential for a decrease in market liquidity, which may mean that it is not easy to buy or sell securities. There may also be difficulties in dealing and settlement, and custody problems could arise.

The risk factors relating to the Sub-Fund are discussed more fully in note 5 of the notes applicable to the financial statements of all Sub-Funds on pages 08 to 12.

a) Counterparty risk The Sub-Fund was not exposed to any counterparty risk as at the balance sheet date (2016 - Nil).

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Invesco Perpetual Global Smaller Companies Fund Notes to the financial statements

13 Generic Risk factors continued

b) Valuation of financial investments The categorisation of financial investments in the tables below reflect the basis of valuation of investments used to measure their fair value.

Assets Liabilities £’000 £’000 31.7. 17 Level 1: Unadjusted quoted price in an active market for an identical instrument; 754,483 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 754,483 –

31.7. 16 Level 1: Unadjusted quoted price in an active market for an identical instrument; 621,091 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 621,091 –

All financial investments are classified as level 1: Unadjusted quoted price in an active market for an identical instrument.

14 Portfolio transaction costs for the year 1 August 2016 to 31 July 2017

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 412,881 504 0.12 238 0.06 Total purchases 412,881 504 238 Total purchases including transaction costs 413,623

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 437,339 633 0.14 58 0.01 Total sales 437,339 633 58 Total sales net of transaction costs 436,648

Derivative transaction costs – –

Total transaction costs 1,137 296

Total transaction costs as a % of average net assets 0.16% 0.04%

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Invesco Perpetual Global Smaller Companies Fund Notes to the financial statements

14 Portfolio transaction costs continued for the year 1 August 2015 to 31 July 2016

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 310,046 379 0.12 230 0.07 Total purchases 310,046 379 230 Total purchases including transaction costs 310,655

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 361,464 489 0.14 56 0.02 Total sales 361,464 489 56 Total sales net of transaction costs 360,919

Derivative transaction costs – –

Total transaction costs 868 286

Total transaction costs as a % of average net assets 0.15% 0.05%

Dealing spread costs suffered by the Sub-Fund vary considerably for the different asset/instrument types depending on a number of factors including transaction value and market sentiment.

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Invesco Perpetual Global Smaller Companies Fund Notes to the financial statements

15 Share movement for the year 1 August 2016 to 31 July 2017

Accumulation Accumulation Z Accumulation Y Accumulation shares shares (No Trail) shares shares Opening shares 13,830,591 11,286,270 18,943,011 76,663,877

Shares issued 67,886 338,583 1,622,663 10,226,699 Shares redeemed (1,218,388) (223,042) (1,972,654) (3,878,534) Shares converted (551,353) (384,763) 2,297,136 1,394,037

Closing shares 12,128,736 11,017,048 20,890,156 84,406,079

Income Income shares Z Income Y Income shares (No Trail) shares shares Opening shares 1,609,503 258,710 3,287,965 8,600,873

Shares issued 7,734 2,122 1,978,249 676,272 Shares redeemed (185,584) (21,812) (2,430,371) (1,909,423) Shares converted (31,051) (97,832) 170,177 129,447

Closing shares 1,400,602 141,188 3,006,020 7,497,169

16 Post balance sheet events There are no post balance sheet events that require disclosure or adjustments to the financial statements.

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Invesco Perpetual Global Smaller Companies Fund Distribution table

Distribution table for the year 1 August 2016 to 31 July 2017

Net Net distribution distribution Net payable paid revenue Equalisation 30.9.17 30.9.16 Distribution payable 30 September 2017 p p p p Accumulation shares Group 1 0.5862 – 0.5862 3.1192 Group 2 0.5862 0.0000 0.5862 3.1192 Accumulation shares (No Trail) Group 1 1.7144 – 1.7144 1.6994 Group 2 1.1013 0.6131 1.7144 1.6994 Z Accumulation shares Group 1 3.1399 – 3.1399 2.8846 Group 2 1.8350 1.3049 3.1399 2.8846 Y Accumulation shares Group 1 2.4281 – 2.4281 2.2087 Group 2 1.5239 0.9042 2.4281 2.2087 Income shares Group 1 0.5548 – 0.5548 2.9804 Group 2 0.5548 0.0000 0.5548 2.9804 Income shares (No Trail) Group 1 1.6212 – 1.6212 1.6239 Group 2 0.8716 0.7496 1.6212 1.6239 Z Income shares Group 1 3.0394 – 3.0394 2.8167 Group 2 2.3496 0.6898 3.0394 2.8167 Y Income shares Group 1 2.3657 – 2.3657 2.1731 Group 2 1.4886 0.8771 2.3657 2.1731

Group 1: shares purchased prior to 1 August 2016 Group 2: shares purchased on or after 1 August 2016

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Invesco Perpetual Japanese Smaller Companies Fund Investment report for the year

The Investment Objective and Policy of the Invesco Perpetual Japanese Smaller Companies Fund The Sub-Fund aims to achieve capital growth, primarily through a portfolio of investments in smaller Japanese companies. 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.

Performance Percentage growth to 31 July 2017 Since Since Since Since Since 31.1.17 31.7.16 31.7.14 31.7.12 31.7.07 % % % % % Invesco Perpetual Japanese Smaller Companies Fund (Z Accumulation shares) 1 15.94 13.87 74.97 160.12 129.31 Russell Nomura Small-Cap Index 8.80 20.23 76.88 129.36 174.12 IA Japanese Smaller Companies Sector NR 12.15 20.71 86.63 168.08 170.94 Fund Ranking 1/3 3/3 3/3 3/3 3/3

Standardised rolling 12 month performance Percentage growth 30.6.12 30.6.13 30.6.14 30.6.15 30.6.16 30.6.13 30.6.14 30.6.15 30.6.16 30.6.17 % % % % % Invesco Perpetual Japanese Smaller Companies Fund (Z Accumulation shares) 1 34.2 6.6 0.8 58.4 7.8

Fund and sector average performance data source: Lipper, in Sterling, with income reinvested and net of the ongoing charge and portfolio transaction costs. The figures do not reflect the entry charge paid by individual investors. This may differ from the performance figure shown on page 98 for Z Accumulation shares as the figure above is based on the quoted 12pm price and the figure shown on page 98 is based on the close of business bid price. Russell Nomura Small-Cap 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.

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Invesco Perpetual Japanese Smaller Companies Fund Investment report for the year

Strategy, review and outlook Looking ahead, we are optimistic about the outlook The Sub-Fund gained 13.9% over the twelve for the Japanese small/mid cap equity markets. months in Sterling terms to the end of July 2017, However, we expect them to trade within a narrow underperforming the benchmark Russell Nomura range in the near term due to positive earnings Small-Cap Index. This placed the Sub-Fund in the outlook and concerns about the Abe Cabinet’s third quartile of its peer group, the IA Japanese faltering approval ratings as well as economic policies Smaller Companies Sector NR, which rose by an in the US and Europe. That said, after Mr. Abe average of 20.7%. reshuffled his cabinet, he clearly stated he would really like to focus again on economic policies, which Fund and sector average performance data source: should be regarded as a positive sign. Although we Lipper, in Sterling, with income reinvested and net of need to keep an eye on how the monetary policies the ongoing charge and portfolio transaction costs. of the US and ECB will impact on global financial Performance figures are based on the Z Accumulation systems, we tend to be cautiously optimistic given share class. The figures do not reflect the entry there are many small to medium size companies charge paid by individual investors. Russell Nomura which can grow earnings regardless of what happens Small-Cap Index data source: Thomson Reuters in the broader economy. Our strategy remains to seek Datastream, total return, in Sterling. small to mid-size high growth companies, paying particular attention to earnings momentum in the Past performance is not a guide to future returns. short to medium term.

Underperformance relative to the benchmark index Osamu Tokuno, Fund Manager was attributable to stock selection. Detractors include Where Osamu Tokuno has expressed opinions, they PC Depot, an electronic retailer, whose shares fell are based on current market conditions and are over concerns about the potential negative impact of subject to change without notice. These opinions accusations of bad sales practices. Elsewhere, Yonex, may differ from those of other Invesco Perpetual a leading sports equipment manufacturer, and W- investment professionals. Scope, a manufacturer of battery films, detracted from the Sub-Fund’s relative performance after announcing earnings results which fell short of The Sub-Fund’s ten largest investments were % market expectations. Turning to sectors, sector PeptiDream 4.91 allocation contributed positively to relative returns Japan Material 4.19 with the Sub-Fund’s overweight position in technology and underweight position in financials adding value. Fullcast 3.61 Conversely, the Sub-Fund’s overweight position in Topcon 3.39 healthcare and underweight position in materials Yamaichi Electronics 3.30 detracted over the period. Gunosy 3.23 Despite the victory of Donald Trump in the US Nextage 3.05 Presidential election, Japanese small/mid-size equity En-Japan 3.02 markets continued to move higher on the back of a CKD 3.00 strong global macroeconomic landscape and global GIKEN 2.88 equity markets as well as positive corporate earnings momentum. Although investors’ hope surrounding Mr. Trump’s pro-growth agenda faded quickly the US equity market continued to rise. Meanwhile, Prime Minister Shinzo Abe and his cabinet suffered from a sliding in approval ratings, which raised some concerns about his ability to continue to implement Abenomics, particularly among overseas investors. Nonetheless, strong corporate earnings, more aggressive share buybacks and dividend increases underpinned the overall upward trajectory of the Japanese equity markets over the period.

Under these circumstances, the Sub-Fund continued to focus on high growth companies in the small to medium size listed companies. During the period, the Sub-Fund put emphasis on several investment themes such as the internet and alternative energies. We increased positions in: Topcon, a measuring equipment manufacturer, Yamaichi Electronics, a manufacturer of integrated circuits (IC), Gunosy, an internet service company, Nextage, a second hand car dealer, and en-Japan, a web-based recruiter. These stocks are experiencing strong earnings growth which is not fully appreciated in the markets, in our view.

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Invesco Perpetual Japanese Smaller Companies Fund Investment report for the year

Comparative tables

Year ended 31.7.17 31.7.16 31.7.15 Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 101.54 64.98 67.28 Return before operating charges* 14.58 37.86 (1.15) Operating charges (1.79) (1.30) (1.15) Return after operating charges 12.79 36.56 (2.30) Distributions – – – Retained distributions on accumulation shares – – – Closing net asset value per share 114.33 101.54 64.98

*After direct transaction costs of (0.21) (0.23) (0.10) Performance Return after charges 12.60% 56.26% (3.42%) Other information Closing net asset value (£'000) 36,167 36,580 29,073 Closing number of shares 31,633,388 36,023,088 44,739,214 Operating charges 1.74% 1.74% 1.74% Direct transaction costs 0.21% 0.31% 0.14% Performance fee – – – Prices Highest share price 117.20 108.65 74.15 Lowest share price 91.00 58.91 61.13

Year ended 31.7. 17 31.7. 16 31.7. 15 Accumulation shares (No Trail) (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 259.59 165.29 170.27 Return before operating charges* 37.42 96.66 (2.90) Operating charges (3.26) (2.36) (2.08) Return after operating charges 34.16 94.30 (4.98) Distributions – – – Retained distributions on accumulation shares – – – Closing net asset value per share 293.75 259.59 165.29

*After direct transaction costs of (0.55) (0.59) (0.24) Performance Return after charges 13.16% 57.05% (2.92%) Other information Closing net asset value (£'000) 118 97 319 Closing number of shares 40,053 37,386 192,807 Operating charges 1.24% 1.24% 1.24% Direct transaction costs 0.21% 0.31% 0.14% Performance fee – – – Prices Highest share price 301.09 277.66 188.34 Lowest share price 232.75 149.89 154.89

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

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Invesco Perpetual Japanese Smaller Companies Fund Investment report for the year

Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Z Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 471.94 299.76 308.02 Return before operating charges* 68.19 175.60 (5.25) Operating charges (4.74) (3.42) (3.01) Return after operating charges 63.45 172.18 (8.26) Distributions – (0.10) – Retained distributions on accumulation shares – 0.10 – Closing net asset value per share 535.39 471.94 299.76

*After direct transaction costs of (1.00) (1.07) (0.44) Performance Return after charges 13.44% 57.44% (2.68%) Other information Closing net asset value (£'000) 4,551 9,632 1,775 Closing number of shares 850,048 2,040,965 592,301 Operating charges 0.99% 0.99% 0.99% Direct transaction costs 0.21% 0.31% 0.14% Performance fee – – – Prices Highest share price 548.73 504.71 341.30 Lowest share price 423.24 271.87 280.35

Year ended 31.7. 17 31.7. 16 31.7. 15 Y Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 307.25 195.05 200.32 Return before operating charges* 44.40 114.32 (3.41) Operating charges (2.93) (2.12) (1.86) Return after operating charges 41.47 112.20 (5.27) Distributions – (0.19) (0.10) Retained distributions on accumulation shares – 0.19 0.10 Closing net asset value per share 348.72 307.25 195.05

*After direct transaction costs of (0.65) (0.70) (0.29) Performance Return after charges 13.50% 57.52% (2.63%) Other information Closing net asset value (£'000) 13,841 20,445 3,302 Closing number of shares 3,968,935 6,654,126 1,693,103 Operating charges 0.94% 0.94% 0.94% Direct transaction costs 0.21% 0.31% 0.14% Performance fee – – – Prices Highest share price 357.42 328.57 222.05 Lowest share price 275.57 176.91 182.35

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

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Invesco Perpetual Japanese Smaller Companies Fund Investment report for the year

Portfolio Statement Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Construction 1.55% (31.7.16 - 3.75%) Penta-Ocean Construction 188,400 848 1.55

Manufacturing 44.94% (31.7.16 - 32.69%) Chemicals 2.93% (31.7.16 - 2.65%) Japan Pure Chemical 26,300 481 0.88 MEC 99,500 934 1.71 Stella Chemifa 8,700 185 0.34

Pharmaceutical 4.91% (31.7.16 - 2.23%) PeptiDream 112,700 2,685 4.91

Glass & Ceramic Products 4.23% (31.7.16 - 4.28%) Geostr 169,700 1,102 2.02 Maruwa 33,000 1,210 2.21

Metal Products 2.39% (31.7.16 - 0.13%) OSJB 602,300 1,253 2.29 RS Technologies 1,900 56 0.10

Machinery 11.74% (31.7.16 - 7.36%) CKD 129,100 1,640 3.00 Freund 120,000 1,294 2.37 GIKEN 78,100 1,578 2.88 Rorze 68,900 1,126 2.06 Towa 66,100 781 1.43

Electric Appliances 9.08% (31.7.16 - 8.04%) Ferrotec 110,800 1,247 2.28 Mitsui High-Tec 116,000 1,372 2.51 Torex Semiconductor 43,000 541 0.99 Yamaichi Electronics 122,200 1,805 3.30

Precision Instruments 4.25% (31.7.16 - 2.16%) Asahi Intecc 13,800 470 0.86 Topcon 142,900 1,852 3.39

Other Products 5.41% (31.7.16 - 5.84%) Nissha Printing 56,300 1,165 2.13 Transaction 103,200 811 1.48 Yonex 135,600 983 1.80

Electric Power & Gas 2.35% (31.7.16 - Nil) eRex 193,000 1,284 2.35

Transport & Communication 5.81% (31.7.16 - 6.12%) Information & Communication 5.81% (31.7.16 - 6.12%) Digital Arts 31,900 825 1.51 Kanamic Network 38,700 586 1.07 Sharing Technology 1,200 13 0.02 TechMatrix 43,600 551 1.01 Vision 66,000 1,203 2.20

Trade 10.85% (31.7.16 - 12.44%) Wholesale Trade 2.03% (31.7.16 - 4.73%) Ai 53,200 1,108 2.03

Retail Trade 8.82% (31.7.16 - 7.71%) Ain Pharmaciez 15,500 845 1.54 Golf Digest Online 116,200 650 1.19 Locondo 20,700 313 0.57 Nextage 137,300 1,668 3.05 PC Depot 309,200 1,348 2.47

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Invesco Perpetual Japanese Smaller Companies Fund Investment report for the year

Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Finance & Insurance 1.11% (31.7.16 - 5.34%) Securities & Commodity Futures 1.11% (31.7.16 - 0.63%) Financial Products 70,800 607 1.11

Insurance Nil (31.7.16 - 2.82%)

Other Financing Business Nil (31.7.16 - 1.89%)

Real Estate 0.46% (31.7.16 - 3.99%) Japan Property Management Center 24,700 250 0.46

Services 30.89% (31.7.16 - 33.38%) Aeon Fantasy 56,900 1,328 2.43 Allied Architects 15,400 144 0.26 CyberAgent 14,200 333 0.61 En-Japan 76,400 1,652 3.02 FreakOut 31,200 878 1.60 Fullcast 207,100 1,973 3.61 GameWith 700 18 0.03 Grace Technology 16,000 665 1.22 Gunosy 82,300 1,766 3.23 IBJ 176,900 862 1.58 Japan Material 154,600 2,290 4.19 M&A Capital Partners 27,800 958 1.75 N Field 98,300 1,024 1.87 Nexys 91,800 1,137 2.08 Riso Kyoiku 223,600 1,268 2.32 Shin Nippon Biomedical Laboratories 94,300 393 0.72 SRG Takamiya 10,400 41 0.07 UNITED 8,700 164 0.30

Portfolio of investments (31.7.16 - 97.71%) 53,564 97.96 Net other assets (31.7.16 - 2.29%) 1,113 2.04 Net assets 54,677 100.00

Unless otherwise stated, all holdings are quoted in ordinary shares and are listed on a recognised exchange.

100 Invesco Perpetual Smaller Companies and Markets Investment Series 07 Japanese Smaller Companies Fund_Layout 1 26-Sep-17 16:25 Page 101

Invesco Perpetual Japanese Smaller Companies Fund Investment report for the year

Summary of Material Portfolio Changes for the year 1 August 2016 to 31 July 2017 Cost £’000 Total purchases 37,691 Largest purchases: Topcon 1,907 eRex 1,809 PeptiDream 1,492 Gunosy 1,437 CKD 1,428 En-Japan 1,383 Riso Kyoiku 1,295 DeNa 1,239 OSJB 1,220 Rorze 1,143 FreakOut 1,127 Yamaichi Electronics 1,114 IBJ 1,058 Transaction 1,044 Mitsui High-Tec 1,020 Vision 1,010 Maruwa 919 Nextage 898 MEC 878 GNI 748

Proceeds £’000 Total sales 55,028 Largest sales: Osaki Electric 2,330 DeNa 2,252 Ai 2,204 H.I.S. 2,118 CyberAgent 1,747 M&A Capital Partners 1,732 Stella Chemifa 1,601 Anicom 1,568 Penta-Ocean Construction 1,495 Ferrotec 1,486 Outsourcing 1,449 Digital Arts 1,432 Ain Pharmaciez 1,414 W-SCOPE 1,379 Maruwa 1,374 Nissha Printing 1,339 Septeni 1,337 RS Technologies 1,294 Shinoken 1,245 CYBERDYNE 1,150

101 Invesco Perpetual Smaller Companies and Markets Investment Series 07 Japanese Smaller Companies Fund_Layout 1 26-Sep-17 16:25 Page 102

Invesco Perpetual Japanese Smaller Companies Fund Financial Statements

Statement of Total Return 01.8.16 01.8.15 for the year 1 August 2016 to 31 July 2017 to 31.7.17 to 31.7.16 Notes £’000 £’000 £’000 £’000 Income Net capital gains 2 5,669 20,819 Revenue 3 505 463 Expenses 4 (770) (630) Interest payable and similar charges 6 – – Net expense before taxation (265) (167) Taxation 5 (50) (45) Net expense after taxation (315) (212) Total return before distributions 5,354 20,607 Distributions 7 23 4 Change in net assets attributable to Shareholders from investment activities 5,377 20,611

Amounts received on issue of shares 9,163 24,693 Amounts paid on redemption of shares (26,668) (13,103) (17,505) 11,590

Dilution adjustment 51 70 Change in net assets attributable to Shareholders from investment activities 5,377 20,611 Retained distribution on accumulation shares – 14 Closing net assets attributable to Shareholders 54,677 66,754

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Invesco Perpetual Japanese Smaller Companies Fund Financial Statements

Balance Sheet 31.7.17 31.7.16 as at 31 July 2017 Notes £’000 £’000 £’000 £’000 Assets Fixed assets Investments 53,564 65,224

Current assets Debtors 8 1,397 1,261 Cash and bank balances 9 1,563 1,972 Total other assets 2,960 3,233 Total assets 56,524 68,457

Liabilities Investment liabilities – –

Creditors Distribution payable 10 – – Other creditors 10 1,847 1,703 Total other liabilities 1,847 1,703 Total liabilities 1,847 1,703 Net assets attributable to Shareholders 54,677 66,754

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Invesco Perpetual Japanese Smaller Companies Fund Notes to the financial statements Refer to pages 05 to 14 for notes applicable to the financial statements of all Sub-Funds.

1 Accounting policies The Sub-Fund’s accounting and distribution policies are set out on pages 05 to 07.

2 Net capital gains 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Non-derivative securities 5,676 20,814 Forward currency contracts (18) (1) Foreign currency gains 11 6 Net capital gains 5,669 20,819

3 Revenue 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Bank interest – 3 Non-taxable overseas dividends 505 460 505 463

4 Expenses 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Payable to the Manager, associates of the Manager and agents of either of them: Fund Management Fee 1 770 630 770 630

Total expenses 770 630

1 Total audit fees of £6,206 (2016 - £6,231) exclusive of VAT payable to the auditors for the year ended 31 July 2017 are borne out of the Fund Management Fee.

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Invesco Perpetual Japanese Smaller Companies Fund Notes to the financial statements

5 Taxation 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 a) Analysis of charge for the year Overseas tax 50 45 Total tax charge 50 45

There is no corporation tax charge for the year (2016 - Nil).

b) Factors affecting the tax charge for the year The tax assessed for the year is higher (2016 - higher) than the standard rate of corporation tax in the UK for an authorised investment company with variable capital. The differences are explained below:

01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Net revenue before taxation (265) (167) Corporation tax at 20% (2016 - 20%) (53) (33)

Effects of: Overseas tax 50 45 Revenue not subject to tax (101) (92) Movement in excess expenses 154 125 Total tax charge 50 45

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 Sub-Fund had surplus management expenses of £17,375,000 (2016 - £16,606,000). It is unlikely that the Sub-Fund will generate sufficient taxable profits in the future to utilise these expenses and therefore a deferred tax asset of £3,475,000 (2016 - £3,321,000) has not been recognised.

6 Interest payable and similar charges 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Interest – –

7 Distributions 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Accumulations and distributions payable 30 September 2017 – 14 Amounts deducted on redemption of shares (32) (9) Amounts received on issue of shares 9 (9) (23) (4)

The distributable amount has been calculated as follows: Net revenue after taxation (315) (212) Shortfall of income taken to capital 291 194 Equalisation on conversions 1 14 (23) (4)

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Invesco Perpetual Japanese Smaller Companies Fund Notes to the financial statements

8 Debtors 31.7.17 31.7.16 £’000 £’000 Amounts receivable for issue of shares 80 140 Sales awaiting settlement 1,151 783 Foreign currency contracts awaiting settlement 132 288 Accrued revenue 34 50 1,397 1,261

9 Cash and bank balances 31.7.17 31.7.16 £’000 £’000 Cash and bank balances 1,563 1,972

10 Creditors 31.7.17 31.7.16 £’000 £’000 a) Distribution payable Net distribution payable – – – –

b) Other creditors Amounts payable for redemption of shares 1,108 602 Purchases awaiting settlement 536 729 Foreign currency contracts awaiting settlement 132 291 Accrued expenses 69 79 VAT payable 2 2 1,847 1,703

11 Commitments and contingent liabilities There were no commitments or contingent liabilities at the balance sheet date (2016 - Nil).

12 Related parties Related party interests in the Sub-Fund are disclosed in note 10 of the notes applicable to the financial statements of all Sub-Funds on page 14. Amounts payable to Invesco Fund Managers Limited in respect of Fund Management Fees are disclosed in note 4. Amounts due at the end of the accounting year for Fund Management Fees of £69,000 (2016 - £79,000) are disclosed in note 10 within accrued expenses.

13 Generic Risk factors As this is a smaller companies fund, investors should be prepared to accept a higher degree of risk than for a Sub-Fund with a broader investment mandate.

The risk factors relating to the Sub-Fund are discussed more fully in note 5 of the notes applicable to the financial statements of all Sub-Funds on pages 08 to 12.

a) Counterparty risk The Sub-Fund was not exposed to any counterparty risk as at the balance sheet date (2016 - Nil).

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Invesco Perpetual Japanese Smaller Companies Fund Notes to the financial statements

13 Generic Risk factors continued

b) Valuation of financial investments The categorisation of financial investments in the tables below reflect the basis of valuation of investments used to measure their fair value.

Assets Liabilities £’000 £’000 31.7. 17 Level 1: Unadjusted quoted price in an active market for an identical instrument; 53,564 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 53,564 –

31.7. 16 Level 1: Unadjusted quoted price in an active market for an identical instrument; 65,224 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 65,224 –

All financial investments are classified as level 1: Unadjusted quoted price in an active market for an identical instrument.

14 Portfolio transaction costs for the year 1 August 2016 to 31 July 2017

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 37,647 44 0.12 — — Total purchases 37,647 44 — Total purchases including transaction costs 37,691

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 55,094 66 0.12 — — Total sales 55,094 66 — Total sales net of transaction costs 55,028

Derivative transaction costs — —

Total transaction costs 110 —

Total transaction costs as a % of average net assets 0.21% 0.00%

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Invesco Perpetual Japanese Smaller Companies Fund Notes to the financial statements

14 Portfolio transaction costs continued for the year 1 August 2015 to 31 July 2016

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 61,581 72 0.12 – – Total purchases 61,581 72 – Total purchases including transaction costs 61,653

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 49,551 59 0.12 – – Total sales 49,551 59 – Total sales net of transaction costs 49,492

Derivative transaction costs – –

Total transaction costs 131 –

Total transaction costs as a % of average net assets 0.31% 0.00%

Dealing spread costs suffered by the Sub-Fund vary considerably for the different asset/instrument types depending on a number of factors including transaction value and market sentiment.

15 Share movement for the year 1 August 2016 to 31 July 2017

Accumulation Accumulation Z Accumulation Y Accumulation shares shares (No Trail) shares shares Opening shares 36,023,088 37,386 2,040,965 6,654,126

Shares issued 2,036,677 1,121 285,535 1,769,234 Shares redeemed (6,153,389) (6,506) (1,695,122) (4,201,574) Shares converted (272,988) 8,052 218,670 (252,851)

Closing shares 31,633,388 40,053 850,048 3,968,935

16 Post balance sheet events There are no post balance sheet events that require disclosure or adjustments to the financial statements.

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Invesco Perpetual Japanese Smaller Companies Fund Distribution table

Distribution table for the year 1 August 2016 to 31 July 2017

Net Net distribution distribution Net payable paid revenue Equalisation 30.9.17 30.9.16 Distribution payable 30 September 2017 p p p p Accumulation shares Group 1 0.0000 – 0.0000 0.0000 Group 2 0.0000 0.0000 0.0000 0.0000 Accumulation shares (No Trail) Group 1 0.0000 – 0.0000 0.0000 Group 2 0.0000 0.0000 0.0000 0.0000 Z Accumulation shares Group 1 0.0000 – 0.0000 0.1028 Group 2 0.0000 0.0000 0.0000 0.1028 Y Accumulation shares Group 1 0.0000 – 0.0000 0.1854 Group 2 0.0000 0.0000 0.0000 0.1854

Group 1: shares purchased prior to 1 August 2016 Group 2: shares purchased on or after 1 August 2016

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Invesco Perpetual UK Smaller Companies Equity Fund Investment report for the year

The Investment Objective and Policy of the Invesco Perpetual UK Smaller Companies Equity Fund The Sub-Fund aims to achieve capital growth in the UK. The Sub-Fund intends to invest primarily in shares of smaller companies in the UK. 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.

Performance Percentage growth to 31 July 2017 Since Since Since Since Since 31.1.17 31.7.16 31.7.14 31.7.12 31.7.07 % % % % % Invesco Perpetual UK Smaller Companies Equity Fund (Z Accumulation shares) 1 16.12 35.77 64.92 146.26 165.92 Numis Smaller Companies (ex Investment Companies) Index 12.14 23.84 38.50 114.33 139.28 IA UK Smaller Companies Sector NR 14.81 30.82 46.25 120.91 124.29 Fund Ranking 21/48 12/48 11/47 18/41 14/35

Standardised rolling 12 month performance Percentage growth 30.6.12 30.6.13 30.6.14 30.6.15 30.6.16 30.6.13 30.6.14 30.6.15 30.6.16 30.6.17 % % % % % Invesco Perpetual UK Smaller Companies Equity Fund (Z Accumulation shares) 1 29.3 19.3 16.3 -4.9 42.0

Fund and sector average performance data source: Lipper, in Sterling, with income reinvested and net of the ongoing charge and portfolio transaction costs. The figures do not reflect the entry charge paid by individual investors. This may differ from the performance figure shown on page 113 for Z Accumulation shares as the figure above is based on the quoted 12pm price and the figure shown on page 113 is based on the close of business bid price. Numis Smaller Companies (ex Investment Companies) 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.

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Invesco Perpetual UK Smaller Companies Equity Fund Investment report for the year

Strategy, review and outlook Weighing on Sub-Fund performance were the The Sub-Fund delivered a return of 35.8% over the holdings in Amerisur and Faroe Petroleum, as the low twelve months to the end of July 2017, compared to oil price put downward pressure on margins across a rise of 23.8% by the Numis Smaller Companies the industry. Drug company Vectura suffered a delay (ex Investment Companies) Index. This placed the in approval for its generic Advair asthma treatment. Sub-Fund in the first quartile of its peer group, the Other Sub-Fund holdings to perform poorly included IA UK Smaller Companies Sector NR, which rose design and engineering group RPC and commercial by an average of 30.8%. vehicle rental business Northgate.

Fund and sector average performance data source: The fund manager focuses on identifying quality Lipper, in Sterling, with income reinvested and net of businesses with strong balance sheets, deemed the ongoing charge and portfolio transaction costs. capable of self-help rather than being overly reliant on Performance figures are based on the Z Accumulation the wider economy to stimulate growth. Active and share class. The figures do not reflect the entry unconstrained in his investment approach, Jonathan charge paid by individual investors. Numis Smaller Brown has adopted a degree of caution given the Companies (ex Investment Companies) Index data continued economic and political uncertainty in the source: Thomson Reuters Datastream, total return, UK. He remains confident, however, that there are in Sterling. resilient companies able to sustainably generate profitable growth in excess of the wider economy Past performance is not a guide to future returns. through market share gains, exposure to higher growth niches and re-investment of cash flows. The period under review was notable for political events – including the triggering of Article 50, Jonathan Brown, Fund Manager initiating the nation’s formal exit from the European Where Jonathan Brown has expressed opinions, they Union, and another UK general election. It was also are based on current market conditions and are notable for an improvement in sentiment towards subject to change without notice. These opinions Sterling against the US dollar, as doubts grew over may differ from those of other Invesco Perpetual the ability of the Trump administration to enact pro- investment professionals. growth measures. The oil price remained stubbornly low throughout the period. After economic growth initially held up well post the Brexit vote, the UK The Sub-Fund’s ten largest investments were % economy experienced a notable slowdown in the first FDM 2.81 half of 2017. GDP grew by 0.2% in Q1 and then by Coats 2.66 0.3% in Q2, both below the long-term growth trend. The overall backdrop, however, proved positive for the Keywords 2.49 smaller (and more domestically focused) end of the CVS 2.38 UK stock market, as the return from the Numis index Johnson Service 2.35 and by the Sub-Fund (see above) dwarfed that of the Equiniti 2.32 FTSE All-Share index at 7.1%. Dechra Pharmaceuticals 2.32 The Sub-Fund benefited from strong performances Clinigen 2.31 from a range of its holdings over the period. These Sanne 2.20 included Keywords Studios, an outsourcing business for Ultra Electronics 2.13 the gaming industry, which announced profit growth well above expectations, driven by increased levels of work from existing customers and contracts from new games studios. Boohoo.com again defied the woes of the clothing retail industry, as its on-line only business continued to grow rapidly, including now in the US. FDM, meanwhile, demonstrated the strength of its IT training and outsourcing model, with impressive earnings growth. Coats, the world’s leading industrial thread manufacturer, issued a strong trading statement as it works with customers on product innovation. The company also concluded a settlement with the regulators over its pension liabilities.

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Invesco Perpetual UK Smaller Companies Equity Fund Investment report for the year

Comparative tables

Year ended 31.7.17 31.7.16 31.7.15 Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 871.21 866.65 727.54 Return before operating charges* 322.28 18.96 152.13 Operating charges (17.20) (14.40) (13.02) Return after operating charges 305.08 4.56 139.11 Distributions (3.26) (4.18) (6.10) Retained distributions on accumulation shares 3.26 4.18 6.10 Closing net asset value per share 1,176.29 871.21 866.65

*After direct transaction costs of (1.67) (1.39) (1.64) Performance Return after charges 35.02% 0.53% 19.12% Other information Closing net asset value (£'000) 342,423 336,737 384,950 Closing number of shares 29,110,423 38,651,856 44,418,151 Operating charges 1.67% 1.67% 1.67% Direct transaction costs 0.16% 0.16% 0.21% Performance fee – – – Prices Highest share price 1,176.39 908.25 872.43 Lowest share price 872.16 783.76 676.98

Year ended 31.7. 17 31.7. 16 31.7. 15 Accumulation shares (No Trail) (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 284.66 281.75 235.35 Return before operating charges* 105.55 6.20 49.36 Operating charges (3.95) (3.29) (2.96) Return after operating charges 101.60 2.91 46.40 Distributions (2.75) (2.78) (3.24) Retained distributions on accumulation shares 2.75 2.78 3.24 Closing net asset value per share 386.26 284.66 281.75

*After direct transaction costs of (0.55) (0.45) (0.53) Performance Return after charges 35.69% 1.03% 19.72% Other information Closing net asset value (£'000) 9,383 9,290 9,261 Closing number of shares 2,429,117 3,263,662 3,287,130 Operating charges 1.17% 1.17% 1.17% Direct transaction costs 0.16% 0.16% 0.21% Performance fee – – – Prices Highest share price 386.30 296.53 283.41 Lowest share price 284.98 256.00 219.22

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

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Invesco Perpetual UK Smaller Companies Equity Fund Investment report for the year

Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Z Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 337.89 333.61 277.96 Return before operating charges* 125.46 7.35 58.40 Operating charges (3.69) (3.07) (2.75) Return after operating charges 121.77 4.28 55.65 Distributions (4.28) (4.12) (4.59) Retained distributions on accumulation shares 4.28 4.12 4.59 Closing net asset value per share 459.66 337.89 333.61

*After direct transaction costs of (0.65) (0.54) (0.63) Performance Return after charges 36.04% 1.28% 20.02% Other information Closing net asset value (£'000) 43,464 15,482 20,475 Closing number of shares 9,455,727 4,581,950 6,137,471 Operating charges 0.92% 0.92% 0.92% Direct transaction costs 0.16% 0.16% 0.21% Performance fee – – – Prices Highest share price 459.69 351.84 335.43 Lowest share price 338.28 303.82 259.05

Year ended 31.7. 17 31.7. 16 31.7. 15 Y Accumulation shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 230.28 227.24 189.23 Return before operating charges* 85.51 5.02 39.78 Operating charges (2.38) (1.98) (1.77) Return after operating charges 83.13 3.04 38.01 Distributions (3.06) (2.93) (3.23) Retained distributions on accumulation shares 3.06 2.93 3.23 Closing net asset value per share 313.41 230.28 227.24

*After direct transaction costs of (0.44) (0.37) (0.43) Performance Return after charges 36.10% 1.34% 20.09% Other information Closing net asset value (£'000) 144,647 60,910 28,735 Closing number of shares 46,152,043 26,450,659 12,645,669 Operating charges 0.87% 0.87% 0.87% Direct transaction costs 0.16% 0.16% 0.21% Performance fee – – – Prices Highest share price 313.44 239.76 228.46 Lowest share price 230.54 207.05 176.38

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

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Invesco Perpetual UK Smaller Companies Equity Fund Investment report for the year

Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 663.95 663.66 561.13 Return before operating charges* 245.63 14.52 117.28 Operating charges (13.11) (11.03) (10.04) Return after operating charges 232.52 3.49 107.24 Distributions (2.49) (3.20) (4.71) Retained distributions on accumulation shares – – – Closing net asset value per share 893.98 663.95 663.66

*After direct transaction costs of (1.28) (1.07) (1.27) Performance Return after charges 35.02% 0.53% 19.11% Other information Closing net asset value (£'000) 77,352 59,857 72,050 Closing number of shares 8,652,549 9,015,364 10,856,492 Operating charges 1.67% 1.67% 1.67% Direct transaction costs 0.16% 0.16% 0.21% Performance fee – – – Prices Highest share price 896.55 695.51 672.82 Lowest share price 664.68 600.18 522.11

Year ended 31.7. 17 31.7. 16 31.7. 15 Income shares (No Trail) (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 260.04 259.92 219.67 Return before operating charges* 96.44 5.71 46.04 Operating charges (3.61) (3.03) (2.76) Return after operating charges 92.83 2.68 43.28 Distributions (2.52) (2.56) (3.03) Retained distributions on accumulation shares – – – Closing net asset value per share 350.35 260.04 259.92

*After direct transaction costs of (0.50) (0.42) (0.50) Performance Return after charges 35.70% 1.03% 19.70% Other information Closing net asset value (£'000) 825 656 939 Closing number of shares 235,551 252,314 361,267 Operating charges 1.17% 1.17% 1.17% Direct transaction costs 0.16% 0.16% 0.21% Performance fee – – – Prices Highest share price 352.89 273.54 264.49 Lowest share price 260.34 236.16 204.60

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

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Invesco Perpetual UK Smaller Companies Equity Fund Investment report for the year

Comparative tables continued

Year ended 31.7.17 31.7.16 31.7.15 Z Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 320.22 320.06 270.43 Return before operating charges* 118.90 7.06 56.77 Operating charges (3.50) (2.94) (2.68) Return after operating charges 115.40 4.12 54.09 Distributions (4.06) (3.96) (4.46) Retained distributions on accumulation shares – – – Closing net asset value per share 431.56 320.22 320.06

*After direct transaction costs of (0.62) (0.52) (0.61) Performance Return after charges 36.04% 1.29% 20.00% Other information Closing net asset value (£'000) 10,415 7,409 6,598 Closing number of shares 2,413,298 2,313,617 2,061,358 Operating charges 0.92% 0.92% 0.92% Direct transaction costs 0.16% 0.16% 0.21% Performance fee – – – Prices Highest share price 435.66 337.57 326.30 Lowest share price 320.60 291.50 252.01

Year ended 31.7. 17 31.7. 16 31.7. 15 Y Income shares (pence per share) (pence per share) (pence per share) Change in net assets per share Opening net asset value per share 221.03 220.92 186.66 Return before operating charges* 82.07 4.88 39.20 Operating charges (2.28) (1.92) (1.75) Return after operating charges 79.79 2.96 37.45 Distributions (2.93) (2.85) (3.19) Retained distributions on accumulation shares – – – Closing net asset value per share 297.89 221.03 220.92

*After direct transaction costs of (0.43) (0.36) (0.42) Performance Return after charges 36.10% 1.34% 20.06% Other information Closing net asset value (£'000) 16,813 12,426 4,472 Closing number of shares 5,644,007 5,621,761 2,024,161 Operating charges 0.87% 0.87% 0.87% Direct transaction costs 0.16% 0.16% 0.21% Performance fee – – – Prices Highest share price 300.86 233.10 225.31 Lowest share price 221.29 201.30 173.95

The operating charges figure is equivalent to the FMF shown on page 07, which we also refer to as the ongoing charge in our Key Investor Information Documents (KIIDs) and our literature.

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Invesco Perpetual UK Smaller Companies Equity Fund Investment report for the year

Portfolio Statement Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Oil & Gas 2.54% (31.7.16 - 4.15%) Amerisur Resources 30,117,737 5,421 0.84 Faroe Petroleum 8,834,111 7,730 1.20 Premier Oil 5,362,020 3,231 0.50

Basic Materials 1.67% (31.7.16 - 1.56%) Chemicals 1.67% (31.7.16 - 1.56%) Victrex 548,035 10,774 1.67

Industrials 31.25% (31.7.16 - 28.49%) Construction & Materials 1.78% (31.7.16 - 0.86%) Kier 311,547 4,013 0.62 Polypipe 1,868,782 7,498 1.16

Industrial Goods & Services 29.47% (31.7.16 - 27.63%) Applied Intellectual Capital 2 513,848 – 0.00 Coats 21,687,892 17,133 2.66 Digital Barriers 6,091,129 1,736 0.27 Diploma 813,773 8,781 1.36 Equiniti 5,686,031 14,954 2.32 Essentra 1,759,171 9,420 1.46 Hill & Smith 697,934 9,352 1.45 James Fisher & Sons 420,131 6,584 1.02 Johnson Service 11,446,491 15,167 2.35 Keywords 1,427,079 16,069 2.49 Luceco 188,771 419 0.06 Mears 110,572 546 0.08 Northgate 2,003,268 8,634 1.34 Restore 1,428,585 6,772 1.05 Ricardo 739,759 5,707 0.88 Robert Walters 1,248,038 5,803 0.90 RWS 2,806,709 11,879 1.84 Sanne 2,052,845 14,175 2.20 Severfield 10,351,256 7,453 1.15 Staffline 673,377 8,175 1.27 Ultra Electronics 655,430 13,744 2.13 Vp 923,454 7,665 1.19

Consumer Goods 5.01% (31.7.16 - 5.99%) Food & Beverage 2.05% (31.7.16 - 3.09%) Dairy Crest 1,010,367 5,997 0.93 Hilton Food 1,068,875 7,220 1.12

Personal & Household Goods 2.96% (31.7.16 - 2.90%) Bovis Homes 700,045 7,057 1.09 Crest Nicholson 935,674 5,029 0.78 Ted Baker 108,350 2,715 0.42 Victoria 790,993 4,311 0.67

Health Care 10.15% (31.7.16 - 9.76%) Advanced Medical Solutions 2,172,715 6,469 1.00 Clinigen 1,486,848 14,883 2.31 Consort Medical 1,256,261 13,379 2.07 Dechra Pharmaceuticals 842,587 14,939 2.32 ECO Animal Health 1,431,514 9,376 1.45 Vectura 5,648,573 6,445 1.00

Consumer Services 19.59% (31.7.16 - 22.60%) Retail 7.66% (31.7.16 - 11.32%) boohoo.com 5,033,097 11,840 1.84 Carpetright 1,666,111 3,228 0.50 CVS 1,191,993 15,377 2.38 JD Sports Fashion 2,807,175 10,047 1.56 Majestic Wine 1,349,938 4,310 0.67 Topps Tiles 5,597,754 4,604 0.71

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Invesco Perpetual UK Smaller Companies Equity Fund Investment report for the year

Portfolio Statement continued Holding or Percentage as at 31 July 2017 nominal Market of total value of value net assets Investment positions £’000 % Media 6.99% (31.7.16 - 7.17%) 4imprint 711,172 11,130 1.72 Ebiquity 3,790,681 4,473 0.69 Euromoney Institutional Investor 834,202 9,210 1.43 Future 1,516,479 4,807 0.74 M&C Saatchi 2,265,014 7,265 1.13 Tarsus 2,761,535 8,236 1.28

Travel & Leisure 4.94% (31.7.16 - 4.11%) Hollywood Bowl 2,533,312 4,104 0.63 Marston's 5,184,077 6,003 0.93 Patisserie 1,730,763 6,300 0.98 Wetherspoon (JD) 831,063 8,485 1.31 Young & Co's Brewery (non-voting) 690,538 7,009 1.09

Telecommunications 1.73% (31.7.16 - 1.69%) Gamma Communications 1,718,887 11,138 1.73

Financials 14.61% (31.7.16 - 12.65%) Banks 0.78% (31.7.16 - 0.50%) Secure Trust 265,957 5,051 0.78

Real Estate 7.60% (31.7.16 - 7.70%) CLS 3,147,815 6,639 1.03 Safestore 2,882,410 12,175 1.88 Savills 1,024,679 9,366 1.45 St. Modwen Properties 2,790,671 9,988 1.55 Urban & Civic 1,427,557 3,854 0.60 Workspace 771,066 7,051 1.09

Financial Services 6.23% (31.7.16 - 4.45%) Arrow Global 2,437,273 10,620 1.65 Brooks MacDonald 301,610 6,032 0.93 Invesco Perpetual UK Smaller Companies Investment Trust 3 1,977,914 9,583 1.49 Rathbone Brothers 338,048 9,036 1.40 Xafinity 3,133,806 4,920 0.76

Technology 12.61% (31.7.16 - 10.55%) AVEVA 272,400 5,402 0.84 EMIS 1,159,046 10,999 1.70 FDM 1,969,928 18,114 2.81 Kainos 1,396,153 4,004 0.62 Microgen 2,456,729 10,515 1.63 NCC 2,676,601 5,179 0.80 SDL 1,557,075 10,004 1.55 Servelec 2,884,096 8,162 1.27 Softcat 2,001,436 8,006 1.24 Tracsis 223,219 960 0.15

Bonds 0.00% (31.7.16 - 0.00%) Scotia 8.5% Convertible Bond 26/3/2002 1 583,000 – 0.00

Portfolio of investments (31.7.16 - 97.44%) 639,881 99.16 Net other assets (31.7.16 - 2.56%) 5,441 0.84 Net assets 645,322 100.00

Unless otherwise stated, all holdings are quoted in ordinary shares and are listed on a recognised exchange.

1 Unquoted securities - for the year ended 31 July 2017 these amount to 0.00% (31 July 2016 - 0.00%) of the Net Asset Value of the Sub-Fund. 2 On 25 February 2009, Applied Intellectual Capital became a privately held company. 3 Investments managed or advised by Invesco Asset Management Limited or associates of the Invesco Group.

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Invesco Perpetual UK Smaller Companies Equity Fund Investment report for the year

Summary of Material Portfolio Changes for the year 1 August 2016 to 31 July 2017 Cost £’000 Total purchases 135,773 Largest purchases: Ultra Electronics 8,907 Ricardo 7,032 Young & Co's Brewery (non-voting) 5,708 Consort Medical 5,641 Robert Walters 5,499 St. Modwen Properties 4,542 Premier Oil 4,433 Xafinity 4,390 Future 4,250 Kier 4,060 Hollywood Bowl 4,054 Victoria 3,689 NCC 3,597 Equiniti 3,529 Secure Trust 3,469 Patisserie 3,418 Euromoney Institutional Investor 3,307 Clinigen 2,983 Ted Baker 2,572 Amerisur Resources 2,430

Proceeds £’000 Total sales 156,154 Largest sales: boohoo.com 13,010 JD Sports Fashion 11,826 RPC 11,114 Ithaca Energy 9,766 Mears 9,383 CVS 9,105 Cape 8,211 Keywords 6,069 SThree 6,021 Wireless 5,662 Brammer 4,735 Avon Rubber 4,002 LSL Property Services 3,761 Origin Enterprises 3,758 Senior 3,714 Advanced Medical Solutions 3,647 Luceco 3,584 Mountview Estates 3,440 Diploma 3,239 e2v Technologies 3,193

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Invesco Perpetual UK Smaller Companies Equity Fund Financial Statements

Statement of Total Return 01.8.16 01.8.15 for the year 1 August 2016 to 31 July 2017 to 31.7.17 to 31.7.16 Notes £’000 £’000 £’000 £’000 Income Net capital gains/(losses) 2 170,374 (36) Revenue 3 11,583 10,994 Expenses 4 (8,267) (7,844) Interest payable and similar charges 6 – – Net revenue before taxation 3,316 3,150 Taxation 5 – – Net revenue after taxation 3,316 3,150 Total return before distributions 173,690 3,114 Distributions 7 (3,431) (3,288) Change in net assets attributable to Shareholders from investment activities 170,259 (174)

Amounts received on issue of shares 32,460 54,966 Amounts paid on redemption of shares (62,995) (82,603) (30,535) (27,637)

Dilution adjustment – 421 Change in net assets attributable to Shareholders from investment activities 170,259 (174) Retained distribution on accumulation shares 2,830 2,673 Unclaimed distribution monies 1 4 Closing net assets attributable to Shareholders 645,322 502,767

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Invesco Perpetual UK Smaller Companies Equity Fund Financial Statements

Balance Sheet 31.7.17 31.7.16 as at 31 July 2017 Notes £’000 £’000 £’000 £’000 Assets Fixed assets Investments 639,881 489,890

Current assets Debtors 8 885 1,894 Cash and bank balances 9 7,521 12,637 Total other assets 8,406 14,531 Total assets 648,287 504,421

Liabilities Investment liabilities – –

Creditors Distribution payable 10 485 547 Other creditors 10 2,480 1,107 Total other liabilities 2,965 1,654 Total liabilities 2,965 1,654 Net assets attributable to Shareholders 645,322 502,767

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Invesco Perpetual UK Smaller Companies Equity Fund Notes to the financial statements Refer to pages 05 to 14 for notes applicable to the financial statements of all Sub-Funds.

1 Accounting policies The Sub-Fund’s accounting and distribution policies are set out on pages 05 to 07.

2 Net capital gains/(losses) 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Non-derivative securities 170,373 (35) Foreign currency gains/(losses) 1 (1) Net capital gains/(losses) 170,374 (36)

3 Revenue 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Bank interest – 20 Management fee rebates 73 53 Non-taxable overseas dividends 727 818 UK dividends 10,387 9,536 UK REIT dividends 396 567 11,583 10,994

4 Expenses 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Payable to the Manager, associates of the Manager and agents of either of them: Fund Management Fee 1 8,267 7,844 8,267 7,844

Total expenses 8,267 7,844

1 Total audit fees of £6,423 (2016 - £6,448) exclusive of VAT payable to the auditors for the year ended 31 July 2017 are borne out of the Fund Management Fee.

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Invesco Perpetual UK Smaller Companies Equity Fund Notes to the financial statements

5 Taxation 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 a) Analysis of charge for the year Overseas tax – – Total tax charge – –

There is no corporation tax charge for the year (2016 - Nil).

01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Net revenue before taxation 3,316 3,150 Corporation tax at 20% (2016 - 20%) 663 630

Effects of: Revenue not subject to tax (2,223) (2,071) Movement in excess expenses 1,560 1,441 Total 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 Sub-Fund had surplus management expenses of £107,792,000 (2016 - £99,994,000). It is unlikely that the Sub-Fund will generate sufficient taxable profits in the future to utilise these expenses and therefore a deferred tax asset of £21,558,000 (2016 - £19,999,000) has not been recognised.

6 Interest payable and similar charges 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Interest – –

7 Distributions 01.8.16 01.8.15 to 31.7.17 to 31.7.16 £’000 £’000 Accumulations and distributions payable 30 September 2017 3,315 3,220 Amounts deducted on redemption of shares 266 367 Amounts received on issue of shares (150) (299) 3,431 3,288

The distributable amount has been calculated as follows: Net revenue after taxation 3,316 3,150 Equalisation on conversions 115 138 3,431 3,288

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Invesco Perpetual UK Smaller Companies Equity Fund Notes to the financial statements

8 Debtors 31.7.17 31.7.16 £’000 £’000 Amounts receivable for issue of shares 106 80 Sales awaiting settlement 113 1,159 Accrued revenue 666 655 885 1,894

9 Cash and bank balances 31.7.17 31.7.16 £’000 £’000 Cash and bank balances 7,521 12,637

10 Creditors 31.7.17 31.7.16 £’000 £’000 a) Distribution payable Net distribution payable 485 547 485 547

b) Other creditors Amounts payable for redemption of shares 272 492 Purchases awaiting settlement 1,456 – Accrued expenses 752 615 2,480 1,107

11 Commitments and contingent liabilities There were no commitments or contingent liabilities at the balance sheet date (2016 - Nil).

12 Related parties Related party interests in the Sub-Fund are disclosed in note 10 of the notes applicable to the financial statements of all Sub-Funds on page 14. Amounts payable to Invesco Fund Managers Limited in respect of Fund Management Fees are disclosed in note 4. Amounts due at the end of the accounting year for Fund Management Fees of £752,000 (2016 - £615,000) are disclosed in note 10 within accrued expenses.

13 Generic Risk factors As this is a smaller companies fund, investors should be prepared to accept a higher degree of risk than for a Sub-Fund with a broader investment mandate.

The risk factors relating to the Sub-Fund are discussed more fully in note 5 of the notes applicable to the financial statements of all Sub-Funds on pages 08 to 12.

a) Counterparty risk The Sub-Fund was not exposed to any counterparty risk as at the balance sheet date (2016 - Nil).

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Invesco Perpetual UK Smaller Companies Equity Fund Notes to the financial statements

13 Generic Risk factors continued

b) Valuation of financial investments The categorisation of financial investments in the tables below reflect the basis of valuation of investments used to measure their fair value.

Assets Liabilities £’000 £’000 31.7. 17 Level 1: Unadjusted quoted price in an active market for an identical instrument; 639,881 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 639,881 –

31.7. 16 Level 1: Unadjusted quoted price in an active market for an identical instrument; 489,890 – Level 2: Valuation techniques using observable inputs other than quoted prices within level 1; – – Level 3: Valuation techniques using unobservable inputs. – – 489,890 –

All financial investments are classified as level 1: Unadjusted quoted price in an active market for an identical instrument.

14 Portfolio transaction costs for the year 1 August 2016 to 31 July 2017

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 135,090 204 0.15 479 0.35 Total purchases 135,090 204 479 Total purchases including transaction costs 135,773

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 156,173 263 0.17 – – Collective investment schemes 244 – – – – Total sales 156,417 263 – Total sales net of transaction costs 156,154

Derivative transaction costs – –

Total transaction costs 467 479

Total transaction costs as a % of average net assets 0.08% 0.08%

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Invesco Perpetual UK Smaller Companies Equity Fund Notes to the financial statements

14 Portfolio transaction costs continued for the year 1 August 2015 to 31 July 2016

Transaction Value Commissions Taxes Purchases (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 119,505 172 0.14 399 0.33 Total purchases 119,505 172 399 Total purchases including transaction costs 120,076

Transaction Value Commissions Taxes Sales (excluding derivatives) £'000 £'000 % £'000 % Equity instruments (direct) 147,730 252 0.17 – – Collective investment schemes 3 – – – – Total sales 147,733 252 – Total sales net of transaction costs 147,481

Derivative transaction costs – –

Total transaction costs 424 399

Total transaction costs as a % of average net assets 0.08% 0.08%

Dealing spread costs suffered by the Sub-Fund vary considerably for the different asset/instrument types depending on a number of factors including transaction value and market sentiment.

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Invesco Perpetual UK Smaller Companies Equity Fund Notes to the financial statements

15 Share movement for the year 1 August 2016 to 31 July 2017

Accumulation Accumulation Z Accumulation Y Accumulation shares shares (No Trail) shares shares Opening shares 38,651,856 3,263,662 4,581,950 26,450,659

Shares issued 568,151 31,590 798,403 7,460,156 Shares redeemed (2,630,263) (856,022) (865,925) (8,605,012) Shares converted (7,479,321) (10,113) 4,941,299 20,846,240

Closing shares 29,110,423 2,429,117 9,455,727 46,152,043

Income Income shares Z Income Y Income shares (No Trail) shares shares Opening shares 9,015,364 252,314 2,313,617 5,621,761

Shares issued 46,558 687 175,323 616,100 Shares redeemed (319,723) (17,450) (265,294) (761,082) Shares converted (89,650) – 189,652 167,228

Closing shares 8,652,549 235,551 2,413,298 5,644,007

16 Post balance sheet events There are no post balance sheet events that require disclosure or adjustments to the financial statements.

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Invesco Perpetual UK Smaller Companies Equity Fund Distribution table

Distribution table for the year 1 August 2016 to 31 July 2017

Net Net distribution distribution Net payable paid revenue Equalisation 30.9.17 30.9.16 Distribution payable 30 September 2017 p p p p Accumulation shares Group 1 3.2564 – 3.2564 4.1846 Group 2 1.7230 1.5334 3.2564 4.1846 Accumulation shares (No Trail) Group 1 2.7531 – 2.7531 2.7762 Group 2 1.3527 1.4004 2.7531 2.7762 Z Accumulation shares Group 1 4.2844 – 4.2844 4.1238 Group 2 1.7867 2.4977 4.2844 4.1238 Y Accumulation shares Group 1 3.0556 – 3.0556 2.9331 Group 2 1.5545 1.5011 3.0556 2.9331 Income shares Group 1 2.4894 – 2.4894 3.1959 Group 2 0.9549 1.5345 2.4894 3.1959 Income shares (No Trail) Group 1 2.5177 – 2.5177 2.5612 Group 2 1.8780 0.6397 2.5177 2.5612 Z Income shares Group 1 4.0557 – 4.0557 3.9640 Group 2 2.3211 1.7346 4.0557 3.9640 Y Income shares Group 1 2.9316 – 2.9316 2.8537 Group 2 1.4764 1.4552 2.9316 2.8537

Group 1: shares purchased prior to 1 August 2016 Group 2: shares purchased on or after 1 August 2016

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) Regulatory statements

Statement of the Manager’s Responsibilities in Statement of Depositary’s Responsibilities in relation to the Financial Statements relation to the Financial Statements The Collective Investment Schemes sourcebook The Depositary is responsible for the safekeeping (“COLL”) requires the Manager to prepare accounts for of all of the property of the Company (other than each annual accounting period which give a true and tangible moveable property) which is entrusted to it. fair view of the financial position of the Company as at the end of the year and of the net revenue or expense It is the duty of the Depositary to take reasonable care and the net capital gains or losses on the scheme to ensure that the Company is managed in accordance property of the Company for the year then ended. with the COLL, the Open-Ended Investment Companies In preparing the accounts the Manager is required to: Regulations 2001 (SI 2001/1228) (“the OEIC Regulations”) and the Company’s Instrument of — select suitable accounting policies and then apply Incorporation in relation to the pricing of, and dealings them consistently; in, the shares of the Company, the application of the — make judgements and estimates that are reasonable revenue of the Company, and the investment and and prudent; borrowing powers of the Company. — comply with the disclosure requirements of the Statement of Recommended Practice relating to Depositary’s Report to Shareholders Financial Statements of Authorised Funds; Having carried out such procedures as we considered — follow applicable accounting standards; and necessary to discharge our responsibilities and duties — keep proper accounting records which enable it to as Depositary of the Company, it is our opinion, based demonstrate that the accounts as prepared comply on the information available to us and the explanations with the above requirements. provided, that in all material respects the Company, acting through the Manager: The Manager is responsible for the management of the Company in accordance with the Prospectus and (i) has carried out the issue, sale, redemption the OEIC Regulations. and cancellation of shares in the Company, the calculation of the price of the Company’s shares The Manager is responsible for taking reasonable and the application of the Company’s revenue steps for the prevention and detection of fraud and in accordance with the COLL and, where other irregularities. 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 Europe plc, UK Branch London 27 September 2017

128 Invesco Perpetual Smaller Companies and Markets Investment Series 09 Regulations_Layout 1 26-Sep-17 16:25 Page 129

Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”)

Independent Auditors’ Report to the Shareholders of Conclusions relating to going concern Invesco Perpetual Smaller Companies and Markets We have nothing to report in respect of the following Investment Series (the “Company”) matters in relation to which ISAs (UK) require us to report to you when: Report on the audit of the financial statements — the Authorised Corporate Director’s use of the going Opinion concern basis of accounting in the preparation of the In our opinion, Invesco Perpetual Smaller Companies financial statements is not appropriate; or and Markets Investment Series’ financial statements: — the Authorised Corporate Director has not disclosed in the financial statements any identified material — give a true and fair view of the financial position uncertainties that may cast significant doubt about of the Company and each of the Sub-Funds as at the Company’s and each of the Sub-Funds’ ability 31 July 2017 and of the net revenue and, the net to continue to adopt the going concern basis of capital gains/(losses) of the scheme property of accounting for a period of at least twelve months the Company and each of the Sub-Funds for the from the date when the financial statements are year then ended; and authorised for issue. — have been properly prepared in accordance with United Kingdom Generally Accepted Accounting However, because not all future events or conditions Practice (United Kingdom Accounting Standards, can be predicted, this statement is not a guarantee as comprising FRS 102 “The Financial Reporting to the Company’s and each of the Sub-Funds’ ability to Standard applicable in the UK and Republic of continue as a going concern. Ireland”, and applicable law), the Statement of Recommended Practice for UK Authorised Funds, Reporting on other information the Collective Investment Schemes sourcebook The other information comprises all of the information and the Instrument of Incorporation. in the Annual Report other than the financial statements and our auditors’ report thereon. Invesco Perpetual Smaller Companies and Markets The Authorised Corporate Director is responsible for Investment Series is an Open Ended Investment the other information. Our opinion on the financial Company (‘OEIC’) with six Sub-Funds. The financial statements does not cover the other information and, statements of the company comprise the financial accordingly, we do not express an audit opinion or, statements of each of the Sub-Funds. We have audited except to the extent otherwise explicitly stated in the financial statements, included within the Annual this report, any form of assurance thereon. Report Including Long Form Financial Statements (the “Annual Report”), which comprise the Balance In connection with our audit of the financial Sheets as at 31 July 2017; the Statement of Total statements, our responsibility is to read the other Return and the Statement of Change in Net Assets information and, in doing so, consider whether the Attributable to Shareholders for the year then ended; other information is materially inconsistent with the the Distribution tables and the Notes applicable to the financial statements or our knowledge obtained in the financial statements of all Sub-Funds, which include the audit, or otherwise appears to be materially misstated. summary of significant accounting policies and notes to If we identify an apparent material inconsistency or the financial statements of individual Sub-Funds. material misstatement, we are required to perform procedures to conclude whether there is a material Basis for opinion misstatement of the financial statements or a material We conducted our audit in accordance with International misstatement of the other information. If, based on the Standards on Auditing (UK) (“ISAs (UK)”) and applicable work we have performed, we conclude that there is a law. Our responsibilities under ISAs (UK) are further material misstatement of this other information, we described in the Auditors’ responsibilities for the audit are required to report that fact. We have nothing to of the financial statements section of our report. report based on these responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for Authorised Corporate Director’s Report our opinion. In our opinion, the information given in the Authorised Corporate Director’s Report for the Independence financial year for which the financial statements are We remained independent of the Company in prepared is consistent with the financial statements. accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

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Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”)

Independent Auditors’ Report to the Shareholders of Other required reporting Invesco Perpetual Smaller Companies and Markets Investment Series (the “Company”) continued Opinion on matter required by the Collective Investment Schemes sourcebook Responsibilities for the financial statements and In our opinion, we have obtained all the information the audit and explanations we consider necessary for the purposes of the audit. Responsibilities of the Authorised Corporate Director for the financial statements Collective Investment Schemes sourcebook As explained more fully in the Statement of Manager’s exception reporting Responsibilities set out on page 128, the Authorised Under the Collective Investment Schemes sourcebook Corporate Director is responsible for the preparation we are also required to report to you if, in our opinion: of the financial statements in accordance with the applicable framework and for being satisfied that they — proper accounting records have not been kept; or give a true and fair view. The Authorised Corporate — the financial statements are not in agreement with Director is also responsible for such internal control as the accounting records and returns. they determine is necessary to enable the preparation of financial statements that are free from material We have no exceptions to report arising from misstatement, whether due to fraud or error. this responsibility.

In preparing the financial statements, the Authorised Corporate Director is responsible for assessing the Company’s and each of the Sub-Funds’ ability to PricewaterhouseCoopers LLP continue as a going concern, disclosing as applicable, Chartered Accountants and Statutory Auditors matters related to going concern and using the going London concern basis of accounting unless the Authorised 27 September 2017 Corporate Director either intends to wind up or terminate the Company or individual Sub-Fund or The maintenance and integrity of the Invesco Perpetual to cease operations, or has no realistic alternative website is the responsibility of the Manager; the but to do so. work carried out by the auditors does not involve consideration of these matters and, accordingly, the Auditors’ responsibilities for the audit of the auditors accept no responsibility for any changes that financial statements may have occurred to the financial statements since Our objectives are to obtain reasonable assurance about they were initially presented on the website. whether the financial statements as a whole are free from material misstatement, whether due to fraud or Legislation in the United Kingdom governing the error, and to issue an auditors’ report that includes preparation and dissemination of financial statements our opinion. Reasonable assurance is a high level may differ from legislation in other jurisdictions. of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report This report, including the opinions, has been prepared for and only for the Company’s shareholders as a body in accordance with paragraph 4.5.12 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.

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Authorised Corporate Director (the “Manager”) Invesco Fund Managers Limited Registered Office: Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK Registered in England No. 898166

The Manager’s investment adviser is: Invesco Asset Management Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK Registered in England No. 949417

Invesco Asset Management Limited and Invesco Fund Managers Limited are authorised and regulated by the Financial Conduct Authority.

Registrar Invesco Fund Managers Limited Registered Office: Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK

For registration enquiries please call free on telephone 0800 085 8677 or write to us at: Invesco Perpetual Administration Centre, PO Box 11150, Chelmsford CM99 2DL, UK

Depositary Citibank Europe plc, UK Branch Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, UK Authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority.

Independent Auditors PricewaterhouseCoopers LLP 7 More London Riverside, London SE1 2RT, UK 10 Back Cover_Layout 1 26-Sep-17 16:25 Page 132

Further information

General enquiries Client Services Team 0800 085 8677 International calls +44 (0)1491 417000

Lines are open 8.30am to 6pm, Monday to Friday, excluding UK Bank Holidays.

www.invescoperpetual.co.uk [email protected]

Fax 01491 416000

Post: Invesco Perpetual Administration Centre, PO Box 11150, Chelmsford CM99 2DL, UK

All instructions for investment and other correspondence relating to your account should be sent to this address. If you do not use this address, instructions for investment will be returned to you and our response to other correspondence may be delayed.

To invest ICVC Dealing Line 0800 085 8571*

*The initial investment into an ICVC account must be made by completing and signing an application form; subsequent investments into the account can be made by post or via the telephone dealing line.

Clients must confirm that they have been provided with the most up to date relevant Sub-Fund and share class specific Key Investor Information Document(s) prior to investing.

Telephone conversations of all dealers, staff and those of clients on our Dealing Lines will be recorded for mutual protection.

Valuations Automated Valuation Service 0800 028 4050. Lines are open 24 hours a day.

Online Valuation Service. Available to UK residents and their financial advisers only. To register for this service please go to www.invescoperpetual.co.uk

Further information on our products, including the most up to date relevant Sub-Fund and share class specific Key Investor Information Document(s) and the Supplementary Information Document, is available using the contact details as set out in the section “General Enquiries” above.

The Prospectus, which contains a written statement of the terms and conditions of the Company, can be obtained from the Manager, as can copies of Interim and Annual Reports. Please call our Client Services Team Line on 0800 085 8677 or log onto our website (www.invescoperpetual.co.uk).

Telephone conversations of all staff and those of clients may be recorded for mutual protection.

Invesco Perpetual is a business name of Invesco Fund Managers Limited Invesco Fund Managers Limited is authorised and regulated by the Financial Conduct Authority FCA Registered No. 119298 Registered in England No. 898166 Registered address: Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK 63122 /PDF /270917